Many investments allow an investor to name a beneficiary of the asset upon death. The proper use of this benefit can make a person’s estate plan much more efficient, says the Tupelo (MS) Daily Journal in the recent article, “A simple way to simplify estate planning.”

The type of assets that permit beneficiary designations include employer-sponsored retirement plans (ex. 401k), IRAs, life insurance policies, annuities, transfer-on-death investment accounts, pay-on-death bank accounts, stock options and executive deferred compensation plans.

Remembering who the beneficiary is on these accounts can be difficult. However, when you consider the consequences of having the incorrect person named on the asset, it’s well worth the effort. Due to the importance of the beneficiary designation, note these reminders:

  • Designate beneficiaries. Without this, assets can be tied up in probate court, resulting in delays, costs and unfavorable tax treatment.
  • List a primary and contingent beneficiary. It is common to have a spouse as primary beneficiary, and a child as contingent, which lets the asset pass to the child, if the spouse has also passed away. You can also name a charity you support to be the contingent.
  • Keep things up-to-date. Any time there’s a birth, adoption, death, marriage or divorce, you should review your accounts and polices.
  • Go through the instructions on the form before signing it. Beneficiary forms can vary, so review each one.
  • Coordinate your beneficiary designations with your will or trust documents. If they don’t, it could cause the probate process to be delayed.
  • Work with an estate planning attorney before naming a trust as a beneficiary. Tax consequences may be different for a trust than for an individual, so some situations make a trust a wise option.
  • Know the tax consequences of naming a beneficiary of a particular asset. That’s because every asset does not have the same tax treatment.

It’s also important to remember that beneficiary designations trump any instructions you’ve specified in your will or trust. Beneficiary designations can help make an estate flow to the next generation much more efficiently. However, you must keep an eye on them and keep them up-to-date, as part of a regular review with your attorney.

Reference: Tupelo Daily Journal (November 2, 2018) “A simple way to simplify estate planning”

Checkbox-1236690“Sometimes, surprises are fun. However, nobody wants estate planning surprises, especially when it’s time for your beneficiaries to inherit your worldly goods.”

Pretty much everything you own, transfers in one of three ways:  1) by title; 2) by will; or 3) by contract.

When’s the last time you’ve reviewed your beneficiaries? This question was explored in a recent InsideNoVa article, “Naming Beneficiaries: A Quick Tip to Reduce the Surprise Factor.”

For example, if your checking account is titled in your spouse’s and your name “with rights of survivorship” (WROS), you effectively co-own the account. That one should be all set, at least until the surviving spouse dies.

Your will instructs your executor on the transfer of any assets that aren’t transferred by title or contract. That’s probably at least some of your estate. Therefore, if you don’t have a will, make an appointment with an estate planning attorney to make sure you have this important document.

Next, the beneficiary designation contacts for assets like your retirement accounts, pension plans and insurance policies should be reviewed when there’s a life event, like a birth or adoption of a child, a divorce, or a marriage.

Start the process by identifying all the accounts you own, including life insurance policies, annuities, and the like that will pass by beneficiary designation. You should then see who the primary and contingent (secondary) beneficiaries are for each. You can usually assign percentages to your beneficiaries. Therefore, you could name your spouse as primary beneficiary, 100%. Your siblings could then be secondary beneficiaries in equal shares.

Some contracts allow you to have your funds be distributed “per stirpes.” In that case, if you name your three children as primary beneficiaries, they each would receive a third. However, if your eldest son dies with you, with per stirpes, his share will go to his children.

In addition, there may be situations when you might designate a trust as a beneficiary. This can get complicated, so work with an experienced trust and estate attorney.

In any situation, if it’s been a long time (or never) since you reviewed your beneficiary designations, do it right away.

Reference: InsideNoVa (October 26, 2018) “Naming Beneficiaries: A Quick Tip to Reduce the Surprise Factor”

Us-dollar-made-forom-coins-1558391“The one reason not to delay taking Social Security.”

