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Who’s Keeping an Eye on Your 401(K) Plan?

April 19, 2018

Filed under: Fiduciary Duties — Neel Shah @ 9:15 am

Have you ever wondered who is responsible for reviewing your 401(k) plan and ensuring that it is working for you? More than 54 million people across the United States rely on their 401(k) plan as their primary method to save for retirement, but many plan participants don’t know who’s responsible for managing it and how to use it the most effectively. 

Identifying who is responsible for your 401(k) plan can help give you greater clarity about working towards your retirement goals. A 401(k) plan, simply put, is a special purpose trust identified by your employer to help you save for retirement. This is overseen by one or more individuals known as plan trustees.

These plan trustees are legally responsible fiduciaries that must make sure that the 401(k) plan operates for the benefit of the plan participants and the participants’ beneficiaries. Furthermore, the plan trustees have to verify that your plan complies with the requirements of the Employee Retirement Income Security Act, which requires that every plan participant is treated fairly. A formal written document should be included with your 401(k) plan about how the plan does operate and the summary plan description can also be a valuable piece of information to review.

Bringing this information to your meetings with your financial planner or your estate planning attorney can help position you to better understand how this will protect your future.

 

Watch Out for Telephone Tax Scams This Year

April 18, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

The elderly are exposed to all different types of possible financial fraud, and unfortunately, tax scams are on the rise. Telephone tax scams have become extremely prominent in recent years and despite the fact that there have been featured in the news media and warnings from the federal government, it is tempting to want to deal with these tax situations sooner rather than later. Chances are though, however, that the IRS is not calling you directly. 

Some of the most common forms of these telephone tax scams right now, tell a person that they are going to be prosecuted if they do not make a payment immediately. Tax scams ate always on the rise nearing tax season, particularly any phone calls that threaten criminal prosecution, lawsuits or police arrest.

The IRS says to avoid giving any personally identifying information over the phone. More than likely when the IRS reaches out to a person who has a tax issue, this will be done in writing and will come on official IRS letterhead. Over the phone, people may threaten you and try to encourage you to give personal identifying details, such as your bank account, to make a payment. But this is not the IRS. Many of these criminals impersonate IRS agents and promise you a big refund if you give them private information.

According to the Treasury Inspector General for Tax Administration, reports that were filed with that agency have led to more than $54 million in payments from victims to these phone scams. Being aware of these scams is one of the best ways to protect your assets from being decimated, now or in the future. If you have concerns about how to protect your assets appropriately, schedule a consultation with an experienced estate planning lawyer today.

Can I Amend My Existing Trust?

April 17, 2018

Filed under: Trusts — Neel Shah @ 9:15 am

If you have a lot of changes to make to a trust document and you have a revocable living trust, you may be curious about the best way to amend it. Many people may be tempted to simply write their changes directly on the trust document and initial it. However, you need to sit down with your knowledgeable estate planning attorney and figure out whether or not this is true in your case. Since not every trust is amendable, you’ll first want to figure out whether you do have an amendable and revocable trust. avoid this trust mistake7You should not make changes directly to the trust document and initial them. You must use an amendment to a trust to reflect your changes. Amendments are relatively simple documents but they should be put together by your lawyer. These amendments acknowledge the ability to make changes, amend the trust and then provide that the remaining portion of the trust stays in full effect, despite the new amendment. If you’ve already amended the trust a few times, or if you have a significant amount of changes to incorporate on your trust, this can be very difficult for a trustee to follow. This can lead to confusion and conflict down the line, so make sure you talk through what is best in your case.

There are ways to amend an existing trust that essentially creates a brand new trust and this could come as a complete restatement. You’ll want to talk this over with your knowledgeable estate planning attorney to figure out what is truly best for you.

