Here are the highlights from my daily blog for last week. If you’d like to read any blog in its entirety, just click on the link provided. Enjoy!!
When comparing drug plans, don’t choose a plan just based on the monthly premium. Low-premium plans often have higher prescription co-payments and could end up being more expensive. Look at the “estimated annual drug costs” which is how much you can expect to pay for the entire year in total out-of-pocket costs, including; premiums, deductibles and co-pays.
An important deadline is approaching – enrollment for Medicare Part D plans is underway and there are only a couple weeks left to pick the plan that suits you. Your selection needs to be made by December 7th. Just make sure you choose wisely as there are big changes happening to many popular plans. Click here if you'd like to read the entire blog. References: Forbes (November 8, 2012) “Avoid A Costly Medicare Part D Mistake Right Now” and The New York Times – The New Old Age Blog (November 1, 2012) “Part D, Part 2”
While this may sound like the realm of just the truly wealthy, asset protection is something that people with a nice home and a couple of cars should consider, particularly if they can imagine being sued.
Sometimes it’s not the thought of transferring our assets that first moves us toward proper planning, but the thought of preserving our assets long enough to be transferred. So does asset protection really work? And what exactly are you protecting your assets from?
Virginia's legislators just structured new statutes creating the new Virginia Domestic Asset Protection Trust or DAPT and you can accurately conclude that this planning is alot more commonplace than you might have thought. Click here if you'd like to read the entire blog. Reference: The New York Times (November 2, 2012) “Safeguarding Your Assets Against the Hazards of a Lawsuit”
On estate taxes, what is Congress going to do about "portability"? Isn't it supposed to expire at the end of this year?
You may be surprised to hear that, on occasion, Congress will agree on something. Confused by the notion? The media likes to paint a different picture, and in many cases they are spot-on that Congress is up-in-arms about the law. Nonetheless, some interesting things come out of those silent agreements. For example, estate planners may be able to keep stock in “portability,” an estate tax provision that is likely to either survive year’s end or be resurrected in 2013. Click here if you'd like to read the entire blog. Reference: The Wall Street Journal (November 4, 2012) “Estate-Tax 'Portability' Likely to Stay”
Who was John J. Osborne?
If you were to ask anyone in Belleair Florida who John J. Osborne was before his death from cancer on September 6, 2012, you likely would be greeted with a shrug or a negative shake of the head. It did not take long however, before everyone in this small town of 4000 knew exactly who John J. Osborne was. He was their neighbor. He loved to trim the hedges bordering his modest home. He was a bank examiner by profession before his retirement, he loved to collect antiques… and he was the man that made the town of Belleair the beneficiary of his entire estate. He left almost $4 million dollars in stocks along with his home and all its furnishings. His estate is equal to the town’s yearly operating budget. It is, in fact, more than the town expects to collect in property taxes this year. Admittedly, a surprising gift from a man who few neighbors knew and whose life was presumably summed up in just six sentences in an obituary which ended with the statement: "There will be no funeral service." Click here if you'd like to read the entire blog. Reference: Stephanie Wang, Tampa Bay Times Tuesday, November 13, 2012
Thursday, November 22, 2012
What better day than Thanksgiving to talk about all we are thankful for? Better be careful what you wish for however.
Who hasn’t wished at one time or other that the money we leave our loved ones is used in a way that enriches their lives? The problem is that if you aren’t careful with your planning, you not only end up ruling from the grave but if you place too many conditions on your beneficiary, your legacy might just end up being quickly ‘re-gifted’.
For example, consider the long suffering husband who was constantly berated by his wife for smoking. In his estate plan, he left a legacy to her on the condition that she smoke 5 cigarettes every day for the rest of her life. "Widow Fumes at Order to Start Smoking", San Antonio Express News September 10, 1993, at 6A. Perhaps his goal was more about revenge than enrichment but conditional gifts are not asrare as you might think despite this extreme example. The thing to remember if you want to inspire your beneficiaries is that the courts will rarely overrule your bequests unless the condition attempts to thwart public policy or the rule of law. Click here if you'd like to read the entire blog.
Reference: Manipulating the Conduct of Beneficiaries with Conditional Gifts by Gerry W. Beyer, Estate Planning Developments for Texas Professionals, October 2012.
To avoid the time and expense of probate proceedings, property should be put in a living trust when a widower has children and then remarries, says J. Graydon Coghlan, president of CFG Wealth Management of La Jolla, Calif.
Entering into a second marriage (or third or fourth) results in what we call a blended family, because ultimately you are blending one family with another and a new dynamic is created. Blended families are very common in modern life, and with these new families come sticky planning situations for children from the prior marriage. If you and your family have come together in a different way, then it simply makes sense for you to plan in a different way.
Financial Advisor recently took up the issues facing a specific type of blended family – one created when a senior widower remarries. The role of the widower is statistically proven to be one of the most likely to give rise to challenging situations. More than 60 percent of men (compared to less than 20 percent of women) are involved in a new romance or remarried within two years of the passing of their first spouse.
What many fail to recognize is that a new set of legal arrangements automatically apply upon remarriage, the implications of which may conflict with previously agreed upon intentions. Proper estate planning can eliminate, or at least mitigate, these unintended consequences. Of course, as Financial Advisor states, the revocable trust “may be a widow’s best friend.” A trust arrangement can put legal muscle behind your intentions and ensure they are carried out as you plan. Click here if you'd like to read the entire blog. Reference: Financial Advisor (October 16, 2012) “A Trust May Be A Widower's Best Friend”