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Wednesday, December 26, 2018

A 2019 Tax Break for Small Business Owners


Small business owners may be looking forward to a tax break in the new year. The GOP tax plan was hastily engineered and rolled out to benefit big corporations--not small business owners. Now a 20% deduction is available to entrepreneurs—but there are limits. You may qualify for the break if your taxable income is below $157,500 if single, or $315,000 if married.

Becoming an LLC may come with additional requirements

Many of our clients over the last few years have upgraded their business status to an LLC or other corporate structure. The reasons are simple— it separates the business from its owners. A corporation acts like a completely separate body that can do things like buy and sell property, be taxed and enter into contracts. Most importantly, it protects its owners from personal liability for corporate debts and obligations. LLCs are very popular right now, and an LLC can save you money on taxes, but there’s a caveat.

Here are some things to think about if you’re considering an LLC:

1. An LLC isn’t a free-for-all

The new tax law's 20% deduction on qualified business income is subject to limitations that keep it from being a free-for-all for every entrepreneur. In general, to qualify for the full deduction, your taxable income must be below $157,500 if you're single or $315,000 if you're married and file jointly.

2. If income exceeds these thresholds, you may not qualify for the deduction

Entrepreneurs with potentially high-earning service businesses, such as doctors, lawyers, CPAs and financial advisors—those positioned to make a lot of money--may not be able to take advantage of the deduction because their incomes exceed the limits.

3. Your spouse’s income: Another caveat that may further limit the potential deduction 

Partners in a business may find themselves in another situation in which one owner gets the 20% deduction and the other doesn't. While partners may qualify, if they have a high-income spouse, they may wind up exceeding the taxable income threshold. In this case you can have two people doing the same work for the same pay, but only one can take the deduction on his/her return because of other factors.
An LLC protects owners from having their personal assets seized by the business' creditors. For many entrepreneurs and small business owners, an LLC remains the best choice for an upgrade to a sole proprietorship. With the new tax laws, an LLC now provides additional benefits.

Are you planning to upgrade your business status to a corporation in the new year?

Make an appointment today by contacting us at one of our three Bay Area officesOur dedicated team is helpful, compassionate and affordable.

Wednesday, December 19, 2018

Early Dementia Detection Helps Seniors Manage the Disease


In 2016 The New York Times devoted a special section to Alzheimer’s. It was a beautifully written story, Fraying at the Edges, by N.R. Kleinfield, that focused on Geri Taylor’s heroic journey with the disease. Ms. Taylor had become forgetful; mundane tasks often confused her. One day she got off the subway and had no idea why she was there. She tried to pass off increasingly frequent memory problems as inevitable infirmities of old age. But the day she looked in the mirror and didn’t recognize the face staring back at her was her come-to-Jesus moment. She knew she could no longer ignore what was happening to her mind.

Diagnosis: Mild cognitive impairment, a precursor to Alzheimer’s disease

Her doctor put her on Aricept, a drug designed to improve cognitive performance, and it seemed to sharpen her thinking. But as her doctor told her, she wasn’t just losing her memory, she was losing “executive function”— forgetting the sequence of steps in the processes of all the little things we do, the things we take for granted.

It’s important to get help sooner for people whose minds are slipping

Patients showing signs of mental decline or dementia should be getting checked during routine medical visits. Dementia is an uncomfortable topic for patients and their families. It’s also a difficult topic for their doctors, but family physicians need to do a thorough evaluation and share the diagnosis.
Patients and family members should push for an evaluation if they’re worried that symptoms might not be normal aging. We all laugh about misplacing our keys. But there’s a difference between occasionally misplacing keys and putting them in the freezer. By the time you’ve gone from misplacing your keys to forgetting what those keys are for, you’re too far gone to participate in your own care. It’s not just memory that suffers, but judgment, and sometimes it can be years before dementia is diagnosed.

