John Lane Law

Talk to Your Senior Parents About Four Major Planning Topics

"Many people avoid dealing with the subject of senior caregiving until a crisis arises."

According to The Ventura County Star in "Talk to aging parents about finances, health care, living arrangements," there are four main areas about which senior parents and their adult children must communicate. These areas are living arrangements, medical coverage, estate planning and finances.

Understand your parents' ideas about their future living arrangements when and if they become unable to care for themselves. If they want to stay in their own home, familiarize yourself with the available community resources for support and research alternative living arrangements in the event that remaining at home is no longer a viable option.

Analyze the type of medical coverage your parents have and its coverage. Get the name and telephone number of their primary care physician and any specialist they are seeing. Have a sense of their medical history and condition.

Estate planning includes legal, financial, and end-of-life issues. See if your parents have an advance health care directive, a will and/or trust, and a general power of attorney for finances. Find out who has copies of these documents or where they're kept. Also, get the contact information for their estate planning attorney.

Talk to your parents about their financial resources, both income and assets—this is critical if you need to place them in a long-term care facility or apply for government programs. Also, find out if they have long-term care insurance and what it covers.

Last, the hardest conversation may be about their final needs. See if your parents have made funeral arrangements and have prepaid them. If they don't have these plans, encourage them to tell you what they want.

Go over all of these issues with your parents while they can participate and make their wishes known. Involve your siblings if you have them and make them part of that discussion.  

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Ventura County Star (February 9, 2016) "Talk to aging parents about finances, health care, living arrangements"

Take the Heat Off Your Kids with Estate Planning

"The value of a will, and of long-term care insurance, which can be a million dollar gift to your children and family members."

What's the difference between retirement planning and estate planning?

A lot!

Retirement planning is for that time when you change direction and stop the grind of working full-time. Estate planning is what Federal News Radio's article, "Estate vs. retirement planning: You bet your life, literally!" says is an after-you've-gone shopping list.

Think of estate planning as how you would like things to be, and to be divided, to minimize stress on your loved ones and avoid nasty family fights that can occur after the funeral. You can minimize problems and decide some of the tough issues before you pass away. Estate planning is a thoughtful gift for your family and friends.

Retirement planning is much broader—and your estate plan should be included as an important piece of your retirement plan. An estate plan has three basic goals:

• To give you control over your assets as long as you are able to do so.
• To protect you and your loved ones in case you become incapacitated.
• To distribute your assets in accordance with your intentions after your death.

Again, a retirement plan has broader goals such as:

• Ensuring that you have enough assets to support your retirement lifestyle.
• Ensuring that potential health care issues can be met in the location where you retire.
• Proximity to friends and family.
• Deciding what to do with the time you previously devoted to your job.
• Creating an estate plan that is consistent with your goals.

The earlier you start your estate planning, the better. If you are 18 or older, you should have a basic estate plan in place. Start planning for retirement on your first day of work!

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Federal News Radio (February 3, 2016) "Estate vs. retirement planning: You bet your life, literally!"

This Just In: Estate Plans Need to Stay Up-to-Date

"Now that everyone has settled into the New Year, it is a perfect time to review and update your estate plan."

Situations change and, as a result, you need to consider any changes to your estate planning documents. There are marriages. Children are born and adopted. Loved ones and friends pass away. Because of these changes, taking the time to update previously drafted documents is critical.

Dairy Herd published a valuable article, "Legal: Review and update your estate plan now," which advised that you should at least have the basic estate planning documents in place. This includes a will, a power of attorney, a medical power of attorney and an advanced healthcare directive (often called a living will). Also, some should look into trusts, depending on individual situations.

Taking the time to prepare these documents now can help avoid fighting and stress for loved ones left behind.

Create a "Death File." After you have your basic estate planning documents in place, gather them in one place and inform two responsible people of the file's existence and location. It can be placed in a home safe, a bank deposit box or on file with an attorney. The person(s) named as your power-of-attorney and executor need to know the location of these documents and have the ability to access them if needed.

Review Documents for Updates. As mentioned above, it's important to review these drafted documents periodically to see if any changes are needed. Also, when you review a will or a trust, look to see if any of the property listed has been sold, transferred, or purchased. If it has, update the documents to reflect the change in ownership.

