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Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM

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The Top Ten Mistakes in Estate Planning for 2012

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Jan 24, 2012 2:42:00 PM

We enter 2012 with a roller coaster economy, elections, and changes in tax law as well as, medical and nursing home costs going skyward. All these changes together with the Baby Boomers retiring in record numbers and Alzheimer's disease at almost epidemic proportions, updating and maintaining your estate and asset protection plan is an absolute necessity.

In order to help families manage these changes and uncertainties, the Estate Planning and Asset Protection Law Center of Dennis Sullivan & Associates has provided the top 10 mistakes to avoid in estate and asset protection planning for 2012. For more information on how best to protect your life savings and eliminate these and other mistakes, attend one of our Trust, Estate & Asset Protection workshops by calling 800-964-4295 (24/7) or by registering online.

Mistake No. 1: Failing to Update and Maintain Your Estate & Asset Protection Plan

Statistics show that 86% of all trusts don't work often because the trusts were not maintained and updated to reflect current circumstances. Planning is an ongoing process because of the changes in our lives and the law. An estate plan should be reviewed on a regular basis to make sure it is protecting you and your family. That is why we created the 19-Point Trust, Estate and Asset Protection Review to help you discover where problems may exist in your planning and the opportunities you have to fix the problems before it’s too late. For more information on how you can review your own planning, refer to our 19-Point Trust, Estate & Asset Protection Guide, which is available on our website at www.DSullivan.com.

We also offer existing clients a Lifetime Protection Program to make sure their planning stays on track for the years ahead.

Mistake No. 2: Not Planning to Avoid Probate

"I have a Will...I'm all set"...

A will alone does not avoid the probate process; actually, it guarantees it. In Massachusetts, the probate process takes a minimum of 1 year; it is also public, so family and financial matters become public record. Probate can be avoided by executing and funding a trust. Trusts are extremely flexible estate planning documents that should be considered as part of your estate plan.  Trusts can also provide disability planning where a will cannot.

Mistake No. 3: Not Coordinating Your Assets to Your Trust(s)

Not coordinating investments and other assets to a trust means that probate will not be avoided. Probate is the process by which assets of a deceased person are passed to those who will inherit them. The probate public process can take up to one year and can be very expensive. By properly coordinating your assets to your trust, you can avoid probate and save your family time and money.  For many who have created a trust, they miss the critical step of properly coordinating their home and investments to their trust.

Mistake No. 4: Not Reviewing Your IRAs and Investments To Make Sure They Are Safe and Productive for You Based on Your Age and Objectives

Whether you are growing your savings to fund your retirement or are in retirement, it is important to manage your investments and minimize your investment risk.  With the current economic climate you want to make sure now more than ever that you have an investment program designed especially with your goals and safety in mind.

For more information on trust and investment management, please call our office 781-237-2815 to request a copy of our DVD series, "Safe Investing for Seniors," which we provide as part of our educational series for members of the Lifetime Protection Program.


Mistake No. 5 Not Planning for Disability

If you become disabled, what will happen to your family? Who will make your financial decisions? If the proper disability documents are not part of your estate plan, your family may be forced to go to court to appoint a guardian or conservator just to be able to participate in your health care and financial decisions. If you have executed the proper documents years ago but have not updated them, your family could still be forced into court. Many of the top hospitals in Massachusetts do not accept disability documents that are more than 1 year old. The most effective way to avoid these issues is to plan ahead with a trust that will provide for your family financially if you are disabled and to have current disability documents.

Mistake No. 6: Not Planning to Avoid State and Federal Estate Taxes

A trust is an effective way of doubling the amounts that a married couple can pass tax-free to their children and grandchildren. The federal estate tax-free amounts are constantly changing. The exemption amount is scheduled to drop to $1 million per person in 2013, unless it is changed before then. It is important to consider how the growth of your assets over time will effect your tax situation. The state of Massachusetts also imposes a separate estate tax on all estates over $1 million. Therefore, for both federal and Massachusetts purposes it is important to utilize the tax-free amounts, up to $2 million for a married couple, but it is not automatic. Your planning should address both state and federal estate taxes, which can be substantial.

