Idaho Estate Planning

Comparing Nursing Homes

If you and your family are screening nursing homes for a loved one, then you already know what a daunting process it can be. It may just be a little easier now with the federal government's newly-revised Nursing Home Compare web service.

As Forbes recently pointed out, the comparison tool offered through Medicare.gov has been simplified and expanded. Under advisement from the Centers for Medicare and Medicaid Services, the old criteria of 17 points has been replaced with a new set of 21 points based on specific issues like infections, falls, general well-being, and pressure ulcers – the very issues that residents and families may deal with directly once admitted to the facility. The idea is to make it easier for families to research their area and get an accurate understanding of quality and performance in possible nursing homes for their loved ones. Hopefully it can help you and your family as well.

Idaho Estate Planning is part of the Treasure Valley Care Planning Council, a non-profit network of elder care professionals available to provide information on the information discussed above and much more. Let us know your concerns and we will help you find the resources you need.

In addition to caring for a loved one, it is also important to consider your own concerns for the future. How will you maintain your independence as you grow older? What effect would a costly health issue have on your quality of life? The more planning you do now the less difficulty there will be later. Good planning is no accident.

Contact us today and let us help.

 

Dynasty Trusts

There are many strategies – or tools – available to the savvy estate planner to help protect and preserve the fruits of a lifetime of accomplishment, and pass them along to future generations. Bloomberg recently wrote about a specific type of trust known as the Dynasty Trust – a little known strategy that you might have thought was only suitable for the ultra-rich. However, in today's tax environment, Dynasty Trusts are gaining popularity as a valid strategy for those of more modest means.

Trusts can be powerful tools for overcoming transfer taxes to include the estate tax, the gift tax, and the generation-skipping transfer tax – but there are always limitations. A dynasty trust is used to pass money on to multiple generations of descendants while paying as little in taxes as possible. The trusts have no expiration date and there are no required minimum distributions, meaning their assets may grow for an unlimited number of future generations.

This year represents a pretty good opportunity to set one up too, thanks in no small part to the generous gift tax exemptions in effect until the end of 2012. Currently the exemption is set at $5 million, and effectively $10 for married couples, which is a nice hefty amount to begin a trust. Since the trusts last indefinitely and avoid taxes, the money can simply accumulate over the remainder of your lifetime, offering a huge advantage over other transfer methods.

Bloomberg offers some math:

A dynasty trust funded with $10 million from a couple today could be worth as much as $184 million in 50 years, assuming no intergenerational transfer taxes and a 6 percent annual return, and before subtracting any federal income or capital-gains taxes paid on the trust's investment returns. By comparison, assets not placed in a trust and taxed twice as an estate in that period could be worth $39 million at the end of 50 years, assuming a $1 million exemption and 55 percent top rate.

Because of their unique nature, dynasty trusts can't be set up in all states. This type of trust is very advanced estate planning. If you are looking to set up this kind of family wealth, or transfer a large family business, then this planning strategy may make sense for you. At Idaho Estate Planning, we can help you find the resources you need to put your estate plan together. We have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones now and into the future. Remember, good planning is no accident!

Debt Deal is a Mixed Bag for Older Americans

For months we've been on the edge of our seats trying to figure out what Congress would do about the debt ceiling, and how their actions would affect the nation's seniors. Finally, we can all breathe a quick sigh of relief … then go back to waiting. The recent debt deal did not raise taxes and it did not make the threatened cuts to Social Security or Medicare, but it does lay the groundwork for renewed discussion in the future.

The AARP says the deal is mixed bag for older Americans, but not as bad as it might have been. Proposed cuts to Social Security and Medicare did not make it into the final bill. Of note, too, is that the proposed changes for calculating the Social Security Cost Of Living Adjustment (COLA) – a less generous formula that effectively cuts the benefit – did not make it into the final bill either. But in order to preserve these programs many other programs were slashed, including those emphasizing nutrition, senior job placement, and home and heating assistance.

