Legal – Legacy Estate Planning

Legal – Legacy Estate Planning

Month after month, you may read articles about the importance and value of estate planning. Congratulations! The message is sinking in, and you’re making a plan that will benefit your family for years, decades, perhaps generations, into the future.

So, at this juncture, the word “legacy” may be popping up for you. “Legacy Estate Planning,” as we call it in the financial services world, is about more than leaving resources behind to your family. It’s about strategically leaving resources for your family, so your estate can do the most good for the most years. It’s an honorable pursuit, and for most families, it’s an absolute necessity.

Legacy estate planning is not about money, it’s about intentionally planning for its use by those you love. It’s about setting up parameters and allowances; setting up rules and boundaries.

Your children love you, and your grandchildren love you, too. You want to leave them any and all inheritance you can when you pass from this world, but you have specific ideas on how it would benefit them most. In short, you realize they may need to get out of their own way to make the best choices with the resources you leave for them.

When you create a Legacy Estate Plan, you can include language and stopgaps that help your loved ones correctly manage the funds you have gifted them. In the documents you create with your advisor, you can set parameters for use of what by whom and when. If you’re worried about in-laws, include restricting language to that regard. If you’re concerned about someone being taken advantage of by another, put parameters in place to prevent it.

This is the beauty of the peace of mind you can experience with a Legacy Estate Plan. Help your loved ones help themselves, and create a space in the future where your estate can be its’ most effective in the lives of those you love most.

It’s time to plan. Do it in a way that’s worthy of your legacy. It’s this legacy, not the money, that will make the biggest difference in the lives of those you love. Don’t wait to contact our office with any questions you may have.

How to Help Aging Parents Get Their Estate Planning Done

How to Help Aging Parents Get Their Estate Planning Done

Depending on your relationship, it may be uncomfortable to approach your aging parents about their end-of-life choices, but do not put off his conversation. As our parents age it is critical we foster open communication on who they want to take care of them, how care should be provided, and the legacy they wish to leave.

Your parents will almost certainly have ideas and wishes to fulfill. You can help them ensure their goals are met but also can take the time to make sure they are prepared for an uncertain long-term care future.

When it comes to Florida estate planning, there’s a lot to consider. Offering support could be exactly what the situation needs. Whatever the case, starting the conversation is step one. This is only the start though. Your goal is to ultimately plan for how they will find good care should they need it and know how they will be able to afford it.

The earlier you can have this conversation the better. Let us share one way to break the ice:

“Mom, or Dad, would it be okay if we talked for a minute? I feel like it’d irresponsible of me if I didn’t ask you about your estate plan and future health decisions?”

Simply put, an estate plan includes anything the aging person owns and it puts into writing how they would like to distribute any available assets after they pass. It also can include a financial power of attorney and a healthcare power of attorney. Both are documents allowing a named individual to make financial and healthcare decisions on the person’s behalf should he or she become incapacitated.

Consider continuing the conversation with this:

“Your estate plan is important to me, but it is more than that. I am worried that you may one day need long-term care. I think we need to start talking now about how we will find good care and be able to afford it.”

This conversation may catch your parents by surprise. Reassure them. Let them know that you are not trying to pressure them into making an immediate decision but you do want to open the conversation. Discuss with them how this type of care, which could become necessary in the future, can be expensive, and involve considerable inconveniences during an emotionally difficult period.

Share with them that if they do not have Florida estate planning documents that contemplate future elder care needs, much of the planning they need may not be possible. In fact, they may be at risk of not being able to save any of their assets from being depleted on the cost of a nursing home. Encourage them though that together you can create a plan with their elder care attorney to ensure that they are provided for under any potential future circumstance.

It may not be easy to talk to your aging parents about their estate planning and elder care needs, but with love and support it can alleviate worry and bring about peace of mind. Consider it an opportunity to be of service to your loved ones who once took care of you. Do not hesitate to ask us your questions.

How Will Tax Reform Impact Seniors and Persons with Disabilities?

How Will Tax Reform Impact Seniors and Persons with Disabilities?

