Law Office of Frank Bruno, Jr.

Author: dev-team

  • Will Your Estate Be Subject To Taxes? We Can Help!

    Imagine leaving a legacy for your loved ones, only to have a significant chunk disappear to taxes. Estate taxes can be a real burden, but with smart planning, you can significantly reduce their impact. Here’s how our expertise can help you minimize tax worries, protect your assets and maximize your legacy:

    1. Understanding the Tax Landscape: Estate taxes are levied on estates exceeding a certain dollar threshold at the time of death. We break it down for you. For example, the federal estate tax kicks in for estates exceeding $13.61 million, but in New York, that number drops to $6.94 million. Without proper planning, a tax bill could erode your carefully built estate. Failing to address an estate of such size could lead to substantial tax liabilities, potentially amounting to hundreds of thousands of dollars! Estate tax laws can be complex, and exemption thresholds vary by state.
    2. The Power of Trusts:Trusts are like financial shields, protecting your assets from taxes. We’ll explore options like irrevocable trusts, charitable trusts, and other tax-saving structures to ensure more of your wealth reaches your beneficiaries.
    1. Unlocking Exemptions and Credits:Who doesn’t love a good tax break? We’ll help you leverage available exemptions, like the lifetime gift tax exemption and the marital deduction, to minimize your tax burden. This ensures a larger portion of your estate goes directly to your loved ones, as you intended.
    2. Future-Proofing Your Plan:Estate tax laws are fluid, and change can happen underscoring the importance of periodically reviewing and updating your estate plan. Our team remains vigilant about legislative changes and can adapt your plan accordingly to maintain its effectiveness in minimizing estate taxes.

    Don’t allow estate taxes to erode the wealth you’ve diligently amassed! Kickstart your journey by scheduling a Peace of Mind Planning Session. In this one-hour working session, we will look at your options, discuss our packages, and outline our fixed price legal fees. Should we determine a mutual fit, we’ll proceed to discuss the next steps. And if not, that’s perfectly fine too! Reserve your session here, and mention this blog to waive the $450 session fee!

  • The Importance of Estate Planning now

    As estate planning lawyers, we recognize planning for the future can feel overwhelming. However, the importance of estate planning cannot be overstated. It’s not just about your assets; it’s about securing your legacy and ensuring your loved ones are taken care of in case of tragic events or the unthinkable happens.

    Ever feel a little lost when it comes to planning for the future? You’re not alone. Estate planning can seem daunting, but it’s a crucial step to ensure your wishes are met and your loved ones are protected. Here’s why it’s important to take charge, regardless of your life stage:

    Wealth Preservation: Estate planning empowers you to minimize taxes and other expenses linked to transferring your assets to your beneficiaries. By establishing key documents, you can potentially save your family significant amounts over time.

    Secure Your Legacy: Estate planning goes beyond just dividing assets. It’s about safeguarding your wishes for the future. You can designate guardians for minor children, outline healthcare preferences, and ensure your values are carried forward.

    Loved Ones Protection: Estate planning encompasses vital decisions about guardianship for minor children, healthcare directives, and end-of-life care, beyond financial matters. By clearly expressing your wishes, you alleviate confusion and potential conflicts for your loved ones during challenging times.

    Empower Your Loved Ones: Life can be unpredictable. By having a clear plan in place, you can spare your family from unnecessary stress and confusion during difficult times. Your wishes are known, healthcare decisions are documented, and guardianship is designated, providing them with peace of mind.

    Proper estate planning can spare your heirs from the lengthy and costly probate process, which can consume a significant portion of the estate.

    Save Time and Money: The probate process can be lengthy and expensive, potentially draining a portion of your estate. Proper estate planning can help your heirs bypass probate altogether, saving them time and valuable resources.

    Maintain Privacy: Without an estate plan, your financial details may become public during probate. Careful planning allows you to control the distribution of your assets with discretion, shielding your family from unwanted scrutiny.

    Ready to Take Control? Don’t delay until it’s too late! Take the first step by booking a Peace of Mind Planning Session. During this one-hour working session, we’ll explain your options, review our packages, and discuss our flat fees. If we decide to proceed together, we’ll outline the next steps. Book your session today! Mention this blog to waive the $450 session fee and take the first step towards a secure future for yourself and your loved ones.

