The Petrosewicz Law Firm Estate Planning Blog

Are You Ready for an Emergency?

Fires, floods, earthquakes: the natural disasters that have turned people’s homes and lives upside down have made us aware of how vulnerable we are, and how little time there is when disaster strikes. A “go-bag” to protect your family that contains credit cards, cash, flashlights, flares, batteries, warm clothes, prescriptions, and other necessities is just one part of being prepared, says the article “The most important ‘go bag’ item for emergencies is only 2 inches long” from The Union.

That’s your “financial go bag.” It won’t feed you or keep you warm, but it will save you countless hours and headaches when life returns to normal. Here’s what you need to know:

1. Gather all your important documents. That means your driver’s license, passport, birth certificate, social security card and Medicare card. If you own your home, you should include deeds to property and titles to cars, as well as insurance policy summaries for home, auto, medical, long term care, life, or umbrella policies. Include statements for checking, savings, investments, debt accounts with account numbers and federal and state tax returns from the last three years. Add estate planning documents. If you have a pet, include their license information, chip ID and vaccine records. If there is an 800 number for a service that can track your pet. Make sure to include that.
2. Create a physical list of important phone numbers and addresses for family members, professionals, including your estate planning attorney, CPA, financial advisor, dentist, doctors and emergency contacts. Print it out and put it in your go bag. If you don’t have any power, your list on the phone will not be accessible.
3. Create a video inventory of your home, including the contents of dressers, drawers, cupboards, collections. Don’t forget the garage and outdoor landscaping.
4. Scan all this information and store it on two thumb drives (also known as memory sticks). Protect the information, by using an encryption method to secure it, in case it gets lost.
5. Put one of these thumb drives into your safe deposit box and another in your go bag. Even a fireproof safe won’t survive a massive wildfire, so don’t put it in a safe in or under your house. Put the go bag somewhere near an exit point, where it blends in and is secure.
6. Tell your family and closest friends that you have a financial go bag and where it can be found.

This does take a little time, but if disaster strikes, and you can move quickly with your documents and your “regular” go bag, you and your family will be in a better position to rebuild your lives.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Union (Dec. 23, 2018) “The most important ‘go bag’ item for emergencies is only 2 inches long”

Does Your Retirement Plan Include Travel?

You’ve spent a lifetime making mortgage payments and putting kids through college. You are now finally free to make the trips that you’ve always dreamed of and exotic countries like Bali or traditional stops like Paris and Rome await you. However, you’re also living on a fixed budget and cost, says the article “How to Plan for Travel in Retirement” from Investopedia, is a real obstacle.

The average retiree spends about $11,077 per year on travel, and the mean after-tax household income for seniors who are 65 and older was $44,051 in 2017. How do you make these two numbers work and see the world? Think budgeting and financial goal-setting, both before and after you retire.

Start by considering how well-prepared you are for handling everyday costs during retirement. Do you have the cash flow to cover the normal cost of living? Then add the cost of travelling. If the answer is yes, start making plans. If not, then it’s time to go to work on planning and saving.

Analyzing current cash flow and projected retirement spending can help determine how much you’ll realistically be able to devote to travel. Obviously, the more retirement savings you have, the more room you’ve got to plan.

A few things to consider:

• If the travel you have in mind is too expensive, can you still travel but at a lower cost?
• Can you afford to travel at all, based on your current cash flow?
• Should you delay travel plans, so that you have time to save for them?
• How many trips do you think you can manage, financially, each year?

Once you know your annual travel budget, you then can decide whether you want to take one big trip a year or a series of smaller, less expensive trips. Remember to include airfare, hotel costs, food, shopping and entertainment. Don’t forget the cost of medical care.

Medicare does not provide health coverage when travelling overseas, so you’ll need to be aware of what, if any, coverage you have from Medicare Advantage. You may need to purchase additional travel health insurance, so also include that in your budget.

You might use a “bucket” strategy: have one bucket for fixed expenses, another for variable expenses and a third for a future bucket. Travel would be the future bucket, for those who are still working. You might also want to start a dedicated account, savings, money market or CD. You can also allocate a portion of your investment portfolio for travel costs.

