Estate Planning – Carrier Law https://davidcarrierlaw.itulwebdev.com Michigan Estate Planning & Elder Law Attorneys Fri, 05 Jun 2020 23:27:53 +0000 en-US hourly 1 https://wordpress.org/?v=6.1.1 https://davidcarrierlaw.itulwebdev.com/wp-content/uploads/2018/08/cropped-carrier-site-icon-082018-32x32.png Estate Planning – Carrier Law https://davidcarrierlaw.itulwebdev.com 32 32 How to Document Your Wishes https://davidcarrierlaw.itulwebdev.com/document-your-wishes https://davidcarrierlaw.itulwebdev.com/document-your-wishes#respond Tue, 31 Mar 2020 14:43:57 +0000 https://davidcarrierlaw.itulwebdev.com/?p=103926 During these uncertain times, many are rushing to document their wishes. Here are three free documents to help you do so.

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During these uncertain times, many are rushing to document their wishes. Here are three free documents from Carrier Law to help you do so.

Care Directive Questionnaire

Also known as an “Advance Directive” or “Living Will”, this document outlines your wishes for decisions around your care, burial, and funeral.

Funeral Representative Designation

This document designates a representative to make decisions about your funeral arrangements after your death.

HIPAA Form

This document designates who you would like to have access to your medical records, billing records, and any other information protected by the Health Insurance Portability and Accountability Act.

Please note that the above documents do not act in place of power of attorney documents for medical or financial decisions, nor do they give rise to an attorney-client relationship. Power of attorney documents are perhaps the most critical documents to protect you and your family, and avoid probate court in a time of crisis. They should be drafted by an experienced Estate Planning attorney. 

To set up a phone call or video conference to discuss legal questions or to create your power of attorney documents, call us at (800) 317-2812 or email us at david@davidcarrierlaw.com.

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Critical Documents to Have in Place https://davidcarrierlaw.itulwebdev.com/critical-documents-to-have-in-place https://davidcarrierlaw.itulwebdev.com/critical-documents-to-have-in-place#respond Tue, 31 Mar 2020 01:13:27 +0000 https://davidcarrierlaw.itulwebdev.com/?p=103907 Now more than ever, it's important for anyone 18 or older to have proper medical and financial power of attorney documents in place.

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Now more than ever, it’s important for anyone 18 or older to have the proper medical and financial power of attorney documents in place.

These documents ensure that you can act on behalf of a loved one, and that a loved one can act on behalf of you. If these are not in place in the event of an emergency, a probate court order may be required to give authorization, and many courts are currently closed or limiting access due to COVID-19.

An excerpt from another attorney asking for advice:

“I just received a call from a client. Mom and Dad both have Coronavirus. Ambulance took Dad to Henry Ford Hospital; advised Mom to stay home because she could still walk. Dad has dementia and is understandably out of sorts and unable to answer basic questions for hospital staff. Hospital won’t permit family to visit, of course, and are only communicating with family on an emergency basis (i.e. when they thought they were going to lose Dad earlier today).

Dad has a POA, but no Health Care POA. Hospital advised family to secure a guardianship for Dad. I cannot reach Macomb County Probate Court.”

If you need power of attorney documents, we can help.

During these challenging times, we still have the capability to draft documents – including Health Care and Financial Power of Attorney documents – and have them properly signed, witnessed, and notarized in a safe, controlled environment.

To set up a phone call or video conference to create your power of attorney documents, call us at (800) 317-2812 or email us at david@davidcarrierlaw.com.

 

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Why You Need a Health Care Power Of Attorney https://davidcarrierlaw.itulwebdev.com/why-you-need-a-health-care-power-of-attorney https://davidcarrierlaw.itulwebdev.com/why-you-need-a-health-care-power-of-attorney#respond Fri, 27 Mar 2020 12:10:09 +0000 https://davidcarrierlaw.itulwebdev.com/?p=103719 If you do not have a Health Care POA in place, your family must go to court to secure guardianship to make decisions on your behalf.

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The most important legal document you can have right now is a Health Care Power of Attorney.

An excerpt from another attorney asking for advice:

“I just received a call from a client. Mom and Dad both have Coronavirus. Ambulance took Dad to Henry Ford Hospital; advised Mom to stay home because she could still walk. Dad has dementia and is understandably out of sorts and unable to answer basic questions for hospital staff. Hospital won’t permit family to visit, of course, and are only communicating with family on an emergency basis (i.e. when they thought they were going to lose Dad earlier today).

Dad has a POA, but no Health Care POA. Hospital advised family to secure a guardianship for Dad. I cannot reach Macomb County Probate Court.”

