Perlin Estate Planning

Financial and Estate Planning for Singles

“I’m single, do I need to do anything differently with my finances?”

According to a recent Forbes article, “5 Financial Planning Strategies For Singles,” most of the advice on this topic isn’t very different from what’s given to married couples. Nonetheless, here are a few tips to consider, especially if you’re single.

Start saving for retirement now. Many of us will bank on Social Security along with our own personal savings in retirement. Some may have a pension or will possibly continue working in retirement. Whatever the exact plan, a good retirement savings objective is 15% of your salary and include your employer match, if you get one in your 401(k) plan. If you don’t have a plan through work, consider starting a personal IRA.

Prepare for the unexpected. Singles don’t have the luxury of second income as a fall back, so build up an emergency fund that can cover three to six months of expenses. Singles should aim toward the six-month cushion, so any unexpected expenses can be paid off without having to use your credit cards or retirement savings. Keep the money in a liquid account.

Consider insurance. Life insurance can be a replacement income for those who depend on you. With no dependents, it might not be needed, but consider a small policy to cover funeral expenses.

Estate planning. Perhaps you think you don’t need an estate plan, because you’re single. However, you should have certain documents prepared, if you become incapacitated, so a trusted friend can make health and financial decisions on your behalf. This document is called a health care proxy or a durable medical power of attorney. You need this, along with an advance health care directive and a durable power of attorney for financial and legal matters.

 If you’re single and have minor children, have a will drafted to designate a guardian to care for them. Likewise, if you’re single, most of your assets are in your own name. It’s important that your beneficiary information is up-to-date. In addition to your will, beneficiary designations on your retirement accounts and life insurance policy will direct how those assets are to be distributed. You can also title some accounts to “transfer on death” to move the account directly to another person.

 Take time to prioritize a financial and estate plan and review it regularly. Share this with your trusted family members so that you all will have peace of mind.

 

Reference: Forbes (July 5, 2017) “5 Financial Planning Strategies For Singles”

Don’t Stick Your Head in the Sand When It Comes to Senior Care

“Are we in denial when it comes to care down the road?”

Statistics show that most Americans are in denial about senior care and their future needs, according to HomeCare in a recent article, “5 Ways to Sort Through Long-term Care Planning.”

Roughly 70% of Americans 65 and older will require some type of long-term care. But few do enough or anything at all to plan for this. This is critical, with assisted living costs increasing faster than the pace of inflation. For those who are looking to move into a private-pay assisted living community, the median cost of rent and care in the U.S. is about $50,000 a year.

Finding the money to support senior care needs is difficult, but not impossible. Start with the following:

1. Inventory and Find Ways to Maximize Assets. Consider the value of your assets, like your home and your savings, then calculate your anticipated senior care costs. This includes things like the cost of living with inflation, medical expenses associated with illnesses you may have and the costs of different types of care—like memory care, homecare, nursing care, assisted living and long-term care communities and other family circumstances.
2. Look at Other Factors Concerning Senior Care. Smart strategies include financial planning, but also legal planning—like a will, powers of attorney, and a living trust to protect yourself and your family, and emotional planning, which includes leaving a legacy for your family or managing family dynamics.
3. Conduct Research. There’s plenty of misinformation about senior care, but education can help eliminate misconceptions. The best source is a knowledgeable estate planning and elder law attorney. Some people think that lawyers just draft documents. However, the documents are really just part of the legal service. There’s also the time, effort, and advice that goes into the document, working to address an individual’s unique circumstances.
4. Work with Professionals Who Can Provide Support. When it comes to senior care, you’ll need advice from several professionals, such as your family doctor, your financial advisor, an insurance agent or broker and your attorney. You may also work with a geriatric social worker.
5. Share with Your Family. Communicate your plans with your family to be certain that your wishes are understood and to help alleviate concerns your family may have regarding your care.

Whether you are looking out for yourself or your parents, planning and expert advice are crucial to ensure that you can afford the costs of senior care.

