August 15, 2018April 30, 2026

Cohousing May Be the Answer for Many “Golden Girls” and Guys

“Here’s one answer to the “Where to go next?” question being asked by those inching toward retirement, or those looking to escape the increasing cost of Seattle living and combine resources with a like-minded community.”

For those living in high-cost areas, like Seattle, San Francisco, New York, Los Angeles and other places where the cost of housing is astronomical, the idea of purchasing land and building tiny houses next to each other seems like something out of a movie. But according to an article in Seattle Times titled “Battling rising cost of living? Seeking a community? A look at the cohousing lifestyle,” this could be a very real and enjoyable solution for many retirees.

This past June, Charles Durrett, an architect who has been advocating for the cohousing lifestyle for years, presented a workshop for people who want to establish these types of communities. The idea is that everyone gets their own private home and living quarters, while sharing kitchens and other shared rooms. Neighbors share house items, meals, coordinate activities and make group decisions about how to manage their shared lives.

While he introduced the concept and phrase “cohousing” thirty years ago, he says that he’s now busier than ever before. The workshop was sold out.

The concept could be an ideal solution for seniors who don’t want to give up their privacy but would like to be part of a smaller community. Durrett recommends that each community have a caretaker unit, so someone who is able to take care of the residents, can live as part of the group.

The success of a cohousing community is not in the size or design of the house. It is due to the enthusiasm of the people coming together, who believe their lives will be better, if they are living as part of a community. That’s the common denominator. The architect has lived in a cohousing community for 12 years with 30 adults—20 of them seniors—and 20 children.

Research has shown that people live longer, when they are socially engaged. However, social can also turn to drama, especially in small groups. Therefore, people must learn how to get along and cooperate.

Is cohousing for you? You should do your homework before making a big decision about selling your home to live in a shared community. Your estate plan should also reflect your new position and be aligned with your new ownership. An estate planning attorney will be able to help you achieve that goal, while protecting your assets for your heirs.

Reference: Seattle Times (June 1, 2018) “Battling rising cost of living? Seeking a community? A look at the cohousing lifestyle”

August 14, 2018March 22, 2019

Think 61 is Your Golden Retirement Number? Think Again

“There's nothing wrong with looking forward to retirement and even planning an early exit from the workforce. However, Americans may be a bit misguided, when it comes to this particular milestone.”

If you work for a living, chances are good you like to daydream about what your life will be like during retirement. We all do it and so do younger workers who have yet to pay their dues. However, according to a survey from Bankrate, as reported in The Motley Fool’s article titled “Americans’ Ideal Retirement Age–and Why It’s Not Realistic,” adults across the board think that 61 is the ideal age to retire. Is that realistic?

Unless you can live without Social Security during retirement, 61 is not your magic number. Most American retirees can’t live on Social Security alone and those benefits have a major impact on the ability of most retirees to keep up with their bills. However, eligibility doesn’t start until age 62. The people in the survey either didn’t know they can’t collect Social Security until they turn 62 or they are assuming they can get by without it.

The average Social Security benefit check is just more than $1,400, which adds up to about $17,000 a year. If you are among those who have little or no money set aside for retirement, that’s a lifeline.

A large number of working Americans are way behind in their retirement savings. It’s estimated that around 42% have fewer than $10,000 set aside for the future. How will they retire at all, much less retire at age 61?

Even if you can manage to keep working until age 62, filing at that age has its own issues. Today’s workers need to wait until their Full Retirement Age, or FRA, in Social Security’s terms, to receive their full monthly benefit. The difference is large enough to make it worth the wait.

Assume that your full retirement age is 67, but you retire at age 62. Instead of $1,400, your monthly benefit would be $980.

However, what if you are among those who really want to retire at 61? You’ll need to have started with saving and investing for retirement at a relatively young age and have been willing to take a very aggressive position in your investments. If you started at age 26, with a goal of retiring at age 61, and you are employed by a company with an employee sponsored 401(k), you’d have had to contribute $1,500 a month for thirty-five years to amass enough money—if your investments were earning a steady 7%.

If retirement is around the corner, one thing you can do is make sure your estate plan is in place. Therefore, whatever assets you have, will be distributed according to your wishes. Make sure you have also taken care of having a power of attorney and healthcare directive in place. Speak with an estate planning attorney to make sure these documents are prepared correctly.

Reference: The Motley Fool (July 18, 2018) “Americans’ Ideal Retirement Age–and Why It’s Not Realistic”

August 10, 2018October 30, 2023

Women Living Longer but Saving Less

“All working Americans need retirement savings, regardless of gender. However, the need is particularly strong for women, since they have a tendency to live longer than their male counterparts. Therefore, they’re also more likely to require paid care at some point—since a spouse may not be around to provide care.”