Travel is a wonderful part of retirement, especially in the early years when you have the best health and the most mobility. However, like any other part of retirement, it requires good planning.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Investopedia (Nov. 19, 2018) “How to Plan for Travel in Retirement”

Traveling? Let’s Be Smarter about Our Documents

We do a lot of advance planning for spending a day running errands or going on a bucket list vacation. For those who recognize the importance of estate planning, we get our documents updated, including our living will, durable power of attorney, health-care surrogate and others. However, according to the Bradenton Herald article “Here’s an easy way to keep your important papers with you at all times,” we often don’t keep those documents with us at all times. Maybe we should rethink that.

One man looked at all the documents that he and his wife had signed at their estate planning attorney’s office and asked if he could scan and copy the documents onto a flash drive. The attorney agreed. Note that there were no Social Security numbers, no bank account numbers or any sensitive information on the documents. The documents contained only the couple’s names and the names of their heirs.

The man bought a metal flash drive, put a ring loop on it and attached it to his key ring. He scanned and copied the documents onto the flash drive. He did not put a password on the flash drive; some people may feel more comfortable with that.

However, what happened next proved the wisdom of his idea. A few weeks later, he and his wife were enjoying their vacation and his wife needed a visit to the emergency room at the local hospital. While in the admissions office, she was asked if she had a living will and other health care related documents. Her husband had everything with him. They had to locate a computer that was not on the hospital network, due to internal security policies. However, they found one and were able to download the documents from the flash drive.

Remember that not all states recognize documents from all other states, and if you lose your keys on a regular basis, this may not be for you. Having these documents on hand was far better than not.

Everyone, regardless of their age, should have their estate planning documents in order. Things happen, even to young people. Most people leave these documents in a safe deposit box, a filing cabinet or with their attorney. They are secure—but you don’t have ready access to them.

The flash drive is just one way to have these documents with you, while you are away from home. Some offices now offer online portals, where documents can be stored in the cloud. Not everyone is comfortable with that, but it is an option.

Other pieces of information to consider adding to your flash drive: recent medical reports, a list of prescriptions, a list of doctors and any pre-paid funeral arrangements.

Granted, this is not for everyone, so speak with your estate planning attorney about the idea of keeping your important documents on a flash drive and find out how else you might be able to maintain your important estate planning documents for secure and easy access.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Bradenton Herald (Nov. 12, 2018) “Here’s an easy way to keep your important papers with you at all times”

Hooray for Hollywood for Inspiring Your Retirement Plan

No one denies it—this is a hard time of year to think about saving for retirement. It’s so much more fun to buy gifts for loved ones and, while you’re at it, a little something for yourself. However, Hollywood has some helpful messages, says USA Today in the article “Hollywood can inspire you to save more in your 401(k) for retirement.”

An unlikely source of inspiration for retirement planning? Hollywood? Yes, indeed!

If you remember Jack Colton, the male lead in 1984’s “Romancing the Stone,” then you know about a guy who spent his whole life dreaming of owning a sailboat, even while he was hiding from a foreign army and getting involved in a crazy criminal treasure hunt. Retirement savers need to find their own inner dream, one they cannot be distracted from and that will keep them focused on saving and investment, no matter what. Imagine your future self-doing what you love doing.

Then there’s “The Bucket List,” with Carter and Edward, who are ready to have an adventure, when their diagnoses are terminal. If you’ve got some thoughts about a bucket list floating around, make them real. Write them down. Then put them in order of priority. Visualize what you’ll need to do to get there. Building your connection with your dreams, will keep you motivated.

An example of keeping your eyes on the prize comes from Netflix, with “Fuller House.” This is a great example of how mapping goals can clinch a retirement strategy. Sitcom dad Danny Tanner gives his San Francisco home to his daughter. He’s not retiring, but he planned for years to live where he wanted, while giving his daughter and her family his home. Know where you want to live in retirement and keep that in sharp focus.

“Everybody Loves Raymond” features Ray and his family and his parents. They live close together, so much so that they are involved in every detail of each other’s lives. Or, for a completely different lifestyle, remember the 2012 comedy “Quartet,” directed by Dustin Hoffman? This was about a retirement community for stage performers, who sought to create a new community among their fellow actors.