Check and Update Beneficiary Designations. Not all property passes in the estate by a will. Some assets, like a 401(K), are passed to the beneficiary of the account regardless of what a will says. This is also common with life insurance, pensions, transfer on death accounts, and accounts held as joint tenants with right of survivorship.

Look at Potential Estate Tax Liability. The federal estate tax exemption for 2016 is $5.45 million per person and $10.9 million per couple. To see if tax liability might be an issue, the estimated fair market value of assets needs to be calculated. Talk to an estate planning attorney if your estate may be close to the exemption limit. An experienced attorney will be able to discuss options to avoid the federal estate tax—a whopping 40% on any amount over the $5.45 million exemption.

An up-to-date and comprehensive estate plan will help ensure that your intentions are carried out and will help to avoid headaches among survivors. Once the planning is done, however, don't forget to conduct a periodic review.  Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Dairy Herd (February 9, 2016) "Legal: Review and update your estate plan now"

New Results Show More Parents Concerned About Children's Financial Future

"One third of parents with children aged 18-34 are willing to have a less comfortable retirement to support their children."

More and more U.S. parents are concerned about their adult children's financial situation and are willing to put their own financial well-being at risk to support them, according to a report issued by the BMO Wealth Institute. The report, entitled "The Bank of Mom and Dad: a Source of Comfort for Everyone," found that parents with children aged 18-34 would be willing to make sacrifices to provide financial support for their children. This willingness shows the anxiety parents have about their adult children's future well-being, says CNN Money in a recent report, "Half of U.S. Parents Would Retire Later to Support Adult Children Financially."

An experienced estate planning attorney can assist parents with this concern to reach their own financial goals, including retirement—and to add in financial support to their children into a comprehensive plan.

Parents should remember that today's young adults face unique financial challenges and may require different levels of support than they themselves received. If parents and children talk about the amount of support they expect to provide or receive, they can avoid misunderstandings that could jeopardize their financial futures. The report offers parents the following financial planning tips:

• Start Early. You should try to teach your children about money at an early age. Understanding the basics of personal finance at a young age can help set up a child for future financial success and independence.
• Implement a Roth IRA. A Roth IRA can make savings more tax efficient and extend parents' ability to use their resources to meet financial goals. Although annual contributions are limited by IRS guidelines, income earned in an IRA is generally not subject to any federal or state tax.
• Take Advantage of the Gift Tax. When possible, use the exceptions in the federal gift tax rules to increase the benefit available to children and dependent parents, such as gifts made for tuition or to pay medical expenses.
• Leave a Legacy of Financial Comfort: Parents can make certain that their estate plans, including wills and trusts, adequately provide for their children. In addition, sound insurance planning can be used to supplement the income of a surviving spouse or to support children who may be struggling financially.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: CNN Money (December 22, 2015) "Half of U.S. Parents Would Retire Later to Support Adult Children Financially"

Don't Forget to Ask Your Doctor about Dementia

"Do you worry that forgetting names, or where you put your keys, might be a sign of impending dementia?"

Researchers who reviewed federal government data on more than 10,000 people found that in 2011, only 1 in 4 adults aged 45 or older talked about memory problems with their doctor during a routine checkup. Furthermore, the chance that a person would admit to a memory problem in a doctor's office visit declined with advancing age. This was reported in a US News & World Report article, "Too Few Older Adults Tell Doctors About Memory Loss: Study," discussing findings published in the journal Preventing Chronic Disease.

Routine checkups can be a missed opportunity for assessing and discussing memory problems for the majority of older adults. Experts say the stigma of memory loss and dementia may keep some from discussing these issues with their doctors.

Many think that as long as we don't mention it, memory loss might just be normal aging. However, talking about memory troubles doesn't necessarily mean you have dementia. It might be another highly treatable condition, like depression. But if it is related to dementia, recognizing it early is crucial.

Patients can meet with family members and an experienced elder law attorney to get advice on making individualized decisions for their care, rather than relying on last-minute decisions.

Memory loss and the possibility of the early onset of dementia is a difficult discussion for both the physician and patient, particularly in light of the long-term implications. However, early diagnosis of dementia is important, as even mild memory loss from early Alzheimer's disease may be improved with medication (although these prescriptions don't stop the disease's progression).

It can be hard for people to assess whether their own subtle memory loss is "normal," but a discussion with their physician in conjunction with specialized testing may result in answers that could lead to treatment and a better overall quality of life. 

