THE NASH BEAN FORD & BROWN, LLP BLOG

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If you live a long life, your chance of declining cognition gets worse. The statistics are stark: Among the over-65 cohort, 29% struggle to make wise and informed financial decisions. By that age, 11% are suffering from Alzheimer's, while a further 15% have mild cognitive impairment, which may demand compensatory workarounds to preserve their independence. The decline only progresses. By age 82, the likelihood rises to 50% and by age 90 to 80%. Still, retirees and their families can prepare themselves for the mental challenges of aging. Warning symptoms Are stacks of unpaid bills mounting up? Is it taking you (or your parent) too long to settle the invoices? Do you flounder when you must quickly calculate a tip for a restaurant meal? Is a house that was formerly shipshape getting untidy? Is a retiree who always used to be prudent about investing suddenly throwing caution to the wind and making speculative gambles? It can be alarming for seniors to notice those traits in themselves or for their families to recognize those signs. Before financial calamity strikes, you must act for everyone's sake. Retirees themselves should stay hypervigilant for financial scammers. Several tricks target the elderly, often to elicit personal information that exposes their accounts. Some of these include: Posing as a Social Security or Medicare representative or a utility company Pretending to be a grandchild in need of funds — may be online or by phone Pyramid schemes Counterfeit prescription or anti-aging products, such as for improving memory skills Bogus telemarketing prizes Keep your antennae up and warn elderly relatives and other vulnerable people. Make sure to monitor accounts regularly for fraud or unauthorized activity. Simplify finances When retirees are competently managing their affairs, it is still sensible to streamline accounts. You might, for instance, limit accounts to one taxable, one traditional IRA and one Roth. You should be clear in your mind as to the function of each. Is it there for income or for emergencies to draw on? Or is it intended for legacies, such as for your children or grandchildren? If you can automate your bill payments, it will save you the hassle of tracking, paying and balancing accounts. You can also arrange for direct deposits. Another useful resource is Social Security's own Representative Payee Program, originally authorized by Congress in 1939, which helps beneficiaries who are incapable of managing their Social Security income. Now dealing with almost 3 million recipients, the program enables a designated friend, family or an institution, like a nursing home, to direct the income toward food, shelter, bills or medical care. Leftover money goes to an interest-bearing account or savings bonds. There are plenty of helpful budgeting tools available that retirees may find useful for keeping track of finances. A sampling includes: BudgetPulse — import information manually from accounts Budget Simple — free, intuitive interface Age Well Planner — for creating budgets, planning and cutting spending, plus government resources Mint — a popular tool for consolidating account information, with alerts for overdue bills or low fund levels Daily money managers (DMM) A DMM can be your financial butler and executive secretary, relieving stress and preventing errors. A DMM can perform many critical tasks, preventing them from falling between the cracks. Typical jobs include receiving and paying bills, managing mail, filing insurance claims, and taking on the drudgery of organizing tax return documentation. These providers are certified by the American Association of Daily Money Managers, which requires managers to pass a criminal background check and a written examination. But ask some key questions before you leap. What are the fees for in-person or virtual meetings? Can you get monthly statements? How many communications are allowed? Are you charged each time? Are you protected against a data breach? Can your fees be refunded for unsatisfactory service? You should discuss other strategies with your financial advisor or attorney, such as joint accounts or a financial power of attorney. Your advisor might also suggest an annuity for a limited portion (but not all!) of your assets.

The trouble with inheritances is that you're not around to make sure everyone completely understands the how's and whys of your decision-making process. That is why having frank and honest discussions ahead of time is critical. When siblings have very different personalities, needs, and motivations this can be even more difficult. How can you keep your kids or other heirs from fighting it out after you're gone? Here are a few things to consider. Start the conversation early and often. No, you don't need to have the conversation with your five-year-old, but once your children are adults, it is time. Talk to them about your wishes for your estate. Establish someone who can be an executor who is likely to be responsible and not instigate arguments between siblings and families. Establish your wishes in writing. Now that you've had the difficult conversation with your family, it is time to put pen to paper. This is where you should consult a legal expert who can help you craft a will that can work for your estate and, hopefully, keep the peace between your children or heirs. Understand the clarity of communication. For example, there is a difference between saying that each child will get an equal portion of items from the estate and specifically stating how each of their inheritances will break down in value. There may also be inequity between each child's lifestyle which facilitates a different process between them. Even if you're trying to create scenario that works best for each individual, that sense of fairness will be difficult to overcome. Know the difference between fair and equal. To this end, it is critical that you and your children understand the difference between fair and equal. Equal is giving each child a stake in the house so, after your death, it is sold and the profits split. Fair might be willing the home to your youngest child when your older children are already established in their own homes. You could, then, offer an asset of similar value to the oldest. Do you want to make sure that your family is taken care of in the most fair and equitable way? Our experts can help you establish the right process for your inheritance to avoid major conflicts between family members, so call today! Copyright HomeActions, LLC © 2012 - 2025. Powered by IndustryNewsletters, 5.19.3, authored by Richard Koreto.

