Putnam County Estate Planning & Medicaid

Rich or Regular – Everyone Needs to Make Time for Estate Planning

Whether you are a media mogul or a hardworking family with a single bank account, making time to ensure that your estate planning is done is important to protecting your family.
The only way to make sure that your wishes are carried out after your death is to have the proper estate planning documents prepared in advance, according to a post from WMUR.com, "Money Matters: Common estate planning mistakes." Some people make the mistake of thinking that estate planning will be extremely complicated, while others think it will be far simpler than it ever could be. While every situation is different, there are a number of mistakes that are common at every income and asset level.
Failing to plan. Many of us don't have a will—but like it or not you do have an estate plan. The plan is called the law of your state and the probate judge. If you die without a will, your estate will be divided according to intestacy laws. In that case, there's no guarantee this will be what you wanted. A one-page will or a more complex plan with other strategies like a trust can help reduce estate taxes, save on administrative costs, and put you in the driver's seat when deciding how your assets are to be distributed to your heirs, charities, or to help a family member with special needs. Another important point: in many states a will is the only way that you can name a guardian for your minor children. So, if you move from one state to another, be sure to check local laws.
Failing to maximize your marital estate exemption. The new portability law provisions ease some of the estate tax planning burden by allowing each individual a $5.43 million federal estate tax exemption in 2015. If one spouse dies without using up his or her $5.43 million, the unused portion may be transferred to the other spouse for use at the survivor's death (hence the term "portable."). You should also remember to investigate any state estate taxes when reviewing your strategy and make certain to discuss how portability is elected with your attorney.
Naming a relative as executor or trustee. Your executor is the individual or company responsible for administering your estate after you die. It's a big responsibility, so this person needs to take the job seriously. A loved one may be too emotional to focus on this task, and there can be conflicts if the executor is also a beneficiary. You might consider using a professional along with the family member. This can save you both time and money. Talk to your estate planning attorney.
Relying on advice from family or friends. Your brother's kid may be a first year law student with all kinds of enthusiasm, but you need to work with an experienced estate planning attorney.
Regardless of the size of your estate, estate planning is something that every responsible adult needs to do for their loved ones. Certain documents need to be prepared, both to give your heirs peace of mind and to carry out your wishes after you are gone. It takes planning, which requires the help of an estate planning attorney. As your circumstances change over time, you will want to review these documents to ensure that they accurately reflect your wishes as you go through the many stages of life.
Reference: WMUR.com (December 10, 2015) "Money Matters: Common estate planning mistakes"

Basic Math Can Be Surprisingly Effective in Growing Wealth

Yes, advanced mathematics is necessary if you are a physicist. But for the rest of us, basic math and financial discipline is the most important part of accumulating wealth at any stage of life.
Save more and spend less and you will, over the long and short term, have more money. Simple math.
But a recent Forbes article, "The Most Potent 401(k) Booster," says that if you have the self-discipline and the ability to plan, you can shrink your debts and add to your emergency, college, or retirement funds.
Saving is essential. A recent Wells Fargo survey says that 71% of those over 40 who are consistent savers believe they will have enough for retirement. The more you save, the more confident you will become in your ability to live the life you want.
Start saving when you hit the workforce. But if you're in your 50s, you can start to save more aggressively. Contribute the maximum amount allowed to the 401(k) plan—$18,000 in pre-tax dollars in 2015 and make catch-up contributions to help make up some ground. You can also save an additional $6,000 if you're over 50 as a "catch-up" contribution and deduct these amounts from your federal income tax (unless they are made to a Roth IRA or Roth 401(k), which tax contributions but not withdrawals).
If you aren't saving on your own or through a 401(k), set up an automatic savings plan that contributes money to your 401(k) or IRA. Most employers have this. Then look at your savings rate—this number makes a big difference in how much you can save.
By increasing your contribution, you can boost your nest egg dramatically. For example, let's say you're 30 and you make $50,000 a year. If you receive an annual raise of 2%, and your employer matches half of your 3% contribution, after 35 years, you'd have just over $400,000 at 6% annual rate of return. That's with a starting balance of only $10,000.
But what if you double your contribution rate to 6% and all other factors remain the same? You'll have more than $730,000 with a modest rate of return and low starting balance.
This works only if you save more and take your employer's match. Why not? It's free money. If you set it up on an automatic plan, you'll save even more because when you get a raise, your contribution amount will also increase.
It's simple, straightforward and it works. Every time.
Reference: Forbes (December 7, 2015) "The Most Potent 401(k) Booster"

