If I’m 35, Do I Need a Will?

Asset Protection / Estate / Estate Planning / Estate Planning Attorney / Inheritance / Last Will and Testament / Power of Attorney

If I’m 35, Do I Need a Will? Estate planning is a crucial process for everyone, no matter what assets you have now. If you want your family to be able to deal with your affairs, debts included, drafting an estate plan is critical, says Wealth Advisor’s recent article entitled “Estate planning for those 40 and under.”

If you have young children, or other dependents, planning is vitally important. The less you have, the more important your plan is, so it can provide as long as possible and in the best way for those most important to you. You can’t afford to make a mistake.

Talk to your family about various “what if” situations. It is important that you’ve discussed your wishes with your family and that you’ve considered the many contingencies that can happen, like a serious illness or injury, incapacity, or death. This also gives you the chance to explain your rationale for making a larger gift to someone, rather than another or an equal division. This can be especially significant, if there’s a second marriage with children from different relationships and a wide range of ages. An open conversation can help avoid hard feelings later.

You should have the basic estate plan components, which include a will, a living will, advance directive, powers of attorney, and a designation of agent to control disposition of remains. These are all important components of an estate plan that should be created at the beginning of the planning process. A guardian should also be named for any minor children.

In addition, a life insurance policy can give your family the needed funds in the event of an untimely death and loss of income—especially for young parents. The loss of one or both spouses’ income can have a drastic impact.

Remember that your estate plan shouldn’t be a “one and done thing.” You need to review your estate plan every few years. This gives you the opportunity to make changes based on significant life events, tax law changes, the addition of more children, or their changing needs. You should also monitor your insurance policies and investments, because they dovetail into your estate plan and can fluctuate based on the economic environment.

When you draft these documents, you should work with a qualified estate planning attorney.

It is our goal to provide our clients with the highest level of legal services in the areas of Last Will and Testaments, Living Trust, Irrevocable Trusts, Estate Planning, Probate, Asset Protection, and complete Business Planning. If you or someone you know needs information on Florida estate planning, please contact us today at 239-449-8191 to schedule your free consultation.

Reference: Wealth Advisor (Jan. 21, 2020) “Estate planning for those 40 and under”

Estate Planning for Unmarried Couples

Asset Protection / Elder Law / Elder Law Attorney / Estate / Estate Planning / Estate Planning Attorney / Inheritance / Last Will and Testament / Long-Term Care / Power of Attorney

Estate Planning for Unmarried Couples: For some couples, getting married just doesn’t feel necessary. However, they don’t enjoy the automatic legal rights and protections that legally wed spouses do, especially when it comes to death. There are many spousal rights that come with a marriage certificate, reports CNBC in the article “Here’s what happens to your partner if you’re not married and you die.” Without the benefit of marriage, extra planning is necessary to protect each other.

Taxes are a non-starter. There’s no federal or state income tax form that will permit a non-married couple to file jointly. If one of the couple’s employers is the source of health insurance for both, the amount that the company contributes is taxable to the employee. A spouse doesn’t have to pay taxes on health insurance.

More important, however, is what happens when one of the partners dies or becomes incapacitated. A number of documents need to be created, so should one become incapacitated, the other is able to act on their behalf. Preparations also need to be made, so the surviving partner is protected and can manage the deceased’s estate.

In order to be prepared, an estate plan is necessary. Creating a plan for what happens to you and your estate is critical for unmarried couples who want their commitment to each other to be protected at death. The general default for a married couple is that everything goes to the surviving spouse. However, for unmarried couples, the default may be a sibling, children, parents or other relatives. It won’t be the unmarried partner.

This is especially true, if a person dies with no will. The courts in the state of residence will decide who gets what, depending upon the law of that state. If there are multiple heirs who have conflicting interests, it could become nasty—and expensive.

However, a will isn’t all that is needed.

Most tax-advantaged accounts—Roth IRAs, traditional IRAs, 401(k) plans, etc.—have beneficiaries named. That person receives the assets upon death of the owner. The same is true for investment accounts, annuities, life insurance and any financial product that has a beneficiary named. The beneficiary receives the asset, regardless of what is in the will. Therefore, checking beneficiaries need to be part of the estate plan.

