Trusts and Estates Wills and Probate Tax Saving Strategies Medicaid

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It is never easy to estate plan. For one, estate planning involves uncomfortable decisions about how your assets will be divided following your death. Estate planning, however, is critical because it avoids a number of serious obstacles including family disputes, additional taxes, and the probate process. Despite the potential to solve the numerous problems that would otherwise, some people still believe that estate planning should only be performed by the extremely wealthy. Instead, estate planning tools including trusts can be a particularly valuable tool for individuals. As a result, this article examines some of the advantages that people frequently realize by creating trusts.

# 1 – Trusts Help Outline How Assets Are Received

One of the primary benefits of creating trusts is that they allow individuals to exercise control over how their assets are divided following their death. By spelling out exactly how assets should be divided, a person can avoid any unnecessary disputes that might later arise among family members. When younger children are involved, trusts are capable of outlining the age and condition that children must be to receive assets.

The best time to plan for long-term care is when you are mentally and physically well. While it is a task often avoided, thinking about how you wish to be cared for when you become older or are suffering from an illness or incapacitation is important for you and your loved ones. The only way to ensure that your wishes are followed is to write them down and communicate them to others.

People live longer these days even with serious illnesses and various stages of incapacity. There are steps you should take to plan for any potential future period of incapacitation to protect your finances and the ability for your family or loved ones to afford to care for you as you get older and in need of assistance to care for yourself. A catastrophic accident or medical emergency may alter the course of your life forever. Once these acts occur, you may or may not be in the position to make decisions for yourself. Having a plan will help your family and you focus on healing and living again.

To guide your thoughts, begin by thinking about the answers to the following questions:

While some people think that only the wealthiest people require estate plans, this is simply not true. Everyone can benefit from an estate plan. Despite this, the American Association of Retired Persons reports that over half of adult individuals in the United States lack estate planning documents. There are a number of reasons why people delay estate planning including that if people feel in good health and young there often does not appear to be a need for an estate plan. This article a number of other reasons why  a person should make sure to create an estate plan.

# 1 – To Create a Plan to Pass on Assets

A will is the most fundamental estate planning tool and involves the appointment of a third party who is responsible for administering an estate after an individual’s death. If you have minor children, it is also possible in a will to nominate a guardian for your children in case you die before the children reach the age of eighteen. For specific types of assets like retirement accounts or life insurance, however, it is often critical to make sure that beneficiaries are appropriately named in a will.

The popular adage that the only two things that are certain in life are death and taxes is a good starting point as we begin our discussions on the topic of the possibility of the claw back of gift transfers under the 2017 Tax Cuts and Jobs Act.

According to the Internal Revenue Service (IRS), an estate tax is a tax on an individual’s right to transfer property (cash, real estate interests, or other holdings) at his or her death. An accounting of everything owned on the date of death is made and a tax is levied. This tax can greatly reduce the value of the overall estate, cutting the value of the gifts bequeathed in the will, because the tax must be paid before the gifts made in the will can be disposed.

A method people use to reduce the imposition of the estate tax is to make a gift of money or property to someone during an individual’s lifetime. This gift however may subject the person giving the gift called a donor to federal gift tax. Each year, donors are permitted to make gift transfers that are tax free if they are made under the threshold limit. For example, in 2019, the gift tax exemption amount is $11.4 million. By making a transfer by gift under the threshold limit, the donor and estate avoid paying taxes on that portion of the estate.

personal representative named in a Last Testament is allowed to be an out of state resident only if that individual is a blood relative or a relative through an existing marriage. If a representative does not satisfy this criteria, a person is still able to use an alternative to estate administration in the form of a trust. There are several important things that a person should consider when determining who should act as their personal representative.

Tip # 1 – Trust the Person that Is Chosen

The person that is selected to act as a personal representative must have the ability to complete a task accurately and efficiently. This element is important because personal representatives are given the duty of financial responsibility over a person’s estate. As a result, the person chosen to act as personal representative should have displayed the ability to be trustworthy through other examples in their life.

We are examining proposals at various stages of the legislative process to expand Medicare and Medicaid healthcare coverage to either provide universal healthcare coverage to all Americans or expand eligibility of individuals currently not covered by the Affordable Health Care Act.

Our last post examined two proposals to expand Medicare and Medicaid by introducing universal health care coverage or allowing individuals to buy a private plan using Medicare and Medicaid efficiencies and cost-savings to Americans.

Elimination of employment-sponsored healthcare plans

Electronic wills have the option of providing a variety of important benefits to individuals who are interested in the estate planning process. Considering the tendency of many individuals to delay issues related to estate planning, electronic wills provide individuals with an opportunity to quickly create a legal document that decides how their assets should be divided following their death.

Weaknesses in Electronic Wills

There are some dangers that exist in using an electronic will, which must be addressed before these wills are capable of being used before individuals. A skilled estate planning attorney, however, is often able to help individuals navigate these various issues which include the following:

Medicare at 50 is a bill currently making its way through Congress that would allow anyone over 50 to buy into Medicare. Proponents of the bill want people between the ages of 50 and 65 to be able to purchase a private Medicare health insurance plan and obtain the same tax credits and cost-sharing subsidies as those offered under the Affordable Healthcare Act.

Medicare is a national health insurance program for Americans 65 and older that helps individuals pay for medical care and treatment, including hospitalizations, nursing home care, prescription drugs, and medical supplies and equipment, among others, as they age and retire. Medicare is not free. Seniors pay an annual deductible and are responsible for co-payments and part of their prescription bill.

By and large Americans, of all ages and political denominations, are worried about the availability and affordability of healthcare services. Individuals able to retire are postponing retirement in order to maintain employer sponsored healthcare. Especially if there is a spouse suffering from a chronic illness, the working spouse may need to maintain an employer-sponsored health insurance plan to keep a younger spouse insured.

One of the most common myths that exists about trust asset protection is that it is something that only the very wealthy need to worry about. In reality, many different types of individuals should consider using trusts to protect a person’s assets. Asset protection trusts are one of the best ways that individuals can protect their assets from creditors in addition to many other advantages including tax benefits. This article will review some of the important advantages that are offered by trusts as part of estate planning in the state of New York.

The Basic Structure of Trusts

While there are some significant differences between types of trusts, each trust involves three parties: a beneficiary, a trustee, and a settlor. A beneficiary is the party that receives the assets or valuable items that are placed within the trust. A settlor is the person that is tasked with making periodic contributions into a trust. A trustee is the individual that is responsible with disbursing assets from, managing, or overseeing assets that are placed within a trust.

Tax preparation is one of the most important considerations when creating an estate plan. Whenever a person or business creates an estate plan, there are multiple types of taxes to avoid – inheritance taxes, estate taxes, and income taxes, to name a few. Without a proper estate plan, these taxes can eat into a large portion of the estate.

Here are several common estate planning strategies that could reduce your tax liability:

  1. Marital Transfers. If both spouses in the marriage are American citizens, then lifetime gifts or bequests at death between them not be subject to estate taxes.
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