“How lucky I am to have something that makes saying goodbye so hard.”
– Winnie the Pooh
We stood in a family huddle, crying in the driveway. We had just lost our beloved dog Buddha, age 14. My husband adopted him from an animal shelter in NC about a year before we got married. Buddha loved exploring, car rides, howling at fire truck sirens, the dog beach, running through piles of leaves and the feeling of cool tile on a hot summer day. When we lived in GA, he even had a “second family” that he would visit everyday to get treats. He was a husky/shepherd mix and he had a floppy ear that gave him a friendly look. We will miss him dearly. (Buddha, we will love you forever! You were such a good boy! We wish we had more time together.)
My husband and I have 2 little girls, ages 7 and 5. As parents, this is a rite of passage for us, because like it or not, it’s time to talk to our kids about death.
Here are some tips that we’re now applying in our own family when it comes to talking about death with our kids:
- Tell the truth about what has happened. But share the information in doses, so you can figure out what your child can handle.
- Use the words dead or died. Yes, these words are uncomfortable, but realistic words like these help the grieving process.
- It’s OK to say “I don’t know.” There are going to be questions you can’t answer. Give yourself grace when you don’t have all the answers.
- It’s OK to cry together.
- It’s OK to share memories and laugh.
- Find something special you can do with your child to help remember your loved one.
- Let your child grieve in his or her own way.
- If you’re child is going to a funeral or memorial service, prepare them ahead of time for what they will see. And if they become distraught in that moment, take a “time out” together.
- Be ready to talk about thoughts and feelings often.
- Remember to take care of yourself.
This article is a service of the Law Firm of Myrna Serrano Setty. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge.
Parents want their children to be taken care of after they die. But children with disabilities have increased financial and care needs, so ensuring their long-term welfare can be tricky. Proper planning by parents is necessary to benefit the child with a disability, including an adult child, as well as assist any siblings who may be left with the caretaking responsibility.
Special Needs Trusts
The most comprehensive option to protect a loved one is to set up a special needs trust (also called a supplemental needs trust). These trusts allow beneficiaries to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose their eligibility for certain government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiaries in determining their eligibility for public benefits.
There are three main types of special needs trusts:
- A first-party trust is designed to hold a beneficiary’s own assets. While the beneficiary is living, the funds in the trust are used for the beneficiary’s benefit, and when the beneficiary dies, any assets remaining in the trust are used to reimburse the government for the cost of medical care. These trusts are especially useful for beneficiaries who are receiving Medicaid, SSI or other needs-based benefits and come into large amounts of money, because the trust allows the beneficiaries to retain their benefits while still being able to use their own funds when necessary.
- The third-party special needs trust is most often used by parents and other family members to assist a person with special needs. These trusts can hold any kind of asset imaginable belonging to the family member or other individual, including a house, stocks and bonds, and other types of investments. The third-party trust functions like a first-party special needs trust in that the assets held in the trust do not affect a beneficiary’s access to benefits and the funds can be used to pay for the beneficiary’s supplemental needs beyond those covered by government benefits. But a third-party special needs trust does not contain the “payback” provision found in first-party trusts. This means that when the beneficiary with special needs dies, any funds remaining in the trust can pass to other family members, or to charity, without having to be used to reimburse the government.
- A pooled trust is an alternative to the first-party special needs trust. Essentially, a charity sets up these trusts that allow beneficiaries to pool their resources with those of other trust beneficiaries for investment purposes, while still maintaining separate accounts for each beneficiary’s needs. When the beneficiary dies, the funds remaining in the account reimburse the government for care, but a portion also goes towards the non-profit organization responsible for managing the trust.