Checking, savings and investment accounts that are in both partner’s names will become the property of the surviving person, but accounts with only one person’s name on them will not. A Transfer on Death (TOD) or Payable on Death (POD) designation should be added to any single-name accounts.

Unmarried couples who own a home together need to check how the deed is titled, regardless who is on the mortgage. The legal owner is the person whose name is on the deed. If the house is only in one person’s name, it won’t become part of the estate. Change the deed so both names are on the deed with rights of survivorship, so both are entitled to assume full ownership upon the death of the other.

To prepare for incapacity, an estate planning attorney can help create a durable power of attorney for health care, so partners will be able to make medical decisions on each other’s behalf. A living will should also be created for both people, which states wishes for end of life decisions. For financial matters, a durable power of attorney will allow each partner to have control over each other’s financial affairs.

It takes a little extra planning for unmarried couples, but the peace of mind that comes from knowing that you have prepared to care for each other, until death do you part, is priceless.

Reference: CNBC (Dec. 16, 2019) “Here’s what happens to your partner if you’re not married and you die”

Fixing an Estate Plan Mistake

Elder Law / Elder Law Attorney / Estate / Estate Planning / Estate Planning Attorney / Last Will and Testament / Long-Term Care / Power of Attorney

Fixing an Estate Plan Mistake: When an issue arises, you need to seek the assistance of a qualified and experienced estate planning attorney, who knows to fix the problems or find the strategy moving forward.

For example, an irrevocable trust can’t be revoked. However, in some circumstances it can be modified. The trust may have been drafted to allow its trustees and beneficiaries the authority to make certain changes in specific circumstances, like a change in the tax law.

Those kinds of changes usually require the signatures from all trustees and beneficiaries, explains The Wilmington Business Journal’s recent article entitled “Repairing Estate Planning Mistakes: There Are Ways To Clean Up A Mess.”

Another change to an irrevocable trust may be contemplated, if the trust’s purpose may have become outdated or its administration is too expensive. An estate planning attorney can petition a judge to modify the trust in these circumstances when the trust’s purposes can’t be achieved without the requested change. Remember that trusts are complex, and you really need the advice of an experienced trust attorney.

Another option is to create the trust to allow for a “trust protector.” This is a third party who’s appointed by the trustees, the beneficiaries, or a judge. The trust protector can decide if the proposed change to the trust is warranted. However, this is only available if the original trust was written to specify the trust protector.

A term can also be added to the trust to provide “power of appointment” to trustees or beneficiaries. This makes it easier to change the trust for the benefit of current or future beneficiaries.

There’s also decanting, in which the assets of an existing trust are “poured” into a new trust with different terms. This can include extending the trust’s life, changing trustees, fixing errors or ambiguities in the original language, and changing the legal jurisdiction. State trust laws vary, and some allow much more flexibility in how trusts are structured and administered.

The most drastic option is to end the trust. The assets would be distributed to the beneficiaries, and the trust would be dissolved. Approval must be obtained from all trustees and all beneficiaries. A frequent reason for “premature termination” is that a trust’s assets have diminished in value to the extent that administering it isn’t feasible or economical.

Again, be sure your estate plan is in solid shape from the start. Anticipating problems with the help of your lawyer, instead of trying to solve issues later is the best plan.

Reference: Wilmington Business Journal (Jan. 3, 2020) “Repairing Estate Planning Mistakes: There Are Ways To Clean Up A Mess”

Include Fido or Fluffy in Estate Planning

Elder Law / Elder Law Attorney / Estate Planning / Estate Planning Attorney / Last Will and Testament

Include Fido or Fluffy in Estate Planning: If you are a pet owner, you no doubt make plans for your pet when you go on vacation. If you are a very dedicated pet owner, perhaps you have already made provisions in your will or created a pet trust. If your pet outlives you, then such a trust can provide for your pet. However, what about if you become mentally or physically incapacitated, asks Next Avenue’s article “How to Make Plans to Provide Care for Your Pet If You Can’t.”

What would happen if you had Alzheimer’s and there was no plan for you or your pet? A legal process could be initiated by a family member to establish a court-supervised guardianship or conservatorship and a judge would decide who would be responsible for you and your legal and financial affairs. This person would also be responsible for decisions about your pet, since pets are treated as property by the law.

