Building Legacies that Last Estate Planning and Elder Law

Do You Know What You Need to Know About Social Security?

Old-couple[1]Many people rely on the information provided by the Social Security Administration to learn about their Social Security options and benefits. A recent government study suggests that they might not be getting all the information they need.

For decades the vast majority of Americans have made decisions about their Social Security benefits by asking experts about their options. The Social Security Administration has claims specialists whose job it is to provide all the important information so Americans can make informed decisions about how much they will receive and when they should start claiming those benefits.

However, a study conducted by the GAO alarmingly suggests that Americans who rely on the SSA for information are not always getting what they need to know.

This was recently reported by the Motley Fool in "6 Key Facts Social Security Doesn't Always Tell Retirees."

Americans are not always getting important information such as how the age at which they first claim Social Security benefits affects the amount of their benefits, how the amount of benefits is based on lifetime employment income, whether they are eligible for spousal benefits, and how their benefits might be taxed.

While it is to be hoped that the GAO report will lead to better information being provided by the Social Security Administration, that should not be counted on.

It is a good idea for people with questions about Social Security to seek out the advice of an elder law attorney to make sure they get all the information needed to make an informed decision.

Reference: Motley Fool (Sept. 26, 2016) "6 Key Facts Social Security Doesn't Always Tell Retirees."


Should Seniors Get Married?

Happy-old-couple[1]Getting married always comes with challenges and finances that needs to be worked out. This is especially true for people in their retirement years.

When people fall in love and decide that they want to get married, they often do not think of all of the financial consequences of their decision to wed. In the popular imagination this is something that young couples do all the time. They rush into a marriage without having first considered all of the financial implications.

However, elder law experts point out that the tendency does not go away with age.

Senior citizens are just as likely to get married without thinking everything through. That can be a problem, because seniors have more they need to think about than younger people as the Hartford Courant reports in "Fit To Be Tied? Think Twice About Marriage In Your Golden Years."

Senior citizens considering getting married need to think about how marriage will affect all of their other plans, including retirement and estate plans. For example, a retired person might think his well-crafted estate plan to leave his assets to his children is solid and that a new wife with assets of her own will not affect those plans.  Under the law, in Maryland and DC, however, a spouse is given inheritance rights.  Therefore a retired person should contact a Maryland estate plannning attorney to review options to protect his children and the new spouse.  There are several trusts that protect a spouse during life, while leaving the underlying assets to children from a prior marriage.  Call Profit Law Firm, for consultation to find an option that works for your family.

In reality, it is almost impossible to cut a spouse out of an estate plan entirely. Consequently, whether or not the couple intends it, the new spouse is likely to inherit something without very careful planning. An estate planning

That is not to say senior citizens should never get married. They just need to think about it and visit an elder law attorney familiar with estate planning to learn about all the implications and what can be done about them.

Reference: Hartford Courant (Sept. 24, 2016) "Fit To Be Tied? Think Twice About Marriage In Your Golden Years."


When a Relative Is Missing

Bigstock-Beautiful-woman-looking-throug-20311445[1]If a loved one has been missing for a long time, it is possible to have him or her declared deceased so that an estate can be administered.

You might have seen a television documentary or a movie about someone who disappears. With hundreds of channels in need of content the genre is a popular one. The stories normally focus on trying to piece together the clues about what might have happened to the person who vanished.

What they do not tend to describe in much detail is what happens to the person's property. The property cannot exist in a legal limbo forever waiting for the owner to return as that might never happen.

A recent case out of Missouri helps to answer that question as ABC 17 News reports in "Family of missing man files petition to establish presumption of death."

Charlie Bell disappeared in 2011. He was last seen riding his motorcycle. The police believe he was murdered based on witness testimony, but Bell's body has never been found to confirm it.

His family is now asking a court to issue an order presuming that Bell passed away. If granted, the order would allow Bell's estate to be administered.

Every state has a similar procedure in place for these types of cases.

When a person has been missing for a certain length of time, which varies from state to state, a court upon application can issue an order presuming death and allowing the administration of the estate.

Reference: ABC 17 News (Sept. 22, 2016) "Family of missing man files petition to establish presumption of death."


How to Get an Estate Plan

Bigstock-Extended-Family-Outside-Modern-13915094[1]People seeking retirement advice often express concerns about needing to leave an inheritance for their loved ones. They should get an estate plan to do that.

Different professionals have different roles in your financial well-being. Accountants can assist you with your tax returns. Retirement planners can assist you with your investments. And, as Morningstar explains in "Get Your Estate Plan in Gear" estate planning attorneys can assist you with an estate plan.

The article discusses a couple looking for retirement advice. They wanted to make sure their daughter with special needs would be adequately provided for after they passed away.