The growing need for early diagnosis

  • About 50 million people worldwide have dementia; Alzheimer’s is the most common form of the disease. In the U.S., nearly 6 million people have Alzheimer’s and an estsimated 12 million have mild cognitive impairment, a frequent precursor.
  • In 2015, Alzheimer’s Association research using Medicare records suggested that only about half of those being treated for Alzheimer’s had been told by their health-care providers that they had been diagnosed with the disease.
  • Physicians often hear of symptoms or memory complaints from patients or their spouses and say, “you know, you seem okay to me today, so check back in six months”. The consequences? Patients may end up hospitalized because they forgot to take their medications.

Medicare has begun covering mental assessments

Medicare recently started covering mental assessments as part of annual wellness visits, but doctors aren’t required to do it and there is no guidance on how to do it. In some cases, it might be as cursory as asking “how’s your memory?”

The guidelines do not recommend screening everyone

The Medicare guidelines outline what health care workers should do if people describe worrisome symptoms. It includes checking for risk factors that may contribute to dementia or other brain diseases, including family history, heart disease and head injuries. There are pen-and-pencil memory tests and imaging tests to detect small strokes or brain injuries that could be causing memory problems.

Doctors are trained to heal, when there is no cure for Alzheimer’s

Dr. Michael Sitorius, family medicine chairman at the University of Nebraska Medical Center, said dealing with mental decline adds to the challenge of caring for frail elderly patients. It’s a tough diagnosis to make for many doctors, he said, because medical training focuses on “trying to cure people, and Alzheimer’s and dementia are not curable.”
Dr. Sitorius gives his older patients mental tests at their annual checkups, but sometimes patients or their loved ones don’t want to hear the results. In those cases, Sitorius still addresses related issues including depression, safeguarding medication, nutrition and whether patients should continue driving. The new guidelines are a welcome reminder for family doctors to tackle these issues earlier. “We strongly encourage a full disclosure,” including diagnosis, stage and prognosis, he said.

Meet Anne Hunt, 81, who once ran a busy Chicago cooking school

At her daughter’s urging, Anne Hunt visited her family doctor in 2011 because of increasing forgetfulness. The 81-year-old now recalls struggling with memory tests involving letters and numbers that her doctor had her perform. The test results were inconclusive and there was no diagnosis.
“We didn’t do much about it,” said Bruce Hunt, Anne’s husband, until five years later, when her behavior was clearly worsening – more memory lapses, repeating herself and forgetting where to put things. She was diagnosed with Alzheimer’s after an imaging test showed brain changes associated with the disease.

The benefits of early diagnosis

“There’s no pill they can take to make it go away, so some people think there’s no point to getting a diagnosis,” but that’s being short-sighted, the National Institute of Aging’s Silverberg said. “It really does offer an opportunity to plan.” Alzheimer’s medication such as Aricept and Namenda can ease symptoms. Other benefits include a chance to join experiments testing treatments, opportunities to resolve finances, find caregivers, make homes safer and use memory aids and calendars to promote independent living. The diagnosis energized the Hunts. They joined support groups and a singing ensemble, finding new things to help them cope.
For many, the biggest fear is the unknown. Dementia can be a slow-moving disease. Receiving a diagnosis helps many Alzheimer’s patients make the most of the time they have left.
A big part of end-of-life planning is creating a Living Trust. Make an appointment today by contacting us at one of our three Bay Area officesOur dedicated team is helpful, compassionate and affordable.

Tuesday, December 4, 2018



Small business owners may be looking forward to a tax break in the new year. The GOP tax plan was hastily engineered and rolled out to benefit big corporations--not small business owners. Now a 20% deduction is available to entrepreneurs—but there are limits. You may qualify for the break if your taxable income is below $157,500 if single, or $315,000 if married.

Becoming an LLC may come with additional requirements

Many of our clients over the last few years have upgraded their business status to an LLC or other corporate structure. The reasons are simple— it separates the business from its owners. A corporation acts like a completely separate body that can do things like buy and sell property, be taxed and enter into contracts. Most importantly, it protects its owners from personal liability for corporate debts and obligations. LLCs are very popular right now, and an LLC can save you money on taxes, but there’s a caveat.