Don't Make Choosing a Trustee a Popularity Contest

Incorporating trusts in your estate planning provides more options for you and your heirs. But the same characteristics that you seek in a friendship are not the same things you look for when picking a trustee.
Trusts offer many advantages in estate planning. Privacy, avoiding probate, more control over personal finances, the ability to more closely monitor investments and tax planning are a few of the reasons to incorporate trusts into your estate plan, according to a recent article in Wilmington Business, "Selecting the Right Trustee."
Selecting the right trustee to execute your plans is just about the most critical decisions you can make—maybe even as important as the terms of the trust itself. Think about these qualifications when selecting your trustee:
• Administrative Skills and Knowledge. Your trustee must perform a lot of different tasks, like safeguarding assets, collections, reinvestment and distribution of income, document interpretation, bill paying, and many others.
• Investment Expertise. He or she has to put together an investment program that satisfies the requirements of all the trust beneficiaries. In today's changing and volatile investment environment, this is a big responsibility.
• Tax and Accounting Skills. A trustee is required by law to maintain detailed and accurate records, as well as to submit reports to the trust beneficiaries, the probate court, and the IRS. In addition, he or she has to assist with decisions that will have the most beneficial tax results for the trust and beneficiaries.
• People Skills. A trustee must be able to cultivate a strong relationship with both the creator of the trust and the beneficiaries to serve as a trustworthy financial adviser. Communication among all parties is important so that the stated trust purpose and needs of the beneficiaries are met.
• Integrity. The most important qualification for a trustee is to abide by his or her fiduciary duty and keep high business standards. A trustee is expected to be loyal and treat each beneficiary fairly and impartially.
There is a natural tendency to ask a close friend or relative first, but selecting a trustee needs to be a more objective decision. Does the person have the highest possible level of integrity and a strong understanding of financial matters? And do they have the time to carry out the necessary tasks? Your estate planning attorney can help you evaluate your choices and make the best decision for you and your family.
Reference: Wilmington Business (December 15, 2015) "Selecting the Right Trustee"

If A Loved One Has Dementia, Don't Wait Until It's Too Late

Once a diagnosis of dementia has been made, documents and a plan need to be put into place. Waiting until the person is not legally capable of making decisions will lead to a more complex, expensive and emotionally exhausting series of problems.
Individuals who are diagnosed with dementia need a trusted family member or friend to make a commitment to help them make important financial and medical decisions when they no longer can do these tasks. According to an article in Money, "5 Essential Documents for Protecting a Loved One with Dementia," the time to make this assignment is when the person is still mentally competent and has the legal capacity to make sound decisions.
If you delay with the paperwork, your family member's dementia may progress to the point where he or she cannot legally turn over power. At that point, your only option is to petition for guardianship and ask a judge to declare the person incapacitated. That can take about two months and may be expensive. It can get even worse if your loved one—or another family member—contests the application.
Laws vary by state, and mistakes can be costly. You should draft these documents with the help of an experienced elder care attorney. Here are the key documents that are recommended:
Durable Power of Attorney. This gives you the authority to make financial decisions for your loved one, like writing checks to pay his or her bills, handling tax returns, and selling a home. A "durable" power remains in place if the person for whom you are making decisions becomes incapacitated and can't make decisions for himself or herself, as opposed to a regular power of attorney, which terminates if the person who issued it becomes incapacitated. Avoid some headaches and visit the institution with the family member granting you power of attorney to complete any proprietary forms in advance. If your loved one spends a significant amount of time in another state, you should also have a power of attorney drafted by your estate planning attorney according to that state's laws.
Health Care Proxy. This is really a power of attorney for medical decisions, allowing you to make choices about treatments, doctors, and other health-related matters.
Living Will. This is also called an advance directive for health care. It lets your loved one specify the medical treatment that he or she wants—or doesn't want—near the end of life.
Updated Will. A will gives instructions as to what happens to any of your assets after you pass away. Your will needs to be reviewed periodically to reflect changes in your life.
Living Trust. A living trust may be a good solution if the person with dementia has significant non-retirement assets, i.e., real estate and investments. The benefit of the living trust is that it may allow the estate to avoid probate when the person dies and assets are to be distributed. It can also make it easier for the trustee to manage the person's assets. However, this is not a do-it-yourself project. Meet with an experienced estate planning attorney to find out if this kind of trust is appropriate for your situation.
Reference: Money (December 11, 2015) "5 Essential Documents for Protecting a Loved One with Dementia"