Before we get to the increase in the estate tax exclusion, we should explain how taxes apply to inheritances in a broad sense. Many people assume that you are required to report an inheritance when you file your regular income taxes, but this is not the case. Inheritance is not taxable income for a logical reason. Assets that comprise estates are left over after the decedents paid taxes throughout their lifetimes. For example, if a person saved a certain amount of money every pay period for … [Read more...]
A Look at Adjusted 2020 Medicaid Figures
As elder law attorneys, we place a significant focus on the process of Medicaid planning. The reason why this jointly administered federal/state government health insurance program is relevant may come as a surprise to you. If you work and pay taxes for at least 10 years, you will qualify for Medicare when you reach the age of 65 under currently existing laws. Even if you have not met this requirement, if you are married and your spouse has done so, you would become eligible based on their … [Read more...]
The SECURE Act Has Made Significant Changes to IRA Rules
At the end of 2019, Congress passed the SECURE Act making significant changes to the distribution rules for inherited IRAs; these apply to individuals who die in 2020 or later. Most inherited IRAs must be now distributed within ten years of the death of the IRA owner, though there are still exceptions for surviving spouses, minor children, and disabled beneficiaries. This blog post will talk about some of these SECURE Act changes. We also have client law updates in Matthews on January 23 and … [Read more...]
Asset Transfers: When Simplicity Gets Complicated
You may hear about different ways that assets can be transferred after you pass away. If you do not know much about the intricacies of estate planning, they can sound like great ideas. That being said, you should really know the facts so that you can make truly informed decisions. Some of the so-called “simple solutions” are not that simple in the long run. Joint Tenancy With Right of Survivorship If you own a home, you can add a co-owner to the title or deed of the property. This … [Read more...]
What Is the Most Essential Estate Planning Document?
We often get questions about the most important estate planning document. Because so many people have made no preparations at all, they want to know where to begin. They figure that they should start with the piece that is absolutely essential and go from there. In a way, this makes sense, but there is no single answer that is right for everyone because primary estate planning objectives vary from person to person. What is most important for one individual may not be to the next … [Read more...]
Trusts Are Often Misunderstood
A lot of people are under the impression that a last will is the preferred estate planning document. They shy away from trusts for a couple of different unfounded reasons. One of them is the idea that a will is the right choice if you are not extremely wealthy. The second one is a fear of permanently losing control of assets that are conveyed into a trust. Let’s clear up these misconceptions. Essentially, there are two different classes of trusts: revocable trusts and irrevocable trusts. … [Read more...]
Look-Back Added to Veterans Pension Rules
As elder law attorneys, we educate people about the benefits that may be available to them. With this in mind, there is one way that veterans can get a boost during their senior years in addition to the retirement pension that longtime veterans receive after at least 20 years of service. Before we look at the benefit in question, we should briefly touch upon the way that the retirement pension can pave the way toward a comfortable period of rest and relaxation. Clearly, if you join up … [Read more...]
Effective Planning Can Safeguard Your Legacy
If you fully understand the value of estate planning, you are probably gratified by the thought that you will be able to leave behind some resources for your loved ones to draw from after you are gone. Many people feel this way, but you should be aware of a certain unpleasant reality so you can take the right steps to preserve your legacy. Latter Life Expenses When you reach the age of 65, you will qualify for Medicare under existing laws. This government health insurance program for senior … [Read more...]
Be Aware of the Medicaid Look-Back Period
Medicaid is a jointly administered federal/state government program that provides health insurance for people with very limited financial resources. It was not intended to serve this function, but it has become the de facto source of long-term care insurance in this country. Why would this be the case, when we already have a health insurance program in place that is intended for senior citizens in the form of Medicare? This is a good question. Many people would say that it makes no sense, … [Read more...]
Estate Administration 101
Estate planning is sometimes viewed as an exercise in document creation. You simply express your wishes in writing and that’s the end of the story. It is certainly important to create a will or a trust to serve as the centerpiece of your estate plan with regard to leaving behind instructions. At the same time, you should be well aware of the estate administration tasks that must be completed after you are gone to bring your wishes to fruition. The Role of the Executor If you use a will as … [Read more...]
