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.

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.

 (Photo credit: Wikipedia)

(Photo credit: Wikipedia)

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

Filed under: Dementia,Finances,Married Couples,Power of Attorney — admin @ 1:44 pm

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.

(Photo credit: chesbayprogram)

(Photo credit: chesbayprogram)

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?

(Photo credit: Wikipedia)

(Photo credit: Wikipedia)

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.

That’s right.

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.

saving and retirement (Photo credit: 401(K) 2013)

saving and retirement (Photo credit: 401(K) 2013)

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

Filed under: Estate Planning,Inheritance,Trusts,Wills — admin @ 1:52 pm

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.


Lou Reed. Schinitzer Concert Hall Portland, OR (Photo credit: Wikipedia)

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.

Inherited IRAs Not Protected

July 9, 2014

The Supreme Court has ruled that inherited IRAs are not protected in bankruptcy.


Bankruptcy (Photo credit: LendingMemo)

The June opinion, which has far reaching implications according to a story in Forbes, found that Heidi Heffron-Clark, who inherited an IRA from her mother in 2001 and filed for bankruptcy nine years later, could not shield that money from creditors.

Historically, IRAs have been protected from creditors in bankruptcy to ensure that people have money to live on during retirement. But the court found that inherited IRAs are different from those you set up and fund yourself. You can’t put more money into an inherited IRA and you can take money out at any time without penalty.

The decision does not affect spouses as long as they roll over IRAs inherited from their deceased spouse into their own IRAs.

Casey Kasem’s End Of Life Care

July 2, 2014

World famous disc jockey Casey Kasem died this year at age 82, but his final days were marred by a legal battle among his family over what would be the best care he could get towards the end of his life.

Photo taken at the 41st Emmy Awards 9/17/89 - ...

Photo by Alan Light. (Photo credit: Wikipedia)

The fight stemmed back years and involved his wife, Jean, and the children from his first marriage, says an article on CNN.com.

 Kasem was incorrectly diagnosed with Parkinson’s disease in 2007, but later was re-diagnosed as having a progressive brain disorder called Lewy body dementia.

In any case, the family feuded in Kasem’s final days over the best way to care for him. The children said they wanted to honor his wishes that he live out his last days comfortably. His wife said they were giving up hope and ending his life too early.

Kasem’s case is typical of what is going on in families all over the country. That’s why it is important to designate a health care agent, or proxy, to speak on your behalf if you are incapacitated.

The article also says seniors should write down specific instructions about what they want for end-of-life care and identify the health agent in a document called a durable power of attorney. It ends the guessing game.

Paul Walker’s Estate And The Lessons Learned

June 25, 2014

Paul William Walker IV, the star of the Fast & Furious movies, died in a car crash Nov. 30, 2013. He was survived by his parents and his 15-year-old daughter, Meadow Rain.

Paul Walker

Paul Walker (Photo credit: Wikipedia)

His father recently filed to open his son’s estate, including his will. It sheds some valuable estate planning lessons, says an article in Forbes.

Walker had assets of about $25 million, the probate filing and will revealed. He also had a revocable living trust benefiting his daughter as the sole beneficiary.

The will named Walker’s mother, not Meadow’s mother, as the guardian and caretaker of the money.

Lessons learned:

  • Setting up a trust meant the probate process would be simpler than it could have been without one. It also means that his daughter will likely receive the money over time, not all at once. In most cases, that’s a good thing.
  • Walker did not fully fund his trust. Instead, he relied on his will and that means more public scrutiny.
  • He named a guardian, his mother. It does not mean that Meadow’s mother will lose custody of the child, but it might were the mother to be found unfit or unable to keep custody. That was a good move.
  • Walker set up his will at age 28. He didn’t wait until he was old. Good move.
  • He did not update his estate planning documents for 12 years. (He died at age 40.) His net worth had increased over the years. What if he didn’t want his daughter to inherit all that money? What about his longtime girlfriend, Jasmine Pilchard Gosnell? Didn’t he want her to get something? Bad move.
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