If You Die in Debt, Will Your Heirs Have to Pay Up? Probably.

Several months ago we discovered this insightful article on the website US News. It answered a question we have heard frequently in our client meetings, on our call-in radio programs and at our seminars: “If I die with debts, will my heirs have to pay them off?” Because this question (and the worry behind it) is so common, we felt it was timely to re-address this issue.

So here’s the bottom line: If you die leaving debt behind, most of the time – if you have any assets at all – the answer is yes, your heirs will be saddled with that debt. The article explains several possible scenarios where those debts you incur in life will burden those who inherit your estate.

Debt is an especially tough problem for seniors, a group whose debt burden is definitely increasing. “With seniors’ debt burden rising, many are likely to die with debts still unpaid,” says US News. “While not all that debt will pass to their heirs,” the article goes on to say, “much of it will come out of any inheritance they expect to leave behind.”

How bad is the senior debt problem? The article states that in 1989 about 44 percent of senior households in the U.S. were carrying some debt. In 2013 that percentage had risen to just over 61 percent. But the figure that caught our attention was the amount of that debt: for households headed by adults age 60 or older, the average debt burden had skyrocketed from about $9,000 in 1989 to nearly $41,000 in 2013. One particular surprise that we’ve recently written about on our AgingOptions Blog (click here for the story) is that many seniors are loaded down with student debt incurred by their kids and grandkids, because of education loans for which the parent or grandparent co-signed. For seniors already strapped for money after the recent recession, debt can be a crushing burden now and a headache in the future when your children have to deal with it.

US News states that, if you have any assets at all, your creditors will likely get “first dibs” during the probate process. “That means,” the article reports, “that your children or other heirs effectively will pay your debts because they will be subtracted before any inheritance is transferred.” This will force your kids to pay off your debts with the cash you had hoped to pass on to them. It may even mean selling off assets such as a home to pay off your creditors after you’re gone. Depending on the state you live in, some spouses become liable for the debts incurred by their spouse (Washington is one of those states, referred to as a “community property” state). The debt you leave behind may place a severe burden on your surviving spouse. In other words, according to one financial advisor quoted in the US News article, “Debt is the last thing you want to have when you die.”

The article lists six things you need to do if someone you love dies with debt. (Again, click here to link to the US News piece and read all six.) Some of these steps are obvious, such as the immediate notification of creditors, especially credit card companies: you want to make sure no one can open a fraudulent account in your loved one’s name, and you also want to put an immediate halt to any additional fees and surcharges. A few other important things on the checklist involve filing tax returns and filing for those assets that do not go through probate, such as life insurance payouts and retirement accounts.

But the first thing on the US News “to do” list is to consult with an attorney. Here at AgingOptions, where retirement planning and elder law are our specialties, we would welcome the chance to sit down with you and go over the situation in which you find yourself following the death of your loved one. In fact, a call to our office should be one of the first ones you make, so that we can begin advising you of all the necessary steps you’ll need to take to satisfy creditors and protect your own family’s interests.

An even better idea for dealing intelligently with debt and finances is for retirees to start now to put a LifePlan in place – a comprehensive retirement plan that covers all aspects of your retirement and your estate. We can advise you on how to protect your assets and how to avoid burdening your loved ones both while you live and after you’re gone. All your legal and financial plans become part of your LifePlan, as do your housing preferences, family instructions and medical coverage needs. It truly is a “Life Plan.”

The very best way to start the LifePlanning process is by attending one of our free LifePlanning Seminars. You’ll come away with valuable knowledge that will help you face your retirement years with a new sense of confidence, knowing you’re prepared. Don’t leave your heirs with a burden of debt – or even worse, with the burden of caring for you and making decisions against your wishes. You’ll find a complete list of upcoming dates and locations right here on our website, along with simple online registration. We encourage you to register today because many of our LifePlanning Seminars are filled to capacity. And as always, if we can assist you by phone, please call our office during the week. We’ll look forward to seeing you soon.

(originally reported at http://money.usnews.com)

Caring for Elders While Holding a Job: the Prescription for Stress

Some months ago we read a report on the blog of the AARP that revealed a problem too often overlooked, but one that will sound familiar to a significant number of Americans. The problem is the growing number of people, estimated at nearly 24 million workers, who are holding down paying jobs while at the same time serving as family caregivers. That’s a sure prescription for stress, fatigue and uncertainty, not only for employees but also for employers. “For employers big and small,” says AARP, “the need to support workers who also provide unpaid care for a family member is a growing reality.”

You can read the AARP article by clicking here. Even though the article first appeared in mid-2016, the information – and the predicament of working caregivers that it describes – are all too relevant today.