If you do not have a Health Care POA in place, your family must go to court to secure guardianship to make decisions on your behalf. During the COVID-19 crisis, many courts are closed or operating on a limited capacity.

 

If you would like to create or update powers of attorney, call us at (800) 317-2812 or respond to this email to schedule a phone or video conference.

 

If you have any other questions or concerns, please don’t hesitate to contact us.

 

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COVID-19 Updates https://davidcarrierlaw.itulwebdev.com/covid-19-updates https://davidcarrierlaw.itulwebdev.com/covid-19-updates#respond Wed, 25 Mar 2020 23:53:48 +0000 https://davidcarrierlaw.itulwebdev.com/?p=103665 In light of Governor Whitmer's executive order to stay at home, our offices are closed and we will not be conducting routine in-person meetings or workshops through April 13.

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March 25, 2020

In light of Governor Whitmer’s executive order 2020-21 (COVID-19) to stay at home, our offices are closed and we will not be conducting routine in-person meetings or workshops through April 13.

However, we want to reassure you that the Carrier Law team is still here to support youDuring these challenging times, we still have the capability to draft documents, and have them properly witnessed and notarized.

We are working remotely with the following options available to provide continuous service.

Meet with us via phone call or video conference.

If you have an upcoming meeting at one of our offices, you will be notified with details for meeting via phone or video conference. If you would like to schedule a new appointment, respond to this email or call us at (800) 317-2812.

Create or update legal documents like Powers of Attorney.

Now more than ever, it’s important to have the proper medical and financial powers in place. These documents ensure that you can act on behalf of a loved one, and that a loved one can act on behalf of you. If these are not in place in the event of an emergency, a court order is required to give authorization, and the courts are currently trying to limit access due to COVID-19. If you would like to create or update powers of attorney, call us at (800) 317-2812 or respond to this email or to schedule a phone or video conference.

Sign and notarize documents in a safe, controlled environment.

Documents like powers of attorney are not legally-binding until they are signed, witnessed, and notarized. We have temporarily implemented alternative measures that will allow you to do this in a safe, controlled environment. These signings will be arranged on a need basis by appointment.

View our LifePlan workshop via video recording.

If you were scheduled to attend a LifePlan workshop, you can view the material via video recording. Since it is a recording, it can be viewed at any time. You do not need to watch it at the time of your scheduled workshop. You will need a computer or mobile device with speakers and internet connection. Below is a link to access the webinar:

https://davidcarrierlaw.itulwebdev.com/free-lifeplan-workshop-webinar

We are here to help you get through this. We will navigate the unknowns together and ensure you are legally secure. If you have any questions or concerns, please don’t hesitate to contact us.

 

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The Tax Implications of the SECURE Act https://davidcarrierlaw.itulwebdev.com/Tax-Implications-of-the-SECURE-Act https://davidcarrierlaw.itulwebdev.com/Tax-Implications-of-the-SECURE-Act#respond Tue, 25 Feb 2020 17:29:35 +0000 https://davidcarrierlaw.itulwebdev.com/?p=102335 Congress recently passed – and the President signed into law – the SECURE Act, landmark legislation that may affect how you plan for your retirement. Many of the provisions go into effect in 2020, which means that now is the time to consider how these new rules may affect your tax and retirement-planning situation.

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Guest post, by Stonehenge Consulting

Congress recently passed – and the President signed into law – the SECURE Act, landmark legislation that may affect how you plan for your retirement. Many of the provisions go into effect in 2020, which means that now is the time to consider how these new rules may affect your tax and retirement-planning situation.

Setting Every Community Up for Retirement Enhancement Act (SECURE Act)

Key provisions affecting individuals:

Repeal of the maximum age for traditional IRA contributions

Before 2020, traditional IRA contributions were not allowed once the individual attained age 70½. Starting in 2020, the new rules allow an individual of any age to make contributions to a traditional IRA, as long as the individual has compensation, which generally means earned income from wages or self-employment.

Required minimum distribution age raised from 70½ to 72

Before 2020, retirement plan participants and IRA owners were generally required to begin taking required minimum distributions, or RMDs, from their plan by April 1 of the year following the year they reached age 70½. The age 70½ requirement was first applied in the retirement plan context in the early 1960s and, until recently, had not been adjusted to account for increases in life expectancy. For distributions required to be made after Dec. 31, 2019, for individuals who attain age 70½ after that date, the age at which individuals must begin taking distributions from their retirement plan or IRA is increased from 70½ to 72.

