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Family Estate Plan

5 Estate Planning Strategies to Keep Your Money in the Family

5 Estate Planning Strategies to Keep Your Money in the Family

The inheritance you leave could still be eaten away by taxes and expenses. Here are five strategies to avoid that.

By Maryalene LaPonsie, ContributorNov. 19, 2015, at 11:07 a.m.

5 Estate Planning Strategies to Keep Your Money in the Family

It’s an obvious first step, but many people don’t even bother to draw up a will.

IF YOU’RE SINGLE, YOU can have up to $5.45 million in assets before your heirs have to worry about paying a penny in estate taxes.

Knowing that, you might assume only the super wealthy need to worry about estate planning. However, financial planners say you’d be wrong to think planning is only necessary for the 1 percent.

“The bigger issue in estate planning for the majority of people is managing the step-up in basis on inherited assets and income taxes,” says Matt Anderson, a certified financial planner and vice president of The Wise Investor Group in Reston, Virginia.

The step-up in basis refers to how assets such as investment property and second homes are valued and taxed after a death and how taxes are levied against traditional IRAs and 401(k)s inherited by someone other than a spouse.

What’s more, states may want their piece of the pie. “If you’re just looking at the federal [estate tax exemption] number, you might not realize your state has a lower limit,” says AJ Smith, managing editor of the finance site SmartAsset.com. New Jersey has the lowest exemption, with state estate taxes kicking in once assets exceed $675,000 per person – a number that’s not hard to reach for those who have been saving since early adulthood.

Meeting with an accountant and an estate attorney is the best way to sort through complex issues such as the step-up in basis for property. While you’re talking to the pros, ask them about the following five strategies.

Draw Up a Will 

It’s an obvious first step, but many people don’t even bother to draw up a will. In fact, a 2014 Rocket Lawyer survey of 2,048 adults found 64 percent of Americans don’t have a will. What’s more, 17 percent said they didn’t think they needed one.

Speak with the Right Financial Advisor For You

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However, without a will, your estate must be divided in probate court, a process that could leave your beneficiaries footing a big bill. “If your estate is not properly constructed, the only person that wins is the attorney,” says Sean P. Lee, co-founder of the financial education organization Retirement Elevated.

Check Your Beneficiaries

Not all assets are disbursed through a will. Some accounts, such as retirement funds and life insurance policies, let owners name beneficiaries for that particular asset.

“You’d be surprised how many people have no beneficiary or a previous spouse listed,” Lee says. Without a named beneficiary, an account will need to go to probate court, where a judge will decide who gets the money.

It’s a good idea to review beneficiary information after every major life change, including the birth of children, marriage or divorce. As Smith says, “You want your money to go where you want it to go.”

Set up a Trust

If you have a sizeable estate or are worried your heirs won’t be wise with your money, you can set up a trust and appoint a trustee to distribute your wealth.

Trusts can be set up in several ways, but irrevocable, or permanent, trusts may offer the most tax benefits. When money is put into an irrevocable trust, the assets no longer belong to you. They belong to the trust itself. As a result, the money cannot be subject to estate taxes. While a trustee ultimately controls the money, you can create stipulations on its use, and money can be distributed from a trust even while you are alive.

A trust does have to pay taxes on its income from dividends, interest and other sources, and the tax rates for trusts can be higher for individuals. For that reason, Anderson suggests people pay expenses from a trust, whenever possible.

For example, if you were planning to help your child with a down payment on a house, it may make more sense to transfer money from a trust rather than pull cash out of a different account. “Using money from a trust will cause income to be taxed at the beneficiary’s potentially lower tax rate, instead of the trust’s tax rate,” Anderson says.

Because of the complex nature of trusts, you’ll want to consult with an estate attorney to determine how best to create one that meets your goals.

Convert Traditional Retirement Accounts to Roth Accounts

Leslie Thompson, a certified financial planner at Spectrum Management Group in Indianapolis, says the biggest surprise for many people is that their traditional IRAs and 401(k)s are subject to income tax if passed to a beneficiary who is not a spouse. “People think just because they have $100,000 in an IRA, their beneficiaries are going to get $100,000,” she says.

In reality, that money is subject to income tax. Currently, those taxes can be spread over the life of the beneficiary, but that might change.