These days, says AARP, serving as a caregiver to an adult relative (especially an aging parent) is growing more and more complex than it may have been in the past. Caregivers today often have to navigate a fiendishly complicated health care delivery system while performing more intense and complex care in the home, all while coping with the demands of work. Research suggests that employed caregivers feel a growing sense of stress and performance anxiety at work, with more and more pressure and less and less job security. Research also reveals that parents who are caring for young children at home often enjoy far more workplace flexibility than workers who are caring for older family members. Some caregivers even suggest they have experienced workplace discrimination, which according to an AARP research report from 2012, is not prohibited by most federal and state employment laws.

According to a study entitled Caregiving in the United States 2015, cited by AARP, about 60 percent of family caregivers are also employed outside the home, and most of these “working caregivers” (nearly two-thirds) are caring for a relative 65 years old or older. As if this weren’t enough of a recipe for stress, the caregivers are also aging: half of these employed caregivers are themselves 50 years old or older, which means they are already experiencing the challenges of being an older worker in today’s high-stress, increasingly insecure workplace.

There are two chief take-aways from these articles. The first, in the words of the AARP blog: “As the U.S. population rapidly ages, the need to support workers with family caregiving responsibilities will grow.” In other words, AARP favors more generous family leave and paid sick day policies, along with greater work flexibility for caregivers. The organization advocates legislation to give caregivers increased measures of employment security and, when necessary, paid time off. Above all, we need a “culture of understanding about eldercare needs” especially as they affect those in the workplace.

The second point is more concerning: as the population ages, “we’re facing a caregiving cliff,” said Dr. Susan Reinhard, AARP Public Policy expert. “By mid-century, there will only be three caregivers available for each person requiring care.” As today’s baby boomers age, there may not be enough people able to care for them. “That means,” says AARP’s Reinhard, “we need to provide support for existing caregivers who are underserved” by current services. In other words, we had better be planning now for the caregiving needs of the not-too-distant future.

Planning for the future is the centerpiece of our activities here at AgingOptions, and that includes planning for your future care needs. This will most probably involve your family members, because aging is a family affair. Have you sat down and talked with your adult children about your expectations and wishes for the future? Have you and your family members had an honest conversation about the fears and concerns each of you is experiencing as you contemplate your aging years? Far too many families leave these issues unaddressed and unresolved until it’s too late. Here at AgingOptions, we frequently conduct family conferences in which all these issues are laid out on the table for open, constructive discussion. We would be glad to do that for you. Through planning and preparation, you can successfully avoid becoming a burden to your loved ones as you age, and also avoid being forced into unplanned institutional care.

The key is to have your own personalized AgingOptions LifePlan – our name for a fully-developed, individualized retirement plan that takes all your needs into account: financial plans, legal protection, medical coverage, housing options and family communication. If you’re ready to start creating your own LifePlan, we can help. The best way to start is to attend one of our free LifePlanning Seminars – popular, information-packed sessions held in various locations throughout the area. These seminars fill up fast, however, so we encourage you not to wait. Instead you can click here for dates, and free online registration. It will be a pleasure working with you as together we plan your ideal future.

(originally reported at http://blog.aarp.org)

There’s a “Family Disconnect” When It Comes to Discussing the Future

Have you and your adult children had a frank and detailed conversation about your estate and your wishes for the future? Do they know about your will and about your desire for leaving a legacy?

If we were to ask those questions to an average group of parents, according to this insightful article just published on the website Insurance News Net, 70 percent would answer yes – those important conversations with adult children have taken place. But if we posed the same questions to the adult kids, fewer than half would agree. The rest, more than half of adult children, claim they’ve never talked about estate planning or other related future topics with their parents. This is a significant – and potentially costly – disconnect.

This gap in perception between adults and children was revealed in recent findings from the Family and Finance Study produced by Fidelity Investments.  The study showed that, while fully 90 percent of parents and children say that it’s important to have frank conversations about estate plans and wills, in too many cases those conversations aren’t happening. “How prepared are American families when it comes to leaving a legacy and discussing estate plans with their loved ones,” asks the Insurance News article? “Perhaps less than they may think.”

Here at AgingOptions we see evidence of this lack of communication almost every day, and we hear about it from radio listeners and guests at our seminars. Mom and Dad may think they have made their future wishes clear to their adult children, but the kids remain in the dark. Then when one or both of the parents passes away, family friction and sibling fights can quickly erupt. “Even in the simplest of family situations,” says Insurance News Net, “conversations that do not occur frequently and in detail may result in fairly substantial family disagreements and disconnects.”

Another statistic caught our eye from this article: the Fidelity study found that in about 70 percent of cases adult children had major misconceptions about the value of the parent’s estate. “On average, children underestimated that value by $278,000,” the study showed.  It seems to us that a misunderstanding of that magnitude will only increase the chances for conflicts and disagreements when it comes time to divide the estate.

