July, 2019 | Shah & Associates, P.C. Estate Planning & Elder Law Blog
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Who’s Skipping Out On Will Planning?

July 31, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

So you don’t want to sit down and draft a will- or maybe even make the appointment with your attorney. If this is you, you’re not alone.

Numerous studies have undertaken the question of who has a will and other key estate planning tools in place to protect them in case of a sudden accident or incident. Lexis Nexis says that 55% of adults have no plan for the transfer of assets when they die or a legal will. That number spikes even higher among African Americans and Hispanics. You might anticipate that those with higher incomes are more likely to have an estate plan pulled together. However, one recent study found that people who had incomes of between $100,000 and $149,000 had a will less than 10% of the time.

Although that number spikes to 15% for those who had an income that goes beyond $150,000, not having a will can expose your loved ones to unnecessary challenges. Not having a will could mean that your loved ones have to go to a court proceeding known as probate.

This can become more complicated and lead your loved ones to face challenges they didn’t need to if you had sat down with an experienced lawyer. There’s no doubt that answering questions about your future and especially about your own mortality can be difficult, but they also aren’t questions you want to leave behind for your loved ones to handle in a time when they are grieving.        

Asset Organization: It’s the Planning You Need

July 30, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

A key component of your estate plan’s success is being able to keep all the details organized. This helps you to make the best decisions on behalf of you and your family, and enables someone to find these critical documents if something happens to you.

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Getting things organized can all also help you identify when there are gaps in your current estate planning. Once you know the gaps, setting up a meeting with a NJ estate planning attorney can help you cover all your bases with your incapacity, estate, asset protection, and business succession planning.

If you were to pass away suddenly, for example, this can save your loved ones from spending critical time searching for important documents in an already difficult period in their life. Here are a couple of top tips to stay organized:

  • Keep a binder to store all of your information, including separate entries for cars, real estate and other personal property.
  • Keep track of whether or not you’ve spend any amount on improvements, whether or not there is any debt against it, and the underlying value of the item.
  • Take a look at each asset you own and decide whether or not this is something worth keeping. You might decide to sell this item now so that loved ones are not left with a financial burden in the future.
  • Consider for the assets that you decide to keep, what would happen to that asset if you were gone.

Thinking about these decisions now can make it much easier for your family to go through the process of closing out your estate in an organized fashion.       

What Is Your Legacy Going to Be?

July 29, 2019

Filed under: Estate Planning — Laura Pennington @ 1:14 pm

Are you thinking about how you can best leave behind a legacy of financial support and love for your family, but haven’t taken the necessary steps to put together an estate plan? According to plenty of research, you’re not alone. Estate planning is often an overlooked as an opportunity to protect your loved ones and yet it can also be one of the most important things you do, not just to protect your future beneficiaries but also to protect your own interests in the future.

There are several different steps that you can take to ensure that your assets and money don’t end up being spent on taxes and legal fees, rather than being used to support your family. Another common misstep that can be made in the estate planning process is forgetting to line item name the prized possessions that you hoped to pass on to certain loved ones.

You don’t want these items ending up in the wrong hands. Although your dreams and goals might change as you move through varying stages of life, and add or remove certain people from your world, one thing never changes: to achieve any goal or dream, you have to have a plan. Your dreams likely reflect what you’re hoping for yourself in your older years, in retirement and also what you hope for your children as far as what you leave behind for them as beneficiaries.

Sitting down with an experienced and dedicated estate planning lawyer gives you the chance to answer all of these questions with a knowledgeable professional who knows many of the most common obstacles and missteps made by people approaching estate planning.       

