As the baby boomer generation reaches retirement age some of the facts are emerging about their preparedness and the news is not especially encouraging. A recent AP-LifeGoesStrong.com poll suggests that most of the baby boomers who are approaching retirement age polled say that Social Security will represent the centerpiece of their retirement incomes.

In addition, nearly one fourth of the people who responded to the poll had no retirement savings at all, and the mean amount that poll respondents had saved for retirement was $40,000. In fact, over a third of the individuals who participated in the poll said that they would have to work after retirement to make ends meet.

Obviously the best way to approach retirement is to get started saving early on in your adult life. This is best done with the assistance of a retirement planning attorney who will work with you to map out a long-term strategy that leads to a comfortable retirement. But with this having been stated, there is another factor to consider when you are planning for your retirement beyond the accumulation of financial resources.

Exactly how high your expenses will be during your golden years and beyond is going to have a lot to do with how well your health holds up. If you live a stressful life, overtaxing yourself while you engage in an unhealthy lifestyle, the odds are that you will face health problems that could have been avoided had you made healthier lifestyle choices.

We are all well aware of the general benefits of good health, yet many of us are obese, and a lot of people have been lifelong smokers. If you recognize the fact that there are significant financial savings possible by doing all that you can to live a healthy lifestyle, that is just one more incentive that can lead to a higher quality of life all around.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

When you think about estate planning the financial aspects are probably going to occupy your mind. You must prepare all of the assets that you have been able to accumulate throughout your life for distribution to your loved ones, and this is indeed a formidable task. In a sense it is like the ultimate act of spring cleaning, identifying everything you have tucked away over many decades. And then you have to determine who will be getting what as it were and how best to deliver it.

But aside from the financial aspect, there is an emotional side to estate planning as well. Most people can come to terms with their own mortality as it applies to them personally, but it can feel empty to come to the realization that you will no longer be there for your loved ones. You will be leaving behind financial resources, but there are some things that money can’t buy and there is no substitute for the wisdom that you have acquired throughout your life via the many experiences that you have had.

People have felt this way for centuries, and one response that dates back to biblical times is the creation of an ethical will. These documents are not legally binding in any way; they are simply intended to pass on information to your loved ones that is of a personal nature. It can be instructive, sharing your ethical and spiritual values, but there are no hard and fast rules. The ethical will is a final letter to the ones that you love expressing whatever it is that you would like them to know.

In the long run, this type of heartfelt sharing may be the most valuable thing that you can leave behind to your family members. And in addition to the meaning it has to the readers, writing out an ethical will can also be a cathartic experience for the author.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

As you take stock of the different people that you will be leaving inheritances to you are likely to feel perfectly comfortable leaving a lump sum inheritance with no strings attached to some of your heirs. However, there may be others who have not yet made their mark in the world, and you may be concerned that leaving them too much too soon may do more harm than good. You may also have people on your list who have personal problems, or a history of poor money management.

One option that you may want to consider if you do want to place some conditions on an inheritance would be to create an incentive trust. You fund the trust, appoint a trustee and name your beneficiary, and when you are drawing it up you include stipulations that must be met before distributions from the trust will be made.

For example, you could state that monthly distributions will be made as long as the beneficiary remains a student in good standing at a college or university. You may add that a lump sum will be made available as a reward for every level of education completed. And you could then instill a work ethic in the beneficiary by allowing for a dollar-for dollar match out of the trust for each dollar earned on the job by the beneficiary.

You can also use an incentive trust to guide the beneficiary away from self destructive behavior. If you had an heir who had a substance abuse problem, for instance, you could require this individual to successfully complete a rehabilitation program and subsequently submit to substance testing before distributions will be made.

These are just a couple of hypothetical scenarios, but you can basically stipulate any condition you want met as long as it is not something that is illegal.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

One of the things you have to be aware of when you are planning your estate is the threat of asset erosion due to the estate tax. Some people assume that they can simply give away their assets as gifts before they pass away to avoid the estate tax, but there is a gift tax in place with a rate that mirrors the estate tax. There is a $5 million gift tax exemption, but because the gift and the estate taxes are unified the exemption is unified. As a result, if you used your $5 million exemption giving tax-free gifts all of your estate would be subject to the estate tax.

So you have to employ tax efficiency strategies wherever possible, and one of these would be the “zeroed out” GRAT strategy. GRAT is the acronym that stands for grantor retained annuity trust, and with these vehicles you receive ongoing annuity payments for a period of time that you specify upon creation of the trust. You name a beneficiary who would assume ownership of any remainder that may exist.

