Author: Neel Shah

These mortgages are marketed quite heavily to the target market- individuals over the age of 62. These provide the ability to borrow against home equity, but not understanding how these work could leave heirs at risk of losing a family home. 

On a national level, debt has risen quite quickly for those aged 65-74. It is expected that about 13 percent of reverse mortgages are underwater, and many lenders in these situations push for immediate foreclosure action.

Even though the number of reverse mortgages has decreased by about two-thirds in recent years, the number of them in default has quadrupled. One of the main concerns with this is that a home can be purchased for 95 percent of the current value. Any shortfall could be covered by a federal insurance fund, allowing an involved person up to 30 days to determine the best course of action in addition to six months to secure financing.

If you’re curious about reverse mortgages and how it could impact your estate planning, make sure you consult with a knowledgeable attorney who can help you get your affairs in order.

Most people are aware of how devastating one lawsuit can be, even if they have never been victims of one. Despite this, many people are under the assumption that it could never happen to them, leaving them exposed to major risks in the form of litigation. 

There are 20 million lawsuits filed in the U.S. each year, and it’s unnerving to think that an investor or owner of a company can work upwards of 2000 per year only to have a few hours set them back financially for life. Bear in mind that not all of these cases will go to litigation. In fact, 95 percent of them are settled out of court. This means that your asset protection plan should include a goal of putting yourself in the best possible position for a settlement.

The key to doing this is to make legitimate legal barriers that are difficult or uncomfortable to surmount. Some common approaches to this might include an offshore account, a Domestic Asset Protection Trust, or even retitling assets. Make sure you discuss what will work best for you with your estate planning attorney.

 

As a result of relatively high divorce rates and better longevity these days, blended families now outnumber traditional families. Divorce and remarriage has the tendency to increase the number of individuals involved in an estate, which can lend itself to complexity if not properly planned for.

With more individuals at the table for an estate, there is also high potential for acrimony and suspicion. An individual who is remarrying needs to understand the importance of disinheriting a former spouse. If this is not done, that spouse’s rights can trump whatever it outlined in a will.

One way to protect a blended family is to use an LTD trust or a QTIP trust. An LTD trust is beneficial for protecting the inheritance of children, while a QTIP trust helps to provide lifetime income for the new spouse. After getting remarried, carefully review all of your beneficiary designations and set up a consultation with an attorney to get your questions answered.

An executor plays a very important role in carrying out an estate, and it can be nerve-wracking as well as frustrating if you suspect that an executor is not being completely prudent or truthful. Executors have a fiduciary duty to carry out their tasks with integrity and trust. If there is suspicion that something has been handled inappropriately, probate court can mandate a complete accounting of actions taken. 

If the executor appears to be dishonest, the court does maintain the power to remove and replace an individual in that position. In some states, individuals who have been negatively impacted by an executor might be able to pursue a lawsuit against him or her. What is on the line in these scenarios is the personal assets of the executor, which could be used to make the estate “whole”.

If you suspect that an individual in the role of executor is not managing the estate responsibly, you should contact a lawyer. This is a serious matter that should not be overlooked.

There are many asset protection tools out there- you can just ask your attorney to highlight some of the most popular ones for you. Asset protection tools often work together, complementing one another to give you peace of mind and confidence about the future. Two tools that work well in an overall plan include life insurance and annuities. 

Outside of their general use in estate planning, both of these can be helpful for shielding assets, as long as any exemption limits at the state level are clearly understood.

Choosing to go with life insurance is one way to ensure that the assets in the policy transfer to beneficiaries very easily. You can determine a face amount that is line with the resources you are attempting to provide, such as mortgage payment replacement or funds for a college education.

When it comes to annuities, they share something with IRAs: the funds inside are not taxable until they are distributed. There are no caps on contributions here, either, so an annuity can be a good way to put some assets aside for future use.

To learn more about these tools, in conjunction with other legal avenues for protecting your assets, reach out to an asset protection attorney today. Contact us at info@lawesq.net.

