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Losing a parent is often one of the most difficult times a family can face. Many times, it can result in friction between siblings. There are simple ways to help avoid this, however, such as deciding early how property should be sold or maintained. This article elaborates on specific steps you can take now to help keep the peace during a difficult time for your loved ones. Below are some ideas and suggestions to consider when making your estate plan.
- Find a Real Estate Attorney with Experience and Referrals – It’s important to work with someone who understand the needs and wishes of retirees. Find someone with plenty of experience in the field as well as satisfied clients.
- Produce an Overview of Your Financials – One easy way of helping your beneficiaries simplify the process is to create a simple overview of what you own and where. This minimizes any possibility of skepticism. This overview should include a list of all assets, liabilities, and insurance policies, as well as contact information for all insurance and legal professionals you have. It would be a good idea to include usernames and passwords for any accounts or websites.
- Communicate with Your Family Now – Once you have the above steps in place and completed, it is vital you communicate with your family to prevent any miscommunication in the future. Discuss your estate intentions and legacy items that are important to you. Explain who your executor will be as well as let them know where the important documents are kept.
If you are ready to meet with an experienced and reputable estate attorney to begin your estate planning process, call Rhodes Law Firm today!
Last Will and Testament Document Ready to Sign. Last Will Document and Fountain Pen Closeup Photo.
For reasons that are not entirely clear, the number of Americans making wills is dropping. Less than a third of Americans currently have a valid will, according to statistics.
Even those that have a will may not have their affairs set in order. There are certain circumstances under which it is necessary to change your will, or at least advisable to do so.
If it’s been a while since you made a will or trust, you should inform yourself about when it might be a good idea to make changes to it.
Read on to find out how to change a will or trust.
Wills & Trusts: What’s the Difference?
Wills and trusts are both estate planning tools. You can use either a will or a trust to distribute your assets, or you can use both.
The main difference between the two is that a will does not take effect until you die, while a trust takes effect as soon as you make it.
When Might I Have To Change My Will or Trust?
Making a will is an important and commendable step in one’s life. However, it is unfortunately only half the battle. Most people will have to alter wills or trusts several times in their lives.
The following are some circumstances in which you should consider changing your will.
Changes in Your Family Situation
If you’re arranging the distribution of your assets, chances are you’re leaving the majority of your estate, if not all of it, to members of your immediate family. Therefore, it makes sense to change your will or trust when the structure of your family changes.
This might come about in the case of a new birth or an untimely death. However, most often, it relates to the spousal relationship.
In many states, a marriage or divorce will immediately render a previous will void. Even in those states where it doesn’t, you should make a new will anyway.
It is especially important to make a new will if you remarry after getting divorced.
Death of Beneficiaries
If someone you name in your will or trust dies before you, it is usually a good idea to change the document.
It should be noted that the death of a beneficiary will not necessarily make a will invalid. The rules vary from state to state, but in many cases the gift will simply pass to the heirs of the deceased person.
A person’s heir or heirs will usually be their wife, their children, their parents, or their siblings.
Changes in Your Assets
Imagine you won the state lottery tomorrow. Whatever your will says would probably be largely irrelevant, as it wouldn’t account for the fresh pile of cash now sitting in your bank account.
This is obviously an extreme example. However, assets almost always change over the years.
Whether you purchase new property, start making more money at work, lose money in an investment, or just spend a percentage of your savings, the amount of assets you have is probably changing all the time.
Therefore, you should check your will or trust every few months to ensure that what you’re bequeathing is consistent with what you actually have.
Also, if you gain or lose a large quantity of assets, you should change your will or trust immediately.
Change in Location
If you make a will in one state and subsequently move to another, your will may not be valid in the latter state.
The rules on this vary from state to state. If you’re unsure about whether your will is valid, it’s always best to consult an attorney.
Changes to the Law
Various laws that are relevant to wills and trusts change quite frequently. These might rules in relation to tax, power of attorney, or long term care benefits. Advanced health directives are also relevant.
These laws are numerous and complex. If you’re not sure whether a legal change affects your estate plan, it’s always best to ask your lawyer.
