Michigan Estate Planning Blog

Caregiving and Estate Planning Provides Peace of Mind for All Generations

 

If your goal is to keep the farm, ranch, or small business in the family, planning, including estate planning and caregiving, is the number one strategy to making it happen. Families may dissolve the farm or business without advance planning to pay for long-term care expenses. A recent article from AgWeek, “Caregiving plans can provide peace of mind for farming and ranching families,” explains what needs to be done.

Part of the issue is that most ranchers and business owners won’t qualify for Medicaid because they own a significant asset. Having to sell off something they’ve worked their entire lives to build is often a result of no planning.

If you have a long-term care insurance policy, it needs to be carefully reviewed to determine what conditions need to be met for benefits to be paid. For example, most policies have a “waiting period,” so you’ll need to plan how to pay for caregiving during the months before the policy kicks in.

There’s also confusion about the difference between Medicare and Medicaid. Medicare is health insurance for medical expenses, while Medicaid is usually used for long-term care and caregiving needs. However, Medicaid is a needs-based program. An estate planning attorney can help the family determine what needs to happen in advance, whether the goal is to protect the farm, ranch, or small business while helping the aging parent become eligible for Medicaid.

Estate planning includes planning for incapacity, which can occur at any time but is more likely as we age. Suppose the individual hasn’t completed a power of attorney, healthcare power of attorney, and other medical directives. In that case, the family will need to go to court to obtain conservatorship or guardianship to take over the person’s financial matters and make healthcare decisions on their behalf. An estate planning attorney can help the family prepare the documents and create a plan.

Having an estate plan in place is also another means of protecting the family’s assets from elder abuse. Everything needs to be documented, and records need to be well-organized so every family member knows where documents are, where assets are and the plan for the inevitable events of aging.

Meeting with an estate planning attorney to create the last will and testament, power of attorney and all other planning documents can minimize the stress and costs involved. Without planning, everything becomes far more complicated, costly and stressful for all concerned.

Reference: AgWeek (May 14, 2024) “Caregiving plans can provide peace of mind for farming and ranching families”

Great Expectations – Inheritance Planning Is A Two-Way Street Saginaw, Michigan

When it comes to consideration of what an “inheritance” means today in America, there are difficult waters to navigate for those planning for their estates and those planning to inherit those estates. According to a recent CNN Money article titled “Average American inheritance: $177,000,” it is a tale of two facts: The good: American retirees expect to leave an average inheritance of almost $177,000 to their heirs, the sixth highest of any country, according to an HSBC survey of more than 16,000 people in 15 countries. And the tough to count on: Around the world, 69% of retirees plan to leave an inheritance to their offspring, at an average of $148,000. Retirees in India were most likely to do so -- with 86% expecting to leave money behind -- while American retirees were the least likely, with only 56% expecting to give inheritances to their children. You see, the math behind bequest and inheritance in the U.S. is an increasingly tricky one. There are a number of factors at play. These include such wild cards as the rising costs of late-age care, unstable financial markets and the lack of wealth transfer maximization. Regardless, whether you are the one planning the wealth transfer or the one planning to receive it, this is a time to be realistic. So, what should you do? Be sure to do the best with the financial resources you have. As a family, that means coming together to consider the issues and discussing a real plan for how it all ought to fall into place under a variety of “what if” scenarios.

Reference: CNN Money (December 13, 2013) “Average American inheritance: $177,000”

For more information, see www.jerryreiflawyer.com

Survivorship Insurance - Making A Comeback Saginaw, Michigan

Where there is a risk and an attending financial exposure you cannot afford, there is a form of insurance to cover that risk exposure. When it comes to the ultimate risk – your family’s risk of losing you – life insurance is the fundamental solution. But what if there are two spouses? Naturally, financial risk is felt by the survivor at the passing of the first. That is why almost everyone needs some form of life insurance to provide for the surviving spouse. However, when there is some quantifiable financial risk left behind when the survivor passes, then there is a special form of life insurance to cover such exposure. It is called “survivorship life insurance.” For the basics on survivorship insurance, consider reading a recent Forbes article titled “Sales of Survivorship Insurance Gain.” This form of insurance is underwritten on the lives of both spouses, but only pays the benefits after the death of the surviving spouse. In essence, it works like two life insurance policies stacked together, and survivorship policies are almost always more affordable than owning separate policies on each spouse for the same grand total of death benefit. In addition, when properly owed in an irrevocable trust arrangement, the death benefit proceeds are even excluded from the insured couple’s estate tax calculation. Survivorship insurance can help solve many financial risks. For example, at the death of the surviving spouse, the death benefits can help provide a “safety net” for a family member with special needs, ensure sufficient liquidity to pay any estate taxes that otherwise might threaten a “liquidity event” for estates heavily weighted in real estate, business interests or art, or help equalize estates when some children will inherit the family business and others will not. As you can see, there are multiple reasons why survivorship life insurance sales are increasing. Especially in times of economic uncertainty, life insurance provides cash when needed most.

