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What are the Penalty-Free IRA Withdrawals?

What are the Penalty-Free IRA Withdrawals?

What are the Penalty-Free IRA Withdrawals? Traditional and Roth IRA distributions can bring about a 10% penalty, if you take them too soon. However, there are several early-withdrawal exceptions that will let you avoid the fine.

Investopedia’s recent article entitled “9 Penalty-Free IRA Withdrawals” examines some IRA withdrawals that can be made during retirement.

The IRS will hit you with a 10% penalty on an early IRA withdrawal to motivate you to keep your retirement savings intact. However, you may be able to get around the penalty in some situations. Here are nine circumstances where you can take an early withdrawal from a traditional or Roth IRA without being penalized.

  1. Unreimbursed Medical Expenses. If you don’t have health insurance, or you have out-of-pocket medical expenses that aren’t covered by insurance, you may be able to take penalty-free distributions from your IRA to pay for these expenses. To be eligible, you must pay the medical expenses during the same calendar year you make the withdrawal. Further, your unreimbursed medical expenses must the more than 10% of your adjusted gross income (AGI).
  2. Health Insurance Premiums During Unemployment. If you’re unemployed, you may take penalty-free distributions from your IRA to pay for health insurance premiums. For the distributions to be eligible for the penalty-free treatment, you must satisfy these conditions:
  • You lost your job
  • You received unemployment compensation for 12 consecutive weeks
  • You took the distributions during either the year you received the unemployment compensation or the next year; and
  • You received the distributions no later than 60 days after returning to work.
  1. Permanent Disability. If you become permanently disabled and can no longer work, you can withdraw money from your IRA without the 10% penalty. You can use the distribution for any reason. Just remember that your plan administrator may need you to provide evidence of the disability, prior to approving a penalty-free withdrawal.
  2. Higher-Education Expenses. You may be able to avoid the 10% penalty, when you use IRA funds to pay for qualified education expenses for you, your spouse, or your child. These qualified education expenses include tuition, fees, books, supplies and equipment required for enrollment. Room and board are also approved for students enrolled at least half-time.
  3. An Inherited IRA. If you’re the beneficiary of an IRA, your withdrawals aren’t subject to the 10% early withdrawal penalty. However, this exception doesn’t apply if you’re the spouse of the original account holder, you are the sole beneficiary and you elect a spousal transfer (rolling over the funds into your own non-inherited IRA). In this instance, the IRA is handled as if it were yours, to start, which means the 10% early withdrawal penalties still are applicable.
  4. To Buy, Build, or Rebuild a Home. You can withdraw up to $10,000 (which is a lifetime limit) from your IRA without penalty to buy, build, or rebuild a home. To be eligible, you must be a “first-time” homebuyer, (which means that you haven’t owned a home in the previous two years). However, you could have been a homeowner in the past and still qualify as a first-time homebuyer today. If you’re married, your spouse can add an additional $10,000 from his or her IRA. You can also use the money to assist your child, grandchild, parent, or other family members, as long as they meet the first-time homebuyer definition.
  5. Substantially Equal Periodic Payments. If you need to make regular withdrawals from your IRA for several years, the IRS lets you to do so penalty-free, if you meet certain requirements. Therefore, you withdraw the same amount—determined under one of three IRS-pre-approved methods—each year for five years or until you turn 59½, whichever one comes later. This is referred to as taking substantially equal periodic payments (SEPPs) from your IRA.
  6. An IRS Levy. If you have unpaid federal taxes, the IRS can use money in your IRA to pay the bill. The 10% penalty won’t apply, if the IRS levies the money directly.
  7. Active Duty. Qualified reservist distributions aren’t subject to the 10% penalty. In some instances, you may be able to repay the distributions, even if the repayment contributions exceed annual contribution limits. However, you are required to do so within two years of the end of active duty.

While if the circumstances discussed here are exempt from the early-distribution penalty, they still may be subject to federal and state tax. To claim the early-distribution penalty exception, you may be required to file IRS Form 5329 along with your income tax return, unless your IRA custodian reports the amount as being exempt on IRS Form 1099-R.  That explains What the Penalty-Free IRA Withdrawals are.