Planning Lessons from Mufasa

July 24, 2019

Filed under: Estate Planning — Raymund Rasco @ 11:29 pm

Over the past few years, Disney has been creating live-action versions of their animated hits. Most recently, one of my personal favorites, The Lion King premiered. Being one of the most iconic Disney movies of all time, there is no way I can miss a chance to see this movie with my kids. There are many life lessons the movie teaches you, like: the importance of being cautious and mindful of who you trust, the effects of losing a loved one, learning that lost loved ones will always be a part of you, and more. Among the many takeaways from this movie, there is certainly emphasis on one thing: the circle of life. We are born, we grow up, we grow old, and we pass on leaving our legacy behind us. When leaving our family behind us, we want to make sure that our loved ones can “Be Prepared” for their future. Family disputes, such as those between uncles and nephews, are all too common (one of the reasons Estate Litigators get paid so much!)

Just as life begins, it comes to an end, and when it does end, we want to be sure that everyone we hold dear to us about will be taken care of. “Hakuna Matata for the rest of your days” may not be 100% realistic, but your planning need not be difficult. I would be happy to help make your planning easier.

How Many Americans Think Having A Will Is Important but Have Skipped Out on Having One?

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Americans are notoriously conflicted when it comes to end of life estate planning. Thinking about the future of those we leave behind and confronting our own mortality is difficult, and yet it’s also a key aspect of your financial management necessary for the long term security of your loved ones.

This is why it might come as no surprise to you that only one out of every 10 people living in the United States currently even has an estate plan. The problem with this is that many Americans do recognize that having an estate plan or at least the most document, a will, is important.

A 2019 survey conducted by Caring.com found that 57% of US adults don’t have a living trust or a will in their estate planning. Furthermore, one age category in particular garnered top results for skipping out on these key estate planning documents. Only one out of every five 18-34 year olds indicated that they had an estate plan in place.

Over 1,000 adults participated in the study and 76% of them felt that having a will was important, but so few of them have actually taken the next step to do it. The four most common reasons why Americans don’t have a will, according to the study, include:

  • They just haven’t gotten around to it.
  • They don’t believe they have enough assets to leave behind to anyone.
  • They don’t know how to do it.
  • They perceive that it’s too expensive.

Sitting down with an estate planning lawyer can help to remove some of the confusion and misperception of putting together a will.      

Why Do People Create Living Trusts?

July 23, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Have you already heard about the various types of estate planning tools and documents most commonly created and referenced by people in your state? There’s no doubt that living trust has turned up in your search of key estate planning documents, but how do you know if you need one or not?

What’s the primary benefit of establishing a living trust? And is a will enough to accomplish your estate planning goals?

Most people choose to establish a living trust because it gives them some level of control and flexibility over what happens with beneficiary designations, the structure of the trust and key people involved in the process. An irrevocable trust, on the other hand, can be created once and cannot be altered once established. Those people who may have interests now that they wish to protect and add some layer of privacy and remove from probate, enables them to structure the living trust so that it matches the needs of your life now, but can later be updated.

The circumstances of your life are likely to change over the course of the years. You might know that you need a living trust right now to give you some level of control, privacy and protection from probate, but it’s also likely that you might want to update some things inside the trust or eliminate certain provisions in the trust as your beneficiaries get older or as your unique needs alter. Having an established relationship with an estate planning attorney can assist you with this process because a living trust is a valuable tool to return to as your life circumstances change.     

What Are the Key Aspects of Business Succession Planning?

July 22, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Having an estate plan for your business is just as important as having an estate plan for your individual purposes. There are many different components that go into a business estate plan including a will, a living trust, a financial durable power of attorney, a succession plan, a buy/sell agreement, and life insurance.

Hand writing Time to Plan concept with blue marker on transparent wipe board.

All of these can be discussed directly with an experienced attorney. Your will and your living trust are the cornerstones of your business estate plan.

A will enables you to name who you wish to receive your assets, including your company, if you wish upon your death. A living trust is similar to a will in that it allows you to decide who will receive your assets when you pass away, but this is a private document that has benefits when compared with a will. A financial durable power of attorney enables you to authorize an agent to act on your behalf if you are unable to do so for yourself.

