Are You Falling For This Living Trust Myth?

A living trust, when used properly, can be an important component of your estate plan. In some cases, it may help to ensure that all of the wishes that you have regarding how your assets pass is covered accurately. However, it can be a big misconception to assume that a living trust negates the need for a will.

It is unlikely that you will put every item that you own into your trust and there’s also the possibility that you could include additional assets between the time you draw up the living trust and the time you pass away. Your lawyer might recommend something that is known as a pour over will, which essentially allows for the transfer of anything that you have excluded. You may still need a will to help incorporate all estate planning concerns since a will is the only place you can name a guardian for your minor children, for example.

When drafted together, your living will and your trust can cover a lot of bases in the estate planning process and can combine with other things, such as a medical power of attorney, a durable power of attorney and a living will to ensure that all of your wishes are followed to the letter. If you have concerns about making sure that your loved ones are put in a good situation when you pass away in terms of the appointment of an executor, the transfer of assets and more, it is important to work directly with an estate planning law firm.

A living trust works well as part of your overall estate plan based on your personal goals. Let our estate planning office help you put it into action.

Meme Investing? Try Human Ingenuity Instead

What do mean stock investors and Wall Street have in common, and where are they different? How does humanity’s tendency to persevere show up in the market? I enjoyed the article below by David Booth from the Dimensional Fund Advisors website. I hope you enjoy it as well.

-Neel

We’ve all been conditioned to see meme investors and Wall Street in opposition, but it seems to me that they have a lot in common. Both believe in picking stocks and think they can beat the market. In my mind, the important distinction is that Wall Street stands to make a lot of money off meme investors, simply from trading costs. For those who say apps don’t charge for trading, think about it: When was the last time Wall Street gave away anything for free?

I think the best long-term investing strategy has little to do with prediction or stock picking, and everything to do with investing in human ingenuity. Human ingenuity is the engine that drives the stock market. The real anti-Wall Street revolution began in academia in the 1960s and evolved into the formation of index funds more than 50 years ago. The academics spearheading this revolution found no compelling evidence that any individual can consistently beat the market, but that the market itself returns, on average, about 10% a year.

Why do individuals have such trouble beating those returns?

In transparent public markets governed by the rule of law, enormous numbers of buyers and sellers come together to trade. Both sides of every trade must feel like they got a good deal. Otherwise, they wouldn’t trade. That’s what people mean when they say prices are fairly set.

When Wall Street or meme investors think they can capitalize on “mispricing,” they’re not betting against Wall Street so much as they are betting against human ingenuity.

So when you bet on individual stocks, you might win or you might lose, but over 10 years, you’re unlikely to harvest a better return than if you invested in the whole market. If you stop and think about it for a minute, this makes sense. Markets only work if they are unpredictable. After all, they are constantly responding to all the new information that comes in every day. If we could predict when the market was going to move, there would be no market. The fact is nobody knows when a certain stock will go up or down. Contrary to what both Wall Street and meme investors want you to think, there is no method of analysis, no matter how “proprietary” or sophisticated, that tells us what’s going to happen when.

So when Wall Street or meme investors think they can capitalize on “mispricing,” they’re not betting against Wall Street so much as they are betting against human ingenuity. I’m referring to the millions of people working hard to maximize the value of their companies, and millions of investors trying to make the best possible trading decisions based on all available information. Sometimes speculators get lucky, and sometimes they don’t. Regardless, I don’t call what they’re doing investing. I call it speculation—even gambling.

Buying the market is a totally different approach. It’s investing in human ingenuity. People working to maximize the value of public companies are innovative and resilient. They adapt to improve products. They create new processes to solve problems. While you can’t predict what any one person will do on any given day, you can predict that humanity will persevere. The market reflects this simple truth.

The market can reward us for having faith in our fellow human beings. Investing—like life—is full of uncertainty, but at the end of the day, it’s uncertainty that drives opportunity, and returns. Investing is not about trying to outguess Wall Street or meme investors on which stock will go up or down and when. It’s about choosing to side with human ingenuity and betting on a future that’s better than today—because of the hard work of everyone you know, and the many millions you will never meet.

