Creating an End of Life Checklist

Creating an end of life checklist including assets, personal information and locations of important documents will help your family act on your behalf.

Spend the energy, effort, and time now to consider your wishes, collect information and, most importantly, get everything down on paper, says In Maricopa’s recent article entitled “Make an end-of-life checklist.”

The article says that a list of all your assets and critical personal information in an end of life checklist is a guarantee that nothing is forgotten, missed, or lost. Estate planning attorneys can assist you and guide you through the process.  Our firm prepares Estate Planning Binders which include schedules to hold that exact information.  As described here https://galligan-law.com/not-a-little-black-book-but-a-big-blue-estate-planning-binder/  Especially in the age of computers, it’s critical to leave this information for fiduciaries in a way they can find it.  They’ll be glad you did.

Admittedly, it’s an unpleasant subject and a topic that you don’t want to discuss, and it can be a final gift to your family and loved ones.

When you work with an experienced estate planning attorney, you can add any specific instructions you want to make that are not already a part of your will or other estate planning documentation. Make certain that you appoint an executor, one you trust, who will carry out your wishes.

This isn’t a complete list, but consider including the following personal information in your end of life checklist: your name, birthday, and Social Security number, as well as the location of key documents and items, birth certificate, Social Security card, military discharge paperwork (if applicable), medical directives, ID cards, medical insurance cards, house and car keys and details about your burial plot.  Your attorney will give you copies of your estate planning documents, such as your will, trust, documents relating to trust funding, powers of attorney, medical powers of attorney and so on.

In addition, you need to let your family know about the sources of your income. This type of information should include specifics about pensions, retirement accounts, 401(k), or you 403(b) plan.  Be sure to include company and contact, as well as the account number, date of payment, document location, and when/how received.

You also need to include all medicine and medical equipment used and the location of these items.

And then double check the locations of the following items: bank documents, titles and deeds, credit cards, tax returns, trust and power of attorney, mortgage and loan, personal documents, types of insurance – life, health, auto, home, etc. It’s wise to add account numbers and contact information.

Another area you may want to consider is creating a list of online passwords, in printed form, in a secure place for your family or loved ones to use to access and monitor accounts.

Be sure to keep your End of Life Checklist in a secure place, such as a safe or safety deposit box because it has sensitive and private information. Having it in one place will help your family when the time comes to act on your behalf.

Reference: In Maricopa (Feb. 14, 2020) “Make an end-of-life checklist”

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What Do We Know about Early-Onset Dementia?

There is an increase in early-onset dementia cases which presents unique issues for families. Consider early testing and long-term care insurance to help.

Rita Benezra Obeiter, 59, is a former pediatrician who was diagnosed several years ago with early-onset dementia, a rare form of the disease. When this occurs in people under age 65, the conditions cause additional and unique issues because they are so unexpected and because most of the potentially helpful programs and services are designed for and targeted to older people.

One issue is that doctors typically don’t look for the disease in younger patients. As a result, it can be months or even years before the right diagnosis is made and proper treatment can start.

WLNY’s recent article entitled “Some Health Care Facilities Say They’re Seeing More Cases Of Early-Onset Dementia Than Ever Before” reports that her husband Robert Obeiter left his job two years ago to care for her. She attends an adult day care, and aides help at home at night.

If Dementia is a generic term for diseases characterized by a decline in memory, language, and other thinking skills required to perform everyday activities, Alzheimer’s is the most common. The National Institute of Health reports that there’s approximately 200,000 Americans in their 40s, 50s, and early 60s with early onset Alzheimer’s.  These numbers have lead to the consideration of Alzheimer’s legislation.  See here.  https://galligan-law.com/elder-law-community-follows-proposed-new-alzheimers-legislation/ 

One conference discussed a rise in early dementia because of the processed foods and fertilizers or the other environmental hazards, and there are definitely some genes more associated with Alzheimer’s—more so with early onset.  There is no clear answer, and most of the treatments help to slow down the progression.

There is some research showing the Mediterranean diet can be protective, as well as doing cognitive exercises like crossword puzzles and Sudoku.

