When you reach retirement age, money can be a sacred thing, so you must spend it wisely. Savings of any kind are always welcomed, especially when it comes in the form of tax breaks. Here are some tax deductions to help make your retirement a bit richer:

Medical Costs. Did you know that almost all out-of-pocket medical expenses are tax deductible? Notate all of your health insurance premiums, nursing home costs, at-home long-term care, and even prescription drugs. You can deduct these items up to a certain amount when you file your taxes.

House Sales. Do you plan to sell your home and move into a condominium or a smaller house? Many retirees make this choice when their children have married and moved away. If you have owned your home for years or even decades, there is a good chance it is worth much more than you paid for it. As long you remain in your home for two years out of the five years before you sell it, and if your profit is less than 250,000, 500,000 for married couples, you may not have to pay taxes on your house profit.

Investment Expense. Investing is an important part of every strong retirement plan. But did you know that you can write off most investment expenses? These expenses include investment planning advice from your financial planner, equipment such as your home computer if used for investing, fees paid to any individual or institution in order to collect investment monies ,and fees for attorneys or accounting firms that assist you with investment legal or financial advice.

Business Expenses. Many retirees decide to open their own business. Business expenses are deductible as long as they are reasonable. You can deduct your equipment costs, travel costs, and cost of your business location, whether a home office or a storefront.

Donations. Giving is a great way to save money. You can give up to 50% of your yearly income and receive a tax deduction on it. You can also receive deductions for property you donate as well. This great deduction option allows many retirees to give back to their community or a beloved c charity, while still keeping their retirement savings intact.

Standard deductions. If you choose not to itemize your deductions, when you reach the age of 65, you will be eligible for a standard deduction higher than before. For single individuals over 65, the current standard deduction provides an additional 1,250. For married couples it is 2,000 total. A married couple can collect the extra amount for both spouses even if only one is over 65.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

One of the documents you’ll likely sign while putting together your estate plan is a Durable Power of Attorney. This is the document with which you’ll appoint an Attorney In Fact to handle your finances in the event that you’re unable to do it yourself.

While an Attorney In Fact can be a godsend, managing your finances, paying your bills, signing legal document for you and helping you avoid the need for a guardian or conservator, you’ll want to be careful who you appoint.

The person you choose will have a great deal of power over your legal and financial affairs. Poor decision making or dishonesty on the part of your Attorney In Fact can result in a financial nightmare for you. So, what qualities should you look for?

• Age. While, legally, a person only has to have reached the age of majority to serve in this position, it’s a good idea to choose someone who has demonstrated that they’re financially responsible.
• Financial Acumen. While your Attorney In Fact doesn’t need to be a CPA, it’s a good idea to choose someone who has handled his or her own finances responsibly – and who has demonstrated the ability to handle financial affairs at least as complicated as yours.
• Organizational Skills. You want someone who will be able to keep track of all of your bills and paperwork, and know what’s going on with your financial and legal affairs at any given moment.
• Diligence. Choose someone who will take the time necessary to make the right decisions on your behalf, whether this means doing a little fact-finding or consulting with an expert.
• Trustworthiness. Most importantly, you want someone you can trust implicitly. The purpose of appointing an Attorney In Fact is to have someone there to watch out for you when you can’t do it yourself. Choose carefully and trust your instincts.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

Regardless of the type of life insurance policy you may have, you have the right to choose who you want to benefit from the policy’s proceeds. Known as the beneficiaries, you also have the right to change this designation at any time, but to do so, you’ll need to make the change on the policy itself – amendments to your Will or trust can’t alter the policy document.

Common reasons for updating life insurance beneficiaries include:

• A birth or adoption
• A death in the family
• Divorce
• Marriage
• Name changes
• Address and telephone number changes

Changing basic information, such as your name or address is fairly simple.Simply contact your agent or life insurance company and ask for the appropriate forms to make the change. Some companies may even allow you request this type of change online.

If you need to update the beneficiaries, you’ll need all the pertinent information, including the beneficiary’s name, address, contact number, social security number and your relationship with him/her.

The form will need to be signed and witnessed – in most cases, this will have to be done in front of a notary.

Be sure to keep a copy for yourself and file it along with the original policy. Also be sure to follow up with the insurance company to be sure that the form was received and the changes are made. You should receive an amended policy once the changes are completed.

If your original beneficiaries were aware they were named on your policy, you’ll need to notify them of any changes to avoid family disputes later on.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

If you have individual bank accounts and fail to make a Will, your accounts, along with the other assets in your estate, will go through a probate process after your demise. If you want to prevent your bank accounts from going through a probate, you can choose to convert your individual accounts into joint accounts.