Nevertheless, the debt discussion was not put to rest, merely put on hold. One of the biggest results of the law is to create a congressional super-committee of six Democrats and six Republicans who must make significant budgetary recommendations by late November. By Christmas-time this year, Congress must act on these recommendations, or find a better solution, or else severe cuts will go into effect across both military and entitlements spending like Medicare and Social Security.

For now, seniors can breathe a bit easier. But, clearly, the debt crisis has been postponed rather than resolved.

For many of our veterans there may be a ray of hope in all this turmoil. There is an underused VA benefit for those who served during wartime, even if they were never in battle. The Pension Benefit or Aid & Attendance" as it is often referred to, could pay as much as $1,949 a month in disability income to a qualifying veteran household. A study commissioned by VA in 2001 estimated that, over the next 14 years, only about 30% of eligible veterans would apply for Pension. This is likely due to the fact that most veterans simply don't know about it. In fact, about a third of all seniors in this country, age 65 and older, could become eligible for pension under the right circumstances. That's how many elderly war veterans or their surviving spouses there are.

At Idaho Estate Planning we understand how to maximize the benefit or avoid a denial. We can also provide guidance for meeting the asset test. We provide the best strategies for reallocating assets through trusts or income conversions to allow for the best possible accommodation of assets for beneficiaries thus avoiding or reducing: taxes; family disputes; and, Medicaid penalties.

We are VA Accredited and we know how to help you get the benefits you earned through your greatly appreciated service to our country. Good planning is no accident. To secure your peace of mind as well as your family's future, get started now.

Estate Planning in the News

We are used to hearing dramatic stories about the estate woes of celebrities like Anna Nicole Smith and Gary Coleman. From all appearances, however, in the tragedy of singer Amy Winehouse's recent death there is one positive note: she left her affairs in remarkable order.

According to US News & World Report, Winehouse's assets, estimated at around $16.4 million were at risk of going to her ex-husband, who is currently in prison, since the English legal system tends to favor ex-spouses. But Winehouse avoided that problem by writing a new will directing her estate to her parents and brother instead.

While you may not have an ex-spouse in prison you may be part of a blended family, have a special needs child or simply want to make sure your estate is managed according to your wishes. Whether you have $16.4 million (or more) … or substantially less … there are fundamental estate planning moves that every adult should undertake. These include making a will, appointing durable powers of attorney, and completing health care directives. Trusts also are versatile estate planning tools that may help you achieve your goals in a variety of situations.

To ensure a successful plan, we at Idaho Estate Planning will: 1) educate you and your helpers; 2) take the time to get to know you, your family, your desires, your concerns, your goals, and your potential problems; 3) gladly and patiently answer questions until you understand the concept or issue; and, 4) based on experience with the problems and results caused by poor planning, help you design and implement the plan that fits your concerns and goals. Remember, good planning is no accident.

New Scams Aimed at the Elderly

Imagine, with the 2010 tax season still fresh in your memory you receive a letter informing you the government is sending out enhanced refunds. All you have to do is fill out a new tax return…and pay a processing fee! Like me, most of you cringed as soon as you heard those words "processing fee". Apparently, this is the latest scheme crooks have been playing on seniors, preying on their anxieties about the Cost Of Living Adjustment (COLA) – or lack thereof.

According to the IRS and a recent warning from AARP, the summer has seen a dramatic increase in filing scams. Crooks spread false information that by filing again with the IRS and using new forms you can get government money. The most widespread one claims that the government is offering money to offset the lack of the annual COLA, and that by paying a $60 processing fee to a preparer with a new form you can receive as much as $3000.

As you may have guessed there is no such program. That "tax preparer" just pocketed your processing fee and to make matters worse now has a document laying out all your personal and financial information.

One good way to protect yourself and your loved ones from these types of scams is to check with the IRS and the AARP Scams & Fraud website for information about both legitimate programs and scam or fraud warnings.

Many of you have found yourself in the role of part or full-time caregiver for a parent, spouse or other family member. Protecting your family from predators can be a daunting task. Idaho Estate Planning is part of the Treasure Valley Care Planning Council, a non-profit network of elder care professionals available to provide information for and beyond what was covered in this article. Let us know your concerns and we will help you find the resources you need.

