Rivers’s Pets Will Be Taken Care Of
September 17, 2014
Comedian Joan Rivers did a thoughtful job taking care of her family in her will – and didn’t forget her pets.
Rivers had a simple estate plan. Unmarried at her death, she left the bulk of her estate to her sole daughter, Melissa, and her grandson Cooper, says an article on dailyfinance.com. She also used a family trust to buy her Manhattan apartment.
The estimated value of her estate was $150 million, the story says.
Rivers also made sure that the dogs in her life would be cared for after her death. She had two rescue dogs that lived in her New York apartment and two other dogs at her California home.
While the story did not specify how Rivers arranged to care for her dogs, it mentioned that pet trusts are a popular way to do so and don’t cost much as you might think. These trusts let you make specific arrangements about the type of care you want your animals to have and how their money will be managed.
There is more than one kind of pet trust you can use. Traditional trusts allow you to make very specific arrangements about what you want. A statutory pet trust is simpler and does not list specific duties and responsibilities of caretakers. It simply lets caretakers use their discretion.
Estate Planning: Things You May Have Overlooked
September 10, 2014
Most people know they need a will, a health care directive and even a power of attorney as part of their estate plan.
Of late, many people are even remembering to list their online accounts and passwords in papers given to loved ones.
A story in the New York Times says there are other things that are always going to slip by unless you are diligent, however.
The article told of one man whose dad wanted to be buried in the Arlington National Cemetery. But when the man called the cemetery to line it up, he was told they needed a DD214 — military discharge documents — before they could do it. Without it, they would have to put him in cold storage for six months while he searched for it.
The man searched frantically through his father’s possessions and found the document being used as bookmark. His dad was able to be buried where he wanted.
The story also told of a woman whose mother wanted to be cremated and her ashes scattered at sea. Her mother had said she was a member of the Neptune Society, which arranges such burials.
However, when the woman called the society they said they had no record of her mother being a member. The burial could not be done the way she wanted it.
There are lots of things like these that can trip up your final wishes from being carried out. The article references a couple of books that can be downloaded that can help you remember everything you need to remember.
Caregivers Can Lose Retirement Money
September 3, 2014
Caregiving for an ailing family member can be difficult in many ways. It takes its toll emotionally and physically. That’s obvious.
However, an article in the New York Times suggests it also takes a toll financially on the caregiver, and not always in the obvious ways.
Yes, you pick up groceries, pay some bills, maybe even cut back on your hours at work so you can help out. That all adds up.
But there’s another way. The duties of caring for a loved one can reduce Social Security income for the rest of the caregiver’s life, the article says.
A study showed that men who reduced hours to care for aging parents received $38,000 less in Social Security benefits. If they stopped work, they lost $144,000.
Women lost $64,000 if they reduced hours and $131,000 if they quit work.
A legislator from New York has proposed an amendment to the Social Security Act that would rectify the situation. It would apply to those who make no more than the national average wage of $44,000.
If people in this category provided at least 80 hours a month in caregiving, they would get a credit with Social Security to help make up the difference.
The money would come from the Social Security Trust Fund.
But the story says passage of the bill is unlikely. While 16 Democrats have signed on as sponsors, no Republicans are on board.
When It Is Time For Your Parents To Move
August 27, 2014
Moving is stressful. But for an older person who may be forced to give up his or her home — and possibly independence — it can be downright traumatic.
However, an article in the Wall Street Journal on line offered some tips on how the transition can be made easier.
The key, the article said, is to offer the older folks the opportunity to make their own choices, if possible. The earlier planning is started, the better, it says.
Starting the discussion early allows for all options to be considered.
Naturally, many older folks will not want to have that talk, but it is important to remind them that if the time comes when they cannot make their own decisions, they will have to be made for them. This way, they get to choose.
If assisted living is in the picture, the adult children should do the research and present the options to their parents. They should be given the chance to visit the various facilities and, once a decision is made, should be given the chance to decide what things they want to bring with them, depending on how much space is available.
Make sure to get the new residence unpacked and ready to be lived in before your parents spend their first night there. And spend as much time there with your parents in the first few weeks as possible.
At the same time, you cannot neglect your own families and duties.
It can be a challenge, but, done right, it can be done well.
Williams and Hoffman: Trusts vs. Wills
August 20, 2014
The recent deaths of celebrities Phillip Seymour Hoffman and Robin Williams illustrate the differences in using a will as opposed to trusts when making an estate plan.
An article in Florida Today pointed out why trusts are likely better than wills, especially if you are rich and famous.
Williams planned right, according to the story.
While he had a complicated life, with three marriages and three children from his first two marriages, he believed in trusts. They provide privacy, the ability to avoid probate and the ability to plan for your family.
As a result, we really don’t know all the details of Williams’ estate plan.
Hoffman, however, had a will-based plan.
His heirs are still most likely going through probate even though he died six months ago. That means his loved ones are likely having a tough time getting their hands on money to pay bills, the story says.
How To Choose Members Of Your Estate Plan Team
August 13, 2014
Everyone needs at least three estate planning documents. These include a power of attorney for health care, one for finances and a will.
But how do you choose the people to name in your estate planning documents?
An article in the Atlanta Journal Constitution says you should spend time thinking honestly about your family structure, your family dynamics and your assets.