“Both [political parties] are talking right now about potentially forcing people to take that money over a shorter period,” Thompson says. Instead of stretching payments – and taxes – over a person’s expected lifespan, some proposals call for IRAs to be cashed out, and fully taxed, in as little as five years.

You can avoid leaving your beneficiaries with that tax bill by gradually converting traditional accounts to Roth accounts that have tax-free distributions. Thompson says her firm recommends clients make a series of conversions over several years. Since the amount converted will be taxable on your income taxes, the goal is to limit each year’s conversion so it doesn’t push you into a higher tax bracket.

Gift Your Money While You’re Alive

One of the best ways to ensure your money stays in the family is to simply give it to your heirs while you’re alive. The IRS allows individuals to give up to $14,000 per person per year in gifts. If you’re worried about your estate being taxable, those gifts can bring its value down. The money is also tax-free for recipients.

A similar way to reduce your estate value is through charitable donations. As a twist on that idea, Thompson suggests setting up a donor-advised fund. This option would give you an immediate tax deduction for money deposited in the fund, and then let you make charitable grants over time. By naming a child or a grandchild as a successor for the fund, “it would keep the family involved in philanthropy,” Thompson says.

Complex strategies and the ever-evolving tax code can make estate planning feel intimidating. However, ignoring it can be a costly mistake for your heirs, even if you don’t have a lot of money in the bank. “Estate planning needs to happen for everybody,” Lee says.

Hopefully these 5 Estate Planning Strategies to Keep Your Money in the Family have helped you to make some important decisions about your own Estate Planning.

Read more related articles at :

Estate Planning: A Family Affair

5 Strategies To Protect Family Wealth

Also, read one of our previous Blogs at :

How Do Family Relationships Mess Up Estate Planning?

Family Estate Planning

Am I Making One of the Five Common Estate Planning Mistakes?

You don’t have to be super-wealthy to see the benefits from a well-prepared estate plan. However, you must make sure the plan is updated regularly, so these kinds of mistakes don’t occur and hurt the people you love most, reports Kiplinger in its article entitled “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes.”

An estate plan contains legal documents that will provide clarity about how you’d like your wishes executed, both during your life and after you die. There are three key documents:

  • A will
  • A durable power of attorney for financial matters
  • A health care power of attorney or similar document

In the last two of these documents, you appoint someone you trust to help make decisions involving your finances or health, in case you can’t while you’re still living. Let’s look at five common mistakes in estate planning:

# 1: No Estate Plan Whatsoever. A will has specific information about who will receive your money, property and other property. It’s important for people, even with minimal assets. If you don’t have a will, state law will determine who will receive your assets. Dying without a will (or “intestate”) entails your family going through a time-consuming and expensive process that can be avoided by simply having a will.

A will can also include several other important pieces of information that can have a significant impact on your heirs, such as naming a guardian for your minor children and an executor to carry out the business of closing your estate and distributing your assets. Without a will, these decisions will be made by a probate court.

# 2: Forgetting to Name or Naming the Wrong Beneficiaries. Some of your assets, like retirement accounts and life insurance policies, aren’t normally controlled by your will. They pass directly without probate to the beneficiaries you designate. To ensure that the intended person inherits these assets, a specific person or trust must be designated as the beneficiary for each account.

# 3: Wrong Joint Title. Married couples can own assets jointly, but they may not know that there are different types of joint ownership, such as the following:

  • Joint Tenants with Rights of Survivorship (JTWROS) means that, if one joint owner passes away, then the surviving joint owners (their spouse or partner) automatically inherits the deceased owner’s part of the asset. This transfer of ownership bypasses a will entirely.
  • Tenancy in Common (TIC) means that each joint owner has a separately transferrable share of the asset. Each owner’s will says who gets the share at their death.

# 4: Not Funding a Revocable Living Trust. A living trust lets you put assets in a trust with the ability to freely move assets in and out of it, while you’re alive. At death, assets continue to be held in trust or are distributed to beneficiaries, which is set by the terms of the trust. The most common error made with a revocable living trust is failure to retitle or transfer ownership of assets to the trust. This critical task is often overlooked after the effort of drafting the trust document is done. A trust is of no use if it doesn’t own any assets.

# 5: The Right Time to Name a Trust as a Beneficiary of an IRA. The new SECURE Act, which went into effect on January 1, 2020 gets rid of what’s known as the stretch IRA. This allowed non-spouses who inherited retirement accounts to stretch out disbursements over their lifetimes. It let assets in retirement accounts continue their tax-deferred growth over many years. However, the new Act requires a full payout from the inherited IRA within 10 years of the death of the original account holder, in most cases, when a non-spouse individual is the beneficiary.