Partial elimination of stretch IRAs

For deaths of plan participants or IRA owners occurring before 2020, beneficiaries (both spousal and non-spousal) were generally allowed to stretch out the tax-deferral advantages of the plan or IRA by taking distributions over the beneficiary’s life or life expectancy (in the IRA context, this is sometimes referred to as a “stretch IRA”).  However, for deaths of plan participants or IRA owners beginning in 2020 (later for some participants in collectively-bargained plans and governmental plans), distributions to most non-spouse beneficiaries are generally required to be distributed within ten years following the plan participant’s or IRA owner’s death. So, for those beneficiaries, the “stretching” strategy is no longer allowed.

Exceptions to the 10-year rule are allowed for distributions to (1) the surviving spouse of the plan participant or IRA owner; (2) a child of the plan participant or IRA owner who has not reached majority; (3) a chronically ill individual; and (4) any other individual who is not more than ten years younger than the plan participant or IRA owner. Those beneficiaries who qualify under this exception may generally still take their distributions over their life expectancy (as allowed under the rules in effect for deaths occurring before 2020).

Expansion of Section 529 education savings plans to cover registered apprenticeships and distributions to repay certain student loans

A Section 529 education savings plan (a 529 plan, also known as a qualified tuition program) is a tax-exempt program established and maintained by a state, or one or more eligible educational institutions (public or private). Any person can make nondeductible cash contributions to a 529 plan on behalf of a designated beneficiary. The earnings on the contributions accumulate tax-free. Distributions from a 529 plan are excludable up to the amount of the designated beneficiary’s qualified higher education expenses.

Before 2019, qualified higher education expenses didn’t include the expenses of registered apprenticeships or student loan repayments. But for distributions made after Dec. 31, 2018 (the effective date is retroactive), tax-free distributions from 529 plans can be used to pay for fees, books, supplies, and equipment required for the designated beneficiary’s participation in an apprenticeship program. In addition, tax-free distributions (up to $10,000) are allowed to pay the principal or interest on a qualified education loan of the designated beneficiary, or a sibling of the designated beneficiary.

Kiddie tax changes for gold star children and others

In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA, P.L. 115-97), which made changes to the so-called “kiddie tax,” which is a tax on the unearned income of certain children. Before enactment of the TCJA, the net unearned income of a child was taxed at the parents’ tax rates if the parents’ tax rates were higher than the tax rates of the child.

Under the TCJA, for tax years beginning after Dec. 31, 2017, the taxable income of a child attributable to net unearned income is taxed according to the brackets applicable to trusts and estates. Children to whom the kiddie tax rules apply and who have net unearned income also have a reduced exemption amount under the alternative minimum tax (AMT) rules.

There had been concern that the TCJA changes unfairly increased the tax on certain children, including those who were receiving government payments (i.e., unearned income) because they were survivors of deceased military personnel (“gold star children”), first responders, and emergency medical workers.

The new rules enacted on Dec. 20, 2019, repeal the kiddie tax measures that were added by the TCJA. So, starting in 2020 (with the option to start retroactively in 2018 and/or 2019), the unearned income of children is taxed under the pre-TCJA rules, and not at trust/estate rates. And starting retroactively in 2018, the new rules also eliminate the reduced AMT exemption amount for children to whom the kiddie tax rules apply and who have net unearned income.

Penalty-free retirement plan withdrawals for expenses related to the birth or adoption of a child

Generally, a distribution from a retirement plan must be included in income. And, unless an exception applies (for example, distributions in case of financial hardship), a distribution before the age of 59-1/2 is subject to a 10% early withdrawal penalty on the amount that can be included as income.

Starting in 2020, plan distributions (up to $5,000) that are used to pay for expenses related to the birth or adoption of a child are penalty-free. That $5,000 amount applies on an individual basis, so for a married couple, each spouse may receive a penalty-free distribution up to $5,000 for a qualified birth or adoption.

Taxable non-tuition fellowship and stipend payments are treated as compensation for IRA purposes

Before 2020, stipends and non-tuition fellowship payments received by graduate and postdoctoral students were not treated as compensation for IRA contribution purposes, and so could not be used as the basis for making IRA contributions.

Starting in 2020, the new rules remove that obstacle by permitting taxable non-tuition fellowship and stipend payments to be treated as compensation for IRA contribution purposes. This change will enable these students to begin saving for retirement without delay.

Tax-exempt difficulty-of-care payments are treated as compensation for determining retirement contribution limits

Many home healthcare workers do not have taxable income because their only compensation comes from “difficulty-of-care” payments that are exempt from taxation. Because those workers do not have taxable income, they were not able to save for retirement in a qualified retirement plan or IRA.

For IRA contributions made after Dec. 20, 2019 (and retroactively starting in 2016 for contributions made to certain qualified retirement plans), the new rules allow home healthcare workers to contribute to a retirement plan or IRA by providing that tax-exempt difficulty-of-care payments are treated as compensation for purposes of calculating the contribution limits to certain qualified plans and IRAs.

