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.

 

Don’t Ask Heirs to Guess What You Wanted—Have an Estate Plan

Don’t Ask Heirs to Guess What You Wanted—Have an Estate Plan: With an estate plan, you can distribute your assets according to your own wishes. Without one, your heirs may spend years and a good deal of money trying to settle your estate, reports U.S. News & World Report in the article “5 Reasons to Make an Estate Plan.”

If there is no estate plan in place, including a will, living trust, advance directives and other documents, people you love will be put in a position of guessing what you wanted for any number of things, from what your final wishes would be in a medical crisis, to what kind of a funeral would like to have. That guessing can cause strife between family members and worry, for a lifetime, that they didn’t do what you wanted.

Think of your estate plan as a love letter, showing that you care enough about those you love to do right by them.

What is estate planning? Estate planning is the process of legally documenting what you want to happen when you die. It also includes planning for your wishes in case of incapacity, that is, when you are not legally competent to make decisions for yourself because of illness or an injury. This is done through the use of wills, trusts, advance directives and beneficiary designations on accounts and life insurance policies.

Let’s face it, people don’t like to think about their passing, so they postpone making an appointment with an estate planning attorney. There’s also the fear of the unknown: will they have to share a lot of information with the attorney? Will it become complicated? Will they have to make decisions that they are not sure they can make?

Estate planning attorneys are experienced with the issues that come with planning for incapacity and death, and they are able to guide clients through the process.

The power of putting wishes down on paper can provide a great deal of relief to the people who are making the plan and to their family members. Here are five reasons why everyone should have an estate plan:

Avoid Probate. Without a will, the probate court decides how to distribute your estate. In some states, it can take at least seven months to allow creditors to put through claims. The estate is also public, with your information available to the public. Probate can also be expensive.

Minimize Taxes. There are a number of strategies that can be used to minimize taxes being imposed on your heirs. While the federal estate tax exemption is $11.4 million per individual, states have estate taxes and some states impose an inheritance taxes. An estate planning attorney can help you minimize the tax impact of your estate.

Care for Minor Children. Families with minor children need a plan for care, if both parents should pass away. Without a will that names a guardian for young children, the court will appoint a guardian to raise a child. With a will, you can prevent the scenario of relatives squabbling over who should get custody of minor children.

Distributing Assets. If you have a will, you can say who you want to get what assets. If you don’t, the laws of your state will determine who gets what. You can also use trusts to control how and when assets are distributed, in case there are heirs who are unable to manage money.

Plan for Pets. In many states, you can create a Pet Trust and name a trustee to manage the money, while naming someone in your will who will be in charge of caring for your pet. Seniors are often reluctant to get a pet, because they are concerned that they will die before the pet. However, with an estate plan that includes a pet trust, you can protect your pet.

Reference: U.S. News & World Report (October 18, 2019) “5 Reasons to Make an Estate Plan” 

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.

 

What to Do If You Are Appointed Guardian of an Older Adult

What to Do If You Are Appointed Guardian of an Older Adult: Being appointed guardian of a loved one is a serious responsibility. As guardian, you are in charge of your loved one’s well-being and you have a duty to act in his or her best interest.

If an adult becomes mentally incapacitated and is incapable of making responsible decisions, the court will appoint a substitute decision maker, often called a “guardian,” but in some states called a “conservator” or other term. Guardianship is a legal relationship between a competent adult (the “guardian”) and a person who because of incapacity is no longer able to take care of his or her own affairs (the “ward”).