Women have a statistically longer lifespan than men. It’s unsettling to learn that women save about half as much as men for retirement. This disparity could put women in a very bad position, when they are most vulnerable late in their lives, says The Motley Fool in its article “Why Are Women Only Saving Half as Much as Men for Retirement?”

When queried about why they think it is so difficult for women to save for retirement, most woman honestly said they are living from one paycheck to the next, with little to spare for savings. They are also paying back student loans. Men say much the same thing, so why is the average female saver saving so much less for her future?

In a recent Student Loan Hero study, women admit that they don’t know a lot about investment and retirement planning. Women are also more likely to take breaks in their careers to be caregivers, raising children and taking care of aging parents. This reduces their earnings. While some wage equity has been achieved and even made into law, most women do not earn the same as their male counterparts. Therefore, women face special challenges to their retirement savings.

What can be done to address the gap?

Start by examining your budget and cutting unnecessary expenses.
Make sure to maximize your employer’s 401(k) match.
Fight for raises throughout your career. To gain more info on what your position is worth, use websites like Glassdoor’s “Know Your Worth” tool to compare salary data.
Consider changing your investment approach. If you have steered clear of stocks over conservative vehicles like bonds, they may be a good way to catch up.

Finally, don’t forget that retirement includes estate planning. Sit down with an experienced estate planning attorney, who can help you prepare the necessary documents to protect you and your family. Make planning for retirement a priority. Your future self will appreciate it!

Reference: The Motley Fool (June 3, 2018) “Why Are Women Only Saving Half as Much as Men for Retirement?”

August 3, 2018December 13, 2025

Now Is a Good Time to Revisit Your Estate Plan

“There still are many sound nontax reasons to revisit estate planning and possibly update your prior documents.”

Even with the doubling of the individual estate gift and GST tax exemptions to about $11.2 million per person (and double the amount for married couples), you still need a will, says Forbes in a useful article titled “7 Reasons to Revisit Your Estate Plan, Trump Tax Law Aside.”

A will serves as the primary vehicle to convey your intentions for your assets and explain your legacy. The provisions of the will can be used to designate how assets will be transferred, whether outright to beneficiaries, to existing trusts or into a new trust that is created under the provisions of the will. If you use the will to create a testamentary trust, the will is where you specify the age for distributions to the beneficiaries and other important details. The will is also how you convey your wishes to make a gift to specific institutions and who should receive family heirlooms.

The executor or personal representative of the estate is the person or institution in charge of managing your affairs, after you have passed. The executor gathers all the information about your estate, including assets and debts, filing taxes and administrative tasks. That person is named in the will.

If you have minor children, or a child with a disability, you want to choose a guardian and a successor guardian. If you do not, the court will appoint someone to rear your child(ren), and that may not be the person you would have wanted. Your spouse is always the obvious choice, but there are instances where both parents die unexpectedly, with no plans in place for their children.

There are many different types of trusts used to accomplish different things. They can be used to control assets and their distribution, which is particularly important when minor children are in the family. Trusts should be used when there is an individual in the family with a disability, an addiction or other issues who cannot manage their finances on their own.

Tax planning is a major part of any will. For a long time, estate planning attorneys focused on how assets were titled, so that the first of a married couple to pass would be able to fully use their estate tax credit. However, the relatively new concept of “portability,” which allows any unused credit from the first spouse to pass to be used for the benefit of the second spouse, eliminates the need for any unused estate tax credit to go into a bypass trust.

Not only do you need a will, but this year you should consider reviewing your will, if you have not done so. The new tax law may have eliminated or reduced some estate tax liability, but it has not eliminated the need for mindful and proactive estate planning.

Reference: Forbes (March 15, 2018) “7 Reasons to Revisit Your Estate Plan, Trump Tax Law Aside”

August 2, 2018December 13, 2025

Want to Give Away All of Your Money?

“Even if you’re not a millionaire, you may have reached a stage where you think, It’s enough. It could even be a bit too much. A second car may sit mostly in your garage. A beloved vacation home may have transformed from a place to relax to a place to maintain.”

You don’t have to be a millionaire to feel like you’ve got enough. How many cars, vacations or houses does anyone really need? If you’ve reached that point, congratulations. Now, what do you do about it? How do you share your resources in a way that is carefully thought out and doesn’t create a battle among family members? An article from AARP, “How to Give Your Money Away,” provides some good points.

A grandchild needs a college education. Use a 529 college tuition plan to help your grandchild, by contributing to a plan created by the child’s parent. Financial aid formulas look at contributions from a grandparent’s plan but not a parent’s plan as student income. To allow your grandchild to be eligible for student aid or grants, make sure that the funds you contribute go to his or her parent’s 529. Many states permit you to switch ownership to the parent, if the beneficiary remains the same.