David Booth
Executive Chairman and Founder

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Estate Plan Created Before 2010? It’s Time For An Update

Many things change in the state and national landscape over the years, and there’s a good chance that many things have changed in your life too. If you haven’t revisited your estate plan since 2010, it’s a good idea to set up a meeting with an estate planning attorney in your area for a review and an update.

Many things have changed in the last 10+ years, both at the state and national level and also likely in your life.

For example, have you:

  • Set up contingent beneficiaries?
  • Included all children and grandchildren in your plan?
  • Changed your marital status?
  • Acquired more property?
  • Got rid of some property?

You should probably hire a new attorney to do the updating but be aware that some lawyers may be uncomfortable being held responsible for a document they did not initially draft. It is essential to work directly with an attorney because there are many potential mistakes that could happen in the drafting or updating of your estate planning tools.

The more you’re familiar with some of these possible concerns, the easier it is to consult with an attorney and make sure you have covered all of the various bases. If you have gone through significant life changes since the last time you originally created your estate plan and, in particular, if you have acquired a great deal of property or adopted or given birth to children in this time period, you’ll want to have a lawyer who can help walk you through this process.

What Legacy Are You Leaving Behind For Your Family?

A recent study by Empathy.com has shown that the average family incurs over $12,000 in unexpected expenses after a family member passes away. Every year, 3 million individuals pass away in the United States, some of whom have estate plans and others who leave all the questions to be answered by their family members. Funeral costs can be extensive and expensive.

Many people do not realize the comprehensive aspects of planning ahead for a funeral, and failing to plan is still a plan because it leaves your loved ones in the difficult situation of making these decisions after you pass away. This doesn’t incorporate your individual wishes and intentions and could even put them in a financial bind.

Some of the average costs for services spent by family members around the country include:

  • $3,910 in attorney fees
  • Over $7,000 for funeral or memorial expenses
  • $2,456 for accountant support
  • $4,461 for real estate professional help
  • $1,637 for social workers or therapists

Approximately one in seven families had a little bit easier road with these expenses because their loved one had paid in advance for those costs. Set aside the time to meet with an experienced estate planning attorney to make sure you have thought of a way to help plan for these potential expenses and make things easier on your loved ones.

Need more support with the next steps in your planning? It’s time to talk to an experienced lawyer about your options. We’re here to help and guide you through the process.

How To Effectively Choose a Trustee

Do not put off finalizing or signing your estate planning documents because you’re not yet sure who you want to name as trustee. You should speak directly with an experienced and knowledgeable estate planning lawyer about the best steps to approach this.

Choosing someone to manage your estate when you pass away is an important decision, but it is equally important who you choose to serve in the role of irrevocable trust trustee. This is because assets placed inside an irrevocable trust are removed from your personal ownership and fall under the discretion of the trustee. The trustee must adhere to the terms you have outlined in the trust and represent beneficiary’s best interests.

If you choose a friend or family member to serve in the role of trustee, they should be good with money and financially aware. You want someone who is at a bare minimum level familiar with the concept of investing and preferably someone who already has assets of their own that they are investing with the help of a financial professional. Many people like to start by considering family and friends as trustees because these individuals are most likely to be familiar with your personal goals and intentions.

However, this is not always the right choice, if the person that you select is unable to communicate effectively with beneficiaries or could potentially cause further problems. You need to consult with an experienced and knowledgeable estate planning lawyer before setting up a trust to ensure that it covers all of your individual intentions.

How High And Low Interest Rates Can Impact Wealth Transfers

Current global conditions have contributed to a spike in inflation which was already on the rise. It is expected that the Federal Reserve will respond by raising interest rates by as high as 2% in the next 18 months. These changing rates impact estate planning and generate important wealth transfer considerations and conversations. There is no one size fits all strategy for either a low rate or a high rate environment.

Instead, it is important to have an established relationship with an estate planning professional who can help guide you through this process and answer many of the most common questions that you have about the process.

The support of an attorney can be instrumental in identifying adaptations to your state plan that you should implement as quickly as possible and finding the right support for this kind of task is very important. When the Fed raises rates, work with your estate planning attorney to implement strategies that work best when interest rates are higher. Likewise, do the reverse when interest rates are lower. Typically, the rate that applies to a specific strategy you’ve used is the rate in effect on the date the strategy was implemented, this calls on you to take proper action.