If you have gone through the legwork to think through a business succession plan, you are already ahead of most business owners. Knowing the basics of what you want to include in the plan is a good first step, but you need to document your plans in writing in order for them to be clear and valid.  

Remember that writing a plan is not about achieving perfection- it is about outlining a path to continuity. This continuity plan is one that 70 percent of business owners lack, and missing this could cause your company big problems down the road.

The core of developing a plan lies in knowing what the end goal is and enlisting experts (such as succession advisors, a CPA, and attorneys) to help you pull it all together. Make sure to include any designated successors in the process of putting it all together, as this is helpful in defining responsibilities, setting future goals, and dealing with any past errors. Circumstances might change over time, but documenting your desires now is the best way to ensure that business succession planning is on your radar.

The question of whether existing government programs will influence the future of public policy for others is a hot topic right now as politicians on both sides of the aisles are considering what Medicaid and Medicare will look like down the road.

Taking Medicaid and Medicare out of the picture seems unrealistic, but this basic idea ignores the fact that it took years for society to come to terms with the ongoing existence of either of these entitlement staples. Looking back at the history of these programs gives some credence to the idea that the ACA might fall into similar perception, although this is certainly still up for debate.

The landscape is similar for the enactment of both programs in terms of the politics in play before and after. Presidents Johnson and Obama both knew how to avoid the challenges of healthcare reform that their predecessors faced- in order to combat this, both presidents had to look carefully into cost controls.

There are, however, differences. For example, there was some existing GOP support for extending medical coverage to the poor and to seniors in 1965, and there was a greater approval for government programs in general during this time period, too. The fact that Medicare was built on the coattails of the Social Security program, too, helped. This popular program made it easier for the public to approve.

No matter what the future is for the Affordable Care Act, it is important for all individuals to think about their healthcare down the road. Whether it’s a living will or long-term care planning, healthcare is a primary concern for everyone in the U.S. right now. What planning steps have you already taken? Contact us at info@lawesq.net.

Placing an individual in the role of trustee for your estate is something that should be done with care. This person will serve as a fiduciary, remaining responsible for managing your assets. It’s important that the trustee and the person hiring such an individual understand that trusteeship is not a quick or simple job. This position requires energy, common sense, and willingness to focus on the finer details. 

When hiring a trustee, it’s important to be clear about all details and be willing to reconsider the relationship if life conditions of either party change over time. If you are not comfortable with an individual serving in this role, institutional trusteeship is one option.

Going this route means you’ll get unemotional expertise and likely experience in serving in such a role. This decision should only be made after you have consulted carefully with an experienced attorney who can walk you through the pros and cons of having an individual trustee versus an institutionalized one. Get our help at info@lawesq.net.

As a result of a federal law that became active in 1993, states were required to recover long-term care expenses for those aged 55 and over after an individual passed away. Each state also had the option to go after all health expenses, too. There were exemptions made for estates that included a surviving spouse, a child under the age of 21, or a household with a blind/disabled child of any age.

These Medicaid Estate Recovery Programs vary from state to state in terms of their specific requirements and the vigor with which collection is pursued- this is why it’s important to consult with a specialist if you have more questions. 

Implementation of the Affordable Care Act has three different impacts on these regulations, all of which potentially put higher numbers of estates under these guidelines. This includes the mandate that most Americans should obtain insurance, expanded Medicaid eligibility, and the elimination of asset evaluations to determine eligibility. Got questions? Reach out to us at info@lawesq.net.

One of the most important aspects of valuing a business is in the timing- you must have the will to do it now and carry this momentum forward. Even in times of feeling overwhelmed or burdened by day to day stress, unplanned events must be considered. 

In fact, in times of high stress it can become all the more frustrating to realize that you did not carefully plan for the future. Death or disability can come at any time, and not having thought in advance about how to deal with such challenges can prove very problematic for a business owner. Even when a key employee decides to leave the company, the impact can be felt throughout the business if you have not planning for these kinds of events before.

