You’ve worked hard for your money. You’ve been responsible. Saved for retirement. Built a nest egg for your family to fall back on in hard times. You’ve done all the right things. You want to make certain that your family benefits from all your hard work, rather than the government or medical system.
A Sound Financial Plan Should Consider Your Estate Objectives:
Death and taxes may be certain, but there is no reason to pay taxes upon your death than is absolutely necessary! If you live in New Jersey, you not only have federal taxes to worry about, but the NJ state estate tax that is one of the highest in the nation. (surprised?) A good estate plan can help limit your families tax exposure.
Maybe you have already prepared estate documents. But if they haven’t been reviewed recently, chances are they won’t be up to the task they were designed for. Not only may your financial situation have changed, but the estate tax laws have changed dramatically as well – and Congress has to change them yet again in 2012! Due to tax law changes, you may find you are not liable for federal taxes – but your estate documents leave you exposed to a large NJ estate tax bill! Truth is, your estate documents need to more flexible than the original drafter may have ever imagined! We are not attorneys, and cannot offer legal advice – but we can review your situation and explain how your plan works and where it might need attention.
Even if you have all the right wills and trusts created to minimize your tax liability, have you positioned your assets appropriately to take advantage of that carefully crafted estate plan? Many couples we meet with have not! Hint: If your will is designed to pass money to a credit shelter trust, but your assets are all owned “Joint Tenant Right of Survivor-ship” then your estate tax plan will likely fail!
Do You Need a Will?
We think everyone should have essential estate documents, including a will, power of attorney, and medical directive documents. Special attention is required if either you or your spouse have children from a prior marriage, if you have any special wishes for distribution of your assets, if you or your spouse are not a U.S. citizen, if you are in a non-traditional relationship, or if you want to be sure your wishes regarding extraordinary medical treatments are understood and followed.
What About Long Term Care Expenses?
Maybe you have ensured your assets will be protected from taxation – but have you protected them from extreme medical costs at end of life? Medicare does not cover long term care expenses, either at home, or in a nursing home. Effective planning for long term care costs should be done years in advance of the need to make certain all options are available to you. With long term care expenses approaching $100,000 per year, it might not take long to see your entire life savings depleted! We can help review strategies to ensure that your spouse is protected and you are able to leave something for your children!
If your need for long term care (or that of a parent) is in the near term (i.e. less than 5 years) and you think you may need to rely on Medicaid for payments – you should seek the services of a qualified elder care attorney! Medicaid rules and regulations are extremely complicated, and even those who believe they are following the rules often get in trouble.