Here are some things to think about if you’re considering an LLC:

1. An LLC isn’t a free-for-all

The new tax law's 20% deduction on qualified business income is subject to limitations that keep it from being a free-for-all for every entrepreneur. In general, to qualify for the full deduction, your taxable income must be below $157,500 if you're single or $315,000 if you're married and file jointly.

2. If income exceeds these thresholds, you may not qualify for the deduction

Entrepreneurs with potentially high-earning service businesses, such as doctors, lawyers, CPAs and financial advisors—those positioned to make a lot of money--may not be able to take advantage of the deduction because their incomes exceed the limits.

3. Your spouse’s income: Another caveat that may further limit the potential deduction 

Partners in a business may find themselves in another situation in which one owner gets the 20% deduction and the other doesn't. While partners may qualify, if they have a high-income spouse, they may wind up exceeding the taxable income threshold. In this case you can have two people doing the same work for the same pay, but only one can take the deduction on his/her return because of other factors.
An LLC protects owners from having their personal assets seized by the business' creditors. For many entrepreneurs and small business owners, an LLC remains the best choice for an upgrade to a sole proprietorship. With the new tax laws, an LLC now provides additional benefits.

Are you planning to upgrade your business status to a corporation in the new year?

Make an appointment today by contacting us at one of our three Bay Area officesOur dedicated team is helpful, compassionate and affordable.

Tuesday, November 20, 2018

Special Needs Planning: A Multigenerational Effort


A daughter and sibling steps up to bear a heavy load

Let’s step into Sharon’s shoes. She’s the sister of Andy, who is developmentally disabled. Their elderly parents now count on Sharon’s help for shopping, getting to doctor appointments and overseeing their financial affairs.
Sharon lives the closest to their parents, so by default, the bulk of their care has become her responsibility. With their own failing health, her parents can no longer take care of Andy. Without long-term care planning, whether through savings, insurance or both, all of this family care becomes Sharon’s responsibility.

This is a heavy burden to place on anyone

This is a signifiant responsibility, especially for someone with a career, which is the case with Sharon, a CPA. She has two kids, a husband and a dog, and her life gets really nuts for at least three months every year. Sharon just turned 40, and she’s trying to save money for her kids’ college and her own retirement. Some days it all looks completely impossible.

With a special needs child, the needs grow exponentially

We talk a lot about being proactive, doing comprehensive estate planning that includes Living Trusts. But when there’s a family member with significant disabilities, the stakes quickly get higher; planning for their care becomes a family affair that transcends generations. Siblings need to be involved in the planning and care of their special-needs family member.
Parents of special needs children are focused on planning for a time when they will no longer be there to care for that child. Planning must cover a range of issues:
  • Who will manage the assets set aside for the child?
  • Who will oversee the child’s care needs?
  • What financial planning must be done now to ensure there are adequate assets to provide for that child?

Planning and financing two retirement strategies

As parents of special-needs children plan for retirement, they need to be developing and financing two retirement programs—one for themselves and one for their special-needs child.

Sharon’s story illustrates the importance of financial planning

Many parents of special-needs children envision their special-needs child living at home with the parents throughout their lives. That’s a good strategy, but if the child outlives his/her parents, it’s short-sighted. Adjusting to a new living arrangement can be traumatic for special-needs individuals. It takes time and stamina to research and leverage government and community benefits to reduce the burden on the other family members.

Does your family need to create or update a Special Needs Trust?

Make an appointment today by contacting us at one of our three Bay Area officesOur dedicated team is helpful, compassionate and affordable.

Wednesday, November 14, 2018

Don’t Underestimate the Power of a Deed


Jeff had been trying to sell a house he’s owned for 20 years. His realtor found a good buyer, but the preliminary title report showed that the man from whom he had purchased the property had a lien against it. The title company won’t issue title insurance for the new buyer until Jeff gets the lien removed, and Jeff has no idea why it’s there or where to start after so many years.

This cautionary tale illustrates the importance of a properly transferred Deed

These kinds of Deed issues are uncommon, but when they do occur, they make you aware of the power a Deed. Without clear title to a Deed, you can neither buy nor sell a property.