The author suggested that they get an estate plan and gave some tips about how to do it, including:

  • Hire an attorney who specializes in estate planning. If you want to make sure that your loved ones are taken care of, then you do not want to create an estate plan on your own.
  • Take stock of all the assets you own so you know what needs to be distributed in your estate plan.
  • Figure out who you want to include in your estate plan as heirs, beneficiaries and in key roles, such as executors and trustees.
  • Try to learn what type of estate planning documents you might need. If you are not certain, then make sure that you let your attorney know that.
  • After you get an estate plan from the attorney, make sure you manage the physical documents themselves so they are in good shape and can be found if anything happens to you.
  • Keep your estate plan up to date and makes changes whenever your life circumstances change.

Reference: Morningstar (Sept. 23, 2016) "Get Your Estate Plan in Gear."


Locating Old Retirement Accounts

Bigstock-Young-man-holding-a-trash-bin--26453660[1]People with old pensions and retirement accounts often have difficulty locating them. It can be more difficult for estate administrators who need to locate the old accounts. Some help might be on the way.

When pension plans first became a popular benefit in the U.S. it was normal for people to stay employed by the same company throughout almost their entire working life. This held true when employers began switching from traditional pensions to 401(k) accounts. However, that is no longer the case for many working Americans.

People today change employers frequently.

That often means they have old retirement accounts setup at previous places of employment. If someone is not diligent in transferring those accounts when they change jobs, the old accounts can become forgotten or lost. That can make it difficult to later find those accounts when needed, such as when retiring or administering an estate.

This problem was discussed in a Wills, Trusts & Estates Prof Blog article titled "How to Find Your Lost 401(k)."

Currently the U.S. Pension Benefit Guaranty Corp. has a database of traditional pension plans that allows people to find any lost accounts. The agency would like to make that database easier to search and would like to expand it to include defined-contribution pensions and 401(k) accounts.

However, for now, inclusion of 401(k) accounts would be voluntary and there are other companies attempting to corner the market. A bill is in Congress that would make it mandatory to create a nationwide searchable database.

If you have old retirement accounts you cannot locate, you might want to contact your representative in Congress to urge passage of the bill.

Reference: Wills, Trusts & Estates Prof Blog (Sept. 20, 2016) "How to Find Your Lost 401(k)."

One Document Parents Must Have

MP900289365[1]Parents with small children want nothing more than to make sure their children are taken care of no matter what happens. A will is an essential document to do that.

There is something about bringing a new life into the world that changes most people. A new child causes most of us to change from being mostly concerned about our own well-being to being mostly concerned about the well-being of someone else.

This change has been much remarked on and studied. It appears to be almost universal for humans.

People who would not have previously sacrificed their own desires become willing to sacrifice for their children. However, what many young parents do not do is to make plans for how to take care of their children should something happen to the parents.

This is a mistake as Nerdwallet explains in "Protect Your Family by Writing a Will."

Parents who want to make sure their children are taken care of, if the parents pass away, need a will. Two important things can be done with a will. First, in a will parents can make sure their children are taken care of financially. Second, and most importantly, a will is the proper legal document for parents to express their wishes about who should act as guardians for their minor children.

The guardian is the person tasked with taking care of the day-to-day needs of the child. Parents who want to have a say in who rears their children need to have a will.

There are other estate planning documents that can be helpful for parents with young children. Accordingly, every parent needs a will and every parent should talk to an estate planning attorney about other important legal documents that might be useful given their own unique family circumstances.

Reference: Nerdwallet (Sept. 19, 2016) "Protect Your Family by Writing a Will."


What Is Your Estate Planning Attorney Talking About?

Bigstock-Financial-consultant-presents--14508974[1]Estate Planning Attorneys talk about a lot of different legal documents. You need to know what those documents are.

When you visit with an estate planning attorney, the attorney is likely to mention the names of several different legal documents. If you want to understand what the attorney is talking about, then you will need to know what those documents are.

Most attorneys would be happy for you to ask if you do not know. Answering questions is what the attorney is there for. However, if you are not comfortable asking basic questions, then you should learn some basics beforehand.

Recently, the Ventura County Star published a list of basic estate planning documents and what they do in "Get to know estate planning documents." The list includes:

  • Advance Directive – Tells doctors and other health care professionals what procedures not to perform if you are terminally ill and have no chance of recovery.
  • Asset Inventory – A list of all of your assets to let your estate executor know what you have after you pass away.
  • Beneficiary designations – Life insurance, retirement accounts, and other financial accounts you designate to go to a specific person after you pass away.
  • Power of Attorney – Allows for someone else to handle your finances if you are incapacitated.
  • Power of Attorney for health care – Allows for someone else to make medical decisions for you if you are incapacitated.
  • Record of Locations – A list of where your heirs can find all the important financial and legal documents after you pass away.
  • Trust agreement – A method of passing assets to others while having those assets maintained by a third person.
  • Will – The most common estate planning document that says how assets should be distributed after you pass away via probate.

A qualified estate planning attorney can help you decide the best legal documents to use for your unique circumstances.

