How Can A Living Trust Benefit Me?

The main benefit to a Living Trust is to avoid probate. To understand the Living Trust you must understand all the roles that each person involved in the trust will play. There are essentially four different parties to the trust:

1. Grantor. The Grantor is the individual who sets up the trust to protect their assets. They may also be referred to as the Settlor, Trustor, or Creator.

2. Trustee. This is the individual(s) established by the Grantor to manage the estate. This is usually the same as the Grantor so they may continue to control his estate in the manner he is accustomed. Some choose to name a Trustee other than themselves to manage the trust if his circumstances prevent him from being able to do so.

3. Successor Trustee. This is the individual(s) established to take over the original Trustee’s responsibilities if they are unable to do so for any reason, usually death or disability.

4. Beneficiaries. These are the individuals or companies that are to receive the benefits of the trust once the Grantor has passed away. Beneficiaries are mostly spouses and children, but can also be friends, other family members, charities, etc.

Once these roles have been established the trust is executed and must be funded. Funding the trust is a very important step in creating the trust. The trust must hold the assets that will be distributed at the time of death. In order to fund the trust the assets must be re-titled into the name of the trust. This is a very easy process and can be done quite quickly. This is crucial to having your estate avoid the timely and costly process of probate.

Upon the death of the Grantor the Trustee or Successor Trustee will act in the same manner as a representative would in distributing a Will. They will carry out the terms, conditions and instructions stated in the Revocable Living Trust. This usually will entail payment of taxes, bills, and distributing the assets.

Be sure to speak to an Estate Planner at Legal Awareness for Seniors to properly set up your trust and avoid probate.

Seniors and Nutrition

The food we eat can greatly affect our health. It can lower or raise the risks of many diseases such as blood pressure, kidney disease, dementia, some cancers, osteoporosis, diabetes and more. Many people who have eaten healthy their entire life can easily continue to eat healthy. The nutrition of the food is as good for a senior citizen as it is for a senior in high school.

We have gathered some helpful information when dealing with nutrition and the elderly.

  • As you age your sense of taste decreases. It is common to add extra seasoning to the food, however stay away from salt. You can use garlic, ginger, paprika, cumin, and many other healthier spices.
  • Staying at an ideal weight is the key to healthy living. Seniors require fewer calories for energy needs so choosing nutrient rich food is important. Many seniors find themselves eating more junk food; even a senior that is overweight can still suffer from malnutrition.
  • It has been proven that eating fish at least once a week will help decrease the plaques and tangles that lead to Alzheimer’s disease. This information outweighs the concern of mercury intake.
  • Don’t research online for your health needs; nobody is better to ask than your doctor. He may give you a strict diet to follow or offer you supplements. There is a lot of information out there that is geared more towards selling you something than really helping your health. Let your medical professional guide you.
  • For those that are in the early stages of dementia they may overeat because they forgot that they had eaten already. You can help by giving them a mealtime schedule and providing healthy snacks throughout the day.

To get more information about Senior Nutrition you can visit or and visit your doctor or registered dietitian to get help or have your questions answered.

How Can ALTCS Help Me?

ALTCS stands for Arizona Long Term Care System and is Arizona’s branch of Medicaid. Applicants must qualify medically and financially in order to receive these benefits. If you do qualify for ALTCS this will cover the cost of acute care services, nursing home care, home and community based services, and services for developmentally disabled adults and children.

ALTCS does require quite a bit of planning. There are estate planning documents that can be put in to place before applying for ALTCS that will help increase the chances of qualifying. Each year 73% of all applicants are denied because they did not have prior proper planning.

It will take a minimum of 45 days to process the application. Many times they will come back and ask for more documentation. Before applying you must:

  • Meet the age and/or disability requirements
  • Verify citizenship status and identity
  • Verify your Social Security Number
  • Verify your marital status (if married)
  • Living in ALTCS qualified home or facility
  • Apply for all potential benefits
  • Assign your rights to health benefits to AHCCCS (Arizona Health Care Cost Containment System)
  • Pass the Pre-Admission Screening process
  • Meet the financial requirements
  • Have no transfer of assets in the past 5 years that would disqualify you for long term care

There is some pre-planning involved when applying for ALTCS. It would be best to meet with a consultant to give you guidance for your specific situation. Many who try to do this on their own are unaware of some of the penalties that could exist if their estate was managed incorrectly.