Reference: Investopedia (Jan. 20, 2020) “9 Penalty-Free IRA Withdrawals”

Read more about this at:      11 Ways to Avoid the IRA Early Withdrawal Penalty/USNews

 Traditional IRA Withdrawal Rules /charles Schwab

And read one of our previous blogs at:    Making an IRA Part of the Estate Plan

Walt Disney and his Grandchild

What are Walt Disney’s Heirs Worth?

What are Walt Disney’s Heirs Worth?  It’s not known just how much the Disney family is worth. GOBankingRates estimated the company’s net worth to be roughly $130 billion. Roy O.’s grandson, Roy P., said at one point that the family owns less than 3% of the company. Even so, that would put their fortune around $3.9 billion (not counting any investments in addition to Disney holdings).

Wealth Advisor’s recent article entitled “Disney Family Feud As Heirs Battle For $400 Million Trust Fund” says that in 1925, Walt married Lillian Bounds, a studio inker. Eight years later, she gave birth to Diane, and the couple later adopted their daughter Sharon as a baby.

Walt Disney is said to have adored his 10 grandchildren. When he died in 1966 of lung cancer, he left numerous trusts and family foundations for his family and heirs.

Walt’s younger daughter, Sharon, adopted one child, Victoria, with her first husband, Robert Brown. She then had twins, Brad and Michelle, with her second husband, Bill Lund. She died from breast cancer in 1993 at age 56. Michelle has never had a job and owns three homes, spending a lot of time in Newport Beach, CA according to Gardner.

Victoria reportedly lived an extravagant lifestyle that included $5,000-a-night suites at the Royal Palms in Las Vegas. One report notes that she once went on a Disney cruise ship and destroyed her suite to such a degree that Michael Eisner, then-CEO of the company, had to ask the trustees to pay for the damages. Her share of the family fortune was added to Brad’s and Michelle’s after she died in 2002 from health complications. However, Sharon’s twins later became embattled in a years-long feud over their $400 million trust fund. That inheritance was supposed to be distributed in annual payments and lump sums at five-year intervals at ages 35, 40, and 45. However, the trustees dispersed the payments to Michelle and withheld Brad’s.

Michelle and the trustees argued that Brad wasn’t able to take care of his share because of a “chronic cognitive disability” and that Bill, their father, was taking advantage of this to gain money, according to NBC News.

Bill said that the trustees were manipulating his daughter Michelle. Bill was previously a trustee but resigned after an allegation that he used trust money to gain more than $3 million in kickbacks from a real-estate deal. He reportedly agreed to an annual settlement of $500,000.  So we truly do not know what the Walt Disney’s Heirs Worth.

Reference: Wealth Advisor (Feb. 11, 2020) “Disney Family Feud As Heirs Battle For $400 Million Trust Fund”

Read some related articles at:                  The Disney’s, not the happiest family on Earth. /nbcnews.com

Disney Family Networth: Meet the family behind the media empire/businessinsider.com

Also Read one of our previous Blogs:                Are You Considering the Impact of Your Estate Plan on your Heirs?

 

DIY Estate Planning

How Bad Can a Do-It-Yourself Estate Plan Be? Very!

How Bad Can a Do-It-Yourself Estate Plan Be? Very!  Here’s a real world example of why what seems like a good idea backfires, as reported in The National Law Review’s article “Unintended Consequences of a Do-It-Yourself Estate Plan.”

Mrs. Ann Aldrich wrote her own will, using a preprinted legal form. She listed her property, including account numbers for her financial accounts. She left each item of property to her sister, Mary Jane Eaton. If Mary Jane Eaton did not survive, then Mr. James Aldrich, Ann’s brother, was the designated beneficiary.

A few things that you don’t find on forms: wills and trusts need to contain a residuary, and other clauses so that assets are properly distributed. Ms. Aldrich, not being an experienced estate planning attorney, did not include such clauses. This one omission became a costly problem for her heir that led to litigation.

Mary Jane Eaton predeceased Ms. Aldrich. As Mary Jane Eaton had named Ms. Aldrich as her beneficiary, Ms. Aldrich then created a new account to receive her inheritance from Ms. Eaton. She also, as was appropriate, took title to Ms. Eaton’s real estate.

However, Ms. Aldrich never updated her will to include the new account and the new real estate property.

After Ms. Aldrich’s death, James Aldrich became enmeshed in litigation with two of Ms. Aldrich’s nieces over the assets that were not included in Ms. Aldrich’s will. The case went to court.