This guide will walk you through the necessary steps to prepare for your first estate lawyer meeting, helping you feel more confident. Read on to learn more!

A life insurance trust is a form of irrevocable trust that invests the proceeds of a life insurance policy into a trust with designated beneficiaries. Most life insurance policies are owned by the insured. The money is paid when the insured dies, but the payment made to the beneficiaries is taxable. Because a life insurance trust is owned by a trust, which functions as a separate entity from the insured, the beneficiaries do not owe taxes. Life insurance trusts are often used to avoid passing burdensome estate taxes onto the beneficiaries. Understanding Estate Taxes The federal government taxes your estate above a certain amount, based on limits set annually and subject to change. When the estimated value of your estate exceeds this amount, the excess amount if subject to the federal estate tax. This tax is in addition to any income taxes and probate taxes or fees owed at the time of death, and they must be paid in cash within nine months of the death of the estate owner. If you hold considerable financial assets, your estate may be subject to very high taxes, thus reducing the amount you can pass on to your heirs by a substantial amount. Life Insurance Trusts: How They Work An irrevocable life insurance trust has a grantor, the person creating the trust. A trustee is the person chosen to manage the trust. The beneficiaries are those chosen to receive the benefits of the trust. The trustee purchases life insurance in the trust’s name, with you as the insured. The trust is typically named as owner and beneficiary. Upon your death, the money from the life insurance company is paid to the trust. The trust then pays any probate costs, legal fees and other fees related to the death and funeral expenses, and then distributes the remainder to the trust’s beneficiaries. Benefits Of Life Insurance Trusts Life insurance trusts aren’t subject to estate taxes. They also give you greater control of your assets, since you establish the rules and boundaries of the trust fund. A trust cannot be touched by creditors or the courts, so funds inside the trust are relatively secure. There are a few things to note about life insurance trusts. They’re irrevocable, which means that once you set up the trust, you can’t change it. Be certain of how you wish to create the trust and the ground rules regarding the management and distribution of funds. Life insurance trusts aren’t for everyone, but they do offer another option to minimize estate taxes. Tax laws and tax rules are constantly being updated and interpreted. This article contains general information, so please discuss your individual situation with a trusted tax adviser before making tax decisions.

You never know when life will pull the rug out from under you in the way of a lost loved one. You may be forced to make decisions you don’t have the answers for, or even worse not be allowed to make decisions because you or your loved ones haven’t prepared end-of-life documents. Anyone over the age of 18 should have estate planning documents drawn up by an attorney to help your family answer those important and difficult questions. 4 Estate Planning Tools You Need Before a Trip to the Hospital Going to the hospital or doctor may seem like an ordinary thing, much like driving a car, or crossing a street. However, the dangers of these everyday activities can lead to tragedy and loss. It’s important to ensure your affairs are in order in case of these losses. Healthcare Power of Attorney A Healthcare POA helps define what you’d like to see happen medically once you are unable to make decisions coherently anymore. This document ensures that the agent you choose to represent you will respect your legal wishes on how you’d like to be cared for. Another supporting document to have prepared is the HIPAA authorization form and the Living Will. Having these tough talks can be grueling but allowing someone to help guide you can make the process less scary. Durable Property Power of Attorney A Durable Property POA helps define who and how your financial property is taken care of if you were to become incapacitated or couldn’t take care of things for some reason. It assigns an agent or proxy to act in your place once you are no longer able. This includes controlling not only your assets, but any debts or real estate or other property. Last Will and Testament A last will and testament is a legally binding document that allows you to have control over who and how your assets are distributed when you pass away. Although it is an excellent starting place, having just a will is not usually enough. There is a process to the distribution of your valuables called probate. This process is often time-consuming and expensive. It involves filing your will and documents with the local courthouse, as well as collecting proof of your assets and liabilities. Putting a trust in place can help you avoid the probate process. Revocable Living Trust A trust allows an appointed person to take care of designated property, including money, assets, real estate, businesses, and anything else of value that you specify. This is helpful if you have younger children who may not be ready to take responsibility for those assets yet. Having a trust also helps you avoid the lengthy process of probate. There are many kinds of trusts which can be individualized to your specific life and goals. Resources: https://www.guttmanlaw.com/blog/2022/april/what-legal-steps-do-i-need-to-take-before-a-medi/