Right now, in a low interest rate environment, lending strategies that take advantage of these low interest rates can help you transfer wealth to other people with no gift tax or very little gift tax. For more information, make sure that you set aside the time to speak with a dedicated lawyer.

Our estate planning law firm regularly works with people to make sure they’re getting the most out of every aspect of estate planning. We know it can be hard to adjust in a shifting environment, but it’s our goal to be there by your side with your estate planning.

How To Take on The Hard Conversations with Family Members About Estate Planning

Are you worried about whether or not your parents have thought through and set up their estate plan? If not, you may be concerned that you and your siblings will be left to deal with probate on your own.

A big reason why many people put off the process of planning their estate is because they are concerned that they don’t need one. However, having an estate plan is an important way to help support your loved ones, and you can greatly reduce their confusion and frustration after you pass away by undertaking these important steps. It’s not always or ever an easy conversation to discuss end of life planning, or what happens after you pass away.

There is a great concern that talking about death will upset your spouse and family, and although it is true that this can be an uncomfortable conversation to start, knowing a loved one or parent’s wishes about everything from medical care they do and don’t want to receive to potential funeral plans can be reassuring. It can give family members a sense of relief to understand what to expect and what important decisions they should take on behalf of their loved ones.

This is also a good opportunity to discuss your individual legacy, such as the values you want to pass down to your other family members. This can be a much easier way to broach the subject of estate planning and to encourage your loved ones to undertake their estate planning as well.

Ready to set up your own estate plan or review an older one that needs some updates? Contact our office today for personal support with a NJ estate plan.

Do Real Estate Assets Go Through Probate?

If you own any kind of real estate, including a home, you should include these in your will because there is a high chance they will pass through probate. There are some options for keeping real estate outside of your probated estate, such as transfer on death deeds, joint ownership or trusts. It is usually less avoidable for valuable possessions. When determining how your beneficiaries could be affected by the transfer of assets, such as real estate, first think about the number of beneficiaries that you intend to name.

If you are naming multiple people as beneficiaries to a piece of real estate, you may need to think about titling complications such as titling each of those to beneficiaries separately or having the property sold and the proceeds divided. Do not forget to think about potential tax and financial implications of passing things on in this way either. Your beneficiaries may have to pay capital gains taxes as part of a possible sale. You can also use tools such as a qualified personal residence trust to protect real estate. This pulls the property outside of your probate estate and helps to avoid federal estate taxes, which will also allow you to continue to live in the residence for a predetermined period of time.

You must outlive the term of the trust, however, to see the tax benefits. You can also name a joint owner on the property now so that it passes directly to the second owner which is allowed via a transfer on death deed. The property then passes immediately to that person who is usually a spouse outside of probate relatively quickly.

 

 

Are There Any Probate Shortcuts In New Jersey?

When a loved one passes away who lived in New Jersey there are many questions that must be answered regarding the administration of their estate. Certain small estates may qualify for a probate shortcut. This makes it much faster and easier for surviving family members to transfer property left behind by the person who passed away. You may be able to transfer significant amounts of property using this probate shortcut if the simplified probate procedure applies.

An executor must submit a written request to the local probate court asking for the simplified procedure to be used. The court can then approve that executor to take the action of distributing assets without going through the regular process of probate. If there is no valid will and the value of all property doesn’t exceed $20,000, the domestic partner or surviving spouse is entitled to all of it without probate, but they must use all of it except for $5,000 to pay any creditors who have valid claims.

In order for the request to be approved, it must include the deceased person’s residence location and the nature and value of any real and personal property owned by that person. For more assistance with understanding the simplified probate procedures in New Jersey, schedule a consultation with an attorney today.

The more you know about your own estate size, the easier it is to determine which kinds of planning options you must consider moving forward. You can make things easier for your loved ones by setting up an estate plan well in advance. Contact our NJ estate planning office today to discuss.

Who is Responsible for Administering My Trust or Will in New Jersey?

The administration of a trust and will likely fall to two different people in New Jersey, depending on how your estate plan is structured. The executor that you name in your will is responsible for carrying out those instructions inside your will. A trustee, however, plays a similar role, but typically until all assets inside the trust have been distributed to beneficiaries.

