What Estate Planning Documents Do You Need?

What Estate Planning Documents Do You Need? Wouldn’t your children be relieved to learn that you’ve done all the necessary advance planning so that if you should become incapacitated, someone has been properly appointed to help with health care and financial decisions? The Tennessean suggests that you “Give your loved ones peace of mind with legal documents” so that your spouse and your family will be able to take the necessary steps to give you the care and dignity you (and they) deserve.

Here’s a checklist of the documents that everyone should have in place:

Power of Attorney for Health Care. When you have mental capacity, you can make your own decisions. When you do not, you need someone to be appointed who knows your beliefs and wishes and has the ability to advocate for you. Ideally, you should name one person to be your agent to minimize arguments. Talk with your family to explain who has been named your power of attorney for health care, and if need be, explain why that person was chosen.

Power of Attorney for Finances. There are different kinds of POA for finances. The goal of the POA for finances is so they can make decisions on your behalf, when you become incapacitated. Some states use “springing” POA—but that may mean your family has to go through a process to prove you are incapacitated. Check with an estate planning elder law attorney in your state to see what the laws are.

Advance Directive. This describes what kind of life sustaining treatment you do or do not want if you are in a coma, are terminally ill or have dementia. You can direct whether you want CPR, tube feeding, and other life-sustaining procedures to be withheld, if your quality of life is diminished and there is no hope of improvement. This will help your family to know what you want in a time when emotions are running high.

Last Will and Testament. Have a will created, if you don’t already have one. This directs distribution of your assets to your wishes and does not leave them to the laws of your state. Not having a will means your family will have to go through many more court proceedings and people you may not want to receive your worldly possessions may get them.

Trusts. Talk with your estate planning attorney about placing assets in trust, so they are not subject to the public process of probate. Your wishes will be followed, and they will remain private.

Reference: Tennessean (Nov. 16, 2019) “Give your loved ones peace of mind with legal documents”

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.

 

10 Common Estate Planning Mistakes (and How to Avoid Them)

10 Common Estate Planning Mistakes (and How to Avoid Them)

People plan on having a good day, a good year, a good retirement and a good life. But why stop there? Why not plan for a good end of life, too?

End of life or estate planning is about getting plans in place to manage risks at the end of your life and beyond. And while it might be uncomfortable to discuss or plan for the end, everyone knows that no one will live forever.

Estate planning and end of life planning are about taking control of your situation. Death and long-term care later in life might be hard to fathom right now, but we can’t put off planning out of fear of the unknown or because it’s unpleasant. Sometimes it takes a significant event like a health scare to shake us from our procrastination. Don’t wait for life to happen to you, though.

Here are 10 common estate planning mistakes people make and suggestions for how to take action.

1. Not having a real plan in place

I use the term “real plan” because everyone has some type of plan in place — it’s just likely a poorly designed plan for your situation with little thought behind its development. If you don’t have a will or trust in place, state succession laws and the probate process will help determine where your assets go. Do you really want your estate and end of life care determined by state laws and the court system?

Solution: Be proactive and meet with an estate planner and financial planner to set up an end of life and estate plan .

 2. Not updating plans over time

Estate planning isn’t a “set it and forget it” matter. Simply having a plan isn’t enough. Estate plans need to be updated after major life events, when your goals shift or when public policy changes.

For example, if you move to a new state, you need to review your estate plan. Legal instruments like wills, trusts and powers of attorney are state law driven documents, and moving can cause issues. If a new family member is born or someone dies, beneficiary designations might need modifications. And changes at the state or federal government level (e.g., the Tax Cut and Jobs Act passed in late 2017) can severely impact estate planning.

Solution: Revisit your estate plan any time you (or the government) experience a big life change.

3. Not planning for disability and long-term care

Seventy percent of people age 65 will need long-term care before the end of their life. A private room in a nursing home costs more than $100,000 a year, and a home health aide costs more than $50,000 a year.

Long-term care is likely the largest unfunded retirement risk retirees face today, and it’s easy to see why when you look at the numbers.

Considering the facts, it’s clear that no estate plan is complete without some planning for things like disability and long-term care. When you’re still working, disability planning is about making sure you have the right amount of short-term and long-term disability insurance. As you move into retirement, the focus will shift to long-term care planning — how you want to receive it and how you want to fund it.

Solution: Look into disability and long-term care insurance sooner than later. Every year you wait, the price goes up. Discuss your options with your adviser. In the case that long-term care insurance is not feasible, speak with an Elder Law attorney to review your options.

