Smoothing Things Out For Your Heirs

March 4, 2015

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

There are several things you can do to ease the legal distress that your loved ones may suffer after your death.

First, you can do is understand the legal terminology. Know what these terms mean: will, trust, health care directive, power of attorney, beneficiary forms, estate taxes, and probate.


After you understand them, you will have a better idea of what to do so that it is easier for your heirs once you are gone.

One thing you may want to do is leave your home to your heirs, says an article on This an be done in a number of ways, including putting your home in a trust.

You can look all these terms up on line, but a consultation with an estate planning attorney is probably the best way to go to understand what it is you need to know in planning for after you are gone.

Telling Your Kids How Much You Are Worth

February 25, 2015

Filed under: Family,Finances — admin @ 9:00 am

Should your kids know how much money you make or how much you are worth?

A story in the New York Times says, yes, sort of.

It says you can begin to initiate them into your financial world as early as age 5 or 6. Build it slowly, and give them fuller answers to their questions by the time they are teens. It can be a valuable lesson, the story says.

Money is a mystery to kids. They wonder why their house isn’t as big as their cousin’s. Or they may want to know why teachers don’t make much money?

“None of your business” is the wrong answer. They should know about money. Then they can understand how much college costs. And why they should be saving. It will help them later when they have to earn a living and support a family.

No, you don’t have to let them see your tax returns, but you can answer their questions with some degree of truth. Don’t forget, they can find out a lot of stuff on line. For example, they can go on Zillow and see what your house is worth – and how much their friends’ houses are worth.

Telling them something about your net worth can also help them to learn values, the story says. Maybe you want to share with them how much you give to charity.

There are no hard and fast rules, but keeping the kids totally in the dark is probably not the best way to go about it.

Facebook Now Offers ‘Living Will’

February 18, 2015

Filed under: Digital Assets,Estate Planning,Living Will — admin @ 9:00 am

Facebook users can now control their pages after they pass away.

The social media company has created a new tool that lets users determine what happens to their accounts after they die – a sort of “living will” for their pages.

New settings now allow users to have their profiles deleted or have a “legacy contact” or executor to manage their accounts after death.

Until this change, the status of Facebook accounts after death was cloudy. Families could ask the company to take down their pages but conflicts between family members sometimes arose, according to a story in the Boston Globe.

Now, the user’s legacy contact can update a memorial page including a prepared-in-advance message from the deceased.

The action comes after legislators in some states have been pushing for laws to allow family members access to a person’s digital files. Facebook and other digital media sites have opposed such legislation.

‘Step Up’ To Step Down?

February 11, 2015

Filed under: Beneficiaries,Estate Planning,Inheritance,Tax Planning — admin @ 2:07 pm

President Obama, in his State of the Union address, outlined some proposed tax changes, including ending the “step up” provision in the capital gains tax.

While Congress is unlikely to go along, it could mean big changes in the taxing of inheritances.

Obama’s plan would eliminate a big tax benefit in the treatment of inheritances. It would tax capital gains on the decedent’s basis — what the stock or other asset cost when he or she bought it — compared to the current system that allows for a step-up in basis for assets when passed on to heirs.

Making the change would make it harder to shield assets from taxes and would require more planning, according to a story on

The president says it would close a “trust-fund loophole” and ensure that the wealthiest pay their fair share on inherited assets.

However, it would result in taking money out of the pockets of beneficiaries. And it would require a lot of effort. For example, heirs would need to determine the original cost basis for all of the assets they inherit. Tracking every stock, piece of property and valuable to find out their original costs isn’t easy.

The plan would allow married couples to bequeath investment assets with capital gains up to $200,000 tax free, however. And a couple can bequeath a home to a child and $500,000 in capital gains wouldn’t be taxed. As a result, many heirs won’t be hurt by the changes.

However, for those who would be affected, the plan likely would require the establishment of new trusts to protect assets from the new taxes.

When Nursing Homes Control Residents’ Assets

February 7, 2015

A recent NY Times article focused on how some nursing homes seek control of a resident’s assets and income to insure payment of their monthly bills. While the nursing home is entitled to be paid for services rendered, and we should not expect to get it for free, there are sometimes disputes as to the cost and quality of care. The daily rates in Rochester, NY are currently between $400 and $650 per day. The faint of heart should not get a calculator but the family is looking at a monthly cost in excess of $12,000.00, and as much as $19,000 for unique care needs. New York State charges an assessment collected by the nursing home equal to 6.8% of the monthly cost. For most families, they will soon be in the poor house.

The issue in the NY Times article is about the nursing home taking charge of the resident’s assets and income to insure timely payment. In that scenario, there was a dispute about the co-pay due from the family on the bill which had reached an impasse. To break the impasse, the nursing home brought a guardianship proceeding to allow it to take charge of the resident’s income and assets. While I agree that parties should find amicable ways to resolve their financial disputes, here, it appears that the facility tried to resolve it by putting themselves in charge of the resident’s money. If successful, who represents the interests of the resident? Wouldn’t it seem that if the facility were in charge of the resident’s income and assets that the dispute would then be resolved by the facility simply paying itself what it believes it is owed? Is that the way the facility should resolve a financial dispute?