Reference: Forbes (December 15, 2013) “Sales of Survivorship Insurance Gain”

For more information, see www.jerryreiflawyer.com

Great Expectations – Inheritance Planning Is A Two-Way Street Mid-Michigan

When it comes to consideration of what an “inheritance” means today in America, there are difficult waters to navigate for those planning for their estates and those planning to inherit those estates. According to a recent CNN Money article titled “Average American inheritance: $177,000,” it is a tale of two facts: The good: American retirees expect to leave an average inheritance of almost $177,000 to their heirs, the sixth highest of any country, according to an HSBC survey of more than 16,000 people in 15 countries. And the tough to count on: Around the world, 69% of retirees plan to leave an inheritance to their offspring, at an average of $148,000. Retirees in India were most likely to do so -- with 86% expecting to leave money behind -- while American retirees were the least likely, with only 56% expecting to give inheritances to their children. You see, the math behind bequest and inheritance in the U.S. is an increasingly tricky one. There are a number of factors at play. These include such wild cards as the rising costs of late-age care, unstable financial markets and the lack of wealth transfer maximization. Regardless, whether you are the one planning the wealth transfer or the one planning to receive it, this is a time to be realistic. So, what should you do? Be sure to do the best with the financial resources you have. As a family, that means coming together to consider the issues and discussing a real plan for how it all ought to fall into place under a variety of “what if” scenarios.

Reference: CNN Money (December 13, 2013) “Average American inheritance: $177,000”

For more information, see www.jerryreiflawyer.com

Insurance – Financial Planning Foundation Saginaw, MI

To know and not to do is not yet to know. In other words, to know there is a risk, for example, and yet not to act upon that risk can leave disastrous holes in your retirement plan, your end-of-life care, or your estate itself. While it is not the only financial planning tool in the tool chest, many financial plans could benefit from an insurance to solve myriad risks. The kinds of insurances we are “required” to buy help us with the minor bumps and scrapes in life and are sometimes easy to think about, shop for or ensure that we have adequate coverage. Auto and homeowners insurance, for example, come immediately to mind. On the other hand, disability insurance, long-term care insurance and life insurance are another matter entirely. As USA Today points out in a recent article titled “Insurance is most ignored in financial planning,” these three insurances are all too often ignored, misunderstood and difficult to think about emotionally. Nevertheless, they are often essential. Insurance is, quite literally, a product you purchase to solve a risk. It is peace of mind. Without fail, insurance is more cost effective than coping with a disaster. To become disabled, especially late in life, is to lose income that may be necessary for you and your loved ones. Disability insurance can mitigate this. Likewise, with the rising costs of medical care and seeming inevitability of requiring a good deal of elder care, long-term care insurance can step in when the medical needs are overwhelming. And finally, life insurance helps eliminate the risk your family faces without you and your income. Each type of insurance is well worth your consideration, and each can be budgeted to fit within a comprehensive financial plan.

Reference: USA Today (November 10, 2013) “Insurance is most ignored in financial planning”

For more information, see www.jerryreiflawyer.com

 

Do You Really Have Enough Life Insurance?

It’s not too hard to properly insure a car or a valuable piece of art, because the value of the object can be determined, even in a shifting market. What about insuring your life for those who depend on you for financial support? How do you insure your life and how do you even begin thinking about life insurance? For starters, it is essential to note that life insurance can be a complex subject, especially when it comes to the right “kind” and the right “amount” of insurance. So what questions do you ask? Sometimes the important questions don’t come up when you click through those online life insurance calculators, and unfortunately, less so with some insurance brokers. Forbes recently addressed this important issue in an article titled “What A Life Insurance Calculator Can't Tell You.” Generally speaking, insurance exists so you can pay a “premium” now that you can afford to protect against the risk of a catastrophic event later that you cannot afford. When it comes to life insurance, of course, the risk is to your family and loved ones if you were no longer there to care for them. Life insurance is a potent tool in this regard, but it is far from the only tool to protect for your loved ones in the event of your death. The original article provides an excellent analysis of common “needs” that life insurance can protect. In the end, however, nothing can replace the advice and counsel of an experienced and qualified life insurance professional.