Therefore, it may not be a good idea to name a trust as the beneficiary of a retirement account. It’s possible that either distributions from the IRA may not be allowed when a beneficiary would like to take one, or distributions will be forced to take place at a bad time and the beneficiary will be hit with unnecessary taxes. Talk to an experienced estate planning attorney and review your estate plans to make certain that the new SECURE Act provisions don’t create unintended consequences.

Reference: Kiplinger (Feb. 20, 2020) “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes”

Read more related articles at:

5 Biggest Estate Planning Mistakes You Can Make

Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes

Also read one of our Previous Blogs at:

Common Estate Planning Mistakes to Avoid

 

 

tax breaks

What are the Taxes on My IRA Withdrawal?

 

What are the Taxes on My IRA Withdrawal?

Investol?pedia’s recent article entitled “How Much Are Taxes on an IRA Withdrawal?” explains that the withdrawal rules for other types of IRAs are similar to the traditional IRA, with some small unique differences. Other types of IRAs include the SEP IRA, Simple IRA and SARSEP IRA. However, each of these has different rules about who can open one.

Tax-Free Withdrawals Only with Roth IRAs. When you invest with a Roth IRA, you deposit the money post-tax. Therefore, when you withdraw the money in retirement, you pay no tax on the money you withdraw, or on any gains your investments earned. That’s a big benefit. To do this, the money must have been deposited in the IRA and held for at least five years and you must be at least 59½ years old. If you need cash before that, you can withdraw your contributions with no tax penalty, provided you don’t touch any of the investment gains. You should document any withdrawals before 59½ and tell the trustee to use only contributions, if you’re withdrawing funds early. If you do not do this, you could be charged the same early withdrawal penalties charged for taking money out of a traditional IRA.

The Taxing of IRA Withdrawals. Money that’s placed in a traditional IRA is treated differently from money in a Roth, because it’s pretax income. Each dollar you deposit lessens your taxable income by that amount. When you withdraw the money, both the initial investment and the gains it earned are taxed at your income tax rate when withdrawn. However, if you withdraw money before you’re 59½, you’ll be hit with a 10% penalty, in addition to regular income tax based on your tax bracket. If you accidentally withdraw investment earnings rather than only contributions from a Roth IRA before you’re 59½, you can also incur a 10% penalty. You can, therefore, see how important it is to keep careful records.

Avoiding the Early Withdrawal Tax Penalty. There are a few hardship exceptions to the 10% penalty for withdrawing money from a traditional IRA or the investment-earnings portion of a Roth IRA before you reach age 59½.

Don’t mix Roth IRA funds with the other types of IRAs. If you do, the Roth IRA funds will become taxable. Some states also levy early withdrawal penalties. Once you hit age 59½, you can withdraw money without a 10% penalty from any type of IRA. If it is a Roth IRA and you’ve had a Roth for five years or more, you won’t owe any income tax. If it’s not, you will have taxes due.

The funds put in a traditional IRA are treated differently from money in a Roth. If the money is deposited in a traditional IRA, SEP IRA, Simple IRA or SARSEP IRA, you’ll owe taxes at your current tax rate on the amount you withdraw. However, you won’t owe any income tax, provided that you keep your money in a non-Roth IRA until you reach another key age milestone. Once you reach age 72 (with new SECURE Act), you’ll have to take a distribution from a traditional IRA. The IRS has specific rules about how much you must withdraw each year, which is called the required minimum distribution (RMD). If you don’t withdraw your RMD, you could be hit with a 50% tax on the amount not distributed as required.

There are no RMD requirements for a Roth IRA, but if money is still there after your death, your beneficiaries may have to pay taxes. There are several different ways they can withdraw the funds, so they should get the advice of an attorney.

Reference:  Investopedia (Feb. 21, 2020) “How Much Are Taxes on an IRA Withdrawal?”

Read more related articles at:

How Taxes on Traditional IRA Distributions Work

How Are IRA Withdrawals Taxed?

Also Read one of our previous blogs at :

Can I Place My IRA in a Trust?

 

assisted living-long term care

How Do I Protect Property If I Need Long-Term Care?