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: US News & World Report (January 28, 2016) "Too Few Older Adults Tell Doctors about Memory Loss: Study"

Talk Money and Death with Your Kids

"There's always a reason not to have the talk."

Money and death top the list of conversational taboos — especially among family — so a conversation about them might seem toxic. But it must be done. Baby boomers who haven't told their heirs about their estate plans shouldn't wait for the perfect moment, experts say in a MarketWatch article, "How to tell your kids how much money you're leaving them."

A recent survey found that 72% of parents experience at least some reluctance to discussing financial matters with their children. That's not in anyone's best interest. Disorganization and miscommunication can be costly. The costs can be in dollars, as heirs miss tax deadlines and other opportunities sorting through the files, and in hurt feelings and confusion, as children struggle to understand their parents' decisions.

Here are some ideas for boomers who want to start the process:

Decide how you want to communicate. Don't ambush your children with this discussion. Instead, the first conversation should be how to have a discussion about this subject. Tell them what you want to discuss and ask them how they'd like to proceed. Ready them for several conversations so that they're not overwhelmed with everything in one sitting. If you have several kids, ask if they'd like one-on-one conversations or a group talk. Decide on a date for the first conversation, set the agenda, and review your financial and estate planning documents.

Don't start with the bottom line. You might want to jump to the big stuff and discuss who's getting what, but an estate plan involves much more than divvying up assets. It should involve values, which ideally started with parents talking about money with their children when they were young and emphasizing the value of hard work and the importance of saving. If that didn't happen, it's never too late to start. Next, discuss who you plan to designate as your health care power of attorney to make medical decisions in the event you can't do so yourself and who you'll name as your financial power of attorney to handle financial transactions on your behalf. Many people name their spouse as their primary agent, but you should also name a younger person to serve as a secondary agent if the first can't. Also, mention who you plan to name as the executor of your will.

Get some feedback. Children's feelings may be hurt if they don't understand why you designated one child over the other. Tell them your reasoning and ask for input through phrases like "Am I missing anything?" or "Tell me if I'm thinking about this the right way." But remember that you're the ultimate decision maker, and you don't need to change your plans because of your children's opinions. You can just say, "I respect your feelings, but I decided to go ahead with this plan."

If the discussion about powers of attorney and executors doesn't go well, you may think about ending it right there and not discussing your assets. If the discussion goes south, maybe you need to just let your will or trust do the talking after you're dead. You can always include a letter of intent explaining decisions posthumously.

Move carefully with the assets. If you decide to discuss your assets, proceed with caution. There may be arguments over small, symbolic items like jewelry. If so, parents could ask their children which items they'd like the most and do their best to give them some of them.

With dividing up dollars, many middle-class families don't know how much money they'll have left over, if any, after their retirement. That's reason enough to use percentages and not dollar amounts. But adult children still need to know where assets are located if they need to pay for long-term care. If you have these discussions now, it will be much easier to communicate that in the wake of a sudden accident or illness.

While you are at it, consider involving your estate planning attorney in this conversation with your loved ones. He or she can answer any technical questions that come up.  Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: MarketWatch (January 29, 2016) "How to tell your kids how much money you're leaving them"

Are You Going to Leave the Kids an Inheritance?

"The ‘spend it all' parents might ‘need help putting on the brakes.'"

A report by the Hearts & Wallets financial services research firm says that affluent members of the boomer generation are divided about leaving an inheritance to their children, according to Forbes in "How Boomer Parents Feel About Leaving Inheritances." However, those boomers less inclined to leave an inheritance aren't as selfish as you think, and many planning to leave inheritances are distinctly uncomfortable about it.

The Hearts & Wallets report, Funding Life After Work: Impact of Parenthood & Wealth Transfer on Retirement Solutions for Baby Boomers, reveals that roughly 40% of those surveyed plan to leave inheritances. About 30% expect to spend all their money, and the other 30% aren't sure. There's one item that the majority of the parents had in common: they're afraid of running out of money. And those who plan to leave inheritances are extremely terrified of running out of money!

Interestingly, ultra-wealthy parents appear to be more apt to give their kids inheritances, according to a US trust survey of high net worth individuals with at least $3 million in investable assets. Some 57% of the respondents think it's important to leave a financial inheritance to the next generation—which is somewhat less than the 66% of Gen X'ers and 74% of Millennials who felt this way. However, only 27% of the parents surveyed have told their children how much they are likely to inherit. One reason for this is that only 20% strongly agreed that their children will be prepared to handle the wealth they'll receive.

