4 Estate Planning Steps to Protect Assets from a Dementia Diagnosis

It is estimated that 1 in 8 Americans will suffer from some form of dementia after the age of 65; here are 4 estate planning steps that can help protect assets in case you or someone you love becomes incapacitated:

Assemble a team of elder care experts – this can include an elder law and/or estate planning attorney, a financial planner, a CPA, etc.  A team of trusted advisors is essential to help you plan for how your assets will be managed and how decisions will be made about your care in case of
incapacity.

Establish advance directives – advance directives – including a living will, financial power of attorney, health care power of attorney, and medical health care power of attorney – provide for the seamless transfer of decision-making abilities for your care.

Establish a revocable living trust – this will allow your assets to be managed by who you want and how you want without the court getting involved in your affairs.

Have a long-term plan – the time to create a long-term plan is before you need it. People with dementia can live for many years, and the cost to maintain a good quality of life can be a heavy financial burden for a family.   A long-term plan may include funding a long-term care insurance policy, or strategies for spending down assets to qualify for state or federal assistance programs.

If you would like more information on how estate planning can help you protect your assets from incapacity or other threats, contact our Fort Myers law firm to schedule your free consultation. 239-418-0169.

 

Best Place to Retire Depends on Advance Planning

There are a variety of “Best Places to Retire” lists and websites, and DavidRamsey.com recently studied them all to compile a “2019 Best Cities to Retire” list when it comes to choosing where you want to live when you retire.

However, as the article notes, where you spend your retirement years depends on a lot more than just whether you like the ocean or the mountains.  It depends on how well you plan for retirement and several other factors, including:

How many kids you have and when you have them.  Older parents will spend more on raising kids today than those who started young, with college expenses conceivably carrying over into the retirement years.  Those with large families also spend more rather than being able to sock money away for retirement.

When you begin saving for retirement.  The earlier, the better is the guideline for retirement saving.  Those who begin saving at 25 rather than 45 have 20 more years of growth to enjoy in retirement.

What you spend your money on now.  If you like to spend your money on big-ticket items like expensive cars, boats or luxury vacations, that is less you could be saving for retirement.  People who keep their debt low and bargain shop are statistically better prepared for retirement.

Your occupation.  Chances are that higher earning professionals like doctors and lawyers can afford to put more money away for retirement in later years.

So what places make the Top 10 Best Places to Retire lists consistently?  They are:  (1)Lancaster, Pennsylvania (2)Fort Myers, Florida (3)Sarasota, Florida, (4)Austin, Texas (5)Pittsburgh, Pennsylvania (6)Grand Rapids, Michigan (7)Nashville, Tennessee (8)San Antonio, Texas (9)Dallas-Fort Worth, Texas (10) Lakeland, Florida.

The Dorcey Law Firm, PLC is an Estate Planning, Asset Protection and Business Planning law firm with offices in Fort Myers, Florida and Naples, Florida. Our firm is dedicated to its clients, the rule of law and the betterment of the Southwest Florida community

5 Great Reasons to Start Your Estate Planning Now

5 Great Reasons to Start Your Estate Planning Now

We will continue to stress that planning ahead is key; it is essential to providing for your family in a meaningful way, and the only way to transform your family for generations to come. 

  1. The plan the state has provided for you. If you don’t create your own estate plan, the state has provided one for you. In this situation your property goes through the probate process, which is not only lengthy and expensive, but in the end the courts get to decide where your assets will go.

  2. The foster care system. Neglecting to nominate guardians for your minor children means that the state is responsible for them should something happen to you. Without any direction on your part, your children could end up in the care of your nearest living relative, being put in the care of whoever happens to step forward, or—worst case scenario—in the foster care system.

  3. Estate taxes and administrative expenses. With no plan, much of your estate could end up going to the government or being drained by unnecessary administrative expenses rather than going to your heirs in a safe and efficient manner.

  4. Your ex-spouse. If you are separated or divorced, your ex-spouse could still be listed as the recipient on the retirement accounts or life insurance policies obtained while you were still married.

  5. Your family’s financial privacy. Once a will has been submitted to the probate courts it becomes a public document. Only a trust will keep your financial affairs away from the prying eyes of possible predators.

