Central Indiana Estate Planning & Elder Law

We recently visited with Traditions at Solana to talk about what makes them unique, this is what they had to say:

The Traditions at Solana community has a park like setting with peaceful waterfront surroundings and walking paths for the residents to enjoy.  The community has three levels of care including Independent Living, Assisted Living and Memory Care.  

Being a resident in the Independent Living Garden Homes at Traditions at Solana offers maintenance free living with access to all the amenities in the main building.  In addition, Traditions at Solana offers the Behavior-Based Ergonomics Therapy (BBET) to improve quality of life for residents with Alzheimer's and Dementia.  They have a licensed nurse on site 24 hours a day.  Traditions at Solana accepts private pay.

Residents enjoy a variety of activities such as arts and crafts, bingo, cooking, daily happy hour and musical entertainment.  Monthly outings are planned based on the interest of the residents such as a trip to the zoo, and fishing trips.  Transportation is available on Tuesday and Thursday for scheduled appointments, and also is available once a week for shopping trips.

Thank you for visiting with us and sharing how unique your company is!

I’ve Always Wanted A Sports Car!

Okay, maybe you have never wanted a new sports car—maybe you want a new, well, insert whatever that large ticket purchase you’ve always dreamed about into the sentence there. It doesn’t matter what that item is, we’ve probably all had those thoughts at some time, and your children likely have as well.

Perhaps during that daydream about making that purchase, you’ve pulled up your portfolio and looked at your bottom line. You say to yourself, “ah yes, I can afford it, I’ve got plenty of money in my retirement account.” Then you remember (or your financial advisor reminds you) that your retirement account consists of “qualified” (tax deferred) money; meaning—whatever you take out of the account will be treated as income and taxed accordingly to you. At that time, you make your decision accordingly.

Whatever decision you’ve made, you’ve made it after considering the income tax consequences. It’s your hard earned money. I find that people make better financial decisions when dealing with their own money (compared to decisions that some make when it comes to money they’ve inherited).

Now, to the main point…

Generally speaking, pensions are a thing of the past, and the most common retirement planning tools consist of various qualified retirement accounts. You (and if married, your spouse) are going to pass away at some point (sad, I know), and those you’ve named as beneficiaries on your qualified retirement accounts are now set to inherit (queue up slot machine jackpot music). Unfortunately, us human beings don’t always make the best financial decisions when grieving, so…

“I’ve always wanted a sports car. Dad always talked about them. I won’t get anything too extravagant, and he always bought ‘American made’ cars. I’ll get a Corvette!” Now the purchase has been completely justified. Son contacts the retirement plan company, quickly glances through the claim form and glosses over the income tax withholding section, signs on the dotted line, and the damage is done (an advisor, if there is one, will counsel against this, though that is sometimes futile).

At tax time the following year, son gets mail from the retirement plan company with “important tax documents enclosed” stamped on the front. Son finds out that after filing his tax return he owes the IRS a sizeable amount of money. “Man, the government sure knows how to stick it to ya…”

This, and many of the financial traps that inherited qualified retirement accounts present can, and should be avoided. Make sure these beneficiaries are aware of these traps. Concerned they don’t care? Plan around it!

It is very common for me to see families with the bulk of their assets in qualified retirement accounts. Planning to prevent a beneficiary from falling into this trap is easy. You can create a trust that is specifically designed to inherit qualified retirement proceeds, and direct your chosen trustee to distribute the funds to the beneficiary trust(s) as only you know best. You always have the option to set your beneficiaries up for success (or at least prevent failure).

Again, there are numerous issues that can arise when inheriting a qualified retirement account. My advice—discuss the plan for it with your attorney; discuss the process for inheriting it with your advisor; and, discuss the tax consequences with your CPA.

Off to the dealership, just kidding!

If you have questions about your estate planning we're offering a FREE educational workshop on Wednesday, March 21st at 3:30.  You can save a seat by RSVP'ing today here!

Kyle

We recently visited with Bickford of Carmel Senior Living to talk about what makes them unique...

The first Bickford was created to care for Mary Bickford, the most beloved family member.

Mary was a women of compassion, always there to lend a helping hand.  However, then something changed, Mary was diagnosed with Alzheimer's disease.  

The family started looking at available options that would give her the assistance she needed.  The family couldn't find a good fit for Mary, so they decided to build the first Bickford Branch, which became Mary's home.  

Bickford exists to enrich Happiness in the lives of the residents. Happiness is a very personal thing, so it has become their mission to discover what that is for every resident.

Bickford of Carmel offers Assisted Living & Memory Care.  They have sitting areas and living rooms for you to socialize in throughout the facility.  They offer a secure courtyard for you to enjoy the outdoors.  

