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What Happens to Digital Assets when You Die?

Remember the phrase “Swedish death cleaning?” This trend was based on decluttering your life while you’re living so you don’t leave a disaster for loved ones when you pass. Digital death cleaning may be even more critical than decluttering because you can’t clean out what you can’t find.

A recent article from The Wall Street Journal, “Why Everyone Needs a ‘Digital Death-Cleaning’ Plan,” offers a way to get organized so digital assets aren’t lost or used for identity theft and even worse cybercrimes.

Create categories and label files. A file with deeply personal materials might be labeled “DoD—Delete Upon Death,” while a file containing information about finances could be labeled “Relevant.” The goal is to let survivors know if they will need the files.

DoD files are stuff you don’t want anyone to read after you’ve passed. Years of complaints about your ex-spouse or the difficulties in raising children might be better-left unread. Another idea is to put these kinds of files on a hard drive somewhere and label them, so they can be destroyed as per the instructions in your will. Don’t count on encryption to protect files. Just as any password can be hacked, any file can be opened.

Relevant files include information about your estate, finances and account passwords. If you keep instructions about heating or air conditioning systems on the computer, they may be needed to keep things running—for example, if your oil burner is cranky and needs extra TLC at the start of every heating season.

You’ll probably have files to label “Memorabilia.” These may be photos, videos, or anything you think children or grandchildren would like to read in the distant future to learn about you, your family history and the world you lived in.

All your organizing will work best if you also leave a physical document with a list of digital assets, such as subscriptions, email addresses, utility login info, etc.

Talk with your estate planning attorney to determine how your state addresses digital assets in wills. Most states have adopted a uniform law concerning digital assets, so you’ll want the estate plan to follow these rules.

Finally, consider digitizing your life. If you have a collection of photos, articles you’ve published, or ephemera, all of it can fit into a shoebox if it’s been digitized and stored on thumb drives. You’ll be able to enjoy it as an online memory book now, and your children won’t be stuck clawing through an endless series of boxes later. If you’re a true packrat, chances are your children know it and will appreciate your efforts to lighten their lives after you’ve passed.

Doing your digital cleaning is also the time to review your estate plan, especially if it’s been a few years since it was reviewed. If you don’t have an estate plan, now is the time to meet with an experienced estate planning attorney to create a will, plan for incapacity with a Power of Attorney and Health Care Power of Attorney and related documents depending upon your unique situation.

Reference: The Wall Street Journal (Aug. 6, 2024) “Why Everyone Needs a ‘Digital Death-Cleaning’ Plan”

Protecting Assets from Nursing Home Costs

One of the biggest concerns many face when planning for the future is the potential cost of long-term care. If a nursing home becomes necessary, the costs can quickly drain your savings and assets, leaving little for your loved ones. Fortunately, proper planning can protect your hard-earned assets and give you control over your legacy.

What Happens If You Don’t Plan for Nursing Home Costs?

Nursing home care is staggeringly expensive in the United States. The National Council on Aging (NCOA) reported monthly median costs of $8,669 for a shared room and $9,733 for a private room. Without proper planning, many people spend their life savings to pay for care. This can leave little behind for your spouse or heirs. If the government seeks to recover costs from your estate after you pass away through Medicaid estate recovery, even your home may not be left for loved ones.

Can Medicare Cover Nursing Home Costs?

Many people mistakenly believe that Medicare will cover long-term nursing home care. However, Medicare only covers a limited amount of nursing home care and is usually only for short-term rehabilitation following a hospital stay. It doesn’t cover long-term stays that often become necessary as we age. This is where Medicaid comes in. However, qualifying for Medicaid usually requires spending down most of your assets.

What Is Medicaid Spend-Down, and How Can It Affect You?

Medicaid spend-down is when individuals must reduce their assets to a certain level to qualify for Medicaid coverage of nursing home care. This often means using your savings, selling your home, or depleting other assets to meet the eligibility requirements. While Medicaid will cover your nursing home costs once you qualify, the spend-down process can leave you with little left over, erasing your legacy.

How Can You Protect Your Assets from Medicaid Spend-Down?

According to Elder Law Answers, there are several strategies you can use to protect your assets from the Medicaid spend-down process. These strategies can help preserve your wealth for your loved ones rather than being used up by nursing home costs.