Reference: HomeCare (July 2017) “5 Ways to Sort Through Long-term Care Planning”

Use an IRA to Help the Grandkids

“Help to start building your grandchild's nest egg early.”

In the midst of summer, teens and college students are typically working summer jobs.

Kiplinger Retirement Report explains in a recent article, “Seed a Roth IRA for Your Grandkids,” that the income they earn, can give their grandparents a chance to help them build a nest egg. Grandparents can contribute to a Roth IRA on their grandkids' behalf.

Your grandchildren can later use the funds in these accounts for expenses like purchasing a home or building tax-free retirement income.

Another result of this gesture is to teach your grandchild the value of saving from a young age. As an illustration, if you were to contribute $2,000 a year over four years beginning when a grandchild is 15—with a modest 6% annual rate of return—those contributions will grow to more than $143,000 by the time the grandchild is age 66.

If he or she has a summer job or works while attending school, a grandchild has most likely earned income to be able to contribute to a Roth IRA. That contribution can't be more than he or she earned during the year or the maximum of $5,500 (in 2017 per the IRS), whichever is less. One idea is to deposit the money into the account for your grandchild and let your grandson or granddaughter hang onto his or her earnings. If she was to earn $3,500 from a summer job, then she can use it to buy a car. If you give $3,500 to the grandchild, then that money can be contributed to the Roth IRA.

The contribution you make to your grandchild is considered a gift to the child, so be certain to arrange that with your other gifts for the year. A grandparent can give up to $14,000 per year per person, without having to file a gift tax return (or a total of $28,000 to one person from both grandparents).

You can also “pre-fund” an account. However, in the event your grandchild's job falls through or she earns less than was expected, you’ll need to make ensure the excess contribution and its earnings are withdrawn from the account before the next tax filing deadline.

Depending on state law, you will be able to maintain control of the money until the grandchild turns 18 or 21, and then the grandchild can use it however she wants.

Reference: Kiplinger Retirement Report (May 2017) “Seed a Roth IRA for Your Grandkids”

When is the Right Time to Take Social Security?

“When to take Social Security: It’s THE question for people as they approach retirement, and there is a lot to think about.”

A critical decision in your retirement planning, is when to begin taking your Social Security payments. A wrong move can result in long-term consequences.

Kiplinger notes, in its June article, “What to Consider Before Filing for Social Security Early,” that some Americans are beginning see the financial benefits of waiting for their full retirement age (between 66 and 67 based on your birth year). But others don’t wait, because you can take them as early as 62 with reduced benefits.

Some folks want to take their benefits as soon as possible. They’ve been paying into the fund for years and want to get their money back ASAP.  It is also possible that Social Security might go away, and they want to be paid before that happens. Others expected to work until they were 65 or 66, but then they’re “downsized” in their early 60s, making it hard to find another job. They may decide they need the steady income that Social Security offers.

You should understand the options before you file: this includes smaller payments for life, earnings limitations on future job possibilities in your retirement, and a potential income hit on your spouse. Remember that monthly payments will be about 30% percent higher at your full retirement age than if you file at 62, plus 8% per year after full retirement age (FRA) if you delay until age 70.

A fellow who is laid off at 62, may prematurely take his benefits when he can’t find work. If he does get a job, he’ll have an earnings threshold of $16,920 in 2017, if filing prior to his FRA. This limits how much he can make. If he makes more, Social Security will withhold $1 in benefits for every $2 he makes over that limit! In addition, if the husband’s been the higher earner in the family for years, and he takes his benefits at 62, he’s greatly reducing the amount his wife will receive if she outlives him.

Understanding all of your Social Security options, and most importantly, how Social Security fits into your overall retirement income and distribution plan, is crucial in deciding when to take your benefits. There are income needs like basic expenses and lifestyle. Some use the first few years of retirement to travel, start hobbies and visit the grandkids. This means more spending in the early retirement years than later. Next review your income streams, like a pension, taxable retirement accounts, non-taxable Roth IRAs and Social Security.

