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The daughters of two late celebrities are looking to find easier ways for family and friends to visit ailing elders. They’ve brought separate pieces of legislation to Washington State in memory of their fathers’ end-of-life struggles. KOMO News recently ran a news item, “Daughters of Casey Kasem, Peter Falk tackle elder visitation,” which tells their similar stories. Both Kerri Kasem and Catherine Falk were blocked from visiting their fathers, Casey Kasem and Peter Falk, because of personal disagreements with family members. Both men were suffering from serious illnesses. The daughters had to take legal action to see their fathers. As a result of their experiences, the women are independently working in several states to provide a way for close friends and relatives to visit ailing or incapacitated elder family members without needing to file for guardianship. Kasem introduced legislation in 11 other states this year and fought for previously passed legislation in Texas and California, as well as a successful bill in Iowa. Falk introduced legislation in more than 20 states this year. However, in Washington, their proposals haven’t found overwhelming support, as some feel the new legislation is unnecessary and that the current laws protecting vulnerable elders are adequate. Radio personality Casey Kasem had dementia. His three adult children from a previous marriage and Jean Kasem, his second wife, fought a heated legal battle over his care. Peter Falk, star of the 1970s TV series “Columbo” became incapacitated in 2008 due to dementia. Likewise, Catherine Falk battled her father’s second wife in court to win occasional visits with her father. Falk’s Washington bill says a guardian can’t restrict an incapacitated person’s right to visit and communicate with anybody. Their consent is presumed based on their history with people, such as close relatives with positive relationships. However, the guardian could block visitation if they showed good cause. The bill would also require guardians to notify close relatives and others if the incapacitated person moves to a new home, spends time in the hospital, or dies. Kasem’s main bill permits a person to petition a court for visitation rights. Another proposal Kasem supports is one that requires a guardian to tell close relatives and friends if an elder spends significant time in the hospital or has died. None of the bills has been scheduled for a vote. Kasem said she would be interested in joining forces with Falk or others for guardianship reform legislation. Reference: KOMO News (January 31, 2016) “Daughters of Casey Kasem, Peter Falk tackle elder visitation” #ClearLakeElderLawAttorney #ClearLakeGuardianship #Dementia

Holding property as joint tenants with right of survivorship is very common. When two people hold title to property that way, if one of them passes away, then the property automatically becomes the sole property of the other joint tenant. This has benefits for estate planning, as the property does not have to go through probate. However, there are potential drawbacks. If one of the owners is in debt, his or her creditors may be able to go after the property held jointly. If a parent holds property as a joint tenant with a child, it might make it so other children do not receive a fair inheritance. Recently, Investor’s Business Daily discussed alternatives to joint tenancy in “ Best Ways To Title Your Assets — Avoid Traps ,” including: Convenience Accounts – Sometimes an elderly parent will want a child to be able to pay the parent’s bills. The temptation might be to add the child to a bank account as a co-owner. This is often a mistake. In some states convenience accounts allow the parent to remain as the sole owner of the account while adding the child as a person who can withdraw funds from the account and write checks. Tenants in Common – Property can also be held as tenants in common. Unlike joint tenancy, each owner’s share of the property is kept separate and does not automatically pass to the other owner upon death. If you have questions about these or other alternatives to joint tenancy, consult with an estate planning attorney. Reference: Investor’s Business Daily (October 23, 2015) “ Best Ways To Title Your Assets — Avoid Traps ,” #JTWROS #TenantsinCommon #PropertyOwnership #HoustonEstatePlanningAttorney #JointTenants

As you plan your retirement, you should determine how you will spend your time, the details of your retirement budget, and the source of your money in retirement. As you build your retirement plan, you may discover a few bumps in the road, and the sooner you address them, the better you can prepare. With that in mind, here are “8 Surprising Things You Need to Know About Retirement ” from Kiplinger’s. Social Security Benefits and Retirement Savings Are Taxable. Can you believe that Uncle Sam wants some of that money back? Based on your income, up to 85% of Social Security benefits are taxable—and in some states, you’ll owe state income tax on your Social Security benefits, as well. The same thing with withdrawals of pre-tax money you contributed to a 401(k) or a traditional IRA throughout your working years. This will trigger a federal and possibly a state income tax bill. You need to take taxes into account. With taxable accounts, tax-deferred