It can be overwhelming to think about retirement and estate planning. However, these are crucial processes that should be considered by any adult. Many people put off the process every time in estate planning because they assume they will have time to make up for it in the future.
However, a sudden issue or disability can illustrate to you just how important it is to engage in these estate planning and retirement planning issues. Be aware of these common challenges that many people face but neglect to think about. They include:
- Estate planning
- Long term care
The reality is that many people underestimate the risks that they will face both in retirement and towards the end of their life. For this reason, they neglect taking part in the planning process and can make it more difficult for them when they approach that age and realize they have not set enough aside. By thinking about the potential risks and the steps that you’ll take to guard against them now, you can get the peace of mind that if something happens to you, your family members will not be disadvantaged.
Passing on an IRA is different from stipulating another piece of property in your estate planning materials like a will to pass on to someone else if something happens to you. IRAs are managed differently and there are a complex set of regulations involved in this process.
There are a few different ways that IRAs may surprise you in terms of how they are classified and how they impact your beneficiaries. These include:
- IRA beneficiaries may be eligible for particular tax breaks that are often missed.
- IRAs are distributed in a different manner than any other asset, both after death and during life.
- IRAs cannot be jointly owned or change ownership during the life of a person who manages it.
- An IRA may require a unique and separate estate plan.
- The investment gains inside an IRA do not always have to be subject to the 3.8% investment income surtax.
- An IRA passes on to someone else by contract rather than by a will.
Depending on the estate in question, the IRAs could be subjected to double tax at death; an estate tax and an income tax.
The deductions available to IRA beneficiaries are easy to overlook because it requires the coordination of tax planning between the settling the estate and the IRA beneficiary. It is valuable for both of these entities to work together to identify tax saving opportunities. The distributions from an inherited IRA could be taxable to the beneficiary. However, it is a good idea to explore tax planning opportunities well in advance to avoid this situation, if possible.
One common question that people present to their estate planning attorney is whether or not they can revoke or change the transfer on death deed in the future. This is one of the major benefits associated with the ToD deed because it can be changed at the later date, as it is not irrevocable. This is because the grantor has not transferred any interests in the real estate or given up any rights, so they maintain the eligibility to change it at any time.
Remember that the action putting together a transfer on death deed basically adds a beneficiary to real estate. It is quite similar to the process of naming a payable on death beneficiary to your bank account. There is no actual interest in the real estate created, rather an expectation has been created. In order for a transfer on death deed to be effective and legally valid, it has to be recorded and put with the county recorder’s office directly. This also means that another item will have to be filed with the recorder’s office if the grantor changes his or her mind.
This change typically comes in format of a new ToD deed. This is one of the downsides of using a ToD deed because it is not that simple to update. If you change your mind about a provision for payable on death beneficiaries on your savings account, you can visit the bank and be helped by a customer service representative. In order to change a transfer on death deed, however, you will most likely need to hire an attorney to ensure that it is filed properly. This can give you a great deal of peace of mind that the details have been managed effectively, but it can also create an additional obstacle or layer of frustration if you do need to update it.
When putting together a retirement plan, it’s common to focus on how much your income you tend to generate before and during retirement and while this is an important detail, it’s not the only issue you’ll need to review carefully. You need to also incorporate tax planning, health care planning, and legacy planning.
Tax planning is important because if you’re handing over too much of your income to the federal government, you’ll minimize what you can accomplish during retirement. Talking through options with a financial advisor is helpful and may allow you to get pointed in the right direction years in advance of retirement. Your next step should involve health care planning. Health care expenses are a crucial issue for many Americans but they are even more important for retirees.
Medical issues typically keep climbing and getting more expensive over time. Long term care is the most expensive and the biggest issue that most retirees may face and many of the costs associated with it will not be covered by Medicare. Having a plan including long term care insurance well in advance can assist you with navigating the complexities of these issues. Finally, if you have a family, there is a good chance that you intend to leave something behind for them after you pass away.