The guardian might understand how important your pet is to you, but they just as easily might not. If they decide that your beloved pet is a burden, or they don’t want to spend money on your pet’s care, they have the legal power to send the pet to a shelter or give the pet away. Writing a will with a provision or two about your pet’s care won’t help, because the will does not take effect until you die.

One option is to have an estate planning attorney prepare a durable power of attorney document, with a person named to act as your agent. This person would be legally empowered to make decisions about your finances and property, including your pet(s), without intervention by the court. However, that won’t solve the problem either.

The power of attorney document won’t include details on how you want your pet to be cared for. Those details will be entirely up to the person who serves as your power of attorney.

A revocable trust is an alternative. The document can be used to explain, in detail, exactly what your wishes are for your pet (as well as any other property placed in the trust). The person designated as your trustee now has a legal obligation to carry out your wishes. You can say what you want to happen to your pet if you become incapacitated, and how much money from the trust is to be spent on pet care, food, veterinarian care, grooming, toys, etc.

Your revocable trust document can also designate a caretaker for your pet or state that the pet should go to a no-kill pet shelter. You can, if you wish, use the trust document to ensure that the caretaker is paid for taking on the responsibility of caring for the pet and reimbursed for any pet expenses.

You can also direct that your pet be brought to you for regular visits, if you need to live in an assisted living facility or a nursing home. You can also instruct that you want to be placed in a facility that has a robust pet therapy program or a “house pet” that lives at the facility.

Another option is to create a standalone pet trust. This trust is solely focused on your pet and its care. All funds in the trust are designated to pay for the pet’s care and services of a caretaker. The trustee could be the caretaker or someone else. This could give you even more control over what happens to your pet.

Speak with an estate planning attorney who has helped pet owners set up plans for their pets. It’s recommended that this be taken care of as soon as possible. We never know when an illness may strike, or an accident occur.

Reference: Next Avenue (Jan. 10, 2020) “How to Make Plans to Provide Care for Your Pet If You Can’t”

Protecting Adult Children with Disabilities

Elder Law / Elder Law Attorney / Estate / Estate Planning / Estate Planning Attorney / Health Benefits / Health Care Power Of Attorney / HIPAA / Medical Power of Attorney / special needs planning

Protecting Adult Children with Disabilities: One in four Americans has some kind of disability, and an increasing number of children are being diagnosed with some form of autism. The life expectancy for people with Down syndrome has increased from living to age 12 in the 1940s to nearly 60 today. Most children born with cerebral palsy live into their thirties. For parents of these children, it is more important than ever to create a plan and a community, says the article “How to build support system for adult children with disabilities” from The San Diego Union-Tribune.

Financial resources and support services need to be put into place, for when parents are no longer able to provide care. Here are the key points to address:

Preserving the child’s eligibility for government assistance programs, including Supplemental Security Income (SSI) and Medicaid, through the use of a Special Needs trust. Any amount of money can be placed in the trust, and the funds don’t count when determining eligibility. If parents leave money directly to a child, they will lose their ability to get SSI and Medicaid benefits.

Start early. A Third-Party Special Needs trust should be set up before the child turns 18. It doesn’t need to be funded, but it needs to be created.

Be a stickler for the rules. If the child receives SSI, money from the trust may not be used for food and housing, but it can be used for other costs, like therapies that are not covered by Medicaid, or even extras, like a cellphone or vacation. An experienced elder law attorney will be able to help the family with planning and learning the intricacies of these rules.

Name a trustee and a successor trustee. Selecting someone to manage the trust on behalf of the child is a critical decision, and not always an easy one. The trustee should be someone responsible who cares about your child’s well-being. It could be a sibling, if the relationship is good, or a family member. The person should be younger than the parents, so they will be around after the parents have passed.

Open an ABLE Account—Achieving a Better Life Experience account. These are accounts that work in much the same way as a 529 account. They can be established for a disabled person at any time, but the child must have the qualifying disability before age 26. Money from a Special Needs trust can be moved into an ABLE account, and the beneficiary can use it for any qualified disability expense.

Prepare a letter of intent or guidance. This is not a legally binding document, but rather a way of sharing information with others about your child: their preferences, routines, comfort levels and wishes. It can also be used to provide information about caregivers, medical providers and others who are a good fit with your child. You may also wish to share information about what and who they don’t like. Update the letter every year or two.

Power of Attorney. Having a power of attorney for a disabled individual is far more flexible and less costly than a conservatorship or guardianship.