Not everyone has a large chunk of money that can be left to a special needs trust, so life insurance can be an essential tool. If you’ve established a special needs trust, a life insurance policy can pay directly into it, and it does not have to go through probate or be subject to estate tax. Be sure to review the beneficiary designation to make sure it names the trust, not the child. You should make sure you have enough insurance to pay for your child’s care long after you are gone. Without proper funding, the burden of care may fall on siblings or other family members. Using a life insurance policy will also guarantee future funding for the trust while keeping the parents’ estate intact for other family members. When looking for life insurance, consider a second-to-die policy. This type of policy only pays out after the second parent dies, and it has the benefit of lower premiums than regular life insurance policies.
An Achieving a Better Life Experience (ABLE) account allows people with disabilities who became disabled before they turned 26 to set aside up to $15,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. This money can come from the individual with the disability or anyone else who may wish to give him money.
Created by Congress in 2014 and modeled on 529 savings plans for higher education, these accounts can be used to pay for qualifying expenses of the account beneficiary, such as the costs of treating the disability or for education, housing and health care, among other things. ABLE account programs have been rolling out on a state-by-state basis, but even if your state does not yet have its own program, many state programs allow out-of-state beneficiaries to open accounts.
Although it may be easy to set up an ABLE account, there are many hidden pitfalls associated with spending the funds in the accounts, both for the beneficiary and for her family members. In addition, ABLE accounts cannot hold more than $100,000 without jeopardizing government benefits like Medicaid and SSI. If there are funds remaining in an ABLE account upon the death of the account beneficiary, they must be first used to reimburse the government for Medicaid benefits received by the beneficiary, and then the remaining funds will have to pass through probate in order to be transferred to the beneficiary’s heirs.
Get Help With Your Plan
However you decide to provide for a child with special needs, proper planning is essential. We can help!
This article is a service of Myrna Serrano Setty, Esq. Myrna doesn’t just draft documents. We help you ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session and mention this article to find out how to get this $500 session at no charge.
Paying for day care is one of the biggest expenses faced by working adults with young children, a dependent parent, or a child with a disability. But there is a tax credit available to help working caregivers defray the costs of day care (for seniors it’s called “adult day care”).
In order to qualify for the tax credit, you must have a dependent who cannot be left alone and who has lived with you for more than half the year.
Qualifying dependents may be the following:
- A child who is under age 13 when the care is provided
- A spouse who is physically or mentally incapable of self-care
- An individual who is physically or mentally incapable of self-care and either is your dependent or could have been your dependent except that his or her income is too high ($4,150 or more) or he or she files a joint return.
Even though you can no longer receive a deduction for claiming a parent (or child) as a dependent, you can still receive this tax credit if your parent (or other relative) qualifies as a dependent.
This means you must provide more than half of their support for the year. Support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Even if you do not pay more than half your parent’s total support for the year, you may still be able to claim your parent as a dependent if you pay more than 10 percent of your parent’s support for the year, and, with others, collectively contribute to more than half of your parent’s support.
The total expenses you can use to calculate the credit is $3,000 for one child or dependent or up to $6,000 for two or more children or dependents. So if you spent $10,000 on care, you can only use $3,000 of it toward the credit. Once you know your work-related day care expenses, to calculate the credit, you need to multiply the expenses by a percentage of between 20 and 35, depending on your income. (A chart giving the percentage rates is in IRS Publication 503.)
For example, if you earn $15,000 or less and have the maximum $3,000 eligible for the credit, to figure out your credit you multiply $3,000 by 35 percent. If you earn $43,000 or more, you multiply $3,000 by 20 percent. (A tax credit is directly subtracted from the tax you owe, in contrast to a tax deduction, which decreases your taxable income.)
The care can be provided in or out of the home, by an individual or by a licensed care center, but the care provider cannot be a spouse, dependent, or the child’s parent. The main purpose of the care must be the dependent’s well-being and protection, and expenses for care should not include amounts you pay for food, lodging, clothing, education, and entertainment.
To get the credit, you must report the name, address, and either the care provider’s Social Security number or employer identification number on the tax return. To find out if you are eligible to claim the credit, click here.
For more information about the credit from the IRS, click here and here.
Are you worried about taking care of a loved one who has long-term care or special needs? We can help you put plans in place so that your family isn’t left with a mess if you become incapacitated or die.
