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Can you believe that 37% of second marriages and 74% of third marriages end up in divorce? Those are not good odds. CBS Boston’s recent article, “Breaking Up Is Hard to Do: Second or Third Go Around,” asks, “What is it about marriage that makes folks want to try it again and again?” It sort of goes without saying that when you land at the altar for the second or third time, you need to do some more planning than you did the first time. Use your past experience to pinpoint some of the pitfalls because there are studies—believe it or not—that show most individuals actually repeat their mistakes. Before the ceremony, have an open and honest conversation about money, children, estate planning, and maybe even a prenuptial agreement. A prenuptial agreement can be a wise move for almost anyone with assets; they aren’t just for celebrities or the very wealthy. A prenup can provide a fair and equitable way for a couple to start a relationship—particularly when: one has more assets than the other; one spouse is expecting to inherit future assets; or there are children from a previous marriage for whom you want to provide. It’s important to remember that the older you are when you enter into a second marriage, the more concerned you should be about planning. Love at any age can throw things out of kilter in a good way, and you want to provide for this new person in your life. But marriage has its advantages and disadvantages. One of the disadvantages is potentially losing benefits from your first marriage such as a pension or health care coverage if you remarry. In addition, it could impact your Social Security benefits. If you’re entering into a relationship, and you both have adult children, assets, and a home from a previous marriage, consider a prenup and a conversation with an estate planning attorney. If you’re married, the law says that you’re financially responsible for your spouse’s care. If you don’t have an estate plan, most states will assume that you want everything to go to your spouse and children if you should pass away, with 50% going to each. That may not be what you wanted, and if you want everything to go to your children upon your death, you need to speak with a qualified estate planning attorney and create a sound estate plan. Reference: CBS Boston (August 18, 2016) “Breaking Up Is Hard to Do: Second or Third Go Around” #estateplanning #PrenuptialAgreement #SocialSecurity

A majority of Americans (about 66%) don’t have a written will, and for most, it’s something they’ve postponed until later. It’s natural to think about assets as you age, and if you don’t have children or many assets, and you’re OK with your closest blood relative (a parent or sibling) getting your property outright, you can probably get away without having a will. But that’s not recommended. Money points out in “4 Things You Should Know Before You Make Your Own Will,” the definition of “closest blood relative” and the procedure of dividing your assets can vary significantly by state. So if you have some ideas as to where your assets should go, it’s worth the time and effort to develop a plan in writing. Sure, you can give it a go with a Do-It-Yourself. If you die without a will, it doesn’t matter what you wanted. If you’re going to try the DIY route, you need to understand your state laws, such as the fact that in some states, a handwritten will may not require any witnesses. Only half of states accept these wills as legally binding. On the other hand, a newly typed will requires two witnesses’ signatures to be valid just about everywhere. However, an older typed will that was executed in a state like Vermont or Georgia, which used to require three witnesses, will be subject to the old requirements unless it’s updated. Starting to get a little complicated, yes? You should also be aware of any state estate or inheritance tax. If your state has this, you need to prepare for it. About a half a dozen states impose an inheritance tax—that means your heirs who live in that state will have to pay. Another 12 states impose an estate tax, which gets paid on your overall assets (in addition to the federal estate tax). A will doesn’t cover all of your assets. Anything in joint name or payable to a named beneficiary, like life insurance policies or 401(k)s, is outside the control of a will. You can create transfer-on-death or payable-on-death designations for checking, savings, and money market accounts; certificates of deposit; and U.S. bonds. Once you’ve taken care of these items, you need to write out your intentions. Make sure you use the right language, like spelling out who you are and the purpose of the document. You should also be specific, like including full addresses when identifying the property and a complete description of personal property. In addition, use the full names of beneficiaries, not “my wife” or “my child.” You also need to designate an executor you trust and let him or her know where to find your will. Name a secondary executor or a co-executor in the event that your first choice can’t carry out the task or predeceases you. Along those same lines, appoint a guardian for minor children. Finally, the most difficult aspect of a DIY will is trying to think of all the contingencies. That’s where an estate planning attorney can really help you. While a handwritten will won’t cost you a penny, in most states, a will drafted by an attorney can cost a few hundred dollars. Think about this especially if you have a larger, more complex estate. There are important federal estate tax considerations. Paying a little more now for a good, legally drafted will can save your heirs money, headaches, and heartache. This can be especially true when you have beneficiaries not designated by your state intestacy statutes. If your surviving family aren’t the designated successors, they may have to spend a significant amount of money fighting over the assets to which they’re entitled. Reference: Money (August 17, 2016) “4 Things You Should Know Before You Make Your Own Will” #AssetProtection #Guardianship #EstatePlanningLawyer #Inheritance #Wills #TaxPlanning