  • Your Executor Doesn’t Want to Serve?

    Your Executor Doesn’t Want to Serve?

    What if Your Executor Doesn’t Want to Serve?

    When you’ve finally come to determine who you trust enough to serve as your executor, you’ll need to take the next step. It involves having a conversation with the person about what you are asking them to do. You’ll need to ask if they are willing, says the Pocono Record in the article “Don’t assume person is willing to be your executor.” People are often flattered at first when they are asked about this role, but if they don’t fully understand the responsibilities, they may decide not to serve just when you need them the most.

    Once your executor has agreed to act on your behalf and you have a last will and testament prepared by an estate attorney, tell your executor where your will is stored. Remember that they need to have access, in addition to knowing where the document is. If the will is kept at home in a fire-proof box or a document box that is locked, make sure to tell them where the key is located.

    If you feel that the will would be safer in a bank’s safe deposit vault, you have a few additional tasks to complete. One is to make sure that your executor will be able to access the safe deposit box. That may mean adding them to the list of people who have access. They may be technically permitted to enter the box with a bank representative solely for the purpose of obtaining the last will and testament. However, you should check with your branch first.

    Once they have the last will and testament and it is filed for probate, the Surrogate issues Letters Testamentary, which says that the executor has the authority to open the safe deposit box to inventory its contents, after proper notice is given to the state’s authorities. The executor must complete an inventory form for the authorities and any personal property in the safe deposit box must be appraised for fair market value as of the date of death. Inheritance tax will need to be paid on the value, if there is any due.

    Communication is very important in the executor’s role. You may or may not want to allow them to see the will before you pass, but they will need to know where the original document can be found.

    To make the next part of the executor’s job easier, create an inventory of your assets and include information they will need to complete their task. They’ll also need to know contact information and account numbers for homeowners and car insurance, veterans’ benefits, credit cards, mortgage, pensions, retirement accounts and any other assets.

    Some people store their information on their computer. However, if the executor cannot access your computer or cannot get into the computer because they don’t have your password, you may want to create a hard copy document, as well as keeping information on your computer.

    Taking on the role of an executor is a big job. You can show your appreciation, even after you are gone, by making all preparations for the information needed. If Your Executor Doesn’t Want to Serve initially, perhaps their mind can be changed by being organized, having a list of assets and a list of contacts.

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  • Strategies for the “Sandwich” Generation

    Strategies for the “Sandwich” Generation

    If you are taking care of your aging parents and still helping your own children, you are part of the “sandwich” generation. If you feel as if you will never be able to go off duty because of all the people who make demands on your time and money, here are some strategies for the “sandwich” generation.

    Quite a few people start having children when they are in their forties. Your parents could already be in their sixties and seventies, when you have toddlers. By the time your children are in high school, you will be in your fifties with parents in their seventies or eighties. You should be focused on plowing lots of money into your retirement account. However, instead you find yourself pulled in many different directions, without the energy or resources you need for yourself.

    How People with Adult Children Can Get Pulled at Both Ends: Strategies for the “Sandwich” Generation

    You do not have to be raising young children to be in the sandwich generation. Your children might be adults but need financial help because of student loans or other financial pressures. Additional reasons you might need to assist your adult children include things like:

    • You have a child with a disability.
    • One of your children struggles with substance abuse.
    • You have a twenty-something or older child, who is in graduate school.
    • You provide much of the childcare for or you raise one of your grandchildren.

    These are only a few examples of the reasons you might find yourself having to lend a helping hand to your parents and your adult children.

    The Financial Impact of Taking Care of Two Generations: Strategies for the “Sandwich” Generation

    Any of these situations can put demands on your time, energy and finances. People who take care of their older parents and their own children often suffer as a result. For example, these caregivers drive everyone else to their medical appointments but do not have to time to go for routine checkups. There are not enough hours in the day to go for a walk to de-stress or get physical exercise. Sleep deprivation is common among “sandwichers.”

    The financial impact of dual caregiving can be both short-term and long-term. If you are constantly picking up medications and groceries for your elderly parents and helping your children financially, you might find yourself having a cash flow strain. The time the double caregiving takes from your schedule can also make it impossible for you to engage in the amount of gainful employment you would like, so you can increase your retirement savings.