The Florida Supreme Court ruled that Ms. Aldrich’s will only addressed the property specifically listed to be distributed to Mr. James Aldrich. Those assets passed to Ms. Aldrich’s nieces.

Ms. Aldrich did not name those nieces anywhere in her will, and likely had no intention for them to receive any property. However, the intent could not be inferred by the court, which could only follow the will.

This is a real example of two basic problems that can result from do-it-yourself estate planning: unintended heirs and costly litigation.

More complex problems can arise when there are blended family or other family structure issues, incomplete tax planning or wills that are not prepared properly and that are deemed invalid by the court.

Even ‘simple’ estate plans that are not prepared by an estate planning lawyer can lead to unintended consequences. Not only was the cost of litigation far more than the cost of having an estate plan prepared, but the relationship between Ms. Aldrich’s brother and her nieces was likely damaged beyond repair.  that is how bad a Do-It-Yourself Estate Plan Be!

Reference: The National Law Review (Feb. 10, 2020) “Unintended Consequences of a Do-It-Yourself Estate Plan”

Read more about this at : Do it yourself Estate Planning by the American Bar Association

Is Do-it- yourself Estate Planning a Valid option? from Forbes

You can also read one of our previous Blogs at:  Do it yourself Wills go wrong- Fast

 

 

Kirk Douglas

The Latest on Kirk Douglas’ Estate

What is The Latest on Kirk Douglas’ Estate? Wealth Advisor’s recent article entitled “Kirk Douglas Lived Well, Died Rich And May Trigger $200M Los Angeles Range War” explains that Douglas worked steadily in a four-decade period but slowed down after the early 1980s. Since that’s almost 40 years ago, one might think that what would be considered a modest legacy by modern standards would be whittled down considerably. However, Kirk Douglas died extremely rich, despite a long life and decades of semi-retirement.

Douglas was one of the first to ask to participate in the profit of his movies and was one of the first stars to form his own production company. For example, Spartacus was big enough to gross $30 million on its $12 million budget. When he started his company, he refused to pay himself for that film. Instead he took 60% of the profit and wound up about $3 million ahead. His company owned the films and sold off distribution rights.

His widow Anne is now the only shareholder of record. She’s rolled the money into a family trust that over the decades created numerous tiers of holding companies and joint ventures. One of those joint ventures ended up owning half the land under Marina Del Rey’s high-rise Shores apartment complex, a property that cost a reported $165 million to build. The land is nearly priceless.

Now that it’s only Anne, the successor trustees will one day need to decide what to do with the land. She called the shots on the accounting side. Kirk remarked that he didn’t even know where the money was. However, when he found out, he got eager to give it all away. Tens of millions have already been committed to hospitals, schools and theaters.

Estate tax won’t be an issue because Kirk and Anne conducted thorough estate planning so that any wealth that goes to the family will transfer via a trust. That way, they’ll get a portion of the income without triggering estate tax concerns.

Thanks to all of Kirk’s films—many of which he owned like Spartacus—he compiled tens of millions of dollars in cash and stock during his lifetime. In almost 70 years of marital bliss, his planning added up to a lot of marital property. It was good life with good things yet to come.

It’s a testament to the power of long-term thinking. Kirk Douglas’ fortune has remained intact for generations and will undoubtedly keep helping the world for many years to come.

So that is the Latest on Kirk Douglas’ Estate.

Reference:  Wealth Advisor (Feb. 4, 2020) “Kirk Douglas Lived Well, Died Rich And May Trigger $200M Los Angeles Range War”

Read these articles for more information:    Kirk Douglas gives most of $61M fortune to charity, leaving nothing for son Michael

                                                                                             Kirk Douglas leaves most of his $80 million fortune to charity

Also read one of our previous Blogs about other celebrities who left their Estate’s to charity:

George Michael’s Charity Continues

If you are interested in leaving part of your Estate to charity, we also have experience in this area. Visit our Website at:

Charitable Planning In Northeast Florida

 

IRA COUPLE

Am I Better Off Investing Earlier in My IRA?

Am I Better Off Investing Earlier in My IRA? Remember that you’re able to make an IRA contribution for a given year anytime between January 1 and the tax-filing deadline of the following year (usually April 15). That means that you can make a 2020 IRA contribution between Jan’ 1, 2020, and April 15, 2021. However, don’t wait. Why not?