You want to be philanthropic, even if you’re not Warren Buffet. You can use what’s called a DAF—donor advised fund. They are like charitable savings accounts. The tax deduction for any cash or investments placed in the fund is immediate, so you can front-load two or three years’ worth of giving into one year. You can also claim a charitable deduction for a year, when you intend to itemize instead of taking the new standard deduction. You can direct grants from the fund to any non-profit organization you choose and whatever timeframe you like.

One child is a smashing success, the other is a starving artist. Sometimes the disparity of incomes between children, can be a result of choice or abilities. Nevertheless, you may not wish to leave the exact same amount to both kids. One of your children might have a disability and needs special planning. It’s your call and it’s also your call whether to share all the details with your kids. Logic prevails in some families and there’s no drama over these kinds of decisions. Less information about their inheritance is better for others. You could insert a no-contest clause in the will to forestall any litigation.

You have visions of generations enjoying your summer cottage. Sometime this works out. However, sometimes the kids have no interest in the property and just want to sell it. Have that conversation first. If no one wants it, sell it when the timing works for you. If one kid loves the house and the others don’t care, work out the numbers so the house stays in the family, but the child receives a smaller percentage of assets. If the family wants to keep the house, work with an estate planning attorney to create an LLC (Limited Liability Company) and give shares to the kids. You’ll need an operating agreement, including how the cost of maintaining the property will be handled and what happens, if someone wants to sell their share. Define the universe of eligible owners as lineal descendants and not spouses, to forestall an ownership battle in the case of a divorce.

Talk with an experienced estate planning attorney about how to give away your assets in a way that will make sense for your family and gain useful tax benefits for your estate.

Reference: AARP (May 1, 2018) “How to Give Your Money Away”

July 31, 2018December 13, 2025

What Is the Fascination with Anthony Bourdain’s Estate Plan?

“Ever since his untimely death, the press and the public hasn’t been able to get enough of Anthony Bourdain. His name caused another commotion this week, when his will was probated in New York.”

There’s something about a rebel who lives life on his own terms that is like a magnet: it’s sometimes hard to turn away and that’s how many are responding to celebrity Anthony Bourdain’s passing, according to the Forbes’ article “How Anthony Bourdain’s Estate Plan Reflected the Two Most Important Parts of His Life.”

Reports that his net worth was only $1.2 million grabbed a lot of attention. It shouldn’t have surprised anyone, because Bourdain regularly said that until his 40s, he lived paycheck-to-paycheck. What’s really interesting from the estate planning perspective, is how he expressed his wishes in his will. The details became public because it was probated.

Bourdain made provisions for his only child, who will inherit the bulk of his wealth. He also seemed to have been influenced by the enormous amount of travel his career required. What is interesting is that he passed his frequent flyer miles to his estranged wife “to dispose of, in accordance to what she believes to be his wishes.”

Those who travel often and have large frequent flier miles, award points and perks, often overlook them as part of their estate plan. They are often valuable and should be addressed in estate planning.

However, passing along airline points is not as easy as filling out a beneficiary form. Each airline has their own policies, so you may have to fill out a form for each one. Loyalty programs are basically contracts with a company and you’ll need to read the fine print, since not all airlines allow their points to be assigned. The selection of beneficiaries also may be limited by the airline.

Bourdain’s very public profile makes it unlikely any airline would refuse to honor his request to transfer those points. Because he carefully documented his desire to leave his frequent flier miles to a specific beneficiary, it’s even more likely his points will transfer without too much fuss.

Bourdain is proof that even rebels make sure to put estate plans in place.

His will reflects his personality of authenticity and relentless curiously about the world around him. The final message he leaves us with, is to take care of those we love, even as we travel the globe.

Reference: Forbes (July 6, 2018) , “How Anthony Bourdain’s Estate Plan Reflected The Two Most Important Parts of His Life.”

July 12, 2018December 13, 2025

Dodging an Unpopular Tax Provision

The recently passed federal tax overhaul limits deductions for state and local taxes to $10,000. It has not been popular with those affected. Estate planning attorneys might have found a way around it.

The new tax laws that were passed in December of 2017 have been controversial. Some people are very happy with the changes. However, most people have found something they do not like about them. One of the more controversial changes was that the itemized deduction for state and local taxes was limited to $10,000.

People who own expensive property in high tax states are not happy that as it will increase their taxes, in many cases. Initially, some state governments tried to figure out a way around the limit for their citizens, but the IRS shot most of those down. Some estate planning attorneys might have found a solution though, as Bloomberg reports in “How the Rich Can Dodge Trump’s Property Tax Hike.”