1. Establishing a Medicaid Asset Protection Trust (MAPT)

One effective way to protect your assets is by setting up a Medicaid Asset Protection Trust (MAPT). This type of trust allows you to transfer your assets into the trust, effectively removing them from your ownership. Since the assets are no longer in your name, they aren’t counted when determining Medicaid eligibility. However, it’s important to plan ahead and work with a qualified elder law attorney to create one, since there is a five-year “look-back” period in which transfers can be penalized, and the accurate design and funding of a trust are complex.

2. Transferring Assets to Your Spouse

You can transfer assets to your spouse without triggering a Medicaid penalty if you’re married. This strategy is known as spousal impoverishment protection, and it’s designed to prevent one spouse from becoming impoverished due to the other’s long-term care costs. However, consulting with an elder law planning attorney is essential to ensure that this transfer is done correctly.

3. Long-Term Care Insurance

Long-term care insurance can be a valuable tool in protecting your assets. By purchasing a policy, you can cover the costs of nursing home care without depleting your savings. You must purchase this insurance well before you need it, since premiums are lower, and you’re more likely to qualify for coverage.

4. Life Estates and Real Estate Transfers

Transferring your home ownership while retaining a life estate may be another effective strategy. This allows you to continue living in your home while removing it from your assets for Medicaid purposes. After your death, the home passes directly to your beneficiaries, bypassing probate and protecting it from Medicaid estate recovery.

What Should You Do Next?

Planning to protect your assets from nursing home costs can be complex. However, working with a qualified elder law attorney is crucial to securing your financial future and ensuring that your loved ones are cared for. Each person’s situation is unique. The best strategy for you will depend on your specific circumstances, including your health, assets and family dynamics.

Ready to Protect Your Assets?

Don’t wait until it’s too late to protect your assets from nursing home costs. Start planning today to ensure that your wealth is preserved for the people you care about most. Contact our elder law firm to schedule a consultation and learn how we can help you create a plan tailored to your needs. Whether it’s establishing a trust, transferring assets, or exploring long-term care insurance options, we’re here to guide you every step of the way. Reach out today to secure your future and protect what matters most.

Key Takeaways:

  • Preserve Your Wealth: Safeguard your savings and property from the high costs of nursing home care.
  • Avoid Medicaid Spend-Down: Utilize strategies like trusts and spousal transfers to maintain your assets.
  • Ensure Family Security: Protect your legacy, ensuring that your loved ones benefit from your hard-earned assets.
  • Plan Ahead: Early planning can help you qualify for Medicaid while preserving your financial future.
  • Professional Guidance: Consulting with an elder law attorney ensures a tailored and effective approach.

References:

Elder Law Answers (April 17, 2015) “End of Medigap Plans’ Coverage of Medicare Part B Deductible” and National Council on Aging (NCOA) (Oct 27, 2023) “Nursing Home Costs and Payment Options”

Tips for Talking with Parents about Assisted Living

Talking with aging parents about assisted living is one of the most challenging conversations families faces. The reality of significant life changes always forces us to face fears and anxieties that we’d often like to avoid. However, it’s an essential step in addressing the future care needs of your elderly parents. This conversation may not be easy. However, with respect and empathy, it can provide clarity for the future and bring comfort to all involved.

Is It Important to Prepare for Assisted Living?

As our parents age, it’s common to notice changes in their ability to manage daily tasks. Whether it is difficulty moving around, forgetting to take medication, or struggling with household chores, these signs may indicate a struggle to manage alone.

Even if they don’t need to move into an assisted living facility yet, you should have a plan in place just in case an urgent need arises. This way, you can make thoughtful decisions rather than rushing into choices during a crisis. Talking about assisted living early lets everyone think carefully about how best to protect the needs and preferences of the aging parent.

How to Start the Conversation

Starting the conversation about assisted living can feel overwhelming. Many people worry about how their parents will react, fearing they’ll feel pushed into a decision they’re not ready to make. However, approaching the topic with empathy and patience can help ease these concerns.

Begin by choosing a comfortable and private setting where you can talk without interruptions. It’s important not to bring up the topic in a way that feels confrontational. Instead, express your concerns gently, clarifying that your primary goal is their well-being and happiness.

Addressing an Elderly Parent’s Fears and Concerns

When discussing assisted living, it is important to listen to your parents’ concerns and feelings. They may worry about losing their independence, leaving their home, or the stigma they associate with assisted living. By validating their emotions and acknowledging their fears, you can show you respect their feelings and support them.

