Financial Planning Category Archives

A Few Ways to Increase Your Retirement Savings in 2022

Published on: February 1, 2022 | by Ettinger Law Firm

As the new year begins, new opportunities are created for people to make the most out of their finances. Currently, the country is proceeding through the “Great Reshuffle”, which is seeing a large number of workers leave their jobs and make new ones. While many workers want to do their best to save as much as they can, some people are finding it hard to save and reach financial goals. This article reviews some of the important things that you can do to make the most of your finances in 2022 and beyond.

# 1 – Examine Existing Retirement Plan Contributions

This year, 2022 workers can contribute as much as $20,500 to a 401(k) or make similar contributions to 403(b) plans and many 457 plans. This is $1,000 greater than the limit established in 2021. If you’re at least 50 years old, you can also add another $6,500 in “catch-up” contributions.

Taking Rising Healthcare Costs into Consideration

Published on: August 2, 2021 | by Ettinger Law Firm

TD Wealth recently released a survey of estate planning experts who report that health care costs are now the biggest threat to estate planning. While only 7% of estate planning experts reported this information in 2019, 22% of estate planning professionals cited health care costs as at the forefront of estate planning concerns. Additionally, concerns about market volatility rose substantially from last year. Family conflict fell from 25% in 2020 to 10% this year. Over the course of previous years, TD Wealth reported that the most common cause of family conflict was the failure to communicate estate plans with family members. The number of family conflicts fell substantially in 2021. The study also reported that 89% of estate planners reported female clients losing jobs, leaving the workforce, or facing salary cuts due to the pandemic. As a result, a large number of female clients made changes to their financial situation. Women have been negatively impacted more than men due to the COVID-19 pandemic.

Prepare for How Much You Will Need in Health Care Costs

An average retired couple age 65 in 2021 needs approximately $300,000 saved after taxes to cover health care expenses that they face during retirement. This amount, however, can vary substantially based on when you retire as well as your health later on in life. The sooner that you can prepare a plan for how you will pay these costs, the better. The amount that you need also depends on what type of financial accounts you use to pay for your healthcare.

5 Tips on Navigating Elder Law – Estate Planning After a Divorce

Published on: February 11, 2021 | by Ettinger Law Firm

Adequate estate planning is a critical part of the divorce process, but it is frequently overlooked because people are worried about navigating many other aspects of the divorce process.

Careful attention should be paid to the complex issues that arise when handling estate plans where a divorce action is either pending or has been finalized. You should continuously review and update your estate plan after separation and before filing a divorce complaint as well after filing a final decree of divorce.

To make sure that you engage in sufficient estate planning after a divorce, this article reviews some key strategies that you should make sure to review so you have the best chance possible of protecting your wishes after divorce and separation.

How the New Rules Under the Secure Act Changes the Way People Will Inherit Money

Published on: May 12, 2020 | by Ettinger Law Firm

The Setting Every Community Up for Retirement Enhancement Act of 2019, Pub. L. 116–94, was signed into law by President Donald Trump on December 20, 2019, as part of the Further Consolidated Appropriations Act, 2020 (The Secure Act). Future beneficiaries of retirement accounts have different rules than current inheritors. What follows is a brief description of some of the ways the new rules under The Secure Act may impact your future beneficiaries.

The Secure Act changes the way people will inherit money — are you affected by the new rules?

The new rules do not treat all beneficiaries the same. Beneficiaries of qualified retirement accounts, such as individual retirement accounts and 401(k) plans, now must withdraw all of the money out of those accounts within 10 years, instead of over their lifetime as was previously allowed (commonly referred to as the “stretch IRA” provision). An IRA is an individual retirement account. There are no required minimum distributions within that time frame, but the account balance must be zero after the 10th year.

What are the Tax Rules of Gifts to Grandchildren?

Published on: June 20, 2017 | by Ettinger Law Firm

All grandparents want the best for their children and grandchildren and many take the initiative to set aside part of an estate to help future generations get a head start in life. Forward thinking grandparents should also be aware there are certain tax and entitlement benefits rules seniors need to follow to remain in compliance with the law in order to avoid jeopardizing many of their own assets.

First, grandparents need to know the Internal Revenue System (IRS) places a $14,000 limit on untaxable gifts each year to individual grandchildren. Married couples may each give up to $14,000 to each and every grandchildren without any taxes, making the total $28,000 per year. Grandchildren receiving these gifts will not have to pay any income tax of these gifts, unless the assets generate income.

