When Your Will Isn’t Enough

When Your Will Isn’t Enough

Estate planning is near the top of the list of things we know we need to do but often put off. We dread thinking about the end of our lives. Regardless of how unpleasant it is, the end could come at any time, without warning. Therefore, it’s important to have all basic estate planning documents in place, like a will, medical directive and durable power of attorney. These basics are necessary, but it’s extremely helpful to your loved ones if you take it a step further and give them specific instructions that aren’t contained in your legal documents. (more…)

Not All Prepaid Funeral Arrangements Are the Same

Not All Prepaid Funeral Arrangements Are the Same

When someone passes away, their executor – usually their surviving spouse or child – must make funeral arrangements. This includes decisions around transporting the body, choosing a funeral home, arranging for a casket or cremation, and choosing a burial site. Importantly, they need to pay for each of these services along the way. This can be time consuming and stressful – all at a point when loved ones are already overwhelmed with grief.

Prepaid funerals, if purchased correctly, can help mitigate this burden. You pay up front, either in a lump sum or through a payment plan. Upon your passing, your family can contact the funeral company, who will take care of next steps.

Not all prepaid funeral arrangements are the same. Some options that seem to be good end up being bad decisions. Here are some questions to consider when evaluating prepaid funeral options. (more…)

Where to Store Your Legal Documents

Where to Store Your Legal Documents

After you meet with an attorney and have your estate planning documents prepared, you must decide where to store them so that your wishes are executed properly upon your passing.

Original Will vs. Holographic Will

The original will is the legal document that you signed; a holographic will is simply a handwritten will or a copy of the will that isn’t the original. Handwritten wills are only allowed in a few states, so it’s important to have the proper document.

If there’s a chance that family or friends might contest your will, then ensuring that the original will is accessible to the court is very important. While a copy of the will carries weight in court and can reinforce a claim, an original document is more likely to prevail if someone challenges your estate.

Where Should the Documents Be Stored?

Because the original will is such an important document, especially in the case of a contested estate, storing it in a safe place is paramount. There are a number of options for storage, each with its own benefits and drawbacks. (more…)

The Importance of Having a Will

The Importance of Having a Will

As Wealth Advisors, we provide advice on all aspects of your financial situation, and work with a network of carefully selected professionals in taxes, estate planning and insurance to devise appropriate solutions that will help you achieve your goals. This article is a collaboration between Merriman Advisor Geoff Curran and Evan Monez, attorney at Montgomery Purdue Blankinship & Austin PLLC, who is one such member of our professional network team.


 

Though we try to stave off the inevitable as long as we can, it’s a fact of life that eventually, everyone dies. When this occurs, the deceased person’s family, while still grieving their loss, must deal with the transfer of the decedent’s assets. If you don’t have estate planning documents in place when your time comes, the laws of the state you live in determine how your estate is distributed. This is especially complex if you have children under age 18, children from previous marriages, property in different states or an estate large enough to be subject to federal or state estate taxes.

With some advance planning, you can ensure your assets pass as you intend, with as little trouble as possible for your loved ones. This article discusses Washington State law, and the rules discussed here may differ in other states. Please consult a licensed attorney in your state to understand how your state laws apply to the concepts in this article. (more…)

Provide Support for Disabled Family Members with an ABLE Account

ABLE, short for Achieving a Better Life Experience Act, is a type of savings plan established in 2014 to provide support for those with disabilities. The accounts are similar to traditional 529 plans in that contributions can grow and be distributed tax-free for qualified expenses. The difference between a college savings 529 plan and an ABLE 529A savings plan is that ABLE funds can be withdrawn tax free to cover qualified disability expenses versus just qualified education expenses.

Does having assets in an ABLE account impact federal benefits?

Assets in an ABLE account won’t impact federal benefits unless the balance exceeds $100,000. Any excess beyond $100,000 in an ABLE account is considered personal assets, and once personal assets exceed $2,000 (such as in their checking account), Social Security benefits are suspended. This means that if assets in an ABLE account are $100,000 or more, plus checking or any other account surpass $102,000, Social Security benefits are halted. Social Security benefits resume once personal assets fall below $2,000 ($102,000 including $100,000 in ABLE account).

If you take distributions from your ABLE account for qualified housing-related expenses and retain them to be paid the following month (such as paying rent the following month), those distributions are countable resources for Social Security.

ABLE accounts do not impact Medicaid eligibility. However, upon the death of the recipient of aid, Medicaid can claim assets, such as those in an ABLE account, for payback. Outstanding qualified disability expenses, such as burial costs, receive priority over Medicaid claims. If Medicaid payback claims are greater than the remaining ABLE account, there is no further recourse against the disabled beneficiary’s other assets. (more…)

Demystifying the Stretch IRA

iStock_000066493583_XXXLargeStretch IRAs are useful tools for the individual who wants to extend the life of their retirement accounts through multiple generations. Although there is often confusion surrounding stretch IRAs and how they work, the concept is straightforward. A stretch IRA is a strategy, not a product, used to “stretch” the life of Roth IRA and Traditional IRA assets by designating beneficiaries with the longest life expectancy, such as grandchildren or even great grandchildren. By selecting beneficiaries two to three generations younger than the account owner, as opposed to designating children, the IRS will have lower imposed required minimum distributions (RMDs) for the inherited IRA, leaving a greater asset base to grow and cover future distributions.

To calculate the RMD for an inherited IRA (Table 1 – IRS Single Life Expectancy Table), divide the previous year-end account balance by the divisor (beneficiary’s life expectancy) corresponding to their respective age in the year following the death. This divisor is the IRS’s actuarial-based remaining life expectancy for the beneficiary, so each year, the divisor will decrease by 1, causing an increase in the percent of the account balance taken for the RMD.

The IRS provides a list of distribution options available to inherited IRA owners. Distribution options vary depending on whether the beneficiary was a spouse or non-spouse, and also whether the IRA owner passed away before their required beginning date (RBD), which is April 1 after they turn 70½. (more…)