Reference: Ventura County Star (Sept. 17, 2016) "Get to know estate planning documents."


Trusts – What Different Types of Trusts Exist?

Business_meeting[1]Learning about trusts can sometimes be difficult as there are several different types of trusts that you can get that are designed to do different things.

When attorneys talk about trusts they often end up confusing laypersons with all of the legal jargon. There are many different types of trusts out there and each type has its own terminology. This legalese can be difficult for the uninitiated to understand.

This is a problem for people who would like to set up a trust. They need to know what it is their attorneys are talking about so they can choose the right type of trust.

Recently, the Motley Fool discussed some common trust types in "Navigating the World of Trust Funds: Your Quick Guide," including:

  • Revocable Living Trusts – These are trusts the settlor (the person who creates the trust) can easily dissolve. If circumstances change, assets in the trust can be removed and a different trust can be created. These trusts avoid probate.  They do not reduce taxes.
  • Irrevocable Trusts – These trusts cannot be revoked. They often have estate tax benefits, while revocable trusts don't.
  • Credit Shelter Trusts – While not as useful as they used to be, these trusts still offer a good way to avoid some estate taxes. They are particularly useful in Maryland and DC, which currently have state estate taxes for estates greater than $2million and $1 million. Assets in the trust are held for the benefit of children normally, but a spouse can still use those assets while he or she is alive. The assets are not counted as part of the spouse's estate for tax purposes.
  • Generation-skipping Trusts – These trusts are created for the benefit of grandchildren instead of children. This is normally done for estate tax purposes, but the trusts need to be set up by experts to avoid other tax issues.
  • Qualified Personal Residence Trusts – These very specific trusts are a way to pass a home on to heirs while minimizing estate and gift taxes on the home.

When it comes to deciding which trust “flavor,” if any, is appropriate for you, be sure to contact a qualified estate planning attorney.

Reference: Motley Fool (Sept. 18, 2016) "Navigating the World of Trust Funds: Your Quick Guide."

Suggested Key Words: Estate Planning, Trusts

Rise of the Super Rich

Bigstock-Extended-Family-Relaxing-On-So-13907567[1]More and more Americans are amassing large fortunes. That means that more and more Americans are concerned about how passing that wealth on to their children could impact their children's lives.

In "Penta Millionaires: The New Rising Class" Barron's reports that the number of American families with wealth is growing and diversifying. More families have wealth of over $5 million than ever before. Many more of these wealthy are female and younger than ever before.

What many of the new wealthy are discovering is the old truth that having money in and of itself does not necessarily translate into a worry-free life. Instead, being wealthy comes with its own set of worries about maintaining that wealth and how best to pass it on to the next generation.

Wealthy people, especially those who have earned the wealth themselves, often fear that if they leave it to their children, it could ruin their children's lives.

The children might inherit the wealth and decide they do not need to work hard at their own careers and they can just live off of their parents' money. Some parents also fear their children will waste their inheritances on frivolous pursuits and possessions.

There are several ways to help alleviate these concerns about the effect of large inheritances on children.

One way is to make sure the children receive a proper education in how to handle finances. Another complimentary way is through proper estate planning.

Inheritances can be structured to ensure that assets are not squandered and that the children who inherit wealth continue to pursue their own careers.

Contact a qualified estate planning attorney about how to bless your heirs instead of curse them with your wealth. Profit Law Firm can provide information on how to pass wealth in a manner that encourages children to handle it responsibly. 

Reference: Barron's (Sept. 17, 2016) "Penta Millionaires: The New Rising Class"


Alleviating End-of-Life Regrets

Bigstock-Vintage-brass-telescope-on-ant-44347372[1]Everyone regrets something at the end of a long life, even if it is just not telling friends and family how much they meant to them. A letter-writing project seeks to help people alleviate some of those regrets.

Doctors and other professionals who care for the elderly who are approaching the end of their lives often report that their patients are full of regrets. They regret everything from not mending a broken relationship to not saying thank you to those who helped them and not telling people how much they love them.

This should not be surprising as there are many things people wish they had done differently during their lives. One of the tragic things for those near the end of life, however, is that they often do not have the time or ability to tell loved ones what they regret not saying sooner.

The New York Times reports on a new project designed to help with that problem in "Writing a 'Last Letter' When You're Healthy."

The Stanford Friends and Family Letter Project is a relatively simple idea.

It offers a free letter template with seven questions for people to answer. The questions include "Who do you wish to thank?" and "What do you wish to thank them for?"

This simple idea provides an easier way for people to order their thoughts and let people know how they feel.

One thing this project does not address is estate planning.

Having a properly planned estate is one way to lessen end-of-life regrets as it gives comfort in knowing that family members left behind will be taken care of. If you do not have an estate plan, then contact an estate planning attorney about how to get one.

Reference: New York Times (Sept. 7, 2016) "Writing a 'Last Letter' When You're Healthy."