Many of our clients wish to transfer title to their home in an attempt to avoid probate, save the home, and avoid nursing home expenses. Adding an adult child to your home deed, or giving title to your home outright, is usually not a smart thing to do. Yes, transferring your home to your adult children while you are alive might avoid probate (at least for that asset), but gifting your home also can result in a unnecessary tax bill and put your house at risk if your adult children get sued, divorced, or file for bankruptcy.
In January of this year, the rules governing retirement accounts changed significantly. As a result of the passing of The Secure Act, there are long-term changes you might wish to consider to your financial and estate plan.
Stretch IRAs will be abolished going forward. Most of our clients who inherited an IRA on or before December 31, 2019 were able to stretch the distributions over their life expectancy. This was the “Stretch IRA.” For our clients who are inheriting retirement accounts after December 31, 2019, this opportunity to use the “Stretch IRA” will no longer exist.
December 10, 2018
It is estimated that anywhere from 50% to 70% of adult Americans haven’t taken the time to have a basic estate plan. Do you? If you don’t, what are your excuses for not having a basic estate plan in place?
If you don’t have a basic estate plan, you might have something in common with celebrities, such as Prince, Martin Luther King, Jr., and Howard Hughes. All of them failed to plan ahead and have a simple Will or an adequate estate plan.
March 27, 2018
On January 1, 2018, tax legislation was signed, ushering in several changes to the wealth transfer tax system. As a result, we recommend to all of our clients that they review the terms of their Last Will & Testament and/or Revocable Trust at this time to ensure that your estate planning documents remain in accordance with your wishes, as now affected by the 2018 changes in the tax legislation. For instance, many Wills and Revocable Trusts are funded according to “formula clauses” tied to the exemption amount in effect on the date of your death. In the event that you die before the year 2026, these trusts may be funded with significantly larger amounts than anybody was anticipating when your documents were signed.
September 19, 2017
Medicaid is at the center of the current health care debates in Washington. People fear that the demographics in this country will result in skyrocketing Medicaid program costs. Americans have not saved enough to pay for end-of-life health care – thus Medicaid will come under increasing strain. Many of our clients confer with us concerning Medicaid planning, which is sometimes described as divestment. First and foremost, before talking about Medicaid planning, a client needs to talk about how to “qualify” for Medicaid. Medicaid eligibility differs by state and also by marital status. Currently, you cannot have income higher than $2,205.00 to $2,898.00 per month per person, including your Social Security benefits. In addition, there are asset restrictions of $2,000.00, unless there is a spouse who is not receiving care – in which case that spouse can have up to $120,900.00, while their husband or wife qualifies for Medicaid. The primary residence does not count in the asset calculation, but there is a cap of home equity if the recipient of Medicaid is single.
There are complex IRS regulations associated with IRAs and other retirement plans. When Clair Law Offices advises its clients concerning estate planning matters, we customarily defer questions concerning retirement distributions to our clients’ accountants and financial advisers. Errors in taking retirement distributions can be extremely costly. This is especially true of required minimum distributions (RMDs).
June 23, 2017
Clients with disabilities who receive governmental benefits cannot have more than $2,000 in savings. If they do, they start to lose those much-needed benefits.
There is a new type of saving vehicle known as “ABLE Accounts” which permit people with disabilities and their families to save up to $14,000 a year without losing benefits. The accounts are somewhat similar to the 529 College Savings Plans. With ABLE accounts, money can be saved and can be used for anything that helps the life of the person with a disability.
May 18, 2015
In recent years, retirement accounts such as IRAs and 401(k)s have become one of the largest assets in a person’s estate. Because of the tax-deferred status of these types of accounts, they offer unique planning opportunities to the owner compared to a standard savings or investment account.