Estate Planning With 401(k), SEP, and 401(B) Plans

Many of you have retirement plans. If you are reading this article and don’t have a beneficiary designated, stop reading and go designate a proper beneficiary right now! This designation trumps your estate planning documents.

Who Can be Named as a Beneficiary?

  • Individual- 

    Naming an individual as beneficiary of a retirement plan helps protect the account from divorce, creditors and, in some states, bankruptcy and benefits from being subject to favorable tax treatment.

  • Estate-

    Retirement plans payable to an estate are subject to probate which can:

         delay the receipt of such funds

         potentially expose them to creditor claims,

         and necessitate the listing of such assets on the probate inventory

  • Charity-

    Benefits can be distributed to a charitable organization,

    In this plan, the charity receives the benefits free of income tax, as opposed to an individual beneficiary who must pay income tax on the benefits that he receives from a traditional requirement plan.

    Further, any benefits left to charity qualify for an estate tax deduction in a decedent’s estate. This is a win-win.

  • Trusts-

    A trust may be named as the beneficiary of a retirement plan, but it cannot be a Designated Beneficiary.

    However, the beneficiaries of a trust may be treated as Designated Beneficiaries if the trust meets certain criteria.

    The criteria are as follows:

    (i) the trust must be valid under state law;

    (ii) the trust must be irrevocable (either upon creation or upon the death of the owner);

    (iii) the beneficiaries must be identifiable from the trust instrument (essentially, the Internal Revenue Service needs to be able to identify the beneficiary with the shortest life expectancy); and

    (iv) proper documentation (a list of all of the beneficiaries of the trust or a copy of the trust instrument itself) must be provided to the plan custodian by October 31 of the calendar year immediately following the calendar year in which the plan owner died

    If you need help designating a beneficiary or drafting Wills and Trusts, please contact us today! Proper beneficiary designation can save you thousands in inheritance related investment losses.

    817.638.9016

The Weaver Firm Guide to Trusts

photo of beneficiary checks from trust payout

What the heck is a “trust” and why should I care? Good questions. The answers may save you money, time, and headaches.

To help you understand, we’ve provided a quick and easy overview below for a variety of trusts. Let’s start with a few basic trust terms  and definitions–

Trust Terms & Definitions

  • Trustee: The person designated in the Trust Agreement to take possession of the trust assets and manage those assets. He must also preserve and manage the assets according to the provisions in the Trust agreement.
  • Trust Agreement: The Trust Agreement is the document that creates the Trust and sets out the provisions related to the Trust. For instance, it will generally designate the trustee, the beneficiaries, and the purposes of the Trust. It will also typically include provisions designed to guide the trustee in fulfilling his duties.
  • Grantor: The person(s) who creates the Trust Agreement. In order for the Grantor to create a valid trust, he must designate a trustee and a beneficiary. He must also transfer assets into the Trust.
  • Beneficiary: The Trust Beneficiary is the person(s) who receives the benefit of the assets in the Trust.

Types of Trusts – Overview

Testamentary Trusts 

  • The concepts of wills and trusts combine when you consider the creation of a Testamentary Trust.
  • These trusts are created under your will and control the management of your assets after your death.
  • These trusts have a wide array of uses, but they are very often used to provide for the management of assets for minors and young children in the event they might become entitled to receive property under a will.

Revocable Living Trusts 

  • In recent years, the use of Revocable Living Trusts as a substitute for traditional estate planning has exploded in many states.
  • In Texas, however, these trusts as effective estate planning alternatives have limited usefulness.

Educational Trusts 

  • One of the primary concerns that many parents and grandparents have is setting aside money to provide for education for their children and grandchildren.
  • In spite of this desire, those same parents and grandparents recognize that the best interests of their children is not served by giving large sums of money to minors or young adults who might rather buy a car than pay for an education.
  • As a result, the use of an Educational Trust becomes a very appropriate option for providing money for education while making sure the money is used appropriately.

Spendthrift Trusts 

  • Another concern of people creating trusts is that they want the assets of the trust to be protected from the attacks of potential creditors of either the Grantors or the Beneficiaries of the Trust.
  • Spendthrift provisions can be incorporated into a Trust, which will then protect the trust assets from attack.

