Nevada Estate Planning & Elder Law Information Blog

Good News You Can Use

A common concern in retirement is having enough money to live on and maintain your home.  The City of Henderson can help you maintain your housing budget with their Weatherization Grant-Assistance Program known as WAP. 

The WAP program is available to low-income homeowners and renters of single family, multi-family, or manufactured homes who fall into the following income categories:

1 person household - Income cannot exceed $35,750 per year

2 person household - Income cannot exceed $40,900 per year

3 person household - Income cannot exceed $46,000 per year

4 person household - Income cannot exceed $51,100 per year

5 person household - Income cannot exceed $55,200 per year

A representative from the program will be sent to your home to conduct an assessment to determine if your home could benefit from weatherizing to make the home more energy efficient.  You can contact the City of Henderson at 267-2010 for more information on the program.

Things to Consider Before Accepting Guardianship of a Child

This article come to us from the Financial Transitions March 2008 Newsletter published by Wachovia Securities,

When asked to served as the guardian of someone's minor children in the event of his/her death, it is usually meant as a compliment.  However, don't accept this role without giving it serious thought.  Consider the following:

Are your lifestyles compatible? 

Go over all details involved in raising the children.  Will the children have to relocate far from their current home?  It is difficult to lose parents, but it becomes even more traumatic when the children must relocate away from friends and school.  What are the parent's preference regarding education, religion, lifestyle, and other factors?  However well does your family get along with their children?  Consider the impact on your children, including the fact that you will probably have less time available for them.

How much financial support will be available? 

This involves more than making sure money is available for college and other expenses directly attributable to the children, such as clothing, medical expenses, and entertainment.  Additional children in your house will increase many of your bills, including food, utilities, transportation costs, etc.  Your house may now be too small, requiring an addition or moving to a larger home. 

Are you comfortable taking on responsibility for the children's finances? 

Just because you agree to take physical custody of the child does not mean you have to handle their finances.  You may feel more comfortable with another person involved to review how the money is spent.

Has a contingent guardian been named? 

Find out if a contingent guardian has been named in case you cannot serve.  However, do not use this as an excuse to say yes when you really want to decline.  It is better to indicate that you do not want to take on this responsibility now, so another guardian can be chosen.  Also if your situation changes in the future, inform the parents immediately. 

What Is The Most Common Mistake You Can Make In Estate Planning?

If someone were to ask me what the most common mistake is you can make in estate planning, my answer would be simple.  The most common mistake is simply not getting around to planning at all.  Remember the old adage "failing to plan is like planning to fail".  Well this is particularly true in the case of estate planning. 

  The best way to protect you and your loved ones, is to make the time NOW to plan your future estate.  Both you and your loved ones deserve to have a secure future.  Nothing is more frustrating or frightening to family members than having to guess at what they believe your wishes would have been.  You can take the guess work out of the equation by following these easy pointers:

1. Make a Will.  Everyone needs one.  If you do not draft a will, the state will decide what happens to your property after you die.  A will allows you to designate to whom and how, you want your property to pass.  Whether you have a minimal, modest or large estate, you will want to designate the person you wish to wrap up your business after you have passed away.  This person is called the executor of your estate.  Additionally, your family will already be dealing with the grief of your passing, you do not want to compound that grief by failing to leave any directions about how you want your personal property distributed.  If you want your wedding ring to go to your granddaughter, or your gold watch to pass to your son -- let them know in your will.

2.  Keep Your Beneficiary Designations Current.  I know I have written about this before, but I cannot say it enough -- in many cases the beneficiary designation will trump what is written in your will or trust, so make sure your beneficiary designations are consistent with your other estate planning documents.

3.  Execute Powers of Attorney to Plan for Incapacity.  Who will take care of things for you if you are unable to speak for yourself?  A Durable Power of Attorney and a Medical Power of Attorney can protect both you and your family's interests.  A Durable Power of Attorney allows the person you choose to make legal and financial decisions on your behalf.  A Medical Power of Attorney allows you to state in advance the kind of medical care you would want in the event you become incapacitated, and further allows you to indicate the person you would want to make medical decisions on your behalf if you are unable to speak for yourself.  If you do not have these documents, and attorney and the court will need to become involved at the time of your incapacity, which is not only time consuming, but can be a real financial burden for your family.      

Make the time today to see a professional about your future.  If you do not already have a relationship with a qualified estate planning attorney, please contact The Herr Law Group at 735-4377.  We would love to meet with you and talk to you about your planning options.

Are You Traveling Outside of the Country?

If you are planning to spend your time traveling in retirement, here is a helpful tip you should know: 

All persons (including children) traveling internationally by air are now required to have a valid passport.  To apply for a U.S. Passport, applicants must apply in person and:

• Be a U.S. Citizen
• Submit Proof of U.S. Citizenship
• Complete a Passport Application and Pay the Appropriate Fee
• Provide 2 Identical Passport Photos
• Show Valid Identification

Note that all applicants must appear in-person, including children.  If you are applying for a minor child  under the age of 14, both parents or legal guardians must consent to the application.  If you are applying for a minor child between the ages of 14 and 17, parental consent may be requested.