Deed of Trust is a mortgage lien on a property

In California we use a Deed of Trust to put a mortgage lien on a property. The Deed of Trust is recorded and serves as a lien. Deeds of Trust usually carry a provision that if the property is sold or otherwise transferred, the bank can call the loan due and payable immediately. Also, the presence of the lien on the property clouds the title, resulting in your not being able to sell the California property without paying off the existing mortgage and releasing the lien.

The mechanics of paying off the mortgage are straightforward

When you close escrow on a property, the escrow officer takes whatever money is necessary from the sale proceeds and pays off the existing mortgage. The escrow office then records a Reconveyance Deed, which cancels the Deed of Trust in the public records, letting the public know that the Deed of Trust is no longer in effect, thereby clearing the title.

So what happened in Jeff’s case?

In Jeff’s case, the most probable scenario is that the title company and escrow company that handled the purchase made a mistake. It happens. It’s likely they paid the balance of the loan, but through an administrative error, either failed to record the Reconveyance Deed or perhaps recorded it under the wrong parcel number.
  • At the same time, the title company issued a title insurance policy. The purpose of this policy is to protect you from exactly this type of problem.
  • Title insurance works just like your car insurance. If you get in an accident, you notify your insurance company so they can take care of you. The process is the same with title insurance.
  • What Jeff should do is call his old title company and find out how to make a claim.
  • At this point, the title company should figure out what they need to do to clear the title.
  • If the mortgage company that is the beneficiary of the Deed of Trust still exists, they may be willing to go ahead and record a Reconveyance Deed.
  • If the lender can’t be found, or otherwise isn’t willing to remove the lien, the remaining step is to file a lawsuit and ask a judge to clear the title.
In Jeff’s case, unfortunately, there’s been a 20-year interlude, and it well may require a legal intervention for him to get the title to his property so that he can sell it.

Do you have a Deed that needs to be transferred?

A Deed transfer is something that we can accomplish fairly easily, sometimes within a day. A cautionary note–many people have done refi’s over the last few years, and it’s easy to forget to move your property’s Deed back into your Trust. Make an appointment today by contacting us at one of our three Bay Area officesOur dedicated team is helpful, compassionate and affordable.

Wednesday, November 7, 2018

New Opportunities for an Aging Work Force


Robert Metoli, 57, worked for eight years as a skilled technician at Lee Spring, a small Brooklyn manufacturer. His job required his standing all day and it took a toll; debilitating back pain meant he would have to quit a job he liked. The company’s CEO didn’t want to lose a good employee, so he gave him an opportunity to join a team of engineers that created work orders for jobs going out into the factory. The company scheduled and paid for the necessary training.

An experiment that worked

This mutually beneficial information-sharing between Metoli and the engineers was successful, and he’s now able to continue working, free of pain. A New York Times story, Reaping the Benefits of an Aging Work Force, by Kerry Hannon, shows how other employers are finding creative ways to keep their older workers on the job. They value their loyalty, experience and work ethic and flesh out their workforce with GenXers and millennials.

Trends and statistics on older workers and retirement

  • Many people, especially those who own their own businesses, don’t have any immediate plans to retire, or perhaps plan to semi-retire.
  • More than half of baby boomers plan to work past age 65 or not retire at all, according to a report by the Transamerica Center for Retirement Studies.
  • Many worry that they will outlive their savings, that Social Security benefits will be reduced, and that they may someday need expensive long-term medical care.
  • Two age groups, 65 to 74 years old and 75 and older, are projected to have increasing annual rates of labor-force growth, according to the Bureau of Labor Statistics.
  • A problem associated with this growing demographic of older workers: Negative attitudes about the cost of older workers, their stamina, their technological ability and their enthusiasm for learning new ways of doing things.