accounts, and tax-free accounts, you’ll have some flexibility in managing and possibly reducing your annual tax bill in retirement. Retirees Get Some Great Tax Breaks. Taxpayers 65 and older qualify for a larger standard deduction on their federal tax returns, and many states offer tax breaks on all or part of your retirement income. Some states have special breaks for retirees on sales taxes and property taxes. Medicare Doesn’t Cover All of Your Health Costs. You’ll have to pay premiums for Medicare coverage and co-pays on covered services, and some services, like long-term care, aren’t covered. The average 65-year-old couple will pay about $240,000 in out-of-pocket costs for health care during retirement, not including those potential long-term-care costs. Look into purchasing a Medigap supplemental insurance policy to cover some of your out-of-pocket costs. There’s also Medicare Advantage, which provides health coverage through a private insurer. Consider buying a long-term-care insurance policy. This type of policy can help pay for home health aides or care in an assisted-living facility or nursing home. Senior Discounts Aren’t Always a Good Deal. Sometimes other discounts can save older consumers more money. Compare before you take the senior rate. Turning Half a Year Older Matters. Two important milestones rely on half years: once you hit age 59 ½, you are no longer subject to the 10% early-withdrawal penalty if you take money out of your IRA or 401(k). Withdrawals of your earnings from a Roth IRA are also not subject to that penalty. And starting in the year in which you turn 70 ½, you must take Required Minimum Distributions (RMDs) from traditional IRAs and 401(k)s. You Must Withdraw From Your Nest Egg. Once you turn age 70 ½ you must take Required Minimum Distributions from traditional IRAs and 401(k)s. If you don’t take your first RMD by April 1st of the year following the year you turn 70 ½, it’s a hefty penalty—50% of the shortfall. If you don’t need the money to live on, reinvest the money in a taxable account. Your Nest Egg May Need to Stretch for Decades. Your retirement date is only the beginning of potentially decades that your savings are going to be needed to provide income. Life expectancies are increasing, and chances are at least one spouse, if not both, will live well into his or her 90s. You Can Keep Saving for Retirement. If you are still working later in life (even part-time), you can save in tax-advantaged retirement accounts. If your employer offers a 401(k), you can contribute to that plan, so save enough to get any company match. After you hit age 70 ½, you can’t contribute to a traditional IRA, but if you have earned income you can still contribute after-tax money to a Roth IRA. Self-employed individuals have a few other options, like setting up a solo 401(k). Reference: Kiplinger’s (March 2016) “8 Surprising Things You Need to Know About Retirement” #AssetProtection #IRAs #MedicaidPlanning #RequiredMinimumDistribution #RothIRA #HoustonEstatePlanningLawyer #TaxPlanning #RetirementPlanning #LongTermCarePlanning

If you are paying or receiving child support within the Texas Family Code, a recent amendment to the law may increase the amount you pay or receive. Beginning Sept. 1, 2013, the Texas child support guidelines “cap” has increased from $7,500 to $8,550. The first increase in 6 years, this hike was based on a 13.9 percent raise in the Consumer Price Index since 2007. Basically, it was time to increase the cap to account for inflation and the increased cost of living that all of us are facing. Regardless of how the numbers were crunched, the real question is: How does this change affect me and my family? Let me explain. Let’s say, for instance, a parent who pays child support earns $15,000 each month. Prior to Sept. 1, 2013 only $7,500 of that total amount was taken into consideration by the court when figuring out how much child support needs to be paid. Now, with the new law in effect, an additional $1,050 is counted, which means the parent receiving the child support should be entitled to higher child support. Just because the law went into effect does not mean your child support has been automatically recalculated and increased, however. Whether you are paying or receiving, the amount will not change unless one party specifically requests the adjustment, or modification, and — of course — the court orders the modification. A child support calculator can give you an idea of how much your child support will increase, but a Houston family law attorney can really assess your individual case to ensure you are paying or receiving the right amount. Schedule a complimentary consultation with our office by calling (281) 885-8826 and mentioning this article. More Changes in Child Support The net resource cap is not the only amendment to child support laws in the Texas Family Code. Here are a couple more bills that also went into effect on Sept. 1. CSHB 154 addresses the issue of mistaken paternity. This bill allows a man up to two years to file a petition to terminate the parent-child relationship, if he finds out the child is not genetically his and end his child support obligation going forward. CSHB 3017 clarifies the income allowed to be counted when determining child support by including veterans’ benefits in the available pool of income.