There are many different ways to structure an estate plan and different tools that you can use but all should be put together with the experience of a knowledgeable estate planning attorney. Understanding the various options available to you and the most appropriate way to pass on those assets is important. Do not hesitate to schedule a consultation with an experienced estate planning lawyer today.
Most people fall for the impression that your estate planning starts and ends with your will because it is one of the most important and basic estate planning tools. However, incapacity can occur anytime, whether you are involved in a car accident or suddenly develop an illness. If you are in a debilitated state for an extended period of time, you may wish to name somebody else to handle your affairs during this time period.
It is important that you have the proper documentation to ensure that your spouse can take action quickly. Bills need to be paid and decisions may need to be made immediately regarding your care when you are in the hospital.
Simply stipulating that your spouse knows what you want is not enough because the hospital staff nor the law understands the distinction. Families would benefit from having an advanced directive for health care and the financial power of attorney in place well in advance of when they are needed.
Trying to create these documents after an incident has already happened can generate unique legal concerns that can further add complications to an already stressful situation. Scheduling a consultation with an experienced estate planning attorney in New Jersey is the best way to identify all of the tools and strategies that could be used to help you and your loved ones.
Whether it’s a family owned business or a company that you have purchased, you need to be prepared for the process of succession planning shortly after you buy it. It might seem counter-intuitive to think so far into the future when you have only just obtained the company.
However, there are four critical steps that you need to articulate now. The truth is that no one can really predict exactly when they will exit the business. It may be your concept that you will exit when you are near retirement and may pass it on to a future generation. However, if you don’t have any children or other family members who are interested in stepping in or if a sudden disability raises questions about succession much earlier, you will need to be prepared by having had a conversation with a business succession planning lawyer.
Articulating the crucial agreements and documents in place well in advance gives you options. The four major tips that can enable you with the process of business succession planning include:
- Starting early, because too many business owners put these important decisions off until the last minute and this does not account for the unpredictability of life.
- Choose a successor. You need to evaluate whether the person you choose to step into your shoes is interested and willing to do so.
- Establish value. Make sure you establish the value for your share of the business or the business overall by consulting with a business appraiser or a CPA.
- Use a formalized working agreement. A working agreement can make a business transfer much simpler and the succession process should be clarified so that it can be activated immediately in the event of a sudden decision to exit the company.
A recent study completed by Transamerica identified that even though retirement can be an exciting time, it is also one that provokes anxiety and fear among those reaching age 65 and beyond.
Many Americans are concerned that retirement will not live up to their expectations or that they won’t have enough assets set aside to protect themselves. Appropriate estate and advance planning is important when it comes to retirement savings. What follows are the five most commonly referenced issues in the Transamerica study:
- Outliving investments and savings
- Not having access to enough social security benefits
- Long term care expenses that are unpredictable
- Cognitive decline like Alzheimer’s disease
- Lack of affordable and adequate healthcare
Most people are under the impression that Medicare will assist them in the event that they have an incapacitating event. While this is true to an extent, more serious problems like cognitive decline or long-term care concerns will likely not be covered by Medicare and you should have a plan in place to protect you with those. This is one of the biggest reasons that Americans are concerned with outliving the money they have set aside for retirement. Financial support can come from many different places but advanced planning is required for all of them. Scheduling a consultation with a knowledgeable estate planning attorney today can help you see how tax planning, charitable giving, estate planning and long-term care planning can all work together to give you a more powerful future.
Every year the IRS evaluates inflation information to determine whether or not the gift and estate tax thresholds need to be boosted. The estate tax refers to the amount of money a person can have in their estate without triggering federal estate taxes and the gift tax refers to the maximum amount of money you can give to somebody else without tax implications every single year.
Both of these were recently boosted for 2018. Estate taxes will be assessed on a single person’s estate if it is valued at $5.6 million or more, allowing married couples to only have to pay estate taxes if together they have an estate worth $11.2 million or more. This allows you to shield a great deal of money from estate tax liability.
