Tag Archives: estate protection

Why You Should Create an Estate Plan Today

Estate planning is not only for the elderly. Even if you don’t think you have any significant assets to protect, it could be beneficial to consult an estate planning attorney and discuss your options. If you know anyone who has had to deal with the loss of a loved one who didn’t have an estate plan they will probably tell you, in retrospect, that they wish they had made specific arrangements. There’s a reason why people say “Always be prepared!” Here are some major reasons why you should consider creating an estate plan today:

Avoid Probate

The main reason that many people create an estate plan is to avoid probate. Probate is the process of the administration and distribution of the estate of a deceased person. This legal process is typically carried out according to the person’s legal will. However, if the person does not draft a will the probate court will administer the person’s estate according to state statute. As a result of horror stories in the media of families dealing with probate, most people often want to avoid probate at all costs. Creating an estate plan is an effective solution.

Reduce EstateEstate Planning Taxes

Another good reason to consult an estate planning attorney about creating a plan is to reduce estate taxes and/or state inheritance taxes. Depending upon the individual’s situation, the payment of these taxes can account for a significant loss of an estate. Through simple planning you can make estate or inheritance tax much less burdensome or nonexistent.

Avoid Stress

Many times when people have personal experience, or witness someone, go through the process of dealing with the administration of a loved one’s estate they’re more likely to meet with an estate planning lawyer. Not having a plan in case you become mentally incapacitated or pass away can be overwhelmingly stressful for loved ones to deal with. Creating an estate plan is a proactive way to avoid family feuds and costly court proceedings.

Protect Beneficiaries

One of the main reasons for creating an estate plan is to protect beneficiaries. Beneficiaries could be either minors or adults. When creating an estate plan with minor beneficiaries in mind you should appoint a guardian and trustee to oversee the minor’s finances until they are of age (either 18 or 21 years old, depending on the state in which they live). If the beneficiary is already an adult but has trouble managing money you should create an estate plan which will protect the beneficiary from their own bad decisions.

It’s always good to plan ahead – contact elder law attorney Adam J. Tobin today to discuss the best steps toward creating your own estate plan.

10 Incentives to Write Your Estate Plan Today

Though many people don’t feel as though estate plans are for them, they may not realize how beneficial having an estate plan is. Elderlawanswers.com makes a compelling case for why creating an estate plan is important. Take a look at the following list to understand the value of estate planning, and get started on one with an estate planning lawyer today!

1. Loss of capacity. There is a chance that you could one day become too incompetent to handle your own affairs. An estate plan can designate who exactly you want to take over control via power of attorney.

2. Minors. If you happen to pass while you still have children who are minors, do you know who will raise them? Again, an estate plan can determine your own guardian, and you can avoid a potential court decision.

3. No Will.
How will your loved ones know what assets will be inherited and to whom? Each state has laws of intestacy, which decides the distribution of assets passing on to your heirs in the absence of a will. Creating an estate plan with a Massachusetts estate planning attorney will designate your assets to whom you want and how you want them.
4. Blended families. Multiple-marriage families can have children that may not be treated as you would like if you pass. Estate plans can select what goes to your current husband or wife, and to the children of prior marriage(s).

5. Special living_trust_and_estate_planNeeds Children. If you have a child with special needs, not having an estate plan could risk their disqualification from Medicaid or SSI benefits in the event of your passing. In this instance, they would have to use their inheritance to pay for the care they receive. Estate plans, with MA elder attorney supervision,  allow for a Supplemental Needs Trust, which will allow special needs children to continue to remain eligible for government benefits, while simultaneously using your trust assets to pay for other expenses that are not covered.

6. Keeping assets within the family. Without an estate plan, the spouse of your child may end up with your money in the event your child passes away. Additionally, if your child gets a divorce, half of your own assets after your passing could be given to the ex-spouse. Elder lawyers specialize in creating estate plans where you can prevent both scenarios in your plan, and assure that your assets remain within the family, and potentially pass on to your grandchildren.

7. Financial security. In the event that you pass on, will your surviving children or spouse be able to financially survive? The current standard by which your family lives may be unable to be maintained without a plan specifying income replacement through life insurance. This can be prevented by an estate plan!

8. Retirement accounts. Your IRA or other retirement account beneficiary in the event of your death may not reflect your wishes, and large tax consequences for your heirs can result. Make a plan with a Massachusetts estate planning attorney and select your ideal retirement account beneficiary.

9. Business ownership.
If you are a business owner and decline to name a successor with an estate plan, you can risk your family loosing control of your business. You can name who will resume control of the business after you pass with your plan.

10. Avoiding probate. An estate plan eliminates the delays, excess fees, and publicized asset records. You can structure your estate plan with the assistance of an estate planning attorney to avoid probate entirely.

Convinced yet? Contact Adam Tobin and get started on creating an estate plan today.

Source article here.

Possible Social Security Benefit Changes

Social Security seems to be moving toward its day of reckoning. According to a recent article by Philip Moeller, efforts to put Social Security on a sound long-term footing included higher tax rates for payments into the system, raising retirement ages, and treating some Social Security payments as taxable income.