The estate tax impacts just a small number of Americans, but those who are affected have a heavy burden. At the tax rate of 40%, estate tax is onerous enough to make efforts to avoid at all costs, especially those who intend to leave assets to grandchildren or younger heirs with generation-skipping trusts, GST trusts, or dynasty trusts. They will need to address the added burden of generation-skipping transfer tax. Generation-skipping trusts can incur this tax, but if they are established properly with the help of an experienced trust attorney, they can allow you to sidestep tax liability. The Motley Fool’s recent article, “Do You Need a Generation-Skipping Trust?,” explains what a generation-skipping trust is and how it works. Generation-skipping trusts involve skipping a generation in planning your estate. Most people leave their assets to a surviving spouse, and then to their children. In generation-skipping trust, assets go directly to grandchildren, great-grandchildren, or other young descendants, who are known collectively as “skip persons.” The simplest generation-skipping trust is one that involves just grandchildren as the eligible beneficiaries, but a common generation-skipping trust involves multiple generations of beneficiaries. It can take years or even decades before grandchildren and other skip persons become eligible to receive trust distributions. Generation-skipping trusts go through a second level of taxes beyond gift and estate taxes. The 40% tax rate is applied in addition to any regular estate taxes to ensure that the assets see two rounds of taxation as they go down two or more generations. This is consistent with what would happen if the assets were first given to children and then passed to grandchildren at the child’s death. Your estate planning attorney can structure a generation-skipping trust to make use of the lifetime exemption that applies to the generation-skipping transfer tax. You can fund a generation-skipping trust with up to $5.45 million and allocate your lifetime exemption to the trust to avoid future GST tax liability. Once the trust is funded and the exemption applied, any future appreciation in trust assets is allocated to the trust beneficiaries directly. If it’s an irrevocable trust, you won’t have to pay GST tax even if the value of the trust assets increase after your gift is complete. Along with the lifetime exemption, you can make annual exclusion gifts to skip persons without incurring the GST tax. The maximum annual gift is $14,000, and gifts can be made to as many different grandchildren, great-grandchildren or others as you wish. GST are complex, as well as the taxes that go along with them. Speak with an experienced trust attorney to set up a trust and take best advantage of the generation-skipping transfer tax lifetime exemption. Reference: Motley Fool (August 17, 2016) “Do You Need a Generation-Skipping Trust?” #AssetProtection #EstatePlanningLawyer #EstateTax #GiftTax #GenerationSkippingTrust #Inheritance

Long-term care is expensive , and many seniors in the Greater Houston area struggle to pay for the costs associated with aging and their declining health.  Fortunately for older veterans that served the country during a period of war, additional tax-free benefits may be available through the VA to help offset their out-of-pocket costs. This benefit is known as the Aid and Attendance Pension, and it is a 3-tiered tax-free benefit for wartime veterans and their spouses who need financial assistance, or simply need help covering the costs associated with long-term care or un-reimbursed medical expenses. Aid and Attendance is designed for veterans who need help with performing functions of everyday living including, bathing, feeding, dressing, toileting, etc. The benefit can even be used to pay a family member who oversees or provides the care for their loved-one. 4 Criteria for Eligibility There are 4 criteria for eligibility:  service, income, net worth, and medical expenses .  You do not need to have a service-connected disability to qualify.   The VA will look to ensure that you: Are permanently and totally disabled, or 65 or older The veteran must be honorably discharged The veteran must have served at least 90 consecutive days, with at least one (1) day during a period of war. How to Plan for Eligibility There are strict income and asset requirements that must be met in order to qualify for Aid and Attendance benefits. However, even if you have assets or money in your name, you still may be able to secure Aid & Attendance benefits.  Similar to Medicaid, the government allows veterans to utilize financial tools and planning strategies with the assistance of an attorney in order to legally reallocate assets to fall within the VA’s guidelines.  Once approved, older veterans and their spouses can be eligible for up to $25,525 per year, tax-free, to help pay for their care. Get Help When Seeking A & A Benefits!   Our Houston elder attorneys recognize that securing A & A benefits and working with the VA can be difficult. Many veterans are turned away because they do not understand the VA’s rules or the planning available to help meet the VA’s asset and income requirements.  Our attorneys are available to assist you in order to determine the best legal and financial tools necessary to qualify and quickly help you get the benefits you deserve. To schedule a consultation, simply call our office at (281) 885-8826. #AidandAttendancepension #ElderLaw #HoustonElderLawAttorney #veteransbenefits