What You Should Know About Vetting a Financial Advisor

April 16, 2018

Filed under: Finances — Neel Shah @ 2:37 pm

So you’ve already got to the point where you recognize you could benefit from a conversation with an experienced financial advisor. Along with a CPA and an estate planning attorney, a financial advisor can become an important component of your team of trusted professionals. You’ll want to interview several different options for a financial advisor and look into their backgrounds and references from other clients before making a final decision. hire a lawyer and a financial pro for estate planning

The initial interview can help you clarify whether or not this person has served as a fiduciary before, their individual certifications, and the types of services they offer. You can also ask more about their specialties and areas of focus.

The advisor’s minimum investable asset requirement is something you should also ask about during the initial interview. Anyone will want to know exactly how they will be charged by a financial advisor, including how much you’ll pay for advisory services and fees associated with underlying holdings if this person manages your portfolio. Advisors charge by different models, including by the hour or as a percentage of assets under management.

You can verify that the appropriate planner has the CFP certification if this is important to you, and it is strongly recommended that you consider working with someone who has done the extra work to achieve this certification. Hiring an experienced financial advisor is just one piece of the puzzle. Make sure you identify a knowledgeable estate planning lawyer so that the documents and strategies you put together can all be reviewed in full and work with one another.

What You Need to Know About a Supplemental Special Needs Trust

April 12, 2018

Filed under: Special Needs — Neel Shah @ 9:15 am

You already know as a parent of child with special needs that you need to look to the future with care. If you’re no longer able to around to help support a child with special needs, things in your child’s life could become very difficult. It’s natural to want to plan ahead, but you should know that the way you do this can have big ramifications for your future. Mistakes made could cost your loved one government benefits. plan ahead with a special needs trust

Planning ahead for a child with a disability is extremely important for any parent who finds themselves in a position of looking to the future. A carefully constructed trust known as a supplemental special needs trust can help your child not just now but well into the future. This can allow your child to receive necessary funds for his or her lifestyle, without jeopardizing critical government benefits like supplemental security income and Medicaid.

For friends and extended family, this is an additional way to help provide care if something happens to you and you are no longer able to support them. Families that are in a difficult financial situation may delay putting together a trust, thinking that if they have no money to contribute currently, that they don’t need to do so. However, a supplemental special needs trust could be made the beneficiary of your estate and your life insurance policy, ensuring that those assets are not transferred immediately to the child when you pass away, which could jeopardize his or her ability to receive those critical government benefits.

Estate planning and financial planning, particularly as it relates to special needs children is not expensive and can be carefully constructed with the help of an attorney.  

 

I’ve Got a Long-Term Care Policy. Should I Stop Paying or Keep It?

April 11, 2018

Filed under: Long Term Care — Neel Shah @ 9:15 am

If you’ve had a long-term care policy for several decades and have continued to pay the premiums, this is an important component of being able to protect yourself against decimating your savings. However, many people who have long-term care policies have reported that these premiums have increased significantly in recent years. Do you have an LTC plan?

Some people are concerned about whether or not they should let the policy lapse or continue paying for it. The decision about whether or not to continue paying the premiums on your long-term policy can only be made after evaluating your individual financial situation. If you have significant assets but no long-term care policy, a sudden incapacitating event that sends you or your spouse to the nursing home, could completely eliminate all of your savings. With substantial assets you may not be able to get support for Medicaid, at least for a period of time after you’ve spent down your individual assets and wealth. A long-term care policy must be carefully considered as part of your vision.

While many companies used to offer long term care insurance, many of those smaller businesses ultimately closed up shop after becoming insolvent. Today there are only a few major insurance companies that offer long term care. The older long-term care policies will typically have better benefits than the newer ones, so allowing your long-term care policy to lapse could be a big mistake if you are not careful.  

Have You Talked to Your Adult Children About Your Retirement?

April 10, 2018

Filed under: Retirement Planning — Neel Shah @ 9:15 am

Many older people across the United States have not talked to their adult children about impending retirement plans, which can generate a lot of questions and confusion about what the future holds. A fidelity study conducted in 2016 identified that more than one-third of parents had never talked to their adult children about retiring because they felt that the conversation never came up. However, any detailed conversation about estate and financial planning, including conceptions about when retirement may occur, can give everyone greater peace of mind and confidence. 