Let your parents know that moving to an assisted living community doesn’t mean giving up independence. Likewise, many communities offer a variety of activities and social opportunities that can enhance their quality of life. Reassure your parents by sharing how these communities help residents stay active and engaged.

What If Your Parent Is Not Ready to Discuss Assisted Living?

It’s common for parents to resist the idea of assisted living, especially if they’re still relatively independent. If this happens, don’t try to force the issue. Instead, be prepared for multiple conversations over time. Each discussion can help them become more comfortable with the idea, especially if they see that you approach the topic respectfully and understandably.

In an article by A Place for Mom, Dr. Erin Martinez, a gerontologist, advises, “This should absolutely not be a one-time conversation.” Taking time and revisiting the topic as needed can help your parent feel more in control of the decision.

Tips for Talking with Parents about Assisted Living

While talking about assisted living is never easy, a few tips can help:

  • Be Patient: Understand this is a significant life change for your parent. Be prepared for several conversations over time.
  • Listen: Listen to your parents’ thoughts and feelings. This shows respect and helps them feel heard.
  • Focus on Benefits: Highlight the social opportunities and safety that assisted living can offer, helping your parent see the positives.
  • Plan Early: Start the conversation before it becomes urgent. Early discussions can make the transition easier when the time comes.

Ensure Your Parent’s Future Well-Being with an Elder Law Firm

Talking to your parents about assisted living is a challenging process. However, it can lead to a positive outcome. If you’re preparing for this conversation and need guidance on incorporating these decisions into an estate plan, contact our law firm today to create a plan that respects your loved one’s needs.

Key Takeaways

  • Start Early: Begin the conversation about assisted living with your parents before an urgent need arises.
  • Show Empathy: Approach the topic respectfully and clearly, acknowledging your parent’s feelings.
  • Plan for Multiple Talks: Be patient and prepare for several conversations over time to help your parent adjust to the idea.
  • Focus on Benefits: Highlight the social opportunities, safety and support that assisted living communities can offer.
  • Respect their independence: Reassure your parents that assisted living is about maintaining independence with the necessary support.

Reference: A Place for Mom (Jan. 11, 2023) “How to Talk to Elderly Parents About Assisted Living“

Estate Planning can Include Pets as Well as ‘Regular’ People

Who could forget the headlines when billionaire Lenora Helmsley was found to have set aside $12 million for her dog, aptly named Trouble, after she passed? You don’t have to be a billionaire to want to protect your animal companion, says a recent article from The Wall Street Journal, “Putting Pets in Your Will Is No Longer Just for Eccentric Billionaires.”

One family created their will with instructions for caring for their two young children, naming a guardian and a plan for distributing their assets, a basic part of an estate plan. They’ve also planned for their two dogs, naming a sister as their caretaker.

No matter how much you love your dog, cat, horse, or mouse, they are legally considered personal property. If there are no directions in the will for who will take care of your pets when you die, they will go to whoever inherits your property, with no guarantee of what will happen to them. Worse, if you die without a will, the laws of your state will determine what happens to them.

Many pets whose owners die end up at shelters, and not every city has no-kill shelters. This situation is not great for older pets or those with medical conditions who aren’t as adaptable as puppies or kittens. Large birds, like parrots, can live as long as humans, making plans for their future especially important. Other animals end up abandoned, living on the streets.

In other words, don’t assume your family members love your pet as much as you do. You need to make a plan for their future.

Some shelters have programs helping people include pets in their wills, often tied to making a bequest to be made to the shelter to fund the pet’s care.

When parents pass, and a guardian has been named to care for children, there is usually a certain degree of court supervision. However, the same isn’t true for pets. If you choose to name a pet’s caretaker in the will and provide assets for the pet’s care, there’s no one watching to be sure your beloved animal companion is being cared for with the money you provided.

An enforceable alternative is the creation of a pet trust. The caretaker and the trustee should be different people. A trustee’s fiduciary duty is to ensure that the assets in the trust are being used for their intended purpose. The caretaker is responsible for the pet’s overall quality of life.

Your estate planning attorney will be able to create a trust to care for your beloved animal companions, so they will be safe and well cared for. You don’t have to be a billionaire to make this happen.

Reference: The Wall Street Journal (Aug. 10, 2024) “Putting Pets in Your Will Is No Longer Just for Eccentric Billionaires”

Planning for Aging Well: Understanding the Stages of Aging

Aging is a journey we all undertake. However, the path isn’t the same for everyone. Each stage of aging comes with its own set of needs and challenges. Understanding these stages is essential for planning effectively and ensuring that you or your loved ones are well-prepared for the future.