There’s quite a range of prices for Medicare supplement insurance (Medigap) policies, and there’s a good chance you can decrease the cost of your premiums by moving to another plan. However, the options might be limited based upon your health and the state where you reside, says Kiplinger’s recent article “How to Save on Medicare Supplement Insurance.” Even though each Medigap plan with the same “letter designation” provides the same coverage, the price can fluctuate considerably by insurer. For example, a 65-year-old man could pay anywhere from $1,092 to $6,519 in 2016 for Plan F—which is the most popular plan—based on the insurer. Those are nationwide numbers, but prices can even vary within the same zip code. While everyone loves a bargain and a better rate, switching to another policy can be tough since insurers in most states can charge you more, hit you with a waiting period or deny you coverage based on your health if more than six months have passed since you signed up for Medicare Part B. However, you may be able to switch to a lower-cost plan after that initial enrollment period in some instances. It’s best to apply for a new policy if you’re healthy because you may qualify for a new policy. Some folks who are healthy and around 65 can get a new Medigap plan, but other insurance companies won’t answer the phone if you’re over age 70. See if your insurer will allow you to switch to a less expensive policy. Some will let you switch to a less comprehensive policy without medical underwriting. For example, if you have Medigap Plan F, your insurer may let you switch to a high-deductible Plan F without new underwriting. Look at the difference in price: the average premium for traditional Plan F is $2,293 for a 65-year-old man, and for the high-deductible version, it’s just $668. Note: With the lower premium, you’ll have to pay the $2,180 deductible out of pocket before any benefits will begin. That might work if you have few medical expenses, but you may have larger out-of-pocket costs as you get older—when it’s tougher to switch to a different plan. Prior to a switch, determine if the premium savings are worth the possible extra expenses—especially as you grow older and potentially have more health issues. Also, see if your state has any special rules to let you switch policies. You may be able to change plans at certain times, so review the state’s insurance department rules. You may also be able to purchase a Medigap policy without medical underwriting under some cases—like if your insurer leaves the business or when you’re switching from a Medicare Advantage plan. Reference: Kiplinger’s (August 4, 2016) “How to Save on Medicare Supplement Insurance” #Medicare #Medigap #SupplementInsurance

Many of us have invested in a 401(k) or some similar savings plan so that we can enjoy a comfortable retirement. But did you know that there are short-term benefits as well? Contributions are not included in current taxable income. That’s a very lucrative break that helps make saving much more enjoyable. Kiplinger’s new article, “6 Tax-Smart Ways to Lower Your RMDs in Retirement,” says that unlike dubious foreign tax shelters, this one has an expiration date. When you turn age 70½, the US government—in the form of the Internal Revenue Service—wants a piece of that action: tax regulations stipulate that you are required to take withdrawals from your traditional IRAs, 401(k)s and other tax-deferred plans or face a hefty penalty of 50% of the amount you should have withdrawn. The IRS describes a required minimum distribution or “RMD” as the minimum amount you must withdraw from your account each year. You typically must begin taking withdrawals from your IRA, SEP IRA, SIMPLE IRA or retirement plan account when you reach age 70½, but Roth IRAs do not require withdrawals until after the death of the owner. Because the withdrawals are taxed as regular income, those RMDs might nudge you into a higher tax bracket. This increase in your adjusted gross income could mean some other unpleasant tax consequences—including higher taxes on your Social Security benefits, a surtax on your taxable investments and a Medicare high-income surcharge. The key to avoiding a monstrous tax bill is to begin your planning for RMDs well before your 70th birthday. Reference: Kiplinger’s (August 2016) “6 Tax-Smart Ways to Lower Your RMDs in Retirement” #AssetProtection #EstatePlanningLawyer #IRAs #401k #TaxDeferredPlans #TaxPlanning #RequiredMinimumDistributionRMD #RetirementPlanning

