Make Your Estate Simpler for Your Heirs
Article written by Cheryl Winokur Munk, Wall Street Journal.
Here are five ways to help heirs avoid extra time, money, stress and acrimony after you pass.
Keep documents updated
Having a will or living trust is essential—but it isn’t enough. The proper documents need to be updated periodically, especially as life circumstances change.
Amber Hughes, a lawyer in the Phoenix office of law firm Dickinson Wright, offers the example of a mother who belatedly drafted new estate-planning documents but died before signing them. The old will had named as heirs stepchildren she hadn’t spoken to in 20 years, and her sons are spending tens of thousands of dollars to have the unsigned will enforced by a judge.
Many people also fail to update beneficiaries for life insurance, retirement accounts and bank or investment accounts. These assets pass according to the beneficiary designation, if there is one, regardless of what the will or living trust says, says Laura Zwicker, chair of the private client services group at law firm Greenberg Glusker Fields Claman & Machtinger in Los Angeles.
A client’s brother had an IRA valued at several million dollars. When he died, the IRA funds went to a woman he hadn’t dated for at least 10 years instead of to his brother’s daughters, even though they were named as beneficiaries in his trust. The heir indicated on the IRA was the former girlfriend, and that was the one that counted. “Imagine their surprise, but there’s nothing we can do about it,” Zwicker says.
Address digital assets
Many people have digital assets, including email and online photos, that could be lost to heirs if proper provisions aren’t put in place. For instance, a writer who stores plays or novels on a Google drive, but doesn’t set up a Google inactive-account profile, may make it harder or impossible for heirs to gain access to these works. Terms might differ, so having appropriate documentation on file with each provider is important.
Cryptocurrency and nonfungible tokens can also easily be lost if their owners don’t provide heirs a way to access these assets. So people should make sure beneficiaries know how to access an account’s private keys—the secret numbers used to access cryptocurrency—as well as the kind of wallet and crypto type. One caveat: Those private keys and other sensitive information shouldn’t be included in a will because it becomes public through the probate process and that puts the assets at risk.
Assign personal property in advance
Many people assume that heirs will figure out on their own how to divide personal property, but that can lead to fights.
Hughes offers the example of three sisters who fought over their mother’s collection of hundreds of porcelain dolls. They had to hire a professional mediator to draw straws until all of the dolls were distributed. Had the mother made a personal-property list before she died, significant aggravation and hostility might have been avoided. The list can be handwritten and up-to-date, and should be kept with estate-plan documents. The document should also include where items can be found.
Leave good notes
Estate-planning experts advise that people set aside a folder with important information for the heirs, such as names, numbers and locations of accounts, as well as names and contact information for attorneys, accountants and financial advisers. This is especially important since bills are often paid online, eliminating once-helpful paper statements. Also let heirs know where to find your estate-planning documents. “If you can’t find the will and you don’t know who the trust and estate attorney is, that’s a horrible situation,” says Seth Slotkin at law firm Akin Gump Strauss Hauer & Feld in New York.
One word of caution: Try not to leave unnecessary documents for your heirs, because it’s overwhelming, Slotkin says. How long to keep certain documents depends on their nature, but generally speaking, purging unnecessary documents will save your heirs time and money, he says.
Strive for conflict-avoidance
Parents sometimes create conflict by choosing one child over another to serve as executor, trustee or both, says Neil Solarz, shareholder at Weinstock Manion in Los Angeles.
Sometimes it may be appropriate. But in most instances, Solarz recommends naming a relative or friend to avoid potential sibling-rivalry issues. If there’s no one else available, people might consider hiring a trust company or a private professional fiduciary—vetted and licensed individuals who are licensed to act as trustees or executors.
People who have specific reasons for dividing assets or roles unevenly should prepare a letter that explains their thought process, which can help mitigate the potential for future conflicts, Slotkin says. For example, clarify that you named your daughter as executor because she lives locally, but that you want all of your children to work together to settle the estate, he says. Or, if you are leaving the younger of three children $100,000 more than the others, explain why. This extra step can mean the difference between harmony and acrimony among your heirs, he says.
