How Your Ex Can Inherit Your Savings

November 19, 2014

If you have a will, you probably believe you’re all set. Everything seems in place.

But that’s not necessarily so. An article on notes that many people are not aware that wills don’t have the final say about money that is in your retirement plan, such as a 401(k) or IRA.

The one who is listed as the beneficiary of these accounts gets the money no matter what your will says.

So if you divorce and don’t update the forms for these accounts, your ex gets the cash.

The lesson: make sure those forms are up to date.

If you have an IRA, check with your financial institution that holds the account. If you have a 401 (k), talk to your company’s human resources department. And if you still have an old 401 (k) from a prior employer, roll it over into an IRA.

In addition, make sure to designate secondary beneficiaries on these accounts in case your primary beneficiary dies before you do.

If you have a will, talk to your estate planning attorney about having your estate be the beneficiary of your retirement plans.

Estate Planning For Your Collectibles

November 12, 2014

Filed under: Asset Protection,Collectibles,Estate Planning — admin @ 2:43 pm

People can spend a lifetime amassing things they love, like baseball cards or comic books, even art. But they often pay scant attention to what happens to these prized possessions when they die.

They may hope their children will develop a passion for the collectibles that they loved, or they may hope some other collector will pay a lot of money for these items.

Without planning, however, the odds are that these dear items will be dumped at a yard sale, says a story in the Wall Street Journal.

And the owners could miss out on tax savings, the story adds.

Here are a few things collectors can do whether they decide to pass their items along, sell them or even donate them to a collection:

  • If you want to pass them on, make sure there is someone in the family who is interested in the collection. And be sure that person can afford the upkeep, including insurance and storage. If more than one person is interested, how do you split the collection up? You may need to have the collection appraised to answer these questions. You could also start gifting parts of your collection before you die.
  • If you choose to sell, you need an independent appraisal to determine the collection’s fair value. Collectibles are taxed at the higher capital gains rate of 28 percent, by the way.
  • Donating. It may not be that easy to find an institution willing to accept the items.

‘Do It Yourself?’

November 5, 2014

Filed under: Estate Planning,Trusts,Wills — admin @ 2:19 pm

Some people like to do things for themselves. They grow their own fruits and vegetables. Raise their own chickens. Fix their own toilet problems.

But one place where doing it yourself may not be such a smart idea is estate planning, says a story in the Times Herald-Record newspaper in New York’s Hudson Valley.

You can find do it yourself tools for estate planning easily on the internet. They are inexpensive and not hard to use. You can create wills and trusts at a fairly low cost.

But the article says not to forget: you get what you pay for.

One estate planning attorney quoted in the story said such documents are easy to contest in court.

If your circumstances include children from a previous marriage, those with special needs, a business or any substantial assets, you really need the expertise of an estate planning attorney, the story notes.

Do it yourself sites provide documents, but not legal advice.

In addition, laws change all the time. Just this year, New York changed its estate tax exemption.

Bottom line: Weigh the risks and rewards of doing it yourself. If in doubt, seek the advice of an estate planning attorney.

Some Myths About Trusts

October 29, 2014

Filed under: Estate Planning,Trusts — admin @ 1:51 pm

Lots of people misunderstand how trusts work. And there are several common myths about trusts that should be dispelled.

Three of these myths, according to a story on, are:

  • Trusts are only for the rich.

Many people think trusts are so costly they only make sense for the rich. The truth is that while trusts can be more expensive than only having a will, the upfront costs help produce valuable savings later by avoiding costly probate. In addition, if a family member is willing to be the administrator, the administrative costs can be minimized.

  • Trusts are too much work.

Moving assets into trusts doesn’t have to be difficult. In many cases, simple methods may be used such as naming the trust as a payable-on-death or transfer-on-death beneficiary to fund the trust without having to take immediate action. These also avoid the need for probate.

  • Trusts are not needed before death.

A trust established before death can handle management of your affairs while you are alive if, for example, you are incapacitated.

Estate Planning Not Just For The Rich

October 22, 2014

Filed under: Estate Planning,Estate Tax,Trusts,Wills — admin @ 1:39 pm

A common misconception holds that estate planning is only for the wealthy, as a way to save on taxes.

An article on says that nothing could be further from the truth.

Estate planning is all about giving what you want to whom you want, how you want and when you want – with the least amount of taxes and expenses, it says.

Your estate includes anything you own or have control over — your house, retirement accounts, a business or proceeds from a life insurance policy.

A will names the person who will distribute the estate and the recipients. Everybody should have a will, the story suggests.

Those without a will have their assets subjected to the whims of state law.

A revocable living trust can be established by parents to segregate any existing assets from those of a future new spouse and protect their own children from the negative impact of a second marriage.