Housing options. Where will your child live? That depends on what kind of disability the child has and the family’s financial resources. Ideally, the child can transition from the family home to another place while the parents are still living. If feasible, the parents could leave the family home to the child in the Special Needs trust, but they’ll also need to leave enough money for ongoing expenses and maintenance of the house. Some disabled adults live in group home settings, where counselors and other staffers help residents live on their own.

An elder care lawyer will be able to connect the family with many different resources and help with creating a Special Needs trust.

Reference: The San Diego Union Tribune (Jan. 9, 2020) “How to build support system for adult children with disabilities”

12 Ways to Be Happier in 2020

Estate Planning / Estate Planning Attorney

12 Ways to Be Happier in 2020: Even historians of happiness like myself freely admit that we still know relatively little about the subject, especially regarding how to generate more of it in our everyday lives. Some of the most brilliant minds since antiquity have struggled with understanding the nature of happiness. (Even the term itself remains nebulous.) Happiness is an emotion, after all, and one of the more ambiguous ones, making it difficult if not impossible to realize it simply because one desires to.

Despite the major obstacles facing those wanting to be happier, many of us have pursued it with considerable vigor. The gap between the desire for greater happiness and the finding of it has caused much frustration and consternation over the years, a failure of sorts that continues to this day. The emergence of a happiness movement powered by “positive psychology” represents the most direct and grandest attempt to enable people to be happier, but I’m not convinced that any significant degree of any emotion can be concocted or conjured up by self-determination and/or discipline.

Still, findings from the abundance of research in the field lead us to some apparent core truths regarding happiness and its sources. Here, then, are what I propose to be 12 essential ingredients of happiness based on my deep dive into the subject. Listing a dozen pithy actions obviously does not do justice to the enormity of the subject, but is a worthwhile exercise, given how many of us are searching for greater happiness, especially as a new year and a new decade beckon.

Stay positive. Optimism, accentuating the positive rather than the negative, has always been strongly correlated with high levels of happiness. Seeing the glass as half-full rather than as half-empty (to use another cliché) is vital to maintaining the most basic rule of life: that it is worth living.
Find purpose. A good reason to get up in the morning goes a long way to being a happy person. Having a sense of direction, setting and reaching goals, and taking pride in accomplishments are all woven into the fabric of happiness.
Reside in the present. Living as much as possible in the moment, rather than dwelling on the past or worrying about the future, is a guiding principle of happiness. Today is infinitely more valuable than yesterday or tomorrow, making those living in the now much more likely to be happy than those thinking about what might have been or what might be.
Face reality. Regular reality checks help one manage one’s expectations and keep the ups and downs of life in perspective, all things happy people tend to do. In addition, accepting the truth that unhappiness is an essential part of life is, ironically enough, one of the keys to happiness.
Appreciate what you have. Taking pleasure in and being grateful for what one has chases away common scourges of unhappiness like envy and disappointment. Comparing oneself (or one’s stuff or social media photos) to others is a road better not taken, as is attempting to “have it all,” as of course there is no all to have.
Embrace humbleness. Being aware of your limitations is, oddly enough, a prime way to feel really good about yourself. The happiest people on Earth also seem to be the most modest, something a few world leaders might keep in mind.
Emanate kindness. Adopting a philosophy of and approach to life simply around being kind is a powerful source of happiness for oneself and others. Buddhism is heavily steeped in the idea of compassion, most notably, and it is hard to argue with the kindness of the monks and the Dalai Lama.
Be generous. Enabling the wellbeing of friends, family, and complete strangers is a winning formula for personal happiness. Giving can be a more rewarding experience than receiving, folk wisdom that is borne out by study after study.
Strive for patience. An awareness of the vicissitudes of time and the imperfections within us all serve as a valuable tool in achieving happiness. Life is about the means rather than the ends, something we tend to forget while we’re scurrying around to get things done.
Remain curious. Viewing life as an endless opportunity to learn and/or experience things is a wonderful path to happiness. Preserving at least a little of the child within is, to me, a very underrated thing to do.
Keep faith. This can be in a higher power (although it doesn’t have to be), but it’s the view that there is some kind of grand design or order to the universe. This is integral, for many, to happiness. Some perfectly content people may see life as a random series of events, but for my money accepting the idea that there is something bigger than oneself adds a whole other level to our limited time here.
Spread the love. I’m convinced that filling one’s life with as much love as possible is the ultimate avenue to happiness. In the end, the love you take is equal to the love you make, wise words indeed that should guide us into next year—and beyond.