In Henderson you can apply at the Office of the City Clerk, 240 Water Street, Henderson, 89015 -- Tel (702) 267-1400, or at the Henderson Post Office, 404 S Boulder Hwy, Henderson, 89015 -- Tel (702) 565-2719.

For information on obtaining a U.S. passport click here to be directed to the U.S. Department of State Website.

Communication Key to Fulfilling Financial Dreams

Did you catch Newspaper Commentator Humberto Cruz' recent article entitled "Communication Key to Fulling Your Financial Dreams".  In the article, Mr. Cruz writes:

It doesn't matter whether you keep joint or separate accounts, set a limit on spending or not or invest conservatively or aggressively.  What matters is that you communicate and agree on what works for you. 

Even long-married couples don't always communicate.  In a Fidelity Investments survey last year of 502 couples married to each other an average of 24 years, spouses were interviewed separately.  More than a third didn't know when their spouse planned to retire and more than a third also envisioned different retirement lifestyles. 

Why not use a visit to your financial planner, estate planning attorney, or elder law specialist to begin the conversation with you love one about your financial future.   

Consider the Effect of Your Will or Trust During a Divorce

Did you know that existing wills and trust are not invalidated by a divorce?  The law in Nevada provides that those provisions or awards to a spouse contained in a will or trust  will be invalidated by operation of law, however the other provisions of your estate plan will not be invalidated.  (See NRS 133.115 and NRS 163.565.  This means that bequests to your ex-husband's family, or designations of your ex in-laws as a guardian will continue to stand until the will or trust is revoked. 

Additionally, you should be aware that this statutory provision does not take effect until the divorce is final.  If the will or trust is not revoked and a party dies during the midst of the divorce litigation, the provisions of the surviving estate planning document will stand. Consequently, if you have a will or trust already in effect, and are going through a divorce, talk to your lawyer about revoking these provisions even before your divorce is over, so you can be sure that your estate plan reflects your true wishes in the event of an unforseen tragedy.

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Do I Need to Worry About Having a Taxable Estate?

The answer to that question is "it depends".  In 2001 the Economic Growth and Tax Relief Reconciliation Act raised the amount of assets you can leave to your heirs before federal taxes will be assessed.  In 2007 and 2008, the applicable exclusion amount is $2 million dollars.  This exclusive increases to $3.5 million in 2009, and is unlimited in 2010.  However at the end of 2010, the applicable exclusion amount reverts back to levels prior to the passage of the Act in 2001 (approximately $1 million). 

What that means in more straightforward terms in that for the next few years, things look pretty good, however it is unlikely that Congress will simply leave this Act alone, and more likely that there will be changes in the coming years, as this has been their historical practice.  Consequently, most financial planners, CPA, and estate planning attorneys are always looking for ways to limit the amount of your estate that will be taxable upon your death.

Many people assume they have a modest estate and therefore have nothing to worry about, but consider that even a so called "modest" estate adds up.  For instance, for many people their home's equity will comprise a large share of their total assets.  Even though the rate of growth in housing prices have slowed here in the valley, home values remain at levels few of us could have envisioned 20 years ago.  It is no longer unusual for a modest home to have a value of $500,000 or more.

Next consider your retirement plan assets.  Particularly for those fortunate enough to work for a company that matches employee contributions to 401(k) plans, or that issues shares of company stock, again many have retirement assets in excess of half a million dollars.  Consider also life insurance benefits, which while normally are not subject to income taxes, can be subject to estate taxes.  Collectibles, including art and antiques, even base ball card collections can add up.

You can eliminate future tax surprises by understanding the value of your estate, and engaging an estate planning attorney to help you properly plan.  The are many strategies available to you to limit your tax exposure, but the first step is to know upfront how large your estate is likely to me.   

The Battle of the Sexes

Did you hear the one about . . . .

Dan was a single guy living at home with his father and working in the
family business. When he found out he was going to inherit a fortune
when his sickly father died, he decided he needed a wife with which to
share his fortune.

One evening at an investment meeting he spotted the most beautiful woman
he had ever seen. Her natural beauty took his breath away. 'I may look
like just an ordinary man,' he said to her, 'but in just a few years, my
father will die, and I'll inherit 20 million dollars.'

Impressed, the woman obtained his business card and three days later, she
became his stepmother.

Women are so much better at estate planning than men

Passing On Your Charitable Giving Tendencies

The most important thing that parents pass on to their children is their values, and for many, charitable giving is amount those values.  So how do you build that charitable instinct in your child or grandchild?  As with most things in life, children learn by example. 

If you volunteer, your children are more likely to follow in your footsteps.  Parents involved in charitable pursuits, tend to have children with hearts for charity as well.  So next time you volunteer your services to someone in need, consider involving your child or grandchild as well.  Even chores as simple as sweeping up in a soup kitchen or serving food at a homeless shelter can begin a great foundation.  Assuming that you volunteer in a safe environment, having your child "see you in action" can have a double benefit.