What Should I Know about the Young-Old Stage?

The first stage, often called the “Young-Old” stage, typically starts around age 65 and lasts until about 74. Many individuals in this age group remain active and healthy. However, new considerations emerge.

In this stage, routine health check-ups become more crucial to catch any potential issues early. Staying active with regular exercise and maintaining a balanced diet can go a long way in preserving good health. However, retirement can bring a significant shift in daily life. Without the structure of work, some may struggle with a sense of purpose. Support your mental health by engaging in hobbies, learning and staying socially connected.

How to Prepare for the Middle-Old Stage

As people move into the “Middle-Old” stage, between the ages of 75 and 84, they may face increased health concerns. This period often brings challenges like high blood pressure, diabetes, or arthritis. Regular medical care and careful management of medications become more important during this time. Mobility might also decrease, necessitating the use of aids to maintain independence and creating new challenges around staying social.

What Should I Expect during the Old-Old Stage?

The “Old-Old” stage, beginning at age 85, often brings significant changes and challenges. Many people in this stage may require assistance with daily activities, such as bathing, eating, or moving around. The likelihood of conditions like Alzheimer’s or dementia also increases, making specialized care necessary.

This is also the time to have meaningful conversations about end-of-life planning. Ensuring that a person’s wishes are known and respected is crucial. Having legal documents like a will or advance healthcare directive in place can provide peace of mind.

How to Celebrate and Care for the Elite-Old Stage? (Ages 100 and Up)

Reaching age 100 is a remarkable milestone. However, it also brings its own set of unique needs. Individuals in this “Elite-Old” stage may have more complex medical needs that require close monitoring.

Planning for Aging and Cognitive Changes

Cognitive changes are expected as people age, and it’s essential to recognize and address them. Mild cognitive impairment might cause occasional memory lapses, which are important to monitor as they may indicate the onset of dementia. Engaging in activities that challenge the mind can help maintain cognitive functions.

However, if conditions like dementia or Alzheimer’s arise, early detection and proper management are key. These conditions can significantly impact an individual’s life. Having a plan in place can make a difference in managing their progression.

Emotional Needs During Aging

Beyond the physical and psychological shifts, aging is emotionally challenging. As people grow older, they may experience more loss as friends and family members pass away. Dealing with grief becomes a recurring part of life, and providing emotional support, whether through counseling or grief therapy, can be incredibly beneficial.

Many older adults also strongly desire to leave behind a legacy. In this case, outlets for sharing their stories and life lessons can provide purpose and fulfillment in later years.

How Can You Prepare for Advanced Aging?

Preparing for the later stages of life involves more than managing health—it’s also about planning for legal and financial matters. As you age, having all legal and financial documents in order is crucial, including creating a will, setting up a power of attorney and ensuring that medical directives are in place.

Plan for Aging Well

Aging is a natural part of life; understanding the different stages can help you or your loved ones navigate it more smoothly. Whether you’re planning for yourself or a loved one, it’s never too early to start thinking about the future. To learn more about how to plan for aging or to begin creating a personalized plan, request a consultation with our law firm today. We’re here to help you prepare for every stage of life.

Key Takeaways

  • Identify Aging Stages: Recognize the distinct phases and their specific needs.
  • Stay Proactive: Address potential health, social and cognitive changes before they become challenges.
  • Secure Legal and Financial Stability: Ensure that all legal and financial documents are updated and in order.
  • Encourage Engagement: Foster social interactions and activities that bring joy and purpose to your loved ones.
  • Adapt Care Plans: Adjust care and support as your loved one progresses through each stage of aging.

Reference: Care Plans Now (Dec. 14, 2023) “Understanding the Different Stages of Aging and Their Needs”

How Older Adults Fight Isolation and Give Back to Their Communities

Social isolation is a growing challenge for older adults, with significant impacts on their physical and mental health. According to the National Poll on Healthy Aging, 34% of adults aged 50 to 80 report feeling isolated at least some of the time. These feelings of loneliness can lead to declines in cognitive function and contribute to conditions such as heart disease, anxiety, depression, and Alzheimer’s disease. The good news? There are ways to combat isolation, and one of the most effective is through volunteering.

