August 17, 2017June 14, 2025

Estate Planning and Retirement Planning

Estate planning and retirement planning are not separate things. If they are done properly, you will do both at the same time.

People often think of retirement planning as saving for their own financial needs, when they are no longer working. They also think of estate planning as something different, simply planning to distribute whatever is left over when they die.

While things can be done that way, it is better to think of the two things at once, so your plans complement each other.

If your estate planning attorney and financial advisor work together, then both your retirement and estate plans will work better for you.

You will have a comprehensive plan, as TD Ameritrade discusses in “Estate Planning: Build Up, Draw Down, Distribute Balance.”

A comprehensive plan helps determine how you are going to build up your account balances to have more than enough money for your retirement. It also makes sure your assets are held in the best possible way for your future estate.

The plan takes into consideration how you will draw your assets down during retirement to make sure you leave something for your heirs, if that is your decision.

Finally, the plan determines the best way for you to pass the remainder on to your heirs.

If you do things properly, then you will have enough for your needs and your heirs will have plenty after you pass away.

If you would like to get a comprehensive estate plan, then talk to an estate planning attorney about how to make sure your retirement plans complement your estate plan.

Reference: TD Ameritrade (July 19, 2017) “Estate Planning: Build Up, Draw Down, Distribute Balance.”

August 11, 2017

You Need a Power of Attorney

No matter who you are and what you do for a living, if you can read this, then you need a general durable power of attorney.
Think for a moment about everything you routinely do to make sure that all of your finances are in order. You pay many kinds of bills, including cable, phone, utilities, rent or mortgage and many more.
You probably pay these bills every month without much thought, other than a bit of grumbling.
You are used to it. You know how to pay them. You know if there is enough money in your accounts to cover the bills. You can also get that money out of the accounts and get it where it needs to go.
However, what if something were to suddenly happen to you?
You need to consider how difficult it would be for someone else to take care of all those bills, as WMUR 9 ABC points out in "Money Matters: Why you need a durable power of attorney."
You need to think about what would happen, if you have an accident and could not pay your bills for a few months or even longer.
What would it be like to get out of the hospital and come home to a big stack of unpaid bills? How many of your services would be cut off? Would you be in any shape to pay all of the stacked up bills to quickly get everything back in order?
There is a way to avoid that scenario.
You need to go to an estate planning attorney and get a general durable power of attorney. This will allow someone that you trust to pay your bills, if you are physically or mentally unable to do so.
Reference: WMUR 9 ABC (July 6, 2017) "Money Matters: Why you need a durable power of attorney."

August 10, 2017

An Executor Is Powerful, So Choose Wisely

This key position determines if the estate is handled well.
An executor needs to be chosen carefully, according to the Wills, Trusts & Estates Prof Blog in "Selecting an Executor for Your Estate."
While there are others who will have a hand in determining how the estate administration goes, the executor with handle most of the decisions.
It is the executor who will have to make the biggest decisions and, unless someone complains, there will be little oversight from busy probate courts.
You need an executor who is trustworthy, understands financial matters, has the time to do the job properly, is willing to do the job, is patient and will seek the advice of experts, when necessary.
Finding someone who meets all of those qualifications, can be a challenging task for many people. However, it is necessary, if you want your estate to go smoothly.
Fortunately, if you do not have a friend or family member who fits the bill, there is someone you probably know who can help steer you in the right direction.
An estate planning attorney can guide you in creating an estate plan that fits your unique circumstances. They can also advise you on a good choice for an executor.
Reference: Wills, Trusts & Estates Prof Blog (July 13, 2017) "Selecting an Executor for Your Estate."

July 24, 2017

Life Insurance Is Simple and Can Benefit Estate Plan

Estate and capital gains taxes can be avoided.

Wall Street has an enhanced life insurance method that benefits wealthy people and is becoming increasingly popular, according to Barron's in "New-ish Tax Planning Instrument Gathering Billions."

Life insurance is a popular estate planning tool used as a relatively simple way to even out inheritances between heirs or to provide needed cash for family members, after the policy holder passes away.

A policy is purchased, premiums paid and upon the death of the policy holder, cash is distributed to the beneficiary.

Since life insurance is a death benefit, the beneficiary does not have to pay income taxes on it when it is paid out as a lump sum.