If you would like more information on how to start your estate planning now, contact our Fort Myers law firm to schedule your free consultation.

Living Trusts Play an Important Role in Estate Planning

A primary purpose of estate planning is making sure your assets are designated correctly so that they pass automatically, allowing an estate to avoid probate.

Some common examples of assets that are not subject to probate include:

  • A life insurance policy or annuity payable to a specific recipient
  • A joint bank account or investment account that includes right of survivorship
  • Real property titled as “joint tenants with right of survivorship”
  • Property owned jointly by spouses as “tenants by the entirety”
  • Assets placed into a revocable living trust or an irrevocable trust
  • Assets removed from an estate via lifetime gifts or qualifying trusts
  • Accounts designated as “payable on death” or “transfer on death”

Simply having a will that subjects your estate to probate is not sufficient to protect assets against taxes, including income tax, capital gains tax, estate tax, inheritance tax, generation skipping transfer tax and gift tax.

Smart estate planning, including the use of a living trust, can help your heirs avoid the time and expense of probate and ensure they inherit the funds you intend for them to receive in a timely manner.

If you would like more information on how the use of trusts in estate planning can help you protect your assets, contact our Fort Myers law firm to schedule your free consultation.

Times Are Tough: Could Your Children Use Some Money Now?

In these tough economic times, those parents who have buttoned up their Florida estate plan to leave everything to their children and grandchildren upon their deaths may want to think about loosening the strings a little before they go and receive the added benefit of saving on estate taxes as well.

A married couple can provide a gift of $30,000 per year to a child or grandchild with no gift tax due.  In 2019, the number of gifts you can give as a couple is unlimited, but it is restricted to no more than $30,000 per calendar year per married couple, or $15,000 per year per spouse.

Generally speaking, the recipient of your gift will not have to pay any federal gift tax or income tax.  And it shouldn’t affect your federal income tax either.

With many adults jobless and their children struggling as well, this could be a financial lifesaver for family members who need the help now, not when you’re gone.  Even if the recipient is not jobless, the extra money can help fund retirement accounts or pay off debt that will result in a much better financial life for your loved ones.

The Dorcey Law Firm, PLC is an Estate Planning, Asset Protection and Business Planning law firm with offices in Fort Myers, Florida and Naples, Florida. Our firm is dedicated to its clients, the rule of law and the betterment of the Southwest Florida community.

It is our drive 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, Asset Protection, and complete Business Planning. If you or someone you know needs assistance with Florida estate planning, please contact us today to schedule your free consultation.

Thoughtful Retirement Planning Leaves Wives More Financially Stable

Thoughtful Retirement Planning Leaves Wives More Financially Stable:  Statistics show that typically, wives outlive their husbands by up to a decade.  Sadly, the incidence of poverty for women older than 65 is over 12 percent, considerably more than for men within the same age group.

The key reason is that most of the couples’ financial resources will likely be spent during the last few years of the husband’s life on healthcare costs as well as long-term care.

What do you do?  Here are some ideas:

Ascertain how much you will need to save for retirement in order to produce a dependable life-long income.

The person who has the larger salary history (generally the husband) will be able to maximize their Social Security benefits by not taking them until age 70 or beyond.

Plan for your 401(k) accounts and retirement savings to last until both of you are gone.

Have a good system for dealing with long-term health care expenses.

If one of you has a considerable benefit from a pension plan and you have a choice to elect a joint and survivor annuity, take it — the majority of retired people outlive a lump sum payment.

Attempt to keep in top shape through employing healthy and balanced habits.

Make an effort to retire without having lots of debt – specifically, try to pay off your mortgage loan prior to retirement.

The Dorcey Law Firm, PLC is an Estate Planning, Asset Protection and Business Planning law firm with offices in Fort Myers, Florida and Naples, Florida. Our firm is dedicated to its clients, the rule of law and the betterment of the Southwest Florida community.

It is our drive 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, Asset Protection, and complete Business Planning. If you or someone you know needs assistance with Florida retirement planning, please contact us today to schedule your free consultation.