Your succession plan which might also include considerations of a buy/sell agreement and life insurance is your opportunity to outline what will happen to your company in the future if you were to leave. Many people anticipate that they will continue working in their business forever. However, it can be a big mistake to assume that you will always be able or interested in working on your business. Scheduling a consultation with an estate planning attorney who has familiarity with adapting and creating business succession plans should be the cornerstone of the next steps that you take in planning your company’s future.      

Three Long Term Care Myths

July 17, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

With the rising cost of healthcare and all data showing that many people will need some form of LTC in their older ages, it’s costly to assume that any of the three myths listed below are true. Yet plenty of people are under the impression they don’t need an LTC plan or Medicaid planning, giving them limited options when they or a loved one needs to enter a nursing home suddenly.

Myth #1: Medicaid or Medicare Will Cover Me

Medicare does not cover the vast majority of expenses needed for LTC. And Medicaid requires completing a careful application process. Overlooking the need to plan outside of this can be a big mistake or can require Medicaid crisis planning that doesn’t allow you to exercise all your options.

Myth #2: I’m Covered by Other Insurance

Don’t expect that your HMO or disability insurance will kick in to cover most of your long-term care expenses. This leaves you with little to no coverage at all, and those LTC bills can rack up quickly. It’s important to realize that in order to protect your personal assets and savings, you need something outside of existing disability or health insurance coverage.

Myth #3: Only the Elderly Need It

Did you know that a good portion of people who exercise the benefits in a long term care insurance policy are those who aren’t even close to retirement age? Even a serious car accident could leave a young person in need of LTC support or a nursing home stay. Ignoring the potential for an accident or disabling condition in younger years could be catastrophic.

If you want to work through possible planning options, a good time to speak with your estate planning attorney can be set up now. A lawyer can help explain to you some of the long-term plans you can put into place to help protect you should the need for LTC arise.

Could Your Long Term Care Expenses Be in Excess of $250K?

July 16, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Retirees today seem to be confused about how much to set aside for long term care. Fidelity Investments shows that the cost of paying for healthcare expenses alone could go as high as $285,000 for an average retired couple at age 65.

Those health care expenses, however, don’t include long-term care. Long term care refers to two different types of support; the first is services for someone who has severe cognitive impairments or requires ongoing supervision for safety reasons, and the second category includes services for someone who needs help with at least two activities of daily living.

Those activities of daily living or ADLs include toileting, bathing, transferring, eating, continence, and dressing. It’s estimated that over 15% of people approaching their older ages will have expenses for long term care in excess of $250,000.

Most people assume that Medicare will kick in to cover these costs or that they won’t need long term care. Both of these can be costly assumptions to make. You’re better off finding an experienced lawyer to help you understand what will and won’t cover your expenses so that you can approach the situation with clarity and make the right decision.

Have you already set aside money to help support you in your older ages and to pay for long term care? If not, it may be an appropriate time to discuss Medicaid planning with an experienced and knowledgeable estate planning lawyer.        

It’s More Important Than Ever to Be Mindful of Long-Term Care Costs

July 15, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

More people today recognize the potential impact of long-term care because most children of baby boomers have experienced it first hand by helping their loved ones with medical issues associated with aging.

Long-Term Care – New chalkboard with outlined text – on wood

However, these children should also be careful to incorporate potential planning sources for long term care in their own estate plan. The Genworth Cost of Care Survey in 2018 found that a private nursing home’s average cost will run your over $100,000 per year.

Given that the National Care Planning Council says that the average stay in a nursing home is 835 days, you need to be prepared for how expensive this could be if you were to have one long term care event. Considering that the US Department of Health and Human Services says that 7 out of 10 people will require some form of long-term care in their lifetimes, you need to be thinking about whether or not you can afford to self-fund.

Those who have taken no other action to prepare for long term care, such as consulting with an estate planning attorney about Medicaid or purchasing a long-term care insurance policy, are essentially set up to fund their own long-term care if it were needed.       

