Trusts and Estates Blog

Avoiding Retirement Planning Mistakes

seniors having teaI once ran into a retiree who had a considerable amount of wealth and lived very luxuriously. Over the course of our conversation it was discovered that he had spent his entire life working as a janitor of an elementary school. Floored, I asked the obvious, “How did you accumulate such worth in such a moderate career?” He replied, “I just started putting money into a retirement account when I first began work here, a little bit each paycheck.”

How do some people retire in such ease and others struggle to keep up with inflation after quitting work? Sadly, many people fall into some of the most common retirement planning mistakes as are listed below. Take note to these mistakes and be sure to avoid them so you can retire in ease.

Waiting until you’re 55. The number one retirement mistake people face is not beginning planning soon enough. Beginning early makes all the difference in the long run, for if begun early enough, your retirement total will not be as impacted by your immediate salary. Allowing time to compound your wealth will give you a more comfortable retirement.

Decide what percent is enough. Another common mistake people make in planning is assuming too small of a percentage of their yearly income. True, times are tough and money is not at a surplus currently, but if you make retirement planning a priority, your sacrifice now will pay off for years to come. Determining your percentage of investment depends on several factors. Consult a financial planner for help in setting a percentage to invest.

An undetermined goal. True, beginning early is key, but when you begin, take time to set a goal for your retirement total. This step will take strategic planning and help from someone in the business of retirement planning. Not only must you set a goal for a comfortable life after retirement, but you must assume inflation for such a time.

Using retirement monies now. With the downturn of the economy many people were forced to look to alternative means of income for a time. Many looked to retirement accounts and pulled monies saved for the future. If you can ever avoid it, don’t use the monies in your retirement account. Besides the fact you’ll need these monies in the future, often penalties and taxes are charged on monies removed from retirement accounts prematurely.

Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers sophisticated estate planning and administration for the affluent, discriminating client. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at 661-945-5868 or visit their websites at www.EstatePlanningSpecialists.com and www.Medi-CalHelp.com.

Recognizing Financial Elder Abuse

Arrest XSmallAs parents and older loved ones age, they can find themselves unadjusted to a new dynamic of society. Where once they might have trusted many people in their younger days, they’re now faced with the sad reality that not everyone who offers help is truly interested in helping them. As a younger care giver or family member, it’s up to you to keep an eye out for financial abuse of your loved one.

What is financial abuse?

Financial abuse can take many forms. Basically, it’s the illegal embezzlement, theft, or misappropriation of funds or possessions from an elderly person to someone else. Many elderly people have a difficult time caring for themselves so often depend on others to handle their affairs. If the person handling financial and personal affairs is not honest, financial abuse can occur. Financial abuse occurs for too often.

Who could be financially abusing your love one?

Consider checking the backgrounds of those caring for your loved one such as nurses, home health care attendants, personal caretakers, and nursing home personnel. Often those who you’d trust most with your loved one can be the ones abusing them. Not to indict all medical professionals, many only want what’s best for your elderly patient, but be careful to watch for any signs of elderly abuse.

What to do if you suspect financial elder abuse?

Financial Elder Abuse is far more common than most people realize. If you believe your loved one is being taken advantage of financially, don’t hesitate to act. Gather information on why you believe they are being abused and seek positive evidence of these acts. Find a local attorney in your area who deals with elder law and seek his/her help in determining if enough evidence exists for legal action to take place. Do not approach the abuser personally until you are sure you have legal actions in place.

Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers assistance to victims of financial abuse.. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at 661-945-5868 or visit their websites at www.EstatePlanningSpecialists.com and www.Medi-CalHelp.com.

6 Steps for Helping Parents with Retirement Planning

Tree lined roadOne of the benefits of a struggling economy is the increased attention to retirement planning. Granted, some people will have a retirement plan in place early in life, but the average American isn’t fully prepared to retire into a life of comfort. As the child of an aging parent, it would be wise for you to sit down with your parents and discuss the specifics of their retirement plan. Here are a few questions to ask to help them as they plan for retirement.

Start Early. The sooner your start planning for retirement, the better. Even more so for your older parents, the time to talk to them about retirement planning is immediately. By age 50, you should have talked to them about their retirement plans, even if just in an informative manner. Even if your parents are retired, it’s not too late to have this conversation.

Know their Goals. Where do your parents want to live when they retire? Do they wish to travel often? Do they plan to move? Do they wish to begin any new hobbies or activities? Get an idea of where they envision themselves once retired so you can help determine their financial needs during retirement.

Determine Finances. You may not feel comfortable asking about your parents financial situation, but finances are important in determining how to plan for retirement. You need to know if they’ve saved enough to sustain their lifestyle during retirement. Remind them that they cannot survive solely on Social Security benefits alone (according to studies these only cover roughly 40% of retirement costs). They need more planning.

Check into Social Security. Although your parents can’t survive on Social Security benefits alone, knowing how much they will receive in benefits will factor into their financial retirement planning.

Early Retirement? Let your parents know that early retirement may be a possibility, especially if the industry in which they work is being hit hard by the economy. They may be able to avoid lay-offs or cut-backs by retiring early if their affairs are in order.

Discuss Health Care. One of the biggest expenses during retirement will be health care. Consider the medical history of your family, any diseases or disabilities your parents have, and factor in costs of doctors’ visits and existing medication. Also discuss their desires regarding health care facilities and assisted living homes.

Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers sophisticated estate planning and administration for the affluent, discriminating client. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at 661-945-5868 or visit their websites at www.EstatePlanningSpecialists.com and www.Medi-CalHelp.com.

The Advantages of Tax-Free Gifts

file system - focus on the taxation sectionThere are many reasons to hire an estate planning attorney when you are concerned about the financial security of your loved ones. However, a reason that is arguably the most significant is the issue of estate taxes, and a specialist’s inside knowledge on the best ways to navigate the system.

If you haven’t asked your estate planning attorney about how tax-free gifts can best work to your advantage, now is the time to do so. A tax-free gift is one of the few options available to you to avoid the overwhelming federal estate tax, which is currently at 35%. (A qualified estate planning attorney can even tell you when taxable gifts make sense.)

There are several ways in which part of your estate can qualify as a tax-free gift. Listed below are some options that an estate planning attorney can help you set up:

You can give up to $13,000 per year and per recipient starting January 1, 2009. This is still the amount as of June, 2011. This amount reduces the value of your estate, and therefore, the final estate tax that could be applied to your assets. This also allows you to enjoy watching your loved ones benefit from your gift.

Paying someone’s college tuition qualifies as a tax-free gift. If your estate planning includes an amount for a child or grandchild who wishes to attend college, paying or prepaying the tuition to the institution directly will ensure that this portion of your assets will not be assessed any estate tax. There is no cap on this gift.

Paying someone’s medical bills qualifies as a tax-free gift, and will not be assessed the estate tax. There is also no cap on this gift.

Donating money to a charity of your choice qualifies as a tax-free gift, and will not be assessed the estate tax. This is true only if the charity holds a tax-exempt status. As long as the entity is tax exempt, you can gift any amount and it will be tax free. This type of gift can also lower your income taxes.

A qualified attorney will be able to discuss with you the ways in which you can allocate your assets to avoid as much state and federal taxation as possible. Your life’s earnings and hard work should be spent on the things that you find most important, and the more that is left to your family and loved ones, the better. When you consider the effects of a 45% decrease in your total assets, it is worth looking into as many options as possible to keep the money in your family’s hands.

Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers sophisticated estate planning and administration for the affluent, discriminating client. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at 661-945-5868 or visit their websites at www.EstatePlanningSpecialists.com and www.Medi-CalHelp.com.

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