Articles Posted in Estate Planning

Millions of senior citizens will soon find out just how high their Medicare Part B premiums will be in 2018 and whether or not their cost of living increases from Social Security will be able to help offset those adjustments. Unfortunately, many low income seniors may be due for some especially bad news as the board of trustees of Medicare are likely to ask for a premium increase consistent with the expected cost of living adjustment from Social Security, leaving may struggling to better their current situation.

According to reports, the Social Security Administration is poised to increase monthly benefits by 2.2 percent, a raise from an average monthly allowance from $1,360 to $1,390. Although the increase is not dramatic, it is much higher than the miniscule 0.3 cost of living adjustment given last year. Those cost of living increases from the Social Security Administration are important because they have a direct impact on whether or not Medicare can increase premiums.

Under the law, Medicare’s board of trustees cannot allow any premium increases that would effectively decrease the amount of benefits individuals would receive from Social Security. While seniors did not see any increases in their Medicare Part B premiums over the past few years, this was because there was no corresponding increase in Social Security benefits.

Starting a family is one of the most exciting times in our lives. With marriage and children comes responsibility to plan for our futures and ensure our loved ones are taken care of in the event of tragedy. While many young families may feel as though they can put off planning their estate, the truth is that it is never too early to start or too late to revise.

One of the first things new families will need to consider is appointing guardianship for children in the event both parents pass away. Although it is difficult to think about, children need to be entrusted to a reliable person to raise them to adulthood. The difficulty often lies in both parents coming to agreement on who should raise the children in a scenario like this.

Another important step is naming an executor to your estate to ensure your children receive all that is due to them should both you and your spouse pass away. Choosing who will manage your estate can have a tremendous impact on the situation and should be someone trustworthy and willing to go the distance until the children are grown and able to take responsibility.

Laws that address how a person’s estate should be divided after their death were created at a time when no one had anticipated the onset of the electronic era. Today, however, there are many important elements of a person’s life that involve digital files. Some of the most common examples include electronic bills that are not printed in paper form and profiles created through social media accounts that contain personal information.

It is critical that individuals who have important information that exists in digital form take proper steps to prepare their account in case of their unexpected demise. If these preparatory steps are not taken, individuals are at risk of having their assets or estate being divided in a manner that they might not have desires. This article will review some of the most crucial tips that should be followed during estate planning by individuals with digital assets.

Tip #1 – Adequately Record Account Names and Passwords

A large number of individuals are confused about some of the complicated issues involved in estate planning. It is critical, however, that individuals understand all of the details about estate planning. Failure to properly understand the estate planning process can result in individuals facing some substantial difficulties including improper administration of assets.

Myth 1 – A Last Will and Testament Avoid Probate

In actuality, in the state of Florida, even if a person writes a Will and Last Testament, the individual is still required to make sure that a decedent’s assets are passed to the proper heirs and beneficiaries.

More and more often, families include less traditional definitions than they once did. Remarriages are more common, and cohabitation in lieu of marriage is also more common. In other words, blended families are increasingly common in our society today. If you are considering remarriage or have already remarried, it is extremely important to think about estate planning for your new marriage and how to either approach it from the beginning or revisit an estate plan that may already be in place. The following tips could prove useful for blended families exploring the estate planning process and may help you figure out where to begin your estate planning discussion with an experienced estate planning attorney.

Consider a Prenuptial or Postnuptial Agreement

A prenuptial agreement is an agreement that you enter into with your perspective spouse before the two of you get married. It sets out terms that dictate the property and financial rights of the spouses in case of divorce. They can also be used to set forth terms of asset distribution and other important aspects of estate planning. By specifying these terms, you can help your loved ones avoid conflict between members of your blended family while ensuring that your wishes for your assets are carried out. A postnuptial agreement can accomplish many of the same goals but is entered into after you have already gotten married.

