Creating a Last Will and Testament is the foundation of any estate plan. While executing a Will is certainly essential, updating it is equally as important. As the saying goes “nothing stays the same.”  So how do you know when you need to update your existing Will? Although each person presents unique circumstances, there are some common events that warrant revisiting your Will, as well as any other estate planning tools you have in place.

Major life changes always warrant updating your Will. Although there are other events that may also warrant updating your Will, the top three major life changes that clearly require a Will update are marriage, divorce, or the birth of a child or grandchild. The reasons why are equally as apparent. If you get divorced, you likely do not want your ex-spouse to receive the bulk of your estate if you die. If, however, he or she remains a named beneficiary in your Will, that is precisely what is likely to happen. Likewise, if you get married yet fail to name your new spouse as a beneficiary, he or she may not be entitled to anything, depending on the laws of the state where you are a resident. Even if your spouse is entitled to something under state law, it may not be as much as you wished him or her to take from your estate. The birth of a child or grandchild is also a good reason to update your Will. Although the generic term “issue” is often used in a Will to refer to any children or grandchildren, it is best to name children or grandchildren by name in order to avoid confusion. In addition, if you did not have any children when you made your Will, you may not even have a generic provision for any future children, making an update essential.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

For many, a pet is much more than a pet, he or she is part of the family. According to the Humane Society of America, more than half of American families are home to at least one pet. Although dogs are the most popular pet followed closely by cats, there are an infinite number of other animals from birds to pigs that are kept as pets. Regardless of the type of animal that you have made part of your family, chances are that you wish to ensure that your pet will be well taken care of after you are gone.

Just as you make provisions in your estate plan for family members and loved ones, you can provide for your pet in the event of your death. Granted, your pet cannot manage his or her own money, but that can be accounted for as well with the creation of a pet trust. A pet trust operates in much the same manner as any other trust, except the beneficiary is an animal instead of a person. You will need to designate a trustee to oversee the trust as well as someone to handle the day to day care of your pet upon your death. While they can be the same person, they do not have to be. After that, you simply decide on the amount and type of assets you wish to use to fund the trust and your pet trust is created. By creating a pet trust, you can rest assured that your pet will be cared for after your death just as he or she was

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

If you have an elderly family member or loved one who has become incapable of caring for himself or herself, you may wish to step in and help make day to day decisions for your family member or loved one. Unfortunately, you may also have found out that having good intentions, or even being related to the person, is often not enough to allow you to make those decisions. Often, an appointment as guardian of the ward, or person who needs assistance, is required before you can help.

State laws determine when a guardianship is needed, how to petition for one and sets the limits of authority granted to a guardian. In addition, terminology may vary by state. As a general rule, a guardian has authority over the ward while a conservator has authority over the estate of the ward.

In order to become a guardian, you must file a petition for guardianship, or similar document, with the appropriate court. This is typically the probate court; however, it may vary by state or city within a state. After the petition is filed, anyone with an interest in the proceedings is entitled to be notified that the petition was filed, including the ward. The court will then schedule a hearing to determine two things — if the ward is legally in need of a guardian and, is so, whether you are an appropriate person to be appointed guardian. Given the importance of being appointed guardian, you may wish to consult with an elder law attorney once you see the need for appointment

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

The costs associated with long-term care are worth paying attention to if you are engaged in planning for the future. The MetLife Mature Market Institute survey tells us that a year in an assisted-living facility in the United States in 2010 averaged over $39,000. The same period of time residing in a private room in a nursing home would run you over $83,000 on average nationally.

According to the United States Department of Health and Human Services some 70% of senior citizens will someday need some form of long-term care, with 40% of them residing in a nursing home at some point in time. With the average nursing home stay being upwards of 2 1/2 years, you’re potentially looking at some pretty hefty end-of-life expenses. How do you meet these expenses?

Long-Term Care Insurance

The purchase of long-term care insurance can provide you with the peace of mind that you need, but it must be noted that this type of coverage is quite expensive. The younger you are when you obtain coverage the more affordable it is, and this is something to keep in mind when you’re making plans for the future.

Veterans A & A

Veterans of the United States armed forces who have served at least 90 days on active duty with a minimum of one of these days taking place during a time of war may be eligible to receive the Veterans Aid and Attendance pension. Single veterans who need assistance with their day-to-day personal needs can qualify for over $1600 per month.