Say a married couple with two children has a will and enough resources to support the surviving spouse and children should the husband pass away. That’s great. But if the widow remarries, puts her assets in joint name with her new husband, the children from the first marriage are effectively disinherited.

A living trust sets the terms according to what the parent thinks is in the children’s best interest. Most young people would have trouble managing a large windfall.

If you are self-employed, who will run your business if you pass away? A trust could set out the terms of who might take it over and how.

And there is the matter of estate taxes of course. The article recommends you talk to your estate planning attorney to come up with a plan that would minimize federal and state inheritance taxes if they apply to you. While there is currently a federal exemption for estates worth under $5.34 million, states may impose taxes on estates worth considerably less than that.

What To Consider When Picking Heirs

October 15, 2014

Filed under: Asset Distribution,Beneficiaries,Estate Planning,Family — admin @ 9:00 am

Photo Credit: Getty

Who is going to get your money when you die?

A story in Forbes says the most difficult part of estate planning is determining who gets what and when.

The article says the process is emotional and involves a number of trade offs.

It suggests using the following questions to help you make your decisions:

  • How much money would you like to give to charity and how much to your family?
  • Are you going to divide your assets equally among your heirs, or will you base the division on some other factors, like good behavior?
  • Are your heirs able to handle managing the money?
  • Do you want to give gifts now or after you die or both?
  • What do you intend to do with items such as art?
  • How to you plan to convey your decisions to your heirs?

You need to think seriously about these things before making your decisions. Of course, your estate planning attorney can help you with these issues.

Best Places To Die In 2015

October 8, 2014

Filed under: Estate Tax — admin @ 9:00 am

Eight states are adopting changes in their death tax laws in 2015.

Currently, 19 states plus the District of Columbia have state death or estate taxes.

But a number of states are making changes of one sort of another to make it more advantageous to list those states as official residences in order to save money on death taxes, says a story in Forbes.

Federal estate taxes are exempt over $5.34 million, increasing to $5.43 million in 2015. Anything over that amount is subject to a 40 percent tax.

States with estate taxes typically exempt less and impose a tax of up to 16 percent.

New York and Maryland have made the biggest changes. Both increased their exemption amounts significantly.

New York has already doubled its exemption amount from $1 million for deaths before April 1, 2014 to $2,062,500 for deaths from April 1, 2014 to April 1, 2015. The exemption will rise gradually through 2019 to match the federal exemption.

The New York law has one problem known as a “cliff.” It means if a resident’s taxable estate exceeds the basic exemption rate by more than 5 percent, the entire taxable estate will be subject to the state estate tax.

Other states increasing exemption amounts include Tennessee, Minnesota and Rhode Island. Tennessee will eventually get rid of its estate tax completely.

Certain states are indexing their exemption amounts for inflation. These include Washington, Hawaii and Delaware.

New Jersey is also considering making a change.

How To Get Your Parents To Accept Help

October 1, 2014

Filed under: Elder Care — admin @ 1:55 pm

It is all too frequent: aging parents refusing to get help at home even when it is obvious to everyone else that they need it.

Even when a parent has had a fall or two, he or she will often refuse to have someone come in to help them out. They can be very stubborn and set in their ways.

A story in Forbes discusses how one woman got her mother to accept a helper on a temporary basis. It occurred when the daughter was going on vacation and there was no other family member available to come around each day to check on the mother, to buy groceries and so forth.

So the daughter persuaded her mother to let someone come in while she was gone – on a temporary basis. As it turned out, the mother enjoyed the caregiver’s company and eventually agreed to have her come on a regular basis.

There are all kinds of tricks you can use to get what’s best for a stubborn aging parent. This is one of them.

Some Common Estate Planning Blunders

September 24, 2014

Filed under: Estate Planning,Family — admin @ 9:00 am

There are lots of mistakes people commonly make when making arrangements for after they

Here are some of the most common, according to a story in Forbes:

  • Believing estate plans are just for the wealthy. They are for anybody who wants to have a say on end-of-life care, who gets what, and what happens to them if they become incapacitated.
  • Assuming your finances are too simple for an estate plan. Nobody’s life is that simple – and everybody should think about putting into place protections to ensure that their wishes are carried out.
  • Delaying estate planning for too long. But it is never too late. If for no other reason, your having a plan will make things easier for your family.
  • Forgetting digital assets. Many people forget to consider their online assets such as digital passwords for online bank accounts, and their Facebook and other accounts. What happens to them?
  • What about Fido? You love your pets. You should make plans to have them cared for in case you pass away before they do.

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.

Joan Rivers at the 25th Anniversary party of Michael Musto writing for The Village Voice (Photo credit: Wikipedia)

Joan Rivers at the 25th Anniversary party of Michael Musto writing for The Village Voice (Photo credit: Wikipedia)

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 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.

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