Making Sure Your Aging Parent has the Correct Estate Plan in Place

It’s a delicate discussion, but when parents are aging, their children should find out if their parents have several basic estate planning documents in place and talk about their final wishes. If they have not done any planning, now is the time—before a crisis occurs.  Here at The Dorcey Law Firm, our goal is to transform families for generations to come; something we can only do through proper proactive planning.

The Monterey Herald’s recent article, “Financial planning: Making sure Mom is taken care of,” says to first make sure that they have their basic estate planning documents – a will or trust, power of attorney, and advanced healthcare directives – in place. It is important to be sure these documents fully reflect your parent’s desires. An advanced healthcare directive lets them name a person to make health care decisions on their behalf, while a power of attorney allows a named person to make financial decisions.

Based on the way in which the forms are written, the agent or surrogate can have broad authority, including the ability to access bank accounts, consent to or refuse medical treatment, or to leave instructions for health care.  Big decision, such as whether or not to be resuscitated or have life prolonged artificially, can also be put in writing, thus removing this tough choice from a child or other loved one. To limit these instructions in any specific way, it is important to talk with an experienced attorney, and have these wishes in writing.

Another key document to have is a last will & testament or living trust.  When determining if a trust is advisable, there are many factors to consider, particularly when the goal is to avoid probate after passing away.  These factors include the type of assets, and whether they are held jointly or allow for beneficiary designations; the beneficiaries ages and financial stability; whether planning for future divorce or creditor is a concern; and many more. You should conduct a full inventory of your parent’s accounts, including where they are held and how they are titled, as well as gathering the named beneficiaries on all accounts and policies.

It is also important not to make any major changes without consulting your attorney first.  For example, if your parent has a brokerage account with low-cost basis investment, you will not want to change this to a joint ownership account. The step-up in cost basis that assets receive at the time of death makes it better for the account to remain in their individual name. While you may gain control of the asset doing that (something that can also be accomplished through the power of attorney), you will lose the step up in basis.  A beneficiary designation may suffice.

To inquire more on how our law firm helps families plan for their long-term care needs, whether years in advance or after a health care crisis has occurred, please contact our office for a free consultation at (239) 418-0169.

5 Things to Know to Reduce Tax on Capital Gains

Although it is often said that nothing is certain except death and taxes, the one tax you may be able to avoid or minimize most through planning is the tax on capital gains. Here’s what you need to know to do such planning:

What is capital gain?  Capital gain is the difference between the “basis” in property (usually the purchase price of property) and its selling price. So, if you purchased a house for $250,000 and sold it for $450,000 you would have $200,000 of gain ($450,000 – $250,000 = $200,000). However, the basis can be adjusted if you spend money on capital improvements. For instance, if after buying your house you spent $50,000 updating the kitchen, the basis would now be $300,000 and the gain on its sale for $450,000 would be $150,000 ($450,000 – ($250,000 + $50,000) = $150,000). Just make sure you keep good records of any capital improvements in order to prove them in the event of an audit.

Exceptions to the tax?  First, if you owned the property for less than a year, you would be subject to short-term capital gains tax rates, which are essentially the same rates as income tax. Second, if your taxable income, including the capital gains, is $38,600 or less for a single person and $77,200 for a married couple (in 2018), there’s no federal tax on capital gain. But beware that the capital gains will be included in the calculation and could put you over the threshold. Third, if your income is more than $425,800 for a single person and $479,000 for a married couple (in 2018), the federal capital gains tax rate is 20 percent, bringing the combined federal and assumed state rate up to just over 25 percent.

Personal Residence Exclusion. You may exclude up to $250,000 for an individual, or $500,000 for a married couple, of gain on the sale of your personal residence. To qualify, you (or your spouse) must have lived in and owned the house for at least two out of the five years prior to the sale. If you are a nursing home resident, the two-year requirement is reduced to one year.

Carry-Over v. Step-Up in Basis. If you give property to someone else, they receive it with your basis. So, if your parents give you a vacation home they bought for $25,000 and now its fair market value is $500,000, your basis will also be $25,000.  If you sell it, your gain is $475,000. On the other hand, the basis in inherited property gets adjusted to the value on the date of death. If your parents passed the vacation home on to you at death rather than giving it to you during life, the basis would be adjusted to $500,000, potentially saving you hundreds of thousands on its sale. Similar types of savings can be realized with the appropriate use of trusts.