    How to Handle the Stress and Exhaustion of Dual Caregiving: Strategies for the “Sandwich” Generation

    You are not alone. Many people have walked this path before you. They offer these suggestions:

    • Contact your local government agencies, community groups, senior organizations and charitable entities to find as many resources as possible to take some of the weight off of your shoulders. Adult day programs, respite care and other services can be a godsend.
    • Find sources of funding to ease your financial strain. Your aging parents might qualify for more benefits than they currently receive. You can use the website Benefit Finder to locate additional financial help, like Medicare, Medicaid, veterans benefits and many other programs.
    • Change your expectations. Your house does not have to be perfect. Your teens can get rides with friends, or you can set up a carpool.
    • Set a daily sleep goal of at least seven hours and stick to it. You cannot help anyone, if you get so exhausted that your health deteriorates.
    • Try to find the humor in daily situations.

    Remember, this stage and every stage is temporary. You are creating memories that you will treasure.

    References:

    HuffPost – “This Is What No One Told Me About Suddenly Joining The Sandwich Generation.” (accessed November 8, 2019)

    Benefits.gov – “Benefit Finder.” (accessed November 14, 2019)

  • 5 Foods You Need in Your Diet for More Energy

    5 Foods You Need in Your Diet for More Energy

    If you’re feeling run down, you’re not alone. According to the Mayo Clinic, fatigue is one of the most common health complaints. While many things can cause fatigue, diet is often a factor.

    If you’ve eaten a big bowl of pasta for lunch and then struggled to stay awake later, you’re not alone. Certain foods, like bread and pasta, cause major swings in blood sugar, which can result in fatigue. So, what should you eat when you need a boost of energy?

    If you’re looking for a way to boost your energy levels, try incorporating some superfoods into your diet. Superfoods are foods that are rich in antioxidants, vitamins, and minerals. They can help boost your immune system and improve your overall health.

    Give one of these energy-boosting superfoods a try:

    • Purple Sweet Potatoes – Besides being high in fiber, this purple superfood is full of slow-burning complex carbs and energy-boosting phytonutrients. The purple color comes from the same antioxidants that give blueberries their color and anti-inflammatory effects.
    • Green Tea – Although it contains much less caffeine than coffee, it may boost your energy even more than a cup of joe. It has an amino acid that reduces stress and improves cognitive function. That doesn’t mean you need to ditch the coffee, though. Coffee is a source of antioxidants as well and has been shown to reduce the risk of chronic diseases, including type 2 diabetes and liver disease.
    • Legumes and Beans – Beans and legumes provide protein and fiber that helps keep blood sugar stable. Gut bacteria thrive on beans, which help decrease inflammation, and legumes are a source of selenium, a natural mood enhancer.
    • Beets – This red superfood is excellent at detoxing the liver, an organ that can make you tired when not functioning well. Studies show that those who drank beet juice before running had better running times than those who didn’t.
    • Steel Cut Oats – These nutrient-dense whole grains are high in fiber and gluten-free, which translates into lots of consistent energy without dips in blood sugar. Although they take longer to prepare, they are worth the wait.
    • Blueberries – In addition to being loaded with energy-boosting carbs and powerful antioxidants, the same phytochemicals in purple sweet potatoes are known to boost immune function, decrease symptoms of depression, and help the body and mind recover from stress faster.
    • Almonds – These nuts are packed with fiber, protein, and magnesium, which play a crucial role in converting sugar into energy. Low magnesium levels can drain your energy, cause leg cramps, and result in sleep problems.
    • Spinach – Spinach is a leafy green vegetable packed with nutrients, including iron and B vitamins, essential for energy production.

    While all superfoods offer some health benefits, some are especially beneficial for older adults. For example, blueberries’ antioxidants help protect cells from damage. This is important for older adults, who are more susceptible to age-related diseases.

    The next time you head out to the grocery store, consider adding some of these superfoods to your cart and see what they can do for your energy levels and overall health. Also, if you have a loved one that is getting older and you are concerned for their health, giving them some of these goodies to snack on can help keep their health and energy in the right place.

