On October 22, 2024, the IRS issued Revenue Procedure 2024-40, providing the annual inflation adjustments for tax provisions to be used by individual taxpayers for the 2025 calendar year. The adjustments include the following: The estate, gift, and generation-skipping transfer tax exemptions for 2025 are $13,990,000, an increase from $13,610,000 for transfers in 2024. The annual exclusion for gifts is $19,000 for calendar year 2025, an increase from $18,000 for 2024. For 2025, the first $190,000 of gifts to a spouse who is not a citizen of the United States (other than gifts of future interests in property) are not…
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DIVORCE IS FINA UPDATE LIFE INSURANCE BENEFICIARY DESIGNATIONS A life insurance policy is a contract that designates who is to be paid upon the insured’s (your) death. Upon your death, a check will be sent to the person listed as the beneficiary, even if it is your ex-spouse. UPDATE RETIREMENT ACCOUNT BENEFICIARY Although state law may automatically revoke the beneficiary designation if an ex-spouse is listed, federal law (ERISA) states that the last-named beneficiary is the one who receives the funds. Depending on the type of retirement account you have, your ex-spouse may be entitled to the funds if they…
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Life is full of changes, and with those changes come new responsibilities and considerations, especially when it comes to your estate plan. Whether you are experiencing the joys of marriage, the excitement of welcoming a new child, the challenges of divorce, or the grief of losing a loved one, it is crucial to ensure your estate plan reflects your evolving life circumstances and wishes. Let’s explore some key life events that necessitate an immediate update to your estate plan. Marriage. Getting married is a significant milestone, often filled with joy and new beginnings. While updating emergency contacts and adding…
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The death of a loved one is never easy. Regardless of your relationship with the deceased (for example, a relative, significant other, or close friend), you need space and time to process and grieve your loss. Once you have had time to cope with all that has happened, you should consider updating your estate plan in light of your loved one’s death. Although your estate plan primarily focuses on what will happen if you become incapacitated (unable to make or communicate your wishes) or die, the death of a loved one can have a significant impact on…
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Most people believe that receiving a large inheritance from a loved one would be life-changing. At least one study, however, found that about one-third of Americans who had received an inheritance eventually experienced a decrease or no change in their wealth after receiving the inheritance, meaning that they most likely spent everything they received.[1] For baby boomers who received an inheritance of $100,000 or more, nearly one in five spent it all.[2] If you are preparing to receive an inheritance, there are several steps you can take to ensure that your funds will last longer than a few…
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Congratulations on the purchase of your new home! Whether this is your first home or you are upgrading or downsizing from your current home, the purchase of a home is a big event in your life. When major life events occur, it is important that you have a plan in place to ensure that you are properly prepared for the future. Below are a few things to consider now that you finally have the keys to your new home. Update Your Address Now that you are in your new home, it is very important that you update…
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When a loved one is diagnosed with dementia, planning for their long-term care becomes a top priority. The progression of dementia often necessitates transitioning to a living arrangement that can meet both their medical and daily care needs. Families are typically faced with choosing between independent living, assisted living facilities, and nursing homes. Understanding the key differences between these options is essential for ensuring the best care while preserving as much quality of life as possible. Independent Living Communities What They Offer: Independent living communities are designed for older adults who are generally healthy and can manage their daily activities…
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Creating a safe environment for someone with dementia is not only about physical safety but also about maintaining their dignity and quality of life. Dementia can impair a person’s memory, judgment, and coordination, making it essential to adapt their living spaces to prevent accidents and confusion. From personal experience, I’ve learned how critical it is to provide a safe and supportive environment for loved ones facing cognitive challenges. In the 1990s, when my wife’s grandfather suffered a fall, I found myself deeply involved in his care. As his attorney and family advocate, I was tasked with making critical decisions regarding…
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Estate planning takes on added complexity when dementia is involved. The progressive nature of the disease presents unique challenges in preparing for the future, making it crucial to address legal, financial, and healthcare matters proactively. In this blog, we’ll explore key considerations and strategies for effective estate planning, aiming to ensure that individuals with dementia have their wishes honored, assets protected, and healthcare needs met. Understanding Dementia Dementia refers to a range of neurological conditions that result in cognitive decline and memory loss. It’s not a single disease but rather a syndrome that affects thinking, behavior, and the ability to…
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A revocable trust and a Medicaid Asset Protection Trust (MAPT) serve different purposes and are designed for different situations. Here are the key differences between the two: Revocable Trust: Flexibility: A revocable trust, also known as a living trust, allows the grantor (the person creating the trust) to maintain control over the assets placed in the trust. The grantor can modify, amend, or revoke the trust at any time during their lifetime. Estate Planning: The primary purpose of a revocable trust is often estate planning. It helps to avoid probate, which is the legal process of validating a will. By…
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