Although some families still treat conversations about money, retirement, and finances as taboo, it is critical to ensure that your children give yolong term planning help with a lawyer u a chance to say what you need to say when the topic of finances comes up. It can be hard to gauge generational gaps in conversation and lack of clarity about estate planning and retirement planning strategies, but sitting down with a lawyer can help. Before adult children make suggestions, they should do their own research.

They should never come to the table without having an open mind about what their parents believe to be their own best interests. Many times, adult children may not be clear about what the parent intends to accomplish with his or her retirement planning or the assets held in place. Having a conversation about these issues, as well as any long-term care insurance policies is important.

Why Procrastinating Can Be a Huge Mistake for Your Estate Planning

April 9, 2018

Filed under: Estate Planning — Neel Shah @ 9:15 am

Everyone has heard some type of nightmare tale about what has happened to a person’s assets when they weren’t properly included in an estate plan. Often it is the remaining family members left behind after a loved one passes away, left to cope with the problems associated with lack of estate planning or improper estate planning. 

Procrastination can generate a great deal more frustration, problems, and grief for your loved ones, all because you simply refused to sit down with an estate planning attorney. Procrastination can put your loved ones in a very difficult situation if something happens to you while you are still alive, such as becoming incapacitated and having no one appointed to make decisions on your behalf, as well as for the management of your assets if you were to suddenly pass away without an estate plan in place.

This empowers the state to make critical decisions about what happens to your remaining property and this can cause numerous different problems in the handling of your future. It is far better to consult with an estate planning attorney well in advance and hope that you don’t need the support provided by an incapacitation plan. However, if you are concerned about incapacitation, having these documents properly created, signed and stored can greatly increase your chances of comfort, knowing that someone else is appointed to step in and make decisions on your behalf if you become unable to do so.

Why You Need a Succession Plan for A Franchise Business

April 5, 2018

Filed under: Business Succession Planning — Neel Shah @ 9:15 am

An unplanned exit, whether it is due to incapacitation, death or something else, could generate significant consequences for a business. It is extremely important to have a succession plan in place for every type of business, but franchisees must have them as well. It is a win-win situation when a franchiser requires or suggests that a franchisee put a succession plan in place. 

The succession plan doesn’t have to require a great deal of complication, but it will simply outline what happens if the owner leaves by death or otherwise. A planned exit is extremely beneficial to the business because it can lead to minimal disruptions in the company if there is a sudden and unplanned exit. The succession plan may be coordinated along with an estate plan which considers transfers through sale or other means.

This disposition can happen by using buy/sell agreements, family partnerships, life insurance policies, will and trusts, and more. These issues must be coordinated with regard to any restrictions that could exist under a franchise agreement related to the disposition or the sale. Furthermore, the state laws in your individual location can have an important impact on the outcome of the sale.   

Planning Tips to Keep in Mind When Selling Your Business

April 4, 2018

Filed under: Business Planning — Neel Shah @ 9:15 am

If you currently own a business and are anticipating selling it in the future, you need to look back at your foundational documents including any buy/sell agreements to determine whether or not guidelines are already established. 

There are five crucial financial planning areas that you need to consider when planning to sell your business. First of all, you need to articulate your plans for the money, including whether you plan to make major purchases, your future retirement goals and to generate a new vision for your future.

You may also wish to accelerate college funding and charitable giving with college savings plans, or a donor-advised fund. Required cash reserves and estimated taxes should also be in the back of your mind. If you sell early in the year and the tax is not due until April 15th of the year following, you’ll still want to have a long-term game plan for what to do with your taxes.

