Blended Families Need More Thoughtful Estate Plans

Estate planning for blended families is like playing chess in three dimensions: even those who are very good at chess can struggle with so many moving parts in so many dimensions. Preparing an estate plan requires careful consideration of family dynamics, and those are multiplied in blended families. This is another reason why estate plans need to be tailored for each family’s circumstances, as described in the article “Blended families have unique considerations in estate planning” from The News Enterprise.

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What Mistake Did Hollywood Director John Singleton Make with his Estate?

Hollywood director John Singleton didn’t do his family any favors by committing the most common mistake when it came to planning an estate: procrastination.

Forbes’ recent article, “The John Singleton Estate Teaches Why No One Should Procrastinate Updating Their Will” explains that after Singleton died in April at age 51 from a stroke, he only had an outdated will from 1993. Although he was unmarried when he died, he left behind at least five children and two other minor daughters, who may be his offspring. The family has already publicly disagreed about important issues like if he was to recover from the stroke, who should serve as his conservator. They even fought over his cause of his death, after he was brought to the hospital under mysterious circumstances.

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What Taxes are Due if I Gift My Home to my Grandchild?
Two boys with grandmother playing game at home, Happy kids playing with senior woman at home. Family relationship with grandma and grandkids.

What Taxes are Due if I Gift My Home to my Grandchild?

It’s not unusual for a senior to consider gifting her home to a married daughter or to a grandchild. There are certainly tax consequences to consider.

nj.com’s recent article on this subject asks “What should I know about taxes before I gift my home?” The article explains that you can gift your home or any other asset to anyone, provided that person is capable of receiving the gift and takes delivery or ownership of it. However, if the grandchild is a minor, the gift would have to be made either in trust with a trustee or through a Uniform Transfers to Minors Act (UTMA) account that has a custodian, until he or she attains the age of majority.

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Estate Planning, Simplified

Estate planning attorneys hear it all the time: “My children will have to figure it out,” “Everything will go to my spouse, right?” and “It’s just not a priority right now.” But then we read about famous people who don’t plan, and the family court battles that go on for years. Regular families also have this happen. We just don’t read about it.

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Steps to Take as a Parent’s Condition Takes a Turn

An 80-year-old man had seizures several months ago. He was treated in the hospital and since then, has had some lapses in short-term memory. His long-term memory is okay, but he is not retaining day-to-day matters very well. His awareness of a loss of some functionality has left him frustrated and a little depressed, as described in the article “Dear Counselor: Need options as father’s condition worsens” from the Davis Enterprise. The use of some antidepressants and medication has been helpful, and he seems better. However, what should the children be doing, at this time, to prepare for what may come next?

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Does Your Retirement Plan Include Long Term Care Insurance?

Roughly 60% of those turning 65 can anticipate using some form of long-term care in their lives, according to the U.S. Health and Human Services Department. It may be a nursing home, assisted living, or in-home care.

CNBC’s recent article, “Not having long-term care insurance can be ‘the single biggest devastator’ of your financial plan,” reports that over 8 million Americans have long-term care insurance. However, the cost of that insurance is rising. This increase is because of several factors, including the fact that companies underpriced their policies for years and misjudged how many would drop coverage.

Because of those rising premiums, some individuals may choose self-insurance. That means saving a pool of money to earmark for long-term care. Coverage is also available through Medicaid, which has eligibility requirements.

Even with these increases, you should purchase some form of coverage. This is because not being insured can be the biggest devastator of a financial plan.

The rule of thumb has been to buy LTC coverage at age 55. However, it really depends on your situation. The big unknown is health, and the odds of being able to qualify for coverage at age 60, compared to age 30 or 40 is vastly different.

A traditional LTC policy will cover the costs of care for a certain period of time, generally up to six years. The amount of coverage is based on the average cost of care for your location. Most insurers offer it in the form of a monthly benefit, and possibly with some inflation protection.

There’s also a hybrid policy that covers long-term care costs but becomes life insurance paid to heirs, if it’s not used. Of the 350,000 Americans who purchased long-term care protection in 2018, 85% chose the hybrid coverage. It’s also called combo or linked-benefit. The big difference is price: you’ll pay more for the hybrid policy.

Medicaid is another option, particularly if you don’t have a way to save. To be eligible, you must deplete your assets. You can also work with an attorney to find out how you can shield your assets, before you need care. Medicaid also looks back five years into your finances, so if you have given away any money during that period of time, it will be subject to penalty.

Reference: CNBC (October 14, 2019) “Not having long-term care insurance can be ‘the single biggest devastator’ of your financial plan”

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Check Cashing Company Part of Elder Abuse Case

Two women and two check-cashing companies have been accused of profiting from a scheme that had a 74-year-old man suffering with dementia as their target. The scam, reported in the article Woman carried suitcases of cash out of check-cashing business, elder abuse lawsuit says” from the Fresno Bee, was attempting to drain millions of dollars from the man.

The lawsuit alleges that the check cashing companies should have known that the 74-year-old widower was a victim of financial elder abuse by the two women, who are accused of convincing David Silnitzer to write checks totaling hundreds of thousands of dollars.

Making matters worse, one of the women managed to get legal permission to oversee the elderly man’s assets, which were estimated at $6 million.

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These Social Security Myths Could Derail Your Retirement

If you’re like many Americans, you’re relying on Social Security to a large degree to cover your expenses once your career ends and that steady paycheck vanishes, says AZ Central in the article “These 3 dangerous Social Security myths could destroy your retirement.” However, that dependence could lead to serious problems, if you don’t know the best way to manage Social Security.

The better educated you are about this government agency and its benefits, the better off you, your spouse and your family will be. Even if you’re a decade or two away from retiring, it’s a good idea to start learning about how it all works.

Here are three myths that land many people in trouble.

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