Waiting to take Social Security retirement benefits is generally a wise decision. For many seniors, it could increase their monthly payouts by 8% each year that they defer the benefit.

However, Financial Planning’s recent article, “The 1 reason not to delay Social Security,” says that there are a few exceptions to the rule.

For example, retirees should think about claiming Social Security as soon as they can, if they’re in very poor health or have a terminal illness.

While the benefit will be less if they file early, the greater number of individual payments will help offset the smaller benefit amount.

There are three ways that women can plan for a better retirement. Women should not rely solely on their spouses when planning for retirement. Instead, they should more directly participate in how they’ll secure their senior years. That’s because many of them are likely to live longer than their partners, according to an article from MarketWatch. Women should calculate the amount of income they anticipate receiving in retirement and consider other income streams.

In addition, they can talk about their estate plans with their spouses and family members and look for alternative income sources. One example is an immediate annuity. In the right circumstances, they can be a terrific strategy to improve one’s retirement prospects.

Remember that despite not having a 401(k), individuals can still save for retirement. Workers who don’t have the option of a workplace retirement plan, should ask their employer to set up one on the basis of incentives that the company will receive.

These workers can also look into opening a health savings account and an individual retirement account, preferably a Roth IRA, which offers tax-free growth on savings and penalty-free early withdrawals.

They also can choose to switch their status to a 1099 from a W-2 employee to establish a SEP IRA.

Finally, living together in retirement can be difficult for couples who are used to having work as a diversion. To overcome the obstacles, couples should talk about retirement and be honest about their expectations, rules, and disappointments. They should also find a common ground, if they have different interests. It’s healthy for husbands and wives to pursue their own interests and have some separate groups of friends.

Reference: Financial Planning (October 25, 2018) “The 1 reason not to delay Social Security”

Dollarsign-1186313“A new surcharge tier will kick in for 2019 for people with the highest incomes.”

The Centers for Medicare & Medicaid Services has recently announced that most seniors will pay $135.50 per month for Medicare Part B in 2019. That’s a bit of a nudge up from $134 per month in 2018.

Kiplinger’s recent article, “What You'll Pay for Medicare Premiums in 2019,” reports that a few Medicare beneficiaries (about 3.5%) will pay somewhat less because the cost-of-living increase in their Social Security benefits isn’t big enough to cover the full premium increase. The “hold-harmless provision” keeps enrollees’ annual increases in Medicare premiums from rising above their cost-of-living increases in Social Security benefits, if their premiums are automatically deducted from their Social Security payments. Social Security benefits are increasing by 2.8% in 2019, which will cover the increase in premiums for most seniors.

Premium increases are also pretty slight for most higher-income beneficiaries. Who are they? Those with adjusted gross income plus tax-exempt interest income of more than $85,000, if single or $170,000, if married filing jointly. These people already pay a high-income surcharge. However, a new surcharge tier will apply in 2019 for people with the highest incomes. Thus, monthly premiums for higher-income beneficiaries will be between $189.60 to $460.50 per person, based on their income.

If your income is $85,001 to $107,000 (or $170,001 to $214,000 if filing jointly), your monthly premium will go from $187.50 to $189.60. Monthly premiums for singles with an income of $107,001 to $133,500 (joint filers with income of $214,001 to $267,000) will be $270.90 (that’s up from $267.90).  Premiums for singles earning $133,501 to $160,000 ($267,001 to $320,000 for joint filers) will increase from $348.30 to $352.20.

If your income was greater than that, your monthly premium for 2018 was $428.60. In 2019, again, there’ll be an extra surcharge tier for people with the highest income. These high-income surcharges for 2019, are typically based on 2017 income. You can contest the surcharge, if you’ve had life-changing events that may have dropped your income since then. This includes retirement, divorce or the death of a spouse.

If your income is in the range of $160,001 to $499,999 ($320,001 to $749,999 for joint filers), you’ll pay $433.40 per month. Single filers with income of $500,000 or more ($750,000 or more for joint filers) will pay $460.50 per month.