A Will Isn’t The Only Way

Over your lifetime you’ve been used hard work, discipline, vision, and long-range planning to build an estate to pass on to your children and grandchildren. But have you taken steps to protect that wealth from being whittled away by legal fees and other costs associated with probate after you die? Probate – the time-consuming, and often expensive, process of proving in court the validity of a will – can be side-stepped by drafting a living trust. In establishing a trust, the bulk of your assets are transferred into the trust; you no longer personally hold the title. You still control all the assets and derive all income and other benefits from those assets. But when you die, your property doesn’t go through probate because the property isn’t in your name.

There are many advantages to avoiding probate, experts say, including savings in time and money. Even in a simple estate probate usually takes from 10 months to two years. Only after the estate has been appraised, taxes paid, and contested claims settled is the property distributed to the beneficiaries. And during all this time, a lawyer’s meter is running. Fees are generally a percentage of the value of the estate. A typical fee is five to ten percent on an estate.

If yours is a large estate, a living trust also may provide tax advantages over probate. Although Arizona has no estate tax, there is a federal tax on estates in excess of $600,000. A married couple could split their property into two trusts and protect up to $1.2 million from estate taxes. Yet the surviving spouse has the right to all the income from the principal of the trust.

A living trust also provides more privacy than a will. Probate is a public process. While a will details your wishes only up on your death, a living trust can help manage your affairs should you become disabled. A living trust can turn over your assets, and your instructions on how they are to be managed, to a successor trustee should you become unable to manage your own affairs.

In order to provide for disability, experts recommend that the trust be funded while you are still living. Many who draft a living trust fail to transfer assets to the trust. You’ve got the box, but it’s empty. Almost everything should be in a trust except the automobiles.

I suggest to my clients that they review their trust annually just to make sure it keeps up with their current needs. The trust should be reviewed by a professional every three to five years to make sure it is current with tax laws. And any additions to your family, such as children or grandchildren, or additions to your wealth will necessitate amending the trust. The main thing is to make sure it meets your desires. It ought to do what you want it to do.

Although a trust does many of the chores generally associate with a will, it doesn’t replace the need for a will. You must have that back-up document just in case there are changes in your life that aren’t included in the trust. Although a trust should be your main estate planning document.

Visiting Your Parents for the Holidays

The holidays are a perfect time to assess how your parent’s well being has been. During your visit there are a few things you should do.

1. Conversations. Having meaningful conversations about the future is a wonderful way to start your visit. Talk about aging and how they see the process going. It is important that you know your parents wishes and it could be helpful for you to suggest what you expect the future to bring.

2. Safety. Spend an afternoon checking the surroundings for safety. Fix any tripping hazards, broken items around the home, items that need straightening, and be sure to ask if there is anything they need help with.

3. Health. Since it may have been a while since you have seen your aging parent you may notice they have changed. Be sure to look for key elements that should be red flags:

  • Weight Loss. This is the most obvious sign to spot. If you notice a lot of weight loss in your parent there could be something seriously wrong such as dementia, cancer, heart failure or depression. It could also be something as simple as a lack of energy to cook. If you are concerned you should schedule a doctor wellness visit.
  • Balance. Pay attention to how your parents walk and move around. Are they reluctant to walk? Find out if it is due to pain. If they are unsteady there may be a risk of falling and hurting themselves. You will want to have that checked out as well.
  • Environment. When looking around the house do you notice clutter? Unpaid bills? Piled up mail? This could be a sign that a problem exists. Take note of their prescriptions and check expiration dates. If there is anything to be concerned about you should talk to their physician.
  • Emotional. Look for signs of depression including sleep patterns, personal hygiene, home care, and any changes in behavior. If you notice your parent just isn’t acting like themselves it may time to have them checked out for ailments.