4. Not planning for estate tax liability

Estate tax liability feels like a rich person problem, which is true at the federal — but not necessarily the state — level. After the Tax Cut and Jobs Act of 2017, the federal exemption for 2019 is $11.4 million per person. This means a couple can exclude up to $22.8 million in a taxable estate from federal estate taxes. However, after 2025, the law reverts back to the previous $5 million exemption amount, indexed for inflation.

Currently, the government is in need of revenue and is looking toward new taxes as a solution. A wealth tax, raising income taxes or increasing estate tax revenue will likely all be on the table over the next few years.

Solution: Be cognizant of new taxes as you plan — and be aware that a number of states also have inheritance and state estate taxes.

5. Improper ownership of assets

End of life planning can expose oversights surrounding asset ownership. The first mistake people make is not owning property jointly as spouses. On specific occasions, spouses may want to keep property separate. But when titled properly, it creates creditor protections and efficiencies in transferring property upon the first spouse’s death.

Improper ownership of assets could also be where a business owner accidentally titles business property in their own name, or when retirement accounts are put into a trust when the goal is to keep them outside the trust.

Other times, people think they’re outsmarting the system by deeding real estate property to their kids or selling property for $1. These transactions are actually treated as completed gifts, potentially creating a gift tax liability or at least a requirement to file a gift tax return form to the IRS.

Taking asset ownership too lightly or improperly executing it can cause problems when it pertains to estate and end of life planning.

Solution: Figure out what your assets are and understand how they fit into your estate plan.

6. Lacking liquidity

Asset liquidity is important to have during life and especially after death. If your estate needs to be split among children, a surviving spouse or other heirs, it needs to have the proper amount of liquidity. Life insurance is an efficient way to create estate liquidity, help split up wealth and pay off debts.

If you’re a business owner, liquidity ensures your heirs have the cash they need to operate your business immediately upon your death. If you have a buy-sell agreement or other plan to transfer your business within your estate plan, liquidity is crucial — without enough liquidity, the buy-sell agreement could cease to continue.

Solution: Sit down with a trusted financial professional to determine how much liquidity makes sense for you and how you should go about creating it.

7. Not considering the impact of income taxes on you and your beneficiaries

Certain assets left to heirs can create unintended income taxes for your beneficiaries. While many people are aware that their IRAs and 401(k)s are subject to required minimum distributions (RMDs) after age 70.5, you might not know that inherited accounts can also be subject to RMDs. A 401(k) or IRA inherited by an adult child is subject to RMDs and these RMDs could impact the beneficiary’s tax situation. Money will have to come out of the account each year, and in most cases with traditional IRAs and 401(k)s, the entire distribution is taxable. The RMD is taxed as ordinary income and stacks on top of an individual’s current earnings.

If an heir is a professional in their peak earning years, the distribution will likely be taxed at the highest marginal tax rate. This isn’t ideal as it decreases the total wealth passed down.

Solution: If the original account owner does Roth conversions while living, their beneficiary could avoid taxes upon withdrawal because typically Roth distributions are non-taxable. You’d have to pay taxes to convert a traditional IRA into a Roth IRA, but then you’d experience tax-free growth. If heirs are in higher tax brackets than you are, it can make sense to convert before the heirs receive the accounts.

8. Not planning for minor children/beneficiaries

Although it sits at No. 8 on this list, one of the most important goals of estate planning is to make sure your children are cared for in the case of you and/or your spouse’s untimely death.

You also need to have a proper will in place that designates a guardian. (Make sure you ask the relative or friend before listing them as the designated guardian.) Beyond naming a guardian, spell out instructions for how the money should support the children — too often people leave money to the guardian to manage at their discretion.

Solution: Get life insurance to provide for your children, and make sure your will designates a guardian.

9. Not incorporating charitable gifting and bequests

Whether it’s a local nonprofit, church or alma mater, we like to give back to our community. Why not incorporate charitable giving into your estate plan?

The Tax Cut and Jobs Act of 2017 continues to prevent Americans from itemizing many deductions and, in turn, from receiving any tax benefits for their charitable contributions. Tax benefits aren’t the sole reason people give to charity, but they’re a nice bonus.

Solution: Certain estate planning and gifting techniques, like donor-advised funds and charitable remainder trusts, allow charitable giving that maximizes the federal tax benefits.