Gift tax liability has been boosted to $15,000 per year, an increase from $14,000 that it has sat at since 2013. It is important to remember that you are not prohibited from giving gifts greater than $15,000 to someone. It will simply require the creation and submission of a gift tax return. In any of these situations, you may wish to use other strategies to pass on assets to your loved ones. Making use of the gift tax is one such strategy that can be extremely powerful when used properly. Schedule a call today with a knowledgeable estate planning lawyer.
Drafting a power of attorney is a process often engaged in by someone who wants to protect themselves and potentially their finances or health care decisions if they were to suddenly become incapacitated and unable to make them on their own. However, many power of attorney disputes can occur because someone may argue that you were under undue influence at the time or that you did not have the appropriate mental capacity to make this decision to begin with.
As a result, an increasing number of people who are putting together power of attorney documents are doing so after being evaluated by their general physician or mental health professional. While this might seem silly to include what is essentially an argument testifying to the proof of your mental capacity at the time, this can help to minimize the chances of power of attorney disputes, if and when it becomes time to activate the power of attorney document.
It can be difficult to share your decision-making process with loved ones who are ultimately not selected as your power of attorney agent, yet this too can help to minimize conflicts when you explain how you arrived at your decision and which person is enabled to make these crucial choices or act on your behalf if you become unable to do so. In the event that you become incapacitated due to an accident or a disability, you will want someone to be able to step in quickly to render these decisions on your behalf.
Avoiding conflict can make things easier for your family members in an already difficult situation. Consult with an experienced New Jersey estate planning lawyer to learn more about protecting your interests.
There are so many different myths out there surrounding the process of estate planning that it is often too late after someone realizes that a mistake has been made. You may have experienced a loved one who has passed away and left inadequate estate planning instructions. These can be catastrophic and extremely difficult emotionally for family members to handle in the wake of grief.
For this reason, you need to engage in the process of estate planning early and update your estate plan on a regular basis. One common mistake that people make is thinking of their will as their only tool and shield against probate. Many people are under the impression that if they have a will that they do not need to go through the court system or probate.
Revocable living trusts are a tool that enable you to avoid probate; however, the revocable trust is not effective unless your assets are retitled into the trust name. If you hold the assets in your name alone without a beneficiary designation then the assets are distributed in accordance with the terms of your will.
Before any assets can be collected or distributed with the help of your executor, you have to go through the court system and probate. You may be able to express who is eligible to receive what in your will but this situation could still end up in the courts determining the distribution of assets. It is much better to engage in the process of estate planning now by scheduling a consultation with an attorney who can walk you through the pros and cons of various tools and ensure that the strategies you select are in line with your personal needs and wishes for the future.
Probate is the term for a legal procedure that is used to settle a decedent’s estate, when they have not taken the appropriate estate planning precautions. It is a process through which the court validates the will if one existed, appoints an administrator if there was no will, or grants authority to the executor if there is a will. This process ensures that the property is distributed, that taxes are paid and also enables the legal transfer of the ownership of the property.
All of a person’s property is subject to probate proceedings whether or not a will exists, except for that property that is put inside a trust, property subject to a transfer on death deed, life insurance proceeds, payable on death accounts or property owned in joint tenancy with another person.
The property outlined in these categories automatically passes to the joint tenant, the trust beneficiary or the designated beneficiary – although it could still be subject to estate and inheritance taxes if you have not taken the appropriate estate planning precautions. Consulting with a knowledgeable estate planning lawyer can give you a better overview of the types of stages that estate planning requires and how you can get the benefits provided by someone who can help you select the strategies and tactics necessary for protecting your interests.
The concept of digital estate planning is becoming more popular in recent years because of the surge of online accounts and online assets that people possess. If your service provider does not have an online tool or if you want to guard against the potential misappropriation of such a tool, you might wish to establish a digital executor to manage the carrying out of your digital assets when you pass away.
The revised Uniform Fiduciary Access to Digital Assets Act of 2015 enables you to extend the traditional fiduciary power for tangible property to include management of a person’s digital assets. This also allows a fiduciary to manage digital property such as web domain, virtual currency, and computer files. However, it won’t restrict a fiduciary’s access to only particular electronic communications. This means that text messages, emails and social media accounts will stay private unless the original user gives express consent in a trust, will, power of attorney or another document.
