Redkey Gordon P.C.

Don’t Just Think about Your Estate, Plan for It!

The sad truth is that most of us — some 70% of adult Americans — have neglected to write a will. Some think their assets are just too puny to worry about, others worry that the costs of writing a “last will and testament” are too high. But wills aren’t just vehicles for the wealthy or the morbid. If you’ve got a family and a home — not to mention a savings account — you should definitely have one. Cost is no excuse.

A recent MarketWatch article, titled “Why wills aren’t just for the wealthy,” sheds light on this important life-planning topic.

Like many people in the U.S., you may not think about estate planning until you have kids. A will is critical when you have children, because people think about what would happen if both spouses die at the same time. Without a will, a probate court judge will be tasked with selecting the individual who will care for your minor children as a guardian. That could be just about anyone, including a person you would never ever pick to take care of your kids! Why not name someone yourself right now? You also should name an alternate guardian in the document in the event your first choice is unable to serve.

Writing a will is also your opportunity to detail who gets what in your estate. But before you can do that, you need to count your assets. This includes your house, investment portfolio, retirement plan account, and the proceeds from any life insurance coverage. After doing this exercise, many folks see that they’re worth more than they initially thought.

Next you need to decide what you want to leave to whom and who will be executor of your estate. The original article notes an important caveat: check and see that the beneficiaries listed in your will match the beneficiaries you name for your insurance policy, 401(k), and any other retirement accounts. These documents trump your will.

You may also want to do more complex estate planning, such as a trust. Most people create these to protect their heirs from having to pay hefty estate taxes and perhaps to protect their heirs from themselves if they are not very good with money.

The original article reminds us that once you have a will in place, don’t forget to update it on a regular basis and to change it whenever you have a significant change in your family, like a birth, a death, or marriage. Doing all this prep work for when you’re gone may seem like a hassle, but it’s nothing compared to the headaches your heirs will have without solid estate planning in place.

Consult with Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney who can guide you through these and other considerations.

Reference: MarketWatch (March 17, 2015) “Why wills aren’t just for the wealthy”

James Earl Jones Discusses Elder Law Topics on “In America”

"In America" will discuss elder law and the way that legal standards and details are changing over time.

What exactly is Elder Law? Why is this so important for Americans?

Elder law is a general term that describes the laws and regulations that affect older men and women. This term can relate to the proper care and guardianship of an older person who requires medical attention and can no longer function without assistance. The recent Insurance News Net article, titled “Elder Law is discussed with host James Earl Jones on "In America,” notes that the range of topics elder law addresses includes divorce among adults over 65 years old and law regarding elder abuse.

Elder law attorneys for individuals, or for their loved ones, advocate for their clients’ rights and personal goals. They handle details related to estate planning, retirement, government programs like Social Security and Medicaid, and guardianship when a senior is unable to deal with his or her own personal affairs. This also includes long-term care, nursing home issues, and end-of-life planning.

Because this is such a broad category of laws and the effects of those laws differ based on the circumstances, elder law attorneys provide services that focus on the specific goals and concerns of older men and women. The options that are available to an individual or their family will depend on the situation and the person's health. This is why it’s a good idea to speak to an experienced elder law attorney to discuss your particular situation and your objectives.

You can find information about elder law on "In America" with host James Earl Jones. This is a good introduction and can get the discussion going. However, to get concrete answers for your or your loved one’s situation, seek the help of Robert A. Gordon of Redkey Gordon Law Corp, an experienced elder law attorney.

Reference: Insurance News Net (March 16, 2015) “Elder Law is discussed with host James Earl Jones on "In America"”

Darwin award winner...

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Retirement Pitfalls to Avoid

In nearly every way you could make a mistake -- for example, saving too late -- you can also make up ground by availing yourself of all resources at your disposal (say, your employer's 401(k) matching program). With that in mind, here’s a list of 28 major retirement pitfalls to avoid -- and what to do if you end up taking some missteps.

Retirement planning is tricky, no? When and where and how much … there is no “one size fits all” when it comes to retirement.

Experts say that the right retirement plan involves timing and opportunity. But nobody’s perfect. We all are apt to make a mistake, but we can usually make things right. With that in mind, The Motley Fool compiled a list of 28 major retirement pitfalls, how to avoid them—and how to correct them if you take a detour in an article titled “28 Retirement Mistakes People Make.”

Here are a few:

No Retirement Plan. Major disaster in the making! Neglecting your retirement planning is one of the first and biggest mistakes you can make. Consider what you want your future to look like and how much money you can reliably set aside, then find a deposit product that will get you there. Employers often offer 401(k) plans, and you can also open an IRA without an employer sponsoring the account. These are a great way to kick off your retirement savings.

Thinking You’ll Want to Keep on Working. Oh sure. You love your career and can’t dream of life without it. However, things change, like your health, and you might be ready to take it easy and retire. You shouldn’t skimp on your saving because you think you can work until you're 90 and earn more than you do today. There will always be a youth movement in the offing—those folks will be willing and eager to work for less. Think about buying that fishing boat or taking your spouse on a nice cruise. That’s why you worked so hard all those years! 