Volunteering allows seniors to give back to their communities and provides meaningful opportunities for connection, purpose, and improved well-being. The AARP guide, Help Older Adults Prevent Social Isolation, shares ways for older adults to get involved and reduce loneliness. Let’s explore how seniors can use their time and talents to help others and enrich their lives.

Why Should Seniors Volunteer?

Volunteering offers a range of benefits for older adults. Mayo Clinic Health System shares research findings that regular volunteer activity can improve physical and mental health, particularly in those aged 60 and older. Seniors who volunteer often report lower levels of depression and anxiety, increased physical activity, and an overall improved sense of well-being.

In addition to these health benefits, volunteering fosters a sense of purpose. Whether assisting at a local senior center, organizing events, or simply being a friendly face for someone in need, volunteers feel valued and connected to their communities. They develop new friendships, hone valuable skills, and experience the joy of making a difference in the lives of others.

How Older Adults Get Involved

The first step for older adults interested in volunteering is to identify the needs in their community. For example, organizations like Meals on Wheels and Senior Corps offer opportunities specifically tailored to the needs of older adults, such as companionship services and assistance with transportation. These programs provide regular human contact to homebound seniors and help volunteers build lasting connections.

Technology has also opened new avenues for engagement. Apps like Be My Eyes allow seniors to assist visually impaired individuals through video calls. At the same time, programs like Senior Center Without Walls provide telephone-based classes and discussions for older adults. Websites such as Create the Good and VolunteerMatch make it easy for volunteers to find positions focused on helping older adults.

If in-person visits or virtual connections aren’t possible, seniors can still get involved by writing letters, organizing events, or even sharing their hobbies and interests with others. Crafting blankets for newborns or teaching an art class at a senior center can make a world of difference in someone’s life.

Exploring Charitable Giving as a Way to Give Back

In addition to volunteering time, seniors can also give back to their communities through charitable giving. Incorporating philanthropy into an estate plan is a meaningful way to leave a lasting legacy while potentially benefiting from tax advantages.

Seniors can set up charitable trusts, which allow them to receive income from their assets during their lifetime while ensuring that the remaining assets go to a charitable cause after their passing. Alternatively, they can name a charity as a beneficiary in their will or trust, specifying a certain percentage of their estate to go to a good cause. Both options allow older adults to make a positive impact while fulfilling their own personal philanthropic goals.

How Elder Law Attorneys Help Seniors Get Involved and Give Back

Volunteering and charitable giving are powerful tools seniors can use to stay engaged, build connections, and contribute to their communities. However, navigating the options available, especially when it comes to charitable giving, can be complex. That’s where an elder law attorney can help.

Elder law attorneys not only assist seniors with crafting estate plans that include charitable giving but can also help connect seniors with local nonprofit or charitable organizations. Whether you’re looking for volunteer opportunities or want to explore the best ways to donate your assets, an elder law attorney can guide you through the process. Their expertise can ensure that your contributions—both in time and financial resources—are as effective and meaningful as possible.

An Elder Law Attorney Can Share Opportunities to Give Back to Your Community

If you’re an older adult looking for ways to give back to your community, there’s no better time to start than now. Volunteering enriches the lives of those you help and provides you with a sense of purpose, improved health, and new friendships. Consider contacting an elder law attorney for guidance on getting involved, whether through volunteering or charitable giving. They can help you find the right opportunities to make a difference and support you in leaving a lasting legacy.

Combat Isolation with Volunteering

Volunteering and charitable giving are incredibly fulfilling ways for older adults to remain active, engaged, and connected. By dedicating time, energy, or resources to worthy causes, seniors can combat the adverse effects of isolation while making meaningful contributions to the world around them. The benefits are endless, whether it’s making new friends, improving your health, or leaving a legacy.

Key Takeaways

  • Volunteering Fights Social Isolation: Volunteering offers seniors an opportunity to connect with others, build meaningful relationships, and combat the adverse effects of loneliness and isolation.
  • Health Benefits of Volunteering: Studies show that volunteering can improve both physical and mental health, leading to lower rates of depression, anxiety, and even chronic illnesses like heart disease.
  • Variety of Ways to Give Back: Seniors can get involved by volunteering through charitable organizations, helping others with simple tasks, or even using technology to provide virtual support.
  • Charitable Giving as a Legacy: Older adults can include charitable giving in their estate plans to leave a lasting legacy while potentially reducing tax obligations.
  • Support from Elder Law Attorneys: Elder law attorneys can guide seniors in both volunteer activities and charitable giving, helping them connect with local organizations and structure their estate plans to reflect their values.