It’s true that no one can predict the future of their health, but there are ways financially that families can prepare for early-onset dementia. It can cost $150,000 a year or more. That’s why you should think about purchasing long term care insurance starting at the age of 40.  You should also have your estate plan reviewed well before memory becomes a significant issue to make sure the plan facilities long-term are planning.

Long-term health insurance can pay for an aide to come into your home, and it can pay for the cost of assisted living. And, remember that health insurance doesn’t cover long-term care, nor does Medicare.  Making sure you have a financial power of attorney prepared by an elder law attorney will provide your family with the flexibility they need to handle your financial needs, bills and so on.

If you are faced with this condition or have a family history of it, consider long-term care insurance early and make sure to review your estaet plan every few years to stay up to date.

Reference: WLNY (Feb. 12, 2020) “Some Health Care Facilities Say They’re Seeing More Cases Of Early-Onset Dementia Than Ever Before”

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Stretch IRA Alternatives under the SECURE Act

The SECURE Act reduces the amount of retirement assets left to most beneficiaries. Here are 3 stretch IRA alternatives to consider for your loved ones.

The majority of many people’s wealth is in their IRAs or retirement plans that are saved from a lifetime of work. Their goal is to leave their retirement plans to their children, says a recent article from Think Advisor titled “Three Replacements for Stretch IRAs.” The ability to distribute IRA wealth over years, and even decades, was eliminated with the passage of the SECURE Act.  This accelerates taxation and ultimately reduces wealth passed to beneficiaries.  As a result, clients are seeking stretch IRA alternatives.

Now, this blog won’t address all of the details of the SECURE Act, it is instead going to focus on what I’m calling stretch IRA alternatives as a way to pass more wealth to your beneficiaries under the new rules.  Mary Galligan from our office did an excellent webinar on the SECURE act itself as well as an overview which you can find here https://galligan-law.com/-the-secure-act-/  You can also review my past blogs on the topic here https://galligan-law.com/how-the-secure-act-impacts-your-estate-plan/.

That said, keep in mind that existing beneficiaries of stretch IRAs will not be affected by the change in the law. But for retirement plan holders who die January 1, 2020, most retirement plan beneficiaries, —with a few exceptions, including spousal beneficiaries for example—will have to take their withdrawals within a ten year period of time instead of over their life expectancy.

The estate planning legal and financial community is currently scrutinizing the law and looking for strategies will protect these large accounts from taxes. Here are three estate planning approaches that are emerging as front runners as stretch IRA alternatives.

Roth conversions. Traditional IRA owners who wished to leave their retirement assets to children may be passing on big tax burdens now that the stretch is gone, especially if beneficiaries themselves are high earners. An alternative is to convert regular IRAs to Roth IRAs and take the tax hit at the time of the conversion.

There is no guarantee that the Roth IRA will never be taxed, but tax rates right now are relatively low. If tax rates go up, it might make converting the Roth IRAs too expensive.

Life insurance. This is being widely touted as the answer to the loss of the stretch, but like all other methods, it needs to be viewed as part of the entire estate plan. Using distributions from an IRA to pay for a life insurance policy is not a new strategy.  It also assumes the retirement plan holder is insurable, which might not be true given their health and age.  Life insurance also works well with all variety of beneficiaries, including trusts for your loved ones.

Charitable Remainder Trusts (CRT). The IRA could be used to fund a charitable remainder trust.  A Charitable Remainder Trust allows the benefactor to establish an income stream for heirs with part of the IRA assets, with the remainder going to a named charity. The trust can grow assets tax free. There are two different ways to do this: a charitable remainder annuity trust, which distributes a fixed annual annuity and does not allow continued contributions, or a charitable remainder unitrust, which distributes a fixed percentage of the initial assets and does allow continued contributions.  This also also a potentially much longer stream of income to beneficiaries compared to a 10 year payout.

If you plan to leave retirement assets to your loved ones and want to maximize their legacy, please contact of office to schedule an appointment and discuss with your financial advisor about what options may work best in your unique situation.

Reference: Think Advisor (Jan. 24, 2020) “Three Replacements for Stretch IRAs”

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