Crummey Trusts 

  • People making gifts into Trusts generally make those gifts for a variety of reasons.
  • However, regardless of the reason, they do not want to give up their money and pay gift taxes on top of giving away their money.
  • The Crummey trust provisions make it possible to make gifts to a trust while excluding some portion or all of the gift from potential gift tax complications.

Irrevocable Life Insurance Trusts 

  • Life insurance policies can very often present estate tax problems for the person who owns the policy.
  • To combat the estate tax complications, the Irrevocable Life Insurance Trust provides an alternative to own a life insurance policy while completely excluding the proceeds from the estate for tax purposes.

Medicaid Gifts and Trusts

How Do Assets and Trusts Impact Medicaid Eligibility?

Medicaid eligibility requires minimal personal assets.

Your health care needs will increase as you age.

That is a given.

With this increase, your health care bills will also increase.

That is a given.

Some people turn to Medicaid for financial assistance.

That is not such a given.

What is Medicaid?

Medicaid is a government program managed by states to help with medical and long-term care costs.

It is needs-based, meaning individuals must qualify financially for eligibility.

In order to prevent individuals from merely making transfers of their property, either outright or in trust, to qualify for Medicaid, there is a penalty period imposed on transfers made within five years of applying for Medicaid. 

If an individual establishes a trust using some of his or her own funds, where the individual is the sole beneficiary or one beneficiary in a pool of beneficiaries, the trust may be considered a resource for Medicaid purposes.

This is particularly true if the trust can be revoked — a revocable trust– and the assets can be pulled back into the name of the Medicaid applicant, she said.

Third Party Trust

If the trust is created by a third party, with third party funds, for the benefit of the Medicaid applicant, then the answer would depend on the specific terms of the trust and whether or not the settlor — the person who created the trust — is the spouse of the Medicaid applicant.

That’s because income and asset limitations are imposed on the community spouse in order for the applicant spouse to qualify for Medicaid.

The state may also have the right of recovery against the estate of a deceased Medicaid recipient for Medicaid benefits paid to such individual during his or her lifetime. Always use a ladybird deed or a transfer on death deed for real property.

For starters, you cannot simply transfer (gift) assets to your loved ones to become eligible.

In fact, the transfers would need to occur more than five years before the Medicaid application.

Work with an experienced elder law attorney to determine if Medicaid is a viable option for you.

Contact us at 817.638.9016 

Elder Law 101: Nursing Home Care vs. Assisted Living

How Do Nursing Homes Differ from Assisted Living

Nursing home lawyers provide assistance in making an advanced plan to get you care required as you get older or if you experience illnesses or injuries that make you unable to care for yourself any longer.  

As you experience age-related sickness or the affects of illness, there is a substantial chance you will some day require care in an institutional care environment.  

In fact, as Wall Street Journal explains, more than 70 percent of people who reach the age of 65 will require nursing home care at some point in the future.  

You’ll need to make sure you are prepared to move to the right environment — and to pay for the care you require.

Most nursing homes cost upwards of $5,000 a month for care.

The Weaver Firm attorneys can help you understand your options for nursing home care or other care you might require.

In particular, you should consider the differences between nursing homes and assisted living facilities so you can make a fully informed choice regarding which environment is right for you.

If you want help in understanding the different options for senior living when you cannot live alone any longer, you can give us a call at any time to talk with nursing home lawyers at our firm.

Assisted Living vs. Nursing Homes

Assisted living and nursing homes both provide an option for seniors who can no longer live independently but as the New York Times explains, there are important differences.

Assisted Living Facilities

Assisted living facilities generally provide a more home-like environment while nursing homes have a more institutional or hospital-like feel.

These homes may involve seniors living more independently in their own rooms or their own apartments, while nursing homes generally provide semi-private or private rooms with much less privacy and autonomy than assisted living facilities offer.

While an assisted living facility can feel more like living independently for seniors, this independence makes assisted living facilities unsuitable for many seniors who require more hands-on help.  

Assisted living facilities may offer housekeeping services, meals, activities, and some help getting medical care, assisted living facilities typically do not provide the same level of supportive services that a nursing home does. 

The New York Times also indicates that nursing homes are more heavily regulated than assisted living facilities. 

Assisted living facilities are covered by VA aid and attendance. The rules for this program are complex but are not nearly as intense as Medicaid rules.

Some facilities have an assisted living section and a nursing home care section for seniors who are attracted to the idea of assisted living but who may need nursing home care in the future.

