Beginning a family is an exciting time full of memories and milestones. No one wants to consider bad situations while marriages are new and the kids are young. But, unfortunately, sometimes tragedy hits and families are left to pick up the pieces. Planning for the worst is a way for parents to show they care about their family and will continue to do so even if something happens to them. Estate planning for young families is extremely important to ensure a safe and secure future for children and other dependents. While it may appear to be a confusing process, there are…
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The costs of long term care are increasing every year, but most families do not understand what they will be confronting when it is their time to start paying for care. Too many people wait until they are in the midst of a crisis situation before they start trying to figure out how the world of long term care works. Long term care is a very expensive proposition. Families can go broke trying to provide for a loved one. New approaches to fund long term care must be encouraged, and converting life insurance policies into a Long Term Care…
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In order to qualify for Medicaid, in Maryland, you can't have more than $2,500 in assets. Many people forget about life insurance when calculating their assets, but depending on the type of life insurance and the value of the policy, it can count as an asset. Life insurance policies are usually either "term" life insurance or "whole" life insurance. If a Medicaid applicant has term life insurance, it doesn’t count as an asset and won't affect Medicaid eligibility because this form of life insurance does not have an accumulated cash value. On the other hand, whole life insurance accumulates a…
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Many people share a common misconception that Medicaid Planning is not in the best interest of nursing homes. At the same time, many nursing homes are now recognizing that without proper Medicaid planning, some residents who have spent down all of their assets are not automatically qualified for Medicaid…leaving the nursing home with a very large, uncollectible bill. And, as many of you are aware, non-spouse family members are not responsible to pay the nursing home bill for their relative. If the resident is unable to pay and they do not qualify for Medicaid, the nursing home will have a…
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There are many planning devices of which families can take advantage to avoid having to go through the probate/ administration process. Most of them are relatively simple. For example, your bank accounts can pass outside of probate simply by putting a POD (paid on death) or TOD (transfer on death) designation on the account. Once you have a POD or TOD on the account the money will go to the designated person(s) upon the presentation of a death certificate to the bank. Each bank has its own procedure for doing this so please check with your financial institution for their…
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One solution: Donating the principal to a nonprofit in the form of a "charitable gift annuity" in exchange for lifetime fixed annuity payments. Remember the good old days, you know, when you could invest in a certificate of deposit (CD) and the bank would actually pay you something called “interest” on your deposit? No, really, I kid you not. Obviously, I am being a bit factitious, but you get the point. It is hard enough to make money these days, let alone accumulate wealth. Let’s say you are retired and are looking for a place to put your money to…
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Life insurance can be a powerful estate planning tool, but paying for it doesn’t necessarily guarantee your heirs will receive the benefit – not if the policy gets lost in the shuffle of life. Remember, your heirs may have to specifically approach the insurance company with their claim in order to receive any benefits. In fact, New York’s Attorney General’s office is investigating nine leading life insurers to see whether they have done enough to identify beneficiaries of life insurance policies. Do your heirs know the particulars of your life insurance, or where to find the paperwork? As recently explained…
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Since most of just finished filing our annual income tax return, we may not be in the mood to further discuss the topic of taxes … unless it’s all about avoiding them. Which is why now is a good time to turn to the topic of life insurance, taxes and your estate plan. The primary purpose of life insurance, for most people, is to replace income that would be lost should you die prematurely. The good news is that life insurance death benefits are generally received by your beneficiaries free of any federal income tax (and usually free of any…
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Purchasing life insurance in an amount sufficient to cover an estate tax liability has long been a staple of estate planning strategy. But with so many escaping federal estate taxes under the new tax law, families are starting to re-examine their need for life insurance obtained to help heirs pay the tax. Faced with continuing premium payments, many are asking whether they need to keep the insurance. You should think twice, though (and get some professional advice) before giving up your policy. The Wall Street Journal recently advised readers to consider keeping life insurance. First – realize that the “death…
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SmartMoney recently ran a reminder to all possible victims of the estate tax. The fact is that you could have a taxable estate, and not even realize it. Most people assume that since they don’t “feel” wealthy, they don’t have to worry about estate taxes — but they don’t actually do the math. Your “taxable estate” includes (minus liabilities): proceeds from life insurance policies; your primary residence and any vacation and/or rental properties; retirement accounts, investment accounts; cars, furniture, collectibles, and the rest of your “stuff.” Plus any private business ownership interests (such as shares in a family business or…
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