630-665-2500
128D S. County Farm Road, Wheaton, IL 60187
Recent Blog Posts
Do Not Overlook Estate Planning Documents During Divorce Process
Just as June is typically referred to as the wedding month, January is quickly earning the moniker of divorce month. Statistically, there is a glut of divorce filings which occur on the first Monday of January, and those filings continue to occur on a steady pace for the rest of the month.
A person who is going through the process of divorce typically struggles with decisions such as child custody issues, property and asset division, as well as many other legal—and emotional—issues. Given all these upheavals, it could be very easy to overlook one very important issue which a divorcing person needs to address—the updating of estate planning documents.
If you currently have a will drafted, it most likely names your soon-to-be ex-spouse as an heir. There is also a good possibility that your spouse is also the executor of your estate, which means he or she controls whether or not your last wishes will be kept.
Estate Planning and Medicaid Options
Many Americans go through their adult life working hard and saving money with the goal to enjoy a comfortable retirement. Unfortunately, at some point in their senior years, it becomes too difficult for many people to live at home—a decision is ultimately made that that living in a nursing home is the safest and best option. However, nursing homes are expensive and Medicaid will only cover costs for people who all into the low-income category.
For those seniors who worked hard and saved their money, nursing home costs can quickly annihilate savings. This can be especially troubling when for elderly couples when one spouse is still healthy and is able to live on his or her own. Still, what will that spouse use to live on if nursing home costs for the other spouse is eating up all their money?
In order for a person to qualify for Medicare, individuals cannot have more than $2,000 in countable assets. These assets include:
Medicare to Now Cover End-of-Life Care Sessions
On January 1, 2016, Medicare will begin covering the medical costs for patients who wish to participate in end-of-life counseling sessions. Many medical personnel already discuss these subjects with patients, however, they do not receive any reimbursement.
Under the new coverage, physicians and nurse practitioners, as well as other health care providers, will now receive payment for the time they spend discussing end-of-life options with patients.
A report issued in 2014 by the Institute of Medicine, "Dying in America," touted the importance of providing patients with the opportunity to discuss what life saving measures they do or do not want taken in the event that decision has to be made, as well as other end-of-life care options. The report found that many patients suffer through invasive treatments instead of receiving more comfort care, mainly because they never have end-of-life care discussions with their physicians, or even their families.
The Benefits of 529 Savings Plan for Estate Planning
In light of the cost of college tuition and other associated expenses, it is never too early to start your children's or grandchildren's college fund. In fact, one option for savings—529 college savings plans—can actually offer estate planning benefits, as well.
The 529 savings plan debuted in 1996 as a way to set up an educational savings plan without having to pay federal taxes on any interest that is earned by the account. The plan gets its name from Section 529 of the IRS tax code.
There are two different types of plans. The first is the college savings plan. Like other types of financial savings plans, the funds that are deposited in this type of account are typically invested in bond mutual funds, stock mutual funds, money market funds, and other portfolio investments. These funds can later be used at any college or university. It is important to note that these funds are not federally insured or guaranteed by the state.
Are Intra-Family Loans a Smart Choice?
It is not uncommon for parents to provide financial assistance to their adult children for major purchases, such as the purchase of a new home. Moreover, the amount lent to an adult child may be dependent on his or her financial circumstances. However, one option that many families are considering is intra-family loans.
The rising popularity of these loans may come from the lack of higher-interest bearing savings accounts that most financial institutions offer. For parents whose money would be sitting in an account that is only earning approximately 1.5 percent interest, the lending of funds to be used as a mortgage to their adult child, and the earning of 4 percent interest, is a much more attractive proposition.
For an adult child, an intra-family loan can offer lower interest rates than what the lending institutions offer. Utilizing an intra-family loans can also help to avoid the often large down payments that lending institutions additionally require before they approve a mortgage. An adult child is still able to claim the interest he or she is paying to their parents on their income tax, as well. In addition, this interest "stays in the family"—either spent by the parents or it is eventually inherited by the adult child. None of it goes to a bank or mortgage company like traditional mortgage interest does.