Another idea recently passed on to me by Certified Financial Planner, Jocelyn Holzwarth, is using a child's allowance to support charitable giving.  Consider matching a small portion of the allowance if your child contributes some of the allowance to a worthy cause.  For younger children, making the cash gift tangible by turning it into a small toy for underprivileged children can make a big difference. 

Buyer Beware -- Getting Ready for Digital TV

For those of us who are less technically inclined -- beware of unscrupulous electronics vendors telling you that your analog televisions will no longer work after February of 2009.  The AARP website explains,

TV stations across the country are now airing digital television programming. All used to use analog technology, but that will soon be a thing of the past. By February 2009, they will stop sending out program signals on their analog channels. For consumers this change will likely mean a better quality television picture and more channel options. But, if you don't have a digital TV or don't have cable or satellite service, your analog set won't work after this change, unless you add new equipment.

The key is the requirement that you add new equipment.  While many vendors may push you to purchase a new television, keep in mind that your existing television set can be modified to received the new digital signal with the addition of a kit that should run about $50.00.  There is no need to incur the expense of a new television, and there may be rebates offers by the government of up to $40.00 to help with the cost of transitioning to the new signal.

For more information see AARP's article on Getting Ready for Digital Television.

Food For Thought When Planning For The Future

Did you catch the recent article in the Las Vegas Review Journal by author Elizabeth Marquardt on Aging in America entitled "Broken families, lonely ends".  In the article, Ms. Marquardt writes,

I had dinner with a friend whose mother had recently remarried, to a man who had never had children.  Though happy for her mother, my friend was also bothered.  If her mother were to die before the new husband, she wondered, would she herself be expected to care for this man she barely knew?

She isn't alone in her uncertainty.  Because of profound changes in how Americans organize and sustain -- and often break up -- our families, our nation will soon confront a never-before-seen shift in how we die and whom we'll have around us when we do.  And the likelihood is that we will be dying much more alone.

Reduced birth rates, widespread divorce, single-parent childbearing, remarriage and what we might call "re-divorce" are poised to usher in an era of uncertain obligations and complicated grief for the many adults confronting the aging and dying of their divorced parents, stepparents and ex-stepparents.  And compared with the generations before them, these dying parents and parent figures will be far less likely to find comfort and help in the nearby presence of grown daughters and sons.

You can read the entire article by clicking here.  It makes clear the importance of proper planning for not only legacy planning, but also for long term care.  Elizabeth Marquardt, a vice president of the Institute for American Values, a nonprofit pro-family organization, is author of "Between Two Worlds: The Inner Lives of Children of Divorce."

How Much Money Do You Need for Retirement?

A common retirement planning rule of thumb has been that you will need about 70% of your pre-retirement income to sustain your lifestyle after retirement.  This "rule of thumb" is based upon the assumption that certain expenses will decrease like the cost of commuting, work-related expenses, and taxes on income.  However this guideline assumes a relatively inactive lifestyle, and further does not take into consideration, is that other expenses may increase. 

Increasingly, retirees view retirement as a time to travel extensively, entertain, and engage in new (and sometimes expensive) hobbies.  So while work-related expenses may go down, entertainment expenses are likely to go up, as will the cost of medical care.  The question of "how much money you need for retirement?" really comes not to how you plan to spend your retirement years. 

As part of your overall estate and financial planning, consider the use of a qualified financial planner in helping you plan and meet your goals for the future.  The Financial Planning Association of Southern Nevada is a great place to start your search for a qualified Certified Financial Planner. 

Celebrating Veterans Day

Please join us today in celebrating Veterans Day, and in thanking all of our servicemen and women for their sacrifice. 

Click on this link http://www.bobbywarns.com/viewvideo.html to view a moving tribute to Cpl Robert P Warns, II.  It is a reminder to all of us of the sacrifice of our military.

How to Help Your Children Develop a Heart for Charity

A common concern expressed by parents is how to teach charity and the joy of giving to their children. Many parents are concerned that while their own personal financial success has made opportunities available to their children, this same financial success sometimes makes it more difficult for their children to truly appreciate the advantages they receive. The Youth Philanthropy Program is an initiative at the Nevada Community Foundation designed to help foster the value of giving, in children, as well as adults. The program allows small groups of children to learn about our community's needs, charitable giving, and to develop their own philanthropic values, by creating a shared pool of monies for charity that the children get to direct. During the pilot program, young people visited local charities and met a number of times over a six-month period. They then made decisions about how they would distribute the pool of money under their control. Ultimately, they distributed grants to Nevada Childhood Cancer, Communities in Schools, and the Mayor's Prayer Breakfast Youth Initiative. The Nevada Community Foundation newsletter noted that "The money, is merely a tool. The goal of the program is to get kids excited and engaged in building a stronger community. As one parent noted, I will know this is successful when my kids come to me asking for more money to give to charity." To learn more about the Youth Philanthropy Program, contact Chuck Salter, Director of Development, at chuck@nevadacf.org or call 892-2326.

Happy Halloween!