For the majority of retired investors and retirees overall, taxes, trusts, and income are all critical issues. These may be seen as a necessary evil but it is important to reframe your thinking to consider that a trust as one example as nothing more than a legal document that empowers you to exercise control over the distribution of your estate. A trust is often exercised to take advantage of particular tax advantages while also addressing estate tax issues when your estate officially changes plans.
Sadly, investors with a great deal of amassed wealth may have had as much as 50% of their estate lost to taxes when it is transferred to the beneficiaries. One of the most common mistakes made in this method has to do with the funding of a trust using boilerplate trust forms that you find online or from an advisor could increase the chances of a mistake that ultimately harms your beneficiaries.
Since you are putting special care and consideration into your loved ones’ benefits and how they will be rewarded in your estate, you need to follow through on all aspects of properly funding the trust and establishing it to begin with. Scheduling a consultation with an experienced estate planning attorney can help you to accomplish all of these goals and to give you more peace of mind about your own future.
When there is no will established by a person, a personal representative or administrator will be appointed by the surrogate’s court. The first right to apply for the position of administrator is given to the surviving spouse but any heir of the decedent could be appointed.
When one of multiple heirs wants to be appointed an administrator, all other heirs have to renounce their right to the appointed administrator. Usually a surety bond is required in order to cover the cost of real and personal property in the estate.
In order to apply for an administration, you will need a list of estate debts, a death certificate with a seal and estimate of the gross value of the estate, the names, and addresses of next of kin, and a blank check or cash for fees which vary with each estate. The first steps that are usually taken to handle the administration process include:
- Locating the decedent’s will
- Contacting social security
- Securing all estate assets
- Getting one or more original death certificates
- Beginning a checklist of estate assets such as stocks, credit unions, and bank accounts
- Keeping a list of medical expenses, utility bills, and charge accounts
- Investigating veterans’ benefits, if applicable.
- Arrange for the forwarding or pickup of mail
Consulting with an experienced estate planning attorney can help you to name a personal representative or administrator today such that your family members are not left with a difficult decision of determining whether or not they will serve in this role.
Before you start splitting time between two or more states, think about where you’d like to have as your primary place of residence because there are several different advantages to choosing one place over another. Then, after you have made this decision for yourself, be prepared to prove that the state you choose is really your home base. By age 61, many people say that they are free to choose where they want to live, according to the results of a study from Merrill Lynch.
Life responsibilities like work or family often dictate these decisions prior to that time. This is why it is not that surprising to see retirees move at least on a part-time basis to a new location. More than one-third of retirees, in fact, told Merrill Lynch that they have already relocated and 27% anticipated doing so. Making the decision about where you want to live is important. More than 80% of retirees intend to move to the South Atlantic. Since several states have no income tax and others have tax breaks on retirement or real estate taxes for older residents, this is something you should consider in your determination.
Some states are well-known for going after individuals who claim that they are residents in other states to avoid having the financial obligations of claiming residency in the first state. Make sure that you keep all documentation to assist yourself with minimizing the consequences of these allegations.
Looking ahead to retirement is something that is a big issue for many baby boomers getting closer to prominent retirement ages of 50 and beyond. However, an exploration of the finances of people in this age category indicates problems with burdensome debt.
According to the University of Michigan Retirement Research Center, more Americans are carrying heavy debt levels into their 50s and beyond.
More than 20,000 Americans in this age category were asked about their financial topics. The average amount of debt they are covering is $17,623 with 42% of Americans carrying that debt.
The average debt load in 2012 was $3,634. One-third of this was non-mortgage debt carried on a month to month basis. This presents a significant challenge and limited opportunities for people approaching retirement age who may want to have as many options as possible to protect their interests, support themselves in retirement and pass on assets to their loved ones.
If you find yourself in the situation of having debt or having recently paid off debt such that you have more assets, you should consult with both a financial planning and an estate planning attorney to get a better perspective on the facts you need to evaluate in your future.
Appointing an executor is an important step to take if you want to protect your interests after you pass away. Choosing the right person to serve in this role is important because you need to place your faith in this individual. For your family members struggling to cope with your loss, the selection of an executor who doesn’t follow the will’s requirements can present problems beyond what they know how to handle, but there are options.
Probate proceedings are judicial, so there is a judge who will oversee the process. A court may appoint a personal representative in your estate if you do not have one, and the court will maintain jurisdiction over the matter in this situation. There are two major types of estate administrations; supervised and unsupervised. The court will be involved in every stage of a supervised administration. Prior to the action taken by the personal representative, that person would need an order from the court.
