Got aging parents? It can be very important to have a conversation about end of life care. So few people understand the implications of their living will. They know they should have one, but very few understand why. Take a look at this article by Amy Florian.
Make sure to talk to your parents and ask for a copy. This topic has become so important that Medicare is now reimbursing doctors for talking with their clients about living wills.
A sample of the Five Wishes document that she references can be found here.
I heard an interesting case from an estate planning attorney this week. A client passed away and had both a credit card and checking account at the credit union. The checking account was joint with his wife (joint tenants with rights of survivorship) meaning that the moment the client died the cash in the account become the wife’s. With unsecured credit card’s, historically credit issues could only get their hands on money in your probate estate (meaning anything that is not owned JTWROS or does not have a beneficiary designation), but this credit union had written in the unsecured credit card agreement that they had the right to take any assets held by their institution.
So the client had $10k of credit card debt and $8k at the same credit union in a checking account. The credit union took the $8k in the checking account to pay down the credit card. So moral of the story…read your credit card agreement carefully or keep your bank accounts and credit accounts at different institutions.
If you turn on the news tonight, no doubt the top national story will be the year-end tax deal that the Obama Administration and Republican leaders have negotiated. While it is not yet final, the deal would extend the current tax rates (they were scheduled to go up next year) for another two years and extend unemployment benefits. Most importantly for many middle American families, the bill would increase the Alternative Minimum Tax (AMT) patch. This will keep millions of families from having to pay additional taxes.
This finally gives us more direction from an income tax standpoint and could potentially make the next couple of years great for Roth IRA conversions. If you have questions about if you should convert, please email me.
Finally, the tax bill would give us clear direction on the Federal Estate Tax (a tax that must be paid at ones death to transfer money to their heirs). It would increase the exemption amount to $5 million that could go to the next generation free of federal estate tax.
for more complete tax details, check out : http://blogs.wsj.com/washwire/2010/12/07/the-big-issue-the-cost-of-a-second-year-of-tax-cuts/
and for estate tax details: http://www.frumforum.com/the-estate-tax-rises-from-the-dead