How To Change a Will or Trust
There are a number of ways in which you can change an existing will or trust. The best method for you will depend on the extent of the changes you wish to make.
A New Will or Trust
If you want to make sweeping changes to your will or trust, or you haven’t changed it in a long time, you may be better off to just start from scratch.
This will invalidate any previous wills or trusts you may have made.
A codicil is similar to an addendum. Whereas an addendum merely adds to a will or trust, however, a codicil changes a pre-existing element of one.
These are used where there is only one change to be made, or a few minor changes. Codicils are quicker and easier to implement than brand new documents.
Once drawn up, a codicil is attached to your existing will or trust as a secondary document. Codicils must be witnessed and executed in the same fashion as the original will or trust.
A Personal Property Memorandum
This is similar to a codicil. It also takes the form of an additional document that is attached to your original will or trust and makes binding changes to it.
However, this method is only available to you if you included a personal property memorandum when you first wrote your will or trust. In this case, you can remove the existing memorandum and replace it with one that reflects your updated intentions.
A personal property memorandum is used by those who wish to leave specific pieces of property to specific beneficiaries, rather than dividing their estate up equally.
For instance, if you wish to leave your car to one of your children and your art collection to another, you would specify this in your personal property memorandum.
What Happens If I Die Without Making a Will?
Where someone does not have a will when they die, they are said to have died intestate. The way in which your assets are distributed will depend on your family situation and the laws in your state.
Generally, your estate will be divided up among your heirs, with priority given to your spouse and children, followed by your parents and siblings.
If no suitable heir can be found, the ultimate beneficiary is usually the state.
Making Sure Your Family Are Looked After
Nobody likes to think about life after their own passing. However, this is no excuse for not having arrangements made in relation to your affairs, especially if you have a family that will need to be looked after when you’re gone.
For those that already have one, knowing how to change a will or trust is hugely important. You need to be able to make adjustments if some unexpected occurrence should change your state of affairs.
If you’d like to make a will, or have us review or make a change to an existing one, contact us today.
If you think you are safe from data breaches and identity theft because you froze your Equifax credit account, you may be sorely mistaken. Due to a security flaw, identity thieves may be able to easily hijack your phone and utility accounts. According to this article, the National Consumer Telecom and Utilities Exchange, an association that houses consumer payment data for utility bills, is a separate organization and, thus, not affected by your credit freeze with the credit bureaus.
The director of the Identity Fraud Institute at Hodges University, Carrie Kerskie, reported that they have had many people come to them because crooks have opened utility accounts in their names. She suggests that anyone whose personal information was exposed in a data breach request a copy of their NCTUE in addition to the three big credit reporting agencies. Then you can place a freeze on all accounts.
While it’s always possible that your information will still be stolen in the future, it’s important to take extra steps and precautions to try to protect your data and personal information as best as possible. If you need the assistance of an attorney, contact Rhodes Law Firm today. While the COVID-19 pandemic has limited our in-office interactions, we are happy to provide legal assistance by email or phone.
Donation Jar with Copy Space. Fundraiser, Charity and Relief Work.
It is recommended that small businesses should donate 6% of their profits and sales to charitable causes.
Donating profits can help you and your employees feel like you are making a difference and can even draw in more business.
If you want to put your money to good use, you have a couple of options to consider.
Continue reading to discover how giving charitably can help you save on taxes and improve your company!
1. Remainder Trusts
Giving charitably through remainder trusts are a good idea if you have a lot of highly appreciated assets.
Remainder trusts allow you to liquidate your assets and there is no tax consequence when doing so. After you donate to this trust, you will be able to get a tax deduction that applies to your current income.
One of the best things about this type of charity is that you can continue to get the benefits of your assets for the rest of your life. After you die, the rest of your assets that you have remaining will go to whichever charity you choose.
Becoming a philanthropist can open your eyes to all of the types of charities, you can select one with special meaning. In many office settings, the entire team will vote on the charity of their choice.
The more involved that you and your employees are with the charity, the more meaningful and impactful you will be. Take the time to discover the best place for your money to go towards.