If you think this could be an option, you should make sure to find out what the rules are for when and how different kinds of care can be paid for. 

Getting Help from Nursing Home Lawyers

How much does it cost to stay in a nursing home?

The average cost of a private room in a nursing home is more than $90,000 a year.

What are ways to pay for a nursing home stay?

There are four main ways to pay for a nursing home stay:

  1. Cash out of your pocket
  2. Medicaid
  3. Private Long Term Care Insurance
  4. Medicare

How does Medicaid pay?

Medicaid is a joint federal and state government program that helps people with low income and little assets pay for their nursing home cost.

Generally, to be eligible for Medicaid, your income and asset levels can’t exceed levels set forth in your state.

Medicaid officials will “look back” at your financial information over a certain number of years to determine if you have been getting rid of property in order to receive Medicaid.

However, if you have assets over the allowable level, you are permitted to “spend down” or decrease your assets before you receive Medicaid.

Typical spend down costs include medical expenses, mortgages and other debts, and funeral expenses.

Also, your house and car are generally not counted against you for qualification purposes, and therefore don’t have to be spent down.

States vary in their eligibility requirements, so you should check with your state social services office or an elder law attorney for specific information.

Also, keep in mind that not all nursing homes accept Medicaid, so you’ll need to ask about a particular nursing home’s policy. 

Nursing home lawyers at the Weaver Firm can provide assistance with the process of making a plan to get nursing home care or to get care in an assisted living community.

We can also provide guidance on reviewing nursing home facilities and assisted living facilities to find the right care environment for your particular circumstances.

Because the costs of care can be expensive and are not covered by Medicare or by most private insurance, we also provide assistance with the creation of a Medicaid plan so you can protect assets while getting Medicaid to cover the costs of your care. 

Contact us today at 817.638.9016 or RWeaver@weaverlegal.net

How A Lady Bird Deed, Nursing Home Medicaid Benefits, & Your Home Are Important

bird and birdhouse

A “Lady Bird” deed preserves the homeowner’s ability to immediately qualify for Medicaid benefits including payment for nursing home care.

Here’s how it works:  Transfers of assets within a “look-back” period may disqualify Medicaid applicants from immediately qualifying for benefits—but creating a Lady Bird deed, also called an enhanced life estate deed, is not considered a transfer for Medicaid purposes because the homeowner retains the right to sell the property or revoke the deed. No gift is ever made.

This deed is nicknamed “Lady Bird” because the Florida attorney who first drafted the deed used the name in his example. Sorry, Texans, we don’t get to claim this Ladybird.

What are the legal details?

A Lady Bird deed, technically called an enhanced life estate deed, allows a property owner to transfer a remainder interest in a home to the beneficiaries named in the deed, while reserving a life estate (a right to occupy and use the property during his or her lifetime) The grantor (or person who creates the deed) also keeps the right to sell or mortgage the property, change the remainder beneficiaries at any time, or cancel the deed altogether.

If the owner dies without revoking the deed, the property passes outright to the remainder beneficiaries without going to court.

Pretty neat.

How is an enhanced life estate deed different from a traditional life estate deed?

With both the enhanced life estate deed and the traditional life estate deed, a property owner transfers a remainder interest in the property to the ultimate beneficiaries and retains a life estate. However, a property owner using a traditional life estate deed does not reserve the right to sell or give away the land without the consent of the remainder beneficiaries.

The enhanced life estate deed allows the property owner to reserve those rights. That’s why it’s enhanced I guess.

Plenty of benefits to enhanced life estate deeds

Enhanced life estate deeds offer many advantages over traditional life estate deeds:

  1. They preserve the homeowners ability to immediately qualify for Medicaid benefits. Transfers of assets within a “look-back” period may disqualify applicants from immediately qualifying for benefits. However, executing an enhanced life estate deed is not considered a transfer for Medicaid purposes because the homeowner retains the right to sell the property or revoke the deed. No gift is ever made.
  2. They provide homeowner the flexibility to change the remainder beneficiaries at any time.
  3. They allow the homeowner to sell or mortgage the property without the consent of the remainder beneficiaries.
  4. They protect the property from the creditors of the remainder beneficiaries during the homeowner’s lifetime.
  5. Because the owner of the property retains the right to take back the property during his or her lifetime, the transfer will not count as a gift for federal gift tax purposes.