Young adults and the millennial children of older adults are not who you’d think of as needing estate planning advice. These people are most likely away at college or just starting their careers and probably have little in financial assets. Investment News’ recent article, “The most important part of a young person’s estate plan,” notes that, nonetheless, there are some universal estate planning strategies that work across the board, regardless of a person’s financial situation. One of the most important is establishing a medical power of attorney. Every adult who’s over 18 years should have one. When a child is younger than 18, parents and guardians are able to make medical decisions for them. However, becoming an adult severs those parental and guardianship rights. If there would be a medical emergency where a young adult is incapacitated and unable to make a decision regarding treatment, parents may have trouble accessing medical records or making health care decisions without a durable power of attorney for health care. Without a power of attorney, a judge may decide who the agent is. Recently, Anton Yelchin, a 27-year-old actor in the new “Star Trek” films, died without a will. His parents needed to petition the Los Angeles Superior Court to be administrators of their son’s $1.4 million estate. At minimum, young adults should have a power of attorney for health care and a POA for financial assets. The financial POA says who can access financial accounts—like a 401(k) and an IRA. Signing a POA lets a trusted person have a voice ahead of time. Also, a will is critical when a person becomes a parent. If both parents died, a court would have to determine a legal guardian for a child who is a minor. This is far too important to leave up to chance. Younger adults and parents of younger adult children need to make sure they have at least the basics. And, if they have minor children, they need to at least have a will. A qualified attorney can help make sure all of this is done right. Reference: Investment News (August 3, 2016) “The most important part of a young person’s estate plan” #Guardianship #ProbateAttorney #ProbateCourt #MedicalPowerofAttorney #PowerofAttorney #Wills #estateplanning

Justin Bieber is only 22-years-old, but it wasn’t long ago he was breaking girls’ hearts around the world with his hit song “Baby.” Now, he’s reportedly making plans for his funeral and his estate. The Mirror in the United Kingdom says in its article, “Is Justin Bieber really planning his own funeral? Star allegedly making ‘elaborate plans,’” that the singer was reportedly shocked by the number of celebrity deaths this year, including rock icons Prince and David Bowie. Because of this, Bieber started to make arrangements regarding his own inevitable death, according to another British newspaper, The Daily Star Sunday. Unlike a long list of celebrities, including most recently Prince, Bieber reportedly has made plans for his estimated $240 million estate—as well as decisions about his final send-off. Bieber also has made some decisions about his final resting place: the singer wants to have a solar-powered headstone that plays video. In addition, he is also allegedly planning a moving 3D hologram so his music legacy will live on in a most unique way. His family is somewhat shocked by Justin’s interest in his own funeral plans, including his mother Pattie Mallette, who expressed some surprise at her son’s detailed planning. At first, she laughed off his elaborate funeral and estate plans as just another of his passing whims. However, it’s now apparent Justin is serious—not only about planning his own funeral but about everything from his will to his legacy. Justin has apparently been making “meticulous plans” about tributes for himself and has been looking at ways to keep his name alive. The Beebs is also monitoring new hologram technology. He wants to sign a deal that will permit his 3D image to carry on performing after his death. Although sources say that Bieber has been seriously planning his funeral, they’re not certain exactly where he’ll be laid to rest: he lives in Los Angeles but is originally from Ontario, Canada. If you are young, consider planning sooner rather than later. With a plan in place, you will be giving yourself and your loved ones peace of mind. Reference: The Mirror (UK) (July 31, 2016) “Is Justin Bieber really planning his own funeral? Star allegedly making ‘elaborate plans’” #AssetProtection #estateplanning #Wills