 

 

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What Celebrities Can Teach Us About the Importance of Estate Planning https://davidcarrierlaw.itulwebdev.com/What-Celebrities-Teach-Us-About-the-Importance-of-Estate-Planning https://davidcarrierlaw.itulwebdev.com/What-Celebrities-Teach-Us-About-the-Importance-of-Estate-Planning#respond Wed, 19 Feb 2020 18:51:59 +0000 https://davidcarrierlaw.itulwebdev.com/?p=102111 We still don’t know why the helicopter carrying Kobe Bryant and his daughter, among 7 others, crashed into a foggy hillside on January 26, 2020. Like with many unexpected deaths of celebrities, journalists have been speculating about what will happen to Kobe’s sizeable estate.

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by Bill Bereza, Associate Attorney

We still don’t know why the helicopter carrying Kobe Bryant and his daughter, among 7 others, crashed into a foggy hillside on January 26, 2020. Like with many unexpected deaths of celebrities, journalists have been speculating about what will happen to Kobe’s sizeable estate. The assumption seems to be that Kobe, who was known as being savvy with his finances, would probably have a well-planned estate.

We can all assume that if he did not have an up-to-date plan, there will be fights and news about his estate for years. We’ve all heard the stories when celebrities die without a will, or with an old will. Aretha Franklin was one of the recent, but the past includes Prince, Kurt Cobain, Jimi Hendrix, Bob Marley, Howard Hughes, and Pablo Picasso.

The fights that break out among the family members of deceased celebrities don’t just happen to the rich and famous. The same kind of long, drawn-out fights over estates happen in the families of many “regular folks” who leave their families with no plan for managing their estate. It doesn’t take $500 million to lead to a fight, fights happen over $50,000, $5,000 or even five family heirlooms.

When a loved one dies, people often fight hard over little things far exceeding their actual cash value. The fight over possessions is a way to fight over their connection to that dead parent, spouse, sibling. The thought often seems to be, “If mom loved me, she would have wanted me to have this thing. And because I loved her so much, I have to fight for it.”

Why Kobe Needed an Estate Plan and Why You Need One, Too

Your Kids

Parents should be concerned about who is going to care for their children should the worst happen. Would your parents and siblings all agree on who should raise your kids? Are they the people you would want to raise your kids? You don’t need wealth to need a plan when it comes to children.

Kobe had a spouse, living parents, siblings, and four minor children.

In 2011, Vanessa Bryant, Kobe’s wife, filed for divorce. Even though the divorce case was eventually dismissed and the couple reconciled, any time a person is dealing with divorce or possible divorce, they should think about what would happen to their things if they were to die.

In 2013, he was in a public legal dispute with his parents over some valuable memorabilia. Any legal dispute with a parent is an indication that you may want to avoid letting them get control of  your estate if you were to die. This is because, in most states, a parent would have the right to manage the estate of a deceased person or become the guardian of their children. Parents are also often the first in line to inherit if a person dies without a spouse or children.

Your Charitable Contributions

Kobe cared about charitable causes. In 2011, he and his wife formed the Kobe and Vanessa Bryant Family Foundation to provide education and support for at-risk and disadvantaged youth and their families. About his charity, Kobe said, “I wanted to help make a difference in homelessness and what better place to start than in my own back yard.”

In addition to this foundation, Kobe also supported the After-School All-Stars, the Make-A-Wish Foundation, Stand Up to Cancer, and the National Museum of African American History and Culture. If Kobe wanted to keep his charity wishes going, he would likely have planned for managing his foundation after he died, and for funding the charities from his estate.

Your Business

Kobe also had several business interests, include Bryant Stibel, a venture capital firm he co-founded, investments in companies like Body Armor, and a well-known brand, “Black Mamba”. All these interests would need management and planning to continue following his death. A man who sets up his own foundation and venture firms would likely have planned for his possible death.

Along with any type of business or personal investments comes the possibility of debts and liabilities. Part of what a good estate plan can do after death is to shelter your family and heirs from the liabilities of your life. For the average family, a good estate plan protecting a house from a spouse or parent’s credit card debt can make the difference between preserving the home and ending up being evicted by creditors.

Your Personal Net Worth

Finally, Kobe had a significant personal net worth of about $600 million according to recent reports. However, it’s not the money that makes an estate complicated, it’s the items, the family, the history, and the legacy that makes things tough.

So, why are celebrities important to estate planning? It’s not for the drama and money. It’s because it gets people talking about planning for the life of others after your death. No matter your beliefs on the afterlife, we all live on after death in the memories of others and the legacy we leave behind. Making a good last impression is just as important as making a great first impression.

If you’re interested in setting up an estate plan – or reviewing an existing plan – Carrier Law offers free consultations to help you determine the best plan for you.