The initial act of funding the trust constitutes a taxable gift, and the IRS will account for anticipated interest using 120% of the federal mid-term rate. But, its taxable value will be reduced by your retained interest. The objective here is to zero out the GRAT, so you arrange for your annuity payments to equal the entire value of the trust.

When funding the trust you want to use securities that you would expect to appreciate significantly over the term of the trust. If the securities earn more than the original IRS estimate using 120% of the mid-term rate, there will be a remainder when the trust term expires. This remainder will be transferred to your beneficiary and it will not be subject to the gift tax.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

If you’ve been thinking about starting your estate plan, you may be trying to choose between the use of a will or trust.  They share similarities and have differences as well.

This guide will help you better understand each estate plan device.  If you have additional questions about wills or trusts, speak with a qualified estate planning attorney.

Wills and trusts allow you to choose how your assets are distributed to beneficiaries.

Wills and trusts allow you to appoint a trusted helper who is responsible for managing and distributing your assets.

Wills and trusts can help you accomplish many of your estate planning goals.

Wills and trusts can allow you to plan for tax savings.

Wills are only effective after your death.

Trusts can take effect during your lifetime.

Assets in trusts are able to avoid the process of probate.

Assets controlled by wills are subject to probate, which can be extremely costly.�
The contents of wills become public knowledge during the probate process.

The contents of trusts are kept private.

Simple Wills are less costly to prepare and generally are easier to complete.

Trusts are generally more expensive to prepare and generally take longer to complete.

Wills allow you to appoint a guardian for the care of your minor children.

Using wills means that it will generally take a long time (i.e. months or even years) for your beneficiaries to receive your assets.

Trusts allow you to pass your assets to your beneficiaries more quickly.

Wills and trusts are both beneficial estate planning tools.  Many people would benefit from having both a will and a trust.  It’s important to have an estate plan in place so that you maintain control.

To better understand your options, talk with your estate planning attorney about your individual needs.  Your attorney can create a personalized plan.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

When you’re beginning your estate plan, you may have questions about how the entire process will work.  It’s important to note that estate planning is not something that can be done overnight.  You will work alongside an estate planning attorney to create a plan that fits all of your estate planning needs.

Take a look at the information below to learn what to expect during the creation of your estate plan.

• Before starting your planning, your attorney will give you several planning sheets that you will fill out.  These worksheets will help your attorney better understand your goals as well as your financial and family situation.  It’s important to be honest when answering questions because this will help to create the best plan possible.
• Your estate planning attorney will also meet with you to discuss the information that you have outlined.  You will likely need to expand upon certain desires and goals.  Your attorney will want to make sure that he or she fully understands all of your needs before creating your plan.
• You and your attorney will decide on the best estate plan options that fit your needs.  This will include the type of estate planning documents that will be used and how you will go about your individual planning.  Your estate planning attorney will then create your plan.
• Your attorney will have you review and sign all of your documents.  Your documents will be fully explained before you sign them so that you know you’re making the right decision.  If you have any questions about your estate plan, it’s important to communicate with your attorney.
• Once your planning is complete, it’s important not to forget about it.  Not only should you tell your loved ones that you’ve done your planning, but you should also remember to update your plan as needed.

Everyone should update his or her plan every 3 to 5 years.  If you experience significant life changes, you may need to update sooner. If you’re unsure, speak with your attorney to see how the changes in your life may impact your overall planning.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

A financial power of attorney or power of attorney for healthcare can be an extremely beneficial addition to your estate plan.  Both of these documents can make a big difference in your life, if you’re ever unable to make your own decisions.

Not having a power of attorney has risks.  Take a look at some of the information below to learn more about the importance of a power of attorney.  If you become incapacitated risks are realized:

• Without a financial power of attorney, your family will have to go to court in order to get the legal authority needed to access your bank accounts and other financial information.  This can make it extremely difficult and time consuming to pay your bills and expenses.
• During the court process, your bills may go unpaid and your family may not be able to get the money that you need for your care.
• Without a power of attorney for healthcare, your family will have to go to court in order to get the legal authority needed to help make your important medical decisions regarding treatment and procedures.   This can be an extremely lengthy and costly process.
• If you don’t have a power of attorney for healthcare, you may have no control over your healthcare decisions.   This means that your wishes may not be followed.