Unsupervised visitation, however, requires far less involvement from the court when compared with supervised administration. Once the estate has been completely administered, the personal representative issues a final account in with court.
Parties have a maximum period during which they can object and it is strongly recommended that you have a probate lawyer to assist you with this process because you will need someone who is familiar with the law and who can help you navigate the complexities of estate planning and administration. Consulting with a lawyer immediately is very valuable for anyone who finds themselves in this situation.
Comprehensive estate planning is something that any person can benefit from, regardless of the size of their estate. It is a mistake to assume that you do not have to participate in estate planning because you have a few basic documents such as a will in place. Your will could be outdated or even legally invalid depending on whether or not you have moved to new states or incorporated new things into your life since you last put it together. Consulting with an experienced attorney is the best way to get a holistic approach to your estate planning.
One commonly overlooked but increasingly important component of estate planning has to do with your digital estate. What happens when you pass away to your email accounts, bank accounts, and even your social media. Will these disappear? Are they deactivated? Or will they exist in the Cloud forever?
The answers to these questions lie in the domain of digital estate planning and scheduling a consultation directly with an experienced digital estate planning lawyer can help you to accomplish a broad perspective on what you need to include. With so much vital information stored online, you simply cannot afford to neglect your digital estate planning opportunities. The nature of estate planning itself has changed and while you still may benefit from some of the more traditional documents, you can also benefit from considering what plans you’ll put in place to protect the assets you have online or to deactivate them. Appointing another individual to step in in this role is a common way of addressing concerns with your digital estate but you need a plan that is designed for flexibility and fast action. Consulting with a lawyer who is knowledgeable about digital estate planning can help you to craft a plan that is in line with your unique needs.
The nature of estate planning itself has changed and while you still may benefit from some of the more traditional documents, you can also benefit from considering what plans you’ll put in place to protect the assets you have online or to deactivate them. Appointing another individual to step in in this role is a common way of addressing concerns with your digital estate but you need a plan that is designed for flexibility and fast action. Consulting with a lawyer who is knowledgeable about digital estate planning can help you to craft a plan that is in line with your unique needs.
One of the primary purposes that many people engage in the estate planning process is to ensure that taxes are minimized and that their financial matters are handled as they wish. However, you need to consider planning for purposes other than taxes. For example, you will need to think about designating the best executor or trustee because this is a crucial piece of ensuring that the administration of your estate goes smoothly. It might also be important to update materials over time for any special needs provisions if any of the beneficiaries is receiving government assistance.
If there is a change in your family situation, this could also trigger updates in your estate plan. Failing to incorporate this could lead to confusion or even conflicts after you pass away. If the size of your estate has changed, it’s also a good idea to schedule a consultation with an estate planning lawyer to discuss your overall financial distribution plans. The current gift tax exclusion may allow you to provide gifts to someone while you are still alive and can help to reduce the size of your estate and give advantages to your beneficiaries in the short term.
Consulting with an experienced estate planning attorney can help you accomplish not just your tax planning goals but also the other unique considerations you will want to have including passing things on to philanthropy, how to do your beneficiary designations on things like retirement forms and other materials are relevant for estate planning purposes.
If you leave assets behind to your loved ones, you should always do so with a clear expectation of what that money or property is attached to. Ignoring the potential tax consequences could leave your loved ones in a difficult bind, whereas planning in advance gives them more opportunities and helps to stretch that money even further.
Many people do not meet the threshold to trigger the federal estate tax, although it is still important to schedule a planning consultation with an experienced estate planning attorney. There are certain states across the country that do tax individuals who receive inheritances. Variation also exists between these states about the size of the estate and the asset types.
Inheritance does not classify this income unless it relates to the federal tax structure and there is no requirement to report the same. But there are several different inheritances that could lead to income. The latter type would be taxable. Capital gains tax, for example, could be imposed on a profit made. Taxes can be minimized on inheritance assets. Since estate taxes can be complicated, it is strongly recommended that you bring your questions and your individual planning concerns directly to an estate planning lawyer who can assist you with further information.
No one is able to get out of this world alive but you can make it easier on the loved ones that you leave behind. If you have minor children or accumulated assets, you still need to do some estate planning. The more complicated your life and businesses, the more complicated your planning must be.