Read the article for yourself and share your opinion.


Overseeing The Investments Of Aging Parents

February 4, 2015

Filed under: Elder Care,Family,Finances — admin @ 2:12 pm

Plenty of attention has been paid lately to baby boomers and whether they are prepared for retirement.

But boomers face another problem: their parents’ finances.

Many financial advisors and attorneys are seeing a similar pattern — elderly clients who no longer have the mental capacity to handle their finances, according to a story on

A common scenario is where the husband has been handling everything and all of the sudden can’t do it any more – and the wife is clueless.

Often, the situation allows for the elderly person or couple to be victimized by fraud.

Adult children of these people may see signs that their parents are becoming less able to handle money. They may seem less familiar with financial concepts than before or may simply be less able to handle math problems.

If an adult child notices something, it may be time for a conversation. It is best to have the talk on neutral ground, the article says. You may want a third party to bring the matter up – a financial advisor or attorney.

The article suggests parents share their financial documents with their children. There are online portals that allow for this.

It may not be easy to get the parents to agree to this, but it is essential, the article says.

Downton Abbey’s Financial Lessons

January 28, 2015

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

The British television series Downton Abbey might not seem the likely place to get financial advice, but there are some lessons to be learned from the program.

An article on CNN says there are five financial lessons to be learned from the show.

  • Don’t put all your eggs into one basket. The family patriarch, the Earl of Grantham, learned that lesson when he loses the entire family fortune by betting on a Canadian railroad company that goes bankrupt.
  • Ask for a raise. Daisy, who starts out as a kitchen maid, staged a campaign for better pay. She got it.
  • Make a will – and revisit it. The show begins with a crisis over finding a new heir. The man who was to inherit the estate died on the Titanic. None of his three daughters is allowed to take over his fortune.
  • Learn about supply and demand. A devious resident decides to make a killing on the black market after the war. He buys some goods from a man at a bar at an incredibly good price, but the food is junk and no one will buy it from him.
  • Watch out for gold diggers. Several characters marry for money. You can never be sure.

Can You Deduct Estate Planning Fees?

January 21, 2015

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

Is it allowable to deduct the fees you pay for estate planning work?

A column in the Albuquerque Journal says that it may be possible.


A reader wrote in to the writer of the column saying that he and his wife had paid $3,095 to update to their estate plan. It included a trust for their kids as well as advance directives and guardian choices. The reader wanted to know if any of that fee could be tax deductible. The reader also noted that their estate’s worth might be increased in the future and that their tax burden might grow.

The columnist replied that, yes, they probably can deduct, but that there is a burden of proof issue that needed to be satisfied. While he said there is no deduction allowed for fees paid for purely personal advice, the law does permit a deduction for any fees paid for the collection, determination or refund of any tax due.

He said this has been broadly interpreted to include advice with respect to the avoidance of future taxes.

Much of the work described by the reader appears to concern personal issues, but any work having to do with how future estate taxes might affect the couple and how they could structure their affairs to have the flexibility to deal with future changes in tax law as well as the growth of their estate would be deductible, the columnist said.

The issue is figuring out how much of the work was for which purpose. It would require an itemized bill, he said.

If any of the fee was used for business planning, the fees could be allowed as ordinary business expenses, he noted.

Some Can’t Stay Retired

January 14, 2015

Filed under: Retirement Planning — admin @ 9:00 am

Many people can’t wait for the day they can retire. Others, though, have no plans to quit working. Or they do retire, then decide they can’t handle it.

A story in the New York Times recounts the stories of several folks of retirement age who “failed” at retirement.

One woman opened a fitness club after she retired. She said she loves working.

The story says people over age 55 are swelling the ranks of the work force. Some, of course, work because they have to. In all, the government says there are 33 million people over age 55 still working. That’s about 10 million more than ten years ago.

Many are rethinking the idea of retirement. After all, with people living longer, many are facing 30 or 40 years with nothing to do.

A survey said many are taking steps to figure out what they are going to do next. It could be going back to school or learning a hobby. For some, it was to find another way to earn money, as only 54 percent surveyed said they were financially ready for retirement.

An AARP survey found 55 percent who were still working after age 55 were doing so because they wanted to. Many who found a job after retirement stayed for years.

“Retirement is boring” was a frequent comment.

Why Do Old Folks Smile?

January 7, 2015

Filed under: Elder Care — admin @ 2:14 pm

A famous medical ethicist wrote that the perfect age to die would be 75. But a column in the New York Times offers that by doing so, the ethicist might be missing out on his happiest years.

Surveys show that people in their 20s generally rate their well-being as very high. Then happiness declines in middle age and bottoms out around age 50. But then happiness shoots up again, so that those in their 80s are the happiest.

This may happen because of changes in the brain, the column suggests. Older people are more relaxed. They may get more pleasure out of ordinary activities.

The columnist guessed that people get happier by accomplishing specific skills and get better at handling challenges.

The article also suggests that older people are better at seeing things from differing perspectives. There is more empathy. More insight.

Its an interesting issue to ponder as we age.

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