References: Mayo Clinic Health System (Aug. 1, 2023) “Helping people, changing lives: 3 health benefits of volunteering and AARP “Help Older Adults Prevent Social Isolation”

What’s an LLC and Why Create One for Your Business?

The Limited Liability Company (LLC) is a popular choice for starting a small business. While it may not be suitable for everyone, there are good reasons for its enduring popularity. An article by NerdWallet discusses the basics of LLCs, why they’re so popular, and the potential drawbacks of this business structure.

What Is an LLC?

An LLC is a business structure combining some of the best features of partnerships and corporations. It provides the flexibility of a partnership while offering the liability protection typically associated with a corporation. This means that if your business encounters financial difficulties or legal issues, your personal assets—like your home or savings—are generally protected.

Who Can Be an LLC Member?

One of the advantages of an LLC is that it can have as many members as you want. These members can be individuals or even other businesses. It’s even possible to form a single-person LLC with just one member. This makes the LLC one of the most flexible business structures, whether you’re a solo entrepreneur or part of a larger group.

How are LLCs Taxed?

LLCs are unique because the federal government doesn’t recognize them as a specific tax entity. Instead, an LLC can choose how it wants to be taxed. By default, a single-member LLC is taxed as a disregarded entity, meaning the profits and losses pass directly to the owner’s personal tax return.

Multi-member LLCs are usually taxed as partnerships, with each member reporting their share of profits and losses. However, an LLC can also choose to be taxed as a corporation, either as a C-corporation or an S-corporation, depending on what makes the most sense for the business.

What are the Benefits of an LLC?

There are several reasons why an LLC might be the right choice for your business:

  • Limited Liability: As mentioned earlier, one of the most significant advantages of an LLC is that it protects your personal assets from business-related debts and liabilities. This means that if your LLC is sued or incurs debt, your personal belongings are typically safe.
  • Pass-Through Taxation: By default, LLCs enjoy pass-through taxation and don’t pay taxes directly. Instead, they use a simplified tax process with profits and losses that pass through to the members’ personal returns.
  • Flexibility in Management: An LLC can be managed by its members, or they can choose to hire an outside manager. This allows members to be as involved in the day-to-day operations of the business as they want to be.
  • Easy to Set Up and Maintain: Setting up an LLC is relatively straightforward and involves less paperwork and regulatory requirements than other business structures like corporations. Ongoing maintenance typically includes an annual report and minor fees.

What are the Potential Drawbacks?

While LLCs offer many benefits, it’s important to be aware of potential drawbacks. The protection of limited liability isn’t absolute; in certain situations, such as mixing personal and business finances or engaging in fraudulent activities, a court may decide to “pierce the corporate veil,” leaving your personal assets vulnerable.

Additionally, if your LLC is taxed as a partnership, you’re considered self-employed and must pay Social Security and Medicare taxes on your share of the profits. Changes in membership can also be complicated. Some states require the LLC to be dissolved and reformed, which leads to additional legal and financial responsibilities.

How Do You Form an LLC?

Forming an LLC involves choosing a name, filing articles of organization with your state, and creating an operating agreement. You’ll also need to select a registered agent to handle official correspondence and obtain an Employer Identification Number (EIN) from the IRS if you plan to hire employees or operate as a partnership or corporation.

Is an LLC Right for Your Business?

Deciding whether an LLC is the best structure for your business involves weighing the pros and cons and considering your specific needs. Whether you’re a solo entrepreneur or part of a larger group, the flexibility, liability protection, and tax benefits of an LLC can make it an attractive option.

Form Your LLC Today

If you’re considering forming an LLC or need help understanding your options, now is the perfect time to consult with an experienced estate planning attorney. A well-crafted business plan can set you on the path to success, protecting both your business and personal assets. Contact our office today to schedule a consultation and take the first step in securing your business’s future.

Key Takeaways

  • Protect Personal Assets: An LLC helps shield your personal belongings, like your home and savings, from business liabilities and debts.
  • Simplify Taxes: LLCs offer pass-through taxation, allowing business profits and losses to be reported on your personal tax return, simplifying the tax process.
  • Flexible Management: LLCs can be managed by the members or an outside manager, giving you control over how involved you want to be in daily operations.
  • Tailor to Your Needs: Whether you’re a solo entrepreneur or part of a team, LLCs offer the flexibility to structure your business according to your specific goals.
  • Seek Legal Support: Consulting with an estate planning attorney can help you navigate the process of forming an LLC and ensure that your business is set up for long-term success.