“The thing that’s most likely to cause the estate process to dissolve into something horrible is acrimony among the children,” Slotkin says. “If you want to make things easy for your kids, if there’s anything that could be misinterpreted, explain it to them so they’re not fighting about it.”
Medicare and Moving: What You Need to Know
Article written by Donna Levalley, Kiplinger
If you’re moving, you may be wondering if you need to make changes to your Medicare coverage. The answer depends on the type of coverage you have.
Original Medicare and moving
You are in luck if you’re enrolled in Original Medicare, Part A and Part B. You don’t need to make changes to your coverage if you’re moving, either to a new address in your state or out of state. Original Medicare is an insurance policy that can be used countywide. Medicare Advantage plans are more akin to an HMO and participants are limited to their slate doctors and facilities.
Original Medicare doesn’t have the limited provider networks that Medicare Advantage plans do. You can use any hospital or doctor throughout the country that takes Medicare assignment. When a doctor accepts assignment, this means he or she won’t charge you more than the Medicare-approved amount for a health care service, although you’ll still be responsible for any copayments or deductibles that apply. You can use this Medicare tool to find and compare providers close to your new home.
Guaranteed-issue rights and Medigap plans
In most cases, you won’t be able to switch your Medigap policy outside your 6-month Medigap Open Enrollment Period except in specific situations when you have a guaranteed issue right.
Guaranteed-issue rights are granted if you move outside of your Medigap plan’s service area.
Medicare SELECT plans and moving
If you’re moving to a different state, or if you’re moving within the same state, but out of your Medicare SELECT plan’s service area, you have guaranteed-issue rights to purchase a different Medigap plan.
You must apply for a new Medigap policy either 60 days before — or no more than 63 days after — your Medicare SELECT coverage ends.
You have two options for coverage:
- You can buy a standardized Medigap policy from your current insurance company as long as it offers the same (or fewer) benefits. If you’ve had your Medicare SELECT policy for more than 6 months, you won’t have to answer any medical questions.
- You can switch Medigap policies. You can switch to Medigap Plan A, B, C, D, F, G, K, or L that’s sold by an insurance company in your state or the state you’re moving to.
Notify the Social Security Administration (SSA) if you move
If you’re moving, you should contact Social Security to update the mailing address that Medicare has on file for you. Medicare works with SSA to maintain your records and you don’t want to miss any important notifications.
Why Retirees Should Still check Their Credit Report
Article written by Cheryl Winokur Munk, AARP
Many retirees think they no longer need to keep tabs on their credit report, especially if they’ve already paid off their mortgage and don’t plan on taking out another home loan.
Checking your credit report is easy to do. Reports are available for free on a weekly basis from the three major credit bureaus — Equifax, Experian and TransUnion — at AnnualCreditReport.com.
“Regardless of your age, you should never stop keeping your eyes on your credit report,” says credit expert John Ulzheimer, who previously held positions at FICO, Equifax and Credit.com.
Here are four crucial reasons to check your credit report on an ongoing basis, even in your later years.
1. Because errors can occur
There may be small errors on your credit report, such as an incorrect address or phone number, that can be easily fixed and won’t harm your ability to seek credit. But more problematic errors can also occur, such as if another similarly named or identically named person’s missed credit card payments appear on your report. If you do find an error, you’re not alone; a survey from Consumer Reports and the nonprofit WorkMoney found 44 percent of respondents who checked their credit reports found at least one error.
If you spot an error on your credit report, you should report the mistake to the appropriate credit bureau. Explain, in writing, why it’s incorrect and provide supporting documentation.
Ulzheimer recommends seniors continue to check their reports every few months even if they’ve placed security freezes and fraud alerts with the major credit bureaus. While these measures can help protect against fraud, they can’t entirely prevent errors from occurring, since lenders and creditors can still report incorrect information to the credit bureaus or other mistakes can occur.
2. Because you may have unpaid bills
Even if you generally pay your bills on time, you may make an honest mistake if, for instance, a bill got lost in the mail or got accidentally misplaced and a payment was never made as a result. And if you aren’t checking your credit report regularly, a small mix-up could cause interest to spiral, leaving you with a hefty bill. In 2022, Americans paid $130 billion in interest and fees on their credit cards, according to the Consumer Financial Protection Bureau.