Figuring out who you want to spend your retirement years with, can have a major impact on where you will live. Do you want to be close by your family, involved with their daily lives, available for babysitting, family dinners and the grandchildren’s soccer games? Or would you rather pursue your own interests and enjoy a warm climate?

The better you can clarify your retirement dream, the more focused you’ll be on doing what needs to be done, regardless of the distractions around you.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: USA Today (Nov. 11, 2018) “Hollywood can inspire you to save more in your 401(k) for retirement”

For Snowbirds, Estate Planning Is Needed for More than One Nest

Leaving the cold behind is a wonderful journey for the many northerners who make the annual trip. However, they need to be aware of some unintended consequences to their estate plans. State laws govern the administration of estates and the rules in one state may not always be the same in another, according to an article from The Indiana Lawyer titled “Multi-jurisdictional estate planning requires research, collaboration.”

This multi-state thinking applies to anyone with property in more than one state—or countries. How then can they figure out how to administer their assets after death, if they are spread out across the country or around the globe?

The process sounds simple but it’s not. Their estate planning attorney needs to understand and advise them about the laws governing each of the jurisdictions where they have assets. It requires extensive research and may need the help of other attorneys working together. If the cost is a concern, understand that the cost of doing this after death will likely become far more complex and costlier.

The first step is to identify the assets and where they are located and then determine where the client maintains legal residence.

People often have property in a few states, as well as bank accounts in a few states. Tangible assets, such as real estate and intangible assets, such as bank accounts, are treated differently in estate planning law.

Tangible assets are typically governed by the law where the asset is owned, while intangibles are governed by the law of where the client resides. One way to simplify this process is to put all the assets into a revocable trust, which avoids probate and helps a client avoid multiple ancillary estates.

 However, estate attorneys will need to know the estate law of other locations to help their clients make the right decisions for their assets.

Many states have probate laws with similar general principles. However, the details are different. One example: a trust that was properly executed in Indiana was ineffective under Florida law, because of the lack of sufficient witness signatures. It was a small detail, but one that made all the difference.

The problem becomes even more complex, when the person has assets in foreign countries. In some countries, forced heirship will actually prohibit citizens from dictating where their assets go after death. In these countries, a certain percentage of a citizen’s assets must go to their children, spouse, etc., and some countries don’t recognize the concept of a trust, so creating a revocable trust to avoid ancillary estates won’t work.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Indiana Lawyer (Oct. 17, 2018) “Multi-jurisdictional estate planning requires research, collaboration”

Getting Ready to Fly South? Estate Planning and Snowbirds

This is the time of year when people ,who can’t stand cold northern winters, start making their plans to head south to enjoy warmer climates. However, according to TBR Newsmedia’s article “Estate planning tips for snowbirds,” there are some legal matters that need to be addressed before heading south.

You’ll need to determine if you should see an attorney in your home state or in your winter residence, if you want to create estate planning documents and plan for care in the future.

In what state are you a legal resident? Some factors used to determine residency, include the amount of time spent in each state, your mailing address, what state issues your driver’s license, where your car is registered, where you vote and what address you use to file your income taxes.

Once you determine your state of residence, there are other considerations. Where do you plan on living in the future and where do you think you’ll receive healthcare? If you move south upon retirement but plan on heading back north when you are faced with health issues and need the support of family members, you need to consider those things when making your estate plan.

The laws governing Medicaid vary from state to state. You should have your documents reviewed by attorneys in both your northern and southern residences, to be sure that they comply with the law in both places.

There are also differences in the law for powers of attorney and advance directives, including health care proxies and living will documents. These are important documents and you’ll want to be sure they will work in both states.

For instance, in New York State, the person who is named to make medical decisions is called your agent, while that same role is called a surrogate in Florida. The term used under the law to name a default agent is proxy in Florida.  Although it seems simple, it could lead to confusion and a delay in decision-making at a time when minutes count.

The language listed in your power of attorney will differ state by state as well. If your agent is helping you with long-term care planning, this becomes especially important. You need to make sure that your power of attorney includes all possible powers your agent may need, regardless of whether you are paying privately or applying for Medicaid to cover costs.

Talk with an estate planning attorney about your travel plans and make sure that your documents are all in order, before taking off for a warm winter.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: TBR Newsmedia (Sep. 3, 2018) “Estate planning tips for snowbirds”