They also offer complimentary weekly linen service, and they have a laundry room available for you to do your own laundry.  They have a whirlpool spa room available for residents to enjoy a warm bath safely and comfortably.

Residents at Bickford of Carmel can enjoy sing-a-longs, picnics, bingo games, poker tournaments, exercise classes to happy hours, church services, Bible studies, they have something for everyone.  

Transportation is available to physician visits, therapy sessions and other appointments. They offer community trips to local restaurants, historical and educational tours or even a shopping spree.

Thank you for having us Bickford of Carmel!

 

5 Reasons NOT to sign your house over to the kids!

We are often asked, “shouldn’t I just sign my house over to my son/daughter/kids?” The answer is almost always No. Why? There are many reasons:

1. If they own your house, they can sell your house. While it may seem unimaginable that anyone would put their own parent(s) out of their home, we cannot control events that may occur in the future. We simply don’t know what circumstances may arise. If such circumstances arise, and you are told that the house is for sale, you have no recourse because you transferred the property to another owner, and they have sole authority to sell that property. Retaining a “life estate” in the home at the time of transfer may help, but is an irrevocable decision (see discussion below).
2. If they get divorced, your house is at risk. The one thing you can always count on is that things change. That is true for all of us. No matter how strong our marriage may be (or appear to be), only the 2 people in the marriage really know. Your home, having been signed over to your child, will become a “marital asset” if that child later divorces. This means that there is a possibility that you could lose your home.
3. If they get sued or go bankrupt, your house is at risk. Your child may have financial issues of their own, and placing your home in their name adds it to their net worth. If the child files for bankruptcy, your home will be a part of that bankruptcy, and could be ordered sold or otherwise disposed as part of that process. Likewise, if your child is sued, and a judgment entered against them, your home will become a collectible asset to satisfy that judgment.
4. If they are irresponsible, your house is at risk. Signing your house over to someone else means that the house is now their asset. If they apply for credit (i.e. mortgage, credit cards, personal loans, etc.) your house is an asset that increases their net worth, and thus, their ability to borrow and obtain credit. If they later default on their credit due to the inflated value of their assets (caused by your home), your house is at risk in that default.
5. TAXES! You thought you were being generous when you signed the house over to the kids as a “gift”, but you may have caused them an unintended tax burden. Specifically, the capital gain tax that will apply when the house is ultimately sold. Consider this: You purchased your home for $45,000 some years ago (your “tax basis” is $45,000). The home is now valued at $100,000. If the house is sold, there will be capital gain of $55,000 – you enjoy a nice exemption from paying tax on this gain, so this is not typically an issue for the homeowner/resident. However, if you signed the house over to your child, and they later sell the home, they will have to pay capital gain tax on the $55,000 difference between the tax basis and the sale price. Contrast that with this: Same facts, but you don’t sign it over to them during your life. Rather, you child inherits your home at your death. Now, when the child sells the house for $100,000, they owe no capital gains tax because they received a “basis step-up” at your death. Their tax basis is the value of the home on the date of your death, rather than the amount you paid for the home. This can be significant, as the capital gain tax rate can be as high as 20% under the new tax law effective January 1, 2018.

There are other planning methods available to protect your home (and other assets) without necessity of giving everything away and hoping your children don’t blow it.

Seek advice from a qualified elder law attorney before transferring any assets so that you can discover the options available to you and make a fully informed decision. 

We can help!  If you have questions about this or anything estate or elder law related just complete this simple form and we'll be in touch and get you the answers you need!

We recently visited with Clearwater Commons to talk about what makes them unique. This is what they had to say:

 

The facility offers all day dining, the residents are not limited to 3 meals a day, and snacks are available all day. They have a wide selection of food available for every meal.  

Clearwater Commons offers 6 levels of care; independent senior living garden homes along with independent apartments, and assisted living apartments. They also offer rehabilitation services along with respite/short term stays for seniors with specialized needs.

Clearwater Commons facility includes restaurant-style dining, many daily planned activates, transportation to shopping along with social outings, wireless Internet, laundry and housekeeping, theatre, along with a library with computers.

Clearwater Commons offers a program called Lifestyle 360, this is an activity program that offers a variety of social and recreational programs designed to balance all areas of life such as spiritual, physical, intellectual, emotional, and social. Other activities at Clearwater Commons include Exercise groups, shopping at Kroger, and Wal-Mart, along with a Movie offered every day in the theatre, Card games, and Entertainment offered.

Transportation is available Monday through Friday, that will take you to scheduled Doctor Appointments. The residents can also enjoy outings to Happy Hours at places like Steak-N-Shake, and there are planned day trips to places such as Brown County, and local Casino’s.

Thank you for visiting with us and sharing how unique Clearwater Commons is!