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Articles Posted in Elder Law

The COVID-19 pandemic has understandably left many people facing challenges. Remember that even the most difficult times often present opportunities, which currently includes an ideal situation to transfer assets to a loved one. The combination of decreased market values, lowered interest rates, and a high tax rate exemption has caused people to utilize several advantageous estate planning strategies.

# 1 – Making the Most of Gifting

Based on the value of assets, transferring property through gifting often requires individuals to consider estate taxes, gift taxes, and generation-skipping taxes. By transferring assets to loved ones while the asset’s value is temporarily at its lowest, you have the greatest chance possible of removing the assets from your taxable estate while making the most out of available exemptions. 

We continue to wish you and your family safety and good health and hope that worldwide events unleashed by the pandemic we are experiencing does not keep you separated from your loved ones for too long. Wash your hands regularly and avoid touching your face. Limit your contact with other people and maintain cleanliness and good hygiene to slow down the spread of COVID-19.

We continue to discuss items you should review in your current estate plan to take into consideration the volatility of the financial markets and to compensate for financial losses your retirement plans may have experienced because of the losses. Ask your estate planning attorneys to help you  consider the following changes to your estate plan.

 

  •   Refinance intra-family loans to take advantage of lower interest rates.

For over 80 years, Social Security has made guaranteed monthly payouts to eligible retired workers. Today, over 64 million people receive a monthly benefit from the Social Security program. The average retired worker benefit is $1,505.50 a month, as of January 2020. Generally Social Security income for the ordinary retiree is not taxed. There are states however, that do tax Social Security income.

 
The federal government can tax your Social Security benefits

The taxation of Social Security benefits began in earnest as part of the Social Security Amendments of 1983. Beginning in 1984, the Internal Revenue Service (IRS) is allowed to apply federal ordinary income tax rates on up to one-half of an individual’s or couple’s Social Security benefit, depending on their income. If an individual’s or couple’s modified adjusted gross income (MAGI) plus one-half of benefits exceeds $25,000 or $32,000, respectively, they would be subject to this tax.

Every estate plan should include a living trust. A living trust is different from a trust and should be part of your estate plan along with a last will and testament and power of attorney (financial and medical) documents.

 
Why a living trust is an important estate plan document

A living trust is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die. Living trusts, have great value as part of estate planning, but not necessarily to avoid probate. A living trust, if properly prepared and administered, can be a very effective tool to manage assets in the event of illness, disability or the effects of aging. In light of the aging population, the use of living trusts to minimize the risk of elder financial abuse and address similar issues, should be an important consideration in an estate plan.

A power of attorney, including a heath care power of attorney, are crucial estate planning documents. This is especially important if you have Alzheimer’s disease, dementia, or are suffering from another chronic and debilitating illness. Individuals who are widowed or alone should carefully consider who they can trust to manage their financial and medical affairs when they lose the ability to make such decisions themselves.

 

  •     Power of Attorney: A power of attorney is a legal document you can use to appoint someone to make decisions on your behalf. The person you designate is called an “attorney-in-fact.” The appointment can be effective immediately or can become effective only if you are unable to make decisions on your own.

o   New York State has a short-form and a long-form Power of Attorney form.

A trust is an important estate plan document. Other estate planning documents include a last will and testament and intestate succession.

 
Every state has laws that determine who your heirs are and what proportion of the estate the heir is entitled to receive. Heir refers to blood relatives and are usually grouped according to closeness of relationship:  Children and spouse; siblings and parents; aunts, uncles, and cousins. Where there is no will or trust, the estate is deemed “intestate” and must be settled according to state probate law. Individuals who inherit property under a will or trust are referred to as beneficiaries. Persons can be named as beneficiaries on bank accounts, life insurance policies, financial portfolios, retirement accounts, and certain types of titled property such as real estate – they need not be heirs. Remember heirs can be beneficiaries, but beneficiaries are not always heirs.

 
To complete an estate plan, you should consider adding trust documents.

Creating a thoughtful estate plan is one of the greatest gifts anyone can leave their loved ones. It is important to update your will when major changes occur. These might include marriage, divorce, opening or closing a business, buying or selling real estate, or birth or death of an heir.

 
Estate planning is a process that helps ensure that your desires for distribution of your property and assets at death are carried out. During life, to complete an estate plan, you should consider the following: 

 

  •     Will: A will is the primary document that should be prepared while living, to be effective at death. A will is a written document expressing how you would like your estate to be distributed after death. Usually a will must be executed in the presence of two disinterested witness and be notarized. You must also have testamentary capacity (over the age of 18, of sound mind, and competent).

If you have fewer than 35 Social Security credits and are married, you may be able to get your spouse’s requirement benefits if you are at least 62 years old and your spouse receives retirement or disability benefits. You are also able to apply for and receive Medicare at age 65.

 
If you elect to seek Social Security spousal benefits rather than relying on your own work record alone, your benefit amount will be determined by such factors as your spouse’s full benefit amount, the date and your age when you begin receiving payments, and your own work history.

 
When you apply for Social Security spousal benefits:

If you are approaching retirement age, or are still in the middle of your career, understanding the Social Security program, and what income you can rely on when you retire will help you properly plan for your retirement.

 
Social Security Credits + Full Retirement Age

Eligibility for Social Security benefits based on your own work record depends on the total number of Social Security credits earned plus your full retirement age. For most Americans, after earning 40 Social Security “credits” or 40 quarters of coverage, they are eligible for Social Security benefits. In 2019, one Social Security credit was earned for every $1,360 in Social Security taxable income earned for a maximum of four credits and $5,440 in a calendar year.

More than 30 million Americans are living with diabetes. Many types of insulin can be used to treat diabetes and are usually described by how they affect your body. According to WebMd, insulin is a hormone that your pancreas makes to allow cells to use glucose. When your body isn’t making or using insulin correctly, you can control your blood sugar by taking man-made insulin.

 
The American Diabetes Association, published its Conclusions and Recommendations, made by the Insulin Access and Affordability Working Group to tackle the rising cost of insulin. In the seminal report, they found that “Achieving glycemic control and controlling cardiovascular risk factors have been conclusively shown to reduce diabetes complications, comorbidities, and mortality. To achieve these desired outcomes, the medical community now has available many classes of medications and many formulations of insulin to effectively manage the metabolic abnormalities for people with diabetes. However, the affordability of medications in general, and for insulin specifically, is currently of great concern to people with diabetes, their families, health care providers, insurers, and employers. For millions of people living with diabetes, including all individuals with type 1 diabetes, access to insulin is literally a matter of life and death. The average list price of insulin has skyrocketed in recent years, nearly tripling between 2002 and 2013. The reasons for this increase are not entirely clear but are due in part to the complexity of drug pricing in general and of insulin pricing in particular. As the price of insulin continues to rise, individuals with diabetes are often forced to choose between purchasing their medications or paying for other necessities, exposing them to serious short- and long-term health consequences.”

 
Is it legal to enter U.S. with insulin from Canada?

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