The widow of former U.S. Senator Fred Thompson of Tennessee has asked a probate judge to dismiss a claim filed against his estate by his two adult sons, arguing that their allegations of misconduct are a “gross misrepresentation.” Nashville’s newschannel5.com reports in “Fred Thompson’s Widow Asks Judge to Dismiss Estate Claim” that the attorneys for Jeri Thompson filed the motion for summary judgment last week, insisting that she never “conspired” with a prominent Nashville law firm to reconfigure the former senator’s estate. The court documents state that Jeri Thompson, as executor of her husband’s estate, made just one change, which was a change to a contingent beneficiary designation on two term life insurance policies. This change had no impact on the rights of the plaintiffs, Jeri argued, because they weren’t primary or contingent beneficiaries of the policies—either before or after the change. The late Senator Thompson’s two adult sons from his first marriage, Tony and Dan, filed their lawsuit last week against Jeri and the estate, alleging that she exercised “undue influence” on Fred in many last-minute changes to the estate. The plaintiffs’ suspicions look to have been aroused by an invoice for $40,000 in legal work conducted on behalf of Thompson’s estate in the month prior to his death. Jeri Thompson’s latest court pleading states that the only change made to the estate planning documents was to add their youngest son, Samuel, as a 50% contingent beneficiary along with his sister, Hayden. Jeri remained the 100% primary beneficiary on the policies, the court motion says. The result of the change was the same: Jeri received 100% of the net death benefit of the policies, just as she would have if the change had never been made, according to the motion. “Plaintiffs cannot show that they incurred any harm or loss that was cause by any action of Executor,” the motion declares. The motion had attached copies of insurance documents showing those beneficiary changes. These were changes that, according to the lawsuit filed by Fred’s two adult sons, Jeri was previously unwilling to share with them. Reference: (Nashville TN) newschannel5.com (August 8, 2016) “Fred Thompson’s Widow Asks Judge to Dismiss Estate Claim” #ProbateAttorney #WillChanges #BeneficiaryChanges #ProbateCourt #Inheritance #WillContest #Wills #estateplanning

A probate judge in Minnesota who is in charge of the proceedings concerning Prince’s estate has whittled down the large group of potential heirs for the late superstar’s fortune. Carver County Judge Kevin Eide crossed out about 30 claimants and ordered genetic testing for six purported family members, reported The Minneapolis Star-Tribune in “Court order sharply narrows Prince’s potential heirs.” The judge’s order requires genetic testing for Prince’s sister, Tyka Nelson, and three of his half-siblings: Sharon Nelson, Norrine Nelson and John Nelson. In addition, Judge Eide ordered testing for Brianna Nelson, who claims to be Prince’s niece. Also to be tested is potential grand-niece Victoria Nelson. They both say that Briana Nelson’s father was Prince’s half-brother. No reason was given as to why Eide didn’t order testing for Omar Baker or Alfred Jackson, who were listed as half-brothers in the original petition to name a special administrator to the estate. However, the judge’s order noted that the court was “not aware of any objection or dispute” that all six siblings or half-siblings are legitimate heirs. A DNA test has already eliminated a Colorado prison inmate who said he was Prince’s son. As we all recall, Prince died on April 21 of a drug overdose. Because he didn’t have a will, the process of figuring out his heirs and distributing his estate is the work of the probate court. Unless any other potential claimants come forward, Judge Eide’s order drastically cuts down the pool of those who may benefit from Prince’s estate—which is estimated to be at least $300 million—or gain control of his legacy. Some of the individuals who were excluded from potential heirship in the probate order are five unidentified people with somewhat dubious arguments that Prince was their biological father. The order also bounces a handful of claimants who alleged that Prince’s father was someone other than John L. Nelson, who’s listed in court records as Prince’s father. The four siblings or half-siblings of Prince who were ordered to take a DNA test all claim Nelson as their father. Eide may have ordered these people to be tested because of the claimants who said John L. Nelson wasn’t actually Prince’s father, despite the fact that he threw out those claims. Two that don’t need to be tested are claiming relation to Prince through a common mother, but different fathers. Reference: Minneapolis Star-Tribune (July 29, 2016) “Court order sharply narrows Prince’s potential heirs” #Intestacy #EstatePlanningLawyer #ProbateAttorney #ProbateCourt #Inheritance