Wall Street has an insurance dedicated fund as a complicated investment tool that gets treated for tax purposes in the same way as life insurance.

It allows people to invest money that is then managed by hedge funds, without paying any capital gains tax on the investment. When the investor passes away, the accumulated funds in the account are distributed to beneficiaries and have the same tax benefits as life insurance.

Insurance dedicated funds are not new, but they have recently started becoming more popular.

An estate planning attorney can advise you on whether an insurance dedicated fund will fit your unique circumstances.

Reference: Barron's (June 28, 2017) "New-ish Tax Planning Instrument Gathering Billions."

July 14, 2017

NAELA Take on Senate HealthCare Bill

Dear NAELA members,

Yesterday, the Senate released its initial version of the American Health Care Act, called the Better Care Reconciliation Act.

I appreciate that the Senate heard NAELA’s concerns regarding the provision in the House passed American Health Care Act that would have imposed new restrictions on how much home equity states could exclude when an individual applied for Medicaid. This provision would have been particularly harmful to individuals with disabilities in high-cost areas who wished to remain at home.

Unfortunately, the Senate version of the American Health Care Act makes even worse the House’s radical changes to Medicaid by capping the federal government’s commitment to individuals with disabilities and low-income seniors, putting their health and well-being at risk. Then, starting in 2024, it limits federal payments to the states based on the growth of the Medicaid inflation, which, over time, could be insufficient to keep up with the cost of care. This could not come at a worse time, as the population of Americans over the age of 85 grows rapidly.

As members of the National Academy of Elder Law Attorneys (NAELA), we represent individuals faced with significant long-term care needs. These are some of our nation’s most vulnerable people. Many require assistance to perform the most basic life functions. Their families are emotionally, physically, and financially exhausted from the process. They have had their dignity stripped and lost their life savings as a result of illness and disability.

Many of us cannot imagine ourselves in such a situation, but disability and disease can happen to anyone. For many people, including most middle-class and working-class Americans, it’s Medicaid, not Medicare, that provides them with care in these situations.

Changing Medicaid’s financial structure for the worse without addressing many of the underlying issues in the program only exacerbates these problems. Take just one example: Providing services at home is optional while more costly institutional care is mandatory. States under new budget constraints from the per-capita cap may keep the mandatory and jettison the optional. So the change in financial incentives puts Americans, such as those with dementia, a spinal cord injury, or children with developmental disabilities, at risk of being institutionalized when they could otherwise receive care in a less restrictive, less costly, more comforting setting.

The Senate also continues with the House’s repeal of Medicaid’s three-month retroactive coverage. Without retroactive coverage, the families of seniors discharged to a nursing home after a traumatic accident could be liable for tens of thousands of dollars of nursing home costs, which facilities may then deny them entry because they lack sufficient funds.

Medicaid can be improved upon so that individuals with disabilities and older Americans can receive the long-term care they need, without having to become destitute to do so, without having to put unneeded stress on their families. The Better Care Reconciliation Act, as proposed by the Senate, does not do that. It simply makes an already bad situation worse.

I urge all members to call their senators and ask them to vote against this legislation. NAELA will be making talking points and contact information available for you on Monday to do so.

Sincerely,

Hy Darling, CELA, CAP
NAELA PresidentAC

July 13, 2017

How Long Can You Put Off Estate Planning?

When it comes to estate planning, Americans procrastinate. However, it can only be put off for so long.

Even people who like to make detailed plans about everything else, are often tempted to put off estate planning for as long as possible. It is just human nature to prefer not to think too much about what will happen to our worldly possessions, after we pass away.

It can be difficult to imagine our things and our loved ones having a life after us. This leads to estate planning procrastination.

Truthfully, that is never a good idea. You do not know when you will pass away. It can happen suddenly and sooner than you want.

However, if you do procrastinate when it comes to your estate planning, you should know that the procrastination needs to end at some point.

This point was made by the Twin Cities Pioneer Press in "3 moves you should make in the first 3 years of retirement."

If you have managed to put off estate planning until after you have retired from work, then now is the time to stop putting it off.

With any luck, you will still live many more years. On the other hand, estate planning is about more than just deciding what happens to your possessions and assets after you pass away.

It is also about securing your own final years and making sure you have powers of attorney and advanced health care directives in place, should you ever need them.