Here’s one more important question raised by the Insurance News Net article: do your adult children know where to find your important documents such as wills, powers of attorney and healthcare proxies? When Fidelity asked parents that question, 80 percent said yes – but among the sample of adult kids the number who agreed was significantly less, closer to 65 percent. That’s not bad, but it still indicates that you and your adult children may not be communicating as well as you think you are.

We do take some issue with the Insurance News Net article, not because the information is incorrect, but because it seems incomplete. We concur with the basic premise of the Insurance News Net article: aging adults often fail to communicate adequately with their kids about their estate plans. But as is all too common, the article focuses almost entirely on finances, emphasizing the importance of passing along your assets to your heirs with minimal impediments and tax consequences. A solid financial plan is definitely essential, but it is only part of your retirement plan, and if all you do with your adult children is tell them how you want your money disbursed when you pass away, you are doing them a serious disservice.

Aging, as we always say, is a family affair, and that means your family needs to know – and support – all of your wishes as you grow older. Beyond finances, this includes housing, deciding how and where you want to live. It includes your legal documents, which means much more than your last will and testament. Your estate plan will be meaningless if it doesn’t take your medical needs into account, because few things will derail your plans like a medical crisis for which you have not prepared. Is there a type of retirement plan that includes all of these facets? Fortunately there is.

At AgingOptions we proudly offer a unique and comprehensive approach to retirement planning called a LifePlan. Once you have prepared your LifePlan, often including a series of family conferences to make certain everyone close to you is on the same page, you’ll be prepared for a fruitful and secure retirement. You’ll be able to protect your assets while ensuring that you won’t become a burden to those you love. It’s easy to find out more – and there’s no obligation whatsoever: simply plan now to attend one of our free LifePlanning Seminars. Invest just a few hours, and bring your questions – and your adult children if they’ll attend with you. It will open your eyes to the power of this unique, powerful planning strategy.

For a list of upcoming seminars, including online registration, click here, or call us during the week and we’ll be happy to assist you.  Additionally, if you feel it’s time for a family conference to review your estate plans with your loved ones, we can definitely guide you. We’ll look forward to meeting you soon.

(originally reported at https://www.insurancenewsnet.com)



UPDATE: Death of Superstar Prince Means Windfall for the IRS

Last May we wrote about the death of rock superstar Prince. At the time we pointed out that whenever a celebrity dies, there’s always a ripple effect. The death of Casey Kasem prompted increased interest in issues of health care directives, guardianship and end of life planning. The death of Michael Jackson shed new light on the abuse of prescription drugs. And just a few weeks after the death of the rock star Prince, who died in April of 2016 without a will, people began showing a surge of interest in wills and estate planning. (Click here to connect to the original Reuters article about this interesting phenomenon.)

Well, now we have a truly eye-opening follow-up report, which we found in this insightful article on an unlikely website called Movie TV Tech Geeks!  We confess, this isn’t one of our typical sources of retirement news, but in this case the writer, Television Editor Shanka Cheryl, really got it right. The article is entitled, “Prince shows why wills really matter as IRS getting half his estate.” We suspect many readers of this website might be on the younger side, but this article should be a loud wake-up call to everyone, especially seniors.

Prince died on April 21, 2016, leaving behind an estate valued at more than $200 million.  Apparently the international celebrity never got around to drafting a will or establishing an estate plan. Prince was not a particularly young man (he was 57 at time of death) but like many aging boomers he may have had a distorted sense of his own immortality. He was hardly alone: research from LexisNexis reveals that at least 55 percent of all American adults do not have a will or other estate plan in place.

Now, Shanka Cheryl’s article explains, “Prince’s estate has until Saturday (January 20th) to file an estate tax payment for the late rock superstar, and the taxes are expected to ultimately swallow nearly half the estate’s estimated $200 million value.” That means “a likely windfall of roughly $100 million for the government.” Estate law experts say Prince could have prevented that relatively easily, but he failed to act in time.

Not only did Prince leave no known will when he died in April of an accidental painkiller overdose, but he apparently did nothing to shelter his assets from the taxman. Federal and state taxes will claim about half the estate and his six siblings will divide the rest, say local tax experts studying the case. “Experts say Prince could have set up an estate plan with trusts to benefit any relatives and charities he chose – while leaving little if anything to be taxed.” The website article quotes Los Angeles attorney Robert Strauss who stated that there are basically only three options for distributing estate funds: “There’s family and friends, there’s charity, and there’s Uncle Sam. And most clients would rather that Uncle Sam got less.” In Prince’s case, by failing to plan, he made sure Uncle Sam received a generous payday.