Deductibles will also go up in 2019: the deductible for Medicare Part A, which covers hospital services, will increase from $1,340 in 2018 to $1,364 in 2019. The deductible for Medicare Part B, which covers physician services and other outpatient services, will see a small increase from $183 to $185.

Reference: Kiplinger (October 12, 2018) “What You'll Pay for Medicare Premiums in 2019”

Bored-1434386“More than $150,000 is stolen from an 86-year-old man and police say it was his son and daughter-in-law who did it.”

A Pennsylvania couple is facing charges of felony theft and access device fraud for allegedly stealing more than $100,000 from the man’s father over a four-year period. Chester Robert Garman III and his wife Kathy Alice Garman perpetrated the fourth largest financial elder financial abuse case since 2004, according to Dauphin County Commissioner George Hartwick in a report from Fox 43.

The article, “Son charged for stealing $153,168 from 86-year-old father, officials talk elder abuse warning signs,” says that Dauphin County officials are using this elder financial abuse case as a reminder for the public to monitor those 60 and older for signs of abuse, neglect, or financial exploitation.

Reports of elder abuse in the Pennsylvania county continue to rise every year. Thus far in 2018, county officials have received more than 1,600 reports of elder abuse.

"In Dauphin County we want to make it clear that if there are suspected abuses occurring, we will take actions," said Hartwick. "We are communicating, and we will do everything to make sure we are protecting out seniors and bring those individuals who perpetrate those crimes to justice."

It’s not uncommon in elder abuse cases—such as the Garman's—for a person familiar to the victim to be the bad actor, someone they know and trust. The Dauphin County Area Agency on Aging says there are many signs of abuse. If a person sees anything they think is questionable, they should call the authorities.

Elder abuse can come in many types:

  • Physical elder abuse: the non-accidental use of force against an elderly person that results in physical pain, injury or impairment;
  • Emotional elder abuse: causing the senior emotional or psychological pain or distress, like intimidation through yelling or threats and isolation;
  • Sexual elder abuse: contact with an elderly person without their consent;
  • Elder neglect or failing to fulfill a caretaking obligation;
  • Financial exploitation: unauthorized use of an individual’s personal funds or property; and
  • Healthcare fraud and abuse by unethical doctors, nurses, and other professional care providers.

Dauphin County District Attorney Fran Chardo says to help prevent financial abuse of an elder, loved ones should have a power of attorney signed—especially for a senior who has a caregiver, even if they are a family member. Without this legal document, it can be a license to steal.

Reference: Fox 43 (October 22, 2018) “Son charged for stealing $153,168 from 86-year-old father, officials talk elder abuse warning signs”

Flaming-cake-1323013“How do you feel about living until 100?”

November is National Alzheimer's Disease Awareness Month. We would like to remember that when we ask the question, "How do you feel about living until 100?" Most people would love to live to be 100… provided they get to keep a good quality of life. However, with an aging population—including many Baby Boomers—and with genetic testing becoming more available, these people are facing the tough reality about what their elder years might look like. For some individuals, that could include dementia.

The (Bryan TX) Eagle’s recent article, “Alzheimer’s disease: Five common myths, busted,” reports that, according to the Alzheimer’s Association, one in three seniors dies with Alzheimer’s or another type of dementia. There are up to 5.7 million individuals who live and die with the disease, which makes it the sixth leading cause of death in the United States. The article provides five common myths about Alzheimer’s disease.

Myth # 1: Memory loss is a normal part of growing older. A slip of the memory may well be a normal part of growing older. While these forgetful moments may cause a bit of frustration and embarrassment, they don’t affect our ability to live an independent life. However, if a loved one has trouble remembering commonly used words or loses the ability to communicate, it could be a potential symptom rather than a natural senior side-effect.

Myth # 2: Alzheimer’s can be reversed, if it’s diagnosed early. No. Unfortunately, there's no treatment that will reverse the progress of Alzheimer’s disease. However, although there are therapies and drugs that can slow down the neurodegeneration associated with Alzheimer’s, there is no known cure. Even so, early diagnosis has its benefits, like better symptom management, a safer patient environment and the ability to plan for the future.