    Please consider meeting with us if you have concerns regarding your or your loved one’s health or wellness. We would love to provide guidance on certain steps to protect what you have for the people you love the most before the unimaginable may happen.

    Contact us to learn more about how we can help.

  • The Secret Retirement Account HSA

    The Secret Retirement Account HSA

    Medical care is one of the highest expenses in retirement. There is a way for you to save funds for these costs with a triple tax benefit. You do not get taxed on the money you contribute to your Health Savings Account (HSA), on the money you withdraw from it to pay approved medical expenses, or on the earnings the account generates. You also do not have to use the money in the account, until you choose to do so.

    Do not confuse Health Savings Accounts (HSAs) with health care flexible spending accounts (FSAs). The two main differences between HSAs and FSAs are:

    • You can keep thousands of dollars in an HSA for years, even decades. You cannot do that with an FSA.
    • Unlike an FSA, you can invest the money in your HSA into mutual funds, so the account has a possibility for long-term growth and earnings.

    The Secret Retirement Account HSA. HSAs in a Nutshell

    You cannot get an HSA account as a stand-alone plan. You have to enroll in a high-deductible health plan that is eligible for HSA accounts. As of 2019, a high-deductible is at least $1,350 for individual coverage and $2,750 for family plans. Once you enroll in an eligible high-deductible health plan, here is what you need to know:

    • The contribution limit into your HSA is $3,450 in 2019 (combined contributions from you and your employer) for an individual plan and $6,850 for a family plan. If you are 55 or older, you can put an extra $1,000 into your account this year. Covered spouses can add an additional $1,000 to their accounts.
    • You usually cannot have both an FSA and an HSA.
    • Your contributions to your has, have to stop when you enroll in Medicare – any kind of Medicare package. The HSA funds can pay your Medicare premiums, but not your Medigap coverage.
    • If your employer does not arrange an HSA provider, you can open an HSA at the provider or your choice. Fees vary, so comparison shop for the best rates. Optum Bank and HealthSavings Administrators are two well-known HSA providers.
    • You do not have to leave the money in your HSA account. You can pay current approved medical expenses with your HSA account.

    The Secret Retirement Account HSA. HSAs Are Not for Everyone

    HSA accounts have unmatched tax savings potential, but these accounts are not a good choice for everyone. If you have chronic health issues or young children, you might do better off with a traditional form of health insurance like a PPO, instead of a high-deductible health plan. You should not delay getting medical care to keep the funds in the HSA.

    It is probably not the right time for you to open an HSA, if it would cause you financial stress. You should use a comparison calculator to decide which health care plan is best for you and your family.

    When you eventually withdraw money from your HSA, you must use it for approved medical expenses to avoid getting taxed on the funds. It might be your money, but once it goes into an HSA, the government puts restrictions on how you can use it. Be sure to save all receipts for medical expenses you paid with HSA funds.

    References:
    AARP. “Your Secret Retirement Investment.” (accessed June 12, 2019)

  • Remaining Even and Fair in Estate Distribution

    Remaining Even and Fair in Estate Distribution

    Treating everyone equally in estate planning can get complicated, even with the best of intentions. What if a family wants to leave their home to their daughter, who lives locally, but wants to be sure that their son, who lives far away, receives his fair share of their estate? It takes some planning, says the Davis Enterprise in the article “Keeping things even for the kids.” The most important thing to know is that if the parents want to make their distribution equitable, they can.

    If the daughter takes the family home, she’ll need to have an appraisal of the home done by a certified real estate appraiser. Then, she has options. She can either pay her brother his share in cash, or she can obtain a mortgage in order to pay him.

    Property taxes are another concern. The taxes vary because the amount of the tax is based on the assessed value of the real property. That is the amount of money that was paid for the property, plus certain improvements. In California, property taxes are paid to the county on one percent of the property’s “assessed value,” also known as the “base year value” along with any additional parcel taxes that have become law. The base year value increases annually by two percent every year. This was created in the 1970s, under California’s Proposition 13.

    Here’s the issue: the overall increase in the value of real property has outpaced the assessed value of real property. Longtime residents who purchased a home, years ago still enjoy low taxes, while newer residents pay more. If the property changes ownership, the purchase could reset the “base year value,” and increase the taxes. However, there is an exception when the property is transferred from a parent to a child. If the child takes over ownership of the home, they will have the same adjusted base year value as their parents.