If you’re not sure what your next step is in crafting a Medicaid plan, you don’t have to do it alone. Sitting down with a lawyer can present you with options and give you a set of next steps.

How to Handle the Plans for A Loved One Who Has A Chronic Illness

July 10, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Chronic illness is much more common than most people anticipate. There’s a good chance that it has already touched your life in some way. If your loved one is living with some type of chronic disease like Parkinson’s, Alzheimer’s or multiple sclerosis, you already should be aware of the fact that your estate planning should reflect these additional challenges.

According to reports, over 130 million Americans are already living with chronic illness, and that number will increase to 157 million by 2020. A quarter of people between the ages of 65 and 74 have already had their lives affected by chronic illness, so the impact of chronic disease is significant.

Estate planning documents for those who have chronic illness are imperative. If your loved one is already living with at least one chronic illness, you will the need the same estate planning documents that most people use as the cornerstone of their estate plan.

Having a partnership with an experienced estate planning attorney is important, because if the chronic illness has already advanced significantly, it could impede the loved one’s ability to understand and sign these legal documents.

Some of the most common estate planning documents important for someone with a chronic illness include, HIPAA releases, a living will, a health care proxy, an order for life sustaining treatment and a financial power of attorney. Schedule a consultation with an estate planning attorney today to learn more.     

New Government Report Reveals Big Scale for Elder Abuse

July 9, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

The decision that you make to place a loved one in a nursing home can be a complicated one, and it probably required a lot of research and asking of questions on your part to determine that right facility. Unfortunately, elder neglect and abuse in nursing homes across the United States is not regularly reported by health care workers, according to a recent government watchdog report.

It is a federal requirement for those health care workers who become aware of elder abuse to report it as soon as possible, but the US Department of Health and Human Services and the Office of the Inspector General found that many nursing homes across the country did not report elder abuse in about one of five potential cases.

It is expected that the elder population will increase significantly by 2050, reaching a total of 84 million people. Sadly, in 2008 a report found that one out of every 10 elderly individuals reported some form of neglect in the previous year.

Another form of elder abuse is known as financial abuse. Financial abuse can occur when someone attempts to take advantage of an elderly person by trying to update their will or making other edits to their existing estate planning documents. This can often come up in the context of an estate planning lawsuit or dispute after the fact. Being involved with your loved one’s life can help you identify situations in which he or she could be accidentally exposed to elder abuse or neglect.

Getting the support of an experienced attorney to create documents, to protect your loved one in advance can help to minimize the chances of this financial and elder abuse.     

Make sure you have documents set up to allow your trusted family members or loved ones to make decisions on your behalf- an estate planning attorney can help you put together power of attorney documents. These can help reduce the chances of elder financial abuse.

Plenty of Parents Missing Key Documents for Estate

July 8, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Having an estate plan is an important part of your overall financial picture, especially if you’re a parent. A recent study found that plenty of parents are missing key components of the protective documents they could use in order to outline a future for themselves and their children.

Having a child is a big milestone in your life, but it also calls on you to think bigger about how you’ll protect that child if something happens to you. A will is the most basic of estate planning documents, since it allows you to determine who will be the minor guardian if something happens to you and your spouse in addition to outlining where your assets will go.

If you have children, you get to have a say in who will be their guardian. Most parents don’t want this process left up to the courts. You can choose who you want to step into this important role based on what is best for your family rather than what the court deems appropriate.

Sitting down with your spouse or the other parent to discuss this all-important role is recommended. Even if you are separated or divorced, there are important considerations in choosing a person who will be active in your child’s life if you are no longer around.

Finally, the person you choose to serve as the guardian for your minor should be aware of this fact and fine with serving in this way. Even if you believe someone would be the perfect fit to take care of your children if you’re no longer around, you need to make sure they are comfortable serving in such a role, too.