10. Not reviewing impact of beneficiary decisions on retirement accounts

As you learned from No. 7 on this list, most retirement accounts are subject to required minimum distribution rules once the account owner turns 70.5. The goal of qualified retirement accounts is to provide tax, investment and creditor protection benefits to encourage and support retirement savings. However, since retirement accounts can be one of the largest assets that an individual owns, they can represent a large part of their estate. As such, it’s important to consider how to pass along the account and which beneficiaries are the best to inherit a retirement account.

Once the account owner dies, the creditor protections on 401(k)s and IRAs fall off for the most part and heirs are required to spend down the accounts. Further complicating the situation is the fact that wills and trusts don’t have much control over what happens to our retirement accounts. Instead, the driver for who inherits IRAs and 401(k)s is the beneficiary designation on the account.

In some situations, it is best to leave retirement accounts to the surviving spouse. However, in other situations you might want to split up an account between children, grandchildren, a charity or a spouse. If your heirs have creditor issues it can make sense leaving the IRA or 401(k) to a trust. But generally speaking, under today’s tax and legal system we want to start by leaving retirement accounts directly to most beneficiaries and only use trusts if the situation requires it.

Solution: Beneficiary designations drive IRAs and 401(k)s, therefore, make sure these documents are up to date with the current and contingent beneficiaries aligning with your goals.

No one-size-fits-all plan exists for a good end of life or estate plan. Start with goal-based planning — determine what you want to accomplish and how your situation is unique. End of life planning ties into many areas of your life, so it’s important to be proactive and work with a team of qualified professionals like attorneys, tax professionals, insurance specialists and a financial planner.

Take the time to sit down and plan for a good end of life, so your heirs and assets survive and thrive.

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 TrustsEstate 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.

https://www.kiplinger.com/slideshow/retirement/T021-S014-10-common-estate-planning-mistakes-to-avoid/index.html

Written by Jamie Hopkins, Esq., LLM, MBA, CFP®, RICP®. He serves as Director of Retirement Research at Carson Wealth and is a finance professor of practice at Creighton University’s Heider College of Business.

Making Inheritance Talks Easier

Conversations about money and finances can be problematic for many families. Those very same people you grew up with, aren’t always on the same page, especially when the inheritance is the topic, says The New York Times in a recent article “Tips to Ease Family Inheritance Tensions.”

Find a common interest. You may be very different, but you also have a lot in common. The sibling relationship is a long-running one, so focus on preserving or repairing that relationship.

Bring in help to facilitate discussions. If family history makes it too difficult to manage, bring in an estate planning attorney or financial advisor to mediate the conversation. Having an unbiased person to run the show can keep things on track, make sure all viewpoints are recognized and help the group get to a productive conclusion.

Listen to each other. The simplest task may also be the hardest. It’s so easy to fall into old behavior patterns (i.e., the bossy older sister, the brother who goes along to get along). Don’t interrupt each other and check in to make sure everyone is feeling okay about how the conversation is going.

Advice to parents. Even if you don’t have a mega-wealthy family, you may all benefit from having an outside person, like an estate planning attorney or corporate trustee, to be named as a trustee. The more financially competent sibling could be the trust advisor, who can give advice but does not make the final decision. This keeps everyone a little more arm’s length from the decision making.

Talk with your family about money. Inheritances are frequent sources of friction among siblings. Not knowing how they are going to share in the family assets, how it is going to be structured and what expectations are, can create considerable tension within the family. Many families do not talk with their children about money, but that’s a big mistake. Not comfortable with the idea of a conversation? Then write down your motivation for your decisions about how the family wealth is going to be distributed and ask your estate planning attorney to make it part of your documents. It won’t be legally binding, but it may provide your children with some further insights.

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 TrustsEstate 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 239-418-0169 to schedule your free consultation.

Reference: The New York Times (Nov. 6, 2019) “Tips to Ease Family Inheritance Tensions.” 

 

Why Shouldn’t I Delay Making Big Gifts?

The unified federal estate and gift tax exemption for 2020 will jump up to $11.58 million or effectively $23.160 million for married couples.

Market Watch’s recent article, “Get your estate plan in order (this means you),”says that, despite these huge big exemptions and the fact you’re not currently exposed to the federal estate tax, your estate plan may still need updating to reflect the current tax rules.

You may be exposed to the federal estate tax in the future, even though you’re okay right now.

