Anyone who is serious about arranging for the transfer of their assets to their loved ones after they pass away is going to have to consider the realities of the federal estate tax. This tax packs a considerable wallop that can radically reduce the inheritances that your loved ones eventually receive.

Right now the top rate of the federal estate tax is 35%, and the estate tax exclusion is $5.12 million. This means that the portion of your estate that exceeds $5.12 million is subject to being shaved down by more than a third as it is being passed along to your heirs.

Digesting the above can be a sobering realization. But, it may get worse before it gets better.

The present estate tax parameters are in effect due to provisions contained within the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. This act is scheduled to sunset or expire at the end of this year.Under currently existing laws, upon the expiration of this tax relief act the estate tax exclusion goes down to $1 million and the rate of the tax rises to 55%.

The above having been stated, it is always possible that there can be some type of legislation passed between now and the expiration of the tax relief act to alter the scheduled parameters. Since this is an election year the matter will undoubtedly be debated as the months go on. Some people clamor for tax relief while others want to see income increased at the expense of those who have greater than average resources.

Because of the uncertainty and the scheduled changes it would be wise to sit down and discuss your existing estate plan with a good estate planning attorney in 2012 and keep in touch as the year starts to come to a close.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

If you are fortunate enough to live to the age of 65 there is a seven out of ten chance that you will need living assistance at some point in time.

A lot of people will reside in an assisted living community or a nursing home eventually but it is important to understand the fact that these options are extremely expensive. According to the latest statistics provided by the MetLife Mature Market Institute, the average annual cost for residence in a nursing home in 2011 was over $87,000.

To spend a year residing in an assisted living community in the United States in 2011 you would be looking at an average cost of $41,700. It should be noted that these costs are obviously quite high, but they have been rising significantly year-by-year. And, you should recognize the fact that Medicare does not pay for long-term care.

Another option that may work for a lot of people would be to have someone come into your home to assist you with your day-to-day needs. This type of help is much less expensive and the cost of in-home care remained constant in 2010 and 2011. The average hourly cost for a home health aide employed by a licensed agency was $21 and for a homemaker/companion it was $19.

Another thing that can be done is to make modifications within the home to make it easier for a senior with physical limitations to function on his or her own.

In-home care can be a viable option for many individuals who need living assistance. If you are interested in making preparations for the latter stages of your life with the assistance of a professional, take a moment to arrange for a consultation with a good elder law attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

Retirement is something that is not a given and a lot of people find this out when it is too late to recover. To be able to spend two decades or more without working you are going to have to plan ahead carefully and make intelligent projections with regard to the expenses that you may face late in your life.

With this in mind it is a good idea to gain an understanding of the state of long-term care costs in America today. A recent MetLife survey revealed the fact that the average annual cost for a private room in a nursing home in the United States was $87,200 in 2011. A year residing in an assisted living community would cost you an average of $41,700.

Considering the fact that people who need long-term care generally require it for between two and four years this is a rather hefty expense.

How can you pay for long-term care? First of all it is important to recognize the fact that Medicare will not pay for long-term care. But, Medicaid does pay for it if you can qualify. Doing so is going to take some intelligent advance planning for most people because of the upper resource limit of $2000.

Before you assume that you cannot qualify, take into consideration the fact that your home, your vehicle, and many of your personal possessions don’t count toward this figure. And, if you are married your spouse could keep his or her half of community assets up to a certain limit.

Another option for funding long-term care would be to take out long-term care insurance. This coverage is useful but expensive, so there are those who will take out a home equity conversion mortgage to fund long-term care insurance premiums.

And of course you can simply pay out-of-pocket if this is within your financial capabilities.

If you are interested in taking steps to prepare yourself for possible long-term care expenses, right now would be a good time to take action and set up an appointment with an experienced elder law attorney to explore your options in detail.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

When you are in good health and fully capable of handling your own affairs it can be hard to accept the fact that there could come a time when you are no longer capable of making your own financial and medical decisions.