Myth # 3: Alzheimer’s just affects older people. Some Alzheimer’s patients can get diagnosed in their 40’s or 50’s. The early onset Alzheimer’s is uncommon (just 5% of patients are diagnosed before age 65); an accurate diagnosis is important to help the family cope with the realities of the disease.

Myth # 4: A diagnosis of Alzheimer’s means your life is over. Many people live years or even decades, before the disease claims their lives. Alzheimer’s effects each patient differently. The disease is commonly divided into three stages. The first or “mild” stage is where the patient is able to live a mostly normal life. The middle or “moderate” stage requires more extensive care. And in the late or “severe” stage, the patient needs 24/7 supervision and medical assistance. Life many never be the same with an Alzheimer’s diagnosis, but it’s far from over.

Myth # 5: There’s little you can do to protect yourself financially, if you are diagnosed with the disease. A serious diagnosis of any type can drastically impact a family, but it’s important to understand that there are things you can and should do to help your loved ones manage what comes next, emotionally as well as financially. Look at these ways you can help:

  • Create a list of all financial accounts;
  • Review the titles and names on each account;
  • Look at your options for paying for medical care, such as existing insurance policies, Medicare coverage, or other sources of funding;
  • Consider designating a Durable Power of Attorney for Healthcare, so that a trusted person can make decisions for the patient if there’s an accident or incapacitation;
  • Communicating preferences for living arrangements, medical assistance and end-of-life care; 
  • Be sure your will is up to date.
  • Do your planning BEFORE a crisis hits.

Don’t think you have to manage the diagnosis alone. We can help you with your questions, as well as all phases planning and recommend life care resources for care. 

Reference: The (Bryan TX) Eagle (October 4, 2018) “Alzheimer’s disease: Five common myths, busted”

Recording-studio-1231072“There have been big “Changes” to the state of some of Tupac Shakur’s previously unreleased music.”

A collection of recordings that the hip-hop icon Tupac Shakur made before his death, has been returned to his estate.

It’s part of a settlement of a drawn-out legal struggle, according to TMZ.

In addition, The New York Daily News reports in its October article, “Unreleased Tupac music returned to his estate after drawn-out legal battle,” that Tupac’s estate accused the Entertainment One company in a 2013 lawsuit of keeping a strong grip on his unheard master tracks, and at the same time retaining royalties for some of the rapper’s music.

The lawsuit alleged that Entertainment One breached a contract to pay Tupac’s estate royalties worth seven figures for 2007’s Beginnings: The Lost Tapes. Tupac’s estate also sued for the ownership of the master recordings for all of the artist’s unreleased music.

Tupac’s unreleased recordings will now be returned to his estate, while a six-figure payment will be made to cover the royalties.

It’s not certain what will happen to those unreleased tracks, or if there is any plan to release them to the public.

Shakur’s mother, Afeni, had been leading the battle to protect her son’s estate. The litigation over his recordings continued after her death in 2016 at the age of 69, after suffering a heart attack.

“My son left many incomplete pieces and even more unfinished ideas,” Afeni said when filing the lawsuit. “Using the blueprints he gave us, I am committed to fulfilling this duty…[We] will find innovative ways to continue to keep his music, his message, and his legacy alive.”

Tupac died at the age of 25 in 1996 in an unsolved drive-by shooting in Las Vegas, Nevada.

Death Row Records originally had the rights to Tupac’s music, but the label sold them to Entertainment One in 2006.

Reference: The New York Daily News (October 1, 2018) “Unreleased Tupac music returned to his estate after drawn-out legal battle”

Old-couple-1496484“An important part of caring for your aging parents is understanding their situation and knowing what they want. If you don’t know, then it is up to you to figure it out.”