This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents, she helps you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why our firm offers a Planning Session. The Planning Session helps you get more financially organized than ever and helps you make the best choices for the people you love. Start by calling us today to schedule a Planning Session. Mention this article to learn how to get this $500 session for free.
Older parents are becoming more common, driven in part by divorce and remarriages and fertility treatments. Comedian and author Steve Martin had his first child at age 67. Singer Billy Joel just welcomed his third daughter. Janet Jackson had a child at age 50. Later-in-life parents have some special estate planning and retirement considerations.
Update Your Plan
Make sure you have an estate plan and that the estate plan is up to date. One of the most important functions of an estate plan is to name a guardian for your children in your will. This is especially important for parents having children later in life. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal.
Consider a Trust
In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for them when they get older. If the child is the product of a second marriage, a trust may be particularly important. A trust can give your spouse rights, but allow someone else — the trustee — the power to manage the property and protect it for the next generation. If you have older children, a trust could provide for a younger child’s college education and then divide the remaining amount among all the children.
Another consideration is retirement savings. Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement. One advantage of being an older parent is that you may be more financially stable, making it easier to save for both. Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years.
When to take Social Security is another consideration. Children can receive benefits on a parent’s work record if the parent is receiving benefits too. To be eligible, the child must be under age 18, under age 19 but still in elementary school or high school, or over age 18 but have become mentally or physically disabled prior to age 22. Children generally receive an amount equal to one-half of the parent’s primary insurance amount (PIA), up to a “family maximum” benefit. You will need to calculate whether the child’s benefit makes it worth it to collect benefits early rather than wait to collect at your full retirement age or at age 70.
This article is a service of Myrna Serrano Setty, P.A. Myrna doesn’t just draft documents, she guides her clients and educates them about how to protect what matters most. And that’s why Myrna offers a Planning Session, to help you get more financially organized than ever before and to make the best decisions for the people they love. Call our office at (813) 514-2946 to schedule a meeting with Myrna.
In part one of this series, we discussed the hidden dangers of do-it-yourself estate planning. In part two, we cover one of the greatest risks posed by DIY documents.
Maybe you think that you can save time and money with DIY documents you find online. You’re probably anxious to check estate planning off your life’s to-do list. These forms may tempt you because they seem quick and easy. And you’re busy, so why not? Unfortunately, this is one case in which SOMETHING is not better than nothing.
But DIY wills lead to the false sense of security that you have things covered. But the reality is that those generic forms could end up costing your loved ones more money and heartache than if you’d never gotten around to doing anything at all.
In this way, DIY wills and other legal documents are among the most dangerous choices you can make for the people you love. These generic documents can leave the people you love most of all—your children—at risk.
Children at risk
First, it’s probably distressing to think that by using a DIY will you could force your loved ones into court or conflict if you become incapacitated or die.
Second, if you’re like most parents, it’s probably downright unimaginable to think about your children’s care falling into the wrong hands. But that’s exactly what could happen if you rely on free or fill-in-the-blank wills found online, or even if you hire a lawyer who isn’t equipped or trained to plan for the needs of parents with minor children.
Naming and legally documenting guardians involves a number of complexities that most people aren’t aware of. Even lawyers with decades of experience frequently make at least one of six common mistakes when naming long-term legal guardians.
If wills drafted with professional help are likely to leave your children at risk, the chances that you’ll get things right on your own are pretty much zero.
What could go wrong?
If your DIY will names legal guardians for your kids in the event of your death, that’s great. DIY documents are too risky! Consider these factors.
- Does it include back-ups?
- If you named a couple to serve, how is that handled? Do you still want one of them if the other is unavailable due to illness, injury, death, or divorce?
- What happens if you become disabled and are unable to care for your children? You might assume the guardians named in the DIY will would automatically get custody, but your will isn’t activated if you become disabled.
- What if the guardians you named in the will live far away? It would take them a few days to get there. If you haven’t made legally-binding arrangements for the immediate care of your children, it’s highly likely that they will be placed with child protective services until those guardians arrive.
