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Insecurity under new The SECURE Act

FE34F185-BD70-4D3D-9973-FCDF55303505On December 20th, 2019, Congress passed one of the most sweeping changes to retirement legislation that we have seen since the early 2000s. The setting every community up for retirement enhancement act, more commonly and better known as the SECURE Act.  It is essential for people to understand and get a good idea of the changes that have occurred effective January 1st, 2020.

I will address the changes that affect estate planning and elder law the most, but there are many more fine details of this act that should be reviewed.

Required minimum distributions, also known as RMDs, will now start at age 72, and not age 70 and a half. Starting January 1st, 2020, retirement accounts or qualified accounts such as, IRAs, 401(k)s, 403(b)s, and 457s will require a person to start taking the distributions at age 72. Previously, the age was 70 and a half, but congress has provided an additional year and a half before you have to begin taking required minimum distributions. For people who had not yet attained the age of 70 and a half prior to January 1st, this is an additional amount of time until you are forced to start taking the distributions.

Furthermore, a person can now continue to contribute to traditional IRAs after the age of 70 and a half. Previously, a person had to stop contributing, but now will be able to contribute even in the year that they turn 70 and a half and beyond, provided they have earned income.

The change that is providing the most interesting challenge to estate planning attorneys is the fact that inherited retirement accounts will no longer be able to be stretched out over the life expectancy of the beneficiaries. Under the new law, upon the death of the account owner, distributions to non-spouse individuals must be made within 10 years of the date of death.

There are exceptions to this rule for spouses, disabled individuals, and individuals not more than 10 years younger than the account owner.   There is also a minor child exception but only until they reach the age of majority and then they fall under the same 10-year rule.  This change in the law will obviously force distributions out much more quickly than they previously were, which can create a substantial amount of income tax consequences to family members and possible loss of asset protection.  However, if the accounts were inherited prior to January 1st of 2020, they do still abide by the previous rules and can be stretched out over the person’s life expectancy.

It is important for people who had their estate planning documents drafted prior to the SECURE Act to consult with their attorneys.  It is an incredible time to talk to your estate planning attorneys and financial professionals to discuss if any changes need to be made.  

In the meantime, talk to your family members about this change so that they understand the consequences of this new Act and what it means to have to pay the tax consequences within a 10-year period as opposed to over the life expectancy.  There are plenty of opportunities under the new Act. Consult your professional to discuss these options.

If you have any questions about the SECURE act and estate planning, feel free to contact us.  Just fill out this simple form here!

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Disney Quest

77024044_761124134311681_8738660534842294272_nAs many of my clients and friends know, my family is a huge fanatic of Walt Disney World.  We always enjoy spending time in the parks, and certainly enjoy our family time each and every time we go.  

Over Thanksgiving, in 2019, I had an experience that I will never forget.  This was being able to dive with my daughter at the Disney Dive Quest.

The Living Seas in Epcot in Walt Disney World has a 7M gallon aquarium that has approximately eight different species of sharks and hundreds of other fish.  We have often spent hours walking through The Living Seas looking at all of the incredible animals, but for the first time in my life I had the opportunity to go scuba diving in the aquarium with the fish.  

While it is certainly an incredible experience to dive with my daughter no matter where it is, being able to look out of the glass and see my wife and my father, along with my in-laws, and nieces and nephews, was something I will never forget.  I vividly remember turning around to look at my daughter, and behind her was the hidden Mickey of stones at the bottom of the aquarium.  It hit me, in that moment, that I was actually diving with my daughter and able to share the experience with my entire family, along with Mickey Mouse.

If you are ever at Walt Disney World and you have the opportunity to go to The Living Seas, be sure to go in the early evening to see the divers in the tank, usually around 5:30 to 7:00 in the evening.  If you do, please take a moment to see the joy on their faces enjoying each and every moment that they have at the parks.

One of the neatest experiences was watching my daughter play rock, paper, scissors not only with her cousins from inside the tank but also that she was very outgoing and went over to the people that were having dinner at The Coral Seas restaurant and played with random parents as they were eating dinner with their children.  

I am proud to say that she won all of her series and matches that she played from the tank that day.  But regardless, just having that experience with her is one that I will never forget.

I hope that the picture will provide a little idea of the incredible experience.  Be sure to check out the Living Seas and the Disney Dive Quest when you are at Walt Disney World.

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Your Loved One Just Passed Away, What Do You Do First?

EF96B973-F2D9-4888-8BBA-D51914A62A61_4_5005_cIt always amazes me how many phone calls we receive within minutes after a person dies from a family member wanting to know what they should do now that the loved one has passed away.  

I always feel guilty, but my answer is always the same, which is grieve and spend time with your family.  Nothing else needs to be done other than that at this time.  

There are very few things that are immediate or that have to be done within minutes or hours after a person passes other than to spend time with your loved ones and take time to grieve the loss.

I often will provide a checklist of what needs to be done immediately and what can be done over the course of time, and I will provide that list below.  What requires immediate action (of course, after grieving has occurred).