Let’s look at some issues, regardless of whether or you’re “rich” enough to be worried about exposure to the federal estate tax. Year-end is a good time to conduct your estate planning self-check, so let’s get started.

Update beneficiary designations. A will or living trust doesn’t override the beneficiary designations for life insurance policies, retirement accounts and other types of investment accounts. This includes accounts, such as life insurance policies, annuities, IRAs, other tax-favored retirement accounts and employer-sponsored benefit plans. The person(s) named on the most-recent beneficiary form will get the money automatically if you die, regardless of what your will or living trust document might state.

Designate secondary beneficiaries. Designate one or more secondary (contingent) beneficiaries to inherit, if the primary beneficiary dies before you do. Consider this possibility.

Update property titles. If you’re married and own property with your spouse as joint tenants with right of survivorship (JTWROS), the surviving spouse will automatically get sole ownership of the property when the other spouse dies. The major advantage of JTWROS ownership is that it avoids probate. The property automatically goes to the surviving joint tenant.

Name guardians. One of the main purposes of a will, is to designate a guardian for your minor children (if any). The guardians must care for your children, until they reach adulthood.

Any life event could require changes in your estate plan. In addition, the federal and estate and gift tax rules have been unpredictable in the past, along with the state death tax rules. Talk with your estate planning attorney today.

Reference: Market Watch (November 11, 2019) “Get your estate plan in order (this means you)” 

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 TrustsEstate 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 239-418-0169 to schedule your free consultation.

 

Blended Families Need More Thoughtful Estate Plans

Estate planning for blended families is like playing chess in three dimensions: even those who are very good at chess can struggle with so many moving parts in so many dimensions. Preparing an estate plan requires careful consideration of family dynamics, and those are multiplied in blended families. This is another reason why estate plans need to be tailored for each family’s circumstances, as described in the article “Blended families have unique considerations in estate planning” from The News Enterprise.

The last will and testament is often considered the key document in an estate plan. But while the will is very important, it has certain limitations and a few commonly used estate planning strategies can result in unpleasant endings, if this is the only document used.

Spouses often leave everything to each other as the primary beneficiary on death, with all of their children as contingent beneficiaries. This is based on the assumption that the second spouse will remain in the family home, then will distribute any proceeds equally between the children, if and when they move or die. However, the will can be changed at any time before death, as long as the person making the will has mental capacity. If when the first spouse dies, the relationship with the surviving children is not strong, it is possible that the surviving spouse may have their will changed.

If stepchildren don’t have a strong connection with the surviving spouse, which occurs frequently when the second marriage occurs after the children are adults, things can go wrong. Their mutual grief at the passing of the first spouse does not always draw stepchildren and stepparents together. Often, it divides them.

The couple may also select different successor beneficiaries. The husband may name his wife first, then only his children in his will, while the wife may name her husband and then her children in her will. This creates a “survival race.” The surviving spouse receives the property and the children of the spouse who passed won’t know when or if they will receive any assets.

Some couples plan on using trusts for property distribution upon death. This can be more successful, if planned properly. It can also be just as bad as a will.

Trust provisions can be categorized according to the level of control the surviving spouse has after the death of the first spouse. A trust can be structured to lock down half of the trust assets on the death of the first spouse. The surviving spouse remains as a beneficiary but does not have the ability to change the ultimate distribution of the decedent’s portion. This allows the survivor the financial support they need, giving flexibility for the survivor to change their beneficiaries for their remaining share.

Not all blended families actually “blend,” but for those who do, a candid discussion with all, possibly in the office of the estate planning attorney, to plan for the future, is one way to ensure that the family remains a family, when both parents are gone.

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 TrustsEstate 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 239-418-0169 to schedule your free consultation.

Reference: The News Enterprise (November 4, 2019) “Blended families have unique considerations in estate planning”

 

Have an Estate Plan, for Your Heir’s Sake

Few people want to leave their heirs with a paperwork disaster, but that’s what happens when there’s no estate plan. According to the article “The importance of creating an estate road map for your heirs” from Grand Rapids Business Journal, an estate plan usually involves a will, a durable power of attorney for financial decisions, a health care power of attorney (sometimes known as a designation of patient advocate or a health care proxy) for medical decisions, and often, a trust.

An estate plan also involves making sure assets are titled correctly and beneficiary designations for assets are coordinated with these documents, so assets pass to the people of your choosing in an efficient manner.

It’s always better if this information is gathered together and put in a location that is known to trusted family members.