A rising number of employers are hiring, retaining and supporting workers over 50

  • In our example above, Lee Spring was among 13 New York businesses and nonprofits that received Age Smart Employer Awards through this program.
  • The employers offer training and education opportunities and flexible scheduling; adapt physical tasks to the abilities of workers; provide advancement and leadership training for workers of all ages; retrain older workers; and allow phased retirement.
  • According to one expert, Dr. Linda Fried, Dean of the Mailman School: “We’ve increased our life expectancy by 50% in the last 100 years. Now we have to design society for longer lives.”
  • 100 businesses and nonprofits entered the 2017 Age Smart Employer competition, double the number in 2016. Here are four other companies with pioneering programs for older workers.

1. Military shipbuilding company, Huntington Ingalls Industries, operates The Apprentice School in Newport News, VA

  • No age limit. The company’s overall workforce of 22,000 is composed of 38% baby boomers, 40% millennials and 20% GenXers.
  • It takes a long time to become a master shipbuilder; this company values experience.
  • Keeping its workforce engaged with their work, there are intergenerational mentoring programs. Younger workers mentor older ones in the use of technology.

2. PKF O’Connor Davies is part of a network of independent accounting and advisory firms in 440 cities and 150 countries

  • Their 800 employees, ranging in age from 21 to 83, have the option to work shorter work weeks or flexible hours.
  • Some employees have relocated to offices closer to home for easier commutes or they telecommute part time.
  • Employees nearing retirement have reduced their hours or work as consultants.
  • “Hiring older workers for our team has been a homerun for us as well as for workers about to go into retirement or in retirement,” said Thomas F. Blaney, a partner and director of the firm’s Foundation Services. “It’s not about age really. We just want talented people.”

3. Silvercup Studiosis a New York, family-owned film and television production company

  • It was the film site for “The Sopranos,” “Girls” and “Sex and the City”.
  • Two workers recently celebrated their 30th anniversaries with Silvercup.
  • People with experience makes sense—they’re more settled and loyal. The costs of acquisition and training are high.

3. Michigan furniture maker, Steelcase, offers workers a phased retirement program

The company began a phased retirement program in 2012.
  • For the past year and a half, David Rinard, 62, director of environmental special projects, has been transitioning toward retirement.
  • He started his career at Steelcase in 1979 as an assistant environmental engineer and moved steadily up the ranks to director of global environmental performance, a position he held for 13 years.
  • Today, he’s semiretired. He earns an income without worrying about health care coverage before he is eligible for Medicare at 65.

A wide range of retirement-related conversations

Living Trusts are an important service for us, and many of our clients are in their 60s or 70s, so retirement-related topics are frequently part of our office dialog. If a Living Trust is something you keep putting off, there’s still time to complete your Trust in 2018. Make an appointment today by contacting us at one of our three Bay Area officesOur dedicated team is helpful, compassionate and affordable.

Tuesday, October 30, 2018

Estate Rage: Inheritance Disputes Are on the Rise


James and Virginia Null were always fair, dividing everything equally among their three daughters. They worked hard at avoiding any hint of favoritism—going so far as to buy three sets of everything—china, crystal and jewelry—so there would be one to pass on to each daughter.
But fairness took a nosedive when Virginia Null died in 2000 at the age of 62. Within weeks of her death, her husband changed his financial arrangements.
  • He designated his middle daughter Amy as a joint tenant on his financial accounts with the sole right of survivorship.
  • He added Amy to the title to his house.
  • Upon his death in June 2002, almost all of Mr. Null’s assets, estimated at several hundred thousand dollars, went directly to Amy. Her two sisters received next to nothing.
This article in The New York Times, Personal Business; A Legacy of Rancor: Estate Fights Rising, illustrates a battle that’s becoming increasingly frequent.
Mr. Null’s Will, written in the early 1980s, stated that his estate was to be divided equally among his three daughters, but “the right-of-survivorship clause and joint tenancy upstaged the will completely,” said Adam Gaslowitz, an Atlanta lawyer who is representing the two other sisters who are contesting the estate.