Our guide can help you find reputable charities that can help a lot of people!
2. Donor-Advised Funds
Donor-advised funds (DAF) are a great way to give back to a charity and help you get tax breaks.
Over time you can contribute assets, cash, and other securities to this fund. You can get tax breaks as soon as you begin adding them. Once you have made your investments, they will increase and be tax-free.
Donating stock to charity is one way you can handle a donor-advised fund. You can also invest checks and mutual fund shares. If your business has hedge fund interests or private equity, you can even use these for your investment.
Less common assets that you can put towards this charitable fund include retirement savings and Bitcoin.
3. Lead Trusts
If you are looking for a way to donate more than you already have, charitable lead trusts are recommended.
In a lead trust, you can donate a portion of your profits for an extended time. You can put these donations towards one or more philanthropies. Whatever money is remaining typically goes to your beneficiary or family.
Many people consider lead trusts to be the inverse of remainder trusts, that are mentioned above. They are irrevocable and meant to reduce tax liability, once inheritance occurs.
It is recommended to put your money towards this trust if you have a lot of taxable income. You can use this charity to lower your taxes and help your family. You can also get savings through estate and gift taxes as well when you have charitable lead trusts.
4. Local Community
Does your business play a large role in the local community?
By donating to local community foundations you can help the people in your area, feel good about it, and save on taxes. Typically businesses will donate to nonprofits of any size.
Most community foundations revolve around the arts, education, and health services. Disaster relief and environmental corporations in your area can also accept donations. There are more than 750 community foundations in the United States. They can be found in rural and urban areas.
The purpose of community foundations is to help improve the lives of the people in a certain area. This area is determined by geography and can help individuals and businesses. The money will go towards clubs and other charities that put arts, sports, and culture back into the community.
5. Private Family Foundations
Most private family foundations are set up by families with assets.
If you wanted to start a private foundation to donate to, you must come up with a name and fill out some paperwork. You can also donate money to other private foundations. When you donate to them, you will be able to use it as a tax write off and will save you money.
Many people choose to donate to private family foundations because they have a connection with it. If you want to make an impact on a family and their cause you should consider this type of donation.
It will bring you closer to your customers and can make the biggest impact.
Not only will you get tax deductions immediately, but you can also avoid capital gains tax and have minimal estate tax liability.
Giving Charitably Can Help You
Did you know that you can improve your business and cut your taxes by giving charitably to various foundations and trusts?
If you have the extra money in your business and want to put it to good use, you have several options. Charitable remainder trusts and lead trusts can ensure that your family and business are safe even after you pass.
By giving to the local community and family-run foundations, you can help the people in your area that support your business. Not only does giving charitably help lessen your taxes, but it can also help get you more business.
Be sure to contact our team today for assistance with Charitable planning, business law, and more!
It is important to review your estate plans regularly to adjust for any changes that occur, whether they are legal or personal. This year, that is especially true. The Setting Every Community Up for Retirement Act, or SECURE Act, has made substantial alterations to how certain retirement benefits and IRAs should be treated after death. This means that you should take the time to review and update your estate plan. This article on Forbes.com highlights some key points regarding these changes and why you should take the time to consider making changes to your plan.
The SECURE Act changes could possibly result in revision of beneficiary designation forms, revision of wills and trusts, possible modifications of existing conduit trusts, and complete restructuring of the planning for the IRA account. One major change that the SECURE Act brings with it is the death of the “Stretch IRA.” With this death, the ramifications will shake things up for many. The stretch technique permitted heirs to defer IRA over a long period of time, which essentially would permit the IRA balance to compound income tax free. Now, however, most heirs of an IRA dating after 2019 will be required to completely withdraw all assets within 10 years of the date of death.
There are a few exceptions to the 10-year rule. For heirs who qualify as “eligible designated beneficiaries” do not need to adhere to the 10-year payout. Those who are considered eligible designated beneficiaries are surviving spouses, chronically ill, or disabled heirs.