Visiting during the holidays is more than just a reunion; it is a time to keep an eye on the aging process of your parent. If you have any concerns having a heart to heart with them can help alleviate any worry. And don’t forget to enjoy yourselves.

Why More Americans Are Saving Their Retirement With Annuities – Part III

What Are The Different Types Of Annuities?

Annuities can be immediate or deferred. This is simply whether the income payments begin right away or later. Annuities can also be fixed or variable.

Fixed annuities guarantee your money will earn at least a minimum interest rate. Fixed annuities may earn interest at a rate higher than the minimum but the rate isn’t guaranteed until it is credited to your account. With a fixed annuity you are not investing directly in the market and insurance companies must promise that your money is protected from market losses for it to qualify as a fixed annuity.

Money in a variable annuity earns a return based on how the investments you choose perform. Your investments are called “subaccounts” which are investments in mutual funds or other investment products. Your investment choices likely will have different types of risk and will affect the return you earn on your annuity. You may also have a choice to put some money into a fixed account with a guaranteed minimum interest rate. If the value of the subaccounts goes down, you may have less money in your annuity than you paid into it.

Why More Americans Are Saving Their Retirement With Annuities – Part II

The country’s movement away from defined benefit plans (such as pensions) to defined contribution plans (such as a 401(k)) placed more responsibility on individuals to manage their own nest egg. Studies show Americans have done poorly at this task.

In fact, the federal government is promoting annuities as a retirement savings tool to address this problem. The administration changed the rules to allow employers to offer annuities within defined contribution plans, and to delay required minimum distributions (RMDs) to as late as 85 years old for deferred annuity holders.

Social Security benefits represent the largest source of income (40 percent) for retirees in every age group, according to the LIMRA study, The Retirement Income Reference Book 2015. In its annual report, the Social Security Administration predicted its old age and disability trust funds, combined, would be exhausted in 2033.

A Political fix might happen at some point, with most ideas pointing to a raise in the eligibility age for benefits. That could make it even harder for future retirees to remain independent and in charge of their retirement lifestyle.

The Center for Annuity Awareness is an independent resource to assist with retirement decisions and provides readers with unbiased information and tools. In addition, the Center gives consumers access to professional advisors who can help retirees in making important financial decisions about their future. It is more than just the money, it’s helping retirees to secure a lifestyle, peace of mind and maintain financial independence.

What Is An Annuity?

An annuity is insurance against living too long. Annuities insure your savings will last as long as you do – no matter how long that is. With an annuity you’re buying longevity income to insure your savings last your entire life.

People buy an annuity for peace of mind. Most of us have a parent, an uncle, or even multiple relatives, who have lived into their 90s. It takes a lot of money to live two and three decades in retirement. The No.1 fear among retirees is outliving their money. Annuities guarantee that won’t happen.

More information about Annuities will come next week. Stay tuned.

Why More Americans Are Saving Their Retirement With Annuities – Part I

No one has to tell you that it is a new, anxious world for retirees. Pensions are nearly non-existent. People have not been able to save as much money as they will need. The economy is far from stable. Social Security seems under constant strain.

What Will Tomorrow Bring?

No one can accurately answer that question. That is why more Americans are turning to annuities to control their destinies. Annuities are a guaranteed source of income that you own and no one can take away.

That stability in times of crisis and need is what attracted many former critics to embrace annuities as part of a firm foundation for a secure retirement.

Harold Evensky, professor of financial planning at Texas Tech University, is one such former critic. He was dubbed the “Dean of Financial Planning” by Don Phillips, CEO of Morningstar, and is viewed as one of the top fee-only financial planners in the country.

Evensky now says annuities can be the key to help solve retirement’s greatest riddle: How do 76 million baby boomers pay for retirement?

An analysis by the Government Accountability Office finds that among households with members aged 55 or older, nearly 29 percent have no retirement savings or a traditional pension plan.

