Dallas Estate Planning Law Blog

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.

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.

More senior Americans rely on Medicare for medical coverage when they retire, but it can be a difficult and complicated program. Gaining a better understanding of how the Medicare works will make it easier to integrate the program into long\-term care planning. In Texas and other states, individuals can apply for Medicare benefits when they reach the age of 65, although, some may be younger depending on certain disabilities or diseases. The benefits' costs are determined by the time worked and the payroll contributions made over one's lifetime.

Medicare is broken down into four separate parts. Inpatient hospital care is covered by Part A and is free to seniors and spouses who have worked a minimum of 10 years and paid into the program through payroll deductions. Doctors' visits and other outpatient services are listed as Part B; however, it can be costly and may include additional preventive procedures that are medically necessary. Part C is a Medicare Advantage plan that works with private health insurance and adds additional coverage. Part D is prescription drug coverage and has multiple plans and costs depending on the client's needs.

Talking about money among family members is often considered taboo. Many believe it to be an uncomfortable topic. Studies show that families who are not discussing finances could make severe financial mistakes when planning for long\-term care. In Texas and other states, experts agree that talking finances while everyone is still healthy can help avoid problems down the road.

About 40 million adults in the U.S. will act as caregivers in their lifetime. Some under the age of 64 will have sacrificed careers to provide long-term care to loved ones. It is reported that 70 percent of Americans age 65 and older may need long-term care, and a portion of that burden may fall on adult children. It is essential that family members have conversations early to plan how long-term care will be covered.