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What Should I Look for in a Trustee?
A Trustee Manages a Trust

What Should I Look for in a Trustee?

Selecting a trustee to manage your estate after you pass away is an important decision. Depending on the type of trust you’re creating, the trustee will be in charge of overseeing your assets and the assets of your family. It’s common for people to choose either a friend or family member, a professional trustee or a trust company or corporate trustee for this critical role.

Forbes’s recent article, “How To Choose A Trustee,” helps you identify what you should look for in a trustee.

If you go with a family member or friend, she should be financially savvy and good with money. You want someone who is knows something about investing, and preferably someone who has assets of their own that they are investing with an investment advisor.

A good thing about selecting a friend or family member as trustee, is that they’re going to be most familiar with you and your family. They will also understand your family’s dynamics.  Family members also usually don’t charge a trustee fee (although they are entitled to do so).

However, your family may be better off with a professional trustee or trust company that has expertise with trust administration. This may eliminate some potentially hard feelings in the family. Another negative is that your family member may be too close to the family and may get caught up in the drama.They may also have a power trip and like having total control of your beneficiary’s finances.

The advantage of an attorney serving as a trustee, is that they have familiarity with your family, if you’ve worked together for some time. There will, however, be a charge for their time spent serving as trustee.

Trust companies will have more structure and oversight to the trust administration, including a trust department that oversees the administration. This will be more expensive, but it may be money well spent. A trust company can make the tough decisions and tell beneficiaries “no” when needed. It’s common to use a trust company, when the beneficiaries don’t get along, when there is a problem beneficiary or when it’s a large sum of money. A drawback is that a trust company may be difficult to remove or become inflexible. They also may be stingy about distributions, if it will reduce the assets under management that they’re investing. You can solve this by giving a neutral third party, like a trusted family member, the ability to remove and replace the trustee.

Talk to your estate planning attorney and go through your concerns to find a solution that works for you and your family.

Learn why a trust is so valuable in estate planning.

Reference: Forbes (May 31, 2019) “How To Choose A Trustee”s

Are Digital Assets Part of My Estate Plan?
Digital Asset Planning Is Part of Good Estate Planning

Are Digital Assets Part of My Estate Plan?

It seems that every day we conduct more of our daily activities online. We increasingly all have a digital presence on our PCs and the Internet. This is what is called digital assets. To complete your estate planning, you need to consider how to deal with your digital assets. Digital asset planning is becoming an increasingly important part of good estate planning.

Without a clear plan in place, it can be a major headache for your family when you pass away, says The Street in the recent article, “Estate Planning in a Digital World.”

Estate planning for digital assets uses the same basic process as planning for physical assets, but it has some unique challenges:

  • The information in which a digital asset resides may be owned by another entity;
  • Digital assets can change; and
  • Legal issues like intellectual property and privacy laws can complicate things.

Some online services haven’t created clear policies for how digital assets are to be managed when a user has died. In some situations, it may be sufficient to make sure the person you’ve named as executor or given power of attorney has access to your passwords. However, there are some companies that may say that another person accessing an account is a violation of their terms of use. They may freeze or close the account. Therefore, you can see why careful planning and research is critical, when adding digital assets to your estate plan.

Some states have proposed standard governance guidelines for estate planning and digital assets, such as the revised Uniform Fiduciary Access to Digital Assets Act. This standard guideline gives clear rules regarding how an executor can manage digital assets after the owner’s death.

Talk to an experienced estate planning attorney to be sure your digital plan is set up correctly in your estate plan.

Do an Inventory of Your Digital Assets. Begin with a list of all of your digital assets.

Designate a Person to Handle Your Digital Assets. This person will address your online accounts and files after you pass.

Maintain a List of Your Passwords. A big help to your heirs and advisors, is to have ready access to your accounts at your death. Keep this list updated, and store it in a secure location. You should also give a copy to your estate planning attorney.

Leave Detailed Instructions. The better the instructions you leave, the easier it’ll be for your family to know what to do and to be certain that your final wishes are fulfilled.

Including information on how to access and manage your digital assets in your estate-planning documents is a critical step to ensuring that your heirs can more easily manage your affairs, when you are gone.

Learn about digital asset planning.

Reference: The Street (June 3, 2019) “Estate Planning in a Digital World”

Thinking about Aging? Will You Need Long Term Care with Medicaid?
lderly Woman Worried About Long-Term Care Costs and Medicaid

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

Many people will end up needing assistance like Medicaid to care for themselves, as they become elderly and that help may not be provided by their children. It might be wise to look into long term care costs now and how Medicaid can pay for it, according to The Detroit News in “What to know about aging and long-term care costs.”

Here’s what often happens:

  • More than a third of seniors will need to stay in a nursing home, where the median annual cost of a private room has skyrocketed to more than $100,000.
  • Four out of 10 people will opt for paid care at home. The median annual cost of a home health aide is more than $50,000.
  • More than 50% of all seniors will incur some kind of long-term care costs, and 15% of those will incur more than $250,000 in costs, according to a study by Vanguard Research and Mercer Health and Benefits.

Medicare doesn’t pay for long-term care. Medicare does not cover what it terms “custodial” care. For most Americans, who have a median of $126,000 in retirement savings, that’s an immediate financial wipeout. They will end up on Medicaid, the government health program that pays for about half of all nursing home and custodial care.

Those who live alone, are in poor health, or have chronic conditions are more likely than others to need long-term care. For women, there are special risks, since statistically women outlive husbands and may not have anyone to provide them with unpaid care.

Everyone approaching retirement needs a plan. The options are:

Long-term care insurance. The average annual premium for a 55-year-old couple was $3,050 in 2019. The older you are, the higher the cost, and if you have chronic conditions, you may not qualify.

Hybrid long-term care insurance. Life insurance or annuities with long-term care benefits now outsell traditional long-term care insurance by a rate of about four to one. This requires committing a large sum of money up front but is a way to obtain long-term care insurance.

Home equity. Selling a home to pay for nursing home care is not the best solution. However, it may be the only solution, particularly if it’s the only asset. Reverse mortgages may be an option.

Contingency reserve. A wealthy family with assets may simply earmark some assets for long-term care, setting aside a certain amount of money in an investment that can be liquidated without penalty.

Spending down to Medicaid. People with little or no retirement savings could end up depending on Medicaid. There are ways to protect assets for spouses, but it requires working with an elder law estate planning attorney in advance.

Learn how planning for long-term care costs are factored into your estate plan.

Reference: The Detroit News (June 10, 2019) “What to know about aging and long-term care costs”