    If the house is going from parents to daughter, it seems like it should be a simple matter. However, it is not. Here’s where you need an experienced estate planning attorney. If the estate planning documents say that each child should receive “equal shares” in the home, each child receives a one-half interest in the home. If the daughter takes the house and equalizes the distribution by buying out the son’s share, she can do that. However, the property tax assessor will see that acquisition of her brother’s half interest in the property as a “sibling to sibling” transfer. There is no exclusion for that. The one-half interest in the property will then be reassessed to the fair market value of the home at the time of the transfer—when the siblings inherit the property. The property tax will go up.

    There may be a solution, depending upon the laws of your state. One attorney discovered that the addition of certain language to estate planning documents allowed one sibling to buy out the other sibling and maintain the parent-child exclusion from reassessment. The special language gives the child the option to purchase the property from the other. Make sure your estate planning attorney investigates this thoroughly, since the rules in your jurisdiction may be different.

    Reference: Davis Enterprise (Oct. 27, 2019) “Keeping things even for the kids”

  • It’s Better to Plan Ahead

    It’s Better to Plan Ahead. Two stories of two people who managed their personal lives very differently illustrate the enormous difference that can happen for those who refuse to prepare themselves and their families for the events that often accompany aging. As an article from Sedona Red Rock News titled “Plan ahead in case of sudden sickness or death” makes clear, the value of advance planning becomes very clear. One man, let’s call him James, has been married for 47 years and he’s always overseen the family finances. He has a stroke and can’t walk or talk. His wife Esther is overwhelmed with worry about her husband’s illness. Making matters worse, she doesn’t know what bills need to be paid or when they are due.

    On the other side of town is Sara. At 80, she fell in her own kitchen and broke her hip, a common injury for the elderly. After a week in the hospital, she spent two months in a rehabilitation nursing home. Her son lives on the other side of the country, but he was able to pay her bills and handle all the Medicare issues. Several years ago, Sara and her son had planned what he should do in case she had a health crisis.

    More good planning on Sara’s part: it’s Better to Plan Ahead: all her important papers were organized and put into one place, and she told her son where they could be found. She also shared with him the name of her attorney, a list of people to contact at her bank, primary physician’s office, financial advisor, and insurance agent. She also made sure her son had copies of her Medicare and any other health insurance information. Her son’s name was added to her checking account and to the safe deposit box at the bank. And she made sure to have a legal document prepared so her son could talk with her doctors about her health and any health insurance matters.

    And then there’s James. He always handled everything and wouldn’t let anyone else get involved. Only James knew the whereabouts of his life insurance policy, the title to his car, and the deed to the house. James never expected that someone else would need to know these things. Esther has a tough job ahead of her. There are many steps involved in getting ready for an emergency, but as you can see, this is a necessary task to start and finish.

    First, gather up all your important information because it’s Better to Plan Ahead. That includes your full legal name, Social Security number, birth certificate, marriage certificate, divorce papers, citizenship or adoption papers, information on employers, any military service information, phone numbers for close friends, relatives, doctors, estate planning attorney, financial advisor, CPA, and any other professionals.

    Your will, power of attorney, health care power of attorney, living will and any directives should be stored in a secure location. Make sure at least two people know where they are located. Talk with your estate planning attorney to find out if they will store any documents on your behalf.

    Financial records should be organized. That includes all your insurance policies, bank accounts, investment accounts, 401(k), or other retirement accounts, copies of the most recent tax returns, and any other information about your financial life.

    Advance planning does take time, but not planning will create havoc for your family during a difficult time.

    Reference: Sedona Red Rock News (July 9, 2019) “Plan ahead in case of sudden sickness or death”

  • How Do Prenup and a Postnup Vary?

    How Do Prenup and a Postnup Vary?

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    “yours is the light by which my spirit’s born:
    yours is the darkness of my soul’s return
    —you are my sun, my moon, and all my stars” E.E. Cummings

    “The best thing to hold onto in life is each other.” Audrey Hepburn

    Investopedia recently published an article, “Prenup vs. Postnup: How Are They Different?” It explains that if you or your spouse is wealthy, anticipating a big inheritance, or getting married for the second, third, or fourth time, divorce or death could result in serious financial trouble. In death, these issues are greater, if the spouse leaves children from a previous marriage. That’s why more couples are choosing to sign a prenuptial or postnuptial agreement.