The Tax Cut and Jobs Act (TCJA) is now officially law. Both the House and Senate passed the new tax reform bill in December with straight party-line votes and no support from Democrats. President Trump signed it into law right before Christmas. It is the first overhaul of the tax code in more than 30 years. In our continuing commitment to making sure you and your family are protected we want to share with you the tax reform impact on seniors and persons with disabilities.


Retirees, most of whom are on relatively fixed incomes, are probably the most concerned about what the new tax law will mean for them. But, generally, they will be less affected than others because the changes do not affect how Social Security and investment income are taxed. In fact, many will benefit from the doubling of the standard deduction and, with the new individual tax brackets and rates, will be paying less in taxes when they file their tax returns in April, 2019. (Most of the changes will apply to 2018 income, not 2017 income.)


Let us share the thirteen key individual provisions for retirees and persons with disabilities to know and plan for in advance. These individual provisions are set to expire at the end of 2025 so Congress will need to act before then if they are to continue.


1. (Mostly) Lower Individual Income Tax Rates and Brackets. There are still seven individual tax brackets and rates, but most are lower. Current rates are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. Here are the new rates and how much income will apply to each:

Rate Individuals Married, filing jointly

10% Up to $9,525 Up to $19,050 
12% $9,526 to $38,700 $19,051 to $77,400
22% $38,701 to $82,500 $77,401 to $165,000 
24% $82,501 to $157,500 $165,001 to $315,000 
32% $157,501 to $200,000 $315,001 to $400,000
35% $200,001 to $500,000 $400,001 to $600,000 
37% $500,001 and over $600,001 and over


2. Standard Deduction is Almost Doubled. For single filers, the standard deduction is increased from $6,350 to $12,000. For married couples filing jointly, it increases from $12,700 to $24,000. Under the new law, fewer filers would choose to itemize, as the only reason to continue to itemize is if deductions exceed the standard deduction.


3. Personal and Elderly Exemptions. Currently, you can claim a $4,050 personal exemption for yourself, your spouse and each dependent, which lowers your taxable income and resulting taxes. The new law eliminates these personal exemptions, replacing them with the increased standard deduction. The blind and elderly deduction has been retained in the new law. People age 65 and over (or blind) can claim an additional $1,550 deduction if they file as single or head-of-household. Married couples filing jointly can claim $1,250 if one meets the requirement and $2,500 if both do.


4. Medical Expenses Deduction. Currently, people with high medical expenses can deduct the portion of those expenses that exceeds 10% of their income. For example, a couple with $50,000 in income and $10,000 in medical expenses can deduct $5,000 of those medical expenses. The new law increases this to medical expenses that exceed 7.5% of income. In the example above, the couple would be able to deduct $6,250 of their expenses. (Note that this part of the new law applies to medical expenses for 2017 and 2018.)


5. State and Local Tax (SALT) Deduction. The amount you pay in state and local property taxes, income and sales taxes can be deducted from your Federal income taxes—and the amount you can currently deduct is unlimited. The new law limits the deduction for these local and state taxes to $10,000. Residents in the vast majority of counties in the U.S. claim an average SALT deduction below $10,000. Most low- and middle-income families who currently itemize because of their SALT deduction will likely take the much higher standard deduction unless their total itemized deductions (including SALT) are more than $12,000 if single and $24,000 if married filing jointly. Originally lawmakers in the House and Senate wanted to repeal SALT entirely, to help pay for the tax cuts, but lawmakers in high-tax states (specifically CA, IL, NY and NJ) fought to keep it in. Those in higher income households in high-tax states will benefit from the SALT deduction.


6. Lower Cap on Mortgage Interest Deduction. Currently, if you take out a new mortgage on a first or second home, you can deduct the interest on up to $1 million of debt. The new law puts the cap at $750,000 of debt. (If you already have a mortgage, you would not be affected.) The new law also eliminates the deduction for interest on home equity loans, which is currently allowed on loans up to $100,000.