The reason is because the key traits that a person must have to be a good executor, trustee, power of attorney holder or health care agent are not expertise, but honesty and trustworthiness. And they must care about your family.
Here are some tips on naming people to serve in these positions:
- You don’t have to name only one person. You may appoint co-trustees, for example. Or have a person named as a trustee along with a bank as co-trustee.
- Financial or health knowledge is helpful, but not critical. If the person is honest and intelligent, he or she can seek advice from people with specialized knowledge when needed.
- Keep in mind the person’s availability and age. These jobs can be time-consuming. If the person doesn’t have the time, he or she won’t be the best one or the job. Also, if the person is elderly, you may have to name someone else in time, so an elderly person may force you to update these documents again.
- Discuss the issue with people before naming them. Make sure they are amenable to the tasks.
Prepare Early To Turn Over Reins
August 6, 2014
As mental capacity declines for the financial decision maker of the American couple, those duties eventually get turned over to the spouse with his or her faculties intact, a study of Americans over age 50 finds. That’s no surprise.
But the surprise may be that the handoff usually comes too far down the line, well after the decision-maker’s dementia has started to show. As a matter of fact, 80 percent of couples still relied on the decision-maker to make the decisions even after dementia had started to be evidenced.
Maybe worst part of it, says a story on marketwatch.com, is that at that point it is probably too late for the decision-maker to teach his or her spouse about their investments and finances overall.
This problem can also cause such couples to become victims of financial fraud, according to the story.
One of the top problem areas is in managing 401(k) plans, especially if that is where the couple’s income is coming from, it says. If these plans are badly managed, the couple may run out of money.
To keep such disasters from happening, the article suggests:
- the financial decision maker should include his or her spouse in the decision making process before dementia sets in. Such spouses can also take courses or read up on managing money.
- both spouses should keep tabs on withdrawals or changes in investment strategy. Unusual withdrawals or changes may signal a drop in mental function.
- each spouse should have a power of attorney drawn up giving each the power to make decisions for the both of them — or appoint a trusted proxy — in case one becomes mentally incompetent.
- if one notices the other is declining, he or she must take over the reins right away.
So You Are Going To Inherit A Windfall
July 30, 2014
Like many baby boomers, you may be about to receive a nice inheritance. Should you just go out and start spending willy-nilly?
Best not to, says a CNBC story posted on dailyfinance.com.
Determining how to deal with a sudden windfall the right way is important.
The first thing you should do, experts say, is nothing.
Take a period of time to think about it. Inheriting all that money may be terrific but it takes planning and analysis and, because you may still be in the grieving process, it may be best to take it slow, the story says.
Among the first things you should do include contacting Social Security and the Dept. of Veterans Affairs, if applicable, obtain a death certificate and, of course, make funeral plans.
After a couple of months, the story says, you should open a checking account, contact your loved one’s life insurance company, close joint checking accounts and pay bills.
Then, after six months or more has passed, you can start thinking about gifting money, moving or starting an investment plan.
People not used to handling large sums may be overwhelmed, the story points out.
And people may come out from under rocks looking for handouts. Best to send each of them a letter saying your financial advisor has said for you not to make any decisions about the money until your situation has been fully assessed and your long-term situation determined.
Choices When A Spouse Inherits An IRA
July 23, 2014
A spouse who inherits an IRA has two choices.
The surviving spouse can move the account into an inherited IRA to keep the tax shelter. Or he or she can roll the account over into his or her own IRA.
The decision, says a story posted on dailyfinance.com, depends on whether the survivor has turned 59 1/2 and whether the deceased spouse had turned 70 1/2 before dying.
A spouse who is under 59 1/2 and who needs the money is better off staying a named beneficiary. That means the survivor must rename the account as an inherited IRA. In that way, he or she can tap the account without penalty.
If the surviving spouse rolls the money over into his or her own IRA and then withdraws any of it, a 10 percent penalty will be paid until the person reaches 59 1/2, according to the story.
A surviving spouse who is under 70 1/2 and doesn’t need the money should make the IRA his or her own, the story says. No minimum distributions will be required until the person turns 70 1/2.
If the surviving spouse makes the IRA his or her own it also affects heirs in a more positive way as they will be able to “stretch” the distributions over their lifetimes.
Lou Reed ‘Walked On The Wild Side’ With His Will
July 16, 2014
Lou Reed, singer, songwriter and guitarist and a founder of the Velvet Underground, talked about “walking on the wild side” in one of his most famous songs.
The rock and roll hall of fame also walked on the wild side when it came to estate planning.
An article in Forbes says the New York rock legend was careless with the planning of his $30 million estate.
Probate court filings since his passing at age 71 show his estate has earned $20 million since his death. The filing showed he had $10 million at the time of his death.
Reed left the $10 million to his wife, Laurie Anderson, and sister, with his wife getting 75 percent.
The rocker relied on a will he signed in 2012. The article questions why someone worth so much would rely on a will and not have a revocable living trust.
If Reed had set up such a trust, the details of his financial life and to whom he left money would be kept private, instead of being splashed all over the pages of the New York tabloids, the story notes. In addition, wills have to go through probate, while trusts do not.
And if anyone were to object to the will, it would be easier to make a challenge in court than if there had been a trust set up.
Reed knew he was sick with liver disease for some time and could have filed a trust but did not do so. Now, all the details are out in public. There’s a lesson there for everybody, not just the rich and famous.