Beneficiaries receive a stepped-up basis

Because property will remain a part of the grantor’s estate, the cost basis of a property transferred using an enhanced life estate deed would be “stepped-up” to the value of the house on the date of death. This may significantly reduce the amount of capital gains taxes owed when the property is sold.

Can a trust be a beneficiary? 

Yes, a trust can also be a beneficiary. If you love your family but don’t want them to have property outright for whatever reason, sometimes we create a revocable trust to hold the property.

Need help creating a Lady Bird deed or qualifying for Medicaid nursing home benefits? Give us a call at Weaver Firm – Attorneys at 817-638-9016 to schedule an appointment. 

Travis Weaver, Attorney

Travis Weaver, Attorney

What is the “Death Tax”? Don’t let it scare you!

Who Pays Estate or “Death” Tax?

Don’t be afraid! One of the first questions we get asked when discussing estates and probates is, “Will my loved ones pay ‘death’ or inheritance tax after I die?”

The short answer. Probably not.

The estate tax—a.k.a. the “death” tax to those who want it repealed—is a federal tax on assets (including cash and securities, real estate, insurance, trusts, annuities, business interests and other assets) upon one’s death.

In 2017, anyone who died leaving an estate larger than $5.49 million paid 40 cents on the dollar for every dollar over $5.49 million. As you can imagine, this is an unpleasant conversation to have with people.

After the new tax plan passed in 2018, the estate tax exempt amount jumped to $11.2 million per person.

Unlimited amounts pass between spouses. The $11.2 million amount applies to beneficiaries like children or grandchildren.

According to a 2015 report from Congress’s Joint Committee on Taxation, 4,700 estate tax returns reporting tax liability were filed in 2013, out of 2.6 million deaths in the United States. That’s around 0.2 percent of Americans, or roughly two out of every 1,000 people who die.

And once the tax bill passed, the studies estimate that around 1,800 estates will be affected this year.

Estates Often Pay Less Than 17%  in Taxes — Not Top Rate of 40%

The top statutory rate is 40 percent, however the effective tax rate— or what the estates actually paid—was less than 17 percent in 2017, according to the Tax Policy Center.

If the tax rate is 40 percent, how is it estates pay less than 17%? Here are reasons:

  • Remember, estates only owe taxes on the amount above the exempted amount, which, again, is $11.2 million in 2018.
  • There are plenty of deductions and loopholes thrifty accountants and lawyers can use.
  • GRATs (grantor retained annuity trust) – a type of trust created to transfer assets tax-free.  We recently implemented a plan involving a GRAT for a client.  The estate owner put money into a trust designed to repay the estate the initial amount, plus interest at a rate set by the Treasury, typically over two years. If the investment — typically stock — rises in value any more than the Treasury rate, the gain goes to an heir tax-free. If the investment doesn’t rise in value, the full amount still goes back to the estate.

State Inheritance Tax – Texas Doesn’t Have It

Some states have state inheritance taxes. Luckily, Texas has no such tax. Below is a handy guide to your state’s inheritance tax.

Inherited Retirement Account Taxes – Some Apply

If you inherit a 401(k) or IRA, you may be taxed on any distributions and you may pay the capital gains tax on the gains if you inherit stocks or real estate and sell them.

Gift Taxes – Give Away $15,000 Tax-free To You

Finally, individuals are allowed to give away $15,000 per year (in cash, stocks, cars, etc.) without being taxed, and that’s $15,000 per donee. So if you have three kids, you can gift each of them $15,000 per year, for a total of $45,000. If you give more than that amount, you will need to file a gift tax return so you aren’t taxed on the excess amount.

Again, if you’re gifted stocks, know that you’ll pay taxes on the gains should you sell them.

Tax Attorney Could Help Cut Taxes On A Large Estate 

If you’re likely to inherit (or give away) a sizable estate, you should meet with a tax attorney to figure out how everything will go down in your state.

You can afford it, after all.

Come see the Weaver Firm Attorneys today to discuss estate taxation issues and planning techniques.

Rick Weaver, Attorney  or Travis Weaver, Attorney

Office: 817.638.9016 

Email: RWeaver@WeaverLegal.net

Email: TWeaver@WeaverLegal.net

10 Items Your Kids Don’t Want To Inherit & Remedies For All

Piles of inherited collectibles being sold at flea marketDon’t want to see your beloved collection of books, records, china, or figurines on a table at the local flea market?