In addition to caring for your parents or other family members, it is also important to consider your own concerns for the future. How will you maintain your independence as you grow older? The more planning you do now the less difficulty there will be later. Better planning now will reduce the stress placed on you and your future caregivers. Good planning is no accident.

Power of Attorney

Some people who thought they had covered all their bases and acted responsibly to care for loved ones in the event of a debilitating illness or incapacity are finding their plans un-done by strict banking policies. Bank of America recently updated their online security procedures, and no longer accepts a power of attorney for online banking.

As Bernard Krooks wrote last week for Forbes, this strict policy came to light when Chicago resident Eva Kripke was blocked from accessing her husband's Bank of America account. According to Krooks, Mrs. Kripke had been handling her husband Sidney's bank accounts as agent under a power of attorney ever since he was diagnosed with Lewy body dementia four years ago. Suddenly now, however, she is denied access under the bank's updated security procedures.

The bank suggested she go to her local branch and get a printout of her husband's account information. Unfortunately, Mrs. Kripke felt this was unacceptable because her husband's health status requires close financial oversight. Kripke's options in this situation are limited because her husband's illness has rendered him incompetent. Opening a new bank account for her husband elsewhere would require executing a new document, a near impossible task when the grantor is incompetent.

Rules such as these are becoming increasingly prevalent and significant as more people are called upon to care for an aging population and their attendant disabilities.

Understanding Powers of Attorney is just a part of successful estate planning. To ensure a successful plan, we at Idaho Estate Planning will: 1) educate you and your helpers; 2) take the time to get to know you, your family, your desires, your concerns, your goals, and your potential problems; 3) gladly and patiently answer questions until you understand the concept or issue; and, 4) based on experience with the problems and results caused by poor planning, help you design and implement the plan that fits your concerns and goals. Remember, good planning is no accident.

Alzheimer’s & Estate Planning

A diagnosis of Alzheimer's disease can be devastating for everyone involved, including the patient and all of their family members. Should you be facing this diagnosis, there are probably a million thoughts racing through your mind, from keeping your loved one safe to caring for them as the disease progresses. One thing you might not think about is the need for estate planning. As a recent article by Reuter's explains, if you or someone you love has a family history of dementia, is showing symptoms of Alzheimer's or is concerned about later-life planning, it's time to get to work.

You'll want to assemble a team that specializes in long-term planning and elder care issues. A good place to start is the National Care Planning Council (NCPC). The NCPC and their website www.longtermcarelink.net are a very comprehensive resource for Eldercare (Senior Care) and Long Term Care Planning. Idaho Estate Planning is a founding member of the Idaho Care Planning Council and the Treasure Valley Care Planning Council. Both are a part of the NCPC network.

At Idaho Estate Planning we can help you navigate the elective transfer of decision-making authority through a power of attorney or trust and can help you qualify for needs-based programs like Medicaid and Veterans Pension Benefits if necessary. We set up a legal framework through which the client and his or her family can transfer assets and decision-making responsibilities.

Alzheimer's is the sixth leading cause of death in the U.S., with 5.4 million Americans suffering from the disease. So, health care proxies will be another important aspect of your legal plan.

You may want to read 2 previously posted blogs titled Maintaining Control of Your Healthcare Options and Recognizing the Signs of Dementia. When dealing with Alzheimer's and other forms of dementia it is critical to start NOW. At Idaho Estate Planning, we can help you find the resources you need to put your long-term care plan together. We have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones now and into the future. Remember, good planning is no accident!

Beneficiary Designations

What is the quickest way to un-do an otherwise carefully planned estate?

Open a bank account, brokerage or retirement account.

Why? Because the beneficiary designations on these accounts override your will. Yes, it's true – the beneficiary designation is the estate planning trump card. And many an estate plan has come undone because of carelessly named beneficiaries.

The Wall Street Journal last week issued a warning in an article entitled Beware the Beneficiary Form.

"People don't realize the importance of this," says Martin Shenkman, an estate planning lawyer in Paramus, NJ. A carelessly named beneficiary on a financial account can cause a loved one to be disinherited, a disabled child to lose government benefits, and heirs to be slapped with a big tax bill.