If you have been appointed guardian, the following are things you need to know:

  • Read the court order. The court appoints the guardian and sets up your powers and duties. You can be authorized to make legal, financial, and health care decisions for the ward. Depending on the terms of the guardianship and state practices, you may or may not have to seek court approval for various decisions. If you aren’t sure what you are allowed to do, consult with a lawyer in your state.
  • Fiduciary duty. You have what’s called a “fiduciary duty” to your ward, which is an extremely high standard. You are legally required to act in the best interest of your ward at all times and manage your ward’s money and property carefully. With that in mind, it is imperative that you keep your finances separate from your ward’s finances. In addition, you should never use the ward’s money to give (or lend) money to someone else or for someone else’s benefit (or your own benefit) without approval of the court. Finally, as part of your fiduciary duty you must maintain good records of everything you receive or spend. Keep all your receipts and a detailed list of what the ward’s money was spent on.
  • File reports on time. The court order should specify what reports you are required to file. The first report is usually an inventory of the ward’s property. You then may have to file yearly accountings with the court detailing what you spent and received on behalf of the ward. Finally, after the ward dies or the guardianship ends, you will need to file a final accounting.
  • Consult the ward. As much as possible you should include the ward in your decision-making. Communicate what you are doing and try to determine what your ward would like done.
  • Don’t limit social interaction. Guardians should not limit a ward’s interaction with family and friends unless it would cause the ward substantial harm. Some states have laws in place requiring the guardian to allow the ward to communicate with loved ones. Social interaction is usually beneficial to an individual’s well-being and sense of self-worth. If the ward has to move, try to keep the ward near loved ones.

For a detailed guide from the Consumer Financial Protection Bureau on being a guardian, 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.

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.

Five Tips for Starting Retirement Planning in Your 50s

When it comes to retirement planning, many Americans find themselves underprepared. A majority of baby boomers (born between 1946 and 1964) and Generation X’ers (born between 1965 and 1978) often end up without retirement savings or don’t have realistic expectations about post-retirement costs. According to the Insured Retirement Institute, only 25 percent of boomers are confident of having sufficient savings in retirement. If you are in your 50s and nearing retirement without substantial savings or a plan, don’t despair — it is never too late to start planning.

Although every working professional should contribute towards retirement from their early days, for various reasons they often delay the process. If you are nearing your 50s without a post-retirement plan and see yourself working for another 10 to 15 years, this is an opportunity to plan judiciously and save for your retirement right away.

Here are five strategic steps for achieving the best retirement plan:

1. Set Specific and Practical Goals

Proper retirement planning begins with setting specific goals. Calculate your current income, total savings, and ongoing investments to understand how much you could save, and be sure to set realistic goals.

While providing for emergency expenses and paying off a mortgage can be your short-term and intermediate goals, saving up for retirement should be your long-term goal. An annual financial review is helpful in evaluating your past goals and understanding your earnings as well as liabilities.

2. Plan a Realistic Budget Focusing on Retirement

Review your monthly and yearly expenses and list the factors that are likely to remain constant for the next few years. Now allocate funds to each category in a way that will allow you to save more for your retirement.

According to financial experts, if you are saving for retirement after 50, it is best to contribute 30 percent of your salary towards this end. If you find that goal difficult to meet, look at your budget list and reduce optional expenses.

3. Pay Off Debts

Paying off debts early will help you meet your retirement budgets and ease the financial burden. According to an AARP report, 44 percent of Americans continue to pay for their home after they retire.

Clearing off outstanding debts, credit card bills, loans, and mortgages will make it much easier to prioritize retirement funds.

4. Invest in Retirement Plans

401(k)s, 403(b)s and IRAs are some of the retirement plans available in the U.S.  While 401(k)s are one of the most popular plans, not all companies offer them and those that do have their own, often restrictive, investment rules. Then there are two types of IRAs:  traditional and Roth IRAs.

To make the best choice among the many retirement plan options, it is essential to have a thorough understanding of IRA vs 401(k), Roth IRA vs 401(k) and other investment alternatives, as well as  contribution limits.

5. Diversify Your Investments

Investment diversification will help keep you on a firm financial footing. Do not stash all your money in banks; instead, create an investment portfolio and explore your options.

It is important to diversify and distribute your money among multiple sectors. Considering the volatility of markets, diversification of your investment portfolio safeguards your capital and helps it grow.

It’s Time to Step Up a Gear

A concrete retirement plan with emphasis on savings is essential to ensure a comfortable and healthy post-retirement life. Saving for your retirement is the first priority and the sooner you start, the better your chances of achieving your retirement goals.

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.

Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, Arizona. He regularly writes for blogs at MoneyForLunch, Biggerpocket, SocialMediaToday, NuWireInvestor and his own blog for Self Directed Retirement Plans. Email rick@sdretirementplans.com or visit www.sdretirementplans.com.

Protect Your Pets After You’re Gone

Protect Your Pets After You’re Gone:  Currently, 67% of American households own at least one pet, and many people now consider long-term planning for them just as important as they would for two-legged family members, says The Atlanta Journal Constitution in the article “When you’re gone, what happens to your pets?”

If you think about it, our animal companions are completely vulnerable. They can’t take care of themselves. If something happens to their owners, it is possible that they could be taken to a shelter and euthanized. If you don’t want to be kept up at night worrying about this, a pet trust should be part of your conversation with an estate planning attorney.

Pets are viewed as valued members of the family in many homes. They provide companionship, and there have been studies showing that their presence helps to reduce stress. They often sleep in the same bed as their owners and go on vacations with their human family.

A 2018 Realtor.com survey found that 79% of millennials who purchased a home, said that they would pass on a home, no matter how perfect, if it did not meet the needs of their pets.

How can you protect your pets?

Understand that pets are considered property and have no legal rights. It’s entirely up to their owners to plan for their care. Some questions to consider:

  • What’s the difference between a pet trust and a will?
  • Do pet trust laws vary by state?
  • Is a trust independent from a will?
  • What happens to any funds left over, when the pet dies?
  • Can you tap 401(k) or other retirement funds to care for a pet?

To begin, look at the life expectancy of each pet and factor the average vet bill, food bill and any additional money in case of an emergency. The ASPCA says that the annual cost to care for a dog is between $737 to $1,404. Caring for a cat averages about $800. Of course, caring for cats or dogs depends upon the age, breed, weight and whether the animal has any medical needs. Some pets can live a very long time, like horses, and certain birds can live more than seventy years.

Next, identify caregivers who will commit to caring for your pets. You should then talk with your estate planning attorney. If you rely on an informal plan, your pet may be out of luck, if something happens to the caregivers, or if they have a change of heart.

A pet trust allows you to leave money to a loved one or friend to care for the pet in a trust that is legally binding. That means the money must be used for the pet’s care. It can be very specific, including how often the pet should go to the vet and what its standard of living should be. The executor or lawyer could go to court to enforce the contract.

Typically, the trustee holds property “in trust” for the benefit of the pet. Payments to a designated caregiver are made on a regular basis. The trust, depending upon the state in which it is established, continues for the life of the pet or 21 years, whichever comes first. Some states allow the pet trusts to continue beyond 21 years.

Speak with your estate planning attorney about protecting your pet. You’ll feel better knowing that you’ve put a plan into place for your beloved furry friends.

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.

Reference: The Atlanta Journal Constitution (September 24, 2019) “When you’re gone, what happens to your pets?”

 

New Technology Brings A New Aging Marker: Taking Away the Phone

New Technology Brings A New Aging Marker: Taking Away the Phone: At first, Dr. Z thought his 83-year old mother was simply confused when she called to say she’d forgotten passwords to her accounts. Then she’d say that the programs had stopped working. However, over time, he realized that she was showing early signs of dementia, as reported by Kaiser Health News in the article “The Delicate Issue of Taking Away a Senior’s Smartphone”

With seniors using cellphones, computers and tablets, another area of concern for older adults has emerged. Deteriorating cognitive skills may make it difficult for seniors to use these devices, even before other more classic signs of early dementia appear, like forgetting names or keys.

Determining whether to block access to bank and investment accounts or other online resources may present the same issues, as taking away car keys once did.

This issue reflects the growing use of technology by seniors to allow them to stay in touch with friends and family, join interest groups, visit virtually and do their banking and shopping online.

Some physicians are already adapting to this new digital reality. At Johns Hopkins Medicine, one professor of medicine now asks older patients if they use a computer or smartphone and are having trouble, including forgetting passwords or getting locked out of accounts.