  • Notify relatives and friends.
  • If the person was employed at the time of the death, notify the employer.
  • Locate burial or funeral instructions.
  • You may want to check the Last Will and Testament, but please remember that people will often not place burial or funeral instructions in a Will because they expect that often times the Will will not be checked until after the funeral.
  • Look around for pre-paid funerals or burial arrangements.  If for some reason this information was in a safety deposit box the law does allow a family member, in the presence of a bank officer, to open the box to look for a Will and evidence of ownership of a burial plot or prepaid funeral.
  • Make funeral arrangements.  Be sure to keep track of all funeral expenses.
  • Notify the executor of the estate or trustee.
  • Notify the financial professional or review documents to determine if the person is required to take required minimum distributions, which is usually required by the end of the year.

Do not do any of the following:

  • Open a safety deposit box in the name of the individual who passed without following the procedures in the state of which the decedent was a resident.
  • Close the decedent’s bank accounts.  These accounts may be part of the deceased estate, and you will be held responsible for anything that is missing.
  • Take or start giving away any of the deceased persons possessions.  If someone is dissatisfied with what items were given away or destroyed, the person may be held accountable.  Furthermore, from a legal standpoint and for the purpose of family harmony, it is better to distribute them as part of the formal administration of the person’s estate.

After time has passed and you have completed the immediate actions as stated above, most importantly grieving and spending time with your family, then over time you can start the administration of the estate by contacting the attorney to handle the estate settlement and getting copies of all documents and notifying Social Security, et cetera.

If you have questions about this topic, or anything else regarding estate planning for you and your loved ones, fill out our simple online form and we’ll be in touch.  Just click here.

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Snowbirds – What Legal Documents They Need To Take When Traveling South For The Winder Months.

0F00DBF5-3A11-4BB4-8435-1011C8AC8E5EMany of our clients are “snowbirds” and will travel south for the winter months.  

Our clients always remember the essentials of medication, clothing etc. but we always try to remind them to also bring along copies of their legal documents in case of an emergency.  At a minimum it is important when you are away for long periods of time to bring a copy of your financial power of attorney and medical power of attorney so that in the event of an emergency they will be readily available while you are traveling.  

Don’t forget to let your traveling companions know where the copies are located in your luggage or rental unit.  Having copies will provide local family members, traveling companions or emergency personnel the names of who to contact in the event of an emergency.  

You should also leave copies of the documents with your agents so they know that they are expected to act. It also essential to let your agents know where the originals of the documents are located as medical personnel may request to see the original.  We call this an emergency legal kit for short.

The next time that you are getting ready to leave for vacation, not only pack your suntan lotion and other essentials but be sure to pack copies of your legal documents and make arrangements ahead of time.  

While this small step may seem unimportant now, if an emergency occurs, your agents will thank you for knowing that not only are they expected act, but giving them the authority to act.  As we have stated in previous blogs, it is essential to have discussions with your agents ahead of time, not only about where the documents are located but also your wishes.  

Enjoy your travels and peace of mind.

If you need to get your estate planning done so it’s all set for you and your loved ones, join us for one of our FREE educational workshops by clicking here.  

 

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The Terrible Surprise Of Your Estate Planning Not Working When You Expect It To.

98A9107F-EFD9-4B43-96C8-CBC0DC1A4A5AThere is nothing worse than checking something off of your list and knowing that you took care of it only to find out at the end of the day that it didn’t actually work like you expected. Many clients will establish Trusts as part of their estate planning for various reasons.

The purpose of this blog is not to talk about the purposes but the importance of making sure that the assets are funded into the Trust appropriately. Anyone who has ever worked with our law firm knows that we use a Radio Flyer red wagon in our workshops and in our meetings to show how to properly fund a Trust by taking the assets that you own and put them into the “wagon”, your Trust, to ensure that your Trust works properly.

We recently had a client who came to us after a family member had passed and the Trust was very specific as to what the individual wanted to have happen with their assets once they were gone. Unfortunately, no assets were actually owned by the Trust or, said another way, none of the boxes were put into the “wagon” like they were supposed to be.

Unfortunately, because of the oversight, none of the assets went in the direction or to the people that the client intended. In my opinion, this is another reason why the financial professionals and attorneys need to work together and to be at the table together to make sure that your plan works according to your wishes and to the documents. One simple step of not taking the time to put the assets into the “wagon” appropriately completely nullified the entire Trust and plan that the person had set forth in the documents.

If you already have a Trust, please take the time to verify that the assets are properly titled in the name of the Trust and owned by the Trust or that the beneficiary is pointing to the Trust if that is what the plan intended. The bottom line is to make sure that you close the loop to make sure that the plan is going to work the way that you intend and the way that you hope it will. Taking a few minutes now will save a lot of heartache later.

Make sure your Trust is properly funded and that the assets are in your wagon so your plan comes to fruition and you take care of your family.   

If you have a trust and want to learn more join us for one of our upcoming workshops.  You can find a day and time that work for you by clicking here.

 

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