- Even if you name family who live nearby as guardians, your kids are still at risk because it’s possible they might not be immediately available if and when needed.
- And who even knows where your will is or how to access it?
The Kids Protection Plan®
To help ensure your children are never raised by someone you don’t trust or taken into the custody of strangers (even temporarily), consider creating a comprehensive Kids Protection Plan®, which our firm is trained in.
Get the right “something”
Protecting your family and assets if you die or become incapacitated is too important to do on your own. No matter how busy you are or how little wealth you own, the potential disasters of DIY documents are simply too great.
Plus, proper estate planning doesn’t have to be super expensive, stressful, or time consuming. We offer options for all budgets and asset values.
Also, many of our clients actually find the process highly rewarding. Our systems provide the type of peace of mind that comes from knowing that you’ve not only checked estate planning off your to-do list, but you’ve done it using the most forethought, experience, and knowledge available.
If you haven’t done any planning yet, contact us to schedule a Planning Session. This evaluation will allow us to determine if a simple will or some other strategy, such as a living trust, is your best option.
If you’ve already created a plan—whether it’s a DIY job or one created with another lawyer’s help—contact us to schedule an Estate Plan Review and Check-Up.
No matter what you do, make sure have a “something” that’s actually better than nothing. Contact us and we’ll provide you with that level of confidence—and so much more.
This article is a service of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love.
That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make the best choices for the people you love. Call our office today to schedule a Planning Session and mention this article to find out how to get this $500 session for free.
You might not be a big fan of this famous family, but the Kardashians recently demonstrated impressive wisdom in protecting their minor children using estate planning.
During a recent episode of Keeping Up With The Kardashians, Khloé Kardashian was preparing to give birth to her first child, daughter True. Khloé was second-guessing her first choice to name her sister Kourtney as the child’s legal guardian in case anything ever happened to her or the baby’s father.
During her pregnancy, Khloé spent a lot of time with her other sister Kim and her family. Watching her interacting with her own kids, Khloé really connected with Kim’s mothering style and pondered if she might be a better choice as guardian.
“I always thought Kourtney would be the godparent of my child, but lately I’ve been watching Kim, and she’s been someone I really gravitate to as a mom,” Khloé said.
To make things more challenging, Kourtney always assumed she’d be named guardian and said as much. Over the years, Khloé had lots of fun times with Kourtney and her family. So Kourtney thought her own passion for motherhood would make her the natural choice.
For guidance, Khloé asked her mother, Kris Jenner, how she chose her kids’ guardians. Kris’ answer was to compare how her two sisters’ raised their own children.
“You just have to think,” Kris told her, “‘Where would I want my child raised, in which environment? Who would I feel like my baby is going to be most comfortable and most loved?’”
In the end, Khloé chose Kim over Kourtney. She explained her decision had nothing to do with her respect or love of Kourtney. But it was merely about which style of parenting she felt most comfortable with.
“Watching Kim be a mom, I really respect her parenting skills—not that I don’t respect Kourtney’s, I just relate to how Kim parents more,” said Khloé. “I just have to make the best decision for my daughter.”
Khloé’s actions are admirable for several reasons. First off, far too many parents never get around to legally naming a guardian to care for their children in the event of their death or incapacity. Khloé not only made her choice, but she did so before the child was even born.
Khloé also took the time to speak and spend time with her sisters beforehand, so the family understood the rationale behind her decision. Khloé was lucky her choices were close family members, so she had ample opportunity to experience both of their parenting styles.
Depending on your life situation, you might not be able to spend that much time vetting your choice. But at the very least, you should sit down with each of your top candidates to openly and intimately discuss what you’d expect of them as your child’s new parents.
Avoid conflict and court
Furthermore, with multiple family members vying for the guardian role, Khloé’s quick action may have prevented a potential nightmare. If she’d delayed naming a guardian and something happened to her, Kourtney, Kim, and even other family members could’ve gone to court seeking guardianship of her daughter.