The Journal also offers a few tips to protect you from this type of estate plan destruction, to include:

Know what kinds of accounts have beneficiary designations. Did you know that U.S. Savings bonds have a beneficiary form? Other accounts for which you may have named a beneficiary include retirement accounts, life insurance policies, bank accounts, certificates of deposit, stocks, bonds and mutual funds.

Review your beneficiary designations regularly and certainly after any life-changing event such as a marriage, divorce, birth or death of a loved one. Also, job-changers and retirees take note: Beneficiary designations on retirement plans don't carry over when you roll a 401(k) to a new employer's plan or to an IRA, or when you convert a regular IRA to a Roth IRA.

At Idaho Estate Planning we educate our clients on the proper procedures for naming beneficiaries. Our Life Plan™ Members also participate in a yearly review of the assets contained in their estate plan and any changes made through the previous year. If you have been considering putting your estate plan together, we have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones now and into the future. The best time to plan is always now! Remember, good planning is no accident.

Make Sure Your Heirs Know…

The financial consequences of failing to keep your legal and financial documents in order can be significant. As pointed out in a recent Wall Street Journal article, state treasurers currently hold $32.9 billion in unclaimed bank accounts and other assets. Additionally, some of the country's largest life insurers are under investigation for failing to pay out unclaimed life policies to beneficiaries. Insurers say they are behaving lawfully and under their policy contracts are required to pay a claim only when beneficiaries come forward.

Will your family members reap the full benefit of your estate planning efforts, or will they miss out simply because they cannot locate all of your important legal and financial documents in a timely manner? Of course, you don't have to keep every single scrap of paper, but the WSJ offers a pretty comprehensive list of the 25 most important legal and financial documents you should compile, and make sure your heirs can quickly access, to include:

1. Will
2. Letter of instruction
3. Trust documents
4. Housing, land, and cemetery deeds
5. Escrow mortgage accounts
6. Proof of loans made and debts owed
7. Vehicle titles
8. Stock certificates, savings bonds, and brokerage accounts
9. Partnership and corporate operating agreements
10. Tax returns
11. List of bank accounts
12. List of all user names and passwords
13. List of safe-deposit boxes
14. Durable health-care power of attorney
15. Authorization to release health care information
16. Living will
17. Do-not-resuscitate order
18. Personal and family medical history
19. Life insurance policies
20. Individual retirement accounts
21. 401(k) accounts
22. Pension documents
23. Annuity contracts
24. Marriage license
25. Divorce papers

The original article goes into much more detail with each, and whether you have or need each of these documents will depend on your individual situation and the various legal facets of your life, but it is a list that commands a certain attention. By putting this all together you help your loved ones to more quickly and easily pick up the pieces and put your plan into operation.

Few things in life could be more frustrating than putting a great plan together only to have it fail because for lack of implementation. At Idaho Estate Planning we have the expertise and resources to make sure your plan is carried out according to your wishes. Remember, good planning is no accident!

Required Minimum Distributions

If you're turning 70½ this year, get ready to start taking those mandatory annual payouts (your "required minimum distributions" or RMD's) from your IRA accounts. Unfortunately, this is not something you can afford to put off. As SmartMoney points out in a recent article, the IRS wants you to take those distributions, and pay the additional income taxes sooner rather than later, and there are stiff penalties for non-compliance.

In fact, if you fail to take at least the required amount each year, the IRS can assess a 50 percent penalty on the shortfall – the difference between what you should have taken and what you actually took.

SmartMoney offers a quick run-down on RMD basics, but remember this: the requirements are fairly complex, and penalties for non-compliance are pretty stiff. You are well-advised to seek qualified counsel on this one. The most important lesson here is – do not delay. If you have reached age 70-1/2 and you have IRA accounts, you have some big decisions to make now. As SmartMoney says, "If you sit on your hands, you will be in the RMD double-dip mode next year, which might result in a higher tax rate that could have been easily avoided."

At Idaho Estate Planning, we can help you find the resources you need to put your estate plan together. We have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones now and into the future. Remember, good planning is no accident!