Understand when the distributions start from those various sources to fulfill your needs. You should also consider the scenario of a surviving-spouse. Take away all income associated with the other spouse and see how that changes the income for the surviving spouse. Before you decide to rush down and file for your Social Security, look at all your options and consider the short and long term picture.

Reference: Kiplinger (June 2017) “What to Consider Before Filing for Social Security Early”

Community Activist Flower Shop at Center of Estate Battle

“Family issues over the estate of the late Veronica Shoemaker have been settled. Her daughter, Mattie Young, will continue to run the florist shop that the long-time community activist opened 42 years ago.”

Mattie Young battled to maintain her mother's legacy of a lifetime of service to a Florida community. Young is the daughter of the late Veronica Shoemaker, who was a Fort Myers community activist for many decades. Mattie struggled to keep the flower shop bearing her mother's name, after a contested will struggle that threatened her mother's legacy.

The Fort Meyers news-press.com reported on this saga in “Shoemaker estate issue settled; florist shop stays open.” Family members apparently reached an agreement that assured Mattie would continue to run the Veronica S. Shoemaker Florist Shop in the Dunbar community its founder served for decades.

"It's important that her legacy here, her legacy in the community and her spirit continue," Young said.

Veronica Shoemaker's will was challenged in court by her granddaughter Latoya Shoemaker, the daughter of her late son who died in 1982. Latoya argued that her grandmother lacked capacity to make a will, because she was suffering from the effects of Alzheimer's disease. Latoya claimed at one point in the dispute, that the signatures of Veronica Shoemaker were forgeries. The suit stated that Veronica Shoemaker was diagnosed with Alzheimer's in 2007.

Veronica’s will left the florist business to her daughter. She noted that, as she faced advancing age, Mattie had worked to maintain the store's place in the community. Veronica Shoemaker died Jan. 21, 2016, and the will was filed in probate court in June. It was challenged a month later.

An agreement was struck with the help of a mediator and was filed in court. The trial scheduled to begin that week, was canceled.

Although some of the terms of the agreement were kept confidential, Mattie, her niece Latoya Shoemaker and her brother Bennie will be given equal shares in what remains of Shoemaker's estate, after the final expenses are paid and any property sold. The will filed in court had provided for only a 10% percent share for Latoya.

Mattie will continue to operate the flower shop that her mother founded 42 years ago. She expressed relief that the episode was over and her mother's name will remain prominent in the community she inspired and served.

"She put everything she had into this corner," Young said at the store at the corner of Dr. Martin Luther King Jr. Boulevard and the former Palmetto Avenue Extension, renamed Veronica Shoemaker Boulevard in honor of the first black person to win election to the Fort Myers City Council.

Reference: (Fort Meyers FL) news-press.com (April 26, 2017) “Shoemaker estate issue settled; florist shop stays open”

You Can’t Take It with You, but Dying Isn’t Cheap

“Funerals cost $6,000 and up, but planning can help you cut the big expenses.”

No one likes to talk about death, because it's considered taboo. But one subject even more taboo is money, contends gobankingrates.com. According to its article, “7 Money Secrets about Dying That No One Wants to Talk About,” if you don't talk or plan for dying, your death could cost your family a considerable amount of money. Read on to consider some valuable money secrets about death and how to be prepared.

Funerals Can Be Darn Expensive. Funerals homes charge about $6,000 for funeral services, and you'll pay an additional $2,000 for burial, $1,000 for a grave marker or $2,000 for a headstone. That adds up to $10,000 or more. Your family could also spend even more, if you don't put your final wishes in writing and discuss them with your family. The high cost of a funeral you didn’t want, could put your family in debt.

Look at Less Expensive Funeral Options. It’s hard to be sensible and objective when you're dealing with the emotional stress of a loved one's death. However, there are differences in prices. You can find this information online. Do some comparison shopping for your family and tell them which funeral home you prefer.

A Funeral Package Deal Isn’t Always a Great Deal. A funeral home might offer a package, but you may not want or need everything that's in it. Look at your options because funeral home pricing is dependent on the services provided. You can also buy the grave marker, headstone or casket online directly from wholesalers or distributors, which can cut costs.