Sadly, however, many people choose never to conduct their estate planning. A study completed by Caring.com found that just over 40% of adults in the United States have completed basic estate planning documents like a living trust or a will. For those with children younger than age 18, that figure is even lower, with only 36% having put an end of life plan in place.
Many parents work as hard as possible to ensure that their children are safe in all aspects of life but failing to have appropriate estate planning documents like a living trust or a will could compromise their ability to accomplish their goals or put them in a very difficult situation should something happen to you. Without a will in place, you are leaving behind a difficult and potentially expensive situation to be handled by whoever the court appoints.
Many parents will put off estate planning because they are not sure about who to name as the guardian of their children and you assume that it is extremely difficult to talk about your own mortality. Blended families, however, and the complexities of modern life makes it even more important to put together an estate plan that considers your unique needs. Grandparents, for example, may not be a good choice as the guardians of your children simply because of their age but no matter who you choose to serve as guardian of your children, you need to have a conversation about what that entails and whether they are comfortable taking on that role.
There are many different events in your life that may prompt you to think about the benefits of estate planning such as purchasing your first home or having a child or becoming a grandparent. Some of the events that occur in your life that can prompt you to consider estate planning can be more difficult than others.
Cancer, unfortunately, is a reality that far too many people will face over the course of their lifetime and may impact many people across the country in an indirect or direct manner. Understanding the estate planning steps you can take to protect your assets and your legacy after a cancer diagnosis is important and should be done under the guidance of an experienced estate planning lawyer.
There are new cases of cancer every year that affect 454 out of every 100,000 people and the annual cancer deaths affect 171 out of every 100,000 people. According to nationwide statistics, nearly 40% of women and men will be diagnosed with cancer at some point during their lifetime and cancer mortality is higher for men when compared with women. Impulsive actions caused by panic are common with anyone who has received a cancer diagnosis but sitting down with a planner to discuss the various strategies to address their complex challenges can be extremely beneficial.
An inventory of all items that you own and a prioritized list of steps put together by your estate planning lawyer can help you to tackle the most important steps and determine whether or not you already have existing insurance and force that can help prepare you and your family for this difficult time ahead. If you have questions about how a cancer diagnosis or any other major health issue affects your estate plan, contact a knowledgeable lawyer today.
Planning your wishes for end of life concerns is never an easy prospect to consider. However, it gives you clarity on how to live your best and most purposeful life as well as leaving behind powerful gifts for your loved ones.
Many people put off the process of estate planning because they find it to be overwhelming to think about their own mortality. Planning ahead for end of life and leaving your loved ones better prepared, however, can make this difficult transition easier for your family members. The worst thing to do to your loved ones is to leave unclear wishes that prompt them to file lawsuits, contesting your will or other estate planning documents after the fact.
A lack of clarity can lead to confusion and frustration among your family members that ultimately causes greater legal conflicts that are both expensive and time-consuming. Making your plans and sharing your wishes with the help of an experienced estate planning lawyer are some of the valuable steps that you can take to empower your own future. Do not hesitate to get help from an experienced estate planning lawyer if you have questions about how to articulate your wishes and the best strategies and tools you can use while you are still alive and well to protect your assets and your loved ones.
Most parents recognize that they need to consider their estate plan in terms of how to protect their children in the future. But when your child has special emotional, physical or mental challenges, the process of estate planning is even more important. One of the main reasons you want to put together an appropriate estate plan is to preserve that child’s eligibility for programs such as government benefits.
Unfortunately, many of the different estate planning tactics that are out there today may be appropriate for other children but may not fit the requirements of your special needs child. For example, using trusts that do not consider the unique needs of the special needs child could jeopardize your minor’s ability to access government benefits in the future.
One common trap is beneficiary designations in retirement plans. Beneficiary designations are common tools in retirement saving plans that give you a lot of flexibility for passing on an inheritance since you can designate primary and contingent beneficiaries to receive your benefits. The flexibility and convenience of leaving funds behind in retirement plans, however, can have a major unintended financial influence on those receiving government benefits because of their special needs. Qualifying for Medicaid, for example, could be jeopardized if you use these beneficiary designations to pass on assets to your loved one.
The best way to avoid these problems is to put together a special needs trust and leave the assets intended for the child inside that trust. The special needs trust is used to supplement benefits that are already received from government programs without jeopardizing the person’s eligibility to receive them. Consulting with an experienced estate planning attorney who has years of experience helping parents with special needs children is strongly recommended.
