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JANUARY 2026
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Think You Know Estate Planning? These 5 Myths Could Cost You Big
Sometimes in life, what seems like common sense is … not. You might think a simple decision will save time, prevent conflict, or keep your loved ones happy, but the reality can be completely different. This is especially true when it comes to estate planning, where small misunderstandings can lead to big legal and financial headaches. In fact, on Jan. 25, some people celebrate Opposite Day because it’s fun to think about flipping expectations. In estate planning, many of the “rules” people follow are exactly backward. What people assume will protect their family or their assets can actually create risk, disputes, or unintended tax consequences. To help you avoid those pitfalls, let’s debunk some of the most common myths that we often see. MYTH 1: ‘I’LL JUST ADD MY CHILD AS A JOINT OWNER, PROBLEM SOLVED!’ This is one of the most frequent misconceptions. On the surface, adding a child as a joint owner on your house or bank account sounds simple: They inherit immediately, you avoid probate, and they promise to split things fairly after you’re gone. But here’s the opposite of what people expect: Doing this can expose your assets to your child’s legal and financial problems. If they’re sued, going through a divorce, facing bankruptcy, or involved in a car accident liability case, your home or money may be treated as partly theirs. That means creditors (or ex-spouses)
could come knocking, and you could lose assets you thought were safe.
Federal estate tax applies only to estates well above the exemption threshold. California also does not have a separate state estate tax. So, unless someone has a very high-value estate, taxes aren’t the issue. However, the real risk is court involvement. Probate in California is a slow, public, and expensive process. Most people create a trust, not to dodge the IRS, but to avoid probate altogether. MYTH 4: ‘MY ESTATE IS SIMPLE. I DON’T NEED A TRUST.’ Many Californians believe a simple will is enough, especially if all they own is a home, a bank account or two, and maybe an investment or retirement account. But California probate thresholds are stricter than people expect, and even modest estates often must go through probate if not held in a trust. A will alone does not avoid court. The only reliable way to ensure your loved ones skip probate and receive what you intend is to create a trust and properly fund it. MYTH 5: ‘IF I DISINHERIT SOMEONE, THEY CAN’T CONTEST THE TRUST.’ This is a half-truth at best. Disinheriting someone removes them from receiving assets, but it does not stop them from contesting the estate. They can still allege undue influence, lack of capacity, or improper execution.
Once your child becomes a joint owner, they are legally entitled to keep 100% of the account or property after your death. There is no legal requirement for them to share it with their siblings, regardless of their good intentions today. And if they do try to redistribute assets, they may face gift-tax implications. What starts as a shortcut can easily become a family rift or a tax mess. MYTH 2: ‘MAKING ALL MY KIDS CO- TRUSTEES OR CO-EXECUTORS WILL KEEP THE PEACE.’ It sounds fair, balanced, and like good teamwork. But co-trustees and co- executors must agree on every decision, and even the most harmonious siblings can clash under stress, grief, or differing personalities. Banks and financial institutions also tend to dislike dealing with multiple fiduciaries. They worry about liability if one acts without the other’s consent or if siblings later accuse them of mismanagement. Instead of promoting unity, co- management often slows down the process and increases conflict. Sometimes, one responsible decision- maker is the wiser choice. MYTH 3: ‘THE GOVERNMENT WILL TAKE MY MONEY WHEN I DIE.’ Many people believe estate planning is all about avoiding the government “taking” their estate in taxes. But for most families, this is the opposite of reality.