The SECURE Act significantly affects many estate and retirement plans, so it is critical to review your plans today. The team of legal experts at Rhodes Law Firm is ready to help ensure that your plan is structurally sound and your wishes will be upheld. Don’t wait until it’s too late – come see us today to review or create your estate and retirement plans!
Family consulting notary public at office
In the United States, 60% of couples in a second or subsequent marriage have at least one child from a prior relationship. In 2008 one-third of people divorcing were actually re-divorcing (divorcing again).
In blended families, it is important to make sure the children from your first marriage are not unintentionally disinherited. To make sure your intentions are met, second marriage inheritance issues should be addressed before or immediately after your marriage.
Estate Plans Must be Updated
Often in second marriages you and your spouse are older and may already have a will and trust. Those items need to be updated each time you remarry.
Blended families are common. There are special considerations that need to be considered in estate planning. You and your spouse may have children from prior relationships, expenses or income from child support or alimony, joint property with a former spouse, and retirement investments.
Updating your estate plan will prevent inheritance problems. Whether to combine estates from prior relationships or keep them separate will be one of the decisions you need to make. It is important to talk to an estate attorney before you combine any assets.
Common Second Marriage Inheritance Issues
In second marriages inheritance issues become more complicated. There is a high failure rate for second and third marriages. 50% of first marriages, 67% of second marriages, and 73% of third marriages end in divorce.
When you consider 3 out of every 4 divorced people will remarry, inheritance issues and proper estate planning are critical. If you die before your spouse, your spouse could remarry and leave everything to their own children. This would eliminate your first marriage children from receiving any inheritance. Special consideration must be given to each individual factor in inheritance planning.
The first decision is whether to combine estates or keep them separate. Assets made joint provides your new spouse with entitlement to that asset. Assets kept separate may be designated for children of your first marriage.
Income and property obtained during a marriage are considered community property. Income and property obtained prior to the marriage and never comingled remain your sole property.
If your assets have been comingled your spouse will inherit 100% interest in the house, bank accounts, stock accounts, etc. In most cases, the second spouse changes everything and leaves assets to their own children, nothing to the spouse’s children.
Long-Term Care Considerations
In many states spouses have a legal obligation to support each other. If one spouse needs long-term nursing home care the assets of the other may be used to pay bills. This could include personal income and draws from an IRA. In other states, the income and IRA of the spouse may not be affected.
You may want to seek legal advice before deciding to tie-the-knot. It may be financially better to become partners rather than getting married.
You must update beneficiaries on investments and life insurance. The beneficiary designations on these documents supersede anything you put in your will. If your life insurance still lists your ex-spouse as a beneficiary and your will lists your new spouse, the beneficiary designation holds and your ex-spouse will receive the payment.
At the same time, if all of your life insurance and investments have your second spouse listed as a beneficiary, they will inherit everything and your children from your first marriage receive nothing.
401(k), IRA and Financial Investments
The older you are when you remarry the more likely it is you and/or your new spouse will bring assets into the marriage. This may include retirement savings, life insurance, brokerage accounts, and real estate.
401(k) plan rules require the current spouse to be the beneficiary unless he or she legally agrees not to be designated. On all other investments, you may designate who you want to inherit the money. This is an excellent way of ensuring your children receive a financial inheritance from you.
Bank accounts or brokerage accounts held jointly with a child will go to that child upon your death. An IRA goes to the person named as a beneficiary on the account.
Family Heirlooms and Memorabilia
You may be in possession of family heirlooms and memorabilia that are important to your children but are not of any significance to your current spouse. Specifying how those items are distributed in your will or trust will guarantee they are distributed according to your wishes.
Houses Owned Prior to Marriage
If you owned a home prior to your second marriage and your spouse is going to move in, consider whether or not you want that home to eventually go to your children. If you add your spouse to the title, they will inherit the home upon your death and your children get nothing. The title of the home supersedes anything you put in your will.
One consideration is to keep the home in your name only but set up a trust that allows your spouse to reside in the home until their death. When your spouse dies the home will pass to your children.
Medical Power of Attorney
Should something happen to you, who do you want to be able to make medical decisions on your behalf, your children or your spouse? Make sure both your spouse and adult children know your intentions and the appropriate documents have been completed.