Using Joint Account to Avoid Probate

In a joint account, you can simply name your loved one as the joint owner of that account. After your death, the ownership of assets in the account is transferred to the joint account holder, without the need for an order from a probate judge.

If you have named more than one joint holder of your account, the bank would simply remove your name from the list of owners of the account, after your death.

There are, however a few disadvantages of using this method:

• If you add a person’s name to your account and that person does not make any contribution, then your portion of the account, when transferred to the name of the joint holder at the time of your death, is considered as a gift. If the value of this gift is higher than the maximum amount excluded from gift tax, your beneficiary will need to report the gift to the IRS.
• If you have added more than one name to your account, and if any one of the joint owners faces a lawsuit, the entire funds in the joint account could be at risk.
• If you have named a minor as the joint holder of your account, the account will be handled by a guardian or conservator, who will be constantly supervised by a court so that the minor’s interests are taken care of.
• The joint owner of your account can start using the money even in your lifetime, which may not be acceptable to you.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

As we age, we all face the risk of being put under a legal guardianship or conservatorship. This happens when a court decides that you can’t manage your personal or financial needs on your own.

A guardian is responsible for making sure your physical needs are taken care of if you’re unable to take care of yourself. A conservator manages your finances and assets if you can’t do it on your own. Often, if you need a guardian, one person will act as both guardian and conservator, taking care of both your financial and physical needs.

Guardians are not just appointed for elderly people. For example, if you were in injured in an accident and were unable to make decisions for yourself, a guardian might be appointed to act for you until you recovered enough to start managing your own care.

Here are the nuts and bolts of the appointment process:

1. If you become mentally or physically disabled, the person who wants to be your guardian – generally a family member or friend – files a petition with the court, attaching documentation that shows you can’t care for your own needs.
2. The court will appoint a guardian ad litem to evaluate the case and report back with their findings. The evaluation may include talking with you, as well as with medical personnel.
3. If you are capable of saying what you want and you oppose the appointment of a guardian, the case must go to trial, where you can formally argue your side. If you’re unable to respond due to disability, the judge will still order a hearing where evidence can be presented, along with witness testimony.
4. After considering all the evidence, the judge will decide whether to appoint the guardian.

A guardianship can only be terminated by court order, upon your death, or if the guardian resigns. In cases where the guardian resigns, another guardian is appointed.

A good estate plan can help you avoid the court appointment of a guardian you don’t want. Estate planning tools like a Revocable Living Trust or a durable power of attorney for healthcare let you have some control over who takes care of you if you can’t care for yourself.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

Although having a Will is an important element of estate planning, there are simply some issues that it cannot cover.

The Types of Property Not Covered in a Will

You cannot leave property to someone using your Will if that property is held in joint tendency with someone else. This would include property owned jointly through tendency by entirety, or community property with right of survivorship.

A Will also does not cover property that you have in a trust, as well as any life insurance benefits where a beneficiary has already been declared. It will also not cover 401k or IRA funds, as well as stocks and bonds. The change in beneficiary will have do be done through the broker by changing the person that is named on the forms.

Funeral Arrangements

It is not a good idea to leave instructions that you want carried out for your funeral arrangements. The reason that putting this in a Will is a bad idea is that it is likely that your Last Will and Testament will not even be read until after your funeral. It is best to create a separate document for this, and make sure that someone knows how to find this document.

Some other areas that are not really covered through a Will include leaving money to pets. There is no way for a pet to inherit (they are considered to be property) and a Will won’t change this. It is better to leave your pet to someone who will care for it, and then leave money to that person. You also should not use your Will to provide for a loved one with special needs as this could affect their eligibility for government assistance programs. A better way would be to create a Special Needs Trust.

It is also difficult to put restrictions on someone’s inheritance, as this is difficult to enforce.

Wills are very important and can accomplish many things when it comes to estate planning, but a Will cannot cover everything. This is one the reasons why you need more than just a Will to ensure that you have a solid estate plan that will protect your family after your death.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

When someone passes away, their property must be distributed to their heirs. There are a few different ways to do this, two of which (Will and dying intestate) require your property to go through the courts. This is known as probate.

Now, because probate is handled on a state by state basis, any property held outside the state of residence will require a separate probate hearing, known as Ancillary Probate. The type of property that can go into ancillary probate includes real estate, as well as any other tangible property located and registered in another state.

It’s not uncommon for example, to own a vacation home or rental property in another state. Many people also own other property as well, including automobiles, boats and even just raw land. Because of this, ancillary probate is becoming much more common and unless you have taken steps to avoid this secondary probate, your loved ones will face not one but two probate hearings when you pass away .