Your affiliate accounts, Google AdSense accounts, blog, and website may require someone familiar with the business to serve as your digital executor, such as an employee. However, a close friend or family member may serve as the appropriate digital fiduciary for your social media and personal accounts. Make sure that you choose someone who has the ability and the knowledge to carry out your necessary requests and inform a digital executor about what is necessary to access your digital estate plan as well as the rules and wishes you have for that plan.
Ready to plan? Now is a great time to schedule a consultation with a dedicated lawyer.
It is never easy to find yourself contemplating your own mortality. However, it can be made much easier by considering how failing to plan could actually cause problems for your loved ones.
In the event that you pass away without having a plan clearly articulated for your loved ones, they may be faced with the challenges of going through the court system and awaiting someone to be appointed to serve as your personal representative.
Furthermore, family members who may not get along may suddenly find themselves in conflict with one another arguing about your intentions. These problems can emerge even before you pass away, such as in situations in which you did not articulate your end of life wishes.
Your family members may be distraught or confused over your intentions about whether you would like to receive life-sustaining care and this can pose problems for your beneficiaries when there is confusion about who is entitled to what and who should be empowered to make these decisions. In the heat of the moment , ou want to ensure that the appropriate people have been equipped with the ability to make decisions on your behalf.
If you fail to take these necessary planning steps, you could be exposing your entire family to a great deal of unnecessary stress and confusion, not to mention the expense and frustration of going through the court system. Having continuous planning and engaging with an estate planning lawyer regularly can help to decrease the chances of problems faced in the estate planning process.
As the most basic of estate planning documents, most people will benefit from a will. There are a number of different goals that can be accomplished by establishing this tool and it may become the sole component of your estate plan or it may work in conjunction with other tools and strategies. First of all, your will provides for the direction of distributing your assets to beneficiaries in the family after you pass away. An attorney can be utilized to customize its provisions.
You are also enabled to appoint a personal representative to account for your liabilities, taxes, final expenses, and assets as well as distributing your remaining assets. A will is the only way to designate guardians for your minor children. If something happens to you, a judge may still have to approve this appointment but you will have articulated your wishes. If there are any minor children, you might also establish a trust to manage assets for them in conjunction with the will. A will has to be filed in probate court in order to remain effective. This is the judicial probate as your judicial process for managing the assets to transfer them effectively if you pass away or for managing assets if you are incapacitated.
A court is responsible for overseeing the distribution of assets and payment of liabilities. Typically, an executor will need to employ an attorney. Although your will is an important component of your overall estate plan, it is not the only tool that you may wish to use. Your unique circumstances will dictate what you need to use in order to accomplish your estate planning goals and scheduling a consultation today with a knowledgeable estate planning attorney is the only way to have the peace of mind that someone is working on your behalf and that you have the appropriate tools to help you if you become incapacitated or suddenly pass away.
If you have a relatively simple estate and have already listed someone as a beneficiary on all of your investments and life insurance policies, you may wish to consider consulting with an experienced estate planning attorney for the purposes of avoiding probate. If you have already listed someone as a beneficiary in your investment accounts, there’s a good chance that you already realize that you have a goal of avoiding probate.
A transfer-on-death deed may be used for the home and you may also wish to consider how to appropriately pass on a car title. Your estate planning is a comprehensive process and only one piece of this is a will. Your will controls probate assets and those are the ones in your name that do not have any beneficiary designations. A home and a car are great examples of probate assets. Investment accounts, however, are non-probate assets because they have separate beneficiary designations and will pass outside of the will process as a result. This means that if you have stipulated in your will that someone should receive your investment account but have a separate beneficiary listed, the company managing your investment accounts will have to pass it on to the person named as the beneficiary designation.
Your will, in this example, would only control the car and the home but not the investment account. This means that if you wish to avoid probate, you’ll have to take action for both the home and the car. Using a transfer-on-death deed is one option you may also add as a beneficiary designation on a title. There are many different options available to you for the purposes of estate planning and scheduling a consultation with an experienced estate planning attorney is recommended.
