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.

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.   

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

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. 

Happy Halloween!

Over the River and Through the Woods to Grandmother’s Probate We Go!

             

Being an executor for an estate is a seriously heavy burden.  Some may say it’s like carrying the weight of the world on your shoulders!  This is one of the many good reasons to explore creating a living trust for your estate.

The executor named in a will is the person responsible for settling and finalizing a deceased person’s estate according to the deceased wishes.  Some states use the term “personal representative” instead of executor.

Here is a list of most of the tasks you are asking your executor or personal representative to do after you are gone:

                         

Find your will
Seek advice from an attorney and retain if necessary
Locate the correct probate forms and apply to appear before the probate court (See Part 2 below)
Publish a “Notice to Creditors” and mail to each known creditor
Send notices of your death to the post office, utilities, banks and credit card companies
Notify beneficiaries named in your will
Inventory all of your assets and decide which to have appraised
Collect debts owed to your estate
File for your Social Security, civil service or  veteran benefits
File for your life insurance and other benefits
File applicable city, state and/or federal tax returns (Hire an accountant if necessary)
File state death and federal estate tax returns
Pay valid claims against your estate
Distribute your assets and obtain receipts from beneficiaries
File papers to finalize your estate

For protection, your personal representative should keep a copy of all records for at least two years. And your personal representative/executor should not hesitate to seek the guidance of a professional if he or she needs help in settling your estate.

And finally, all of this must be done in a timely, organized manner with government/probate court oversight while attempting to maintain family peace and harmony. 

For more insights, the Wall Street Journal recently published a great article "The Burden of Being an Executor" and you can read it by clicking HERE.