Doris Selko knows the budget is tight. She’s the Southern Regional Coordinator for West Virginians for Affordable Healthcare. Selko is concerned that officials will try to cut Medicaid—although it’s already “a pretty bare bones program.” She emphasized the need to continue to keep funding it. Selko talked about the program at a Wyoming County Commission meeting in an informational presentation, according to The Pineville WV Independent Herald article, “WVAHC hoping to preserve Medicaid.” What did she have to say? Selko noted that Medicaid funding helps keep clinics and pharmacies going in the area. According to Selko, more than 170,000 West Virginians have been enrolled in Medicaid since January 2014—the majority of whom weren’t previously insured. She commented that more than 60% of Medicaid recipients have a job and that they’re people who work in food service, janitorial service, healthcare and other small businesses that haven’t been able to provide insurance for their employees. There were more than 5,000 veterans who became eligible for Medicaid in January 2014. Medicaid spent $16.6 million in West Virginia, and 8,643 residents (36%) receive health and long-term benefits through the program. It’s a statewide federal program with $3 in federal spending for every $1 by the state. Of those in Wyoming County who participate, 6,107 are eligible because their income is at or below 138% of the federal poverty level. Another 2,536 are eligible for Medicaid because they are low income elderly persons and/or have a physical or mental disability. The coordinator said that even a five percent cut would make a difference in services. “It would hurt people.” Reference: The Pineville WV Independent Herald (July 26, 2016) “WVAHC hoping to preserve Medicaid” #ElderCare #Insurance #Medicaid

One state’s private Medicaid managers are coming under scrutiny for failing to pay bills on time. Iowa’s warning: if private Medicaid managers don’t improve their processes, some service providers could be forced to close. According to The Des Moines Register’s article, “Pay Medicaid bills quickly, legislators tell managers,” Medicaid covers about 560,000 poor or disabled Iowans. Hospitals, nursing homes, mental health agencies and other service providers have been complaining for some time that the management companies aren’t paying bills quickly and accurately, but three companies and state human services officials have defended their record. They claim the situation is easing. Senator Liz Mathis’ demand for a solution was at the end of a four-hour Senate hearing before the Human Resources Committee about the transition to private management of Medicaid. Several care providers testified that they have had to borrow money to make their payrolls, and the CEO of one mental health program for children said her agency is owed nearly $1 million for services it has provided to Medicaid clients since April. An executive from another company that owns 30 care centers said his company is short $3 million in such payments. That company started laying off staff members because of the shortfall. The move to private Medicaid management was approved in 2015 by Governor Terry Branstad. The Republican says it will save money and offer more flexible services. Others contend that it’s already leading to cuts in services. The managed-care companies and leaders of Branstad’s Department of Human Services testified that the shift is going smoothly and that most bills are being paid quickly. Many of the others are rejected due to a lack of important information. A report from the Department of Human Services said that the three companies paid out nearly $900 million to service providers from April through June. The payments correlated with about 3.5 million bills, and another 1.7 million bills were kicked back or delayed. The companies claimed that many of the bills either contained incomplete information or were duplicates that agencies submitted while waiting to be paid for earlier bills. The state’s Medicaid director said her staff is working to help service providers understand how to submit bills correctly to be paid promptly. Many of the complaints are from Democratic legislators, but some Republicans have also raised concerns—such as the fact that service providers are still having trouble gaining payments three months after the shift. Cheryl Harding, Amerihealth Caritas’ top Iowa executive, told legislators that she sympathizes with such concerns. “But this implementation has been smoother than many,” she said. Harding estimated it could take 12 to 18 months to “stabilize” the new system. After several legislators questioned her timeline, she said that the situation is already improving and will continue to do so. Reference: Des Moines Register (July 26, 2016) “Pay Medicaid bills quickly, legislators tell managers” #ElderCare #ElderLaw #Medicaid