Let's face it, your children may have different ideas about whether to live in, sell or keep the house you own. To prepare for a smooth and efficient transfer of your home, think about your goals and financial situation. Ask your family about their expectations. Anticipate that the conversation, though necessary, may be difficult. You might want to recruit a neutral friend or family member to help facilitate the dialogue. In the discussion, you want to explore taxes and transaction costs, avoid hurt feelings and not disrupt good relationships. If your home is sold, legal fees, taxes — based on the house's value at the time of your death — and other transaction costs will be incurred. As several states have estate tax exemption limits far below the federal level, heirs may have problems paying the state estate tax bill. If you still have a mortgage at the time of your death, the mortgage's sale clause may be triggered. If your heirs want to keep the house, other assets in the estate might need to be sold to pay off the debt; additionally, the inheritor would need to qualify for a new mortgage. Consider your options Here are some ways to smooth the inheritance associated with a house: Add heirs to your deed as co-owners. This way, they will take ownership when you die. There are some downsides to this approach: You'll want to understand how much you can give another person free of gift tax in any one year and in a lifetime. It is also important to remember that assets gifted during your lifetime don't receive a step-up basis, which means the inheritor may get a larger tax bill. The home becomes an asset, and if the child has financial trouble, the home may be put under a lien. Create a will in which you decide who inherits the property. The downside to this approach includes probate, a legal process that may create a privacy concern. Establish a revocable trust, which allows you to retain control of your home during your lifetime while specifying how and when the asset (along with the rest of your assets) will pass to your beneficiaries. This approach has many benefits, including: The trust acts as a substitute for a will, enabling assets to be privately and quickly distributed without probate. You'll retain full control and use of your home but know that you’re providing an efficient distribution of the asset. Move the house out of your estate into a qualified personal residence trust. Your home is transferred as soon as the trust is established; you retain the right to live in the house (and are responsible for maintenance and taxes) but reduce the gift tax costs. A QPRT includes a date after which ownership is transferred to the beneficiary. If you want to continue to say in the house, you will need to negotiate a lease with the heir. QPRTs are most often used for vacation homes. Create a transfer-on-death deed. A TOD allows you to avoid probate while giving your heirs a step-up basis for tax purposes. TODs may be less expensive than setting up a revocable trust. The drawback is that only individuals (like your spouse, child, other relative, or friend) or charities can be beneficiaries; there’s no way to skip a generation to pass the asset to grandchildren. Consider selling the home and renting another. Tax implications are among the considerations here.  It’s natural to want your home to stay in the family but think not just about your needs but about those of your heirs. Working with professionals can help you achieve an outcome that's in everyone’s best interests. Give us a call today at Nash Bean Ford & Brown and we'll help navigate some of these tough life decisions.