This means that a trustee might serve in their role for a much longer period of time. A child, financial institution, friend, family member, or other professional could also be named as co-trustee or co-executor. While both the titles of trustee and executor might sound relatively simple, these are substantial responsibilities, and it is important for the person who has been chosen to serve in these roles to understand this position and to feel comfortable serving in this role on an ongoing basis.

A trustee, in particular, is especially important because they are usually given some discretion over trust funds and when distributions should be made to beneficiaries. Only a trusted individual should serve in this role and someone who is comfortable communicating with any and all of the beneficiaries on your estate. The support of an experienced and knowledgeable estate planning lawyer can help to create a strategy to encompass the appointment of an executor, as well as a trustee.

Contact an experienced New Jersey estate planning lawyer for further support as you create these documents and name the important people to serve in these roles.

How to Know Your Loved One is Suffering from the Early Signs of Dementia

It can be devastating to realize that your loved one is suffering from dementia, but it can also be difficult to determine when the symptoms have grown to the level that you may need outside medical help. This also has important implications for whether or not estate planning can still be done. Set aside a time to work with an experienced and knowledgeable estate planning lawyer if you believe that your loved one is showing early signs of dementia.

The important steps you take now to protect yourself and their interests can serve as a solid foundation going forward. The early signs of a dementia diagnosis are vague and may not be immediately obvious. They may often be written off because they occur irregularly, increasing confusion, memory issues, loss of ability to do everyday tasks, depression, withdrawal/apathy, or behavior and personality changes are all some of the early indications of dementia.

Those who get distracted with tasks and may forget to serve part of a meal or to finish a task indicate difficulty with following through on all steps involved in that task. Disorientation, language problems, and changes in abstract thinking are other indications that a loved one may be suffering from dementia.

If these signs and symptoms are becoming more frequent or getting worse, you should consult with a lawyer who knows the lay of the land and who can help you figure out whether a nursing home and Medicaid paying for it are things to consider right now.

This makes it important to retain an experienced estate planning lawyer now to give yourself and your loved one the best possible chance to create an estate plan. Contact a NJ estate planning attorney now for more information.

How to Recognize the Signs of Elder Abuse

Elder abuse is substantially under-reported, primarily because many people who are suffering as victims do not feel comfortable speaking up. Many others do not realize that they have potential legal recourse or may so concerned about backlash from the person perpetrating the abuse or the facility that they choose not to speak up. The most common warning signs of elder abuse are sudden and strange changes to a loved one’s financial, physical, or emotional wellbeing.

Watching for physical symptoms is an easy way to spot the potential for physical or sexual abuse. Symptoms and signs of elder abuse can include poor hygiene, unexplained weight loss, injuries such as broken bones, cuts, or bruises, unexplained loss of money or confusion around particular transactions, withdrawal from friends and family members, symptoms of depression, signs of confusion, and discomfort speaking around the person who may be carrying out the abuse.

If you find yourself in the position of dealing with elder abuse, particularly at the hands of someone in a nursing home, you should consult with an experienced attorney. You might also need to move a loved one to a new facility to get the peace of mind provided when you know they are being cared for well. There’s so much to think about when you have concerns over elder abuse, but their safety should be front and center.

Physical abuse is just one example. Financial elder abuse is a serious issue on the rise as well.

Having estate planning documents put in place sooner rather than later, can establish a power of attorney for an elderly loved one that can help to serve as an additional layer of protection. However, to avoid potential elder abuse by the person holding the power of attorney, it is important to select a trusted individual to serve in this role. Talk with an estate planning lawyer about how you can use certain tools like a POA to help reduce the risk of financial elder abuse.

Can I Still Plan My Estate During a Crisis?

A big reason why many people put off estate planning is because they’re not in a crisis. Without seeing an immediate need, it’s easy to write off doing the important planning to protect you in case a crisis does happen. While you’ll get the best results and avoid possible conflicts and estate disputes by doing your planning in advance, there might still be options to make headway when you’re facing a crisis.