The wealthier boomer parents interviewed were also more apt to leave inheritances than ones with fewer assets.

Many boomer parents who won't leave inheritances aren't stingy with their cash—they're just giving their children and grandchildren money while they're still around to watch them use the cash to fulfill their dreams (and also watch to be sure it's used wisely). Some call this phenomenon "investing in their children while they are growing."

Those who do plan to leave inheritances see this generosity as "the ultimate insurance policy against ever running out of money" and earmark some of their assets for their children. They'll only tap in retirement for the amount they'll have beyond that. Yet these parents are afraid that they may have to tap into their principal one day.

These inheritance parents are taking an active role in discussing family finances with their kids. That conversation may prove to be very useful after one or both parents die. Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Forbes (January 21, 2016) "How Boomer Parents Feel About Leaving Inheritances"

What to Do with All of the Time in the New Year?

"January 1 brought the gift of 8,760 fresh hours. Protect them, even when juggling caregiver duties."

 
We're already into the second month of 2016.

On the first of January, we each received the gift of 8,760 hours—plus we get a bonus of 1,440 minutes because it's a leap year with an extra day, February 29. By the time you read this, more than 696 hours will have passed this year, and we can't get them back. They're gone. Forever.

Where have you spent your time so far? This is a pivotal question posed in the article "Caregivers: Spend Your Time Wisely This Year" from the January 15 issue of US News & World Report. And how will you spend your time for the rest of the year?

You have about a half a million minutes left, so think of yourself as the sole heir to a half-million dollars. When you look at it like that, each dollar representing a minute will disappear quickly unless you watch your inheritance and control how you spend it. By getting roped into spending your time (money) on things that aren't beneficial, you're left with less time to do what you want.

Are you stuck at home as a caregiver? Do you feel trapped sometimes because you don't have any time for yourself? Many times, primary caregivers feel constrained by too little time (and money) to take better care of themselves.

Leverage your time and energy with periodic breaks from your duties and take advantage of adult-day services, in-home care, or residential care. An experienced elder law attorney can sort out many of the issues that face caregivers. He or she will have information about adult-day services, caregiver support groups, in-home care, assisted living, and skilled-nursing care.

Take it one step at a time and follow the advice of your elder law attorney. Don't be afraid to ask for help.  Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: US News & World Report (January 15, 2016) "Caregivers: Spend Your Time Wisely This Year"

Don't Die Rich? Why?

"So by adhering to the "Don't Die Rich" theory of planning, how do you put your wealth to work?"

The Wilmington Business Journal says that estate planning should be a serious exercise, together with financial planning. Both are ongoing events, no matter your age or status.

In its article "Do You Really Want To Leave a Large Inheritance?", the Journal advises seniors that having enough retirement funds is critical. But what about this other school of financial planning: Don't Die Rich!

The "Don't Die Rich!" philosophy is based on the premise that money is best used while you are around to enjoy it and appreciate the benefits. Due to lengthening life spans, in many cases, parental assets aren't going to be around to be inherited by children until those children are near retirement age.

So by adhering to the "Don't Die Rich" theory, how do you put your wealth to work?

Consider the following:

You come first, so enjoy yourself. The first beneficiaries of your estate should be you. There's nothing wrong with enjoying your wealth in ways that you can share with your family. Think about spreading the wealth by gifting or making even modest financial transfers to your family heirs. Doing so now, while you are around to see the results, may be better for all concerned instead of leaving them a large inheritance in the future. It's called "gifting with warm hands." Speak with your estate planning attorney about tax implications and strategies.

Charitable giving. Become a philanthropist! There are many pluses to making a major charitable gift during your lifetime, such as tax benefits and the enjoyment of seeing all the good works that your money will give the charity. Talk to your estate planning attorney about the possibility of creating a Charitable Remainder Trust.

By using this trust, you can put money or securities in an Irrevocable Trust for your charity and reserve lifetime income payments for yourself. When you pass away, the income payments stop, and the remaining trust assets are given to your charity. There are a number of other trust-related charitable giving programs, so talk with your estate planning attorney for details.

Of course, the "Don't Die Rich" plan isn't for everybody, but the thought of seeing the benefits of using your money while you are alive does make sense in many cases.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Wilmington Business Journal (January 15, 2016) "Do You Really Want To Leave A Large Inheritance?"