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.

Estate Planning: Things You May Have Overlooked

September 10, 2014

Filed under: Estate Planning,Funeral Arrangements — admin @ 1:21 pm

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.

Graves at Arlington National Cemetery (Photo credit: Wikipedia)

Graves at Arlington National Cemetery (Photo credit: Wikipedia)

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

Filed under: Caregiving,Retirement Planning — admin @ 6:48 pm

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

Filed under: Estate Planning,Trusts,Wills — admin @ 1:35 pm

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.

Robin Williams

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.

English: Philip Seymour Hoffman at a Hudson Union Society event in September 2010. (Photo credit: Wikipedia)

English: Philip Seymour Hoffman at a Hudson Union Society event in September 2010. (Photo credit: Wikipedia)

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.

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