Schedule a meeting with NJ estate planning lawyer if you’re missing a will, power of attorney, or other documents.

Is Asset Protection Planning Only for Avoiding Paying Taxes?

July 3, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Too many people are under the impression that asset protection planning is only relevant for the very rich who want to downsize their tax bill. The truth is that every family benefits from asset protection because this is a legal method of arranging your assets in a manner to protect them from future attacks like those from creditors or predators.

When done early, asset protection planning can be a firm shield against challenges and problems. Asset protection planning can also help with other aspects of your estate plan.

Benefits of asset protection planning extend far beyond the tax advantages and can include benefits from Medicaid planning, protecting money from adult children who may be irresponsible and need additional structure and control for the money flow, planning for a child with special needs, and protecting money from your own future creditors.

Far too many people who overlook all of these different aspects of asset protection planning could expose themselves and their loved ones to unnecessary risks that could have been prevented with a little bit of planning structured by an experienced and knowledgeable estate planning lawyer.

If you are new to the concept of asset protection planning and are not sure how this fits into your overall estate planning picture, schedule a consultation today to sit down with a lawyer and discuss some of the ways that your assets could be threatened.     

New Study Shows that Nursing Home Costs in the United States Are Rising Quickly

July 2, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

Many people already know that the cost of nursing home or long term care in their older ages can be extremely high. The average cost of a nursing home in the United States can easily go above $70,000 a year, and according to a Georgetown University Medical Center study, this has risen even faster than the cost of overall medical care in some states.

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The cost of putting a family member in a nursing home can be a significant financial burden even for those Americans who have set aside necessary retirement funds. But this can be a crushing and devastating challenge for those who have not set aside the appropriate money.

The expense of nursing home care is a particular concern for those people who do not have Medicaid coverage or long term care insurance. Annual out of pocket expenditures for a nursing home can go well beyond $70,000, and in certain states can be much higher. For a person who is not classified as qualified for Medicaid or doesn’t have LTC insurance, this financial burden can put pressure on loved ones as well.

According to the study, for-profit nursing home chains were the least expensive whereas non-profit were the most expensive. For-profit and non-profit facilities operated independently had similar costs. While the majority of Americans are eligible for Medicare at age 65, this doesn’t cover many important long term care costs. You need to have a long term care strategy set aside and partner with an experienced and knowledgeable estate planning attorney to discuss how this could affect your future.     

What is the Cost of Taking Social Security Too Early?

July 1, 2019

Filed under: Estate Planning — Laura Pennington @ 9:15 am

As part of your overall retirement plan, you’re probably counting on your Social Security benefits. But what happens if you miscalculate and end up taking the benefits too early? Couldn’t this short term boost help you if you’ve falling short in other retirement vehicles?

NJ-estate-planning-lawyer


A new study from United Income says that a couple electing for Social Security benefits too early could lose up to $111,000 over the course of their retirement. Given that people are living longer, deciding when to start receiving benefits is an important consideration that could have big impacts on your golden years.

The study found that only a very small portion of retirees-4 percent- took their government retirement benefits at the ideal point in time. To determine that optimal age, there are numerous factors that must be taken into account, including future retirement costs, being single vs. married, life expectancy, other sources of income, and whether or not the person intends to continue working.

Many retirees would get a big bump in their overall benefits if they waited until age 70 to claim, according to the study’s findings. Very few retirees are in a better position by taking these benefits prior to age 64.

Calculating the best age to claim SS benefits is a challenge for plenty of people. Thinking ahead about your retirement, however, helps you have an overall plan for accomplishing your goals in your own life and passing on your remaining assets to your loved ones, too. This can include working with professionals like an estate planning lawyer.

If you’re interested in the big picture, set aside time to talk to your CPA or other financial professional, your insurance specialist, your investment broker, and your estate planning lawyer so that you have considered the impacts of your accounts across the board.