Reference: NerdWallet (Mar. 11, 2024) “What Is an LLC? Pros and Cons of a Limited Liability Company”

Relocating in Retirement? What You Need to Know before You Go

Moving in retirement is a big deal. Whether moving to be closer to family or trying to cut your living costs, moving in your sixties or seventies should only happen after much consideration and careful planning. A recent article, “Moving in Retirement? 5 Things to Ponder Before You Pack” from Nerd Wallet, explains the details.

Lower property taxes or income taxes are an attraction for many. However, look at all the costs to get a total picture, including the cost of living, estate taxes and housing costs, which have rocketed in many Sunshine states. You may find the difference is not as much as you thought. Suppose you’re selling a business before you leave. In that case, your current state may be more interested in recouping taxes than you think, so speak with an estate planning attorney to make the sale as tax efficient as possible.

One unexpected opportunity from moving outside of a Medicare Advantage’s service area is the chance to change your Medicare coverage. Relocating provides an acceptable reason to change a Medicare Advantage plan or sign up for original Medicare. It is also a time when you can sign up for Medigap coverage. You can normally only sign up for Medigap during open enrollment, a six-month period after you turn 65, and when you have Medicare Part B. This coverage is difficult to buy later in life if you have health issues.

Don’t forget to notify your insurance companies and Social Security if you move.

Could you rent first? If you’re moving to a place where you’ve summered for twenty years, renting for the first year is best. The winters may not be as bucolic as the summer. If you have to sell a house quickly after a short period, it could be a costly mistake. You’ll also own capital gains taxes on any profit made on a home sale if you move after living in a new location for less than two years.

What level of healthcare services do you need now or might need in the future? Healthcare becomes more critical as we age, especially if we are living with a chronic condition. If services are not the same quality or are a day’s drive away, your move could lead to bad health outcomes and added stress.

Estate law is state-specific.  If so, your estate planning documents—last will and testament, power of attorney, health care power of attorney, living will, trusts and other documents—may not be considered valid by the courts in your new state. Consult with an estate planning attorney about what needs to be changed to be sure that your estate plan will give you the same results in your intended new state.

Will you enjoy your daily life in your new location? Retirees active in social activities, from sports to community theater to volunteer work, report enjoying their retirement. Will you be living with people who share your interests and values? Will you feel comfortable if your political views differ from those around you?

One last point: transportation doesn’t usually feel like an issue until it is. If your children live on the West Coast and you’re considering moving to a small New England town, will the added cost make frequent visits prohibitive? If your retirement agenda includes a lot of international travel, you may want to consider how living far from an airport will impact your travel plans.

Reference: Nerd Wallet (Aug. 5, 2024) “Moving in Retirement? 5 Things to Ponder Before You Pack”

Is It Common for Siblings to Fight Over Inheritance?

Unfortunately, siblings refusing to speak with other siblings about their late parent’s estate matters is a fairly common occurrence. A recent article from Morningstar, “My brother won’t tell me anything about our mother’s $1.6 million estate. Can I remove him as trustee?” provides a good example of how things can go wrong.

According to a letter to the publication from one brother, a mother was the second to die and the brother who knows about her will has not yet filed the will with the court. To make matters more complicated, he explains that the father had created a trust before he died in 2000, which was never funded. Medicaid paid for $150,000 in nursing home costs, and at the time of her death, the mother owned a 1.6-million-dollar property.

While the best resolution is almost always simply to have a direct conversation, this doesn’t seem likely to occur in this situation. The controlling brother may be doing precisely what is necessary. However, since the brother won’t tell the other brother what is happening, the only way forward may be to go to court.

If a trust was created, it’s entirely possible it was a Medicaid Asset Protection Trust (MAPT). This trust is created to remove assets from being countable for Medicaid purposes. If the trust wasn’t funded, the $1.6 million property may never have been retitled and placed in the trust. This is the second most common estate planning mistake seen by estate planning attorneys; the first is not having an estate plan.

If the trust was never funded, the family home is considered an asset by Medicaid and could be “clawed back” by Medicaid to cover the medical expenses. If the $150,000 were the father’s nursing home costs, the father’s estate would have owned this amount, which should have taken place after the father’s estate was settled. There is a statute of limitations, however, and depending on the rules of the father’s state, this may be a moot point.