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Time to Double Check your Tax Assessor https://davidcarrierlaw.itulwebdev.com/Time-to-Double-Check-Your-Tax-Assessor https://davidcarrierlaw.itulwebdev.com/Time-to-Double-Check-Your-Tax-Assessor#respond Thu, 13 Feb 2020 17:57:42 +0000 https://davidcarrierlaw.itulwebdev.com/?p=101938 Coming soon to your mailbox will be a notice of assessment for all real estate you own in Michigan. These are important notices, that can have serious consequences if ignored. You need to read this letter carefully because it shows the taxable value for the upcoming year.

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Coming soon to your mailbox will be a notice of assessment for all real estate you own in Michigan. These are important notices, that can have serious consequences if ignored. You need to read this letter carefully because it shows the taxable value for the upcoming year.

If anything is wrong, you can appeal with the local Board of Review in March. In some cases, if you miss the March appeal, you lose the chance to ever appeal a decision by the assessor and in other cases, you might have to wait until next year.

Property Classification

There’s a lot of information on this form and it can be very confusing. The first part of the form shows the classification of your property. Some classifications are residential, agricultural, commercial, and timber. This matters when you’re transferring property. Depending on the property’s classification or your use, there are different types of property tax exemptions available.

The second part of the form is the most important, and often the most confusing for people: this covers Taxable Value, Assessed Value, and State Equalized Value (SEV).

Taxable Value

This is the value that is used for calculating your tax. Millage multiplied by taxable value is what you pay in property taxes. This number should only go up slightly from one year to the next. If this number has gone up significantly, or if it equals your assessed value, then your property taxes were probably “uncapped”.

Uncapping is when the taxable value is set to the assessed value after a transfer of ownership of the property. You should contact your assessor immediately if your taxable value was uncapped to find out why. In most cases, if you do not appeal this to the Board of Review in March, you may be stuck with the uncapping.

Assessed Value and State Equalized Value (SEV)

These two numbers are typically the same. The Assessed Value is supposed to be 50 percent of the market value of the property – the local city or township determines the assessed value.

State Equalized Value is the assessed value with an “equalization factor” applied. The equalization factor is determined by the county and state to correct for differing assessments across the townships and cities in a county. Two times SEV is often used as a rough estimate of the value of property.

If the Assessed Value doesn’t match half the actual value of the property, you can appeal to the Board of Review in March to have this corrected. In most cases, people only appeal when the assessment is too high. 

Tax Exemptions

The next part of the assessment shows the tax exemptions that apply to the property. The most common exemption people see is the Principal Residence Exemption (PRE) for their primary home. This reduces your property tax by the amount of the local school millage, up to 18 mills.

If you should have been receiving this exemption but weren’t, you can always reapply for the exemption next year. You can only claim the PRE on one property at a time. It’s up to you to make sure that you aren’t accidentally receiving this on multiple properties. The state will usually catch up to you with an audit, even if it takes years, and you could have a significant tax bill.

It’s important to be sure to rescind the PRE if the property is no longer your primary residence. This often gets missed by children after a parent dies, and the children keep the home. This mistake is often unnoticed until they receive an audit from the state asking for years of owed taxes.

It can be possible to claim the PRE on your home even if you’re in a nursing home or assisted living if you meet certain requirements. There are other exemptions for industrial facilities, renaissance zones, farmland, disabled veterans, forest land, and for reasons of poverty, among others.

Ask Questions

Any time you have questions about your assessment, the first place to start is to ask your local assessor. They will have the ability to provide information and advice about your individual situation. You can also go to an attorney who will advise you on your rights in appealing property tax problems with the local assessor, or with the State of Michigan.

Remember, there are important deadlines that apply to property tax. Your assessment is something that you should review every year because in some cases you only have one chance to appeal a mistake.

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The SECURE Act Has Left Your Savings Insecure https://davidcarrierlaw.itulwebdev.com/The-SECURE-Act-Has-Left-Your-Savings-Insecure https://davidcarrierlaw.itulwebdev.com/The-SECURE-Act-Has-Left-Your-Savings-Insecure#respond Fri, 17 Jan 2020 16:05:54 +0000 https://davidcarrierlaw.itulwebdev.com/?p=100212 The SECURE Act has become law, this means that there are new rules are in place that will affect everyone’s retirement savings. Congress tacked language on to the end of the annual spending bill at the end of 2018.

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While your stockings were hung by the chimney with care, the SECURE Act (Setting Every Community Up for Retirement Enhancement) was quietly signed into law by President Trump on December 20, 2019. Congress tacked language on to the end of the annual spending bill in 2019 that forced Representatives and Senators to either vote for the law or vote for a government shutdown. In short, a distinct threat to American savers was promptly swept under the proverbial rug.