The Roth IRA is one of the most popular accounts that allow people to invest tax-free for their retirement. However, if people earn too much, they will not be eligible to contribute directly to a Roth IRA. But meeting with an experienced financial planner in conjunction with other professionals such as your estate planning attorney may allow you to exercise a backdoor Roth IRA strategy that allows high earners to bypass any income limits.
High earning employees who do want in on tax-free investment growth that is offered by the Roth IRA could benefit from the so called backdoor IRA. In the event that a high earning person already has a tax deductible traditional IRA account, this strategy becomes extremely important. This is why it is knowledgeable and valuable to reach out to a financial planner and accountant immediately.
If you have never opened an IRA before, it is simple to do so. You can open a traditional IRA at the brokerage of your choosing, make a contribution to the account, open a Roth IRA at the same brokerage and then convert that amount contributed to the traditional IRA to a Roth IRA.
This leaves your traditional IRA empty and instead moves the money into your Roth IRA. Make sure you talk over your options for estate planning and an appropriate financial planning protection with a knowledgeable estate planning attorney as well as other relevant professionals.
You might assume that you are still in relatively good health and facing low chances of being put inside a nursing or retirement home. However, new information shows that more than 50% of Americans between the ages of 57 and 61 will spend some time in a nursing home.
That’s according to the RAND Center for the Study of Aging. According to that study, the reason for the increase in the number of people in nursing homes has to do with hospitals discharging people faster and increasing the stays in post hospital rehabilitation centers.
Once someone has been in the hospital for 3 days, Medicare will cover the cost of post hospitalization rehab for up to 20 days and then a portion of the cost for up to 100 days. With more than 56% of people between the ages of 57 and 61 spending a minimum of one night in a nursing home during their lifetime, this study found that 32% of them will pay anything out of pocket.
Anyone with 4 or more children spent about 38% less in nursing home costs than those without children and having daughters was also linked to a decrease in the nursing home cost overall. If you have questions about how long term care, estate planning, and retirement planning work together to help you accomplish your goals, contact an experienced New Jersey estate planning lawyer today.
Looking down the road to retirement? You’ve probably considered a broad range of issues, including what you’ve saved so far, what you might need for health care, and how you intend to live during retirement.
There’s no doubt that you are thinking ahead about your retirement planning goals when wanting to plan for your future. There are key factors that contribute to your mental health status and a new study has identified that your retirement savings and other issues can affect how you feel about your life in general.
Some of the other elements that factor into the overall perception of how your future is perceived include longer lifespans, the greater reliance on defiant contribution pension plans and the questionable state of social security. Many different households including people who are aging inside are dealing with mental health concerns such as anxiety and depression. Medicare Research Institute, in a study that was published in Health Economics, identified that psychological distress was linked to a 47% higher likelihood of a married couple withdrawing money from their retirement account.
And it was also connected to married couples having approximately $42,000 left in retirement savings accounts. Key factors that influence this can all have an impact on a person’s overall psychological makeup. Thinking ahead about your retirement and how it works in conjunction with your intentions for your estate planning, is an important component of planning for your future.
Your retirement plan should look at your long-term goals and it should also be something you think about years in advance. When you’re getting close to retirement, it also makes sense to schedule a meeting with an estate planning attorney to talk about your needs as a whole.
A family that has amassed a significant amount of wealth will have special planning considerations that should be addressed directly by an estate planning attorney. When contemplating a major charitable gift, you have several different options at your disposal including charitable trust, private family foundations, and donor advised funds. These are all unique and should be discussed in full with your estate planning lawyer. Most families with wealth have plans to gift to charity over the course of their life as well as within their estate, and this notable goal helps to empower a broad range of charitable organizations for years to come. With giving in this manner, a person or a family can establish a clear legacy for the future.
A charitable trust is one of the most common ways to manage charitable giving over the course of time. This allows you to utilize a charitable deduction currently while making a large one time gift to charity. You can also receive income payments from that property over a period of years or designate another person to receive them. Having a plan helps to minimize tax consequences as well as to maximize what’s given to the charity. Working together with an estate planning lawyer, you can accomplish several goals at the same time.
A private family foundation, however, allows donors to make a one-time substantial gift as well as to stay involved in how that gift is ultimately distributed. You can even name family members to serve on the board of trustees or board of directors. Finally, one other option is donor advice funds. This operates much like a traditional investment account and allows a financial manager to charge a fee and a minimum required initial distribution. Talking over your options with a knowledgeable estate planning lawyer is the first step in accomplishing your estate planning goals and outlining a plan to address your philanthropic considerations and achievements.