Litigation more common as family strife over inheritances increases

Lawyers say this is typical of suits contesting Wills, often filed by baby boomers whose parents are now in their 70s and 80s. Mr. Gaslowitz has written on this topic for law journals, and he has seen a steady increase in estate fights among the children.
“A lot of people are living off the parental dole. As their parents near the end, these children grab as much as they can and are far less willing to share it with their siblings.” An uneven economy, layoffs and shrunken retirement plans have hurt many. A huge number of baby boomers have done nothing to prepare for retirement, and accumulated assets from their more frugal parents become a critical part of their retirement planning. When things go badly, people realize that they need their inheritances.

The huge transfer of wealth was misstated

”There had been some papers in the early 1990s that suggested there would be this large transfer of wealth from the current retirees to the baby boomers,” said John Gist, the associate director of the AARP’s Public Policy Institute. ”But we concluded that this was not going to be the huge windfall that everybody had thought.”

Amy stepped in after her mother died

In the case of the Null estate, the two sisters argue that Amy Osborne–who lived ten minutes away from their father and handled many of his financial affairs after their mother died–persuaded him to change his financial arrangements. The sisters believe he had no idea what he had done, that he was vulnerable and dependent, recovering from complicated heart surgery.

Amy’s lawyer assures us that he knew exactly what he was doing

“If elderly parents favor one child over others because of that child’s contribution to the parents’ wellbeing”, they have every right to leave their estate to those who are most deserving.
As the family planned the funeral, the other sisters began to realize that something was wrong. Shortly thereafter, Amy served them with papers—they had ten days to contest the distribution of the estate. Blindsided by the turn of events, the sisters contacted a lawyer. Said one sister, “I thought this would never happen in my family. I was so na├»ve.” The bottom line: When there’s money involved, funny things happen in even the closest families.
It’s important to note that even with a Living Trust, assets that have a named beneficiary, such as a life insurance policy, an IRA or a 401(k), assets held in joint tenancy, and those that are Payable or Transferable on Death fall outside a Living Trust.
Is a Living Trust something you keep putting off? Make an appointment today by contacting us at one of our three Bay Area officesOur dedicated team is helpful, compassionate and affordable.

Wednesday, October 24, 2018

9 Things That May Surprise You About Probate


John’s father died unexpectedly in 2012, and he never quite got around to creating a Will or documenting his assets and their locations. The result? Five years later, John, our client, is still trying to finish probating his father’s estate. It has required a monumental detective effort to identify his father’s assets and their locations. As John unraveled the puzzle, he discovered that his father’s assets spanned countries and continents—each requiring a separate Probate procedure.
When someone dies without a Living Trust that identifies how his/her estate will be distributed, the estate goes into the court-supervised process of Probate. It can seem daunting, but thankfully, it is rarely as complicated as John’s father’s estate. Probate is actually a very methodical process, and California Document Preparers assists our clients through every step of the process.

Here are 9 frequent questions and misperceptions about Probate that you may not know:

1. An estimated 50% of estates in the U.S. go through Probate

If you’re facing Probate, you’ve got lots of company. More than 50% of Americans do not create a Living Trust, and their families are left to deal with Probate at what is already a very difficult time of loss and mourning. The Probate process can be time consuming and expensive.

2. Not all assets are subject to Probate

Assets that have a named beneficiary, such as a life insurance policy, an IRA or a 401(k), assets held in joint tenancy, and those that are Payable or Transferable on Death are not subject to Probate.

3. Probate typically takes 9-12 months

Probate allocates a four-month waiting period for creditors to file outstanding claims. In Contra Costa County, for instance, the Probate process generally cannot be administered in fewer than nine months. The times can vary by county, and the complexity of the estate can have a significant impact. If the deceased has made large gifts/donations during his/her lifetime, is a beneficiary of a Trust, owned a business and/or a significant amount of real property—especially if it’s in another state or country, as is the case with John’s father—the process will take much longer.

4. There is a time limit for creditors to file claims

One of the primary responsibilities of the Administrator is to properly notify all creditors of the estate. Once properly noticed, creditors must issue their claims to the court within the creditor claim period, generally four months.

5. The estate’s personal representative manages the Probate process

A decedent names an Executor in a Will. When there is a Will and an Executor, the court likely will name that person the Administrator of the estate for the Probate process. If there is no Will, or the Executor is unable to act, the court appoints an Administrator. It’s important that this role is filled by someone who is able to deal with sometimes complex financial matters.