Many entrepreneurs find their lives consumed by their businesses. With a laser focus on their goals, some of the most successful people in business forget to create an estate plan. While your business might be your legacy, all will be for naught without an estate plan in place. That is especially true in 2022. Do NOT leave your life’s work at risk of being torn apart or entirely lost after you pass. Consider the following estate planning factors to ensure that does not happen: Gift Tax Exclusion Many entrepreneurs are true philanthropists at heart. They want to ensure their legacy is as much about their charitable efforts as their innovations. For the first time since 2018, you can gift an organization or an individual up to $16,000 without the need to fill out a gift tax form. Married couples can double that amount without having to fill out Form 709. The reason for the change? You guessed it: inflation. Federal estate and gift tax exemptions also increased in 2022. A person may gift up to $12,060,000 tax-free over the course of their lifetime. Even if you decide to go above and beyond the $16,000 annual limitation, you will still only owe taxes if you have given more than $12,060,000 in total lifetime gifts. This is excellent news for anyone hoping to put their hard-earned dollars to good work without excessive taxation. Digital Asset Considerations Cryptocurrency and non-fungible tokens have grabbed countless headlines in 2022. If your business has invested in digital assets, you will want to include them in your estate plans. In most cases, NFTs can only be accessed using a personal key or password. If you do not have a way to pass this information on to your beneficiaries, your estate may lose access to them altogether. It is also worth considering what information you would like to make available to your heirs, since a blanket approach may not be suitable for your estate plan. Instead, carefully weigh which digital assets you would like to be accessible to fiduciaries – you will want to spell out precisely how and when NFTs should be transferred to beneficiaries. Digital assets are relatively new, but they are evolving fast. While blockchain security is secure, it is designed to prevent forgery, not theft. Digital art marketplace users have reported thousands of dollars of NFT art stolen from their accounts. Should a hacker steal your NFT and resell it, the blockchain will record the sale irreversibly. It may take the law some time to catch up to new trends, so you will want to be cautious. Factoring NFTs into your estate plan will be keeping abreast of developments in technology, security, and legislation surrounding the transfer of digital assets. Business Succession Plans Succession planning has become all the rage in the wake of HBO’s hit show “Succession.” Such a plan allows for a seamless transition of business after an entrepreneur’s passing. A comprehensive plan accounts for new ownership, managerial duties, and other important details like asset inventories. They outline how ownership should be transferred, whether employees should be hired, fired, or promoted, and shed light on how disputes should be settled. Going without a succession plan in 2022 is, simply put, a bad idea. The Small Business Association offers some guidance on the creation of basic succession plans, but it is best to seek the guidance of a professional estate planning attorney. An experienced professional can help you create a plan that reflects your goals, priorities, and values. Your business is truly a legacy, and without a succession plan in place, you put that legacy at risk. The Best Business Plans Include Estate Plans You have worked hard to build your business. Take time to ensure its longevity by creating an estate plan. Fail to do so, and you may leave your friends, family, and associates scrambling to keep the organization afloat. This only leads to further disputes and problems – an ounce of prevention really is worth a pound of cure. To ensure your estate plans are in line with your goals regarding gift tax, digital assets, and business succession, schedule online or call our team today at (281) 218-0880.