The SECURE Act is the most extensive retirement act since the Pension Protection Act of 2006.

The Act itself is the latest attempt to both plug the hole in the pension deficit and grab more taxpayer money. The Act is a jumble of exceptions and rules, so it presents a puzzling bind for the investor and estate planner.

A little history may be helpful.

Over the past 100 years, politicians have replaced personal savings, family obligations, and private charities with federally-managed transfer systems to support the elderly. Social Security and Medicare are primarily funded by taxes of young workers. Today’s Social Security system gives workers no choice or control over their financial future. Most middle-class workers have no ownership of their benefits, and Social Security benefits are not inheritable. Add to this a woeful lack of financial education and you can see why the SECURE act was easy to pass.

Anyone paying attention knows that Social Security is not sustainable and that the solvency of these programs has been a concern for awhile now. The government’s creation of the Pension Protection Act of 2006 monitoring IRA and 401k plan savings was the first attempt to control those monies via taxation to cover the growing deficit.

In 2018, the system’s trustees pegged the official Social Security “insolvency” date at 2033. Unfortunately, for those under age 51, we are now a year closer to that date than we were a year ago. Unless something changes dramatically between now and then, current law will require benefits to be slashed by 21% at that point.[i]

Consider the latest figures:

      1. Gex X and late Boomers will swell the retirement rolls 116% by 2040, while the number of workers supporting them will grow just 22%. Lack of savings and ill-preparedness for retirement make these groups more susceptible.
      2. Without reform, the combined cost of Social Security and Medicare is expected to rise from 13.8% of taxable wages today to 24.2% by 2040. Add the projected spending on Part B of Medicare and the total projected costs of the two programs grows to 30% of wages by 2040.[ii]
      3. There is a four trillion dollar federal pension deficit to contend with [iii], and the government will not be able to pay these future benefits with current levels of taxation. Fourteen years after the Pension Protection Act, the federal government could, in principle, confiscate up to of ⅓ your IRA portfolio at the time of your death via the SECURE Act.

What changes with the SECURE Act?

      1. Eliminates the age limit for making traditional IRA contributions.
      2. Increases the RMD age from age 70 ½ to age 72 for all retirement accounts subject to Required Minimum Distributions (RMDs).
      3. Allows penalty-free withdrawals for birth or adoption, but the distribution is still taxable.
      4. Eliminates the “Stretch IRA” by mandating inherited retirement accounts be withdrawn and taxes paid within ten years. (“Inherited retirement accounts” refers to those where the beneficiary is not a spouse, sibling, or special needs child of the original owner of the retirement account.)
      5. Encourages employer-based plans to offer annuities in their program by providing liability protection for providing annuities. The provision provides a safe harbor for employer liability protection. The employer is still required to do due diligence as a fiduciary when selecting an insurance company and the annuity option. The employer is not required to choose the lowest cost contract.
      6. Allows Taxable non-tuition fellowship and stipend payments to be treated as compensation to qualify for an IRA or Roth IRA contribution.

How to Protect Your Assets Now

The change that will affect your estate plan and your kids the most is the end of the “lifetime stretch” for inherited retirement accounts (item #4 above). Per the SECURE Act, money left in an inherited retirement account must all be drawn out within ten years. This is a major tax grab by the government, but doesn’t mean that well-made plans will no longer work.

Tools like trusts that protect retirement assets for your kids still work, but only if they are made with options and discretion that allow your kids to deal with the unknowns of the future. A trust that allows varying distributions for beneficiaries gives trustees discretion to give or take in ways that will give the most benefit, and allows for oversight by a director or protector who can make changes to the framework of the trust itself, is the safest for your children and their future.

SECURE Act in Action

Let’s consider a 70-year-old widow, who has $700,000 in IRAs that she and her deceased husband built up over a lifetime of working. It’s not a fortune, but she’s lucky because she has a decent pension combined with Social Security that cover her needs. She will have to start withdrawing from the IRAs at age 72 now, but she will only take the minimum because she doesn’t need more, and she wants to save it for her four daughters.

Because she’s planning for the long term, she’s investing it and getting an average of 8% return. If she lives to her statistically-expected age of 85, she will leave behind just under $1.2 million in tax-deferred retirement accounts to be divided between the four daughters. There are a few possible outcomes for the daughters with the $300,000 they each inherit:

Scenario 1 – a daughter may have large unpayable debts (medical bills, credit debt, etc). If there is no trust to protect her, this inheritance will be choked by debts and garnished by creditors, leaving the daughter not only with no inheritance but a crippling tax debt ($105,000 each if they are taxed at 35%).