Reference: Forbes (March 28, 2013) “What A Life Insurance Calculator Can't Tell You”

For more information, see www.jerryreiflawyer.com

 

Mind the Details – Property Insurance Coverage and Estate Planning Saginaw, Michigan

Estate planning is more than creating a tool chest for wealth transfers. There must be careful coordination between many moving parts. For example, if you fail to mind the details of your insurance planning, then your estate planning tools may do more harm than good. A recent article in AdvisorOne provides a good reminder of the need to take care of the details when constructing your estate plan. The article, titled “Trusts and LLCs: Smart Ways to Transfer Wealth and Risk, but Mind the Details,” uses the example of trusts and LLCs to illustrate how even the best intended planning can go astray. These common entities are often used by estate planning attorneys to protect client assets from probate and creditors, and they are also used to transfer the assets to loved ones after death. Unfortunately, unless the assets are properly retitled, the full benefit of the planning may not be realized. In addition, unless various insurance carriers are notified that the trust or LLC is now under a new owner (or additional insured), there may be challenges in the event of a future claim. Example: if the family home is transferred into a Qualified Personal Residence Trust (QPRT), but the property casualty policy is not updated to reflect this transfer. Insurance is underwritten with the listed owner in mind. If you transfer an insured asset to a legal entity, then you might invalidate the insurance coverage. The point is that there are no half-measures in planning for your estate. Perhaps this might be a good time to review your assets, your estate planning and your insurance coverage?

Reference: AdvisorOne (February 21, 2013) “Trusts and LLCs: Smart Ways to Transfer Wealth and Risk, but Mind the Details”

For more information, see www.jerryreiflawyer.com

 

Planning Considerations for Your Art Saginaw, Michigan

What would you consider are your favorite and most valuable assets? Maybe it’s your stocks, business, or real estate. For some, however, their favorite and most valuable assets may be the beautiful art hanging on their walls. If your art collection is important to you and your heirs, and truly valuable in and of itself, then it’s important to make proper plans to protect it. In life we tend to limit our risks through various forms of insurance. Accordingly, when it comes to your art, this issue was addressed in a recent Forbes article titled “Should Your Art Be Insured?” This is not an easy question to resolve in every instance. A previous article in Forbes explored another angle on personally-owned art. The article, titled “Is Art An Asset Or An Investment?,” added another take on the world of such art. Remember: the value of your “art” is really whatever someone would be willing to pay for it. You may have heard that when it comes to art, there is more to it than what meets the eye. A true statement indeed, and even more impactful when you consider the valuation and planning for the artful assets you cherish.

Reference: Forbes
(October 31, 2012) “Should Your Art Be Insured?”

Forbes (October 5, 2012) “Is Art An Asset Or An Investment?”

For more information, see www.jerryreiflawyer.com

 

Planning Considerations for Your Art Saginaw Michigan

What would you consider are your favorite and most valuable assets? Maybe it’s your stocks, business, or real estate. For some, however, their favorite and most valuable assets may be the beautiful art hanging on their walls. If your art collection is important to you and your heirs, and truly valuable in and of itself, then it’s important to make proper plans to protect it. In life we tend to limit our risks through various forms of insurance. Accordingly, when it comes to your art, this issue was addressed in a recent Forbes article titled “Should Your Art Be Insured?” This is not an easy question to resolve in every instance. A previous article in Forbes explored another angle on personally-owned art. The article, titled “Is Art An Asset Or An Investment?,” added another take on the world of such art. Remember: the value of your “art” is really whatever someone would be willing to pay for it. You may have heard that when it comes to art, there is more to it than what meets the eye. A true statement indeed, and even more impactful when you consider the valuation and planning for the artful assets you cherish.

Reference: Forbes (October 31, 2012) “Should Your Art Be Insured?”

Forbes (October 5, 2012) “Is Art An Asset Or An Investment?”

For more information see www.jerryreiflawyer.com

 

Umbrella Insurance Coverage – Worth A Look

It’s safe to say that, if there’s a risk out there, there’s also an insurance underwriter somewhere dying to write a policy for it. However, if you are especially affluent or risk-prone, excess personal liability insurance (“umbrella insurance coverage”) can be a helpful safeguard. Any trial attorney will confirm one unshakeable truth - money attracts unwanted attention. Unfortunately, in our litigious society, all it takes is one particularly obstinate person out to “get the rich” to team up with a less-than-scrupulous attorney and make it their mission to ruin your life with a frivolous lawsuit. This was the subject of a recent article in Financial Planning titled “Covering Up.” Not only will you pay for your defense, but juries can also be unfair. In an era of class envy, you may get a jury that wants to help one of its own a “lawsuit lottery” at your expense. To help mitigate the risk of a lawsuit judgment, consider taking out umbrella insurance coverage just in case.

Reference: Financial Planning (April 1, 2012) “Covering Up”