Another step to consider is leaving a personalized letter of instructions to your spouse or other family members. The letter can be used to explain why you distributed your assets the way you did or guide them on what you’d like them to do with your estate regarding the assets. This is not a legally enforceable document, but it may provide your family members with a level of understanding not otherwise explained in your will.

For most people, retirement accounts, real estate, bank and investment accounts, cars and maybe pensions are the total sum of their estate. If your estate is larger or more complex, i.e., you own a business or a large real estate portfolio, your estate plan may be more complex.

Step-by-step instructions regarding each asset may be helpful for your heirs, including contact information for each asset. They will also find it helpful to have a list of your professional team: your estate planning attorney, financial advisor and accountant.

For certain accounts, instructions may need to be very specific. For a retirement plan, if your spouse survives you, they’ll need to know about rolling the funds into an inherited spousal IRA and naming beneficiaries. Your estate planning attorney can help your surviving spouse avoid any expensive mistakes.

If you own a business, there will be need for more guidance. A succession plan should be set up long in advance of your retirement, so that family members who are active in the business will be able to see it continue, if that is your goal. If the family does not want to run the business, they’ll need to know who to contact to ensure that it maintains its value after your passing, so it can be sold for a healthy profit.

Attorneys and accountants will definitely be able to help your family after your passing, but if you own a business, you know it better than anyone else. Just as you have a business plan for various contingencies, you need to have a plan in the event of your untimely passing. This is lacking for many family-owned businesses, and it often does not end well for the family or the business.

The more detailed the directions you can leave for your family, the better off everyone will be. Having a good estate plan is an act of great kindness to those you love.

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 TrustsEstate 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 239-418-0169 to schedule your free consultation.

Reference: Grand Rapids Business Journal (October 31, 2019) “The importance of creating an estate road map for your heirs”

 

Should I Use a Trust to Protect My Children’s Inheritance?

Should I Use a Trust to Protect My Children’s Inheritance? Parents with savings have several options for their children’s future inheritances.

nj.com’s recent article answers this question: “We have $1.5 million. Should we get a trust for our children’s inheritance?” According to the article, parents could create lifetime trusts or trusts in their wills for the benefit of the surviving spouse during the spouse’s lifetime.

After that, they can have the remainder of the assets pass in trusts for each of the children, until they reach a certain age or ages.

A lifetime trust is a type of trust that’s created during an individual’s lifetime. This is different from a testamentary trust, which is a trust created after a person’s lifetime through the operation of that person’s will.

Usually the individual who settles the trust (the “Grantor”) will retain control over the assets in the trust, including the right to revoke the assets during his or her lifetime. These forms of lifetime trusts are known as grantor trusts.

Another option is to have these types of trusts continue for the benefit of the grandchildren.

The children’s trusts can have instructions that the assets and income are to be used for the health, maintenance, education and support of the child.

The parents would need to name a trustee or co-trustee. This is the person who’s responsible for investing the assets, filing tax returns and paying taxes (if necessary). He or she will also distribute the assets, according to the terms of the trust.

Trusts are complicated business, so meet with an experienced estate planning attorney to determine the best strategies based on your circumstances and goals.

Reference: nj.com (October 16, 2019) “We have $1.5 million. Should we get a trust for our children’s inheritance?”

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 TrustsEstate 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 239-418-0169 to schedule your free consultation.

 

Six Things to Consider Before Making Gifts to Grandchildren

Six Things to Consider Before Making Gifts to Grandchildren: Grandparents often are particularly generous to grandchildren as they see their family’s legacy continuing on to a new generation. In many cases, grandparents feel they have ample resources and their children or grandchildren may be struggling financially. Assistance with summer camp fees, college tuition, wedding costs or the down payment on a first home, can relieve pressure on the next generation and permit grandchildren to take advantage of opportunities that otherwise would be out of reach. Some grandparents also don’t feel it’s right that children and grandchildren should need to wait for an inheritance, when they have more than they need.