 

How Do I Protect Property If I Need Long-Term Care?

Nearly 90% of those over age 65 would say they’d prefer to stay in their home and live independently as they age. However, even if you are one of those people, you need to make certain that you have a plan in place to ensure your assets can go toward the things you want, rather than unexpected healthcare costs.

The Observer-Reporter’s recent article entitled “Protecting Your Assets is Only Half of Your Long-Term Plan” explains that there are many factors, like chronic conditions and lifestyle choices, that can increase healthcare expenditures as you get older. Understanding and planning for the potential costs now, could be the difference between spending your savings on health care expenses, instead of on the things you want.

You may be concerned about being a burden to family and friends as you age. That’s common since nearly three-quarters (72%) of parents expect their children to become their long-term caregivers. However, just 40% of those children are aware they were tapped for that role!

Research shows that when family and friends assume the role of primary caregivers, they have a 60% chance of exhibiting clinical signs of depression—six times more than the general population. Having your family and friends become your caregivers may be best for you financially, but it probably isn’t in their best interest.

You should have a sound understanding of the cost and burden that long-term care can put on your family and friends. This is the first step to preparing your long-term plan. It is important to understand that there are a few different long-term planning options available, with varying levels of care coverage. One is Medicaid, which is a means-tested government health insurance plan that can cover some or all of the care you may need in a skilled nursing facility. However, what it covers is income- and asset-based. Medicare may cover some limited long- term care for rehabilitation but typically not custodial care.

There is also long-term care insurance which can fill many of the gaps that Medicare and Medicaid may leave. Most plans are customizable and have options for full or partial coverage for all of the types of long-term care. However, there may still be gaps in your coverage.

Ask an elder law attorney about other options and resources.

Reference: (Washington, PA) Observer-Reporter (Feb. 17, 2020) “Protecting Your Assets is Only Half of Your Long-Term Plan”

Read related articles at:

Protecting Your House After You Move Into a Nursing Home

HOW CAN I PROTECT MY HOME AND ASSETS FROM NURSING HOME EXPENSES?

Also read one of our previous Blogs at:

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

 

Retirement Planning and Declining Abilities

Retirement Planning and Declining Abilities

 

Whether the reason is Alzheimer’s, Parkinson’s or any of a number of illnesses that lead to dementia, it’s hard for families to think about legal or financial concerns, when a diagnosis is first made. This can lead to serious problems in the near future, warns the article “Cognitive Decline Shouldn’t Derail Retirement Planning. Here are Some Tips to Prepare Your Finances” from Barron’s. The time to act is as soon as the family realizes their loved one is having a problem—even before the diagnosis is official.

Here are some useful tips for navigating cognitive decline:

Take an inventory. Families should create a detailed list of assets and liabilities, including information on who has access to each of the accounts. Don’t leave out assets that have gone paperless, like online checking, savings, credit card and investment accounts. Without a paper trail, it may be impossible to identify assets. Try to do this while the person still has some ability to be actively involved. This can be difficult, especially when adult children have not been involved with their parent’s finances. Ask about insurance policies, veterans’ benefits, retirement accounts and other assets. One person in the family should be the point person.

Get an idea of what future costs will be. This is the one that everyone wants to avoid but knowing what care costs will be is critical. Will the person need adult day care or in-home care at first, then full-time medical care or admission to a nursing facility? Costs vary widely, and many families are completely in the dark about the numbers. Out-of-pocket medications or uncovered expenses are often a surprise. The family needs to review any insurance policy documents and find out if there are options to add or amend coverage to suit the person’s current and future needs.

Consider bringing in a professional to help. An elder law estate planning attorney, financial planner, or both, may be needed to help put the person’s legal and financial affairs in order. There are many details that must be considered, from how assets are titled, trusts, financial powers of attorney, advance health care directives and more. If Medicaid planning was not done previously, there may be some tools available to protect the spouse, but this must be done with an experienced attorney.

Automate any finances if possible. Even if the person might be able to stay in their own home, advancing decline may make tasks, like bill paying, increasingly difficult. If the person can sign up for online banking, with an adult child granted permission to access the account, it may be easier as time goes by. Some monthly bills, such as insurance premiums, can be set up for automatic payment to minimize the chances of their being unpaid and coverage being lost. Social Security or Supplemental Security Income benefits are now required to be sent via direct deposit or prepaid debit card. If a family member is still receiving a paper check, then now is the time to sign up for direct deposit, so that checks are not lost. Pension checks, if any, should also be made direct deposit.