Transfer on Death and Payable on Death Designation Issues. If you have a trust or estate plan, the original article says experts recommend you check your "transfer on death" and "payable on death" designations to make certain they match your will. These designations will impact who gets your retirement account assets when you die. "Transfer on death" registrations trump your will’s directions.

Faulty Trusts. If you have some money for your children or beneficiaries to inherit, then you should analyze your trusts. Every situation varies, but designating a trust as the beneficiary of a retirement account could be a problem if it’s not drafted correctly.

Talk to Robert A. Gordon of Redkey Gordon Law Corp, a qualified estate planning attorney and take a gander at the other 25 mistakes discussed in the article.

Reference: Motley Fool (March 11, 2015) “28 Retirement Mistakes People Make”

Medicaid Rules in Connecticut Could Be Changing in Regards to Asset Levels

In all states, federal Medicaid law provides special protections for the spouses of Medicaid applicants. But states decide how much the non-institutionalized spouse may keep, within a range. Connecticut's allowance -- $23,844 -- is the lowest. And legislators are calling for an increase.

If this legislation succeeds in reducing the amount of money assigned to the institutionalized spouse, he or she would become eligible for Medicaid assistance more quickly.

The CT Post report, in an article titled “Legislature asked to raise asset level for Medicaid spouses,”says that the bill would affect couples with assets of about $24,000 to $100,000. Right now, when a person tries to qualify for Medicaid, couples will split their assets evenly, and the nursing-home-bound spouse must spend down his or her portion to $1,600. This means if a couple has $60,000, each spouse is attributed $30,000, and the one heading to the care facility must get his or her share down to $1,600. [Note: These numbers can and do vary state by state.] This is typically accomplished by paying for initial nursing home care. Under the state’s new proposal, the community spouse would be able to keep $50,000 in assets.

The original article says that advocates believe that in allowing the community spouse to keep $50,000, it might help him or her stay out of poverty, off government programs, and in the couple's home.

Raising the allowance for spouses could save money in the long run: it could keep the spouses off public assistance longer by giving them some money for health or other emergencies that could impoverish them.

In all states, federal Medicaid law provides special protections for the spouses of Medicaid applicants. However, it’s the states that determine the amount of money the non-institutionalized spouse may keep (within a range). Connecticut's allowance of $23,844 is the lowest in the country. States like Massachusetts, Vermont, Maine and Illinois are much higher. The highest is reported to be $119,200.

Medicaid nursing home costs average an estimated $6,000 a month in the state, so it can be quite an expense. See how your state is handling the Medicaid spend-down, and if there are any changes on the horizon. Make an appointment to see a qualified elder law attorney to discuss Medicaid in your state.

Contact your local estate planning attorney, Robert A. Gordon of Redkey Gordon Law Corp for further assistance. 

Reference: CT Post (March 10, 2015) “Legislature asked to raise asset level for Medicaid spouses”

Estate Distribution among the Kids – Who Gets What?

In the book The Charles Schwab Guide to Finances After 50, author Carrie Schwab-Pomerantz poses the following scenario: “I’m confused about how to divide my estate between my children, who have different needs and financial resources. Is it best to divide it into equal parts?”

This question is directed at people who have children at different levels of personal and financial success, according to a recent Millionaire Corner’s article titled “Dividing the Estate: Treat Your Children Well.”It suggests that the parent in this scenario may want to do more for the struggling child than for the successful one as far as designating heirs for their estate assets.

The original explains that it makes sense for parents to treat their children equally. While one may think about providing extra assistance to a child with fewer resources, or for a child with special needs, you need to do so cautiously. The article also reminds us that the status of the children can change over time, making a strong argument for equal distribution.

However, if you do decide to divide your estate unequally, it’s a good idea to explain your plan to all of your children right away—be honest about any of your concerns for each of them.

If you choose an unequal distribution, you might consider giving more money to the children who need it the most, and the more successful children could have some of the family heirlooms with emotional value and maybe a high resale value. To make sure your estate wishes are executed as you want, contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney who can make certain everything is legally binding and proper.

Some people choose adult children to serve as executor or trustee for the estate, and the article warns against this. The size of the estate and the complexity of assets are two things to consider, along with the emotional stability of the family members who will be benefitting from the estate.

When one person in a family is given authority or power over others, there’s always a chance problems could arise. Children may all get along now—but could that change when money is involved or issues of control arise? It might.

When choosing an heir to execute the estate, you should think about whether that person is going to be paid from the estate for the services he or she provides. Once you make a decision, you should talk to your children and be open about your estate plan. This includes what’s in it for each of them and why you’ve chosen a specific person. They’ll be happy to know that you trust all of them with this and that they’ll honor your wishes without discord.

Reference: Millionaire Corner (March 12, 2015) “Dividing the Estate: Treat Your Children Well”