To inquire into saving on capital gains taxes, ensuring as much of your legacy gets passed on as possible, please contact our office for a free consultation at (239) 418-0169.

 

New free service alerts property owners from potential property fraud

New free service alerts property owners from potential property fraud

FORT MYERS, FLA (Aug. 19 2019) – Lee County property owners can now sign up for a new free service to alert themselves of potential property fraud, Clerk Linda Doggett announced today.

Property Fraud Alert emails notifications to subscribers within 48-hours whenever a lien, deed, mortgage or other land record with their registered name on it has been recorded into the Clerk’s Official Records. This notification does not apply to documents filed in court proceedings.

According to the FBI, property and mortgage fraud is one of the fastest growing white-collar crimes. Scammers file fraudulent deeds, making it appear as if they own the property. This type of fraud can go undetected if the property owner does not periodically check the Official Records. Although checking does not prevent the actual fraudulent activity from occurring, it does provide an early warning of what may have otherwise gone undetected.

“We invest in insurance and security systems to protect valuables inside our houses, but we often forget about our actual homes and property,” Doggett said.

All property owners in Lee County are encouraged to sign up and begin protecting their property. To subscribe or learn more, visit LeeClerk.org/propertyfraud.

After registering and confirming your email address, any time a document is recorded in Lee County that matches the name that you registered, you will be alerted by email. A link is provided in the email to easily view the recorded document.

If you register with a common name, you may receive an alert for a legitimate record that pertains to another individual with the same name.

“Reviewing your property records is an important way to protect you from fraud. I encourage you to sign up today and take advantage of this free service” Doggett said.

Anybody who believes they have been the victim of property fraud should contact the Lee County Sheriff’s Office at 239-477-1000.

https://www.leeclerk.org/about-us/spotlight

Family Caregivers and Home Care

Caring for an ailing family member is difficult work, but it doesn’t necessarily have to be unpaid work.  Traditionally, Medicaid has paid for long-term care in a nursing home, but because most individuals would rather be cared for at home and home care is cheaper, all 50 states now have Medicaid programs that offer at least some home care. In some states, even family members can get paid for providing care at home.  The programs vary by state, and also include some non-Medicaid-related programs.

Medicaid’s program began as “cash and counseling,” but is now often called “self-directed,” “consumer-directed,” or “participant-directed” care.  The first step is to apply for Medicaid through a home-based Medicaid program.  Medicaid is available only to low-income seniors, and each state has different eligibility requirements.  Medicaid application approval can take months, and there also may be a waiting list to receive benefits under the program.

The state Medicaid agency usually conducts an assessment to determine the recipient’s care needs—e.g., how much help the Medicaid recipient needs with activities of daily living such as bathing, dressing, eating, and moving.  Once the assessment is complete, the state draws up a budget, and the recipient can use the allotted funds to pay for goods or services related to care, including paying a caregiver.  Each state offers different benefits coverage.  Some services that Medicaid may pay for include the following:

  • In-home health care
  • Personal care services, such as help bathing, eating, and moving
  • Home care services, including help with household chores like shopping or laundry
  • Caregiver support
  • Minor modifications to the home to make it accessible
  • Medical equipment

The Medicaid applicant must apply for Medicaid and select a program that allows the recipient to choose his or her own caregiver, often called “consumer directed care.”  Recipients can choose to pay a family member as a caregiver, but states vary on which family members are allowed.  For example, most states prevent caregivers from hiring a spouse, and some states do not allow recipients to hire a caregiver who lives with them.  Most programs allow ex-spouses, in-laws, children, and grandchildren to serve as paid caregivers, but states typically require that family caregivers be paid less than the market rate in order to prevent fraud.

In addition to Medicaid programs, some states have non-Medicaid programs that also allow for self-directed care. These programs may have different eligibility requirements than Medicaid and are different in each state. Family caregivers can also be paid using a “caregiver contract,” increasingly used as part of Medicaid planning.

To inquire more on how to utilize family caregivers for long-term care needs, whether for yourself or for an aging parent or relative, please contact our office for a free consultation at (239) 418-0169.