If there’s a notable change in how someone is using technology, the practice now proceeds with a more in-depth cognitive evaluation.

At Rush University’s Alzheimer’s Disease Center in Chicago, older adults are bringing up problems with technology, as a non-threating way to introduce their troubles with thinking. Instead of saying they are having memory issues, they say they are having problems with their smartphones or getting programs on their computer to work.

If technology becomes confusing, anything that is not essential should be removed from the smartphone or computer. When safety becomes an issue, such as seniors who are targeted by scammers, family members should counsel the senior against giving out their Social Security or credit card information.

Be cautious about getting someone’s passwords to check on their email or online bank or brokerage accounts. Without consent, it’s a federal crime to use another person’s password to access their accounts. Consent should be granted in writing.

Online shopping is another problem. Gain the person’s permission to unsubscribe from accounts that send emails and remove friends from Facebook. A parental control app blocks use, when the senior is not supervised and also blocks adult content.

For others, the use of a “stored value” card that has a limited amount of money can be used, in place of a credit card. Credit bureaus need to be notified not to open accounts in someone’s name.

Talk with an estate planning attorney to learn how to cope with an adult with cognitive problems and their online life. This is a new area in elder care, and it will become increasingly prevalent, as boomers age.

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.

Reference: Kaiser Health News (September 26, 2019) “The Delicate Issue of Taking Away a Senior’s Smartphone”

 

A Will is the Way to Have Your Wishes Followed

A Will is the Way to Have Your Wishes Followed: A will, also known as a last will and testament, is one of three documents that make up the foundation of an estate plan, according to The News Enterprises’ article “To ensure your wishes are followed, prepare a will.” As any estate planning attorney will tell you, the other two documents are the Power of Attorney and a Health Care Power of Attorney. These three documents all serve different purposes, and work together to protect an individual and their family.

There are a few situations where people may think they don’t need a will, but not having one can create complications for the survivors.

First, when spouses with jointly owned property don’t have a will, it is because they know that when the first spouse dies, the surviving spouse will continue to own the property. However, with no will, the spouse might not be the first person to receive any property that is not jointly owned, like a car.  Even when all property is jointly owned—that means the title or deed to all and any property is in both person’s names –upon the death of the second spouse, a case will have to be brought to court through probate to transfer property to heirs.

Secondly, any individuals with beneficiary designations on accounts transfer to the beneficiaries on the owner’s death, with no court involvement. However, the same does not always work for POD, or payable on death accounts. A POD account only transfers the specific account or asset.

Other types of assets, such as real estate and vehicles not jointly owned, will have to go through probate. If the beneficiary named on any accounts has passed, their share will go into the estate, forcing distribution through probate.

Third, people who do not have a large amount of assets often believe they don’t need to have a will because there isn’t much to transfer. Here’s a problem: with no will, nothing can be transferred without court approval. Let’s say your estate brings a wrongful death lawsuit and wins several hundred thousand dollars in a settlement. The settlement goes to your estate, which now has to go through probate.

Fourth, there is a belief that having a power of attorney means that they can continue to pay the expenses of property and distribute property after the grantor dies. This is not so. A power of attorney expires on the death of the grantor. An agent under a power of attorney has no power, after the person dies.

Fifth, if a trust is created to transfer ownership of property outside of the estate, a will is necessary to funnel unfunded property into the trust upon the death of the grantor. Trusts are created individually for any number of purposes. They don’t all hold the same type of assets. Property that is never properly retitled, for instance, is not in the trust. This is a common error in estate planning. A will provides a way for property to get into the trust, upon the death of the grantor.

With no will and no estate plan, property may pass unintentionally to someone you never intended to give your life’s work to. Having a will lets the court know who should receive your property. The laws of your state will be used to determine who gets what in the absence of a will, and most are based on the laws of kinship. Speak with an estate planning attorney to create a will that reflects your wishes, and don’t wait to do so. Leaving yourself and your loved ones unprotected by a will, is not a welcome legacy for anyone.

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.

Reference: The News Enterprise (September 22, 2019) “To ensure your wishes are followed, prepare a will.”