A Traditional Funeral Isn’t the Only Option. Don’t feel pressured into having a traditional funeral for yourself or your loved one, especially if you can't afford it. The difference between a full traditional burial and a cremation can be $7,000, with the additional services required.

Prepaid Funeral Policies. Funeral homes and insurance companies offer prepaid funeral policies. This sounds like a good way to save your family money on your funeral costs, but you can spend more on premiums than the policy will pay at your time of death.

When you don't plan or you plan improperly, your family will pay the price. While you are at it, spend the money to have an experienced estate planning attorney draft a will so that it conforms to your state's laws.

Reference: gobankingrates.com (March 14, 2017) “7 Money Secrets about Dying That No One Wants to Talk About”

Some Facts about Elder Financial Exploitation

“As with those who have endured other types of abuse, victims of financial elder abuse often feel they can't or shouldn't seek recourse.”

Perpetrators of financial exploitation are frequently family members, caregivers or other people who are known and trusted by the elderly. This makes many seniors who are financially exploited, even more reluctant to come forward. Perpetrators often depend on this or pressure victims to keep quiet.

As Yahoo Finance recently posted in “What to Do If You or Someone You Love Has Been Financially Exploited,” betrayal by a family member or another trusted person is especially hard on those who are financially abused. Seniors who've been financially exploited, may feel shame and guilt. Consequently, they do not feel entitled to help or support, let alone to feel victimized.

The widespread nature of financial exploitation shows that it can happen to almost anybody. More states are trying to find ways to legally address financial exploitation and to better address and deter this abuse, as the population ages and an increasing number of seniors are vulnerable.

Most states criminalize financial elder abuse.

This means that, in addition to laws already in effect to prosecute theft, there are added penalties, which can be filed in financial exploitation cases involving seniors or vulnerable adults, increasing the jail time for perpetrators.

Some states also now have statutes allowing older or vulnerable adults to sue specifically for elder financial exploitation. The states include Arizona, California, Florida, Oregon, Minnesota, Utah, Illinois and Washington.

A key feature of elder financial exploitation cases is that they allow victims to sue for multiple times the amount lost (usually two or three times the amount) and to recover attorneys' fees. This punishes perpetrators more and acts as a deterrent. This approach also encourages settlement of these cases. Awarding attorneys' fees is another incentive for seniors to secure legal representation.

Remember that the cost of financial abuse goes beyond the monetary loss. Victims and their families should access services, like counseling and case management, to help them heal after being financially abused.

Reference: Yahoo Finance (March 14, 2017) “What to Do If You or Someone You Love Has Been Financially Exploited”

The Bumpy Ride of Care for Your Parents

“Thanks to Father Time and copious amounts of prescription drugs, people are living longer. But with longer lives comes the potential for increased healthcare needs.”

It can happen out of the blue. One second your folks are in pretty good shape. The next second, your dad is in the hospital with pneumonia and your mom is showing signs of early onset dementia.

How the devil did this happen? This is the basic question asked by Chicago Now in its recent article, “Getting Old Sucks: Why To Start Estate Planning With Your Parents.” As the article puts it: “you are officially on the rollercoaster ride to elder hell.”

Fortunately, there are things you can do on this bumpy ride to make it easier on you and your parents. While it’s uncomfortable at first discussing the topic of death with your parents, it’s necessary and important.

Talk to them about estate planning and make sure that they have wills, durable healthcare and medical powers of attorney (POA) and health care directives. If your parents don’t have these documents, you should make an appointment with a qualified estate-planning attorney and get this completed today as soon as possible.

For example, what if your father has a debilitating stroke, doesn’t regain consciousness and needs 24/7 medical support indefinitely? Without a health care directive, the hospital will keep him alive, even in a vegetative state, until he passes naturally.

You’ll be unable to have him removed from life support, unless you can show the physician and hospital administrators his legally valid health care directive and his medical POA that details his wishes. Without these estate planning documents, you and your mother will have limited control on how he should be treated.