Are you currently following all the news about potential tax updates? If so, you’re not alone. Many people are expressing their concerns about whether or not tax issues will affect them if a major reform comes into play.
Congressional Republicans and the White House have proposed a new tax reform plan that eliminates the Federal Estate Tax. However, while this would make it easier for some people to simplify their estate planning, avoiding complex strategies to produce a potential tax bill, this doesn’t mean that you should necessarily ignore estate planning overall. First of all, you want to ensure that your assets go to where they are needed the most.
The more complicated your family situation, the greater the need for a comprehensive estate plan. Remember that some states will still have state-level estate taxes. The majority of states do not have an estate tax, but six states have inheritance taxes that apply to the recipients of gifts and 14 states in addition to the District of Columbia have state level estate taxes. The exemption amounts are often much lower than the federal exemption of $5.49 million.
The need for federal tax planning in and of itself will also not go away and you should never skimp on estate planning because there are many different goals that you can still accomplish with this process and benefit from the insight of an attorney, who can help you to identify strategies to pass along your accumulated assets to your loved ones. Scheduling a consultation with an experienced estate planning attorney today is strongly recommended.
Currently, there are debates in the mix about raising the social security retirement age. However, researchers argue that this should factor in health trends for those people reaching retirement age as well. Ten years from now, Americans who were born in 1960 will be eligible to start collecting a full social security retirement change.
A federal retirement change enacted in 1983, enables them to get the social security benefits two years later than their parents. However, today’s pre-retirement generation already indicates serious health issues and limits on their lives, when compared with previous generations. The findings were the result of the University of Michigan team, looking at data from long-term health studies and funding acquired from the Alfred P. Sloan Foundation.
The study shows that today’s older employees will face greater challenges than their predecessors as they continue to seek out work and apply for social security disability benefits. Younger cohorts are now facing more serious health issues and in particular, as they will now have to wait until an older age to retire and do so in poor health. This could increase the chance of significant health-related costs.
The researchers found that those people born later will have to wait a longer period of time to get full Social Security benefits, also had higher rates of memory and thinking ability problems than earlier cohort groups did at similar ages. Those people who were asked to rate their own health at age 50 said it was poor or fair in larger numbers than other age categories. One in four individuals had to wait until age 66 to claim full social security disability benefits and those who had fewer than 12 years of education reported at least one health associated limitation when they were in their mid-50s. Planning ahead for long-term care costs and talking about your retirement benefits in conjunction with your estate planning are both worthwhile goals.
Unfortunately, elderly individuals are in the market for crucial government assistance programs such as social security and Medicare. Scammers recognize this and given the many people who are turning 65 each day and becoming eligible for benefits from each, it is equally important to be aware of the potential risks of being caught up in a scam. Scammers are getting more elegant and experienced with how they use technology or threats to encourage people to hand over personal identifying information.
Many phone calls are going out to individuals who may have enrolled in a Medicare program or may be in the process of receiving a new social security card and these individuals may hear from the scammers that they need to provide their social security number or other personal identifying information over the phone in order to get these materials in the mail.
Bear in mind that the Social Security Administration will usually contact you directly and be able to provide verification of who is contacting you. Instead, scammers will often leave a message on your voicemail prompting you to call back a number that leaves a generic voicemail as well threatening you that a lawsuit has been served against you or that a warrant has been issued for your arrest.
These scammers are targeting vulnerable seniors who may be unaware of their rights and may be deeply concerned about the nature of these voicemail messages and thus prompted to provide personal information such as their bank account, their Social Security number or other critical details.
You can avoid these scams by being mindful and always asking people to clarify who they are, where they work and their supervisor’s name and contact information, where possible. This can go a long way towards minimizing your concerns that you have given up details when they were unnecessary. The Social Security Administration and Centers for Medicaid Medicare services will usually contact you directly and will typically do so in a written format. Although if someone does contact you on the phone, it should be relatively easy to figure out whether or not they are truly working for the agency they claim to be.