People are living longer than ever during our current era and in fact the oldest old is the age group that is growing faster than any other. Though this is obviously a positive development on the one hand, when you reach an advanced age it becomes very possible that you will experience dementia.

The primary cause of dementia among our elders is Alzheimer’s disease. According to the Alzheimer’s Association approximately 40% of people who reach the age of 85 suffer from the disease.

If you were to reach the point where you were unable to make your own decisions interested parties could petition the court to appoint a guardian to act in your behalf. You may not have any say regarding who this individual is, and most people would not feel comfortable with this situation.

You could take personal control by engaging in incapacity planning. The wise course of action would be to execute durable powers of attorney for health care and financial matters. You name attorneys-in-fact when you are creating the documents and these individuals would act as decision-makers should you become unable to act in your own behalf.

Incapacity planning is an important part of any comprehensive plan for aging, and if you are currently unprepared right now would be a good time to pick up the phone to arrange for a consultation with a good Estate Planning or Elder Law attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

The high and rising costs associated with long-term care are a growing source of concern within the Pensacola elder law community. The 2011 statistics are now available courtesy of the MetLife Mature Market Institute and the results are attention-getting to say the least.

The national average for a single year residing in an assisted living community was approximately $41,700 and this represented a 5.6% increase over 2010 costs. The same period of time living in a nursing home with a private room would cost you $87,200 on average. The typical length of stay is between two and four years.

These are some rather significant expenses to face late in your life, but veterans who served our country honorably may be entitled to a benefit that will provide some assistance.

The benefit that we are referring to is the Veterans Aid & Attendance special pension. If you served for at least 90 days in the military with a minimum of just one of these days taking place while the country was at war you meet the length of service requirements.

From a medical perspective you must be able to prove that you do in fact need assistance with your day-to-day needs. There is also an upper resource limit of around $80,000, but your home, your car, and certain personal possessions don’t count toward this figure.

Single veterans who qualify can receive as much a $1632 per month and this can certainly help defray your long-term care costs.

To learn more about long-term planning for veterans, simply take a moment to arrange for a consultation with a good  elder law attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

When you are budgeting for the latter portion of your life it is important to understand just how expensive long-term care has become in the United States today.

If you combine the average nursing home costs with the average length of stay you may be looking at an expense that exceeds $200,000, and a lot of people are going to have to plan ahead carefully to be able to pay these kinds of bills without decimating their legacies.

Medicare can help you in a lot of ways when you are a senior citizen, but one thing it does not do is pay for long-term care. This reality leads many people scrambling for solutions, and one option that exists is to apply for Medicaid, a government program that does pay for long-term care.

The challenge with Medicaid is the fact that there is an upper resource limit of $2000 in countable assets. The term “countable” is key however because some of your most valuable assets, such as your home, don’t count toward this limit. And, the healthy or community spouse can keep his or her half of shared countable assets within a certain limit. This limit has been raised to $113,640 for 2012; it was $109,560 in 2011.

It takes some intelligent planning to qualify for Medicaid while retaining all or most of your assets without incurring any penalties. If you would like to discuss the matter with a professional, simply contact an experienced elder law attorney to arrange for an informative consultation.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

When you look into the statistics regarding how prepared Americans are for aging and eventual death you find some disheartening numbers. Less than half of Americans have an estate plan in place, and this is not a good thing because exactly 100% of Americans are going to die at some point in time.

And, you never know what the future holds. You may say that you are too young to worry about planning for the future, but guess what? Each and every year tens of thousands of people who are under the age of 35 pass away for one reason or another.

When you are an adult in this age group you may well have a young family including dependent children who are relying on your income to maintain their standard of living. Do you think it is wise to make plans to provide for them should you pass away at a young age? Shouldn’t you ask yourself who would raise your children if both parents were to pass away together in an accident?