As the Reuters article reported last spring, following the death of Prince, “many Americans moved ‘draft a will’ – arguably one of life’s most unpleasant tasks – to the top of their to-do lists.”  In some ways, as we reported, that’s good news. However, as professional retirement planners, we here at Aging Options fear that some of these newly-inspired people may be going about the process the wrong way, relying on free or low-cost will-writing software and websites that provide only bare-bones services, hardly adequate for most estate plans.  If you content yourself with simply seeking out the least expensive “quickie will kit” available online you will be doing yourself and your family a disservice. This is one area where it’s essential not to scrimp!  The cheapest and quickest route is almost always the wrong one.

We also remind you, as we tell our radio listeners and seminar guests, that merely writing a will is not enough. The process of putting your legal affairs in order is only one aspect of a fully-developed retirement plan, which we call a LifePlan. A LifePlan takes the key facets of your future planning into account: legal affairs, financial security, medical care, housing choices and family communication. This is the kind of comprehensive plan that brings true security as you age. It’s also the kind of well-developed plan that you can never get from an online will kit!

Want to find out more? Here’s the best way: attend one of our free LifePlanning Seminars, held throughout the area. There’s absolutely no obligation – and we’re fully confident that you’ll come away armed with a fresh new approach to retirement. These free information-packed sessions fill up quickly, so click here for a listing of upcoming LifePlanning Seminars, select the seminar of your choice, and register online – or call our office during the week and well gladly assist you.

Making a will is important. But having a LifePlan in place will be of far greater benefit. If only Prince had known that, his family could have been spared even more grief, dissension and loss.

(originally reported at www.reuters.com and https://movietvtechgeeks.com)

Solve Family Caregiving Squabbles with the Power of Mediation

Some months back we found a valuable article on the website Senior Care Advice that helped shed new light on a familiar but often overlooked topic: family mediation. Even though the article came out last spring, the subject is always a timely one, and we encourage you to click here to read this thought-provoking piece.  It points out once again something that we always remind our clients and radio listeners about:  how engaging a family mediator at the right time can not only save thousands of dollars but can also hold families together in stressful times.

The article quotes a study from the insurance firm MetLife stating that nearly 10 million adult children are currently providing care for their aging parents, a figure that is growing continually.  In fact, says MetLife, “With the onslaught of Baby Boomers reaching old age, the number of adult children caring for their parents…has tripled over the last 15 years.”  This can create enormous complications in the lives of caregivers and open the door to unexpected conflict, something we see all too frequently in our practice here at AgingOptions. “Family disputes between siblings and even parents and children can cause rifts in the family dynamics just when the need for solidarity is at its greatest,” the article says.

We often counsel family members who are in the thick of arguments and conflicts with those closest to them, and the number one emotion is often surprise ­­– they can’t believe this kind of conflict can be happening in their family. But family strife involving caring for Mom or Dad is sadly all too common, and in our experience the surface causes of these divisions are predictable:  it’s usually about money, control and independence. In fact, though, the emotional roots often run much deeper. The article points out that “It is usually one family member that bears the load of nearly all the care and that can cause stress, burn-out and resentment.” When that happens, the other family members often feel guilt, which makes for more conflict.

That’s where a mediator can play a critical role in holding the family members together. By engaging a mediator early on, family members, including aging parents, have a “safe, neutral environment” where issues can get resolved. A mediator is a well-trained neutral party who can listen to all sides of a family dispute and suggest creative solutions.  Here at AgingOptions our attorneys have served many times as family mediators, and we have seen firsthand the wisdom of engaging a mediator early in the planning process. Let us emphasize that word “early.” Too many families wait until a parent’s physical and mental problems are acute and the challenges of caring for them have grown intense. Another drawback caused by procrastination in settling simmering disputes is that Mom and Dad may have become incapable of making their wishes known, opening the door to all sorts of sibling rivalries and jealousies. If you sit down with a mediator while Mom or Dad is physically and mentally able to participate actively in the planning process, things go much more smoothly. “If the elder makes the decisions beforehand, they don’t feel like their independence has been taken away,” says the Senior Care Advice article.

There’s much more to consider in deciding how and when to engage a mediator, but we urge you to have the conversation among your own family members sooner rather than later. Please do let us serve in that capacity if you feel the need for unbiased professional mediation in your family situation. With our decades of combined experience, we at AgingOptions can provide suggestions about the legal documents you’ll need to have in place in order to make sure your parents’ wishes are respected. We can help you and your siblings put important issues down on paper in a simple agreement that deals with potentially difficult issues. We can also suggest ways to compensate the primary caregiver, a topic that can lead to family feuds if not adequately addressed. These and many more are examples of potentially touchy matters where a mediator can save your family’s unity.