https://www.psychologytoday.com/us/blog/psychology-yesterday/201912/12-ways-be-happier-in-2020

Positive thinking helps with stress management and can even improve your health

Elder Law Attorney / Estate Planning / Estate Planning Attorney / Health Benefits / Positive Thinking / Stress Management

Positive thinking helps with stress management and can even improve your health. Practice overcoming negative self-talk with examples provided. Is your glass half-empty or half-full? How you answer this age-old question about positive thinking may reflect your outlook on life, your attitude toward yourself, and whether you’re optimistic or pessimistic — and it may even affect your health.

Indeed, some studies show that personality traits such as optimism and pessimism can affect many areas of your health and well-being. The positive thinking that usually comes with optimism is a key part of effective stress management. And effective stress management is associated with many health benefits. If you tend to be pessimistic, don’t despair — you can learn positive thinking skills.

Understanding positive thinking and self-talk

Positive thinking doesn’t mean that you keep your head in the sand and ignore life’s less pleasant situations. Positive thinking just means that you approach unpleasantness in a more positive and productive way. You think the best is going to happen, not the worst.

Positive thinking often starts with self-talk. Self-talk is the endless stream of unspoken thoughts that run through your head. These automatic thoughts can be positive or negative. Some of your self-talk comes from logic and reason. Other self-talk may arise from misconceptions that you create because of lack of information.

If the thoughts that run through your head are mostly negative, your outlook on life is more likely pessimistic. If your thoughts are mostly positive, you’re likely an optimist — someone who practices positive thinking.

The health benefits of positive thinking

Researchers continue to explore the effects of positive thinking and optimism on health. Health benefits that positive thinking may provide include:

Increased life span
Lower rates of depression
Lower levels of distress
Greater resistance to the common cold
Better psychological and physical well-being
Better cardiovascular health and reduced risk of death from cardiovascular disease
Better coping skills during hardships and times of stress

It’s unclear why people who engage in positive thinking experience these health benefits. One theory is that having a positive outlook enables you to cope better with stressful situations, which reduces the harmful health effects of stress on your body.

It’s also thought that positive and optimistic people tend to live healthier lifestyles — they get more physical activity, follow a healthier diet, and don’t smoke or drink alcohol in excess.

Identifying negative thinking

Not sure if your self-talk is positive or negative? Some common forms of negative self-talk include:

Filtering. You magnify the negative aspects of a situation and filter out all of the positive ones. For example, you had a great day at work. You completed your tasks ahead of time and were complimented for doing a speedy and thorough job. That evening, you focus only on your plan to do even more tasks and forget about the compliments you received.
Personalizing. When something bad occurs, you automatically blame yourself. For example, you hear that an evening out with friends is canceled, and you assume that the change in plans is because no one wanted to be around you.
Catastrophizing. You automatically anticipate the worst. The drive-through coffee shop gets your order wrong and you automatically think that the rest of your day will be a disaster.
Polarizing. You see things only as either good or bad. There is no middle ground. You feel that you have to be perfect or you’re a total failure.

Focusing on positive thinking

You can learn to turn negative thinking into positive thinking. The process is simple, but it does take time and practice — you’re creating a new habit, after all. Here are some ways to think and behave in a more positive and optimistic way:

Identify areas to change. If you want to become more optimistic and engage in more positive thinking, first identify areas of your life that you usually think negatively about, whether it’s work, your daily commute or a relationship. You can start small by focusing on one area to approach in a more positive way.
Check yourself. Periodically during the day, stop and evaluate what you’re thinking. If you find that your thoughts are mainly negative, try to find a way to put a positive spin on them.
Be open to humor. Give yourself permission to smile or laugh, especially during difficult times. Seek humor in everyday happenings. When you can laugh at life, you feel less stressed.
Follow a healthy lifestyle. Aim to exercise for about 30 minutes on most days of the week. You can also break it up into 10-minute chunks of time during the day. Exercise can positively affect mood and reduce stress. Follow a healthy diet to fuel your mind and body. And learn techniques to manage stress.
Surround yourself with positive people. Make sure those in your life are positive, supportive people you can depend on to give helpful advice and feedback. Negative people may increase your stress level and make you doubt your ability to manage stress in healthy ways.
Practice positive self-talk. Start by following one simple rule: Don’t say anything to yourself that you wouldn’t say to anyone else. Be gentle and encouraging with yourself. If a negative thought enters your mind, evaluate it rationally and respond with affirmations of what is good about you. Think about things you’re thankful for in your life.