From a financial standpoint, it is important to remember that the hospitals will continue to bill you even when your father is on life support and technically brain dead. After 100 days of Medicare coverage, your mom will be fully responsible for these care and treatment expenses, if there’s no supplemental insurance.

Start the dialog with your parents and let them determine how they want to live and die. This will save you and your loved ones considerable stress, frustration and heartache in the future.

Once this is under control, work on your own estate planning. You should contact a knowledgeable and experienced estate-planning attorney with your questions.

Reference: Chicago Now (March 7, 2017) “Getting Old Sucks: Why To Start Estate Planning With Your Parents”

Battle Continues Over Country Singer’s Estate

“This case arose out of a will contest between the wife and son of deceased musician Ray Price.”

 

Price's widow filed an interlocutory appeal alleging that the trial court erred in appointing a receiver to take possession of property subject to the will contests, according to a recent write-up in The Texas Lawyer, “In the Estate of Noble Ray Price.”

Price, one of country music's most beloved singers, died at home on December 13, 2013 at the age of 87. Price had been hospitalized in Texas and had been fighting a battle against pancreatic cancer for about a year. The day before he entered hospice care, Price left a message to fans: "I am at peace. I love Jesus. I'm going to be just fine. Don't worry about me. I'll see you again one day."

Citing Chapter 64 of the Texas Civil Practice and Remedies Code, the court explained that for a receiver to be appointed, the party seeking appointment must have a probable interest in or right to the property or fund. In addition, the property or fund must be in danger of being lost, removed or materially injured.

The review of the trial court's determination is for an abuse of discretion.

The court of civil appeals examined the pleadings and testimony of the case. It showed that Price's son Cliff was contesting the validity of a will that Price signed in the hospital right before his death. Cliff claimed that Ray lacked the capacity to execute the new will.

The appellate court found that the trial court didn’t abuse its discretion in determining that Cliff had a probable interest or right to the property.

In addition, the court of civil appeals stated that in light of Price's widow's testimony that she felt Price's property belonged to her and not to the estate, and that she had accepted payments on Price's behalf and written herself a check from his record company, the trial court didn’t err in holding that the property was in danger of being lost, removed or materially injured.

Accordingly, the court of civil appeals affirmed the decision of the Texas trial court.

Price's musical career spanned more than 65 years, and music experts say his recordings are some of the most versatile in country and western music history. They ranged from honky-tonk to western swing to a more complex sound in the 1960s that brought him some of his biggest hits.

Reference: Texas Lawyer (March 1, 2017) “In the Estate of Noble Ray Price”

Estate Planning with a Child with Addiction

“Many parents who have children struggling with addiction or mental illness are often too consumed with caring for those children in the present, to give any thought about how those children will be cared for when they are gone.”

A question to consider in estate planning, if you have children is: Do your children now or have ever they struggled with alcohol, drugs, gambling or mental illness in the past?

Trust Advisor’s recent story, “Hope For The Best, But Build Trusts For The Future Of Children With Special Challenges,” remind us that an estate planning attorney is there to help with these unavoidable issues through proper estate planning.

Before diving in, estate planning requires a parent to acknowledge that an addicted son or daughter may never recover. With this in mind, estate planning must be done so that the child never has easy access to funds. In this instance, a trust with special-purpose language may be a wise option.

This solution gives you traditional estate planning goals like avoiding probate, minimizing taxes and ensuring that the intended beneficiaries are named. However, it also needs to be customized for a unique family situation, such as a child with addiction.

Parents can add a clause that lets the trustee deal with such a child. The clause can even have an incentive for the child to meet certain goals or requirements to receive a distribution from the trust, like staying sober.

Estate planning for addictive children has a few special wrinkles, but it’s very similar to traditional estate planning. Work with a qualified experienced estate planning attorney, so you can protect your child from their addiction and from themselves.

Reference: Trust Advisor (February 15, 2017) “Hope For The Best, But Build Trusts For The Future Of Children With Special Challenges”