Check out our “Top 10 Items Your Kids Don’t Want to Inherit” AND remedies for finding a good home or at least peace of mind regarding your treasured items–

No. 10: Books

Unless your grown kids are professors, they don’t want your books. There are a couple common mistakes my clients make in valuing books:

The 17th-century books are likely to be theological or grammar-based, and are not rare. The 19th-century books are probably not in good condition, and since most came in a series or set, it’s unlikely you’ll have a full (valuable) set.

Remedy: If you think the book is relatively common plug the title, author, year of publication, and publisher into a search engine. Once you have the information, try selling on Amazon or donating to a library. People always need books.

No. 9: Paper Stuff – Photos, greeting cards, postcards

Family snapshots, old greeting cards, and postcards are not worth anything unless the sitter is a celebrity or linked with an important historical event or the subject is extremely macabre, like a death memorial image. Old greeting cards are not valuable unless handmade by a famous artist or sent by Jackie O. Postcards are valued mainly for the stamps.

Remedy: Take all your family snapshots and have them made into digital files. The other option is to sell those old snapshots to greeting card publishers who use them on funny cards or give family photos to image archive businesses like Getty. If the archive is a not-for-profit, take the donation write-off.

No. 8: Steamer Trunks, Sewing Machines and Film Projectors

Trust me, every family has at least three steamer trunks from the 19th century. They are so abundant that they are not valuable, unless the maker is Louis Vuitton, Asprey, Goyard or some other famous luggage house.

Likewise, every family has an old sewing machine. I have never found ONE that was rare enough to be valuable.

And every family has a projector for home movies. Thrift stores are full of these items, so, unless your family member was a professional and the item is top-notch, yours can go there as well.

Remedy: Donate this category and don’t look back. Declutter your life.

No. 7: Porcelain Figurine Collections and Bradford Exchange “Cabinet” Plates

These collections of frogs, chickens, bells, shoes, flowers, bees, trolls, ladies in big gowns, pirates, monks, figures on steins, dogs, horses, pigs, cars, babies, Hummel’s, and Precious Moments are not desired by your grown children, grandchildren or any other relation. Even though they are filled with memories of those who gave them to your mom, they have no market value. And they do not fit into the Zen-like tranquil aesthetic of a 20- or 30-something’s home.

Remedy: Find a retirement home that does a gift exchange at Christmas and donate the figurines. If you want to hold on to a memory of your mom’s collection, have a professional photographer set them up, light them well and make a framed photo for your wall. Collector’s plates will not sell anywhere to anyone. Donate these to a retirement village as well or to anyone who will take them.

No. 6: Silver-Plated Objects

Your grown children will not polish silver-plate, this I can guarantee. If you give them covered casserole dishes, meat platters, candy dishes, serving bowls, tea services, gravy boats, butter dishes and candelabra, you will be persona-non-grata. They might polish sterling silver flatware and objects, but they won’t polish the silver-plated items your mom entertained with. The exception may be silver-plated items from Cristofle, Tiffany, Cartier, Asprey, and other manufacturers of note.

Remedy: None. Give it away to any place or person who will take it.

No. 5: Heavy, Dark, Antique Furniture

There is still a market for this sort of furniture, and that market, in the fashionable areas of the U.S., is most often the secondhand shop. You’ll receive less than a quarter of purchase price if you sell on consignment in one. Unless your furniture is mid-century modern, there’s a good chance you will have to pay someone to take it off your hands.

Remedy: Donate it and take a non-cash charitable contribution using fair market valuation. You can always sell these items at a consignment store or on craigslist.

No. 4: Persian Rugs

The modern tranquility aimed for in the décor of the 20- to 30-somethings does not lend itself to a collection of multicolored (and sometimes threadbare) Persian rugs.

Remedy: The high-end market is still collecting in certain parts of the U.S. (think Martha’s Vineyard), but unless the rug is rare, it is one of the hardest things to sell these days. If you think the value of the rug is below $2,000, it will be a hard sell. Like antique furniture, it may be best to donate. Tax deductions are helpful. 