All of these factors may help you plan for the future of your parents, but what about your own retirement planning? Are you satisfied that you have laid the foundation for a fruitful retirement that takes into account your health care needs, your housing choices, your financial concerns and your legal affairs, along with your family dynamics? An AgingOptions LifePlan can do all that. That’s our term for a comprehensive multi-faceted retirement plan, and we can help you get started toward developing your own. Your LifePlan helps you make sure your retirement dreams and wishes become reality. Why not find out more about this breakthrough in retirement planning strategy? The first step is often to attend one of our free LifePlanning Seminars, an information-packed session that will help you begin the process. Then if you wish we will meet with you personally to put all aspects of your plan into place.

Find out all the dates, times and locations, and register for a free LifePlanning Seminar on the Upcoming Events tab on this website (you can simply click here). You can also call us during the week and we’ll gladly assist you. We’ll look forward to meeting you at an upcoming seminar in your area.

(originally reported at www.seniorcareadvice.com)

New Ruling Restores Residents’ Rights to Sue Nursing Homes

A little over a year after it was first proposed, a new federal regulation will soon go into effect to allow residents and their families to sue nursing home operators in cases of neglect, abuse and criminal behavior. The regulation, which affects any nursing home that receives federal funds, does away with a common industry practice designed to force aggrieved residents into a process called arbitration. Officials from the nursing home industry decried the ruling while advocates for the elderly say it is long overdue.

This development has generated a great deal of news coverage. One good article that explains the change is this one published very recently in the New York Times.

The new rule, which supporters say promises to deliver several new protections and safeguards for nursing home residents, was ordered by the Centers for Medicare and Medicaid Services (CMS), an agency within the federal Health and Human Services Department. It came after a lengthy review of a practice which is common in the industry, to include in the residency agreement a clause forcing residents to accept arbitration and relinquish their right to sue. This practice has come under fire as being unfairly biased toward the operators of nursing homes. The demand that residents and families take disputes to arbitration was typically part of the contract signed by new residents at the time of move-in, often under stressful circumstances and without full understanding of the legal implications.

“Clauses [requiring arbitration] embedded in the fine print of nursing home admissions contracts have pushed disputes about safety and the quality of care out of public view,” writes the New York Times. “The system has helped the nursing home industry reduce its legal costs, but it has stymied the families of nursing home residents from getting justice.” The article cites cases of sexual abuse, physical abuse, even murder of one resident by another. In each case, the demand for arbitration kept these stories out of the public eye and, the article implies, forced families to accept settlements that were unjust and completely in favor of the nursing home operators.

The Times article calls this change “the most significant overhaul of the agency’s rules governing federal funding of long-term care facilities in more than two decades.” The new ruling, which the industry could challenge in court, will go into effect next month (in November 2016) and is not retroactive, meaning that it only affects new nursing home admissions. Current arbitration contracts would remain in effect. (About 1.5 million residents live in nursing homes affected by this ruling, report the Times.)

According to the article, the nursing home industry has argued that arbitration “offers a less costly alternative to court. Allowing more lawsuits, the industry has said, could drive up costs and force some homes to close.” But officials at CMS and also many elder care lawyers feel quite differently. These advocates suggest the true rationale is to “potentially keep embarrassing practices under wraps.” Most arbitration proceedings include non-disclosure requirements where the terms of settlements are not disclosed.

So the bottom line, we would argue, is that this change is good news for consumers, creating more of a level playing field and restoring at least some fairness for nursing home residents and their families. We’ll keep you posted on our blog and on our radio programs as this change moves forward.

Getting objective information about retirement decisions is definitely a challenge. Here at AgingOptions, we want to be your objective guide as you make a whole host of retirement-related decisions, including choosing where you will live. If you need advice on how best to evaluate nursing facilities, assisted living options or any senior housing choices, contact us and we can help you by providing sources of information you can rely on, instead of blindly trusting salespeople and marketing agencies. And for all your retirement planning considerations – finances, legal affairs, family communications and medical protection – we encourage you to explore the comprehensive process we call LifePlanning. Your LifePlan becomes your blueprint to help you build the secure and satisfying retirement of your dreams.

To learn more about LifePlanning, and about other vital facets of preparation for retirement, we invite you to attend a free, no-obligation LifePlanning Seminar, offered at locations throughout the area. Click on the Upcoming Events tab on this website for dates, times, locations and online registration. Or contact us during the week and let us assist you. It will be a pleasure helping you make smart choices as you plan for your retirement future.

(originally reported at www.nytimes.com)

In Retirement Planning, the Only Dumb Question is the One Not Asked

One of those adages that tend to be true is that men will typically refuse to stop and ask for directions. (Someone once explained that that’s the reason why the Israelites wandered for 40 years in the wilderness!) Generally, it seems, men would rather meander aimlessly down the wrong road than to pull into a convenience store in order to get their bearings.

Psychologists say there are several reasons for this trait. One website called Psych Central explained that men generally “prefer to learn by doing, not by being told what to do.” Men also have the desire to “win” and to be victorious, something they feel robbed of when they have to stop and ask for help, as if finding your way is a kind of contest. And finally men want to be strong, which explains that desire to figure things out for themselves.