Additionally, grandparents can make direct payments to doctors and educational institutions to cover services on behalf of their grandchildren. The IRS does not consider payments for medical treatment and education as gifts subject to tax and grandparents can still give up to $14,000 each per year to their grandchildren without worrying about gift taxes.

Overzealous Powers of Attorney and How to Handle Them

Published on: March 22, 2017 | by Ettinger Law Firm

When determining how you want your estate and assets administered upon your death, it is also important to consider how you want decisions made in the event that you cannot make them for yourself. Naming a power of attorney has a number of benefits that will avoid any drawn out court proceedings to name an agent in the event of your incapacitation. Power of attorney documents name an individual, also known as an agent, to perform specific tasks when you cannot. These powers can vary, as there is medical/health care power of attorney and also property or financial power of attorney powers.

Medical power of attorney gives an individual the ability to make your health care decisions, such as where you should receive care, if you should receive a specific treatment in the event your wishes are not listed, as well as dealing with your insurance and medical premiums. Financial powers of attorney allow an individual, upon a specific event, to handle a variety of your financial matters on your behalf. While many people will name someone as power of attorney in the event of incapacitation, some will name a power of attorney to take effect immediately, thus, delegating decision making power.

These situations are predisposed to undue influence, something the court is very suspect of and will closely monitor in the event they believe an individual is abusing their power of attorney role over an elderly individual. In the event that you are competent and have named someone as a power of attorney, but due to a number of circumstances, including the end to a relationship or a possibility of undue influence, you wish to revoke the power of attorney, you can do so by delivering a notice to the power of attorney, your estate attorney, as well as other interested parties notified of the document.

What is a Blind Trust and Why Do They Matter?

Published on: December 6, 2016 | by Ettinger Law Firm

Blind Trusts

Blind trusts are another type of trust that is established in order to set assets aside and preserve them for a specific period of time, however the person establishing the trust has no control over the funds and thus does not receive access to them. Additionally, the individual also does not receive periodic reporting of the assets held in trust and their investments.

Blind trusts are a type of irrevocable trust, meaning that the beneficiary does not have any control over the administration or distribution of the trust or its terms. The person establishing the trust relinquishes his or her rights to make decisions and gives the trustees, those people who are now in charge of managing and handling the assets, full power to make decisions. The maker of the trust only has the power to establish the trust and to terminate it.

Executors, Trustees and Powers of Attorney: Blessing or Curse?

Published on: November 28, 2016 | by Ettinger Law Firm

When choosing the people you trust the most to serve as a part of your estate plan in any capacity, whether they be a family member, close friend or trusted individual in the community, it is important to understand the role that you are asking them to play. Serving as the executor of your estate, the trustee of your trust, as your healthcare representative or power of attorney is not a blessing. Making sure that the people you ask to fulfill these roles ahead of time understand that is crucial to ensuring that your estate plan is carried out effectively and to your wishes.

Managing Expectations

Many people feel that being chosen for one of these roles is a great honor. After all, being asked to serve as someone’s power of attorney or trustee means that there is a presence of trust in the relationship. After all, out of all the people who could have been chosen, out of all the people who could have been asked, you asked that specific person to handle your affairs.

Fiduciary Duties & The New Rule for Financial Advisors

Published on: November 22, 2016 | by Ettinger Law Firm

The New Rule

When consulting a financial advisor, we all assume that they would have our best interest in mind when determining where our portfolio should be invested and what investments best suit our interests, however, this has not always been the case. This year, the Labor Department issued new regulations that require industry professionals dealing with individual retirement accounts and 401k accounts to act on the best behalf of their clients.

Before this new standard was issued, financial advisors only needed to meet a suitability standard, meaning that the financial advisor only has to choose what is suitable for the portfolio, which is not always what is in the client’s best interest. A financial advisor under this standard could invest in a fund he found suitable, but may be more risky or expensive, although a similar option is available with a different fund. This suitability standard led to many advisors investing in funds they were personally interested in, sparking a need for change.

Diversification in Your Portfolio

Published on: September 8, 2016 | by Ettinger Law Firm

Depending on the purpose of a trust, a trust may be able to further sustain its’ life and generate additional income by investing the funds originally set aside by the grantor in a variety of investment tools. In order to generate additional income, a professional investor will seek to have a diverse portfolio established in order to mitigate any potentially large losses and keep your funds safe.

While the idea of hitting it big with one major investment is the dream of many, the reality is highly unlikely, thus, investing money in a wider range of areas is beneficial. While the investment team and trustee will be able to best assess the proper investments for your trust funds, each situation will differ and will be influenced by the risk the trust is willing to take as well as the timeline for distribution of funds needed.

Types of Investments