No. 3: Linens

Go ahead, offer to send your daughter five boxes of hand-embroidered pillowcases, guest towels, napkins, and table linens. She might not even own an iron or ironing board, and she definitely doesn’t set that kind of table.

Remedy: Source those needlewomen who make handmade Christening clothes, wedding dresses, and quinceañera gowns. Also, often you can donate linens to costume shops of theaters and deduct the donation. 

No. 2: Sterling Silver Flatware and Crystal Wine Services

Unless the scrap value for silver is high enough for a meltdown, matching sets of sterling flatware are hard to sell because they rarely go for “antique” value. Formal entertaining is not a priority these days. And of course, sterling must be hand-washed and dried. Can you see your kids choosing to use the silver? Same goes for crystal: The sets you have are too precious, and the wine they hold is too small a portion. Period.

Remedy: Sites like Replacements.com offer matching services for folks who DO enjoy silver flatware and have recognized patterns. Because they sell per piece, and therefore buy per piece, sellers get a rather good price. Sell your whole silver service; it will be “pieced out.”

Unless your crystal is Lalique, Moser, Steuben, Baccara, or another great name, you will not be able to sell your “nice set.” Give “unknown maker” sets away, fast.

No. 1: Fine Porcelain Dinnerware

Your grown children may not want to store four sets of fancy porcelain dinnerware, and frankly don’t see the glory in unpacking it once a year for a holiday or event.

Remedy: Like silverware, china is something to consider for sale to a replacement matching service like Replacements.com. Know your pattern to get a quote from one. Because such replacement companies buy per piece, the aggregate of the selling price is always more than a bulk sale at a consignment store, which might be your only other option.

These are typically items we don’t include in a will. If you need to update your will or trust, give our office, Weaver Firm-Attorneys, a call today at 817.638.9016 or send an email to TWeaver@weaverlegal.net. We’ll be glad to help you sort things out. 

Travis Weaver, Attorney

Travis Weaver, Attorney

Top 10 Scams Targeting Seniors

We are all targets for scammers. Since we often help older individuals, our lawyers at Weaver Firm – Attorneys are especially careful to warn our elderly clients about these schemes.

Seniors make good targets because they generally have good credit and accessible savings.

Further, many seniors are alone or suffer from conditions like memory loss or frailty, which creates an easier target for fraud.

Top 10 Scams Targeting Seniors – Protect yourself and loved ones by reviewing these common fraud schemes that prey on older men and women

  • Medicare & Health Insurance Scams: In these schemes, a con artist pretends to be a Medicare representative and will call or set up a makeshift mobile clinic to try to get people age 65 or older to reveal personal information.  With access to personal information, these con artists later file false claims against Medicare and pocket the money. DON’T GIVE OUT PERSONAL INFORMATION TO STRANGERS.
  • Counterfeit Prescription Drugs Schemes: Often, these Internet schemes offer specialized medications at a bargain price. These schemes are dangerous because seniors can lose a lot of money and may not receive the real medications they need.
  • Funeral & Cemetery Scams: This scam involves a crook who scans obituaries and then attends funeral services to take advantage of a grieving spouse or family member.  Often the crook then claims that the decedent owed the crook money and will try to collect on a fake debt.
  • Internet Fraud: Email phishing scams range from those involving a Nigerian prince to a surprise inheritance from an unknown relative.  Seniors also unwittingly update personal information in response to a phishing email from what appears to be a legitimate company or known sender. If  someone offers you a large sum of cash over the internet, avoid these emails.
  • Homeowner & Reverse Mortgage Scams: These scams affect seniors who have equity in their homes. These scams range from predatory lending practices to sales products that can only be purchased with proceeds from a reverse mortgage to family members pressuring a senior to obtain a reverse mortgage in order to steal the proceeds of the loan.
  • The Grandparent Scam: In this scam, a crook calls a senior and says, “Hi, Grandma, do you know who this is?” The senior takes guesses on which grandchild the caller sounds like.  The caller then asks for money to solve some unexpected financial problem like car repairs or overdue rent and begs the senior not to tell the “grandchild’s” parents.
  • Telemarketer Fraud: This common scheme involves a telemarketer asking for identity or financial information.  Some statistics suggest that seniors are twice as likely to make a purchase over the phone. This form of scam is difficult to trace because there is no face-to-face interaction or paper trail.  Scammers usually share the valuable identity and financial information with others.
  • Sweepstakes Scams: In this well-known scheme, a senior is told that he or she won the lottery and needs to pay a fee to unlock the supposed prize. A check is sent to the senior and deposited into the senior’s account, until the senior discovers the fake check has been rejected.  By the time the senior discovers the fake check, the criminals have already collected the fees, which are pocketed by the crooks.
  • Home Repair Schemes: These crooks go door-to-door to conduct home repairs on seniors’ homes. The scam varies from overcharging for work to requiring payment upfront without finishing the work.  These crooks also lure seniors outside of the home to view the proposed repair, and while the senior is outside, an accomplice enters the home to steal valuables.
  • Investment Schemes: Where many seniors find themselves planning for retirement and managing their savings, these seniors should be wary of pyramid schemes complex financial products that lack strong endorsements from trusted finance sources.