If you’re applying these notions merely to finding your way down an unfamiliar road, the worst you’ll probably get is lost. But if you’re exercising your blind refusal to ask for help in the area of finances, especially when you really don’t understand what’s going on, you’re heading for much more serious consequences. Here at AgingOptions we see this tendency all the time, and not just among men. All of us can display bull-headed tendencies that cause us to refuse to ask for aid when we desperately need it. That’s why we were drawn to this brief article on the New York Times website that advises us not to be afraid to ask. “Being humble when it comes to money is incredible smart,” says author Carl Richards, a financial planner and Times contributor. Richards says one of the “smartest money strategies” is to ask questions, even the ones that sound simple, when you don’t know the answer.

Why don’t we do this? Why are we sometimes so hesitant to ask? It probably goes back to the reasons men dislike asking for directions. None of us, male or female, wants to look dumb. We all like to come across as smart, savvy, and well-informed. But Richards says it’s that lack of humility, especially in money matters, that can lead to big mistakes. We would add that the importance of asking questions really impacts not just finances but all aspects of retirement – yet frequently we encounter people too stubborn to listen to wise advice.

In the Times article Richards singles out as a good example of humility none other than the “Oracle of Omaha,” 86 year old billionaire Warren Buffett. According to Richards, Buffett – even with all his billions – still spends 80 percent of his workday “reading and thinking. Why does he do this? To learn things he doesn’t already know,” writes Richards. Even Warren Buffett is humble enough to admit he doesn’t have all the answers. Why aren’t we?

The author recounts a recent episode where he and his wife visited their attorney for some basic estate planning. “As he rolled through the plan,” says Richards, “we just sat there nodding along, pretending that we understood everything he said. We signed a few papers, shook hands and walked out of the building.” It wasn’t until they got to the parking lot that he and his wife looked at one another and admitted that neither one had really had a clue what the lawyer had been saying! In spite of the fact that both Richards and his wife were fairly sophisticated in the area finances and legal affairs, they had to humble themselves, go back, and ask some clarifying questions that might better have been handled the first time around.

“While humility is a virtue in all parts of life,” Richards concludes, “when it comes to making smart decisions with money, it serves as a vital layer of protection. When it comes to our money, there are no dumb questions.”

Here at AgingOptions we would add a hearty “Amen” to that statement, and expand the topic from money to all of retirement. Let’s face it, planning for your retirement future can be complicated. Can you protect your assets in retirement? Can you avoid becoming a burden to your loved ones? Is there a way to create a retirement plan that puts all the important pieces – finances, medical care, legal affairs, housing choices, and family dynamics – into one master blueprint? Fortunately the answer to all these questions is a confident yes, when you utilize the approach we call LifePlanning. With your LifePlan in place, your road map to the future fulfillment of your dreams is clearly laid out – and you won’t always have to stop and ask for directions!

Find out more about this breakthrough in retirement planning by attending a free LifePlanning Seminar soon. It will be a few hours very well spent, we can assure you, based on the testimony of many hundreds who have taken part. You can register online for your convenience, simply by clicking on the Upcoming Events tab, or you can contact us for assistance. Helping you plan for a secure and fruitful retirement is our professional specialty, and it will be a privilege to meet you at a LifePlanning Seminar soon. And bring your questions – even the ones you’ve been hesitating ask!

(originally reported at www.nytimes.com)

Part of Your Financial Plan: Remember to Update Your Beneficiaries!

Here’s a question: if you’ve made it clear in your will which one of your heirs should inherit money from your estate, how it is possible those funds will end up going to someone else?

The answer is simple: if you’ve forgotten to update the beneficiary information on a life insurance policy, retirement plan, or other financial instrument. It sounds absolutely basic, but, as an article published earlier this year in USA Today puts it, “Your ex could get rich if you don’t update your beneficiaries.” We suggest you click here to read this helpful piece.

As the article states, when it comes to keeping their estate plan current, most people think first about what goes into their Last Will and Testament. But they often neglect something even more obvious by failing to make sure their beneficiary designations are up to date. And here’s something you may not have known: beneficiary designations on a 401(k) or IRA are legally binding. As a result, states the USA Today article, they “often take precedence over wishes you’ve put in your will. And that can result in some unpleasant situations if your beneficiary information isn’t updated.”

The article goes on to quote a Dallas financial analyst, Charles Sizemore, who points out a scenario that’s fairly common: an employee establishes a retirement plan and fills out the beneficiary designation form on the first day of a new job. He or she never updates the form for ten, fifteen, twenty years or more, even though much has changed. Sizemore says, “Your life [today] could look a lot different. You might have divorced and remarried, or you might have kids or grandkids that weren’t around back then.” The big downside is clear: you could end up “accidentally leaving your estate to an ex-spouse or disinheriting stepchildren.” If you fail to update your beneficiaries, your financial plans might go out the window.