Have the correct estate planning documents been prepared? A health care representative and a general durable power of attorney should be created, if they don’t already exist. The durable power of attorney needs to include the ability to take action in “what if” cases, such as the need to enroll in Medicaid, access digital assets and set up any trusts. A durable power of attorney should be prepared before the person loses cognitive capacity. Once that occurs, they are not legally able to sign any documents, and the family will have to go through the guardianship process to become a legal guardian of the family member.

Reference: Barron’s (Jan. 11, 2020) “Cognitive Decline Shouldn’t Derail Retirement Planning. Here are Some Tips to Prepare Your Finances”

Read more related articles here:

Does Your Retirement Plan Account For Your Own Cognitive Decline?

The Retirement Risk That No One Wants to Talk About

Also read one of our previous blogs at :

How Do I Include Retirement Accounts in Estate Planning?

 

coronavirus positive

Medicare and Medicaid Will Cover Coronavirus Testing

Medicare and Medicaid Will Cover Coronavirus Testing

With coronavirus dominating news coverage and creating alarm, it is important to know that Medicare and Medicaid will cover tests for the virus.

The department of Health and Human Services has designated the test for the new strain of coronavirus (officially called COVID-19) an essential health benefit. This designation means that Medicare and Medicaid will cover testing of beneficiaries who are suspected of having the virus. In order to be covered, a doctor or other health care provider must order the test. All tests on or after February 4, 2020 are covered, although your provider will need to wait until after April 1, 2020, to be able to submit a claim to Medicare for the test.

Congress has also passed an $8.3 billion emergency funding bill to help federal agencies respond to the outbreak. The funding will provide federal agencies with money to develop tests and treatment options as well as help local governments deal with outbreaks.

As always, to prevent the spread of this illness or other illnesses, including the flu, take the following precautions:
•    Wash your hands often with soap and water
•    Cover your mouth and nose when you cough or sneeze
•    Stay home when you’re sick
•    See your doctor if you think you’re ill

For Medicare’s notice about coverage for the coronavirus, click here.

Medicare and Medicaid will cover Coronavirus Testing!

Read about additional information on this subject at:

Medicare now covers coronavirus testing

Coronavirus Disease 2019 (COVID-19)/medicaid.gov

Also read one of our previous Blogs at:

C19 UPDATE: Paying for Covid-19 Testing and Treatment if You Have a High Deductible Insurance Plan

Young Family

Estate Planning Is For Everyone

Estate planning is something anyone who is 18 years old or older needs to think about, advises the article “Estate planning for every stage of life from the Independent Record. It includes much more than a person’s last will and testament. It protects you from incapacity, provides the legal right to allow others to talk to your doctors if you can’t and takes care of your minor children, if an unexpected tragedy occurs. Let’s look at all the ages and stages where estate planning is needed.

Parents of young adults should discuss estate planning with their children. While parents devote decades to helping their children become independent adults, sometimes life doesn’t go the way you expect. A college freshman is more concerned with acing a class, joining a club and the most recent trend on social media. However, a parent needs to think about what happens when the child is over 18 and has a medical emergency. Parents have no legal rights to medical information, medical decision making or finances, once a child becomes a legal adult. Hospitals may not release private information and doctors can’t talk with parents, even in an extreme situation. Young adults need to have a HIPAA release, a durable power of medical attorney and a power of attorney for their finances created.

New parents also need estate planning. While it may be hard to consider while adjusting to having a new baby in the house, what would happen to that baby if something unexpected were to affect both parents? The estate planning attorney will create a last will and testament, which is used to name a guardian for any minor children, in case both parents pass. This also includes decisions that need to be made about the child’s education, medical treatment and even their social life. You’ll need to name someone to be the child’s guardian, and to be sure that they will raise your child the same way that you would.

An estate plan includes naming a conservator, who is a person with control over a minor child’s finances. You’ll want to name a responsible person who is trustworthy and good with handling money. It is possible to name the same person as guardian and conservator. However, it may be wise to separate the responsibilities.

