The Livens Law Firm

Dallas Estate Planning Law Blog

Be proactive about long-term care and estate planning decisions

Americans who are close to retirement age say they do not know how much money they will need to live a comfortable life after they stop working. Only 16 percent say they are confident that they have saved enough to sustain them during their golden years. For those turning 65, there is a significant chance that long\-term care will be a factor in their future. In Texas and across the country, long-term care costs exceeded $225 billion in 2015.

The National Association of Unclaimed Property Administrators says that $7.7 billion in retirement savings were left in orphan accounts in 2015. When leaving one job for another, make sure there is no money left behind in a 401(k) account. Consider alternative options such as rolling investment money into a current employer's plan or opening an IRA account. To avoid penalties for not reinvesting within 60 days, make sure that money from an old account is invested directly into a new 401(k) or IRA accounts.

Estate planning is critical to protect crypto-assets

Billions of dollars in wealth may be in jeopardy if crypto-assets are not included in estate plans. Experts say that when it comes to estate planning, cryptocurrency will need to be documented with proof of ownership and how heirs can access it. In Texas and elsewhere, the rise in the value of cryptocurrency has created quite a stir recently.

In the past, if someone were to die without a comprehensive estate plan, heirs would wait for financial statements to be received in the mail. Today, tracking banking and brokerage accounts has become more complicated over time because of online banking and investing. Email addresses and passwords are now necessary to access accounts, and cryptocurrency assets can go undetected without proper documentation. There is no paper trail, no bank statements or reported income to the Internal Revenue Service, and without an encrypted passcode, any wealth created may go undetected.

Long-term care planning for a happy retirement

After a lifetime of working, most are excited for the time when they can retire and sit back, relax and enjoy life. Saving for health care and investing in long\-term care insurance before retirement can reduce the stress that many seniors now face. In Texas and other states, many seniors claim their golden years are being tarnished because of high health care expenses.

According to data released by the Nationwide Retirement Institute, health care costs are holding many seniors back from enjoying their retirement years. Roughly 80 percent of seniors who have been retired for over 10 years say they were blindsided by health issues earlier than expected. Experts say saving early and purchasing the right insurance can help ease the pain of future medical costs.

Estate planning is an important part of a financial plan

Family members with considerable assets may be unaware of the best way to bestow their wealth upon future generations. There are several options available for gifting to loved ones and donating to charities as part of bequeathing one's estate. In Texas and other states, estate planning can ensure assets are divided among the right beneficiaries.

Donating to charity can set an example about the importance of giving and can help foster a sense of empathy for others in need. It could be the humane society or local churches or even a struggling family within the neighborhood. An estate plan can guarantee that a favorite charitable organization is remembered according to one's wishes.

Make long-term care part of the retirement plan

Recent surveys show that only 14 percent of Americans have discussed future plans with a professional advisor. Experts from several financial services stress the importance of the financial planning for long\-term care. In Texas and other states, there is a wide misconception about the need for long-term care in retirement.

Most Americans assume that as they move into their senior years, they will not need additional care. Close to 70 percent of elders will require long-term care, and most are unaware of the costs involved. Annual costs for nursing homes vary and can be upwards of $100,000. Another misconception is seniors assume that family members will handle their care as they age, but the emotional and physical burden is often more than a family member can bear.

Americans procrastinate about wills, estate plans and money

Preparing and maintaining an updated will is one of the best things a person can do for his or her family. People who have assets and want to have them distributed in a specific manner after their death will need to layout their requests in a will. In Texas and elsewhere, over 30 percent of adults procrastinate about creating a will or any sort of estate plan.

When it comes down to financial matters, most Americans who fail to make retirement plan contributions lose out on the opportunity to grow their money. Studies show that 25 percent of workers fail to invest in retirement plans and are losing money because of it. Contributing $300 each month over 40 years would result in over $700,000 with an annual return of 7 percent. Those who delay contributing five years will only amass about $500,000 with the same return rate.

Long-term care planning for elderly parents

Many Americans are struggling with the financial reality of caring for a senior parent. With nursing home costs of more than $7000 monthly, most families feel they have no other recourse than to care for mom and dad at home. In Texas, more families are investing in long\-term care insurance to help offset the cost of care for their loved ones.

By opening the lines of communication now, adult children can find out where their parents stand in the event of a medical crisis. If parents are fortunate enough to have assets to cover future health care, now is the time to find out how those assets can be accessed. Experts also recommend an adult child having a power of attorney to oversee medical and financial matters.

Financial and tax options for an IRA inheritance

What happens when a person passes away and leaves an IRA to someone other than a spouse? A spouse who receives an IRA inheritance has the most flexibility and can treat the account as his or her own. Others will find that their options are limited, and making the wrong decision can have expensive financial consequences. In Texas and other states, four options are available for the beneficiaries of inherited IRA accounts.

Custodians or representatives often suggest cashing the account in. Some beneficiaries are unaware that options exist beyond full cash out of an IRA, but banks rarely offer other alternatives. Other options would be to spread the distributions out over five years. The money can be dispersed in installments or all at once at the end of the five-year term and are taxable upon withdrawal.

Retirement checklist for long-term care expenses

One of the biggest hurdles seniors face during retirement is the rising cost of health care. Medicare premiums and prescription drug costs can eat into savings quickly. On average, a 65-year-old person will spend over $200,000 on health care during retirement, and that does not include long-term care. In Texas and other states, retirees on a limited income are looking for ways to lower the cost of health care.

Preventive services offered by Medicare help seniors stay healthy. Free wellness visits are available every year, including diabetes testing and mammograms. Depression and some cancer screenings are also available yearly free of charge. By utilizing these services now, elders can stay in good health and reduce health care costs overall. Experts also advise addressing minor health issues before they become major events.

Start planning for retirement and long-term care now

No matter the age of a person, taking steps now to save for the future can help create a comfortable retirement. Everyone envisions their retirement to be enjoyable and comfortable. However, some may find they need long\-term care, and the last thing anyone wants is to run out of money. In Texas, people are making changes now to ensure that their senior years are happy and healthy ones.

One may want to strongly consider having six to 12 months of living expenses tucked away for unexpected emergencies. In the event of serious illness or job loss, it is important to have a plan in place and funds to cover expenses such as a mortgage or rent, utilities, insurance, and taxes. Consider canceling life insurance policies with high monthly fees in favor of long-term care insurance instead. Having a savings fund for emergencies will prevent the need to tap into retirement accounts.

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