Articles Posted in Asset Protection

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monopoly-capital-gains-tax-300x225Let’s face it, most families simply won’t have to worry a lick about the federal estate tax. That’s because about 99% of unmarried people don’t have an estate that exceeds $5.49 million. And more than 99% of married couples don’t have a combined estate of $10.98 million. So, for most families, have no worries about trying to avoid the 40% federal estate tax but fail to spot this unintended tax issue of the Capital Gains Tax.

But almost every family who engages in estate planning has assets that have appreciated in value. That means there is the potential for capital gains tax at the federal level when those appreciated assets are sold.

Example: Let’s say Dad bought stock in ABC Co. for $5 per share over the years. Now, that Dad is 76 years old, ABC Co. stock sells for $60 per share. That means that there is $55 of gain in each share of stock that Dad owns. If Dad sells the stock during his lifetime, he’ll get hit hard with a capital gains tax.

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We’ve talked to many Wisconsin families about things that they had done in an effort to protect their money from all being sucked up by the nursing home costs which can exceed $100,000 annually. Lots of mistakes are being made by people who don’t truly understand the intricacies of the Wisconsin Long Term Care Medicaid law and regulations. While you won’t get all the answers in this post, you’ll learn what some of the common mistakes are. So… here are options that just don’t work. Continue reading

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According to estimates, if you are 61 years old now, the average annual cost of long-term care when you are 79 years old is likely to be: 1) over $180,000 per year for nursing facility care; 2) over $69,000 per year for assisted living care; and, 3) over $80,000 per year for in-home care.

According to the US Government Administration on Aging, “70% of the people who turn 65 can expect to use some form of long-term care during their lifetimes.” Also, according to the Administration on Aging, “one-third of today’s 65 year-olds may never need support, but 20 percent will need it for longer than 5 years.”

So, based upon the skyrocketing costs of long-term care, and the odds that two-thirds of us may someday need long- term care, should we plan ahead? The answer is YES.

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When talking about families and inheritance, studies show that while financial assets are important, family values and family history take the driver’s seat. Most people treasure family stories and life lessons regardless of their age, financial situation, or race. A simple case would be comparing the reactions of siblings on two topics: a family legend or a new car. Chances are, the stories of the new car will stop after one month while the family stories will continue to be told and enjoyed for decades. This is because family stories, family values, and life lessons learned by members of the family are integral to its legacy.

safeDepositBoxA very recent study though shows that millennials think of inheritance as a “bonus” but expect to get that bonus – and are expecting large sums of up to $100,000. However, they are willing to lower that figure because many parents are already helping their adult children financially with student loans and other expenses.

An article published on www.Marketwatch.com reported that one in three Americans will “blow their inheritance” because they are not prepared to handle it. In fact, those who inherit money tend to spend it quickly and one-third end up with negative savings two years later.

Parents have a responsibility to teach their children money management so any windfall they get will be spent wisely. Inheritance, while a “bonus,” should not be just “fun money.” In today’s economy, a $1,000,000 inheritance does not even guarantee a comfortable retirement for a couple beyond their fifties. Continue reading

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Asset protection planning, no matter what anyone tells you, was never meant to be a tax avoidance tactic. Asset protection planning is a legal option for planning your wealth in advance of a claim or the threat of a claim.retirement trust

Asset protection planning is used to improve your bargaining position, make options available for settling claims, and avoid litigation – not to escape paying your taxes or debts or hiding your wealth from certain people.

And while there are some who insist asset protection planning is a form of cheating, this is only a perception because the truth is: There are some who try to use this option to cheat and lie, but it does not make it right and eventually they get caught.

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If you are a farmer or a rancher, you are hardworking and dedicated. Your farm or your ranch is more than just a way to make a living — it is your legacy. You have spent your life building something that you can be proud of and that you want to pass down to your children so that they can preserve what you have built and they can continue to provide for themselves and their families. Unfortunately, if you do not make an estate plan, your land and your assets may be liquidated cutting your legacy short and ending your family’s unique lifestyle choice.
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Estate planning is important for everyone but especially for those who own their own business such as farmers and ranchers. If you avoid making or updating an estate plan, your assets will be subject to state intestate laws. Instead of you deciding how your estate will be settled upon your death, the courts will make that decision for you. Below are three common estate planning mistakes farmers and ranchers make and how to avoid them.
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Using Bankruptcy to Protect Retirement Funds and Other Assets for SeniorsSeniors are facing several financial issues as they near retirement age — they are living longer and they are entering retirement with more debt. The financial crisis left many people struggling with debt. For those close to retirement, that debt may still be lingering. To make matters worse, seniors are entering retirement owing student debt and many owe substantial mortgage payments. For many seniors, the financial obligations result in working well beyond retirement age. For others, the debt is too overwhelming to handle on their own. They need a way to protect retirement funds while getting rid of the debt.

Using Retirement Funds to Pay Debts

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Facebook Legacy Contact - What Happens to my Facebook Account When I Die?Digital assets have become one of the leading problems in estate planning because attorneys are rushing to catch up with the technology and the laws governing who may have access to your online accounts once you pass. Most people now have multiple social media accounts that have a wealth of information they may want family and/or friends to have once they are gone. On the other hand, some people may have information in their social media accounts that they prefer to be deleted never to see the light of day by another person.

Therefore, in addition to providing for your family’s financial security, protecting your assets, and ensuring your assets are distributed according to your wishes, you must now consider what to do with your online social media accounts when you die. Facebook has made this a little easier for account holders.

Facebook Legacy Contact

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A Central Requirementold man

Health care has been the topic of discussion lately, but the greatest threat to your financial health is long-term care. This is the kind of care you need if you are not able to perform normal daily activities (such as eating, dressing, bathing and toileting) without help, and it is expected that you will need this help for an extended period of time, often for the rest of your life.

Long-term care is often needed due to aging, chronic illness or injury, and with people living longer, most of us will need it for at least some time before we die. But it is not just for the elderly—a good number of younger, working-age adults are currently receiving long-term care due to accident, illness or injury.

The Key Takeaways

  • The cost of long-term care is the greatest threat to your financial health.
  • Most of us will need long-term care for at least some time before we die.
  • It is better to assume you will need long-term care and plan for it than to just hope it doesn’t happen to you or a family member.

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Making Awkward Financial Discussions Easier for Everyone

Do you have someone in your life such as a spouse, a parent, your child or a close friend that is making unwise financial decisions that are destructive or unproductive? Most of us have someone like this in our lives. We want to help that person achieve financial well-being but we do not know where to begin. It may seem impossible to help them get on a good, solid financial track without appearing condescending or judgmental. It is not our intent to put our loved ones on the defensive or to make them feel inadequate but we cannot stand by and watch them continue to make their financial situation worse.

Two Key Financial Concepts You Need to Teachtools

If you can impart any financial wisdom to your loved ones, there are two key concepts you should try to teach them. Through these two concepts, you can help them understand wise money management and key financial principles.

Living within your financial means allows you to have more money for high-priority purchases and discretionary spending; and, Having discipline to correct your bad money behaviors and habits leads to financial security.

Learning to Live Within Your Financial Means Usually Corrects Bad Behavior
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