Mistake No. 7: Not Considering the Potential “Double Taxation” on Retirement Benefits

Taxes on IRAs and other retirement benefits can be as high as 70% before your children or grandchildren can collect a cent. This is because IRAs and other retirement benefits are taxed once as part of your taxable estate and again as income when the money comes out of the fund. By planning to avoid this “double taxation” you can stretch out and protect your IRA and retirement benefits, create tax savings, and increase the growth of the fund.

Mistake No 8: Not Planning to Avoid the Cost of Nursing Home Care

One out of every three people over 65 and one of every two people over 80 will need nursing home care for some period of time. Increasing health care and nursing home costs are one of the greatest threats to a comfortable retirement. In Massachusetts, nursing home care costs range from $12,000-$15,000 per month, $144,000-$180,000 per year. Because long-term care is so expensive, many families have elected to execute a Protective Trust to keep their life savings from the reach of a nursing home and protected for the spouse so they avoid nursing home poverty.  For additional reports and guides on avoiding nursing home poverty, please visit our website www.DSullivan.com.

Mistake No. 9: Believing Estate Planning is for The Elderly

No one can predict what will happen or when, and as the saying goes, “It’s better to be safe than sorry.” Not executing basic estate planning documents can cost your loved ones time and money. To take the first step in protecting you and your family visit www.DSullivan.com and register for a free educational workshophosted by the estate planning and asset professionals at Dennis Sullivan & Associates. Upcoming workshops will take place at 10AM and 2PM on Thursday, February 2; and Friday, February 17. Check our website for future dates and times as well as helpful educational reports, guides, videos and other resources such as CDs and DVDs.

Mistake No. 10: Not Planning to Protect Children and Grandchildren's Inheritances

Any significant gift or inheritance raises the question of whether the recipient will be able to have full enjoyment after the transfer, given considerations relating to potential creditors, divorce, or lawsuits against a beneficiary. Is the beneficiary able to handle investment and spending decisions, and will the beneficiary be subject to pressure from a spouse or other individual to place the assets into joint names, to make gifts that they might not otherwise want to make, or to make high-risk investments or loans?

If it has been a while since you’ve created your estate plan or even if it has only been a couple of years, you owe it to yourself and your family to find out if your plan is going to protect you and them when you need it.  Eliminate ALL these above-mentioned, common mistakes and misconceptions by scheduling a Trust, Estate & Asset Protection review based on our unique, 19-point review process to make sure you have protected your home, spouse, life savings and legacy for 2012 and beyond.

For additional educational information call us at (781)-237-2815, to request our latest DVD on "Life-Care Planning and Safe Investing for Seniors", register online or call 800-964-4295 (24/7) to attend a Trust, Estate and Asset Protection Workshop where the 19 Point Self Guided Trust, Estate and Asset Protection review process will be discussed.  We are hosting educational workshops on the following dates:

 

            Thursday, February 2 @ 10 a.m. and 2 p.m. 

            Friday, February 17 @ 10 a.m. and 2 p.m.  

            Thursday, March 1 @ 10 a.m. and 2 p.m.

 

We look forward to hearing from you. 

 


Tags: Protective Trusts, Alzheimer's Disease, asset protection, Estate Planning, Lifetime Protection Program, Mistakes, Nursing Homes, probate

What Resources Are Available for The Alzheimer's Family?

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Nov 7, 2011 4:25:00 PM

With the number of families affected by Alzheimer’s Disease growing daily, it is becoming vital information for almost everyone to learn how to manage this dread disease and its far-reaching ramifications.   

What Are The Predictions? 

Latest studies indicate that the number of Americans with Alzheimer’s Disease could double by 2020 (9 million people) and quadruple (to 16 million) by 2050.

What To Do.

The first step is to tap available resources and become informed about the disease.  The Alzheimer's Resource Kit  (retail value of $197) can be downloaded free and is an invaluable source of information for the patient, family, and caregiver. 