The Purpose of Estate Planning
Estate planning legally ensures your assets end up where you wanted them to. If you fail to plan, the children from your first marriage could be unintentionally disinherited.
If you die intestate (without a will) the courts will decide where your assets go. If there is no will or trust and you are married, all your assets will pass to your spouse.
Consider a Prenuptial Agreement
You may want to meet with an attorney prior to your second marriage to discuss having a prenuptial agreement prepared. More than 40% of weddings have a bride or groom that was previously married. This will provide you and your spouse with full financial disclosure of the assets and debts of the other.
The agreement lays out in a legal contract what happens to your assets in the event of divorce or the death of the other person. You may want to make sure your adult children have a copy of this agreement, as their inheritance may depend on it.
Make Sure Your Inheritance Goes Where You Want
The majority of children born to married couples are born during the first marriage. Many couples in a second marriage do not have common children, so there is no desire to preserve the family.
Make sure you speak with a legal professional about second marriage inheritance issues. Take this important step now.
The number of senior citizens in the United States is expected to jump from 45 million in 2010 to 86 million in 2050 thanks to advances in medicine and technology.
The growing number of elders means a growing number of uncomfortable conversations with parents and grandparents.
One of the topics that should be discussed is aging and long-term care. Do you have plans in place to help care for your loved ones?
This article serves to help you talk about the uncomfortable subjects with your elders.
Driving is universally associated with identity and responsibility. The conversation to try and limit or eliminate your parents’ driving privileges will be met with ardent protest.
Keep the concern on their health and safety. It’s natural for aging people to lose mobility, reflexes, and vision. Letting your mom or dad know they aren’t alone can help alleviate fears of losing the keys.
If you present a problem, be sure to include an answer. Outside of family giving rides, provide a list of elderly transportation services.
Your loved ones might not have a debilitating illness or condition, but the medication they take could impair their abilities required to operate a vehicle.
Finally, it is imperative to bring up their safety and the safety of those around them. Accidents and small collisions can cause serious damage to their bodies.
Talking about driving privileges is the first step to a larger conversation about long-term care.
Aging and Long-Term Care
Health and wellness can take a quick dive for a person in advanced age. Start the conversation with your parents about aging and long-term care.
Even before health gets too bad, aging and long-term care offer a wide array of helpful services to support daily living. Home health care, adult day care, and long-term care facilities are the major options.
There is a full complement of benefits to hiring home health care to provide services for your parents.
- Caregivers can provide one task or multiple tasks
- Care plans are customizable and individually created for patients
- The patient maintains a level of independent living
- Home health care can be flexible with scheduling
- Companionship to look after parents especially those with memory-loss conditions
Caregivers that come to your parents’ residence can be tasked with multiple assignments like cleaning, laundry, and cooking. They can also assist with bathing, transportation, and errands.
Some home health care companies have trained nurses to assist with bowel movements or other medical chores.
Adult Day Care
Adult day care provides a solution if your loved one is cared for by family and friends but cannot be watched during the day.
Like daycare for children, adult day care watches your parent and provides a suite of services.
- Give regular caregivers a break
- Hygiene such as bathing and personal grooming is provided
- Other seniors can interact socially
- The facility will have activities to keep people engaged
- Meals are provided
- Transportation to and from the facility
Adult day care may also offer ancillary services like support groups, counseling, and social workers.
Long-Term Care Facility
In some cases, the only option is to place your parent into a 24/7 care facility. A conversation with other family members is important before talking with your loved one.
Various reasons can lead to a nursing home, but be sure to know the benefits.
- The main attraction is 24/7 care
- Trained nurses are on staff
- Normally, there is a certain level of security and access control
- Activities and entertainment planned throughout the week
- Regular visiting hours
Nursing homes provide peace of mind for all family and friends. The social engagement aspect is a benefit that home-health care can’t always give.
A concern your parent or parents will have is the cost. If it’s not an obstacle for you, then weigh the options carefully. A senior may be too embarrassed to discuss their current financial status.