Vanguard’s recent article entitled “IRA contributions: The earlier, the better” notes that you invest to earn money, and the amount of money you earn depends primarily on three factors—two you can control.

  1. Investment performance. There’s no way to control investment performance and all investing involves risk. The main cause of risk is market movement, which impacts your investment earnings.
  2. The amount you invest. You earn your money with compounding, when your investment earnings make their own earnings. If you contribute more, you have more money to generate earnings. That means you have more earnings to generate additional earnings. You can control the amount you invest, provided you keep within the annual IRA contribution limit.
  3. Your investment timing. If you wait until April to make an IRA contribution, you’ve missed 15 months of compounding, so if you have the financial flexibility to decide when you contribute to your IRA, do it ASAP.

As an illustration, let’s imagine that you invest $5,500 in your IRA each year for 30 years, and your average annual return is 4%. In Situation A, you make a lump-sum investment every January, and your end balance is $323,967. That includes $158,967 in earnings. In Situation B, you make a lump-sum investment every April and your end balance is $308,467. That includes $143,467 in earnings, which is $15,500 less than you’d earn in the first scenario. In each situation, you’re contributing a total of $165,000 to your IRA over the span of 30 years.

This illustration shows some what-if scenarios that aren’t always possible to do in real life. For instance, you may not be able to invest the same amount each year or have to skip a few years. However, you should make small steps toward saving 12%–15% of your gross income (including employer contributions) every year. If you don’t have the financial flexibility to make a lump-sum investment in your IRA—in January or April (or in any other month as a matter of fact), try to set up recurring automatic bank transfers. If you make bi-weekly contributions over the course of 30 years (for a total contribution of $165,000) and earn a 4% average annual return, the end balance is smaller than Situation A but larger than Situation B.

However, remember that you can’t contribute more than you’ve earned for the year.

Reference: Vanguard (Jan. 21, 2020) “IRA contributions: The earlier, the better”

Read more about this at: When is the Best Time to put money in your IRA-Forbes

   The Best Age to Open an IRA and start investing

Also read our previous blog at:    Can I Place My IRA in a Trust?

 

How Much Does New Budget Cut from Medicaid and Medicare?

How Much Does New Budget Cut from Medicaid and Medicare? In President Trump’s proposed fiscal year 2021 budget, the HHS budget notes that taxpayers could save $756 billion in Medicare through 2030 by reducing fraud and waste and relying on lower payments to hospitals through “site-neutral” payment policies. For Medicaid, the Health and Human Services Department’s annual budget proposal presumes that expanded work requirements, tighter beneficiary eligibility screening and capped or “block grant” state funding will all be in effect.

These approaches show how the White House will change entitlement programs in an election year, if Trump’s budget is approved. His administration would like to see able-bodied adults who enroll in Medicaid to have a work requirement imposed. If this requirement was implemented, it would probably decrease the population of recipients and more of those receiving benefits would be physically unable to work.

“As part of the President’s Health Reform Vision, Medicaid spending will grow at a more sustainable rate by ending the financial bias that currently favors able-bodied working adults over the truly vulnerable,” the HHS budget document said.

The Centers for Medicare & Medicaid Services (CMS) has okayed 11 state work requirement programs and is in the process of looking at nine others. These state work mandates are being challenged in court, but the administration still contends they’ll save Medicaid $8 billion in 2021 alone.

CMS would like to implement Medicare’s “site-neutral” payment policy. This would pay the same lower rate for services whether provided at a doctor’s office or in a hospital outpatient setting. It’s a priority to see it go into effect. However, a federal court scrapped the policy last year, saying it was a programmatic overreach. Nonetheless, the Trump administration again implemented it this year and is facing more lawsuits from the hospital industry. The Trump White House says the site-neutral Medicare payments would save more than $164 billion over 10 years.

The administration also wants to cut Medicare payments for doctors’ residency training programs and hospitals’ uncompensated care. Those moves would save about $52 billion and $88 billion, respectively, over 10 years, the budget document explains.

The administration also estimates that overhauling Medicare payments for care after a patient leaves the hospital would save more than $101 billion over the next 10 years, answering the question How Much the New Budget Cuts from Medicaid and Medicare?