7. Temporary Credit for Non-Child Dependents. Under the new law, parents will be able to take a $500 credit for each non-child dependent they are supporting. This would include a child age 17 or older, an ailing elderly parent or an adult child with a disability. It is temporary because it is set to expire at the end of 2025 along with the other individual provisions.


8. Higher Exemptions for Alternative Minimum Tax (AMT). The AMT was created almost 50 years ago to prevent the very rich from taking so many deductions that they paid no income taxes. It requires high-income earners to run their numbers twice (under regular tax rules and under the stricter AMT rules) and pay the higher amount in taxes. But because the AMT wasn’t tied to inflation, it has gradually been affecting a growing number of middle-class earners. The new tax law reduces the number of filers who would be affected by the AMT by increasing the current income exemption levels for individuals from $54,300 to $70,300 and for married couples from $84,500 to $109,400.


9. Federal Estate Tax Exemptions Doubled. The new law does not repeal the Federal estate tax, but it eliminates it for almost everyone by doubling the estate tax exemption to $11.2 million for individuals and $22.4 million for married couples. Amounts over these exemptions will be taxed at 40%. The new rates are effective starting January 1, 2018 through December 31, 2025.


10. Eliminates Individual Mandate to Buy Health Insurance. With the elimination of the individual mandate to purchase health insurance, there will no longer be a penalty for not buying insurance. This is expected to help offset the cost of the tax bill and save money by reducing the amount the federal government spends on insurance subsidies and Medicaid. The Congressional Budget Office expects that fewer consumers who qualify for subsidies are expected to enroll on Obama Care exchanges and fewer people who are eligible for Medicaid will seek coverage and learn they can sign up for the program. (Estimates of those who are expected to have no health insurance by 2027 are all over the place, ranging from 3-5 million to 13 million.) Critics, including AARP, claim that eliminating the individual mandate will drive up health care premiums, result in more uninsured Americans and add $1.46 trillion to the deficit over the next ten years, which could trigger automatic spending cuts to Medicare, Medicaid, and other entitlement programs unless Congress votes to stop them. Some claim the individual mandate helps to encourage younger and healthier Americans to sign up for coverage. Without it, the individual market might lean more toward sicker and older consumers, which might lead some insurers to drop out of the market. 29% of current enrollees on the federal exchange already have only one option in 2018. Others maintain that the mandate is not a key driver for obtaining insurance. About 4 million taxpayers paid the penalty in 2016.


11. Inflation Adjustments Slowed. The new tax law uses “chained CPI” to measure inflation, which is a slower measure than that currently used. This means that deductions, credits and exemptions will be worth less over time because the inflation-adjusted dollars that determine eligibility and maximum value would grow more slowly. It would also subject more of your income to higher rates in the future.


12. 529 Plans Expanded. 529 plans have been a tax-advantaged way to save for college costs. The new tax law expands the use of tax-free distributions from these plans, including paying for elementary and secondary school expenses for private, public and religious school, as well as some home schooling expenses. Educational therapies for children with disabilities are also included. There is a $10,000 annual limit per student.


13. ABLE Accounts Adjusted. ABLE accounts, established under Section 529A of the Internal Revenue Code, allow some individuals with disabilities to retain higher amounts of savings without losing their Social Security and Medicaid benefits. The new tax law allows money in a 529 education plan to be rolled over to a 529A ABLE account, but rollovers may count toward the annual contribution limit for ABLE accounts ($15,000 in 2018). The new law also changes the rules on contributions to ABLE accounts by designated beneficiaries who have earned income from employment.


As we move further into this year, expect some clarifications and strategies as the experts weigh in on the tax reform impact on seniors. There will also undoubtedly be some adjustments as the new tax bill goes into effect.  Please don’t hesitate to contact our legal team if you have questions about these new provisions and how they may impact you or those you work with or if you are ready to start planning in light of these changes.

Is Estate Planning an Elder Care Law Goal in Florida?

Is Estate Planning an Elder Care Law Goal in Florida?

Estate planning creates a legacy for your spouse, children, and loved ones. This planning enables you to pass your real property, assets and finances to your heirs. In your plan, you choose who will manage your estate once you pass away. 