Whether you or a loved one is looking at a serious health issue or other legal reason to do your estate planning, one of the first things to do is contact a lawyer. A lawyer can walk you through all the legal and possible options for planning your estate and getting your documents in order.

Here are some questions to ask when you contact a lawyer to walk through your crisis planning possibilities:

  • Do we have any options to take action now? For example, if a loved one now has serious dementia and no planning has been done, it will be harder to create legally valid documents if this person is unable to speak for themselves. Any signatures they add to documents could be easily questioned in the future. However, if the person is in early stages of dementia and is still capable of understanding their surroundings, creating powers of attorney is possible.
  • What’s at risk if we don’t take action now? When someone needs immediate help, such as a rush application for Medicaid, this should be pursued with utmost care.
  • How soon can we realistically accomplish these goals, and what roadblocks do you see? Depending on your estate planning question or concern, it’s important to know how long it will take to get strategies or documents in place as well as some of the common challenges.

If you’re ready to start estate planning now to avoid having to do it in a crisis, or if you’re currently facing a crisis and need help, reach out to our estate planning law offices now.

Is Active vs. Passive Actually Passé?

As a member of probably the last generation to grow up with a rotary dial phone in the house, I can still recall when there was clear distinction between phones and computers. Phones were utilitarian devices, while computers were gateways to limitless knowledge and entertainment.

Nowadays, that distinction has dissolved. For many consumers, phones arguably obviate the need for a personal computer.

Similarly, evolution in finance has etched away the apparent cut-and-dried distinction between active and passive investing. The current landscape suggests the characteristics implied by such traditional, binary labels may not be sufficient to describe many of today’s investment approaches. A more nuanced framework takes the spirit of active and passive definitions—betting against market prices vs. embracing them—and examines how it applies to an investment’s underlying philosophy and implementation.

DIMINISHED DISTINCTION

Index investing emerged amid a growing body of evidence showing that traditional active methods of attempting to select stocks and time markets were ineffective. Studies documenting underperformance by active fund managers supported the sentiment that market prices were largely fair and any attempt to find under- or overpriced securities was akin to flipping a coin. So, the arrival of index funds represented a shift towards embracing market prices—if you can’t beat ’em, join ’em!

Because early indexing didn’t spin its wheels in bottom-up company analysis or top-down economic trend forecasting, it became known as passive investing. However, this stretches the definition of “passive.” A sailboat without its own propulsion must still be actively manipulated to keep wind in its sail. Indexes are not perpetual motion machines free of maintenance, but require periodic management through additions, deletions, and security reweighting. Index construction rules are often designed to accommodate the mutual funds and exchange-traded funds (ETFs) tracking the indexes, reducing index turnover, for example, by limiting the number of rebalancing events and imposing thresholds on security weight changes.

Also blurring the line between active and passive is the fact that some investors may use index funds to pursue an active investment approach. For example, the largest S&P 500 ETF had the highest average daily trade volume of US-listed securities in 2021, at $31 billion USD.2 It is reasonable to assume a portion of that trading activity represented asset allocation changes motivated by market viewpoints, rather than buy-and-hold position accumulation.

A more evolved process for categorizing investments applies the active/passive label separately for a strategy’s structure/implementation and its underlying philosophy. While some investment approaches still appear active or passive through and through under this framework, many investment styles have a foot in both camps.

Stock-picking and market-timing strategies would universally be described as active, and the 2×2 framework in Exhibit 1 shows how this label is earned. These approaches are rooted in an active philosophy that implicitly presumes mispriced securities or market segments can be identified. This philosophy is executed in an active structure that deviates from the market in an attempt to exploit mispricing opportunities.

Broad market index funds, on the other hand, fit a passive definition along both dimensions. The raison d’être of index funds is an acceptance of the market’s pricing power, a concession that trying to outguess markets is unlikely to succeed in the long term. The structure of the broad market index funds is true to that belief, generally holding the entirety of the prescribed asset class or market segment with no deviations motivated by expected-return goals.

Expansion of the ETF landscape has spawned a segment of index ETFs that do not track broad market indices, instead offering more targeted exposure for investors who are looking to time markets or concentrate on particular stocks. For example, you can find a social sentiment ETF that holds the top 75 large cap stocks based on investor exuberance measured through channels such as social media and news outlets. Another example is a millennial-themed consumer ETF that seeks to ride the coattails of companies benefiting from millennials’ consumption preferences. I hope its prospectus isn’t written in cursive!