Avoid these scams by refusing high-pressure deals, guarding all personal and financial information, and practicing caution with any offer that sounds too good to be true.  However, having a carefully drafted power of attorney is another way to guard against fraud.  With a power of attorney, a senior can appoint a trusted individual to help manage and monitor financial transactions. If you find yourself in a situation like this, contact one of our attorneys at Weaver Firm – Attorneys before you release information.

817.638.2022 or

RWeaver@www.weaverlegal.net

Skating On Thin Ice – Daughter May Waste Inheritance

Protecting your child once meant insisting on a sweater, warm hat, and gloves. In the cold reality of adult life, your adult child may make poor financial choices and endure major slips and falls.

Check out a client’s questions and our response on providing income to an adult child after you’ve skated away permanently:   

Dear Weaver Firm,

I am in my 70’s and have two children from a previous marriage of five years. One has a son and the other has two daughters.

My daughter is married and values material things far more important than financial security. She and her husband stay in debt, which has contributed to a rocky relationship for the past 15 years. I don’t know if it will last or not, especially when my granddaughter leaves home in just a few years.

More than likely, there will be some money left when my current husband and I are gone. Is there a way to assure that whatever she might be left would be protected from her wasting it away and instead, possibly contribute to her old age? We have individual wills but wondered if a trust of some sort or other type of document would be better? 

What would be the best way to structure this for both of my children and grandchildren and also, my husband’s one family member that he wants to leave something to? My current husband and I have been together for the last 35 years and live in Texas.

-Concerned Client

Dear Client,

Your question has two parts: Do you split your estate equally? And, how do you split your estate?

The first one is easy: Yes. You want to leave your children something, but you don’t want to leave them with resentments and questions. You want to leave this world in a swift, graceful manner that leaves people with a good feeling — the inheritance equivalent of the triple axel from the 2018 Winter Olympics: three equal, generously timed moves, and then you’re off the proverbial ice. Except in your case, for good.

As to your second question. I suggest an irrevocable trust, outlining ways in which your inheritance should be spent. This has two advantages. Your son has a financially responsible life, so he will be glad with any bequest and, I’m sure, will be heartened to know there is money set aside for home improvements or his children’s education. Your daughter, while not so financially responsible or astute, gets the same deal. Only in her case, you are protecting her from herself and protecting the interests of your granddaughter.

You don’t say what relationship your husband’s relative has to him, but if it’s not a sibling, you may consider leaving him/her a smaller amount than the money you leave the rest of your family. You may want to discuss the tax implications of such a trust with a financial adviser when you have decided on your stipulations and the amounts.

You want to appoint someone who has no conflict of interest whether that person is a professional trustee — that is, a bank or trust company — or not. You need to depend on that person to act in a competent and trustworthy manner.

This Trust can be contained in your Will (testamentary trust) or a standalone document. 

Planning for blended family is crucial to avoid hard feelings and litigation down the road. We’re glad to visit with you about your options and concern for your adult children. Call 817-638-9016 to schedule an appointment with attorneys, Travis Weaver or Rick Weaver. At Weaver Firm, we understand your concerns. Let us help protect your family and their future.

817.638.9016 or RWeaver@www.weaverlegal.net

How to Prepare for Being a Widow/Widower in 2018

Among the risks that married couples face in retirement, the risk of becoming a widow or widower is unavoidable.

A recent Society of Actuaries report,

“Managing Post-Retirement Risks: A Guide to Retirement Planning.”

lists some troubling facts about losing a spouse:

►Some income may stop at the death of a spouse or former spouse.