Scenario 2 – the daughters take all their money right away, pay the tax, leaving them with just $195,000 each out of the original $300,000. They pay off some bills, buy some “must-have” items, go on a fun vacation, and after ten years the money is all gone. You might say that they never expected the inheritance anyway, so what does it matter that it’s all gone.

Scenario 3 – the daughters wants to do the smart thing. They leave the money in the IRA and don’t spend it all on things right away. They are fortunate not to have others coming after them for the money. However, they are not tax experts. After mom is gone, and without any advisers or trustees for a trust, they makes some bad decisions about when to take out money, or don’t plan for the taxes well. After ten years they still ends up with some money, but much less than they could have had.

Scenario 4 – the daughters have a trust in place that protects them from the risks of the world. They have an adviser in place assigned by mom in the trust to ensure that they get the most benefit out of their inheritance. They may receive equal payments over ten years so that over those ten years each has received almost $470,000 from the original $300,000. They may leave it all in the trust for the maximum ten years, each withdrawing almost $650,000 in the tenth year, or they may receive more some years, and less or none other years, depending on their income and tax situation. Thanks to mom’s plan that includes an adviser, their inheritance has grown significantly.

The government will still come along by the tenth year to take their cut of whatever the daughters inherit. But with the right plan and legal tools in place, they can make the most of their inheritance before that happens.

Life is about making the best of the situations we’re given, and having no plan is like burying your money in the ground. You can be sure it is there, but you can also be sure it has never achieved what it could. The SECURE Act is not a reason to give up but a reason to explore the options available. The Carrier Law team can help set your family up for success, contact us today to get started.

[i] https://www.cato.org/publications/commentary/americas-entitlement-crisis-just-keeps-growing

[ii] https://www.cato.org/research/social-securitys-financial-crisis

[iii] https://knowledge.wharton.upenn.edu/article/the-time-bomb-inside-public-pension-plans


bill bereza carrier law attorney   by Bill Bereza, Associate Attorney

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The Scary Truth of Online Legal Documents https://davidcarrierlaw.itulwebdev.com/the-scary-truth-of-online-legal-document-websites https://davidcarrierlaw.itulwebdev.com/the-scary-truth-of-online-legal-document-websites#respond Thu, 09 Jan 2020 15:17:02 +0000 https://davidcarrierlaw.itulwebdev.com/?p=99933 Many people are into do-it-yourself or DIY projects for every aspect of their lives. While DIY home improvement projects are great, should you DIY your legal documents?

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Many people are into do-it-yourself or DIY projects for every aspect of their lives. While DIY home improvement projects are great, should you DIY your legal documents?

Some online sites will let you create a will or a power of attorney for health care or financial documents, while other sites allow you to create a trust. These online forms make it easy for you to DIY your legal documents, simply answer questions and pay with your credit card at the end. Super easy and legal in all 50 states, right? Wrong.

Unfortunately, the average American does not always understand the difference is between a trust, a will, and a financial power of attorney document. For example, some people incorrectly believe that a will avoids probate court or some people believe they need a revocable trust when an irrevocable trust is better for their needs.

The use of these online, DIY websites allow this misinformation to continue, especially because users believe they will receive expert care while also saving money. This is a false sense of security.  Prices are misleading and an online service can’t create the same documents – tailored to your needs – and provide you with legal advice that a trusted and accredited attorney can.


Here are 7 issues you could run into when using a DIY legal forms site:

  1. The choice between multiple forms without an informed perspective on what form is the best fit for you.
  2.  A templated form that is not tailored to your financial and estate planning needs.
  3.  A website that will not review your answers and will not help you if something is incorrect.
  4.  Disclosure statements that state they are not a law firm, or a substitute for an attorney or law firm, and that they cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights,  remedies, defenses, options, selection of forms or strategies
  5.  Laws are state-specific and there is no way to confirm that the form you have selected is accepted in your state.
  6.  Websites may provide you with basic forms – but not a comprehensive estate plan that meets your needs.
  7.  Incorrect documents and/or improper drafting of documents can cost you thousands of dollars, resulting in much more expense than doing it right the first time.

An experienced estate planning law firm, such as Carrier Law, will ask the right questions, find out your needs and design a plan that is tailored to you.  Not just filling in a blank form.


Here are 3 huge benefits of using an experienced estate planning attorney:

  1.  They will think of things that you have not. It is their job to cover all the bases and ask enough questions to make good recommendations.
  2.  The attorney will be trained and experienced in providing you with good legal advice as to why or why not a document is appropriate, and if appropriate, how it should be drafted.
  3.  The attorney will guide you in selecting your agents: Attorney-In-fact, Patient Advocate, Trustee, Guardian, Conservator, as well as designing a distribution plan for your assets upon your passing.