The action you take to protect your out of state property will depend a lot on your particular situation, and who it is that you want to receive this property. To avoid ancillary probate with your out of state property there are some steps you can take.

Married Couples – People that are married can easily avoid ancillary probate by simply ensuring that the property is deeded to both spouses. One spouse will inherit the property by right of survivorship. The main problem with this is that if both spouses were to die at the same time in an accident, the property would then go into ancillary probate. This is also true in the case where the surviving spouse passes away at a later time, unless an estate plan has been put into place to prevent this from happening.

Joint Deed With Other Beneficiaries – Another approach to keeping your out of state property out of ancillary probate is to add the beneficiary of your choice to the deed, along with yourself, but keep in mind that it may also be necessary to include right of survivorship with the deed. This is the approach you would take if you are not married, or if you want someone to inherit the property other than your spouse, but there are several problems to this approach. One is that you may lose some tax benefits by adding someone else to the deed, plus if that person were to become involved in a lawsuit, a lean could be put against the property.

The Revocable Living Trust – No matter what your personal situation is, in most cases the easiest way to ensure that your out of state property does not go into ancillary probate is to deed it to your Revocable Living Trust. With this type of trust your property can go directly from the trust to your chosen beneficiaries, without the problems of going through ancillary probate.

If you own property outside of your home state, estate planning is essential to ensure that your heirs receive your property after you die. By far the best choice to ensure that your property goes directly to your chosen heirs is through an estate plan that includes a Revocable Living Trust.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

Asset protection is a process that protects protecting your assets from third-party claims such as from creditors and lawsuits. It typically involves taking account of the assets you have, setting out your future goals, and then placing assets in a position to help achieve these goals.

Asset protection can also include planning ahead for different scenarios. For example, if you’re incapacitated or die, nominating your beneficiaries and who’ll manage and distribute your assets beforehand is vital. This might involve naming or transferring assets into a will, trust or company. Many individuals also use asset protection strategies to avoid the probate process. Trusts can often be the preferred option, as probate can be long, drawn out and expensive. One of the most common reasons for wanting to avoid probate is because your intended beneficiaries might not end up with assets as per your wishes.

Asset protection in estate planning is a legal process. If plans aren’t carried out according to legal stipulations, assets can become unprotected. Individuals also need to get it right; otherwise, assets could be liable to fraud and mismanagement.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

A trust is designed primarily to assist with transferring and retitling of assets. Trusts can be managed by a person, group or firm, known as the Trustee. Upon death, the assets in a trust are distributed to beneficiaries according to your wishes. The party responsible for the trust also makes financial decisions about the assets in the trust.

A living trust refers to a trust that is set up while you are alive, instead of after you’ve passed on. Depending on how you structure the trust, you can maintain control of the assets and continue to benefit from any income generated from those assets.

When you set up a living trust, you must name a beneficiary and in many cases, the person you choose to manage the trust and benefit from the assets is actually yourself. A successor trustee is also named to take over the management of the trust when you pass on or if you become incapacitated.

Setting up a living trust provides offers a number of benefits including minimizing taxes and avoiding probate upon your death. It is however, a legal process that can be very complex. Naming beneficiaries and protecting your property upon death are extremely important decisions and as such, should be done with the help of a good estate planning attorney.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.

If you’re just getting started in the estate planning process, you may be wondering what all the lingo means. Like any legal field, estate planning has a number of terms that help define the players in the estate planning process. Understanding those terms will help you create a plan that’s right for you.

Here are some basic terms relating to Estate Planning:

Probate – This is the legal process that oversees the settlement of an Estate after the owner’s death. The Probate process includes payments to creditors, payments of taxes, protection of assets to be given to beneficiaries and the like. There are ways to minimize those taxes and even avoid probate altogether. Talk to your estate planning attorney to discuss your options.

Beneficiaries – These are the people who will inherit your assets and belongings – whether it’s a big financial gift or the family scrapbook – after your death.

Fiduciaries – These are the people you name in your Will who would be responsible for handling various aspects of your Probate process. For example, a fiduciary would be responsible for seeing that benefits of a particular bank account go to your minor children after you pass on.

Will – A Will is a legally binding document that details how your estate should be distributed after you die. A Will is considered a key component of your Estate Plan.

Trustees – Like a Will, a trust can distribute your assets after you pass but it also offers several benefits that a Will does not. A trust can keep your estate out of probate, it can minimize the taxes your heirs would have to pay and it can also allow you to set up incentives and encourage personal growth among your heirs. The person you appoint to oversee your trust is called a Trustee. Trustees are often family members but they can also be an attorney, a bank or similar institution.

The Bonfrisco Law Firm is a member of the American Academy of Estate Planning Attorneys.