►The death of a disabled person’s caregiver spouse may bring financial problems at a very difficult time.

►The surviving spouse may not be able or willing to manage the family’s finances.

►Inability to cope with a spouse’s death or terminal illness contributes to high rates of depression and suicide among the elderly.

To be sure, it’s difficult to predict which spouse will live longer in individual cases, according to the SOA. But, on average, women are widowed more often than men. 

So, what can you and your spouse do to manage the risks associated with becoming a widow or widower?

Set aside time to talk 

Talking about money matters together is a great gift couples can give each other, says Kathleen Rehl, author of Moving Forward on Your Own: A Financial Guidebook for Widows. “Start by saying, ‘Honey, because I love you so much, I want us to talk about some important money issues together—that are really important to know about for the time one day when one of us is gone.’”

Others agree. “First and foremost, spouses – especially women – need to know about the household’s finances, including where all accounts are held,” says Cindy Levering, a retired pension actuary and volunteer for the Society of Actuaries. “In particular, it is very important that they know what benefits might be available from employment-based plans — pension, 401(k), life insurance, and medical for example — and how to contact the appropriate human resource people to access any benefits that may be due.”

If you avoid these conversations, Rehl says, “a surviving spouse may be in a double whammy — hit with grief and emotions of widowhood plus not having many clues about their money situation.”

Levering also suggests sharing financial information and contacts with children, not just their attorneys. “I know a lot of people don’t want to talk about their finances with their children but it is important that someone know what to do if necessary,” she says.

Run what-if scenarios 

Determine whether your financial plan will provide enough lifetime income to the surviving spouse. Note that expenses don’t necessarily decrease by half after one spouse passes away, says Levering. Also note that the surviving spouse may have less to live on if he or she has to spend down assets to take care of the spouse that passes away, says Levering.

If, after running your what-if scenarios, there’s a shortfall, consider increasing your savings, trimming your expenses, investigating a reverse mortgage and/or downsizing, and buying life insurance.

Delay Social Security 

If you’re the higher earner, consider delaying Social Security until at least full retirement age (FRA) or better yet until age 70, if there’s a good chance that your spouse will outlive you, says Betty Meredith, president of the International Retirement Resource Center. Why so? “The surviving spouse collects a higher lifetime benefit based on the primary earner’s benefit,” she says.

Also consider, if you have traditional defined benefit pension plan, choosing the joint-and-survivor annuity instead of the single life annuity.

Check all your beneficiary designations 

Make a list of every place you have ever worked and contributed to employer-sponsored retirement plans. “When a person divorces and remarries, old beneficiaries stay in place until they are changed by the account owner,” Meredith says.  “It happens all the time where an ex-spouse or other parties receive retirement funds upon the workers’ death instead of the current spouse.”

Do the same for all life insurance plans, bank and credit union checking and savings accounts, titling on real estate, and the like, says Meredith.

Make sure credit cards and other accounts are set up so both spouses have access, says Levering.

Consider long-term care. Think what would happen if one or both spouses needed long-term care. “Purchasing coverage sooner rather than later may be prudent,” says Levering.

Hire a financial team 

Put in place a trusted team of financial advisers, including an attorney, certified public accountant, and certified financial planner, that, Meredith says, “the surviving spouse will feel comfortable working with and trust to help them transition to a life without you, especially if they have typically not been involved in the financial side of your marriage.”

Estate plan up to date?

Create or update your estate-planning documents, including wills, trusts, advance directives, living wills, durable powers of attorney for health care, physician orders for life-sustaining treatment.

 “Consider filing a ‘do not resuscitate’ or DNR order with your local hospital and have readily available if needed,” says Meredith. “Many people want to avoid aggressive attempts to prolong their life, but medical culture and practices often do not support these wishes. This can help prevent racking up large medical bills for the surviving spouse to pay.

For her part, Anna Rappaport, chair of the Society of Actuary’s retirement task force, recommends reviewing all property with your attorney and making sure you understand what is individual and joint names, and how it might be disposed of. 

Also consider planning your funeral arrangements in advance. 

Relocate

Meredith also recommends moving to a home where a surviving spouse can more easily manage upkeep, taxes, have social network, and the like.

For More Information about planning for Widows or Widowers, please contact our office today at 817.638.9016