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Retirement accounts take years to build, and passing them on isn’t always simple. Trusts can provide control, creditor protection, and ensure funds last, while keeping families tax-compliant under evolving rules. BENEFITS OF NAMING A TRUST AS BENEFICIARY Here are three essential reasons to consider naming a trust as the beneficiary of your IRA or 401(k). 1. Control Distributions: A living trust allows you to establish rules for how and when retirement funds are distributed, which is particularly beneficial if the beneficiaries are minors, have special needs, or struggle with managing money responsibly. 2. Provide Clarity for Blended Families: You can specify exactly who receives what, ensuring children from a previous marriage or other heirs are protected according to your wishes. 3. Support Tax-Efficient Planning: For high-net-worth individuals, a living trust can play a crucial role in minimizing estate taxes and preserving wealth for future generations. 401(K) TRUST BENEFICIARY ADVANTAGES: COMMON ISSUES A TRUST CAN FIX Retirement accounts left to heirs often create complications that a trust can prevent: • Minor Children: Minors can’t directly inherit IRAs, requiring a court guardian, but a trust lets you appoint a trustee and avoid court involvement. • Blended Families: If you want a spouse to receive income during their lifetime and your children to inherit the remainder, a trust clearly outlines the terms and timing. • Spending Control: Beneficiaries may quickly deplete inherited accounts under the 10-year payout rule. A trust allows you to set distribution schedules that preserve assets. • Creditor Protection: Inherited IRAs lack the federal bankruptcy protections of personal IRAs, but a trust can shield assets and help keep funds in the family. IRA TRUST BENEFICIARY TAX IMPLICATIONS UNDER THE SECURE ACT The SECURE Act generally requires inherited IRAs to be distributed within 10 years, but trusts, properly drafted as conduit or accumulation, can protect assets and preserve tax benefits for certain beneficiaries. Avoid Inheritance Pitfalls How a Trust Can Safeguard Your IRA or 401(k)
Did You Know? Did you know … the world is packed with wild opposites that may completely flip your expectations? Bananas are berries, but strawberries aren’t. In botanical terms, bananas count as
berries, while strawberries do not. It’s the opposite of what almost everyone assumes!
Hot ice exists. There’s a substance called hot ice (sodium acetate trihydrate) that looks frozen solid but feels warm when crystallized.
There’s a “negative” temperature that’s actually hotter than any positive temperature. In physics, systems with inverted energy states can drop below absolute zero, which makes them hotter than any system above zero. Cats purr when happy … and when stressed. The soothing sound can signal polar-opposite emotions.
FINDING THE RIGHT TRUST STRUCTURE FOR YOUR IRA OR 401(K) Different trust types handle distributions differently:
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• Conduit Trust: Passes IRA or 401(k) withdrawals directly to the beneficiary, minimizing taxes but offering less long-term control. • Accumulation Trust: Allows the trustee to retain withdrawals in the trust, protecting assets even after they are distributed from the retirement account. BUILD A TRUST STRATEGY THAT PROTECTS YOUR LEGACY A trust isn’t always necessary, but it can protect and structure retirement accounts. Dahl Law Group helps California families determine whether it aligns with their estate and tax plans. Ready to protect your hard-earned retirement savings? We’ll help you create a strategy that secures your family’s future and ensures compliance with evolving tax laws.
them solve their tax, business, or estate planning problems before things get worse.
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Meal Deductions Made Simple Guidance for California Business Owners
THE RIGHT WAY TO TRACK AND DOCUMENT YOUR BUSINESS MEALS: WHAT THE IRS EXPECTS • Save detailed receipts: Include date, time, and location. • Record attendees: Note names, titles, and relationships to your business. • Describe the purpose: Write a brief explanation of why the meal occurred. • Link to business outcomes: If the meal resulted in decisions, deals, or next steps, note them. TAKE CONTROL OF YOUR TAX STRATEGY TODAY Meal deductions are just one part of a bigger tax strategy. At Dahl Law Group, our new Dahl Tax Group helps California business owners integrate tax and legal planning under one roof. • Proactive planning throughout the year • Stronger protection of deductions • Confidence that nothing slips through the cracks as your business grows Combining tax, business law, and planning under one roof gives owners the confidence they need. Get expert guidance on properly preparing and documenting your business meal deductions at Dahl Law Group.