Here are some examples of negative self-talk and how you can apply a positive thinking twist to them:

Putting positive thinking into practice
Negative self-talk	Positive thinking
I’ve never done it before.	It’s an opportunity to learn something new.
It’s too complicated.	I’ll tackle it from a different angle.
I don’t have the resources.	Necessity is the mother of invention.
I’m too lazy to get this done.	I wasn’t able to fit it into my schedule, but I can re-examine some priorities.
There’s no way it will work.	I can try to make it work.
It’s too radical a change.	Let’s take a chance.
No one bothers to communicate with me.	I’ll see if I can open the channels of communication.
I’m not going to get any better at this.	I’ll give it another try.

Practicing positive thinking every day

If you tend to have a negative outlook, don’t expect to become an optimist overnight. But with practice, eventually your self-talk will contain less self-criticism and more self-acceptance. You may also become less critical of the world around you.

When your state of mind is generally optimistic, you’re better able to handle everyday stress in a more constructive way. That ability may contribute to the widely observed health benefits of positive thinking.

https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/positive-thinking/art-20043950

https://www.mayoclinic.org/healthy-lifestyle/stress-management/basics/stress-basics/hlv-20049495

Elder Financial Abuse Is Increasing

Asset Protection / Elder Care / Elder Law / Elder Law Attorney / Estate Planning / Estate Planning Attorney / Long-Term Care

Elder Financial Abuse Is Increasing: A September 2018 Forbes report said that elder financial abuse would only get worse as we age. With 10,000 people turning age 65 every day for the decade, the demographics include a growing pool of potentially fragile retirees and the elderly, many of whom are susceptible to financial exploitation.

alphabetastock.com’s recent article entitled “Elder Financial Abuse Is Rising” says that, although the criminals are out there, a lot of elder financial abuse actually begins in the retirement system, because individuals must accumulate and handle a large amount of money designed to last an entire lifetime. With $14.5 trillion in self-directed retirement accounts in the U.S., it’s a big, enticing target for financial predators.

Elder financial abuse includes all of the frauds and scams targeting seniors and because it’s a hidden crime, many victims opt not to report it. Those that do report the crimes, frequently don’t prosecute.

However, when it comes to trying to promote real changes that will provide some material protections, the investment, insurance, and financial services industries directly or indirectly have been showing some reticence about the potential compliance expense. Some of these companies are lobbying to maintain a status quo—one that’s on a course to see a steady rise in elder financial exploitation.

Many retirement investors think their professional financial advisors are fiduciaries who are legally bound to act in their best interests. However, that’s not always so. Many professional financial advisors need only adhere to a lower legal standard of behavior. They can’t outright tell you a lie—but they can make recommendations that don’t put the customer’s best interests as a top priority.

A GAO study found elder financial abuse to be a growing epidemic. Rather than being able to live out their golden years in safety and financial security, the lack of financial safeguards are leaving an entire (and growing) group of older Americans at risk. These seniors are often left on their own and confused as to how the advisors they entrusted with their financial security are permitted to make moves that are motivated by high commissions and self-interest. These so-called professionals aren’t required by the law to place interests of their clients ahead of their own.

Theft and illegal behavior is one small component of the elder financial exploitation. A bigger part comes from abusive financial practices, such as higher fees and complex and unsuitable advice and recommendations from professional financial advisors who aren’t fiduciaries.

Be sure that you are working with a financial professional who is a fiduciary. Ask your elder law attorney for recommendations.

Reference: alphabetastock.com (January 11, 2020) “Elder Financial Abuse Is Rising”

Retirement and Estate Planning Work Better Together

Estate Planning / Estate Planning Attorney / Long-Term Care / retirement planning / Social Security

Retirement and Estate Planning Work Better Together: So, you’ve been married for a while, and you’re both comfortable with which bank accounts, credit cards and investment accounts are shared and which other accounts are kept separate. However, where the big picture is concerned—like coordinating retirement plans, health coverage and tax planning—you both need to take an active role in planning and making good decisions. In fact, says the article “Couples and Money: When Together is Better” from Kiplinger, the decisions that work well for you as individuals may not be so hot, when they are looked at from a couple’s perspective.