One-third of U.S. households own at least one type of IRA, so chances are that you might inherit one in the future. If that happens, you’ll need a plan—a plan that avoids common and sometimes costly mistakes. USA Today’s article, “If you inherit an IRA, make a plan before doing a thing,” lists 10 common inherited IRA mistakes: Failing to set up the inherited IRA properly Using the incorrect Life Expectancy Tables—the Single Life Table must be used Using the incorrect Life Expectancy factor—the life expectancy factor of the beneficiary in the current year must be used Not taking the Required Minimum Distribution (RMD) after death of the owner and in future years (result: a 50% penalty) Using the incorrect IRA balance for the RMD calculation—the value of the account as of December 31st of the prior year must be used to calculate the RMD (under-withdrawal means a 50% penalty) Not naming beneficiaries could mean acceleration of distribution for the inherited IRA beneficiary Failing to make a trustee-to-trustee transfer in the establishment of an Inherited IRA—no 60-day rollover rule here Including other non-inherited IRA funds to an inherited IRA Not confirming that the RMD is taken out of account by December 31st each year Not establishing the inherited IRA before December 31st of the year following the death of the owner. Reference: Reference: USA Today (March 15, 2016) “If you inherit an IRA, make a plan before doing a thing” #InheritedIRAsRequiredMinimumDistributionRMD

If you plan to retire in the next 20 years, you need to start looking at your options and plan to make more informed decisions about your future to meet your long-term goals. The North Bay Business Journal says in “10 basic steps for retirement planning” that a professionally created retirement plan usually includes a review of your estate plan and portfolio investments, tax planning, education funding strategies, insurance and risk management, and retirement and senior issues. Work with a qualified estate planning attorney to ensure that you are doing all you can to effectively build and protect your wealth. Emergency Fund. Build an emergency reserve of three to six months of living expenses to decrease stress and prevent the need for loans from retirement plans in the event of job loss or other emergency. Retirement Contributions. Max out your contributions to your 401(k)—or at least enough to receive a full employer match. If you’re self-employed, look at a SEP IRA or Solo 401k that allow you to contribute more than a traditional IRA. Estate Planning. At the very least, you need basic estate planning documents in place: a will, powers of attorney, healthcare proxy, and perhaps a trust. Make sure you review them every few years. Tax Planning. Spending extra dollars using an experienced, proactive professional can save you thousands in taxes. This is not the place to skimp. Investments. Make sure you have a diversified investment portfolio across all of your accounts. Risk Management. Coordinate your insurance with any that your employer offers. Ensure that your home is well-covered. Life insurance should also be examined to provide for loved ones in case of your death. Long-term care insurance should be considered. Education. Don’t pass on your own retirement to put your children through college. They can get student loans, and you can help them once they graduate. You can’t take out loans for your retirement. Major Purchases. Think about large purchases you may want to make in the future and how you’ll save and pay for them. Debt. Have a plan to pay off debts before retirement. Financial Review. Remember to periodically review your financial or estate plans because= situations and laws change. We are living longer, and planning for a long retirement is critical. Reference: North Bay Business Journal (May 16, 2016) “10 basic steps for retirement planning” #AssetProtection #LifeInsurance #TaxPlanning #estateplanning #LongTermCarePlanning

There have been many recent reports regarding the petition that Britney Spears’ father, Jamie Spears, filed with the Court that has overseen her conservatorship. This has been an unexpected occurrence considering that the pop star has been under a conservatorship ruled by her father for nearly 13 years, especially since the petition that was filed by her conservator (Jamie Spears) called for ending it altogether. In one of our previous blogs, Britney Spears’ Conservatorship & How It Can Happen To You , we discussed the importance of having the proper estate planning documents in place so that you or a loved one does not have to go through the same conservatorship process and court hearings that Britney has endured. Although California calls it something different than we do here in Texas, a conservatorship is the equivalent of a guardianship and requires much of the same proceedings that Britney has gone through. Since a conservatorship is essentially the equivalent of a guardianship, the same documents we prepare in our office could have helped avoid this entire situation had they been executed prior to the Court appointing Jamie as her