These are but two examples of index funds that sit apart from traditional passive approaches. They track indices, so are passive in structure. But the philosophical underpinning of these niche ETFs would seem inconsistent with an acceptance of market prices. An investor who believes stock prices reflect available information about companies likely would not see the appeal of an allocation to trendy stocks based on a belief in their growth potential. Our framework assigns an active/passive designation to these index ETFs.

The final quadrant expresses Dimensional’s approach, which starts with a firm belief in the power of markets. In that sense, our philosophy is aligned with the industry’s original shift to passive. We use the information in prices throughout our investment process with an aim to increase expected returns daily, seeking to add value above markets and benchmarks. The implementation is therefore active—we are not beholden to the construction rules of an index. So, we land on passive/active: an approach that seeks to outperform markets without trying to outguess them.

By: Wes Crill, PhD
Head of Investment Strategists and Vice President

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

 

When Will a Loved One Need to Start the Probate Process?

When you pass away, there are many important tasks that need to be taken care of as soon as possible. It can often be overwhelming or confusing for family members to figure out what to do, particularly if they cannot locate your documents or are unaware of what you wanted to happen with regard to funeral and burial planning.

There is no one-size-fits-all answer when it comes to opening probate, but the truth is that this should be done by an intended or appointed personal representative as soon as possible after you pass away. In many cases, it makes sense for family members and friends to consider the grieving process before jumping into the legal and administrative aspects of death. That being said, an executor or personal representative doesn’t have the appropriate authority to act on behalf of the estate until they have been formally appointed.

There’s not much that the that a probate lawyer or an appointed personal representative is able to do until the death certificate has been issued and until probate has been opened. It may be a good opportunity to review and look for any and all documents that the deceased might have created, including their will and any other important paperwork, such as deeds or location information about a safety deposit box. Notifying the person you intend to appoint as executor or personal representative is strongly recommended to increase the chances that they will be able to spring into action relatively quickly.

If you don’t yet have your estate set up, talk to an experienced estate planning attorney about your options. A lawyer can advise you about what to expect and how to create a comprehensive estate plan to match your goals.

Nearly Three-Quarters of Older Workers Regret This Financial Mistake

No one wants to enter retirement only to learn that there’s a key step they could have taken to protect themselves years before. By then, it’s too late. In the best-case scenario, you play catch up. In the worst, you adjust your standard of living, sell assets, or make other difficult decisions.

Current retirees recently participated in a study indicating that 70% of them share a common regret. The research study completed by the Insured Retirement Institute has important implications for younger workers as well and younger employees can take positive steps in their financial planning to support it.

The data showed that nearly 70% of older workers wished they had started saving money for retirement earlier than they did. It’s much harder to hit your investment goals and to protect your interests in older years if you don’t start saving for retirement early. It is extremely important to find the support of a dedicated retirement planning advisor and other members of your financial team, such as an estate planning lawyer.

An estate planning lawyer can help you define how you want to align your retirement goals with your giving goals in later years and the possibility of long-term care expenses. Failing to think about retirement and estate planning holistically can have negative repercussions for you and the loved ones that you intend to support as beneficiaries. Set aside time to meet with an experienced estate planning lawyer today and to find the other professionals to help support your financial goals now and in the future to avoid making retirement mistakes.

New Jersey Hits Bottom Spot on States to Retire List

Do you plan to move to New Jersey to retire, or do you live there now? If so, you need to plan ahead to protect yourself and to make sure you have enough funds to support you and your loved ones.

New Jersey was recently ranked as the United States’ worst state to retire in, according to WalletHub’s annual list. Nearby New York did not score much better. This is the most significant impact that made New Jersey a difficult place to retire was that it finished 49th in the category of affordability.

Other factors that influence this high retirement cost include that it came in low in terms of having an elderly friendly labor market, that the taxpayer ranking was low and that the annual cost of living and in-home services were middling or towards the bottom of the list. Moving somewhere based on your preferences and your health status can be dangerous because it can overlook other important factors that may influence your ability to live the lifestyle that you intended to at the time of retirement.