The idea is to first create an LLC in a non-tax state such as Delaware or Alaska. Real estate ownership is then transferred to the LLC. After that, several non-grantor trusts are created. Ownership of the LLC is then divided up and transferred to the new trusts. When tax time comes around, each non-grantor trust can take a $10,000 deduction for any property taxes that were paid by the LLC. Effectively, the new deduction limit can be rendered moot. Ask your local estate planning attorney about this practice.

The IRS could issue a new regulation against this practice. However, estate planners think it will work.

Reference: Bloomberg (June 15, 2018) “How the Rich Can Dodge Trump’s Property Tax Hike.”

July 9, 2018December 13, 2025

Estate Planning for the Separated

Two recent celebrity deaths highlight a potential issue in estate planning. What happens when a couple does not get divorced but separates amicably?

The recent deaths of fashion designer Kate Spade and celebrity chef Anthony Bourdain have elicited an outpouring of grief. They both committed suicide, which came as a shock to friends, family and fans. However, they both also share something else in common.

At the time of their passing, they were both separated from their spouses. That highlights a peculiar issue in estate law as Forbes discusses in “Kate Spade, Anthony Bourdain And Estate Planning When You Are Separated.”

If Spade and Bourdain had gotten divorces, then their spouses would not be entitled to any portion of their estates. If the spouses were included in the estate plan, they would be constructively written out by a court. However, that does not happen when a couple is separated.

The spouse of the deceased retains full rights to the estate. That means if there is no estate plan, the spouse will normally receive the entire estate through the laws of intestate succession. If there is an estate plan, then the spouse receives anything the plan says he or she gets. If the spouse does not receive enough of the total assets of the estate, then the spouse can elect to take his or her spousal elective share (the amount of which varies between states).

Of course, both Spade and Bourdain might have been perfectly fine with their spouses receiving their assets. They did after all choose not to divorce, but instead to separate.

Reference: Forbes (June 12, 2018) “Kate Spade, Anthony Bourdain And Estate Planning When You Are Separated.”

June 16, 2018December 13, 2025

Why You Need an Estate Planning Attorney

Why You Need an Estate Planning Attorney

You might think that you do not need professional assistance for your estate plan because you know who you want to get what. There is more to estate planning than that.

It is actually easy to create an estate plan for yourself. You can simply write your own will, directing who should get what pieces of property. If you execute that will properly with witnesses and signatures, your will can be probated.

If you are not certain that is the best idea and would like a little bit more help, download some prepared forms to fill out from an online service at a low cost. The ease of doing that might make you think that an estate planning attorney is not necessary. However, there are other reasons to see an attorney, as the Huntsville Item points out in “Do you really need an estate planning attorney?”

Those other reasons include:

The estate planning attorney knows about property law and how different types of property are handled differently by courts. If you do not get this correct in your will, your estate can face difficulties.
There are different types of estate planning documents that do different things. Estate planning attorneys can help you pick the right ones for your unique circumstances.
Estate taxes are still a concern at the federal level for many people and in several states. A professional is needed to properly plan around them.
The attorney can also help craft your estate plan in a way that compliments your other financial goals, often including paying less in taxes.

Reference: The Huntsville Item (May 21, 2018) “Do you really need an estate planning attorney?”

June 15, 2018December 13, 2025

Planned Giving

One of the ways that you can leave a good legacy behind, is to provide money to charity in your estate plan.

Your worth is likely more than the sum total of your assets. You have worth that does not have any direct monetary value. Your capacity to like and love your friends and family cannot be given a monetary value, for example. However, in estate planning, it can often seem like the only thing you will have left at the time you pass away, are assets that have monetary value and need to be given to other people.

You cannot give away your capacity to love after death. However, that does not mean your other value has to be left out of your estate plan completely. You can use your estate plan for planned charitable giving, as the Nashua Telegraph discusses in “Planning to give and leaving a lasting legacy.”

Planned giving is simply making provisions in your estate plan that a certain amount of money or a percentage of your estate’s assets should be given to charity. It is a popular option for people. It is popular not only with the wealthy, but also with people of more modest means who want to leave something behind for good causes.

There are several different ways you can make charitable donations a part of your estate. Some are as simple as a few lines written into a will and others are for more complicated, including setting up special trusts for the purpose. An estate planning attorney can help you choose the best way to do so.

Reference: Nashua Telegraph (May 20, 2018) “Planning to give and leaving a lasting legacy.”

Estate Planning, Wills, Trusts

Building Legacies that Last Estate Planning and Elder Law

Tag: Estate Planning