Reference: Bloomberg Law (Feb. 11, 2020) “Trump Projects Saving Billions From Medicare, Medicaid Policies”

Read more related articles at: Trump 2020 Budget proposes reduced Medicare and Medicaid- cncb.com

 Is President Trump Really Proposing To Cut Medicare By $845 Billion?- Forbes

Also check out our previous Blog:

                                                              Thinking about Aging? Will You Need Long Term Care with Medicaid?

 

Special Needs

Special Needs Guardianship Can Be a Challenge

Special Needs Guardianship Can Be a Challenge. A person who’s diagnosed with autism should have a named guardian before turning 18. At that point, the person can sign binding contracts, make health care decisions and sign IEPs (Individualized Education Plan) without parental involvement.

Autism Parenting’s recent article entitled “A Brief Overview of Special Needs Guardianship” explains that guardianship is a legal process in which a responsible person is named as the final decision maker for another. When it’s the parent and their child with autism, the parent can become the guardian of the 18-year-old with autism in a specific legal process. Guardianship gives the parent the final say, on all decisions regarding the child.

It’s not uncommon for a parent to be hesitant about becoming the guardian, especially if the child is developing well and has several abilities. One question to ask in this situation concerns the intellectual or developmental age of my child. If the honest answer is below the age 18 (like 14 or 12 years old), then you’ll want to ask yourself if you’d allow your 14-year-old make all healthcare, education, housing and financial decisions and have those decisions be legally binding. Probably not. In that case, you should look into guardianship.

If your adult child continues to develop and at some point down the road can make decisions on her own, the guardian can petition the court to have relationship revoked.

Another important time period that guardianship needs to be considered is when the parents die. The appointed guardian then will be responsible for day-to-day care or decisions on that day to day care. The selection of a guardian for this situation is often a large roadblock to finishing up a family’s plan.

The reason is because parents must make this decision before completing their will. If parents have trouble with choosing a potential guardian, consider these criteria when considering each person: location, family circumstances, their personality qualities and demeanor, their age, their experience with special needs individuals, the fact that the person knows your family member, your parent or your loved one knows the individual, their financial position, marital status and work schedule.

By the following factors, parents can rank each possible future guardian and settle on the best possible choice.

Although the guardian might never be as committed as a parent, if you use a more objective process (like the criteria above), parents will be better able to find a qualified future guardian.

Special Needs Guardianship Can Be a Challenge but with careful planning it can be achieved.

Reference: Autism Parenting (undated) “A Brief Overview of Special Needs Guardianship”

For More Information on this subject Click here: Guardianship and Conservatorship | Autism Speaks

Special Needs Children turning 18 Years Old -Caregiver.com

Also Read our Previous Blog at :  Estate Planning for Special Needs Family Members

 

Able Accounts

An Introduction to ABLE Accounts

An Introduction to ABLE Accounts

When Congress passed the Achieving a Better Life Experience (ABLE) Act in 2014, it was a game-changer for families with special needs. For the first time there was a tax-advantaged way to put money aside for dependents with disabilities without compromising their eligibility for government benefits. And, unlike a special needs trust, an ABLE account can be managed and controlled by the beneficiary.

Since this law was enacted, however, there has been some confusion about how ABLE accounts work, and the public has been slow to sign on. Here are answers to a few basic questions to help clarify what ABLE accounts can and can’t accomplish for the special needs family.

What is the ABLE Act, and what does it mean?

The ABLE Act is a provision of the 529 section of the IRS code, the section that previously established the framework for education savings plans to help families save for college. The ABLE Act allows money to be set aside for a person with special needs in a similar way. This money can grow tax-free over time and is used to pay for qualifying expenses toward the care and support of the special needs beneficiary. These accounts are administered by the individual states and accept contributions in the form of cash only (not bonds, securities, real estate, or other assets). As of February 2020, 42 states and the District of Columbia had set up ABLE programs, although if your state does not yet have its own program, many state programs allow out-of-state beneficiaries to open accounts. For a directory of state programs, click here.

What can ABLE accounts pay for?

Money in an ABLE account is intended for the care and support of the person with special needs. Qualifying expenses include housing, transportation, assistive technology, health care, and employment support. Any amount withdrawn for non-qualifying expenses incurs a 10 percent penalty payable to the IRS and is subject to taxation on any gains or investment returns.