Medicaid

Many people are surprised when they hear that Medicare does not cover long-term care expenses, but Medicaid does under certain circumstances. You must meet the financial need requirements, but when you consult with an estate planning attorney you’ll find that it is possible to qualify while still retaining ownership of a significant amount of your personal property.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

One of the things that you would do well to keep in mind when you are considering the subject of estate planning is the fact that things do not stand still. When you first arrange for a consultation with an estate planning attorney and walk out of the office with an estate plan in place you could get complacent, feeling as though you have satisfied this responsibility.

This is a mistake because that initial plan is going to have been devised based on your life as it stood on that day. Time marches on, and inevitably things change, both within your family and throughout the society as a whole and many of these changes have an effect on your estate plan.

With this in mind you would do well to recognize the fact that the estate tax parameters are scheduled to change in the beginning of 2013. Because of the passage of the piece of legislation that has come to be known as the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 the current maximum rate of the estate tax is 35% and the exclusion is $5 million. But this tax relief act is going to expire at the end of 2012. As the laws currently stand, the exclusion will go down to $1 million and the rate will rise to 55% at that time.

Legislative changes that would impact these parameters are certainly possible. But at the same time, right now there is a congressional committee in place that is devising a plan for reducing the federal debt by $1.5 trillion over the next decade. This is going to require spending cuts. Given this reality, pushing for further estate tax relief at a time when tough cuts are being made may be a difficult sell in some quarters.

It may be unrealistic to expect the typical layperson to stay on top of all of these intricacies. This is why it is a good idea to develop a relationship with an experienced estate planning attorney who will gain an understanding of your situation and let you know how to proceed in light of any changes that may take place.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

When you decide that you would like to go on a trip you are generally going to invest a good bit of time making preparations. Of course you want to identify your destination, and you will probably develop an itinerary. And if you are like a lot of people, you will consider all the contingencies that may arise and make sure that you are prepared to handle them.

Life itself can be viewed as a journey, and along these lines it is important to make preparations for all the eventualities of aging. You can’t say with certainty what the future will hold, but what you can do is become aware of the facts, understand the possibilities that lie in wait, and make the appropriate plans for addressing them.

One of the challenges that many people who reach an advanced age experience is that of mental and/or physical incapacity. Believe it or not, upwards of half of the people who are described in geriatric circles as the “oldest old,” those 85 years of age and up, are suffering from dementia. This is largely due to the ubiquity of Alzheimer’s disease. Dementia can make it impossible for its victims to make sound decisions regarding health care and financial matters.

To prepare yourself for this possibility it is advisable to execute durable powers of attorney. With these documents you empower representatives of your choosing to make medical and financial decisions for you in the  event of your incapacitation. Because of the fact that they are in fact “durable” they do remain in effect upon the incapacitation of the grantor, unlike standard powers of attorney.

If you do not have an incapacity plan in place a guardian that you did not choose yourself could be appointed to act in your behalf should you be deemed incapable of making your own decisions at some point in time. Most people would prefer to select their own decision-makers, and this is why capacity planning is so important.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

If you have recently suffered the loss of a parent, you may have a number of practical and legal questions regarding whether or not you need to probate your parent’s estate. When a decedent dies, many states require the estate assets to pass through a legal process known as probate. Which estates require probate, and which type of probate process is required, or available, will depend on a number of factors.

The most important factor in determining whether an estate must pass through probate is what state the decedent died in, or was a resident in at the time of death. Complications can arise right away regarding which state has jurisdiction in the event that the decedent owned property in more than one state. Once the issue of jurisdiction has been settled, however, the laws of the state with jurisdiction over the estate will dictate which probate procedures are required or available.

Typically, estates with significant assets, real property or where the decedent died intestate–or without leaving a valid Last Will and Testament — must go through formal probate. Formal probate can be lengthy, costly and complicated; however, assets of the estate cannot be transferred until the probate process has been completed through the appropriate court.

While a formal probate process is often required, many states also offer the option of a less formal small estate administration or small estate affidavit. If the decedent’s estate is valued at under a certain dollar amount, which varies by state, then a small estate administration or affidavit may be an option. In essence, both these options allow the estate assets to pass to the beneficiaries in a more rapid manner than a formal probate as well as avoid the often high costs associated with formal probate of an estate.