Recent Changes for Estate Tax Returns Announced
A recent statute passed by Congress and signed by the President, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, contains a provision concerning estates which are required to file estate tax returns and imposes new reporting requirements. The law went into effect on July 1 and it only applies to estate tax returns due on or after July 31.
According to the new law, the estate tax return must report, separately, to the IRS, and to each individual beneficiary of the estate, the estate tax value of any property the beneficiary is to receive. These statements must be provided to the IRS and any estate beneficiaries within 30 days of the estate tax return due date. For example, if an estate has a return due on December 1, the reporting must be provided by December 31.
The responsibility for this reporting falls to the executor of the estate. Information which should be provided in the statement includes the value of each property which is being reported, as well as any other information the IRS may require because of the new law.
Granny Scammers Utilizing Social Media to Prey on Seniors
Scammers who prey on senior citizens have been around for a very long time. Estimates indicate that each year, almost $3 billion are handed over to these con artists by unsuspecting seniors.
Some of the more common scams include Medicare fraud, counterfeit drug scams, telemarketing scams, sweepstakes scams, and investment fraud. Additionally, what all of these schemes have in common is tricking the elderly into handing over money—often substantial amounts.
There is a new ploy that has seen an alarming increase lately, referred to as the "Granny scam." These scammers use an elderly person's social media accounts to obtain personal information and use it to con the person out of money.
The person committing the con pours over social media sites, with Facebook being the most common. Important personal information is discovered on these accounts, such as family members names, nicknames, travel plans, place of employment, etc. Once a con artist is armed with that information, he or she will contact the elderly victim and, pretending to be the family member, claim to be in some sort of financial trouble and need money right away.
Estate Planning for Victims of Alzheimer's Disease
According to the Alzheimer's Association, Alzheimer's disease is number six cause of death in this country. However, in the list of the top 10 causes of death, Alzheimer's disease is the only cause which shows no signs of being prevented or cured. The disease's progression cannot even be slowed.
In order to bring awareness to this disease, November has been designated as National Alzheimer's Disease Awareness Month. There are currently 5.3 million Americans who have been diagnosed with the disease, and those numbers continue to increase. Projections are that in 10 years, the number of people who are 65 years or older will spike by 40 percent—to 7.1 million.
For those who have been diagnosed with Alzheimer's Disease, what type of estate planning should be in place?
Study: Are Investors Really Aware of Signs of Fraud?
When it comes to investing your money, do you know what warnings to watch for that could be indicators of fraudulent activity? A recent study reveals that many seasoned investors may not be aware of the signs that could spell financial loss—possibly even disaster—for an unsuspecting investor.
The study, titled "Understanding Investor Perceptions of Financial Statement Fraud and Their Use of Red Flags: Evidence from the Field," was conducted by researchers from George Mason University, North Carolina State University, the University of Cincinnati, and the University of Virginia. A grant for the study was provided by Financial Industry Regulatory Authority (FINRA) Investor Education Foundation.
Surveys were given to 194 participants from 38 different states across the country. The gender of participants was split evenly between men and women, with the average age of between 40 and 49 years old. The average household income of study participants was between $60,000 and $90,000.
Will You Really be Financially Ready for Retirement?
Many people formulate plans for their senior years—they set up retirement and other investment accounts, and they draw up wills and other legal documents to help ensure that their senior years are indeed the golden years.
However, as people make these plans decades before the plans will actually be enacted, it is worthwhile to question whether or not they realize just how much they will need when those golden years arrive.
According to statistics from the Employee Benefit Research Institute, most people will see an approximately 20 percent decrease in household expenses between the ages of 65 and 75 years old, and an even larger decrease (35 percent) by the time a person hits 85 years of age. Still, there are major household expenses that remain no matter what the age a person is and those are the ones people have to plan for when they will no longer be earning a weekly pay.