Since the house was the primary residence of a well-spouse, it may not have been countable for Medicaid. If the father had no other assets, there may be no debt to Medicaid. It’s entirely possible all this was dealt with. However, the brother wasn’t told the details.

This leaves the question of what the brother is doing with the mother’s estate. If no will has been filed, it might be because the estate plan was designed to avoid probate. Assets held in trusts and passed through beneficiary designations don’t go through probate. If the house was placed in a trust, it would not go through probate either.

However, since the sibling is an heir, he has the right to an accounting report or a report from the brother as the trustee and executor. The report should contain information on how assets were owned, and distributions were made.

This is a lesson for parents who know their children don’t get along. If they don’t get along while you are living, don’t expect this to change after your death. If one is given power of attorney, serves as a trustee and executor, and the others are left out of any decision-making, your estate may shrink because of litigation, and the family may fracture. Talk with your estate planning attorney about naming a neutral person for all or some of these roles to avoid adding the stress of an estate battle to your family’s grief.

Reference: Morningstar (Aug. 3, 2024) “My brother won’t tell me anything about our mother’s $1.6 million estate. Can I remove him as trustee?”

Increase in Estate Planning for Gen-Z

A recent study by Trust & Will highlighted that Gen Z is leading in setting up their estates and wills. Despite their young age, they are more curious and engaged in planning their financial futures than any other generation. Financial planner Jack Heintzelman from Boston Wealth Strategies notes, “They want to set themselves up for success and have flexibility in their lives, not just work until retirement.”

What Drives Their Early Planning?

Living through significant global events like 9/11, the 2008 financial crisis and the COVID-19 pandemic has influenced Gen Z’s mindset. These experiences have made them more pragmatic and forward-thinking. Their tech-savviness and access to vast amounts of information online also enable them to make informed financial decisions. They have witnessed economic instability and recognize the value of planning ahead.

How are Financial Advisors Responding?

Financial advisors are noticing this trend and adapting their strategies. In an article by Investment News, Paul Schatz of Heritage Capital mentions that younger clients are more approachable and agreeable regarding estate planning. Kelly Regan from Girard, a Univest Wealth Division, adds that the upcoming wealth transfer makes Gen Z a crucial demographic for advisors. Advisors are now focusing on educating and engaging Gen Z clients, offering tailored advice that resonates with their unique financial goals and values.

What Estate Planning Documents Do You Need?

Mandy Ritter, a senior wealth planning specialist at Captrust, emphasizes the importance of having key documents in place. These include a last will and testament, a financial durable power of attorney, a health care power of attorney, a living will and HIPAA authorization. These documents ensure that Gen Zers have control over their financial and medical decisions, even if they become incapacitated.

Digital Assets and Estate Planning

In today’s digital age, it’s essential to consider digital assets in estate planning. Advisors should ensure that clients have online accounts and digital presence plans. This includes providing executors with access to passwords and digital asset instructions. Managing digital legacies has become increasingly important as more of our lives and assets exist online.

Can Advisors Connect with Gen Z?

Advisors need to listen to their goals and visions to connect with Gen Z effectively. Jack Heintzelman advises,

 “Don’t lead with products or solutions. Listen to what their goals are and how they feel about money. Meet them where they are, and they will take your advice seriously.”

Building trust and rapport with this generation requires understanding their unique perspectives and providing guidance that aligns with their values and long-term aspirations.

Ready to Secure Your Future?

Gen Z is setting an example by taking control of their financial futures early. If you want to ensure that your loved ones are protected, and your assets are managed according to your wishes, it’s time to start planning. Early estate planning can offer peace of mind and a sense of security, knowing you have a clear plan.

Key Takeaways

  • Early Financial Security: Gen Zers are securing their financial futures at a young age, ensuring stability and control.
  • Influence of Global Events: Exposure to significant events has made them more pragmatic and forward-thinking about financial planning.
  • Tech-Savvy Decisions: Their comfort with technology allows them to effectively access and utilize financial planning tools.
  • Entrepreneurial Spirit: Many Gen Zers are entrepreneurs, and estate planning helps protect their business interests.
  • Comprehensive Planning: Including digital assets in their estate plans ensures complete and organized future management.

References: Investment News (Jan. 5, 2024) “The younger, the better: Gen Zers are ready for estate planning” and Trust & Will “Millennials and Estate Planning: Trust & Will’s Annual Report [Updated 2024]”

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