The only way to know for certain which probate process is required in your particular scenario if to contact an experienced probate attorney. Choosing the wrong process can cost you significant time and money as well as hold up the transfer of your parent’s assets.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

Unfortunately, many Americans are without much needed health care coverage. As a result, people often cannot afford preventative health care or treatment for serious medical conditions. If you are without health care coverage, the Medicaid program may be an option. Most people have heard of the Medicaid program, but many do not know how the program is administered, what it covers and how you may qualify.

Medicaid is a program that is funded by the federal government; however, the program is administered at the state level by the individual states. As a result, eligibility requirements may vary from one state to the next as will the extent of the coverage provided by the program. Although there are differences among the states, the program is intended to provide health care coverage for low-income individuals and families who would otherwise be without health care coverage.

There are various factors common among the states that go into a decision regarding eligibility for the Medicaid program. First, you must be a U.S. citizen or lawful non-citizen. Your child, however, may qualify even if you do not meet the citizenship test as long as he or she does. After that, your income and resources will be evaluated to determine whether your household is considered “low-income”. Income limits will vary among the states as well as within the various classes of Medicaid coverage. Some classes of applicants can qualify with higher income limits than others. Children, pregnant women and the elderly or disabled typically have higher income limits than able-bodied adults. Most states also have different eligibility guidelines for persons living in a nursing home or long-term care facility.

The services that are covered by the Medicaid program are usually similar to those covered by private insurance companies. The principle difference is that you must find a doctor or healthcare facility that accepts Medicaid. While coverage for adults may not include preventative services, coverage for children often does include preventative services as well as services for illness or injury. Medicaid may also cover a significant amount of the medical care involved in caring for an elderly or disabled individual who is residing in a long-term care facility.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

It is important to look at the big picture if you want to be prepared for each and every phase of your life. While it is true that we are all constantly dealing with the matters of the present, the wise person does this with an eye on the future.

If you plan on retiring at 65 you have to understand that you may well live for two decades or more after you stop working. It may seem like overstating the obvious, but you have to somehow finance this long stretch of time. As self-evident as this may appear, many people don’t get the idea until it is too late.

Recent polling indicates that 24% of baby boomers nearing retirement age have no savings at all, and 64% of them say that they will be relying on Social Security as the cornerstone of their income during retirement. In 2010 the average Social Security payout was $1,072 a month. Unless you have extremely low expenses this is simply not enough to live on comfortably.

The good news is that most workplaces that provide benefits offer 401(k) accounts that are intended to provide retirement income, and many times your employer will match your contributions. This matching contribution is nothing more or less than free money, so it is a good idea to contribute the maximum amount that your employer is willing to match.

From a tax perspective, the interest earned by your 401(k) account is not taxed, and your taxable income is reduced by the contributions that you make into the account each year. It should be noted that you can start to make withdrawals when you’re 59 1/2 years old, and these distributions are subject to income tax.

However, there is another type of 401(k) called a Roth 401(k) account. With these accounts your contributions are made after taxes, but withdrawals are not subject to income tax, and this is appealing to many people.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.

A lot of people feel challenged to meet all of their responsibilities in the present, so it is easy to understand why they may not want to think about planning for the future. However, this does not make it right. If you do want to retire at some point in time, you have to come up with some type of retirement plan that makes sense. Simply sitting idly by and expecting Social Security and Medicare to take care of everything when you reach the typical retirement age is going to leave you completely unprepared and you may never be able to retire.

As things stand on this day the average monthly Social Security check is not enough for most people to live on comfortably. And, Medicare does cover long-term care at all and there are out-of-pocket costs that must be paid on some of the services that are covered. You also have to consider the fact that we are in the throes of a federal budget crisis and cuts to these programs seem to be forthcoming.

Some people who want to take steps to be prepared for a comfortable retirement choose to serve in the armed forces. Veterans who have served for at least twenty years are entitled to a pension, and if you were to spend your entire career in the military your pension plus your Social Security benefits may be enough to provide you with enough income to live comfortably.

You could also choose to retire after twenty years and then start a new career as a civilian. The pension income could be set aside as a retirement fund and you could also contribute into the 401(k) plan at your new job. In this manner you could really put yourself in an advantageous position by the time you reach full retirement age as recognized by the Social Security Administration.

Purcell and Amen, Attorneys at Law – Your Estate Matters, LLC is a member of the American Academy of Estate Planning Attorneys.