Americans hold huge sums in retirement plans; for many, their 401(k)s and IRAs make up the bulk of their retirement savings. You worked hard to build retirement savings – make sure you avoid these common mistakes: Failing to take distributions on time. Absent any other estate planning strategies, you must start taking distributions from an IRA at age 70 ½. If you don’t take the required distribution, you pay a 50% penalty on the amount you should have withdrawn. Delaying …
Guardians: The Basics
If you become incapacitated, someone will have to act for you; wouldn’t you prefer to choose that person? If your wishes are not in writing, family members or close friends may be forced to file court proceedings to obtain legal authority to manage your affairs. Once a guardian is appointed you lose the right to make even basic decisions about your property and your life. Court proceedings to establish a guardianship can be time-consuming, are open to the public, and can sometimes be …
A Popular Misconception Regarding Living Assistance
More and more people are becoming aware of the benefits of a healthy lifestyle. Those who eat well, exercise regularly, and steer clear of things like smoking and drinking too much often times avoid serious health problems and live longer lives. The above having been stated, some people who live a healthy lifestyle automatically assume that they don't need to worry about budgeting for long-term care. This may be a mistake. First of all it should be noted that there are indeed individuals …
Top Three Reasons People Choose Living Trusts
People sometimes hear about "trust fund babies" and automatically assume that trusts are only useful for very wealthy people. Those of us who have been able to accumulate a great deal of wealth throughout our lives can indeed benefit from the creation of a trust. However, a trust need not be funded with enough money to make the beneficiary independently wealthy throughout his or her life. Trusts are actually viable options for people who are not extraordinarily well-off. Below are the top …
Secretariat & Estate Planning
Many people here in the state of New York and around the world remember the great racehorse Secretariat pulling away to win the Belmont Stakes by an incredible 31 lengths in 1973. This made him the ninth Triple Crown winner of all time, and it was the first time that a horse had captured the Kentucky Derby, the Preakness, and the Belmont in 25 years. If you're not a fan of sports or if this was well before your time you may have heard the story of Secretariat through the major motion …
First Estate Planning Consultation: A Primer
You should know a little bit about what to expect before you arrive at your initial estate planning consultation. There is certain information that you are going to have to make available to your attorney, and doing this may take some preparation. Net Worth Statement It is always a good idea to keep an ongoing net worth statement. Your net worth is going to be calculated by the IRS and by the state of New York to determine your estate tax liability. Your attorney can help you position …
Don’t Assume When It Comes to Revocable Living Trusts
As we have pointed out in previous posts there are marketing websites on the Internet that sell generic legal documents including last wills. They also sell downloads and worksheets that you can use to create revocable living trusts. There are many reasons why you would do well to take pause before using an online tool to create estate planning documents (or any other legally binding documents for that matter). However, we would like to focus on something else here. How do you know that a …
Fewer Affluent Individuals Prioritizing Inheritance Preservation
There is a bumper sticker that makes the rounds among retirees. The exact wording may differ a bit depending on the version that you see, but the gist of it is this: "We're spending our children's inheritances." Some people are of the mind that they have worked hard for their money and they really are not concerned about what they may or may not be leaving behind. Others do in fact have very specific ideas about what they would like to be able to do for their children and …
Wills Can Be Used in Combination
There are many different legal devices that may play a role in your estate plan. Exactly what combinations would be appropriate is going to depend on your unique situation. With the above in mind you would do well to understand the fact that your estate plan is not complete if you choose to execute a last will. Yes, you can state your wishes regarding the distribution of your financial assets with this device. You can also include your choice of executor or executrix. In addition, if you are …
What Is a POD Account?
Estate planning involves making arrangements for future asset transfers. There are a number of different ways that you can go about it. The creation of a POD account is one possibility. Payable on Death Accounts The acronym POD stands for "payable on death" in this context. These accounts are alternately called transfer on death accounts (TOD accounts). Payable on death accounts can be opened at banking institutions of various kinds along with many brokerages. When you open a payable on …
What Is the Annual Gift Tax Exclusion?
There is a gift tax that is applicable when you give gifts to others. However, there is an annual gift tax exclusion, and there is a unified lifetime exclusion. Let's look at these exclusions and what they mean to you when you are planning your estate as a high net worth individual. Annual Gift Tax Exclusion Each year you can give gifts to others free of taxation as long as they do not exceed a certain amount per person. In 2014 this amount is $14,000. To be clear, this is not a total of …
What Is the Five Year Medicaid Look Back?
Medicaid is a government health insurance program that will pay for long-term care. Because it is a need-based program there are upper asset limits. You cannot qualify if your countable assets exceed $14,550.00 in value. Medicaid may not seem relevant to you if you expect to qualify for Medicare coverage as a senior citizen. Medicaid and Medicare do pay for many of the same types of medical expenses, so this is not an unreasonable assumption. However, Medicare won't pay for long-term care. …
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