Though most people do not have an estate plan, the majority of individuals recognize that they should take action but they fall into a pattern of procrastination. One of the reasons for this is because addressing the reality of death is not the most pleasant prospect in the world. However, avoiding it is not going to make it go away.

The only way to break out of the cycle of procrastination is to seize the day and take action. If you’re not prepared for the future, right now would be a good time to pick up the phone to arrange for a consultation with an experienced estate planning lawyer

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

Estate planning is sometimes thought of as being strictly about arranging for the transfer of assets to your family after you die. You can look at it this way if you want to, but it is better to have a more holistic overview.

If you’re like most people you will go through a period of time before you pass away when you may need living assistance, and you would be living with your head buried firmly in the sand if you are among those who say that “it can never happen to me.”

The United States Department of Health and Human Services tells us that in fact a majority of senior citizens will someday reside in an assisted living facility of some sort or require in-home care. So the odds would say that you will eventually need such care if you reach senior citizen status.

We have all heard stories or seen dramatizations in movies or on TV of elder people being placed into nursing homes or assisted living communities. If this takes place when you are suffering from dementia and trying to cling onto memories, being forced to go to an unfamiliar place all of sudden without ever considering the matter can be especially terrifying.

For this reason it is not a bad idea to do some research and identify facilities that you would feel comfortable residing in should it become necessary. This way you have total control and you can feel comfortable moving into an environment that you have already investigated, one that you trust because it was your choice.

Planning for possible incapacity is a pragmatic act that can provide you with peace of mind. If you would like to discuss the legal aspects with an expert, take a moment to pick up the phone and arrange for a consultation with a good Pensacola elder law attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

There are numerous different legal instruments that are routinely implemented into modern estate plans. This is one of the reasons why you would do well to seek professional guidance when you’re making preparations for the future.

With this in mind let’s take a look at the QTIP or qualified terminable interest property trust. Let’s say that you get divorced from your first wife and have children from that marriage. You and your former spouse agree on a distribution of community resources and go your separate ways.

So you are holding assets that are yours and yours alone as you embark on life as a single individual, and perhaps your former spouse played a significant role in helping you accumulate your portion of the assets.

Eventually you decide to remarry, but you want the lion’s share of the assets that you are bringing into your marriage to go to your children after your death. You can make this happen through the creation of a qualified terminable interest property trust.

With these trusts you set it up so that your spouse can benefit from trust earnings and perhaps have access to some of the principal if this is what you want while he or she is alive. But your spouse has no say regarding who inherits the trust after his or her death. You name this beneficiary when you are creating the trust, and it would presumably be your children.

If you would like to learn more about the QTIP and other strategies for blended families, don’t hesitate to contact a good Mobile estate planning lawyer to set up an initial informational exchange.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.

It is important to be aware of the potential for asset erosion that exists when you are planning your estate. The most significant source of asset erosion is the federal estate tax, and right now it is carrying a maximum rate of 35%. This is no small drop in the bucket, but to make matters worse the estate tax rate is scheduled to rise to 55% in 2013.

Implementing strategies that provide estate tax efficiency is going to be important to people who are in possession of assets that exceed the estate tax exclusion amount. This amount is $5 million right now but it is scheduled to be reduced to $1 million in 2013.

When you are assessing your estate tax exposure it is important to understand the fact that insurance policy proceeds are subject to the estate tax. For this reason a lot of people place their insurance policies into revocable life insurance trusts or ILITs.

You appoint a trustee to administer the funds and you name your beneficiary or beneficiaries. You could name your spouse as the primary beneficiary and your children as the secondary beneficiaries. Your spouse could benefit from the resources in the trust throughout his or her life without owning them so there is no estate tax exposure. The eventual transfer of the trust from your spouse to the children after his or her death would not be subject to taxation either.

If you are interested in learning more about irreversible life insurance trusts and other tax efficiency tools, the wise course of action would be to sit down and discuss your future with an experienced and savvy Mobile estate planning attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.