Your estate plan, however, does more than plan for death. When you work with an elder care attorney, you can also plan for incapacity and long-term care. This comprehensive planning allows you to eliminate uncertainties regarding not only your estate but your future as well. 


For Florida seniors and their families, this means estate planning is an elder care law goal.


This year, make your estate planning a priority. Set it as a New Year’s resolution! If you already have a plan in place, make it your resolution to review it to determine if it still meets your needs. By taking this proactive step, you are protecting yourself and your surviving family from long-term care issues, probate court, arguments and other serious issues.


If you do not have a plan in place, make it your resolution to decide to meet with an elder care attorney to begin the process of planning for what you need now and in the future. Your attorney can show you how estate planning is an elder care law goal and will benefit your unique situation. It is never too late to start, but it is better to begin this process earlier rather than later. Having everything in order prior to issues that can arise from the aging process or your death can minimize complications and stressors for your family members.


During this process, decide how much you want your family to be involved. When you include your adult children in the process it can help allay fears and help everyone learn what your wishes for the future are. If you decide to include your adult children, make it a goal to meet with them regularly and keep them up-to-date with your decisions, as well as any changes.


Creating a Florida estate plan that fully reflects your wishes and focuses on your elder care needs is critical today.


Only having a part of the plan can cause more harm than good when you need action taken by your decision maker on your behalf. Further, having an out-of-date or inaccurate plan can also lead to stressful events and family friction at a time when you are vulnerable.


The most important resolution you can make is to ensure you have the right plan in place when you need it. We are here to help you. Do not wait to contact a member of our legal team to get started.

6 Tips for Discussing Your Estate Plan with Your Children During the Holidays

6 Tips for Discussing Your Estate Plan with Your Children During the Holidays

It is important for you to talk to your adult children about your Florida estate planning. You want your children to know who has the legal authority to make your decisions.  You also want them to know what your long-term care goals are should you become incapacitated.  There may never seem to be a good time, however, to have this discussion.


Your estate planning and elder care goals are best discussed when you can be face-to-face with your family. We know this is not always possible. For many families who live in different states, time together is a luxury that only holiday visits make possible. If this is the challenge you face, we encourage you to set aside time with your children during the holidays for this important conversation, whether you are traveling or they are. Let us share with you six steps to take when you are having this discussion together.


1. Plan ahead for this meeting. Before any discussions occur, it is important to determine what you want to share with your children. Plan ahead for what you will discuss, including your goals and long-term care wishes. You may decide that you want to bring copies of your documents to the meeting as well. Don’t hesitate to make a list.  This way you will not forget anything you want to share.


2. Prepare for questions that may be asked. You know your children. What do you believe their questions will be? Do not only think about the questions, but also consider your answers. For example, if you have a child who is a financial professional, but you name another child as your agent under your Florida durable power of attorney, there may be questions. Be ready to help your children understand your decisions.


3. Take into account different personalities. Each of your children are different and have different skills. Your estate planning may reflect your understanding of these differences as well as your belief of how each child will be able to help you in the future. You want to select the right child for the right role based on your wishes, not the wishes of someone else.


4. Be prepared to talk about long-term careYour children may not have much experience with elder care. They may not be well-versed in what type of care you may need in the future or your concerns over how you will pay for it. Be ready to share with them your goals for your long-term care planning and tell them the name of your elder care attorney.


5. Remember your goals. This is a serious conversation. It also may become emotional as you talk to your children. Even though it can be hard to discuss, remember that your goal is to secure your future and to educate your children on your elder care wishes. Do not forget to tell them that this planning also protects them.  You will have the planning tools you need in place to avoid losing all of your money to long-term care costs.


6. Know this conversation does not have to be the last. Let your children know at the outset that this can be an ongoing conversation. You may want to pause the meeting so everyone can reflect on what was shared before coming together again.  Work together to find a time you all can meet and discuss your estate planning and elder care needs further.

Do you need more guidance on the type of estate planning and elder care planning you need in Florida? Our team is ready to meet with you and discuss your questions. Do not hesitate to contact us and schedule a meeting with Attorney Scott Selis.