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Are You Sure You Don’t Need a Trust (Part 2)?

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In our last entry, we explained three reasons why a trust can be a better choice than a will. We will complete the series here with three more scenarios that would call for the utilization of a trust. Reaction to Estate Tax Exposure We have a federal estate tax in the United States that packs a wallop with a 40 percent top rate. The exclusion is the amount that can be transferred before the estate tax would be applicable on the remainder. For the rest of this year, the exclusion is $11.58 …

2021 Federal Estate Tax Exclusion Update

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The federal estate tax looms large because it carries a heavy hitting 40 percent maximum rate. That’s the bad news, but there is some corresponding good news to go along with it. A small percentage of people actually have to pay the tax, because there is a robust credit or exclusion. It will increase in 2021 and we will provide that figure, but first, we will share some general information about this tax. Exclusion Changes The exclusion has changed dramatically over the last 20 years, …

Seniors Will Get Social Security COLA Boost

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At the end of each year, the Social Security Administration releases updated parameters for the upcoming year. That time is upon us, and they have made the figures available. We will share them in this post, and in the near future, Medicare will follow suit. Come back to visit us, because we will pass that information along as well when it becomes available. Cost of Living Adjustment (COLA) for 2021 Seniors that are receiving Social Security benefits will receive a 1.3 …

Are You Preparing for Future Nursing Home Expenses?

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When you are planning ahead for your retirement years, you make projections based on your anticipated living expenses. People take this process very seriously, but many folks completely overlook a very significant expense that can have a devastating impact. Anticipated Lifespan There is a tool on the Social Security Administration website that you can use to find out your life expectancy based on your age. If you plug in the numbers for someone that is turning 67 on this day, you will find …

An Overview of IRA Inheritance Planning

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If you don’t need to use the money in your individual retirement account, you will naturally start to think about how it will fit into your inheritance plan. We will share all the important facts here, include a recent change that impacts IRA beneficiaries in a big way. Traditional vs. Roth IRAs The two commonly used individual retirement accounts are the traditional account and the Roth IRA, and the major difference between them is the timing of the taxation. When you have a traditional …

Did You Check These Three Estate Plan Boxes?

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There is more to the process of estate planning than the creation of a simple will. In fact, a trust can be a better choice as the centerpiece of your estate plan, but that’s a subject that we will tackle at another time. Even if you do use a will, there are some finer details that many people overlook, and we will look at three of them in this post. Letter of Last Instructions The executor acts as an administrator when a will is used as an asset transfer vehicle. This individual will …

Gift Taxes 101

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There is a federal estate tax in the United States that that can have a serious impact on your legacy, because it carries a 40 percent maximum rate. That’s the bad news, but the good news is that most people do not have to pay the tax, because it is only applicable on very large transfers. The estate tax credit or exclusion is the amount that can be passed along before the death levy is applied. At the time of this writing in 2020, the amount of this exclusion is $11.58 million. This figure …

Special Needs Planning and Medicaid Recovery

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Most individuals with special needs rely on Medicaid as a source of much needed health insurance. Since this program is only available to people with very sparse financial resources, there is an income limit. In the state of New York at the time of this writing, the limit on countable assets is just $15,450. If you have a loved one with special needs, you may want to utilize resources to make your family member more comfortable. The fact that there is this asset limit that governs Medicaid …

Have You Considered a Living Trust?

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Many people are under the impression that a last will is the only logical choice as an estate plan centerpiece if you are not extraordinarily wealthy. In fact, this is a myth. If you utilize a last will, your loved ones will not receive their inheritances in a timely manner. The executor that is named in the document would be required to admit the will to probate, and the court would supervise the estate administration process. There is one caveat to the above statement here in New York. …

How Do You Qualify for Medicaid?

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As elder law attorneys, we are often asked why anyone should care about Medicaid when they will qualify for Medicare when they reach the age of 65. This is a logical question, but there is a very good answer, and it comes as an unpleasant surprise to many people. The United States Department of Health and Human Services maintains a very useful website called longtermcare.gov. There are some interesting statistics on the site, and one of them grabs your attention right away: seven out of every …