Key man insurance or personal liability insurance should also be reviewed carefully when it comes time to pass on the business. Many of these policies are owned by the business entity and the business remains the primary beneficiary if the key man passes away. If you are the primary owner of the entity then you have the eligibility to change the beneficiary and the ownership on these policies, and this is a step that you should take as soon as possible to protect yourself.

What You Need to Know About Keeping Your Money in The Family

April 3, 2018

Filed under: Asset Protection — Neel Shah @ 9:15 am

Part of estate planning is ensuring that the inheritance you pass on goes where you want it to after your death. But how can you ensure that your assets are protected long after you’re gone? Do you hope to pass on as many assets as possible? Do you know whether or not your beneficiaries could be exposed to risks that could cost them all of the assets you’ve worked so hard to build? In an increasingly litigious environment, proper asset protection planning using tools like trusts is a must. 

People focus on avoiding probate and putting together a will during estate planning, but it turns out you may need more comprehensive strategies than that. If you died prematurely, became incapacitated, are involved in a rocky marriage that suddenly ends in divorce, or are sued in the next month, all of these are potential attacks on that inheritance you’ve worked so hard to build.

One opportunity to protect this is to use an appropriate trust. This means that there is a clear set of instructions inside the trust about when assets can be removed, such as for education and medical expenses. This can help to guard against the inheritance being squandered. Many people choose a trust because it gives an additional layer of control and peace of mind in the event that you were to become incapacitated or pass away suddenly. It is critical to have a plan in place to protect an inheritance from interference from outside threats, because unfortunately, many people minimize the likelihood of these outside threats.

Family Conflict a Key Issue for Estate Planning

April 2, 2018

Filed under: Estate Planning — Neel Shah @ 9:15 am

There are many different estate planning challenges facing families, individuals and businesses today, but a new study reveals that family conflict tops the list of estate planning challenges. Although tax reform is on the tip of everyone’s tongue when it comes to looking ahead, it’s not the number one issue facing families at this current point in time. 

A TD Wealth survey of 109 different attendees of an institute on estate planning revealed that family conflict is the leading concern for estate planning today. In fact, 44% of planning professionals shared that the biggest threat to estate planning was family conflict, followed by tax reform and market volatility.

There are mixed reactions from numerous planning professionals about the new estate and tax rules. Although approximately half of planning professionals believe that the tax reforms will help their client, another third are not sure what the impact will be and others anticipate a negative aspect. However, many believe that problems associated with family conflict and family infighting are one of the leading reasons and issues that will affect families going forward. Lack of clarity about planning intentions and fall out including probate conflicts and administration may cause concerns after the fact. Having a comprehensive estate plan is the best way to avoid these issues.

What You Need to Know About Selling Your Business Without Suffering the Capital Gains Tax?

March 29, 2018

Filed under: Business Planning — Neel Shah @ 9:15 am

Do you own a business that has appreciated in value and you are thinking about making an exit plan? For many Americans who own a business, this is a substantial part of their financial future and it may be the time to realize this value in cash. As the economy gets better, more people are looking to buy businesses than ever. get help selling your business without capital gains tax

Those individuals with investment capital are looking for good investments instead of the stock market or in conjunction with their stock market plan. However, bear in mind that you have a shadow partner in selling your business; the government, which is ready to take a cut of your sale proceeds as a tax. While an individual business owner can be at a disadvantage in terms of taxes, the organized philanthropy industry has plenty of ability to protect tax advantages.

Saving federal taxes on the sale of a business without any conflict from the government means it necessary to use a charitable tax planning structure. For those individuals who have excess income charitable trust have income tax and estate planning value. Putting together a private charitable foundation can enable you to pass on large amounts of business interest or property while getting an income tax deduction and avoiding the estate tax. Furthermore, you can effectively keep control of the property that has been donated.

One great example is the Gates Foundation. For investors and business owners who want to receive the tax benefits as well as a continuing income, the alternative planning structures put together by an experienced attorney are necessary.

Should You Take Your Required Minimum Distributions Early in The Year?