Even burnout can be challenging if you haven’t thought about bringing a successor in. Assembling a team to help you come up with a plan is an important part of the process. The return on your time in succession planning can be very rewarding, as any challenges faced in the future can be dealt with appropriately. Having these plans in place certainly makes business valuation easier. Contact us at info@lawesq.net.

The IRS recognizes the legitimate business concern of creating a small and closely-held insurance company in order to cover some of the risk associated with various business entities. If the company is defined as a small one, the insurer does not have to pay any tax on underwriting income. Usually the definition of small means no more than $1.2 million in net written premium across a year. 

The originating company in this situation would receive a tax deferral due to the deduction of premium paid, while the insurer does not have to pay underwriting tax, either. The key to all of this is that the captive has to be structured as a legitimate insurer providing coverage at a reasonable cost. Possible risks could arise if the company were used to generate implausible coverage with extremely high fees or high premiums.

The structure of such a captive, and the management of it, should be done with care. This is to ensure the highest level of protection offered by such a structure. The use of captive insurance companies is something that has become increasingly popular, but it should always be done properly in order to maximize benefits. Contact us for more information at info@lawesq.net.

As children grow older and leave the home, as retirement takes away much of the interaction with work contacts, and as the possible loss of a spouse impacts an elderly individual, being alone becomes the norm. Unfortunately, it can also be a dangerous problem if you don’t plan ahead for how you can stay socially involved with friends, family, and your community. 

As baby boomers age, it becomes much more likely that both parents and even friends pass away, which can lead to feelings of extremely loneliness and even depression. When these major life events alter how often you’re interacting with others, it’s important to take steps to build a support structure. For many, this means getting involved in community organizations like a church.

There are many benefits to regular social interaction, including better self-confidence, happiness, and an improved overall outlook on life. Other family members can be a critical part of the support structure you build, but it can be very beneficial to establish regular habits with community organizations. Whether it’s getting together for fellowship or volunteering in some capacity, it can be very advantageous to find other friends and peers to network with. Building a routine that involves regular interaction with these kinds of groups can also help to combat loneliness.

Putting together wills and powers of attorney are cornerstones of estate planning. In the aftermath of 9/11, an attorney in South Carolina approached first responders and firefighters only to learn that as many as 80 percent were without these critical documents. 

While we often suggest on this blog that everyone have a will, it’s especially important for individuals in these special situations to plan ahead. While it’s hoped that your loved ones don’t have to worry about what should happen if you were to pass away, planning can help to limit the trauma and grief faced by your family members in an already difficult time.

If you have never put together a will or amended it recently, consider the challenges your loved ones might face if something happened to you. The last known location of your will could be unknown or other family members could argue that it’s not valid. Lack of clarity could mean that some of your beneficiaries don’t know what they are entitled to. All of these issues can be avoided with a little bit of planning.

It’s never easy to plan for these worst case scenarios, but doing so can give you great peace of mind and help your own family in the event that something ever does happen to you. We’re proud to help those who put their lives on the line discuss these critical details and make plans that reflect your needs and wishes. Contact us today to learn more about the value of estate planning.

Leaving behind a legacy after you pass away requires perceiving and planning to avoid several common pitfalls. Make sure you’ve completed the estate planning process at least once in a comprehensive manner, with yearly check-ins scheduled. Watch out for these common issues:

• Failing to include contingency beneficiaries on a retirement account
• Not planning for the potential of your spouse remarrying someone new, and thus making that new spouse eligible for money you had intended to set aside for children
• Failing to account for the impact of aging parents
• Failing to think about incapacity and what your plans would be if something left you with a disability
• Not thinking carefully enough about trustee appointments or power of attorney selections

Although these might seem minor, they can have major implications for your estate and for the loved ones you leave behind. You can prevent mistakes and mismanagement by doing the work in advance and reviewing it on a regular basis.

Estate planning is certainly more complex than these basic five issues, but getting your plan in working order can be as simple as fixing the issues related to these concerns. Contact an estate planning attorney to learn more. Get our help by contacting info@lawesq.net.