As you get older, you, your older relatives or both may need to address questions about how to leave assets to others when you pass away. The more assets you have, the more complicated things can become. The Investopedia article, “Estate Planning: Which Assets Are Best to Leave Your Family,” says that there are three main factors to consider when looking at how to distribute assets: liquidity, sentiment and tax planning. Each of these impacts what makes the most sense when leaving your assets. Liquid assets can be converted to cash quickly with little effect on the price of the asset. If your estate is mostly hard assets, your heirs might be tasked with selling them for a discounted price in order to find the cash that’s needed to pay any estate tax. You should consider this when preparing your estate plan. Liquid assets are the easiest to leave to family, and the more assets you can liquidate, the easier you will make things for your heirs. Other assets are valuable beyond money and may have wonderful memories attached to them, or they may have been passed down through the generations. Much of the real estate in estates is sentimental, and how to leave these homes to your heirs is a very personal and often difficult decision. The planned distribution of these types of assets should be discussed long before the person’s passing in order to eliminate any fighting after the person’s death. These estate planning questions are hard to answer for most of us. They will involve taxes: most assets receive a step-up in basis upon death if the asset has appreciated in value. But some assets don’t get this step-up in basis—like retirement accounts. Other than qualified accounts, there’s not much difference between hard and virtual assets when it comes to the tax implications in estate planning with the federal estate tax. The tax treatment is the same, and the estate tax is assessed on the fair market value of an asset on the date of death (or the alternate valuation date). Remember, you should consider the tax implications when planning the transfer of assets in your 401(k) and IRA accounts. Capital gains, death and income taxes all come into play when planning for the transfer of wealth from one generation to the next. Comprehensive estate planning always includes a discussion of these tax implications and ways to avoid or minimize the tax bite on your estate. Reference: Investopedia (June 27, 2016) “Estate Planning: Which Assets Are Best to Leave Your Family” #AssetProtection #EstatePlanningLawyer #IRAs #401k #Inheritance #Wills #TaxPlanning

Dying can take a large emotional and financial toll on loved ones. Kiplinger’s recent article, “7 Ways to Slash the Cost of a Funeral,” reports that the median cost of a funeral is roughly $8,500, according to the National Funeral Directors Association. That includes embalming, viewing, a hearse, a metal casket, a vault and other related services. The price, which has increased 29.3% in the past ten years, could be a shock to grieving heirs and may take a hefty chunk out of your estate. That $8,500 price tag doesn’t include common cemetery expenses like a burial site, marker, paid obituary and flowers. Also, that is the middle price—some funerals can cost over $25,000. You can prepay for your own funeral to save on some expenses, but you may want to reconsider prepayment. There are better ways to set aside cash for a funeral, such as reducing funeral costs. Let’s look into this further. Shop around. Licensed funeral homes are required by law to give you a General Price List, or GPL, which is a breakdown of funeral expenses. Ask for a copy if it isn’t offered. Also, funeral homes are required to provide pricing information by phone. Create a budget. With all of the emotions and grief, families can rush into a decision, which can mean unnecessary costs and additional stress. Develop a budget and hold firm. Reputable funeral directors will either work within the budget or recommend a funeral home that can. Think outside the box. The median price of a metal casket sold by a funeral home is around $2,400, and the high-end ones can reach five figures. However, you don’t have to buy a casket from a funeral home, and the funeral home must accept a casket purchased elsewhere—even online. They also can’t charge you a handling fee for receiving a casket purchased somewhere else. Consider cremation. The median price of a funeral with a viewing and cremation is about $6,000—as opposed to $8,500 for a comparable funeral with burial. This expense can be cut further by declining the cremation casket (median funeral home price: $1,000). Funeral homes are required to offer inexpensive alternatives to cremation caskets, like simple containers. You can also supply your own urn and save another $300 or so. Skip embalming. Preserving the body with embalming isn’t a requirement for every death, but many funeral homes will require embalming if there’s going to be a public viewing. However, if a service is held within 24-48 hours with no public viewing, embalming may not be necessary. Even if the service can’t be held right away, refrigeration may be an acceptable alternative to embalming in many states. The median cost of embalming is $695. Make it a simple service. The median charge to use funeral home facilities and staff for a viewing and ceremony adds up to $915. If you really want a funeral home service but can’t afford the full deal, funeral directors will usually work with you to cut corners. You don’t have to buy a funeral home’s complete package. Just pick the goods and services that fit your budget and needs. A cremation memorial service could be held elsewhere for a lot less. Give your body to science. There are several companies that act as an intermediary for whole-body donors and labs doing medical research. For donors accepted by one of these programs, the costs are covered for cremation, transportation and the filing of the death certificate. The cremated remains are returned to the family at no cost within a few weeks. Reference: Kiplinger’s (July 5, 2016) “7 Ways to Slash the Cost of a Funeral” #EndofLifePlanning #FinancialPlanning #FuneralPlanning