Millions of others are woefully short of retirement funds. Annuities are a valuable resource to help stretch dollars, Evensky said.

“I think that (annuities) are going to be an extremely important part of the investment and planning portfolio over the next decade or so,” he said.

An annuity is an insurance contract and like any contract it can be confusing. Terms and fees vary from annuity to annuity. People looking to save for retirement have to determine if the terms of an annuity or any contract are what they need and if the expenses are reasonable.

The most important thing is to have all of the information to see if annuities fit in your plan. Because the simple reality is that the retirement formula has changed. The era of combining pensions with Social Security is over for many people.

More information about Annuities will come next week. Stay tuned.


Essential Retirement Planning Tips

Retirement doesn’t just happen. It takes years of planning. We have come up with some helpful tips to guide you in your plan for retirement.

1. Save. Many who retire have not saved up enough to last. Retirement is usually 20-30 years, which is the longest span of life. Also, retirement funds or pension is not paid out immediately. It usually takes several months or more to receive your first check. It is wise to have enough money in your savings for at least six months of your budget before you retire.

You should also know the maximum amount you can contribute to your 401(k) or 403(b) accounts and IRA’s. Consider limiting your expenses, having a reasonable budget and tax planning to help get the savings you need to live on throughout your retirement.

2. Budget. Creating a budget is one of the key factors in a successful retirement. However, there are many things that get overlooked when planning a budget. Don’t forget about inflation, emergencies, medical expenses, and more. Only a small percentage of people integrate a plan for helping their parents and/or children. Many times those that retire have parents that are still living and may rely on them for income.

When it comes to helping out your children you should have a certain amount set aside to help in case of an emergency. If it isn’t an emergency then you should not be afraid to say no and tell them that you are living on a fixed income.

3. Maximize Social Security. You may choose to start collecting Social Security right away; however, you should look at the benefits to waiting a little bit longer. Some may end up earning up to $100,000 or more in their lifetime by waiting. It is best to talk to your financial advisor to find out what age is best for you to start receiving this benefit.

4. Ask for help. Many baby boomers have a “do it myself” type of attitude. They are use to going online and researching. There is a lot of misinformation out there. It is okay to and you should ask for assistance from a financial advisor.

5. Have an open mind. Planning a budget can seem scary and feel like you are losing your freedom when in fact it is doing the opposite. Having a budget will give you the financial freedom throughout your retirement. There are a lot of opportunities to plan and save for your retirement. Give us a call to find out more.

Beware of Joint Tenancy Deeds

Many people have this idea that they can eliminate probate simply by owning their assets with joint tenancy. Well, that works sometimes, but you have to be careful to make sure that the asset is held in ‘joint tenancy with right of survivorship‘. Those are the magic words that have to be on the document, on the deed, on the bank account. Without the words ‘with right of survivorship‘ the property does not automatically go to the other joint tenant without probate.

Too many times people have come to me and said, “I have this deed. Real estate is being held by me and by my deceased wife as joint tenancy, but the title company won’t let me keep it in my name or sell it without going through probate. They say it needs to have some additional language.” I have to agree with them. The magic clause ‘with right of survivorship’ is missing. That means it will require probate.

Joint tenancy simply postpones probate. Even if that magic phrase is on the deed — it’s held as joint tenants with right of survivorship — this simply means it postpones the probate until the second death. Sure, it will avoid the probate on the first death. With right of survivorship means the property automatically belongs to the survivor. But at the death of the second person, this property is still subject to probate. So it does not avoid it altogether.

Never hold property in joint tenancy with anyone other than your spouse. I recommend that you never hold any kind of property in joint tenancy with anyone other than your spouse. Now I hate to use that word “never.” It seems that there is always an exception. But I haven’t found the exception to this one, yet, because joint tenancy also means joint liability. Now with your spouse, that’s not so bad. You usually have joint liability anyway, but with anyone other than a spouse, do you want to be held accountable for their liabilities?