Here’s a list from the USA Today article of significant life events that should cause you to double check your beneficiary designation: • Marriage or divorce • Birth of a child or grandchild • Death of a previous beneficiary • When a minor beneficiary comes of legal age to inherit

Which financial products are most likely to require updates on beneficiary designation? According to USA Today, here’s a basic list: • Retirement accounts like a 401(k) or IRA • 529 college saving plans • Life insurance • Annuities with a death benefit • Corporate profit-sharing plans • Pension plans • CDs, checking accounts or other bank accounts • Some stocks, bonds or mutual funds

If you’ll contact us here at AgingOptions, we’ll gladly review some of these documents and help you make sure your wishes are absolutely clear. Protecting your assets in retirement is a key part of a sound retirement strategy – and part of that protection involves making certain your plans and desires are carried out at every stage of your life as well as after you’re gone. To accomplish this, we work with our clients to help them establish a comprehensive retirement plan called a LifePlan that carefully and thoroughly addresses all of the central issues involved in planning for a sound future: your finances, your legal affairs, your health care, your housing choices, even your family relationships. With a LifePlan in place, you and your loved ones will face the future with greater confidence and peace of mind.

The best way to begin the planning process is by attending one of our free LifePlanning Seminars, held in locations all over the Puget Sound area. You’ll gain a valuable amount of very helpful information in one highly enjoyable, fast-paced evening. Simply click on the Upcoming Events tab on this website for dates and times, or call us during the week for information and registration by phone. We’ll look forward to seeing you soon! Of course, should you wish to make an appointment for an in-person consultation, contact us. It will be a pleasure to work with you to establish a solid plan for your retirement years.

(Originally reported at www.usatoday.com)

When Helping Your Aging Parent, Protect Your Own Retirement Assets

Caring for an aging parent is a task more and more people are facing this days. A Pew Research study shows that over 40 million Americans provide care to someone over 65. The emotional and financial burden of being a caregiver for an aging parent can definitely come as a shock, sometimes resulting in the caregiver making some shortsighted financial decisions.

In our practice here at AgingOptions we see this situation very frequently. So we were extremely interested in this recent article on the Money website of US News. It strongly cautions caregivers against risking their own retirement savings to help out Mom or Dad. “This support [of an aging parent] can have a drastic impact on someone’s own savings,” warns the article, “leading to retirement troubles down the line.”

If you’re facing the challenge of being Mom or Dad’s caregiver, or expect to be there in a few years, you’ll need to make sure you plan well, both for your parent’s needs and for your own. This may require you to have some tough conversations about topics many families scrupulously avoid – like money, for example. In fact, that’s the first piece advice from US News: don’t shy away from financial conversations. The best way to protect your own finances as a caregiver is to help make certain your parent’s finances are in order, and that, say the experts, puts parents and their adult children into some emotionally difficult territory.

The article offers an excellent solution to this thorny communications problem: “Instead of discussing [finances] one-on-one, hire a third party.” In our practice, we have helped hundreds of families by bringing Mom or Dad to the table with all the adult children and facilitating an honest financial review. This conversation can also help ensure that important legal documents such as Durable Powers of Attorney are in place for the time when the parent can no longer safely manage their finances. US News adds that “Going through a third party ensures there’s an impartial point person that can handle any questions. This keeps everyone on the same page, even if one child takes the lead on caring for a parent.” We agree wholeheartedly.

The second recommendation from the article is that the caregiver must not neglect his or her own retirement plan while helping the aging parent. Peak earning years for most adults comes during ones 50’s, but the average caregiver, says the article, is just 49. The caregiver may be tempted to cut back on retirement savings in order to be able to provide greater financial assistance for the parent. The one word response from the experts in the US News article: don’t. Instead you will want to look into other ways to help meet your parent’s needs without leaving yourself high and dry when it’s time for your own retirement. (The article lists some senior service agencies and support groups for you to contact in your own community.)

Finally, US News says to avoid financial shortcuts such as merging your own finances with your parent’s accounts. “Keep them separate,” says one financial planner in the article. Blending accounts can create endless tax headaches later, not to mention potential complications with Medicaid. Another shortcut you may be tempted to take is to borrow against your retirement account or refinance your mortgage to help out your parent. Again, as well-intentioned as you might be, you will potentially be opening yourself to a greater financial burden down the line, robbing yourself of resources you’ll need in the not too distant future.

The US News article concludes with the observation that as a caregiver you may need to look long and hard at your own expectations about financially supporting your parent. Those expectations may have to be adjusted. “It’s not because caregivers shouldn’t care about their parents,” says US News, “but because the parents have other options. It’s the job of the caregiver, instead, to find the best options that a parent can utilize.”