conservator. Do you have a statutory durable power of attorney? A statutory durable power of attorney would have helped Britney prevent her father from getting control over her estate (finances, real property, etc.), and will ultimately allow you to appoint an individual you trust to manage your estate on your behalf should you become incapacitated in the future. Having a statutory durable power of attorney established by an experienced elder law attorney will also allow your agent to act on your behalf to qualify you for public benefits that you may have otherwise not been able to qualify for, such as Medicaid. This one document could have saved Britney a lot of trouble and will help you avoid the guardianship process in Texas. Do you have a medical power of attorney? A medical power of attorney would have allowed Britney to appoint an individual she trusted, other than her father, to make medical decisions on her behalf and access her medical records. Once an individual turns 18, their doctors will not be able to give their medical records or other medical related information to anyone but that patient. This may cause a hurdle for some individuals who need to know any medical history of their loved one before they make a decision regarding their healthcare. The absence of a medical power of attorney may require your loved one to obtain a guardianship to gain access to these documents and give you the authority to make these types of decisions on their behalf, much like Britney’s father has done in California. An overview of guardianship in Texas As mentioned earlier, guardianship in Texas is very similar to a conservatorship in California. Whether it is for a parent who has been diagnosed with Dementia, an adult disabled child with special needs, or if you have become incapacitated due to a car accident or other tragic event, guardianship is an expensive and lengthy process that will be burdensome for your loved ones to go through. Depending on the circumstances of the guardianship, there is always the possibility of someone contesting or “challenging” the person who is petitioning to the court to become the legal guardian. If this happens, it can cause not only the court costs and legal fees to increase, but it will also delay the time it takes to have someone appointed to make any decisions that need to be made. Without any powers of attorney in place, decisions that will have to be made on your behalf will be delayed until you are appointed someone who is capable of being your legal guardian. This means that any decisions regarding the healthcare you receive, or any financial transaction that would have to be completed on your behalf would not be able to be done until the court appoints a legal guardian. In an ideal guardianship matter, there is no contest to the person applying to become your legal guardian. Even if there is nobody contesting the proposed guardianship, it may take a couple of months (or longer) for a guardian to be appointed. What this means for Britney Since Britney Spears did not have any documents in place that would have prevented her conservatorship from taking place, she has been under strict supervision for the last nearly 13 years. Although her father petitioned to the court to end the conservatorship, the court must approve the order before it officially ends. If the court approves to terminate Spears’ conservatorship, then the #FreeBritney movement will have met their goal since it began. However, Britney’s journey to freedom may be far from over if the conservatorship is ended. Being placed under a court-ordered conservatorship for a long period of time, especially one of Britney’s magnitude that has brought to light the many concerns of these proceedings, may make it difficult for her feel completely “free” even after the conservatorship is terminated. What to do to prevent this from happening to you As everybody is aware of how much court costs can be, did you know that you (your estate) could be responsible for paying the legal fees for those who are appointed as your guardian? For example, Lynne Spears, Britney’s mother, is requesting the court to approve that her legal fees of over $600,000.00 are to be paid from Britney’s estate. Having even the simplest estate plan in place could help prevent you from ending up in a situation like Britney’s (and may even save you and your family from spending thousands of dollars in court fees). Ask yourself this question: Am I properly protected from the courts and other individuals that may take advantage of me or my assets if I become disabled or incapacitated? If the answer is no, then you need to speak to an estate planning attorney. Trusting the right estate planning team to have your back is something that should not be taken lightly. Our team at Your Legacy Legal Care is dedicated to ensuring that you, your loved ones, and your estate are properly protected to prevent you from ending up in a situation even remotely like that of one of America’s biggest pop stars. To get started on protecting you and your family’s future, call us at (281) 885-8826 or schedule online here.