When you leave the office of Nash Bean Ford & Brown after creating your personalized estate plan, you’ll receive several documents that you’re told to put in a safe location. Understanding the nuances of these documents can be tricky, with legalese and formatting, as well as all the fine details included in them. So here, we’ve explained a few of the basic ones you may walk away with. Last Will and Testament, or Trust No one likes to consider a world without themselves in it. However, planning for that inescapable end can bring peace and comfort not only to you, but also your family members once you’re gone. Many people start their estate planning with the drafting of a will. A will is a legally binding document that allows you to have control over who and how your assets are distributed when you pass away. There is a process to the distribution of your valuables called probate. This process is often time-consuming and expensive. A trust allows an appointed person to take care of designated property, including money, assets, real estate, businesses, and anything else of value that you specify. This is helpful if you have younger children who may not be ready to take responsibility for those assets yet. Having a trust also helps you avoid the lengthy process of probate. There are many kinds of trusts which can be individualized to your specific life and goals. Property Power of Attorney A Property POA helps define who and how your financial property is taken care of if you were to become incapacitated or couldn’t take care of things for some reason. There are different kinds, including durable and limited. Which one is better for you will depend upon your preferences and assets, so we suggest consulting with an expert. Healthcare Power of Attorney A Healthcare POA helps define what you’d like to see happen medically once you are unable to make decisions coherently anymore. This document ensures that the agent you choose to represent you will respect your legal wishes on how you’d like to be cared for. Having these tough talks can be grueling but allowing someone to help guide you can make the process feel less scary. Living Will A Living Will document goes more specifically into the decisions you’d like made regarding long-term care, end-of-life care, medical procedures, and other end-of-life matters. This brings up some difficult conversations but can be made easier with guidance. Advanced Healthcare Directive Another document often included in Healthcare Directives is the HIPAA authorization, which stands for Health Insurance Portability and Accountability Act. This law requires your signature for anyone to view your medical records. All of these documents safeguard the life values and legacy you hope to pass on, so consulting with a professional on which documents are best suited for you is highly recommended. Reach out to us at Nash Bean Ford & Brown to set up a free consultation! Written by Valerie Kline Marketing Coordinator and Office Assistant Nash Bean Ford & Brown, LLP Attorneys and Counselors at Law • Est 1857 Resources Estate Planning Guide and Checklist for 2024 (ncoa.org) 4 essential estate planning documents | LegalZoom

Most living trusts (also known as revocable or grantor trusts) have two administrative phases. In the first phase, you administer the trust. In the second phase, after your death, the named trustee takes over its administration. In this way, the trust is a contractual relationship established between you and the trustee who is charged with managing it. The legal processes the trustee faces can be complicated. Failure to administer correctly can expose the trustee to liability for damages to your estate. Common trustee tasks include notifying beneficiaries, compiling and providing inventories of trust assets, and listing all assets titled in the trust's name with each asset's market value. To assist your future trustee, take these important steps when setting up your living trust: Fund your trust. Ensure that your trust is funded by transferring ownership of your assets from your name to the trust's name. Assets still titled in your name at the time of your death will have to be probated. Name a beneficiary. A viable trust agreement requires at least one beneficiary. Should a beneficiary pass away or become incapacitated after the trust's creation, you must amend the trust accordingly. Without updates, the trustee might need court direction. Protect beneficiaries. Draft your trust to shield beneficiaries from lawsuits or divorce. This can help safeguard assets from creditors or divorce proceedings that may affect your children or grandchildren. Choose a trustworthy trustee. Select a trustee you trust to follow your wishes and fulfill their fiduciary responsibilities faithfully. It's also important to designate at least one successor trustee. The initial trustee may prove unsuitable or otherwise unable to do the job. Having an alternative ready will smooth the process for all involved. Document the trust. It's crucial to have your trust in writing. Oral agreements, even among family and friends, are not legally binding, particularly for trusts involving real property. Provide specific directions. Clearly state the conditions under which distributions should be made to beneficiaries or on their behalf. If the trustee has discretion over distributions, misunderstandings and disputes can arise, with beneficiaries potentially believing they are entitled to distributions that the trustee deems inappropriate. Include a pour-over provision in your will. Incorporate this clause into your will to ensure any remaining assets transfer to your trust upon your death. Without it, assets not already in the trust will need to go through probate, potentially leading to improper distribution. Regularly review your trust. Annually review your trust to ensure its terms still reflect your estate planning goals and adjust as necessary. The difference between trusts and wills Trusts and wills are both legal documents that convey how to distribute your assets after your death, but they differ in when they take effect, whether the assets will go through probate, who manages your assets and when assets will be distributed. Like a will, the validity of a trust can be challenged on various grounds — due execution, lack of capacity, undue influence, fraud and duress. It's also not uncommon for beneficiaries to allege that a trustee hasn't properly handled trust assets, has failed to properly maintain trust property or hasn't communicated adequately. Because trustee duties are so complicated and the stakes for failing to properly administer a trust are so high, it is a good idea to consult with a trust lawyer when drafting a living trust.