It’s easy to forget about a small balance on a credit card, especially if the card is rarely used, says Rod Griffin, senior director of public education and advocacy at Experian. But with credit card interest rates hovering around 20 percent, even a small missed payment can damage your credit, especially if it goes to collections, Griffin says. If you’re delinquent about paying, creditors generally start by sending letters and making collection calls. If you remain delinquent, lenders may send your defaulted debt to a collection agency to try to recoup the funds.
Medical bills can also go unpaid, either because people miss a bill or because they simply can’t afford the debt. The good news: the federal Consumer Financial Protection Bureau (CFPB) has proposed a rule that would remove medical bills from most credit reports.
3. Because fraudsters often prey on older adults
Another reason for seniors to stay on top of their credit report is the possibility of fraud. Although people of any age group can be targeted by scammers, older individuals tend to be more vulnerable and often lose more money to fraud as they age.
People ages 60 and over reported more than $3.4 billion in fraud-related fraud crimes to the Federal Bureau of Investigation in 2023. That’s up about 11 percent from 2022, with the average victim of elder fraud losing $33,915 last year through these crimes. But because fraud is known to be a dramatically underreported crime, the true cost is likely far higher.
Checking your credit regularly can help you ensure bad actors aren’t using your personal information to open fraudulent accounts.
“It’s very important that seniors pay attention to their credit reports, because there are (fraudsters) out there trying to get their information on a constant basis,” says David Schneider, a certified financial planner at Schneider Wealth Strategies in New York.
Anita Resch, senior vice president and northeast regional manager in the Green Bay, Wisconsin office of wealth management firm Johnson Financial Group, routinely encourages clients to check their credit report. When one couple in their eighties checked their credit reports, they discovered that someone had been opening new credit cards in their names, Resch says. Luckily, they caught the error early, but the couple still had to freeze their credit, notify their financial institutions and the credit bureaus, and stop all automatic payments and transfers until they could determine what personal information the fraudsters had obtained. Had they not spotted the fraud early, it could have become significantly more difficult to address, Resch says. “You don’t want somebody destroying the credit you’ve created,” she explains. “Once they assume your identity, there’s a lot people can do.”
4. Because you might need to access credit in the future
There are a number of reasons seniors may need a strong credit score later in life, and monitoring their credit report can help them identify areas for improvement.
You might decide to sell your house and rent an apartment instead. You might want to co-sign a loan for a child or grandchild or want to take advantage of rewards points or cash back by opening a credit card at a store they frequent. You could also be in the market for insurance, and carriers take credit into account for rates. Or you might want to take out a home equity line of credit (HELOC) to fund home improvements, in which case you’d likely need a credit score of 620 or higher to get approved.
Bottom line: keep an eye on your credit report so that your credit profile stays in good standing in your later years.
Vacation Destinations for Seniors
Article written by Patricia Doherty, Travel and Leisure
Whether you’re looking for a relaxing retreat or an active getaway, these resorts offer something for everyone.
After retirement, it’s time to treat yourself to a well-deserved vacation. Without time constraints, you can enjoy longer stays or slower travel as you visit multiple regions, a variety of landscapes, or national parks you’ve been meaning to visit. You might also appreciate the convenience of a destination resort where you can enjoy dining and most activities on-site.
Here are some of the best vacations for seniors in the U.S., whether you prefer a verdant mountain retreat, a nostalgic coastal escape, or a glamorous desert oasis.
Suncadia Resort, Cle Elum, Washington
Nestled among the Cascade Mountains on the edge of Washington’s Okanogan-Wenatchee National Forest, this picturesque resort offers tranquil scenery, crisp mountain air, and a variety of outdoor activities. Choose The Lodge for panoramic river and mountain views or The Inn, a plush hotel with golf course views.
According to SHRM, a 2021 Employee Benefits Survey conducted by XPertHR showed that roughly 82% of employers studied matched a portion of their employees’ contributions while the remaining 18% didn’t provide any matches at all.
Source: shrm.org, 2021
Entertainment & Education
Looking for something to read?
This list consists of the top 7 retirement books of 2024.
Source: Morningstar.com
On the Bright Side
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