The internet provides us with a wealth of information at our fingertips. Unfortunately, some less scrupulous websites take advantage of the trust many people put into the internet and provide less than sound legal advice on important issues – like creating a Will and/or a trust. Sometimes, people mistakenly believe the advice they find on the internet, which can be wholly incorrect or only applicable in certain jurisdictions. One problem many individuals come up against is believing that they have a valid Last Will and Testament but what they really have is known as a holographic will.

What is a holographic will?

Basically, a holographic will is a will that has been entirely handwritten and then signed by the testator. Typically, such wills do not have witness signatures. For any Will to be valid, it must comply with the statutes governing trusts and estates in the respective state that the Will is being created and/or administered in. Sometimes, a state will allow a Will to be administered if it was created in another state and would have otherwise been valid in the state where it was created even if it contradicts the administering state’s laws. For the most part, holographic wills are invalid in most states.

Comprehensive financial planning is an intricate, multistep process that often goes hand-in-hand with comprehensive estate planning. There are many different financial planning options available to you when you begin thinking about planning for your retirement, and it is never too early to start looking into them. One of the most commons options people choose in planning for retirement is the establishment of a retirement account like an IRA or 401(k) plan. A recent article from The Motley Fool discusses three common missteps people make when approaching their retirement account withdrawals.

Waiting Too Long

The United States Internal Revenue Service requires minimum distributions from retirement accounts after age seventy and a half. However, that does not mean you need to wait until then to start taking these distributions. In fact, doing so could actually cause you unintended financial harm. By the time a person is seventy and a half, they have likely amassed a good deal of savings in these retirement accounts.

Comprehensive estate planning is an important consideration for everyone. There are many important factors to consider when engaging in responsible estate planning, not the least of which being how you want your assets to be distributed after your death. Most people will face questions about this concern at some point in their life, especially as they get older. However, a recent article from Forbes notes that women have some unique concerns when it comes to estate planning.

Healthcare Concerns

Statistics show that women live longer than men. In fact, the article notes that women are expected to live 4.9 years longer than men. This means that there are several more years of rising healthcare costs that women may need to worry about when engaging in estate planning and planning for retirement. Women need to make sure that their assets will be able to carry them through the extra years they will statistically have, which may involve paying close attention to your spouse’s estate planning portfolio because it could have a significant impact on your own estate planning choices and goals.

When an individual begins to engage in responsible, comprehensive estate planning, they inevitably end up discussing their retirement savings and investments accounts with their experienced estate planning attorney. One of the most common terms when it comes to these types of assets is required minimum distributions. While retirement accounts themselves can be incredibly complex, a recent article from The Motley Fool helps make understanding required minimum distributions relatively easy and can help you approach retirement and estate planning in a more informed, confident manner.

The Basics

You are required to start taking required minimum distributions from your retirement accounts by April 1 of the year following when you turn age seventy and a half. However, it may end up being a wise choice for you to take the first required minimum distribution the year that you turn seventy and a half instead of waiting until the next year because you will end up getting two in that year as you are also required to take one yearly by December 31. Combining two withdrawals can have a significant impact on your taxable income for the year depending on the characteristics of your account.

We have written several posts about the importance of addressing health-related issues as you engage in comprehensive estate planning and plan for your retirement. You may want to invest in long-term care insurance, or you may want to create a trust that you can fund with money to help you cover healthcare expenses as you age. Whatever your approach, a recent article reminds us of the importance of considering healthcare as part of a responsible estate planning strategy. Filing to do so could have a significant negative effect on your estate and the assets that you can pass on to your heirs.

Projected Costs

The article cites a recent Fidelity Investments estimate that the average couple retiring at age 65 this year can expect to have to pay approximately $275,000 for healthcare and related needs during their retirement. This astronomical number is six percent higher than it was in 2016. In fact, the uptick in healthcare costs during retirement have pretty much been on the rise since 2002, with most years seeing an increase in the estimated cost. Since Fidelity first did an estimate of healthcare costs in retirement about 15 years ago, the cost estimate has gone up 70 percent.

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