It’s a good idea to talk with your parents on a regular basis about their wishes for the future, so that everyone can get comfortable with the conversation and the topics, says Next Avenue in the article “How to Have Difficult Conversations With Your Aging Parents.” You’ll all avoid a fair amount of stress and guesswork, if you can have these open and frank conversations.

Here are the conversations you need to have:

The Money Talk. What’s their financial situation? Do they have enough to pay their bills right now? What if they live another ten or twenty years? Do they have a will? Do you know where the will is, and the name of the estate planning attorney who created it? Do they have powers of attorney for finances in place?

The Health Talk. Medical issues that you’ve heard about but aren’t fully informed about need to be clarified. What medications do they take, and is there a list posted on the refrigerator, or located somewhere you can get to it, in the event of an emergency? Have they properly documented a power of attorney for healthcare?

The Aging Talk. Do they plan on aging at home, or are they considering moving to a continuing care facility? What senior living options should they consider, if and when they can’t live on their own anymore?

The End of Life Talk. This is the hardest one, but it is hard for everyone. If they should have a terminal illness, what do they want to happen? Do they have a medical directive, or a living will? How do they feel about extreme measures being taken to sustain life, if they are incapacitated?

The Family Legacy Talk. This is a warmer, happier conversation. What do they want the family to remember about them, and how can you work together to assemble the things that will help accomplish this? Are there family recipes, photo books, treasured heirlooms, videos or jewelry they want to pass along? Are there stories they want to share?

Note that these are not one-time conversations, but processes. Everyone will respond differently, and some parents may need more time to reflect and consider their answers than others. Your parents will need to be ready to have these conversations with you. Some conversations may touch on a raw memory and have to stop, to resume at a later point.

Depending on your parents’ personalities, you may want to speak with them together, if they are both living, or individually. One might be more comfortable discussing certain matters without the other present.

Take notes of the conversation. You’ll be able to review the notes with them if need be and share that information with siblings and family members. You can also see what’s left out. Your notes are not a legally binding document, but they can help when their wills are created or revised.

Speak with an estate planning attorney as part of this process. Estate planning attorneys are fluent in the issues of aging and will be able to discuss sensitive matters with your parents and you, bringing up issues you may not have considered. They will sometimes also have Life Care Specialists who assist with these discussions.

Reference: Next Avenue (September 21, 2018) “How to Have Difficult Conversations With Your Aging Parents”

Fineart-3-1440534“The question isn’t whether the secretive Microsoft founder structured his finances for maximum posthumous impact. It’s whether the plan is so well-designed that we’ll never find out.”

People who knew Paul Allen say he had a long-term plan. They say his money has been working in secret for decades now, arguably outside his immediate control. Wealth Advisor’s recent article, “Paul Allen Had A $20 Billion Estate Plan (The IRS Can't Touch)” notes that fact will made it difficult for the IRS to get a share of the estate.

Allen left Microsoft back in the 1980s due to a mild form of lymph node cancer. It was the disease that ultimately killed him.

Allen was rich, so he spent his life engaging in a wide range of interests, like venture capitalism, research, real estate development, yachting, sports and music. His fortune flowed through a holding company. Subsidiaries of Vulcan Inc. ran his investments, as well as his charities, sports teams and high-tech toy collections. Vulcan isn’t a conventional family office, so there’s no division between the principal and his interests on the “family” side and the day-to-day operations on the “office” side. That makes it much harder to separate Allen’s personal estate from his corporate interests. He was sole owner of the company, but the company owned everything else.

The cancer came back 10 years ago. He licked it then, but probably took that as a wake up call to be sure the operations would continue without him. Execs at his company have mentioned his plan for continuity. Therefore, Vulcan will look exactly the same without him, as it did when he was running it.

Vulcan invested billions into reshaping Seattle, purchasing real estate and sometimes selling it for big profits. He owned the local sports teams and a few of the museums. Vulcan also ran the most prominent local movie theater. On the business level, Vulcan was the vehicle through which he bought into the start-up companies that he liked.