March 28, 2018

Filed under: Retirement Planning — Neel Shah @ 9:15 am

Required minimum distributions, also referred to as RMDs, are typically due by the end of the year, so most people will put them off until that point. Many people will assume that it is best to take their RMDs later in the year to maximize the tax deferred bill for as long as they can.

 However, there are some practical advantages to taking your RMD earlier in the year. First of all, taking RMDs early in the year puts less pressure on your beneficiaries if you were to suddenly pass away before taking the distribution. When an IRA owner who is subject to RMDs passes away before taking the distribution for the year, it has to be taken by the beneficiary. There may not be enough time to get this done appropriately if an IRA owner passes away later on in the year.

Before you schedule what to do with your IRA and your RMDs it is a good idea to review all of the documents and plan beneficiary form now to avoid disputes down the road as well as confusion or conflicts after you pass away. A beneficiary form of you is an update of a simple service but a high value one that should be discussed directly with your estate planning attorney to verify that your other documents are in line.

Do You Have Significant Planning Needs?

March 27, 2018

Filed under: Special Needs — Neel Shah @ 9:15 am

Many people might assume that they don’t need the benefits of estate planning and will therefore, put off this process entirely. However, more and more people are in need of advanced planning strategies and finding themselves in a crisis situation, such as when a loved one who handled all of the finances passes away or when someone becomes incapacitated suddenly can be overwhelming. Advanced planning considerations are especially true for those families who have children with special needs. get help with planning for a child with autism

Children with varying types of disabilities, including autism, will likely need a parent’s financial assistance over the course of their entire lives. Finding the appropriate wealth management planner is extremely important. One in forty children between the ages of three and seventeen in the United States will be diagnosed with autism spectrum disorder and autism, according to research from the National Health Interview Survey. This disorder first became included in tracking in the early 2000s by the CDC. The condition is a very complex one but one that requires advanced planning considerations. Research shows that it can cost $17000 or more each year to care for a child who has autism than it does for a child without the disorder.

For those children with severe autism, the expenses increase. When a family member first comes to see a financial advisor, they can be overwhelmed by all of the different options. A financial professional and estate planning attorney can help to alleviate some of the burden by ensuring that appropriate planning channels have been put in place.

What You Need to Know About Filing Taxes After a Loved One’s Death?

March 26, 2018

Filed under: Taxes — Neel Shah @ 9:15 am

Many clients who are suddenly facing the prospect of losing a loved one find themselves in over their head and extremely confused about the next steps they need to take. There may be nothing certain about life except death and taxes, but filing and paying taxes after a loved one has died can seem like a lot to do. get help doing taxes with a loved one's estate

The final return must be done whether it falls to an executor or the heirs. If an individual passes away during the year and he or she received income, then a tax return is needed.

If your spouse passes away during the year, you can file married, file in jointly or married filed separately, whichever of these gives you the preferred tax treatment of your income. Sometimes you must carry out different tax calculations in order to determine this.

Money that is received from IRAs, life insurance annuities or other pensions may have tax implications that need to be handled and appropriate tax planning is essential. Funds are received, taxes become due and it can become a serious problem if no planning was done to cushion the shock of the tax bill.

When dealing with a multitude of issues after losing a loved one, getting financial assistance may seem like just one more step. However, a few minutes with a professional can be a stress reliever and can give you a clear course of action. It is especially important to consider the financial tax return implications when business partners are involved. Even if the partners are spouses, there are numerous considerations that need to be carefully calculated and taxes filed for the business that may include a final business return. Business taxes are extremely complicated and require the insight of a professional.

Tips for Ensuring You Get the Maximum Benefit Out of a Living Trust

March 22, 2018

Filed under: Living trust — Neel Shah @ 9:15 am

Many people who generate revocable living trusts don’t truly reap all of the advantages available to them. They might understand the basic benefits associated with putting together a revocable living trust, but you need to ensure that you are heirs are able to enjoy the benefits of this trust down the road. 

