Protect assets, retain access with a Spousal Lifetime Access Trust
A Spousal Lifetime Access Trust (SLAT) is an estate planning tool that can be used to lock in the current estate tax exemption while still allowing a certain degree of access to trust assets. SLAT basics A SLAT is an irrevocable trust created by one spouse for the benefit of the other. The gift removes assets from your estate but allows your spouse to access the trust. It provides you with indirect access to the funds while protecting assets from both creditors and estate taxes. Here are the key benefits of creating a SLAT: Avoiding probate: Assets in a SLAT…..
Continue ReadingPreventing a will contest
When you write a will, you have control over how your assets will be distributed after your death. However, if someone in your family disputes your will, an anonymous probate court judge could end up with the final say over who gets your property. Emotions run high when someone dies. If family members aren’t content with what they’ve received, or don’t believe your wishes are being interpreted properly, they may contest your will. Will contests can drag out for years, preventing your heirs from getting the assets you wanted them to receive. As part of creating an estate plan, look…..
Continue ReadingEstate planning critical for non-traditional couples
Generally speaking, estate planning laws were designed for the traditional nuclear family, a married couple with kids. But according to the 2010 U.S. Census, such families are less than 50 percent of the total. Non-traditional families, including single parents, blended families and unwed partners, need to pay particular attention to their estate plans to avoid unwanted consequences. If you die without a will, your assets will be distributed according to your state’s default laws. If you’re not married, these laws indicate that your assets are passed on to your next of kin, such as children, parents or siblings. Consider wills,…..
Continue ReadingOpportunity Zones offer tax breaks
For a limited time, investors can help reinvigorate distressed communities while deferring capital gains on profits earned elsewhere. The 2017 Tax Cuts and Jobs Act created the Qualified Opportunity Zone program in order to offer tax incentives for investment in economically blighted communities. When you invest in an Opportunity Zone, you can defer and possibly reduce taxes on recognized capital gains. If you will be subject to a large tax bill as a result of capital gains in the near future, an Opportunity Zone investment may be worth exploring. An investment that defers capital gains Opportunity Funds are investment vehicles that…..
Continue ReadingFinding the best retirement calculators
Figuring out how much to save for retirement and when you can safely stop working can be difficult. A growing number of online retirement calculators, many of them free, are available to help. Although these calculators can yield vastly different results, they can be useful tools. Based on information about you and your finances, calculators try to predict how much you need to save to achieve your retirement goals. Some calculators are web-based, and others require you to download a program or an app. Retirement calculators can be useful, but you need to keep in mind that results can diverge significantly and they are not always accurate. It may be a…..
Continue ReadingWhen can you delay taking Medicare?
Although you’re eligible for Medicare at 65, there are circumstances in which you might not want to apply, particularly if you’re working for a larger employer or contributing to a health savings account (HSA). However, you may face penalties if you don’t sign up at the right time, so it’s important to know when you can delay signing up without a penalty. You can first sign up for Medicare during your Initial Enrollment Period, which is the seven-month period that includes the three months before the month you become eligible (usually age 65), the month you are eligible and the following three months. If you don’t sign up for Medicare Part…..
Continue ReadingIt’s now harder for veterans to qualify for long-term care benefits
The Department of Veterans Affairs (VA) has put in place new rules that make it more difficult to qualify for long-term care benefits. The rules, similar to those already in force for Medicaid, establish an asset limit, a look-back period, and asset transfer penalties for claimants applying for pension benefits that require a showing of financial need. The main VA benefit for those needing long-term care is Aid and Attendance, which offers money to low-income veterans (or their spouses) who are in nursing homes or need help at home with everyday tasks. Currently, to be eligible for Aid and Attendance, a veteran (or surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified,…..
Continue ReadingThe new tax law means it’s now time to review your estate plan
The tax law signed in 2017 doubled the federal estate tax exemption, meaning the vast majority of estates won’t have to pay federal estate tax. But that doesn’t mean you should ignore its impact on your estate plan. The law doubled the federal estate tax exemption to $11.18 million for individuals and $22.36 million for couples. (These figures are indexed for inflation, so in 2019 they are $11.4 million and $22.8 million, respectively.) The tax rate for the few estates still subject to taxation is 40 percent. Although most estates won’t pay any federal estate tax, you should review your estate…..
Continue ReadingLong-term care insurance policyholder wins breach of contract suit over increased premiums
A long-term care policyholder has successfully sued her insurance company for breach of contract after the company raised her premiums. At age 56, Margery Newman bought a long-term care insurance policy from Metropolitan Life Insurance Company. She chose an option called “Reduced-Pay at 65” in which she paid higher premiums until she reached age 65, after which the premium would drop to half the original amount. The long-term care insurance contract set out the terms of the reduced-pay option. It also stated that the company could increase premiums on policyholders in the same “class.” When Newman was 67 years old, the…..
Continue ReadingBe on the lookout for new Medicare cards (and new related scams)
The federal government is issuing new Medicare cards to all Medicare beneficiaries. To prevent fraud and fight identity theft, the new cards will no longer have beneficiaries’ Social Security numbers on them. The Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicare program, is replacing each beneficiary’s Social Security number with a unique identification number, called a Medicare Beneficiary Identifier (MBI). Each MBI will consist of a combination of 11 randomly generated numbers and upper-case letters. The characters are “non-intelligent,” which means they don’t have any hidden or special meaning. An MBI is confidential like a…..
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