It is important to understand the way that taxes can impact inheritances when you are planning your estate. If you have never looked into the subject, you may be pleasantly surprised when you hear the facts. In this post, we are going to hone in on the step-up in basis. Before we get there, we will take a broader look at inheritances and taxation to provide you with a foundation. Income Tax and Individual Retirement Accounts An inheritance is not looked upon as taxable income by state tax … [Read more...] about What Is a Step-Up in Basis
A trust is an estate planning device that is often misunderstood. Many people are under the impression that you can never change a trust, and you lose control of the assets. This is not entirely true, and in this post, we will provide some clarity. Irrevocable Trusts There are some trusts that you cannot revoke once they have been established. Generally speaking, you would not be able to change the terms of this type of trust. The trustee is the administrator of a trust, and the person … [Read more...] about Can You Change a Trust?
As you go through life, you find that people that are in advantageous positions are the individuals that were able to see over the horizon. They take the right actions at the right times, and more often than not, they are rewarded when the future becomes the present. This is a dynamic that applies to long-term care and the costs that go along with it. Nobody wants to think about a time when they may not be able to handle their own day-to-day needs, but it happens to most of us. Seven out … [Read more...] about Overview of Medicaid Spouse Allowances
There is a legal process that can enter the picture when assets are being transferred after someone dies. The probate court presides over these matters, and you should know a bit about it when you are making inheritance planning decisions. With this in mind, we are going to share five important pieces of information about probate in this post. Wills Must Be Probated If you express your final wishes in a last will, you would name an executor in the document to act as the administrator. The … [Read more...] about Five Things to Know About Probate
When you pay FICA or self-employment taxes, it can seem like the money is going into a black hole, but you are actually paying into Medicare and Social Security. Each year, you can earn as many as four retirement credits, and in 2020, you get one credit for every $1410 that you earn. After you have a total of 40 credits to your name, you will qualify for Medicare when you reach the age of 65. And even if you never worked, if your spouse has accumulated the 40 credits, you would qualify for … [Read more...] about Understand the Limitations of Medicare
It is wise to put an estate plan in place as soon as you are a self-supporting adult, and it becomes a must when you have other people relying on you. Though the reasons for this are rather obvious, studies that are conducted reveal a startling lack of preparedness. Less than 30 percent of people that are between 35 and 54 years old have put estate plans in place according to Caring.com. When folks take chances like this when they have life partners and/or children, they are really being … [Read more...] about Is Your Estate Plan Outdated?
When you are looking ahead toward your retirement years, you probably envision the good times that lie in wait. If you take the right steps along the way, you will have the resources to relax, enjoy leisure activities, and cross things off your bucket list. Without question, your golden years can be quite fruitful. A lot of people that understand the importance of retirement planning do not look over the horizon. The twilight years will inevitably follow these golden years, and there is an … [Read more...] about Living Assistance and the Medicaid Waiver
A lot of people assume that a last will is the right estate planning document to use unless you are very wealthy with a complicated estate. This is a misconception, because there are trusts that are useful for people that are not multimillionaires. The one that is the right choice for the widest range of people is the revocable living trust. Let’s look at four compelling reasons to use a living trust as the centerpiece of your estate plan. Consolidation of Assets If you maintain direct … [Read more...] about Four Reasons to Use a Living Trust
People that don’t have enough good information sometimes make estate planning errors that yield negative consequences. In this post, we will look at three common estate planning traps that you would do well to avoid. Going It Alone There are those that know they should put a plan in place, but they keep procrastinating for one reason or another. Some of these folks see ads placed by websites that sell do-it-yourself legal documents, including last wills. Going this route can seem like a good … [Read more...] about Avoid These Three Estate Planning Traps
There is no one-size-fits-all estate planning approach, because each case is unique. This is why it is important to discuss your situation with an attorney. Strategies exist to address any type of scenario, and with this in mind, let’s look at planning for a spendthrift heir. Revocable Living Trust Generally speaking, assets that are transferred through the terms of a last will would be distributed in lump sums. This may be a source of concern if you have a poor money manager on your … [Read more...] about Planning Solution for a Spendthrift Heir