If you have yet to create a power of attorney, now is the time to do so.  Taking the time to create both a power of attorney for healthcare and financial power of attorney can allow you to be prepared for an emergency situation.

It’s also important to make sure that your loved ones know that these documents exist! Without knowledge of a legal document’s location, it may be ineffective.

If you have additional questions or if you’d like to create a power of attorney, consult with an estate planning attorney.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

People who are planning for the future have a lot of important decisions to make, and if you are going to use a last will to transfer your assets one of these decisions will involve the selection of an executor or personal representative. Stating your wishes in writing is one thing, but there are hands-on tasks involved in carrying them out. This is the job of the executor.

Some people think about the role of executor as someone who breaks the news to the family regarding the wishes of the deceased. This is only a small part of it, so you should not select your executor based solely on how close you are to this individual. Your estate is going to have to pass through the process of probate if you use a last will, and during this period final bills (including taxes) must be paid and the assets must be prepared for distribution to the heirs. Property may have to be liquidated, and this can require appraisals.

There is a lot to accomplish, and it requires a certain amount of business savvy to get all these things done. Depending on the size and scope of your estate this administration can be time-consuming as well, so you have to make sure that your executor has the available time that it will take to carry out all of these responsibilities.

In addition, a comprehensive plan for aging is going to include an incapacity component. This too requires the selection of representatives. Most people will execute a durable medical power of attorney naming someone to make health care decisions in their behalf should they become incapacitated. In addition, a durable financial power of attorney is necessary as well, and with this document you empower an individual of your choosing to handle your financial affairs in the event of your incapacitation. Clearly, you must choose wisely when selecting these representatives given the stakes involved.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

A will is an important estate planning document.  Before creating a will, it’s important to take the time to understand what a will can and can’t do.

To learn more about how a will can help you achieve your estate planning goals, take a look at some of the facts below.  If you want to create a will, meet with an estate planning attorney.

What can a will do?

• Creating a will allows you to name an executor who will be responsible for handling your estate’s affairs.  This includes gathering, protecting, managing, and distributing your assets as well as handling finals bills, taxes, and miscellaneous administrative tasks.
• You’re able to appoint a guardian (and an alternate guardian) for the care of your minor children.
• You can list those who you wish to receive your assets.
• With your will, you can decide what assets will be given to each beneficiary.
• You can forgive debt.
• You can leave conditional gifts, such as “I leave $5,000 to my grandson Billy, if he graduates college by the time I die.”

What can’t a will do?

• You can’t leave some types of conditional gifts.  For example, “I leave $20,000 to my daughter Suzie, if she divorces her husband.”

• With your will, you’re unable to enforce penalties for anyone who decides to contest your will’s contents.

• Your will cannot control assets that automatically transfer after your death.  This includes retirement accounts, pay on death accounts, and life insurance policies as well as jointly owned assets.

• While you’re able to include your funeral instructions, it’s not recommended because your will may not be read for a significant period of time until after your death.

If you have additional questions about how a will can help you, consult with a qualified estate planning attorney.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.

Are you thinking about starting your estate planning?  If so, there are many estate planning documents that you will want to consider adding to your plan.  With the right documents in place, you can prepare yourself for the future.  If you have any questions about the use of these documents, or if you’d like to begin your estate planning, meet with an estate planning attorney.

Living will

This document allows you to spell out your medical wishes.  This includes the types of medical treatment that you consent to at the very end of life.  You may also include your wishes regarding life support.  If you want your wishes to be followed, then you need a living will.

Healthcare power of attorney

If you want someone to be able to make important medical decisions in your time of need, you need a healthcare power of attorney.  With this document, you will appoint an agent who will help to make sure that you receive proper care and treatment.

Financial power of attorney

If you ever become seriously ill (i.e. incapacitated), you will still need access to your assets.  With a financial power of attorney, you can appoint an agent who will be responsible for managing your financial affairs.  This includes paying your bills, accessing the money that you need, filing and paying your taxes, and more.

Will

Your will is a document that helps to decide how affairs will be handled after your death.  In this document, you can appoint an executor who will help to manage your estate affairs, outline your wishes on how your assets will be distributed to your beneficiaries, and appoint a guardian for the care of your minor children.  A will is one of the most important legal documents that no one should go without!

Talk with an estate planning attorney to discuss the  estate planning documents you need.

Kuhn & Kuhn Law Firm is a member of the American Academy of Estate Planning Attorneys.