See if any of the options apply to your family:
- Some insurances do cover aging and long-term care services. Check your parents’ plan to see if they are protected.
- Look to purchase long-term care insurance before health problems arise.
- A local government may also subsidize care for seniors. It is generally limited to a few hours a week, but it may be a great way to test what you need.
- See if there is financial aid available to families that qualify
The financial obligation of choosing in-home caregivers is vastly cheaper than putting a parent in a full-time care facility. You may not have the option but to place a loved one in the more expensive nursing home.
Convey to your elders that a caregiver or facility will make their life easier. It will free up time for them to rest or pursue leisure activities.
It will be easier to convince someone to start small by having a caregiver come over a few times a month to help with a small task. As time goes on, they will see the joy and help caregivers can provide.
If you’re having discussions with one of your parents about long-term care, then you should be talking about plans for their passing.
Have they seen a lawyer to create a will? Do they want to be resuscitated if anything causes them to lose consciousness?
While your parents are still sound of mind, help them navigate the plans for their death. Help them understand what happens to their money, possessions, and property.
Show your parents a will legally binds their last wishes without causing confusion or frustration for their kin. They can keep their money from going to the IRS by setting it up to benefit family members.
Frame the conversation in a way to give them control and power of their belongings. This will help them accept certain limitations while still feeling a sense of responsibility and power over their life.
Have the Conversation
Talking about the declining health of a loved one is never easy. People want control of their lives.
You can help your parents keep their dignity and some of their independence by discussing the benefits of aging and long-term care.
If you need help navigating the financial obligations of long-term care, contact us and we will give you solutions.
Living Will document and court gavel
End of life estate planning can be a difficult thing to confront. But that doesn’t mean it’s not important.
Most Americans understand how helpful having a living trust is. In fact, 76% of Americans think it’s important to have one. Unfortunately, only 40% of those people actually do have a living trust.
And even fewer will spend time updating a living trust.
Your living trust is similar to a car.
It needs to be maintained regularly so that it can stay in good working order. Our lives, circumstances, and relationships change over time. And our wills should reflect these changes.
However, unlike getting your tires rotated or your oil changed, you can update your living trust in just a few minutes. And from the comfort of your own home.
Interested in learning more? Continue reading and we’ll walk you through everything you need to know about updating a living trust.
Reasons for Updating a Living Trust
You might think that if you’ve already got a living trust, you don’t have to worry about it ever again. On the contrary, having an outdated living trust might not end up being very effective when the time comes to put it to use.
Let’s go over some of the most important reasons why you should update your living trust.
Changes in Your Family or Relationships
Have the relationships that you have with the people who are named in your living trust changed over the years? Have you become divorced or estranged with former loved ones?
You might want to think twice before leaving your precious valuables to people who you don’t even like anymore.
And, more importantly, you might’ve changed over the years too. You might want to donate your valuables to a charity or other group after your death.
On a brighter note, there might be many new and wonderful people in your life that you’d like to give to. Perhaps you got married, had a child, or have become closer to grandchildren, nieces, nephews, or made new friends.
No matter who’s been added to your life, you’d want to update your living trust if you’d like those people to get a piece of the action.
Also, if you’ve had a child in the intervening years between now and the writing of your living trust, it’s highly recommended that you review your living trust. You’ll want to name a guardian for your child should something happen to you or your spouse.
And if your kids have reached the age of majority in your state, you might want to consider giving them responsibility as your executors.
Comb through your list of representatives, trustees, heirs, executors, and guardians. Think about if the circumstances of your life and relationships have changed in anyways.
For example, are these people that you listed still able to fill the roles that you’ve assigned for them? Are they even still alive?
It’s reasons like these that you need to be updating your living trust once a year.
Changes in Assets
Another major reason for why you should update your living trust is if you’ve experienced a major decrease or increase in value in your estate.
Maybe you sold or bought a large asset or started or closed a business. Also, you might have new pension plans or insurance policies that affect the naming of beneficiaries in your living trust.
Changes in Location
If you’ve moved to a state that is different than where you originally wrote your living trust, you should speak with a lawyer in your new area. Determine with the attorney if the will is still valid.
