Winter 2011 Newsletters

Family Law and Divorce

Here’s what happens to a will after a person dies

Many movies and television shows include a scene where a family gathers around a big table after a relative has died to listen to the reading of the will. While this makes for great drama, things don’t usually happen this way in the real world. In fact, there is no requirement that a will be read out loud to anyone.

So what does happen with the will?

Once the will is located, it should be given to the estate’s attorney. Instead of reading the will aloud, the estate’s attorney sends copies to anyone who may have an interest in it. This includes:

  • The executor or personal representative, who is in charge of applying for probate, managing the decedent’s property, and making sure the instructions in the will are carried out. [Read more…]

The difference between Alzheimer’s disease and dementia

Many people use the terms “Alzheimer’s disease” and “dementia” interchangeably, but the two have different meanings, and it can be very important to know the difference.

Dementia is a general term for memory loss that is severe enough to interfere with daily life. The signs of dementia may include forgetfulness; difficulty making plans, thinking ahead, or using language; and a change in character traits, among other symptoms.

Alzheimer’s disease is a partially hereditary disease that causes a loss of brain cells. The symptoms start out mild, but grow progressively worse over time. An early symptom of Alzheimer’s is difficulty learning new information. [Read more…]

10 million Americans are now caring for aging parents

Nearly 10 million adults age 50 and over are now caring for an aging parent, according to a new study published by MetLife.

There has been a dramatic rise in the number of men and women providing parental care over the past decade and a half, the study notes. In 1994, only 9 percent of women and 3 percent of men in that age group were providing care to parents. By 2008, the percentage of female caregivers had more than tripled to 28 percent, while the figure for males had quintupled to 17 percent.

Daughters are more likely to provide help with personal activities such as dressing, eating and bathing, while sons are more likely to provide financial assistance, the study found. [Read more…]

Should you hire a caregiver yourself, or use an agency?

Most seniors prefer to stay at home as long as possible rather than move to a nursing home. For many families, this means eventually hiring a caregiver to look after an aging relative. There are two main ways to hire someone – directly and through a home health agency.

The benefit of hiring a caregiver yourself is that you can select the person you like the best and who is the best fit for your family. In addition, hiring someone privately is usually cheaper than hiring through an agency.

On the other hand, if you hire a caregiver directly, you’ll need to consider all the tax and liability issues. As an employer, you’ll be responsible for filing payroll tax forms and verifying that the employee can legally work in the U.S. [Read more…]

Your IRA can be a valuable tool for estate planning

IRAs are popular investment vehicles for retirement. But if you don’t need all the assets in your IRA to support yourself after you retire, they can also be an excellent tool for estate planning.

Handled properly, an IRA can provide tax-sheltered growth for your heirs for many years to come. But you need to be careful, because it can be easy to make costly mistakes.

An IRA, or Individual Retirement Account, is a personal savings plan that allows you to set aside money for retirement. The advantage of an IRA is that you may be able to deduct some or all of your contributions from your taxes. [Read more…]

Note to anyone who recently moved to (or vacations in) Florida

Florida has a new law on powers of attorney. The law is important for anyone who recently moved to Florida, as well as anyone who lives elsewhere but owns a vacation home there or regularly spends time in the state.

Florida will no longer accept powers of attorney unless they are signed by two witnesses and notarized. Also, powers must take effect immediately, rather than only if the person becomes incapacitated.

Power of attorney documents that were signed before October 1, 2011 are still valid in Florida even if they don’t meet these requirements, but:

  • A bank or other institution in Florida can refuse to accept an out-of-state document unless the agent provides a letter from an attorney saying the document is legally valid in its home state; and [Read more…]

Some states let you ‘win’ a will contest while you’re still alive

People are sometimes concerned that after they die, a beneficiary (or more likely a non-beneficiary) will go to court to contest their will. Typically, a disgruntled would-be heir might claim that the person who made the will wasn’t mentally competent, or was under undue influence from some other person. These types of will contests can be very expensive, and they can cause a lot of emotional hardship within a family.

Recently, a handful of states have allowed people who make a will to go to court while they’re still alive and have a judge rule that the will is valid – thus preventing a will contest.

These states include Alaska, Arkansas, Nevada, North Dakota and Ohio. Similar legislation is pending in Delaware.

Even if you don’t live in one of those states, you might be able to obtain a court ruling there, such as by putting your assets into a revocable trust and hiring a trustee in that state. [Read more…]

Gifts made in the next year can reduce state estate taxes

Some 22 states have a state estate tax or a state inheritance tax. These taxes are in addition to the federal tax. For some people, it’s possible to reduce or eliminate these state taxes by making gifts before the end of 2012.

Ordinarily, you can give up to $13,000 each year to as many people as you like without paying gift tax. Through the end of 2012, you can also make total lifetime gifts in addition to these amounts of up to $5 million. You won’t have to pay gift tax on these additional lifetime gifts, although they will reduce your estate tax exemption when you die.

That means that if you make gifts before the end of 2012 of up to $5 million (such as, for instance, gifts to trusts that will benefit your children), it will have a neutral effect on your federal estate tax – your estate won’t owe more or less as a result. [Read more…]

Many estates can save money by filing tax returns – even if they don’t have to

And people with older wills should have them reviewed now, due to a new law from Congress

A federal estate tax return doesn’t have to be filed every time someone dies. In fact, most estates never have to file one. In 2011 and 2012, a return has to be filed only if the person’s estate (including property, life insurance, taxable gifts, etc.) is worth $5 million or more.

However, even if a return isn’t required, a recent change in the law means there could be big tax savings for many families if they file one anyway.

The change applies to estates of people who die in 2011 or 2012 and are survived by a spouse.

There are strict time limits for filing a return, so if you know of someone whose family could take advantage of these savings, you or they should speak with an attorney right away. [Read more…]