What are the advantages ABLE accounts?

ABLE accounts provide advantages in two areas: taxation and access to government benefits. Through an ABLE account, a person with special needs can accumulate savings in a tax-advantaged way similar to 529 college savings plans. Like 529 plans, the funds in an ABLE account grow tax-free, and some states even offer account contributors a deduction from state income taxes.

A person with disabilities who has more than $2,000 in assets would normally not qualify for federal government benefits such as Supplemental Security Income (SSI), but under the ABLE Act, families may establish ABLE accounts that will not affect the child’s eligibility for SSI (up to $100,000), Medicaid, and other public benefits. Such accounts are also easy and inexpensive to set up and do not require the services of a lawyer or special needs planner.

Are there any drawbacks or limits to ABLE accounts?

Due to certain restrictions, ABLE accounts may not be for everyone. Eligibility is limited to people who developed their disability before age 26, so anyone who becomes disabled later in life does not qualify. Also, unlike 529 plans, total contributions to ABLE accounts are limited to $15,000 per year, although beneficiaries who work can make ABLE contributions above the $15,000 annual cap from their own income up to the Federal Poverty Level, which is $12,760 for a single individual in the lower 48 states (in 2020), provided they do not participate in their employer’s retirement plan.

If the value of the account exceeds $100,000, any SSI income is suspended until the account dips below that limit. Faced with saving for the lifetime needs of a loved one with disabilities, families realize that $100,000 may not be enough yet are wary of losing that government income even for a short period. Another drawback is that after the death of the ABLE account beneficiary states can claim reimbursements from funds remaining in the account for any Medicaid benefits paid during the beneficiary’s lifetime.

Before setting up an ABLE account for your loved one, make sure you understand every aspect of the law, and consult your special needs planner.

For more on ABLE accounts, click herehere and here.

 

Other important information for Able Accounts can be found here:     What to know before opening an Able Account/USNews.com

    How to draw up a Special Needs Trust for a Child with Disabilities/ USNews.com

 

Also read one of our Previous Blogs here:              How much money should I put in a Special Needs Trust for my Child?

 

 

Estate Tax

What Exactly Is the Estate Tax?

What Exactly Is the Estate Tax? In the U.S., we treat the estate tax and gift tax as a single tax system with unified limits and tax rates—but it is not very well understood by many people. The Motley Fool’s recent article entitled “What Is the Estate Tax in the United States?” gives us an overview of the U.S. estate and gift tax, including what assets are included, tax rates and exemptions in 2020.

The U.S. estate tax only impacts the wealthiest households. Let’s look at why that’s the case. Americans can exempt a certain amount of assets from their taxable estate—the lifetime exemption. This amount is modified every year to keep pace with inflation and according to policy modifications. This year, the lifetime exemption is $11.58 million per person. Therefore, if you’re married, you and your spouse can collectively exclude twice this amount from taxation ($23.16 million). To say it another way, if you’re single and die in 2020 with assets worth a total of $13 million, just $1.42 million of your estate would be taxable.

However, most Americans don’t have more than $11.58 million worth of assets when they pass away. This is why the estate tax only impacts the wealthiest households in the country. It is estimated that less than 0.1% of all estates are taxable. Therefore, 99.9% of us don’t owe any federal estate taxes whatsoever at death. You should also be aware that the lifetime exemption includes taxable gifts as well. If you give $1 million to your children, for example, that counts toward your lifetime exemption. As a result, the amount of assets that could be excluded from estate taxes would be then decreased by this amount at your death.

You don’t have to pay any estate or gift tax until after your death, or until you’ve used up your entire lifetime exemption. However, if you give any major gifts throughout the year, you might have to file a gift tax return with the IRS to monitor your giving. There’s also an annual gift exclusion that lets you give up to $15,000 in gifts each year without touching your lifetime exemption. There are two key points to remember:

  • The exclusion amount is per recipient. Therefore, you can give $15,000 to as many people as you want every year, and they don’t even need to be a relative; and
  • The exclusion is per donor. This means that you and your spouse (if applicable) can give $15,000 apiece to as many people as you want. If you give $30,000 to your child to help her buy their first home and you’re married, you can consider half of the gift from each spouse.

The annual gift exclusion is an effective way for you to reduce or even eliminate estate tax liability. The estate tax rate is effectively 40% on all taxable estate assets.