The laws regarding living trusts vary by state. Because of this, you should never assume that an old will can meet the requirements that are demanded by your new state.
Changes in Tax Laws
Federal, as well as state tax laws, are changing constantly. You are going to want to stay informed of any changes in your state that might have an effect on your living trust and estate plan. By staying informed and consulting with a lawyer who specializes in estate planning and living trust, you can stay on top of all the different law changes.
What to Look for When Updating a Living Trust
There are several important aspects of your living trust that you are going to want to make sure are always up to date. These factors include:
- Divorce and Marriage
- Children have reached the age of majority
- You’d like to give to an organization like a charity
- You started a new business
- You’re approaching or reached the age where you’re required to start taking distributions from your 401(k), IRA, or other plans
- It’s been at least three years since you last reviewed your living trust
- Birth of a child or grandchild
- Death of a person who’s listed in your living trust
- A change in relationship with people in your living trust
- A change in the circumstances of your trustees, guardians, executor, etc.
- A large decrease or increase in your estate’s value
- A change in your tax laws
- If you’ve moved to a new state
Although you should look over everything in your living trust, these are some of the most important points to consider.
The Importance of Updating Your Living Trust Every Year
Updating your living trust once a year is a simple task that is nonetheless extremely helpful. Although it can sometimes be seen as uncomfortable or morbid, having and maintaining your living trust may save your family from a lot of confusion and arguments in the long run.
Need help with your estate planning? Contact us today to get started!
Social Security is a truly wonderful program that distributes nearly 64 million benefit checks to more than 15 million retired workers. These monthly payments also benefit the survivors of deceased workers and those on long-term disability. This is a lifeline many cannot afford to lose. However, many might not realize that your Social Security benefit might be taxable.
This article by The Motley Fool has a great article that delves into the history behind the taxation of social security benefits as well as offers more information on whether or not you may be taxed. Social Security taxation, a controversial addition to the Amendments of 1983, was originally aimed to only impact upper-income households in order to avoid cutting benefits for retired workers.
The odds of future retirees’ benefits being taxed is currently at about a 50/50 chance. When the taxation of benefits was put into place, people or couples whose modified adjusted gross income exceeded $25,000 and $32,000 were subject to the tax. In 1993, the second tier of taxation was created, aimed at those whose MAGI were more than $34,000 and $44,000. However, these thresholds have never been adjusted for inflation, and therefore more and more seniors are being subjected to the taxes of Social Security benefits.
This taxation, while unpopular, is a large chunk of what is helping keep Social Security benefits afloat. Social Security is facing an imminent funds shortfall, and the Board of Trustees has anticipated the program’s $2.9 trillion in asset reserves will be depleted completely by 2035.
Read more about the taxation of Social Security benefits here. With Social Security’s wellbeing in flux, it is more important than ever to have a plan for your retirement and later years. Contact us at Rhodes Law Firm today to get started on your future.
Taking care of loved one’s assets and debts while also grieving their passing is not an easy task. When it is time for you to choose an executor for your estate, there are a few things that would be beneficial to take into consideration. This article by the Washington Post discusses factors that should be contemplated before naming your executor.
First, success is not everything. You may think that your child who works as a successful accountant may be the obvious choice to take care of your estate. However, oftentimes people who are successful with their line of work struggle to tie that discipline over into their personal lives. Taking care of a parent’s estate requires patience above all, as it could take years to handle.
Second, you don’t have to automatically choose your firstborn. Just because this child is the eldest does not mean he or she can inherently handle all that comes with being the executor of your estate. Also, while one child may be great at dealing with finances, it may be best to choose one that will prioritize keeping the peace between family members during this delicate time. A child who is a mediator is often the wisest choice.
Carefully planning your estate is the best way to minimize any emotional and/or financial chaos in the wake of your death and leave your loved ones in a much better position to handle these matters.
Rhodes Law Firm can help walk you through the entire estate planning process, including choosing executors. We know this is a tough topic for most, but we are here to help you make the best decisions for your family and loved ones. Let us help you today! Give us a call or stop by our office to speak with our experienced team.