This could have led to years of contentious legal battles that not only cost the family huge sums of money, but the potential hardship imposed on the children can be incalculable. Even if you think something like this would never happen to your family, why take the risk, especially when it’s so easy to avoid?
Get started now
While the Kardashians are rich and famous, you too can provide the exact same level of protection for your kids, even with minimal financial resources. It’s important as soon as it’s physically possible to choose someone who will step in to raise your children if you cannot. You must also legally document your choice and make sure the individual you’ve selected knows what to do if they’re called upon.
Many parents have no idea how to go about making this critical decision, much less create a legally binding plan, so they never get around to doing it. And even parents who have legally named a guardian (even with a lawyer’s help) often make at least one of six common mistakes that leave their children at risk.
That’s because most lawyers aren’t aware of all that’s involved with planning for the well-being and care of minor children after their parents’ death or incapacity. But at Myrna Serrano Setty, P.A., we’re dedicated to legal planning for the unique needs of families with young children.
And if you’ve already named guardians on your own or with a lawyer, we can review your existing legal documents. We’ll determine whether you’ve made any of the six common mistakes that leave your kids vulnerable and help you fill those gaps.
Beyond naming legal guardians, can create a comprehensive estate plan with all of the necessary legal documents to ensure the protection and well-being of your entire family and assets, no matter what happens. Contact us now.
On February 14, 2018, there was another mass shooting at a school, this time in Parkland, Florida. Our thoughts and prayers are with the families devastated by this tragedy. As we struggle to cope with this tragedy, we need to figure out how to talk about this with our kids. Parents can help their kids feel safe (or safer) by establishing a sense of normalcy and security and by talking to them about their fears. At some point, our kids are going to learn about what happened, and we need to be prepared to talk about it.
How do we do that? Here are some tips:
1. Observe your child’s emotional state. Sometimes it takes a while for anxiety and depression to manifest itself. You know your child better than anyone. And don’t be afraid to seek professional help.
2. Make time to talk. Let your child’s questions guide you in how much information to provide. Sometimes it takes a while for them to express their feelings.
3. Validate their feelings. Let them talk about their fears.
4. Keep your explanations developmentally appropriate. For example, kids in early elementary need brief, simple information balanced with assurance that school personnel are there to protect them. Give simple reminders of school safety, like reminding them about school safety drills and locked doors.
5. Review safety procedures at home and at school. This is a good chance to also review your family’s emergency procedures. For example, if something happened to you, who would the school contact? Who would have the legal authority to take care of your kids? What happens if you don’t live near family?
6. Limit television viewing. We live in an era of the 24-hour news cycle. This can be overwhelming, even for adults.
7. Explain that there’s a difference between reporting, tattling and gossiping. Encourage kids to talk to a trusted adult if they see or hear about something that may harm others.
8. Explain that while there is no absolute guarantee that nothing bad will ever happen, you will try your best to keep them safe because you love them more than anything in this world.
This article is a service of attorney Myrna Serrano Setty, who does more than just draft documents. She guides families through difficult topics, like estate planning, so they can protect what matters most. Myrna may be reached at (813) 514-2946 and firstname.lastname@example.org.
- Part 1: What You Need to Know About Divorce and Estate Planning January 17, 2020
- Tips for Talking with Young Kids About Death November 7, 2019
- Tools for Parents of Children With Special Needs October 3, 2019
- What you need to know: Medicaid Asset Transfer Rules September 5, 2019
- Do Right By Your Pet. Be careful with your Will. August 27, 2019
- Part 1: What You Need to Know About Divorce and Estate ...January 17, 2020 - 8:49 am
- Tips for Talking with Young Kids About DeathNovember 7, 2019 - 6:23 pm
- Tools for Parents of Children With Special NeedsOctober 3, 2019 - 5:22 pm
- What you need to know: Medicaid Asset Transfer RulesSeptember 5, 2019 - 6:00 pm