In recent years, tax policy has tended to change depending on which political party held the reins in Washington, D.C. These swings mean you need to review your estate plan regularly. At a minimum, every few years. (It’s a good idea to do that regardless of tax laws, in case there are changes in your assets, beneficiaries, or other circumstances.)
On January 19, 2021, the Centers for Medicaid and Medicaid Services (CMS) issued a final rule addressing Medicare Part C – Medicare Advantage Plans and Part D Prescription Programs. The rule is complex, but here are some of the provisions that are particularly relevant.
Do you have a Will? That is, do you have a legal document that outlines your wishes regarding the distribution of your property after your death? The document should also spell out other important considerations like the legal care of your minor children upon your passing.
Between one-half and two-thirds of American adults do not have a Will. The big question is why? There are many answers, but some of the most common answers are, “I don’t have time,” “I’m still young,” or “I don’t have much so what does it matter.” None of these answers are real answers, they are actually excuses. The truth is, a Will is something that has to do with our eventual death, and who wants to think about that?
To start, see if you answer yes to any of these questions:
The federal estate tax exemption may be lowered, which means it may be time to think about steps you can take to keep your estate from being taxed. An irrevocable life insurance trust will allow you to pass on money to your heirs while avoiding both the federal estate tax, as well as any applicable state estate tax.
What happens to all your digital accounts, services and property after you die? The official name for all these is a Digital Estate Plan (DEP).
With a DEP in place, all your digital accounts and services can be deleted, managed or transferred to someone after you've passed. You can also ensure all paid or recurring services are closed and not draining money from your bank account or racking up credit card debt. Finally, a DEP will provide guidance and direction about what you want done with your digital assets and overall online presence.
In the same way you need to organize your physical possessions, it’s best to leave an organized plan in place for your digital life as well.
Many baby boomers may hesitate to discuss money with their children, but the reality is that a massive amount of wealth will be transferred in the upcoming decades.
Some $68 trillion will move between generations in the next two decades, reports U.S. News & World Report in the article “Discuss Your Estate Plan With Your Children.” Having this conversation with your adult children, especially if they are members of Generation X, could have a profound impact on the quality of your relationship and your legacy.