In the end, estate planning gives you peace of mind in knowing that your family will be okay after you pass away and that you will also be okay, should you ever need help.

If you have retired and still have no estate plan, then talk to an estate planning attorney as soon as you can.

Reference: Twin Cities Pioneer Press (June 17, 2017) "3 moves you should make in the first 3 years of retirement."

July 12, 2017

You May Not Know What You Think You Do

People have a lot of false ideas about estate planning and how wills and trusts work. They should seek out people who do know what is correct.

We do not all like to admit it, but the truth is that we are all often wrong. Many of the things we thought were right, we later learn were incorrect.

Logically, that means many of the things we are “sure” about now, we will only learn to be less so later on.

There is no shame in this.

We cannot be experts in everything.

A physicist cannot be judged too harshly for getting the details of macroeconomics wrong, for example.

One area that many people are often very wrong about is estate planning, as pointed out in TCPalm in "Misconceptions about wills and trusts."

The article mentions several things people are often wrong about when it comes to estate planning. What is specifically mentioned in the article, however, is not as important as understanding that you are probably wrong about estate planning.

You might not be wrong about everything that has to do with estate planning, but you are almost certainly wrong about more things than you think you are.

This suggests that you should not do your own estate planning.

You are wrong about some aspects of estate planning and you do not even know which aspects you are wrong about.

Consequently, you should seek out people who are experts in estate planning and those people are estate planning attorneys. Let them help you with your estate plan.

That would be the wisest thing to do, just as it would be wise for estate planning attorneys to seek out your advice in your line of expertise.

Reference: TCPalm (June 16, 2017) "Misconceptions about wills and trusts."

July 11, 2017

New Zealand Trusts

Changes to New Zealand's foreign trusts laws might show that using offshore trusts to hide assets is more prevalent than previously thought.

For many years, New Zealand has been thought of as a great place to hold foreign assets in trust. The nation had lax laws and allowed foreigners to have tax-free trusts with little oversight.

When the Panama Papers, the leaked emails of a law firm in Panama, were released, all that changed.

It was revealed that New Zealand was being used by some very wealthy people to hide assets from their own governments. This created some international pressure on New Zealand by other governments, as those other governments do not appreciate avoidance of their taxes.

In response to this pressure, the New Zealand government changed its trust laws. All foreign trusts were required to register, declare who controlled the trusts and declare who the beneficiaries of the trust were.

It was assumed this move would not be a burden for most foreign trusts, since there are many reasons someone might want to have a tax-free trust in New Zealand other than tax avoidance.

However, most foreign trusts have failed to register under the new law and many have fled the country, as the Wills, Trusts & Estates Prof Blog reports in "Trust the Kiwis."

This suggests that using foreign trusts to hide assets is more common than previously thought.

Accordingly, government regulators will look for other ways to crackdown on trusts and make tax avoidance more difficult.

Reference: Wills, Trusts & Estates Prof Blog (June 20, 2017) "Trust the Kiwis."

June 6, 2017

Massive Medicare Fraud Alleged

A former insurance company executive has made public allegations that insurers have systematically overcharged Medicare and cost the government billions of dollars.

Every few years it seems the federal government needs to do something to fix Medicare or risk running out of available funds for the program. One attempt to fix Medicare was undertaken in the early 2000s. It is now known as Medicare Advantage.

The program privatized parts of Medicare by turning things over to insurance companies. The idea was that insurers would do a better job of controlling costs in the program than the government.

Instead of doing that, however, a whistle-blower alleges that insurers have used the program to make billions of dollars from Medicare they are not entitled to, as The New York Times reports in "A Whistle-Blower Tells of Health Insurers Bilking Medicare."

The alleged fraud is a relatively simple one.

Insurers are said to have used the medical coding system to make patients look sicker than they really are. As a result, the insurers easily collect more money from the government than they actually should.

The government has already announced plans to sue one insurer based on these allegations and more lawsuits against other companies are expected.

It is important for the government to stop this fraud, if true, and any other Medicare fraud.

The Medicare system is yet again close to running out of funds and in need of a fix. The government cannot afford to lose billions to fraud.

Reference: New York Times (May 15, 2017) "A Whistle-Blower Tells of Health Insurers Bilking Medicare."

Building Legacies that Last Estate Planning and Elder Law

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