As with so many aspects of retirement, the delicate issues addressed in this article – family relationships, personal finances, sibling connections and so much more – are often best handled in the company of a trusted third party. We would like to offer our services to you, both as your “family mediator” and as your personal retirement planner. When it comes to laying the foundation for your own retirement, we utilize a comprehensive approach we refer to as LifePlanning. Your LifePlan will cover all the important needs you’ll face in retirement, ensuring that your legal affairs are in order, your housing choices addressed, your medical coverage in place, your financial assets well protected, and your family thoroughly informed of your wishes. Your LifePlan is your blueprint to help you build the retirement you’ve dreamed of. To learn more about this unique and exciting approach to retirement, we invite you to attend a LifePlanning Seminar, offered without cost or obligation. For dates, times, and online registration, click on the Upcoming Events tab, or call our office.

The bottom line: whether you’re addressing the needs of an aging parent or planning for your own retirement future, don’t make the journey alone. We’re here to assist you, at any time.

(originally reported at http://money.usnews.com)

Can Your Estate be Divided Unequally and Still be “Fair”?

A recent column in the Wealth Matters section of the New York Times caught our attention. The title brings to mind an issue we deal with often among our clients here at AgingOptions: “How a Will Treating Children Differently Can Still Be Fair.” If you’ve ever wrestled with the notion of dividing your estate unequally among your heirs, you can click here to see what the New York Times has to say about this potentially touchy – even explosive – issue.

The article asks, “Is there ever a time when inheritance should be uneven? And if so, can uneven still be fair? The answer to both questions is yes.” But, as the Times piece emphasizes, good, clear, timely communication is essential to avoid hurt feelings, family strain and even painful litigation.

If you stop and think about it, the article points out, when raising their children, good parents seldom treat each child precisely equally. That’s because each child’s needs and circumstances vary. Instead the effective parents tend to emphasize treating each child with fairness and equity. So when it comes time to plan your estate, it may be natural for you as a parent to want to consider each adult child individually, gauging their life circumstances and making the decision to distribute your assets unevenly. But if you decide to take this course of action, you may need to prepare for some pushback from the child who thinks he or she was treated unfairly.

The New York Times quotes an anonymous woman married to a well-to-do man in the tech industry. On the surface this woman appeared to be much better off than her siblings, so when her mother began preparing to divide her estate she planned to give this daughter a much smaller share. Unbeknownst to the mother, however, the daughter was subject to a pre-nuptial agreement barring her from controlling her husband’s assets. She was actually far more vulnerable than her mother realized. “Just because I married someone with money doesn’t mean I should get cut out,” the daughter in the New York Times article said.

In another case of an uneven bequest, a mother planned to favor her daughter, a school teacher with a modest income, over her son, a well-off doctor. But the doctor felt cheated, as though he had done all he could to please his parents only to be “disinherited.” In the end, after lengthy and productive conversation, the daughter received a larger share, but the son wasn’t left out entirely. Above all the sibling connection was maintained and not jeopardized.

There are several other instances of unequal estate distribution cited in the New York Times article involving circumstances that can get much more complicated. In some cases the unequal split is unintentional, as when one child inherits a gift with a tax liability, or when there are children from multiple marriages, or when a family business is involved. In these cases we strongly urge you to sit down with professional counsel, because these issues left unresolved can tear families apart for generations to come. Here in our office we see the tragic results of this lack of planning all too often. We will be happy to meet with you at any time.

So the bottom line is communication. Leaving your estate unequally to your children may indeed cause potential problems, but as the New York Times puts it, “All these problems can be minimized, if not fixed, with a conversation.” But the Times adds this warning: “The downsides of not getting this right are huge.”

At AgingOptions we take a comprehensive approach to retirement planning, one that we call LifePlanning. Part of the LifePlanning process involves good, honest, timely communication with your family, something with which we can definitely assist you. Having a plan in place is important, but if your loved ones have no idea what your wishes are, or why you made the choices you made, conflict and bitterness can result. Besides good family communication, your LifePlan will help you make wise housing choices, prepare all your legal documents, secure necessary health insurance and protect your assets in your retirement years. The result will be a happy, secure, rewarding retirement, and a family who will be grateful to you both now and after you’ve gone.

You can start investigating the LifePlanning approach to retirement by attending a free LifePlanning Seminar. Click on the Upcoming Events tab for dates, times and registration, or call our office for assistance. Bring your retirement questions – and see if you don’t agree that LifePlanning is the most thorough, balanced approach to retirement planning that you’ve ever seen. It will be our pleasure to help you as you journey toward the retirement you’ve always dreamed of.

(originally reported at www.nytimes.com)