Financial regrets—we’ve all had some. But in “8 Financial Decisions You’ll Regret Forever” Kiplinger asked financial planners and personal-finance experts about some of the most consequential mistakes people can make with their money. Here’s what they said: Borrowing from your 401(k). It can be tempting, but this is a bad idea for many reasons. You’ll probably reduce or suspend new contributions during the period you are repaying the loan. This means that you are short-changing your retirement account and losing out on employer matches, and you’re missing the investment growth from the missed contributions and the cash that you borrowed. Before borrowing from a 401(k), look at other options. Claiming Social Security early. You are entitled to start taking benefits at 62, but you probably shouldn’t. Wait until your full retirement age, right now at 66 and rising to 67 for those born after 1959, before tapping into Social Security. Delaying until 70 is even better. Paying the minimum on credit cards. The average household with debt owes $15,762 on credit cards, according to NerdWallet.com. It can take years to pay off credit card debt with mounting interest, especially if you keep charging. Stop making new charges, transfer the balance to a lower-rate card, and pay more than the minimum every month. Not saving for retirement. “I’ll start saving for retirement when I make more money,” many folks say. However, Morningstar calculated how much you need to sock away monthly to reach the magic number of $1 million saved by age 65, and assuming a 7% annual rate of return, you’d need to save $381 a month if you start at age 25; $820 monthly, starting at 35; $1,920, starting at 45; and $5,778, starting at age 55. Bankrolling your kids. Footing the bill for private tuition and other expenses at the expense of your own retirement savings could come back to bite you. You can’t borrow for your retirement living, so explore scholarships, grants, student loans, as well as less expensive in-state schools instead of tapping into your retirement nest egg. No one plans to go broke in retirement, but it can happen by not saving enough to begin with. Passing up professional advice when you need it. Everyone can use a little good advice, particularly when talking about complex financial issues. Common but avoidable mistakes like dying without a valid will or not designating the right beneficiaries for your retirement accounts can create headaches for your heirs, with your wealth possibly going to the wrong people. Avoiding the stock market. Staying away from stocks because they seem too risky is one of the biggest mistakes investors can make. While the market has its share of ups and downs, since 1926 stocks have returned an average of about 10% a year. Bonds, CDs, bank accounts, and piggy banks don’t come close. Some may say the stock market is risky and should be avoided, but this comes at the expense of low returns. In fact, you have not eliminated your risk by avoiding the stock market, but instead shifted your risk to the possibility of your money not keeping up with inflation. Quitting school. It’s very rare that the student who skips school goes far in life. Based on U.S. Bureau of Labor Statistics data, a high school graduate working full time will have median lifetime earnings of $1.4 million, while a worker with a bachelor’s degree will earn nearly $2.4 million, and a doctoral degree leads to median earnings of about $3.4 million over a lifetime. Reference: Kiplinger (March 2016) “8 Financial Decisions You’ll Regret Forever” #AssetProtection #SocialSecurity #PlanningforRetirement #Probate #LeagueCityWills #401ks #LeagueCityEstatePlanningLawyer

All of the details of Ali’s will have not been uncovered after his recent death. Nonetheless, Investment News says in “How will Muhammad Ali’s estate play out?” that there are some aspects of his life, business affairs, and family dynamics that might make for interesting estate questions. Ali’s estate is estimated to be worth somewhere between $50 million and $80 million. Ali, one of the most recognizable people on earth, earned millions of dollars every year from endorsements and image licensing deals. The deals were directed to his company, Goat, LLC—which stands for “Greatest Of All Time.” He sold stakes in the company but kept a 20% interest. Similar to other deceased celebrities, the estate is required to place a present value on the anticipated future earnings that could possibly be derived from publicity rights, which will set the ultimate tax. It’s a tough task. The IRS and estate of the deceased might have widely varying estimates of the future income stream from these sorts of intangible assets. For example, the passing of a well-known music artist or sports figure means that this person’s popularity will soar after his or her death—and appreciate the value of these assets. If Ali left everything to his wife, including the 20% company stake, the valuation will be academic because she will have an unlimited marital deduction. This allows the transfer of an unrestricted amount of assets to a spouse without estate tax at any time, including death. Others receiving a stake in his image rights don’t get the same break. No matter who inherits the rights, Arizona has some favorable rules for protecting image rights. This is because of something called a post-mortem right of publicity: the estate has an enforceable right to prevent others from exploiting his name, likeness, and image for commercial use. Ali’s primary residence was in Arizona, one of the states that doesn’t have a state estate tax, so his estate would only be subject to the federal 40% tax rate on estate values exceeding the $5.45 million exemption. In contrast, the Champ also owned property in Kentucky, where he grew up. Kentucky has an inheritance tax. His heirs will see a maximum 16% tax rate on inherited assets. Some parties are exempt from paying the inheritance tax. Kentucky statutes say that if Ali willed his residence to his wife or children, they’d be exempt from the tax. Any nieces, nephews, aunts, uncles, daughters-in-law and sons-in-law would have to pay. Ali was married four times and had nine children, including an adopted son and two daughters outside of marriage. The way in which Ali referenced his nine children in his will could also come into play. This might be an interesting issue in how he defines them, who he provided for, and if he intentionally left anyone out. Reference : Investment News (June 9, 2016) “How will Muhammad Ali’s estate play out?” #AssetProtection #EstatePlanningLawyer #ProbateAttorney #ProbateCourt #Inheritance #TaxPlanning