U.S. Senator Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, asked the U.S. Government Accountability Office (GAO) to review benefit options affecting lower-income beneficiaries, who traditionally are the core focus of the program. This group, and particularly older widows, depends almost exclusively on Social Security. The GAO report reviewed eight areas where, it said, benefit changes were most commonly proposed. The report looked at how effectively each proposal would help lower-income beneficiaries, whether it would have much of a financial impact on Social Security, and on how difficult it would be to administer. Here are summary excerpts of some of their findings, which will be part of a larger Social Security report due soon from the Kohl committee.
Guaranteeing a Minimum Benefit. Guaranteeing a minimum benefit by increasing Social Security retirement benefits for those who have worked in low-wage jobs throughout their careers addresses concerns about benefit adequacy. One option would provide a minimum benefit equal to 120 percent of the poverty line for a minimum wage earner who had worked for 30 years. Another option would provide a minimum benefit equal to 100 percent of the poverty line for a 30-year worker and 111 percent of the poverty line for a 40-year worker. Social Security Administration officials said that, depending on how this option is designed, it could work well, but it is difficult to target lifetime low earners effectively.

Reducing the Marriage Duration Required for Spousal Benefits. Reducing the marriage duration required for spousal benefits is an option that targets divorced spouses. However, experts also said they do not expect this option to effectively target economically vulnerable groups. This option would not benefit women who were never married but could benefit higher-income women who are not economically vulnerable.dependent children or elderly relatives. Time spent out of covered employment as a caregiver may reduce benefits for workers, and others may not work enough to earn the required 40 credits to be eligible for benefits. One caregiver credit option would allow a specified amount of care giving time, such as three or four years, to count as covered

Providing Caregiver Credits.
Providing caregiver credits increases benefits for those who spend time out of the workforce to care for employment, and assign a wage to that time. Another design excludes a limited number of care giving years from the benefit calculation so that instead of averaging earnings over 35 years, earnings are averaged over fewer years. A third design supplements caregivers’ retired worker benefits directly, regardless of whether they took time out of the workforce for care giving. For example, an income-tested supplement could be given to increase retired worker benefits by 75 percent for those who have one child and 80 percent for those with two or more children. Both parents of a child would be eligible for this supplement, as long as the total household income did not exceed 125 percent of the federal poverty line. Retirement security experts said this option recognizes the societal value of care giving, but experts also said that, for various reasons, it may not reach its target population. For example, low-income people are less likely to be able to take time off from work. Therefore, people who have relatively higher incomes may benefit more from the creation of caregiver credits. Retirement security experts and SSA officials told us that caregiver credits would be complex to administer. A key issue is how to verify that care was provided to a qualifying person.

Read the rest of the changes here.

Have a question about social security, taxes, or other information for you or a loved one? Make sure to contact Adam Tobin to get your questions answered!

The Hot-Button Issue for 2010: Estate Tax

Elder Law Attorney can help with your inheritance tax property.Currently, the estate tax in the U.S. is in a unique position. The code was written so that every year until 2009 the tax would lessen, until 2010, where it would disappear completely. However, next year, 2011, the estate tax will come back with a vengeance to a much higher level.

For a more in-depth breakdown, in 2011, the exclusion will only be $1 million and the tax rate will rise from 45% to 55%. Under the Estate Tax Law for 2009 which excluded the first $3.5 million and with a tax rate of 45% on anything above that, only about 3% of all estates paid any Estate Tax at all. And in 2010, there is no longer a “stepped up basis” on inherited assets: there is now a “carry over” basis. If you inherit anything at all before or after 2010, you receive a stepped up basis on the value of the asset so you don’t pay any Capital Gains Taxes. Read more here.
So, if someone has an elderly parent with a large estate and they die, usually the estate is taxed up to 50%. If this happens in 2010, that tax is zero. This of course creates some theoretical chaos, as those aware of this tax have an unpalatable inheritance incentive.

What does this loophole mean to you and what you could inherit over the next few years? Make an appointment Adam J. Tobin to better understand this tax code and figure out your next step. For a free consultation email Adam at atobin@adamtobinlaw.com or call 978-725-9083.

Estate Planning: What You Can Do Now

estate-planningElder lawyers are a great resource for planning your estate. An increasing amount of people are seeking advice on estate planning, and there is currently an intense discussion in Congress about an estate tax law. In her latest book, “Estate Planning Smarts”, Deborah L. Jacobs outlines the essential pieces you need to know when planning your estate.
A good estate plan should accomplish these goals:

•    Caring for yourself by authorizing people to handle your affairs if you no longer can because of illness or disability
•    Specifying who gets what after you pass away
•    Providing for children who are minors or who have special needs.
Trusts play critical roles in estate planning, and can be used to hold money for minors, forestall spendthrift family members, protect assets from former spouses or creditors, or even make provisions to care for pets that survive you.
(Source: www.estateplanningsmarts.com)
See an elder lawyer like Adam J. Tobin, or one nearest you to get your estate plan in motion!

How can a Living Trust protect me?

Living Trusts are one of the most common estate planning tools in use today. This legal arrangement, usually drafted by an estate attorney, creates a separate entity called a Living Trust. A Living Trust is called that simply because it is created while you’re alive (as opposed to a “testamentary” trust created after death).

Basically an after-death trust (Testamentary Trust) will spring into existence, usually by virtue of a will, after a person’s death. The assets to fund this type of trust must usually go through the probate process. In some cases this type of trust may need to be court-supervised even after the estate is closed.

A living trust, on the other hand, is a trust made while the person establishing the trust is still alive.

  • A living trust also is useful for individuals subject to estate taxes.
  • Living Trusts avoid probate, since they are completely private. Because a trust is recognized as a separate legal entity, distributions can be made by a Trustee without any involvement from the courts. The courts maintain no control over the Trust’s assets, and do not tie up the assets in a lengthy (and costly) probate process. The Trustee simply distributes assets to named heirs, but only if those assets have actually been placed inside the Trust.
  • No worry about losing control of assets. Carefully constructed Living Trusts protect your assets.

Every family’s situation is different. Feel free to contact me if you need further guidance.