Finally, the following kinds of assets aren’t considered part of your taxable estate:

  • Anything left to a surviving spouse, called “the unlimited marital deduction”;
  • Any amount of money or property you leave to a charity;
  • Gifts you’ve given that are less than the annual exclusion for the year in which they were given; and
  • Some types of trust assets.

Reference: The Motley Fool (Jan. 25, 2020) “What Is the Estate Tax in the United States?”

Read more about this subject at: Florida Department of Revenue- Estate Tax

Ten Facts You Should know about the Federal Estate Tax

Also check out our previous Blog at:  As a Trust Beneficiary, Am I Required to pay Taxes

long term care givers

How Can Long-Distance Caregivers Help Loved Ones?

How Can Long-Distance Caregivers Help Loved Ones? A recent article noted that long-distance caregivers have the same concerns and pressures as local caregivers, perhaps even more. They spend about twice as much on caregiving as people caring for a loved one nearby, because they’re more likely to need to hire help, take uncompensated time off work and pay for travel. A huge challenge for this group is just staying informed and assured that the person needing care is in good hands. As a result, long-distance caregivers must have good communication and a solid team on the ground.

AARP’s recent article entitled “Long-Distance Caregiving: 5 Key Steps to Providing Care From Afar” provides us with five steps to staying informed and effective as a long-distance caregiver and thoughts for implementing the measures.

  1. Be sure you have access to information. Having a means of receiving good information and possessing legal authority to make financial and health-care decisions is critical for all primary caregivers, but it’s even greater for ones caring from a distance. Arrange as much as you can during an in-person visit.
  • Start the discussion on finances and map out with your loved one how to pay for health care and everyday expenses.
  • Ask whether your parent or other senior is able to sign the forms or make the calls necessary to give doctors, hospitals and insurers permission to share information with you or another trusted family member. This should include banks and utilities.
  • Be sure the senior has designated a durable power of attorney for health care and financial decisions.
  • Know what to do in an emergency, as far as access to the home by a neighbor, if needed.
  1. Create your on-the-ground support team. Don’t try to do it all, especially if your loved one has more serious or complicated health issues. In addition to healthcare professionals, ask friends, family and community groups to join a network of caregiving helpmates. Remember to add your loved one as part of the team.
  • Assign roles and tasks, that the members of the team are willing and able to do.
  • Create a list with contact info for everyone and keep it up to date.
  1. Consider hiring a reputable caregiving professional. They’re often called a geriatric care manager, aging life care manager, or eldercare navigator or coordinator. These professionals are frequently licensed nurses or social workers who can also be valuable mediators or sounding boards, when family members disagree on care decisions.
  • Verify the person’s professional certifications, see how long the person has been in the field and request references.
  • Care managers can charge $50 to $200 an hour. Medicare doesn’t cover this service, nor do most health insurance plans. However, if you can handle it financially, an experienced manager may be able to save your family time, money and stress with even a short call.
  1. Find ways to communicate regularly with your local support group and loved one. You should leverage technology. With permission, place video monitors, wearable activity trackers, remote door locks to prevent wandering (if the care recipient has dementia) and even electronic pill dispensers that can tell you if someone has taken the prescribed medications.
  2. Leverage your visits. Nothing’s better than an in-person visit. When you can manage one, come with a list of things you need to know or discuss.
  • Interview possible home aides or house cleaners or meet with social workers or other professionals involved in your loved one’s care to discuss any concerns.
  • Look for signs of abuse, which means monitoring your senior’s checking account and see if there are any irregularities and look for red flags of physical or emotional mistreatment, like bruises, unexplained injuries, or a sudden change in personality. Note if your family member talks about a person you’ve never met who visits often and has been “very helpful.”

Although you may have several practical tasks to tick off your list, it’s important to spend quality time with your loved one. And seek the advice of a qualified elder law attorney, if you have any questions. This is some of the ways Long-Distance Caregivers can  help Loved Ones?

Reference: AARP (Oct. 30, 2019) “Long-Distance Caregiving: 5 Key Steps to Providing Care From Afar”

Read more about this topic at:

Getting Started with Long-Distance Caregiving

8 Tips for Long Distance Care Giving

You can also read one of our previous blogs at:  How your caregiver can get paid and treated fairly

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