In a typical living trust, you and your spouse might transfer the title of the majority of your assets to the trust and then serve as co-trustees. This empowers you to maintain control over the assets and manage them as you did before, except you are serving as a trustee rather than the individual owner.

There are numerous different benefits associated with a living trust, the first one is that your assets inside the trust avoid probate and a successor trustee will step in to manage on your behalf after you pass away. If the original one becomes disabled, a living trust can also be very beneficial. The most common mistake made with living trusts has to do with failing to transfer legal title of assets to the trust. This is referred to officially funding the trust and it can be done by sitting down in a meeting with an experienced estate planning attorney.

 

Watch Out for The Power of Attorney Trap

March 21, 2018

Filed under: Power of Attorney — Neel Shah @ 9:15 am

A power of attorney is a vital estate planning document, but you need to know how to maximize its benefits as well as the limits. In a power of attorney document, you are the principle and name one or more agents, frequently an adult child to act on your behalf. The agent can be empowered to take any action on your behalf or may be restricted to particular activities. 

You will need a power of attorney because if something happens to you and you become incapacitated, the agent can pay bills, manage your assets and make decisions for you. The alternative is for your loved ones to have to go through a court procedure in which a judge must determine that you are incompetent and then have someone appointed to act on your behalf. This is referred to as guardianship in most states.

In an ideal situation, you can make things easier for your family members during an otherwise difficult time by allowing the power of attorney to take over smoothly and manage your affairs seamlessly because you are no longer able to do so. You need to ensure that you have selected a person who is confident serving in this role and one who gives you a lot of peace of mind about the process.

Avoid the Mistake of Leaving Behind a Messy Estate

March 20, 2018

Filed under: Estate Planning — Neel Shah @ 9:15 am

Perhaps the best test of how much you care about your survivors and the legacy you’ll leave behind is the organization of your estate. There are two crucial components of your estate to consider. When you work on your estate planning in additional to your physical belongings throughout your life, it makes things easier for you and your loved ones. 

The first is your physical estate and for many people, this refers to their personal possessions as well as their home. Many people have had a personal experience with the physical estate of their parents and many have had unfortunate stories about how many belongings they have had to sort through and dispose of. Your physical estate, in addition to lack of proper planning documents, can present problems for your loved ones. You likely don’t want to leave behind a lot of work for your family members because you haven’t combed through your belongings carefully.

Many people accumulate belongings over their lifetimes and rarely will streamline it. These possessions can compound over the decades and many, by default or through deliberation, allow their children to deal with the consequences. Survivors than feel obligated to sort through all of these things because they may be looking for valuable or sentimental items.

It can take days, weeks or even longer for loved ones to sort through these belongings and you can do your family members a favor by considering the steps you can take in advance.

You Can’t Count on Luck in The Retirement Planning Process

March 19, 2018

Filed under: Retirement Planning — Neel Shah @ 9:15 am

There are several steps that you should always keep in mind when trying to balance retirement, college savings, estate planning and all of your other priorities for your life. If you don’t know what you want, there is no good way to plan for this. This is why you should sit down with your spouse and any other key family members to figure out what is most appropriate for you. Cover what you want to do in retirement, where you want to go and where you want to live. 

You can then work backwards to identify the assets that may protect you during this time. The second step to work towards your retirement is to create a savings plan that matches your goals. If you have ten or few years from retirement, you will need to be more calculated about the savings strategy you use to approach your goals. If you have 20 or more years before you intend to retire, you have multiple options for working towards those goals. Make sure that you re-assess your risks at each stage as you get closer to retirement.

Another thing to consider is that you need to get your retirement plan in line with taxes. A crucial part of a comprehensive financial strategy is a tax plan and an often-overlooked aspect of financial planning is estate planning. Without an appropriate estate plan organized, your belongings could end up with the state and this can put your loved ones through a lengthy or even expensive estate planning process. It’s far better to have a lawyer who can assist you with these goals well in advance.

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