Business owners often overestimate deductions, especially meal expenses. This guide explains the rules and recordkeeping requirements, another way the Dahl Law Group helps California businesses maximize deductions and minimize risk. CAN YOU DEDUCT A MEAL BECAUSE YOU TALKED BUSINESS? Casual work talk over dinner isn’t enough; the IRS requires proof that the meal had a legitimate business purpose. To qualify, business owners must clearly connect: • Where and when the meal took place. • The attendees present and their relationship to the business. • The purpose of the discussion to support a specific company goal. UNDERSTANDING THE SUTTER RULE: WHAT BUSINESS OWNERS MUST KNOW The Sutter Rule comes from Sutter v. Commissioner , where the court denied a meal deduction because receipts and vague claims of “business discussion” weren’t enough. The IRS requires clear proof of a legitimate business purpose to comply with the 50% deduction rule. • Business purpose: A brief but clear explanation of why the meal mattered to your company. • Guest list: Names and business relationships of everyone present. • Discussion notes: A summary of what was discussed. • Expense reasonableness: Costs that are consistent with business norms, not personal extravagance. DEDUCTIBLE VS. NON-DEDUCTIBLE BUSINESS MEALS Most ordinary business meals are 50% deductible, while lavish, social, or entertainment expenses are generally non-deductible under current IRS rules, especially after the 2025 changes.
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Some people address this by giving the disinherited person a small, specific gift paired with a no-contest clause. If that person challenges the trust and loses, they receive nothing. This strategy doesn’t guarantee peace, but it can reduce the likelihood of a frivolous challenge. Estate planning shouldn’t rely on myths or assumptions. Understanding the real risks and taking steps to avoid them protects your assets, prevents unnecessary conflict, and ensures your family can follow a clear and fair plan.
Scenario
Deductible?
Meal with a client discussing a project with documented notes
Yes – 50% deductible
Jan. 25 may be a day for turning the world upside-down, but when it comes to estate planning, sticking to the facts is the best way to keep everything right-side-up.
Dinner with friends, no business purpose
No
Lavish meal with no business outcome
No
–Elliott Harry
Meals are included as part of employee travel for business
Yes – 50% deductible
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INSIDE What’s
2. 1. Estate Planning Myths That Could Backfire on Your Family Wild Opposites You Won’t Believe Are Real
Build a Trust That Protects Your Family and Minimizes Taxes Can You Deduct a Meal Just Because You Talk Business? 3 Fun Alternatives to Instagram
4. 3.
Tired of Instagram? Try These 3 Apps Instead! Numerous studies show social media’s negative effects on children, teens, and adults. Luckily, a few social media apps allow you to post your pictures without the stress of likes and comments. Here are three apps you can use if you want to post your memories for your friends and family to see that aren’t as social as Instagram. VSCO This app is very popular for those who like to edit their pictures, as you can use tons of different filters and editing tools. But this app also allows you to post your photos to your feed. People can follow your page, but they cannot like or comment on your pictures. VSCO focuses on photography instead of the or comment on your photos. This app is great for those who want a modern twist on a nostalgic item. IMGUR If you don’t take social media as
seriously as others, you may love this next app. Like Instagram, Imgur allows you to share photos and short videos with your followers. But Imgur is more lighthearted and has a less personal approach when it comes to posting content. So, if you’re a fan of memes, GIFs, and inspirational quotes, this app is for you! Just because Instagram and other social media platforms may be a little too social for you doesn’t mean you have to miss out on the fun of posting online. Give these apps a shot and enjoy the freedom of posting what you want without any pressure!
social aspect. It’s an excellent choice for those who want to edit photos but don’t want to deal with the social media interaction.
DISPO Did you miss taking pictures on a
disposable camera? Well, this app is for you! When you open the camera, it shows you the tiny lens you would typically have to look into if you were holding a real camera. Then, you have to wait an entire day until your film loads so you can see the pictures you took. Like VSCO, people can follow you, but they can’t like
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