6. Property owned outside California is a separate Probate

If the decedent owned real property outside the home state, a separate Probate must be opened in that state, called Ancillary Probate.

7. The Administrator may collect fees

In addition to out-of-pocket expenses for managing and settling the estate, Administrators may earn fees for their services, typically from 2-4% of the estate’s value. Probate can be very time consuming, especially for complex estates.

8. The Administrator can be held liable

The Administrator can be held personally liable for improper management of the estate. The Administrator also can be removed if an action is brought by a beneficiary or other person that clearly demonstrates mismanagement.

9. Heirs must be notified about proposed actions

California law requires that heirs and beneficiaries be properly notified when the Administrator desires to take certain actions, such as sale of real property, occur. Failure to properly notice or handle issues regarding the estate may result in legal action from beneficiaries.
While the Probate process is fairly straightforward, it can quickly become complex when there are multiple beneficiaries and complicated assets. We assist our clients through each step of the process.

Probate is a growing service for us

We are now featuring Probate at one fixed price: $4,500. No surprises. Contact California Document Preparers at one of our three Bay Area offices to schedule an appointment or find out how we work with our clients.

Tuesday, October 16, 2018

Baby Boomers: Learning Lessons in Estate Planning from Their Parents


While many baby boomers have made alarmingly few plans for retirement, others are immersed in a kind of geriatric boot camp as they help their parents navigate their final years. One adviser recommends using your parents’ experience as a training manual: Healthcare considerations, life insurance, Living Trusts and funerals are the building blocks of end-of-life planning.

Learning the hard way: A Living Trust means that your family will avoid Probate

The long-term implications of not having a Living Trust are significant. Without a Trust, your estate will need to go through the expensive and time-consuming Probate process. Baby boomers who have been left to Probate their parents’ estates have vowed to leave their own children better prepared.

Something to think about: Prepaid funerals or burial expenses

While the estate can be used to pay for funeral expenses, you will need liquid assets to pay for funeral expenses. If a parent has been in hospice, nursing care or assisted living for the last few months of his/her life, there likely will be bills from a wide range of healthcare providers that will need to be paid.
It’s not unusual that assets are tied up in Probate or otherwise inaccessible. Not all baby boomers can front the money needed to pay for their parent’s burial expenses and the inevitable healthcare bills that trickle in. As part of long-term planning, many families set aside money or prepay for at least a portion of these inevitable expenses.

Planning for health complications

Many seniors look forward to their retirement as time to pursue second careers, volunteer, travel and enjoy their friends and families. Unfortunately, unexpected health issues and their related costs can completely derail plans for a blissful retirement.

Boomers learn from their parents that health care is an important part of retirement planning

  • An estimated 70% of Americans can expect to use some form of long-term care at some time in their lives.
  • Statistics for 2018 show that 5.7 million Americans are living with some form of dementia.
  • More alarming, 200,000 people under the age 65 have early-onset Alzheimer’s. At this time, there is no treatment or cure for this insidious disease.

Escalating insurance costs

Today’s medical advances mean that we can make smarter decisions about our healthcare needs. We’re living longer, but depending on our health, that may not mean that we’re living better. If life or disability insurance is part of your plan, it’s important to know that rates increase as you get older. Many life insurance policies bundle long-term care into their plans. Researching family history for heart disease, diabetes, dementia, cancer or other hereditary illnesses may help you make informed healthcare decisions.

Learning from our parents: Plan for the worst and hope for the best

Don’t wait until there is a crisis; figure this out while you’re healthy and able to make thoughtful, informed decisions. Everyone who’s had to cope with the loss of a parent knows the importance of careful estate planning and the benefits to surviving family members. Baby boomers whose own parents have left them with a poorly planned estate are learning from this experience and leaving their own families better prepared.
There’s still time to create your Living Trust in 2018. Our comprehensive Living Trust package includes a Power of Attorney and Advanced Healthcare DirectiveContact us at one of our three Bay Area offices to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.