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If youre part of a blended family (meaning you are married with children from a prior marriage in the mix), youre no stranger to the extra considerations and planning it takes to keep your familys life running smoothly from which parent your children will be with for the holidays to figuring out the schedule for a much-needed family vacation. Youve also probably given some thought to what you want to happen to your assets and your family if something happens to you. But what you might not have realized is this: If you dont create a plan for your assets before you die, the law has its own plan for you that might not reflect your wishes for your assets, especially your retirement assets. And if youre in a blended family, this can have a significant financial impact on the ones you love and even create expensive, long-term conflict.This week, we explain how the law affects retirement distributions for married couples, and why you need to be extra careful with your retirement planning if youre in a blended family to ensure your retirement account assets go to the right people in the right amounts after youre gone.Be Aware of How ERISA Affects 401K DistributionsIf youve remarried, you and your new spouse have probably talked about updating the beneficiary designations on your retirement accounts to reflect your blended family arrangement. (If you havent talked about it, you need to talk about it ASAP). Sometimes, people who are remarried decide to leave their retirement funds to their children from a prior marriage and leave other assets like their house and savings accounts to their current spouse. You may do this to avoid future conflict between your spouse and your children over your assets.But even if you want to leave your retirement for just your children, if youre married and your retirement account is a work-sponsored account, your children wont inherit the entire account even if you name them as the sole beneficiaries. Thats because the federal Employee Retirement Income Security Act (ERISA) governs most employer-sponsored pensions and retirement accounts. Under ERISA, if youre married at the time of your death, your spouse is automatically entitled to receive 50 percent of the value of your employer-sponsored plan even if your beneficiary designations say otherwise.The only time that your surviving spouse would not inherit half of your ERISA-governed retirement account is if your spouse signs an official Spousal Waiver saying they are affirmatively waiving their right to inherit 50 percent of the account, or if the account beneficiary is a Trust of which your spouse is a primary beneficiary. IRAs Have Different Rules Than 401KsIf you want your children to inherit more than 50 percent of your work-sponsored retirement benefits, and completing a Spousal Waiver isnt an option, consider rolling the account into a personal IRA instead.In contrast to 401(k)s and similar employer-sponsored plans, IRAs are controlled by state law instead of ERISA. That means that your spouse is not automatically entitled to any part of your IRA. When you roll a 401(k) into an IRA, you gain the flexibility to name anyone you choose as the designated beneficiary, with or without your spouses consent. On the other hand, if you want to ensure your spouse receives half of your retirement savings, make sure to include them as a 50 percent beneficiary or better yet, have your individual retirement account payout to a Trust instead. With a Trust, you can:Document exactly how much of your retirement you want each of your loved ones to receiveControl when they receive the funds outrightEasily update and change the terms of your Trust without having to remember to update your financial accounts.Beneficiary Designations Always Trump Your WillWhether you have an employer-sponsored 401K or an IRA you manage yourself, there is one critical rule that everyone needs to know: beneficiary designations trump your Will.A Will is an important estate planning tool, but most people dont know that beneficiary designations override whatever your Will says about a particular asset. For example, if your Will states that you want your retirement account to be passed on to your brother, but the beneficiary designation on the account says you want it to go to your sister, your sister will inherit the account, even though your Will says otherwise.Similarly, lets imagine that you get divorced and as part of your divorce decree your ex-spouse agrees that they will not have any right to your retirement fund. However, after the divorce, you forget to take their name off of the beneficiary designation for the account. If you die before updating the beneficiary designation, your former spouse will inherit your retirement account. If you forget to update your ERISA-controlled account and have remarried, your current spouse would receive half of the account and your former spouse would receive the other half. Thats why its so important to work with an estate planning attorney who can make sure your accounts are set up with the proper beneficiary designations and ensure that your assets are passed on according to your wishes.Work With An Attorney Who Makes Sure All Your Assets Will Be Passed On How You Want Them ToUnderstanding how the law affects different types of assets is essential to creating an estate plan. But theres more to it than just having a lawyer you need an attorney who takes the time to really understand your family and your assets so they can design a custom plan that achieves your goals for your assets and your legacy. Thats why we help our clients create an inventory of all of their assets to ensure that every asset they hold is accounted for and passed on to their loved ones exactly as they want it to.Contact Entrusted Legacy Law at 412-347-1731.
Prices are soaring. Many peoples monthly bills are increasing faster than the cost of living adjustment. Unfortunately prescription drugs have not been spared in the price increases, and people are having to choose which of their necessary medications they are going to have to give up. Fortunately, some help is on the way - Medicare Part D is an optional plan offered to anyone who qualifies for Medicare, and covers prescription drug charges. There have been many changes to Medicare Part D in 2023, including more vaccines being covered with no out-of-pocket cost to the recipient; lowered or fixed insulin prices; and the creation of the new Extra Help program. The Extra Help program is for low-income individuals (less than $21,870 per year for a single person or $29,580 for a married couple living together) who also have limited resources ($16,660 for a single person or $33,240 for a married couple). If you qualify for Medicaid, Social Security Income, or a Medicare Savings Plan, you automatically qualify for the Part D Extra Help program. Extra Help offers full or partial benefits to the recipient. Starting in January 2024, a further expansion to the Extra Help program will allow an even wider range of seniors to enroll. Currently, the applicants household income must be less than 135% of the federal poverty level. The 2024 change will expand it to more potential recipients by raising that amount to 150% of the federal poverty level. According to the Centers for Medicare and Medicaid Services, this change is expected to benefit more than 300,000 current enrollees who are only receiving partial benefits, who will now be eligible to receive full benefits under the program. There are even more changes coming in 2025 and beyond. According to the Department of Health and Human Services, up to three million seniors could benefit from this Extra Help program, but are not currently enrolled.
Aid and Attendance benefit is a VA pension perk that is frequently underutilized. Let's examine the program's benefits, who is eligible for it and how the aid improves life. Let's learn the details about the valuable aid designed for those who served the nation. An Overview of the Aid and Attendance Benefit:The VA benefit helps the eligible veterans and their surviving spouses with monthly cash benefits based on their income and net worth. The benefit helps cover long-term care costs, like in-home assistance or nursing home care.Who's Eligible, and What's the Process?To apply and enjoy the benefit, veterans must meet the following criteria. 1. You must have actively worked for 90 days, with at least one of those days spent in a time of war.2. You were discharged with honor.Additionally, you must meet these physical prerequisites: * You depend on someone else to carry out your daily work, like dressing up, bathing, eating, and grooming. * You stay in bed or spend most of the day there because of some illness.* Your eyesight is contracted to 5 degrees or less, or your vision is restricted to 5/200, even with glasses or contact lenses.To apply for the benefit, veterans must submit documents like discharge papers, medical records, and financial information. It is suggested that you get help from VA-accredited agents or organizations with an earlier record of helping veterans with the application process.Better Life for the Veterans:The aid and attendance benefit helps offer monetary assistance at the late stage of life, as this reduces the financial burden when one is not earning or is not at a stage where they can earn for their living. The maximum annual benefit is subtracted from the countable income of a household to calculate the monthly benefit. You are eligible for the entire annual amount if the family has no countable income.The benefit ensures that the veterans can safely stay home and receive the right care. It helps improve the lives of veterans and their loved ones. Final Words:The aid and attendance benefit is a lifetime of support and acknowledgement for their service, ensuring they live a good life. Applying for the program or following all the processes might be difficult. Platinum Benefit is vital in helping veterans get the support they deserve. Always look for experts who have a previous record of helping veterans with applying for the program.