An estate plan also ensures that your children receive their inheritance, when you think they will be responsible enough to handle it. If a minor child’s parents die and there is no  plan, the parent’s assets will be held by the court for the benefit of the child. Once the child turns 18, he or she will receive the entire amount in one lump sum. Few who are 18-years old are able to manage large sums of money. Estate planning helps you control how the money is distributed. This is also something to consider, when your children are the beneficiaries of any life insurance policies. An estate planning attorney can help you set up trusts, so the monies are distributed at the right time.

When people enter their ‘golden’ years—that is, they are almost retired—it is the time for estate plans to be reviewed. You may wish to name your children as power of attorney and medical power of attorney, rather than a sibling. It’s best to have people who will be younger than you for these roles as you age. This may also be the time to change how your wealth is distributed. Are your children old enough to be responsible with an inheritance? Do you want to create a legacy plan that includes charitable giving?

Lastly, update your estate plan any time there are changes in the family structure. Divorce, death, marriage or individuals with special needs all require a different approach to the basic estate plan. It’s a good idea to revisit an estate plan anytime there have been major changes in your relationships, to the law, or changes to your financial status.

Reference: Independent Record (March 1, 2020) “Estate planning for every stage of life

Read more relevant articles at:   ESTATE PLANNING IS FOR EVERYONE/globalwealthadvisors

You’re never too Young to Estate Plan

Also Read our previous gs at :  Creating an Estate Plan Should Be a New Year’s Resolution

                                                          Am I Too Young to Think About Estate Planning?

 

 

 

Alzheimer’s

New Blood Test May Make Alzheimer’s Diagnosis Easier

New Blood Test May Make Alzheimer’s Diagnosis Easier.  Researchers at the University of California – UC San Francisco have analyzed the blood test in more than 300 patients and believe that they will see such a test available in doctor’s offices within five years, according to a press release from The University of California- San Francisco’s entitled “New Blood Test Could Make Alzheimer’s Diagnosis Easier Than Ever.”

“This test could eventually be deployed in a primary care setting for people with memory concerns to identify who should be referred to specialized centers to participate in clinical trials or to be treated with new Alzheimer’s therapies, once they are approved,” said Adam Boxer, MD, PhD, neurologist at the UCSF Memory and Aging Center and senior author of the study published in Nature Medicine. Boxer also is affiliated with the UCSF Weill Institute for Neurosciences.

There is currently no blood test for either condition. Alzheimer’s diagnoses can only be confirmed by a PET scan of the brain, which can be expensive or an invasive lumbar puncture to test cerebrospinal fluid.

If approved, the new blood test could make screening easier and help increase the number of patients eligible for clinical trials—vital to the search for drugs to stop or slow dementia. Patients who know whether they have Alzheimer’s or FTD are also better able to manage their symptoms.

In the new study, scientists collected blood samples from 362 people aged 58 to 70, including 56 individuals who’d been diagnosed with Alzheimer’s, 190 diagnosed with FTD, 47 with mild cognitive impairment, plus 69 healthy controls.

Researchers checked the blood samples for proteins that could serve as signs of dementia. One protein, called pTau181, is known to aggregate in tangles in the brains of patients with Alzheimer’s. Blood levels of pTau181 were about 3½ times higher in people with Alzheimer’s as opposed to their healthy peers. People with FTD had normal levels of pTau181, and those with mild cognitive impairment due to underlying Alzheimer’s had an intermediate increase.

When researchers followed the patients for two years, they saw that higher levels of pTau181 predicted more rapid cognitive decline in those with Alzheimer’s or mild cognitive impairment.

The researchers note the new blood test has the same degree of accuracy as current PET scans and lumbar punctures in distinguishing Alzheimer’s from FTD. It would be less expensive and easier.

Alzheimer’s impacts nearly 6 million Americans and comprises two-thirds of dementia cases. FTD includes a broad group of brain disorders often linked with degeneration of the frontal and temporal lobes of the brain. So this New Blood Test May Make Alzheimer’s Diagnosis Easier.

Reference: UCSF (March 2, 2020) “New Blood Test Could Make Alzheimer’s Diagnosis Easier Than Ever”

Read more related articles at: 

Simple Blood Test May be Able to Diagnose Alzheimer’s Disease

Blood test is highly accurate at identifying Alzheimer’s before symptoms arise

How to Pay for a Loved One’s Memory Care and Manage Their Finances

Also read our previous Blogs at: 

How Do I Prepare my Parents for Alzheimer’s?

How Do We Live Our Lives When A Loved One Has Alzheimer’s?

 

 

 

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

 

 

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