    As prenuptial agreement is made prior to the marriage, where the couple determines how they’ll divide their assets should the marriage end.

    Although negotiating a prenuptial agreement before your wedding may seem unromantic, these agreements can save a lot of heartache and money in the event of divorce—especially when it’s not a first marriage. When a couple decides to divorce, prenups can prevent nasty, drawn-out, excessively expensive litigation. A prenup details everything, so everyone knows exactly who gets what and there’s no room for argument. These agreements also can dictate financial distributions in case of a spouse’s death, which is especially important for couples with children from previous marriages.

    Prenuptial (before a marriage) and postnuptial (after a marriage) agreements detail how a couple will divide their assets if the marriage ends. Prenups are useful if one spouse has substantial assets, a large estate, or anticipates getting a large inheritance or distribution from a family trust. A prenup can protect each spouse’s premarital assets, as property and income in a marriage would otherwise be deemed community property.

    Have an attorney draft one of these agreements, because tax law can create complications.

    A prenup can have terms that state how much your spouse will receive of your estate, if you get divorced or die. This is critical if you have a significant estate and children from a previous marriage to whom you want to leave some of your estate. If you don’t sign a prenuptial agreement that states this, most states will automatically give your surviving spouse a share of your estate at your death. With a prenup, you can predetermine a specific alimony amount or even eliminate this.

    Postnuptial agreements are almost identical to prenups. The big difference is that postnuptial agreements are made after the wedding.You will decide how to divide marital assets, as well as any future earnings, in your postnuptial agreement.

    Reference: Investopedia (April 25, 2019) “Prenup vs. Postnup: How Are They Different?”

  • Inheritance now what?

    Inheritance now what?

    Inheritance now what? Inheriting money puts a whole new spin on your outlook on money, says The Kansas City Star in its article “Coming into some money? Be wise with it.”

    Should you pay off your debts first, if you have any? Make a list of your debt balances and their interest rates. If the interest rate is high, pay it off. If it’s low, you may be better off investing the funds.

    Next, check on your emergency fund. If you don’t have three to six months’ worth of living expenses on hand, use your inheritance to ramp up that fund. Yes, you can use credit cards sometimes. However, having at least two months’ worth of living expenses in cash is worthwhile.

    The third step is to contribute the most you can to a health savings account (HSA), if your employer does not contribute to it and if you have a qualifying health plan. That’s $3,500 if you are single, $7,000 for families and add $1,000, if you are over 55. This gets you a nice tax deduction and withdrawals are tax-free, as long as they are used for qualified medical expenses.

    If you’re still working, and depending upon the size of the inheritance, it might be time to “tax-shift” your portfolio.

    Let’s say you regularly contribute $3,000 to a 401(k). If you can, increase that amount by $22,000, to the maximum, if you’re 50 and older. Since your paycheck decreases, so does your tax. If your tax rate is currently 22%, you’ll only need to add $17,160 from your inherited account to reach the same spendable dollars. The tax-deferred account in your portfolio will grow faster, while the taxable account shrinks.

    Think about whether to commingle funds with your significant other or not. Let’s say you and your spouse have a retirement portfolio. You both can spend it now, maybe on your house. The inheritance may also help you to retire earlier. If you save the inheritance, keeping it in a separate account with only your name on it, it remains your asset, in case of a divorce. Most states will consider this money a non-marital asset, and not subject to division between divorcing parties.

    Consider using the inheritance as a way to avoiding tapping into retirement accounts. Withdrawals from IRAs are taxable. If you’re not worried about commingling funds or investment gains, then use the inherited account to minimize the tax losses from retirement accounts.

    Most people don’t have enough saved to keep spending during retirement as they did while working. Skip the spending spree that often follows an inheritance and enjoy the money over an extended period of time.

    Receiving Inheritance, now what? Now is one of the times when a review of your estate plan becomes a wise move. A new financial position may require more tax planning and more legacy planning.

    Reference: The Kansas City Star (June 27, 2019) “Coming into some money? Be wise with it”