Next, it’s important to build a support network that may include other families dealing with Alzheimer’s, relatives and friends.  Individuals who are suffering from memory loss and their families should, of course, also address the health-related issues with their doctors. While there is no cure yet for Alzheimer’s, there are a variety of treatment options and significant research continues.

Another crucial step is estate and asset protection planning with a reputable elder law attorney. Establishing powers of attorney for both health care and financial matters is the only way a family member can legally make decisions for a loved one if he or she becomes mentally incapacitated. There are multiple other legal issues to discuss during the Alzheimer’s estate planning process, and each individual’s needs vary.

How To Pay for Alzheimer's Care?

Medicare is a type of public health insurance for age 65 and older.  However, Medicare does not pay for long-term care. The criterion is that there must be some actual improvement to your condition. Since diseases like Alzheimer's and Parkinson's have no known cure today, rehabilitation is not possible, so Medicare will not pay.

Unlike Medicare, Medicaid will pay for Alzheimer's, Parkinson's, or dementia-related diseases, or a decline in functioning due to the aging process. You must, however, exhaust all your resources (including your spouse's) before you will be eligible, that is unless you take steps to protect your home, spouse and life-savings so you can avoid nursing home poverty. We can help. To learn more, call our office.  In addition, visit our website, www.DSullivan.com to download our free elder guide The Massachusetts Elder Guide to Medicaid, Nursing Homes and Asset Protection or watch our educational video on "How To Avoid Nursing Home Poverty."

Take Control - Establish A Life-Care Plan.

With longevity, comes expense.  (We are all living longer and may have many years ahead of us post-retirement, so it is all the more important that we plan ahead for those years.) Life-care planning is an integrated planning approach that addresses the health care, legal, and financial issues of aging and disability.  As such, it is critically important for seniors and their families to begin talking about a life-care plan.  If executed properly, a life-care plan can save seniors and their families lots of trouble and heartache.

The goals of a quality life-care plan include, maintaining the health and well-being of your loved one; assessing long-term care options in the home and outside the home; identifying all sources of income available to pay for care; obtaining eligibility for public benefits programs like SSDI, VA, and Medicaid benefits; protecting assets.   In addition, the life-care plan provides the services of a Geriatric Care Manager (GCM) to assist with the development and implementation of the plan.  It also provides assistance with living arrangements and placements, coordination  of available community resources as well as working with the family to provide support, guidance, and advocacy.

What Are The Special Benefits for Veterans?

The Veteran's Administration (VA) has reported that thousands of Massachusetts veterans may not be receiving the disability benefits they deserve.  One of the VA's best-kept secrets, which is an excellent potential source of funds for long-term care, is a veteran's benefit for non-service connected disability.   

Most VA benefits and pensions are based on a disability that was incurred during a veteran's wartime service.  This particular benefit, however, is available for individuals who are disabled due to issues of old age, such as Alzheimer's, Parkinson's, multiple sclerosis, and other physical disabilities and have the additional requirement of needing the aid and attendance of another person in order to avoid the hazards of his or her daily environment.  

These benefits can be a blessing for the eligible disabled individual who is not yet ready for a nursing home.  A veteran married to another veteran can receive a maximum of $1,949 per month in benefits and a widow can receive up to $1,056 per month (for the year 2011).  The applicant must be “permanently and totally disabled” based on VA standards, which means  he/she need only show that he/she is in need of aid and attendance on a regular basis.  Someone who is housebound or in an assisted living facility and over the age of 65 is presumed by the Veterans Administration to be in need of aid and attendance. 

For more about these benefits, download our free guide entitled, "The Nuts and Bolts Guide to Veterans Benefits".  If you have questions, please call our office 781-237-2815.  To learn more about how to protect yourself, your spouse, your home and life-savings from increasing medical and nursing home costs, you may register online or call 800-964-4295 (24/7) to attend one of our Trust, Estate & Asset Protection Workshops.  Upcoming dates in Wellesley are as follows:

Friday, November 18 @ 10AM & 2PM   

Thursday, December 8 @ 10AM & 2PM

Thursday, December 15 @ 10AM & 2PM.

Tags: Medicare, Alzheimer's Disease, asset protection, Medicaid, veterans benefits