Having a comprehensive retirement and estate plan are some of the most important things you can do to protect your interests and make sure that you have a strategy in place for moving somewhere that allows you to live this lifestyle. Being close to family members and whether or not there is a state estate tax or income tax are other issues to consider.

If you don’t have an estate plan yet, or if you haven’t yet discussed Medicaid for your long term care plan, contact our law office today for further help.

Study Shows Older Retirees’ Funds Took Big Hits In 2021

When looking to your own future, there are three big concerns: retirement, long-term care planning, and estate planning. In many ways, the plans for each of these intersect and influence each other. You might have funds set aside for your retirement that are also earmarked for a loved one.

New research from the Senior Citizens League shows that inflation is having negative impacts on retirement savings. In fact, more than 60% of retirees who responded to the survey indicated that their savings had dropped by 10% or greater in 2021. Medical services and health care costs have continued to rise, making this especially important for older adults to think about the possibility of covering long-term care expenses.

A February report indicates that the January consumer price index in the United States grew by 6%, which shows that inflation is still rising and causing negative impacts for consumers of all ages. The biggest increases in consumer prices were in gasoline, used trucks and cars and overall energy.

Although these issues don’t affect retirees as much, many people may be dipping into their savings for a variety of reasons, such as retiring early or spending greater funds on health care than anticipated. In order to create a comprehensive estate plan that protects your individual needs and helps provide for your loved ones in the future, you need the support of an experienced estate planning lawyer.

Although you can’t predict the future, you can pick a retirement and estate strategy that helps support you for many years after you leave the workforce. Get your questions answered by speaking with a NJ estate planning attorney today.

What Are the Downsides of Long-Term Care Insurance?

Recognizing the rising cost of health care and in particular of long-term care, you may be investigating the option for getting long term care insurance. This can help to give you peace of mind that if you need advanced care support, such as that provided by a nursing home, that you will be able to afford it.

Many people do not realize that long term care insurance is a separate kind of insurance from Medicare and that Medicare does not cover the vast majority of expenses in nursing homes after a specific period. If you have extensive need for support with activities of daily living, you may need to qualify for Medicaid, cover these expenses in private pay or use long term care insurance benefits.

Another downside is that most long term care insurance policies have a built-in 60 to 90 day waiting period. This means you won’t be able to use their payment options right away even if your policy is active. Read the fine print on your own policy to verify this.

One of the biggest benefits of LTI is that if you are healthy, you are more likely to stay in your home and maintain your independence longer. One of the biggest downsides of long-term care insurance is that it can be extremely expensive and your premiums can increase after you buy the policy. There may also be specific deadlines for making your ongoing payments to the long-term care insurance company. Many people are shocked by the extensive cost of long-term care insurance particularly when those premiums can go up annually.

Schedule a time to meet with an experienced elder lawyer if you believe that long term care insurance is not appropriate for your current plan and you wish to discuss options for qualifying for Medicaid.

Which Documents Should a Widow or Widower Review After the Loss of a Spouse?

Most older married couples have their estate plans connected to one another. This calls for an evaluation of all of these estate planning materials when a husband or wife passes away. Many of these documents may be invalid and leave you without an important safety net if the primary person named on them was your now-deceased spouse.

Finding an experienced estate planning attorney who has an understanding of the sensitivities involved in this process is extremely important for navigating your new life. There are a few different kinds of documents that should all be reevaluated after losing your spouse. These include:

  • A medical power of attorney, also known as a health care proxy, which determines who can make end of life and medical decisions for you if you become incapacitated
  • Existing durable powers of attorney because you most likely named your spouse as the person to have legal authority to handle financial matters if you’re unable to do so
  • Last will and testaments, which might include significant language passing on many of your assets to your now deceased spouse
  • Medical release forms that only named your spouse
  • Beneficiary designation forms that retirement companies and life insurance policies
  • Any other estate planning materials

Given that you likely tied together your estate plan with your spouse, it is time to reconsider who you wish to make important decisions for you, take actions for you and who you want to receive your assets if something happens to you. All of these goals can be accomplished with the help of an experienced estate planning lawyer. We can help you navigate this difficult transition.