Helping out family members is to be encouraged, but can raise a number of legal issues involving taxes and eligibility for public benefits, as well as questions of fairness among family members. Here are six issues grandparents should consider before making gifts to family members:

  • Is it really a gift? Does the grandparent expect anything in return, for example that the funds be repaid or that the money is an advance on the grandchild’s eventual inheritance? In most cases, the answer is “no.”  But if it’s “yes,” this should be made clear, preferably in writing, whether in a letter that goes with the check or, in the case of a loan, a formal promissory note.
  • Is everyone being treated equally? Not all grandchildren have the same financial needs, and grandparents don’t feel equally close to all of their grandchildren. While it’s the grandparent’s money and she can do what she wants with it, if she’s not treating all of her grandchildren equally, she might want to consider whether unequal generosity will create resentment within the family. Many elder law clients say that what they do with their money during their lives is their business. They may help out some children and grandchildren more than others based on need, with the expectation that this will be kept private. But they treat all of their children equally in their estate plan.
  • Beware taxable gifts. While this is academic for most people under today’s tax law, since there’s no gift tax for the first $11.4 million each of us gives away (in 2019), any gift to an individual in excess of $15,000 (in 2019) per year must be reported on a gift tax return. Two grandparents together can give up to $30,000 per recipient per year with no reporting requirement. And there’s no limit or reporting requirement for payments made directly to medical and educational institutions for health care expenses and tuition for others.
  • 529 plans. Many grandparents want to help pay higher education tuition for grandchildren, especially given the incredibly high cost of college and graduate school today. But not all grandchildren are the same age, making it difficult to make sure that they all receive the same grandparental assistance. Some grandchildren may still be in diapers while others are getting their doctorates. A great solution is to fund 529 accounts for each grandchild. These are special accounts that grow tax deferred, the income and growth never taxed as long as the funds are used for higher education expenses. Click here to read more about 529 accounts.
  • Don’t be too generous. Grandparents need to make sure that they keep enough money to pay for their own needs. While small gifts probably won’t make any difference one way or another, too many large gifts can quickly deplete a lifetime of scrimping and saving. It won’t do the family much good if a grandparent is just scraping by because he’s done too much to support his children or grandchildren.
  • Beware the need for long-term care. In terms of making certain that they have kept enough of their own savings, grandparents need to consider the possibility of needing care, whether at home, in assisted living or in a nursing home, all of which can be quite expensive. In addition, those seniors who can’t afford to pay for such care from their own funds need to be aware that any gift can make them ineligible for Medicaid benefits for the following five years.  For details, click here.

There are even more issues to consider that may involve specific family situations. Some grandchildren shouldn’t receive gifts because they will use them for drugs, or the gifts may undermine the parents’ plans for the grandchild or their authority. In some instances, grandparents may want to consider “incentive” trusts, which provide that the funds will be distributed when grandchildren reach certain milestones, such as graduation from college or holding down a job for a period of time. Communication with the middle generation can be key to making certain that gifts achieve the best results for all concerned.

Talk to your attorney about devising the best plan for yourself and for your grandchildren.

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 239-418-0169 to schedule your free consultation.

The 2020 Social Security Increase Will Be Smaller than 2019’s

The Social Security Administration has announced a 1.6 percent increase in benefits in 2020, nearly half of last year’s change. The small rise has advocates questioning whether the government is using the proper method to calculate the cost of living for older Americans and those with disabilities.

Cost-of-living increases are tied to the consumer price index, and a modest upturn in inflation rates and gas prices means Social Security recipients will get only a small boost in 2020. The 1.6 percent increase is lower than last year’s 2.8 percent rise and the 2 percent increase in 2018. The average monthly benefit of $1,479 in 2019 will go up by $24 a month to $1,503 a month for an individual beneficiary, or $288 yearly.

The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $132,900 to $137,700.

For 2020, the monthly federal Supplemental Security Income (SSI) payment standard will be $783 for an individual and $1,175 for a couple.

The smaller increase may mean that additional income will be entirely eaten up by higher Medicare Part B premiums. The standard monthly premium for Medicare Part B enrollees is forecast to rise $8.80 a month to $144.30. According to USA Today, advocates are questioning the method used to calculate cost-of-living increases. The Bureau of Labor Statistics uses the Consumer Price Index for Urban Wage Earners and Clerical Workers to set the inflation rate. This method looks at prices for gasoline, electronics, and other items that younger workers rely on. The advocates suggest using a different index (the Consumer Price Index for Elderly) that puts greater emphasis on medical and housing expenses.

Most beneficiaries will be able to find out their cost-of-living adjustment online by logging on to my Social Security in December 2019. While you will still receive your increase notice by mail, in the future you will be able to choose whether to receive your notice online instead of on paper.

For more on the 2020 Social Security benefit levels, click here.

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 239-418-0169 to schedule your free consultation.

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