Here’s an example. A man is working at a firm that doesn’t offer a match for his 401(k) contributions, but his wife’s employer does. Instead of contributing to his 401(k) plan, he uses the money to pay off a HELOC (Home Equity Line of Credit) that the couple had taken together to do some upgrades on their home. She contributes enough to her own 401(k) to get her company’s match every year. The goal is to cut their debt and save as much as possible. This worked at that time in the couple’s life.

Ten years later, they are both maxing out their 401(k) savings and working to build short-term savings to send kids to college through the use of 529 College Savings Accounts.

Retirement accounts can never be jointly owned. However, some couples fall into a trap of saving for themselves without considering the overall household. Dual earning couples often run into trouble, when one has a workplace plan and the other does not. The spouse with the workplace plan isn’t thinking that he or she needs to save enough for two people to retire. With two incomes, you might think that both are making retirement a savings priority, but without a 401(k) plan, it’s possible that only one person is saving and only saving enough for themselves.

A general recommendation is that both members of a couple save between 10-15% of their household earnings, rather than their personal earnings, in retirement accounts. Couples should review their respective retirement plans together and plan together. If one has a more generous match, access to a Roth option, or better investment opportunities, they should consider how much the person with the better plan should save.

Couples also need to examine other financial aspects of their lives. Coordinating retirement benefits, reviewing life insurance policies, planning a coordinated strategy for taking Social Security and making informed choices about health care coverage can make a big difference in the family’s financial well-being.

Equally important: making sure that an estate plan is in place. That includes a will that names a guardian for any minor children, a health care proxy and a financial power of attorney. Depending upon the family’s circumstances, that may include trusts or other wealth transfer strategies.

Reference: Kiplinger (Dec. 23, 2019) “Couples and Money: When Together is Better”

Turning 65 in 2020? Some Pointers for a Special Year

Estate Planning

Turning 65 in 2020? Some Pointers for a Special Year: Many things change when celebrating your 65^th birthday. For one thing, if you haven’t already retired, chances are good that you’ve set a retirement date and it’s not too far away. There are a number of things to be considered, advises the article “Points to ponder before turning 65” from Knox News.

The year you turn 65 is the year that you enroll in Medicare. Coverage begins at age 65, and the initial window to enroll opens three months before your 65^th birthday and ends three months after. Miss that deadline, and there may be penalties when you do at last sign up for Medicare.

You can sign up for Medicare, whether you are working or not. If you are turning 65 and already collecting Social Security, you’ll automatically be enrolled in Medicare Parts A and B. You’ll need to sign up for Part D to avoid penalties, unless you have coverage through a spouse’s employer.

Here are some details:

Part A covers hospital care and is generally free for enrollees.
Part B covers diagnostic and preventive care. You pay for it with a monthly premium.
If you’re still working at age 66 and have health insurance through your employer, you may choose not to enroll in Part B. You can sign up for Part A, at no cost, and delay Parts B and D.
If you’re still working past 65 and have creditable coverage through your employer or your spouse’s employer, then you can defer Medicare.

Note that you may not get a full monthly benefit, if you claim Social Security right away. You can begin collecting Social Security at the young age of 62, but you won’t get the full monthly benefit that you otherwise would get unless you wait until you reach full retirement age. That date depends upon your date of birth. For most people turning 65 in 2020, that means full retirement age is 66 plus two months. Is it worth the wait? Your monthly benefit shrinks by 7.8%, if you file for benefits at age 65.

This is the time to check on your estate planning documents. If you don’t have these already, speak with an estate planning attorney to make sure that you and your family are protected by the following:

General Durable Power of Attorney for Finances
Durable Power of Attorney for Healthcare
HIPAA release
Revocable Living Trust
Advanced Health Care Directive
Last Will and Testament

It’s a great birthday to celebrate but be certain that you take care of the estate planning, Medicare and Social Security aspects of your life, as you prepare for this milestone.

Reference: Knox News (December 26, 2019) “Points to ponder before turning 65”