Allen was never married, and his sister and her children were his only close family. His sister was a key employee at Vulcan, but Paul kept control and full ownership. She moved to the family foundation side. Her three 20-something children are probably well off, and the older ones have already worked for family businesses. The youngest is still in school. These children will most likely find spots at Vulcan, but whether they ever own the company in their own right is unknown.

While the foundation is too small to own the firm, it could inherit Vulcan. In that situation, the heir isn’t going to pay much of an estate tax on the gift. Allen signed the giving pledge, and handing formal ownership of the firm to the foundation satisfies that objective. Vulcan would continue unchanged, following its founder’s instructions to invest in his interests and fund his causes.

Reference: Wealth Advisor (October 22, 2018) “Paul Allen Had A $20 Billion Estate Plan (The IRS Can't Touch)”


Check-list-1150080-640x745“Without these important documents, your heirs could overlook financial accounts or miss out on life insurance benefits.”

Who likes to think about death and end-of-life arrangements? Not too many of us, to be sure. However, being prepared for the inevitable is a wise thing to do, and it's a kind thing to do for your family.

US News & World Report’s recent article, “12 Documents to Prepare Now for Your Heirs,” says that when people don't have their paperwork ready, it can be a huge headache for the family. A family can be left with all kinds of paperwork to sort out, while dealing with grief. Even worse, heirs may forfeit life insurance proceeds and tax deductions or overlook accounts they don't know exist. That's why it's critical to have important documents ready for loved ones. Here are the documents you should start preparing right away:

A will. This is a legal document in which you name an executor to carry out your wishes, heirs to receive your assets and a guardian if you have minor children.

A letter of explanation. Your will stipulates how assets are to be divided. However, a letter of explanation can provide the reasons for these decisions. This can be helpful, if the estate is to be divided unevenly between children.

List of financial accounts and beneficiaries. Keep a list of all your finances, such as bank and retirement accounts and brokerage funds. Each may have a designated beneficiary or transfer on death provision, known as a TOD. A person who’s named as a beneficiary or TOD designee automatically will receive ownership of the asset after you die. Make sure you keep these beneficiary designations up-to-date.

Personal inventory. Most wills distribute personal property in vague terms, like designating jewelry to one person and household goods to another. To be certain that nothing significant is overlooked, create an inventory of personal items. This inventory can also list items that may be stored in another location, unbeknownst to your family.

Power of attorney. This form is an important document for your family, if you become incapacitated because of an illness or accident. A power of attorney allows a designated person to make decisions on your behalf. One form is for financial decisions, and another is for health care.

Life insurance policies. Your family can miss significant life insurance benefits, if they don't know you have a policy, or it’s been lost or misplaced. Keep records of your life insurance plans and place it with your financial records.

Real estate records. Add deeds, assessments, mortgage statements and property tax information to the documents you've prepared for your heirs. Collecting the records for them in advance will make their lives easier.

Tax returns. List the name of your CPA or tax preparer, if you have your taxes professionally done. He or she can help your family with filing final tax returns for your estate. If you file your own returns, print a copy for your files and record any login information for online tax preparation services.

Logins for accounts. Create a list of your usernames and passwords for financial accounts, email, and social media and keep it where heirs can access the information.

A digital estate plan. Some states recognize digital estate plans as legally binding. However, even if it isn’t, it can be a great resource for your family. A digital estate plan states what will happen to your digital assets, like your social media accounts, websites, digital photos, intellectual property and other files and documents. Within your plan, you can name a digital executor and list those you've named as legacy contacts on specific platforms, such as Facebook and Twitter.

An ethical will. This letter describes what you'd like remembered as your legacy, such as passing down values. An ethical will can be used to share memories or to impart wisdom.

Your final wishes. If you've made prearrangements for your funeral or cremation, place that information with your will and other end-of-life documents. Your final wishes should also include information about organ donation, pet care and who should be notified of your passing.

It’s a big job to nail down these 12 tasks but getting them completed will be a wonderful final parting gift for your family.

Reference: US News & World Report (October 4, 2018) “12 Documents to Prepare Now for Your Heirs”

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