Preparing your estate plan needs to be done right, and your mistakes will not likely be caught until after you die, and then it is often too late to fix them. The team at Carrier Law is not only expertly trained but cares for you and your loved ones in a way an online form cannot. We work with you to create a plan that will protect your assets fully and give you peace of mind.

You owe it to yourself and your loved ones to consult with our team of attorneys. Schedule an appointment or give us a call to learn more and get started. We look forward to helping you create a secure and protected future.

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What legal documents does a young adult need? https://davidcarrierlaw.itulwebdev.com/legal-documents-for-young-adults https://davidcarrierlaw.itulwebdev.com/legal-documents-for-young-adults#respond Thu, 09 Jan 2020 15:02:29 +0000 https://davidcarrierlaw.itulwebdev.com/?p=99924 Whether your child is getting ready to graduate from high school, enlist in the military or a child attending college, there are many items on the checklist that need to be completed.

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On a child’s 18th birthday, they become a legal adult and their parents no longer have natural parental rights. This means that access to the child’s health, financial, and educational records will cease, and the parents no longer have the right to make medical or financial decisions on their behalf.

Whether your child is getting ready to graduate from high school, enlist in the military or attend college, you should consider three essential estate planning documents if they are 18 or older.

These documents will help you set up successful, legally-bound form of communication and access for your young adult.

Document 1: HCPOA

A Health Care Power of Attorney (HCPOA) document designates Medical Patient Advocates who can make medical decisions on your behalf if you are unable to make those decisions on your own. A common misconception is that a HCPOA is only relevant when dealing with end-of-life scenarios. However, a HCPOA can be used when anyone, 18 and over, is deemed incompetent or incapacitated in some way by two treating physicians.

With a HCPOA, the Patient Advocate (you as the parent) can access the patient’s (your child’s) medical records, speak to doctors about health status, consent to or refuse treatment, and make medication decisions.

In addition to providing powers over physical health decisions, a properly drafted HCPOA will also include mental health provisions. If your child has a mental health emergency, a HCPOA could give you the authority to initiate the proper evaluations and consent to treatment.

The HPCOA does have some limitations, which makes a HIPAA Release extremely important.

Document 2: HIPAA Release

A Health Insurance Portability and Accountability Act Release (HIPAA) is meant to act independent of the HCPOA, and even if the child is competent. HIPAA is a federal privacy law that exists in order to protect your personal health information. The HIPAA form is your way of providing permission to health care and insurance providers to release your protected health care information to specified individuals. Without this release, health care providers are only authorized to release information to the patient.

A HIPAA Release is effective immediately upon signing. While a HIPAA Release does not give you the authority to make medical treatment decisions on behalf of another person, it does give you immediate access to a patient’s medical records.

Document 3: FPOA

A Financial Power of Attorney (FPOA) document grants you power over your child’s finances and can be useful in a variety of circumstances, including: the authority to open accounts, close accounts, write checks, make deposits, file tax returns, and access any digital assets (online accounts, social media accounts).

A FPOA can be drafted so that it’s effective immediately upon signing. Making it effective immediately allows you to seamlessly jump in and act without delay and without the added step of getting signatures from two doctors showing that your son or daughter is not competent.

A FPOA could come in handy if your child is studying abroad and you need to pay their bills while they are gone or if you are presented with every parent’s favorite question, “Can I have some more money?” A FPOA will give you access to any accounts your child has open so you can pay their bills or monitor their spending habits, and it will allow you to easily deposit money into their account, if needed.

A FPOA is also essential in the event of an emergency. If your child ends up in the hospital, you’ll need to pay their rent and keep their other accounts current while they are unable to do so.

Additional document if attending higher education: FERPA

Finally, if your child is attending a college or university, they should also sign a Family Educational Rights and Privacy Act (FERPA) Waiver. FERPA is a federal law that protects a student’s privacy by restricting access to student education records. Once a child is 18 years old, the school must have the student’s written consent on file prior to disclosing any educational records to the parent, even if the parent is footing the tuition bill.

A FERPA release allows the child to give their parents (or any named individual) unfiltered access to all educational records, including information on course selection, grades, attendance, account balances, billing records, and financial aid information. The child also has the ability to pick and choose which records their parents can request. For instance, a child may allow their parent to request billing records and account details, but deny them access to their grades.

Get the Essentials for Young Adults package from Carrier Law

When a child turns 18 your unrestricted access to their grades, tuition information and health care records comes to an end, even if they are still covered under your health insurance plan or if you are paying the college tuition. Creating a comprehensive young adult estate plan will protect both you and your child from unnecessary stress and your child from financial and medical uncertainty. Schedule a free appointment to get started!

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