Well managed money brings with it a freedom of lifestyle in retirement. Sadly, reports say that less than 5 percent of Americans will be financially free by the age of 65. Changes in the U.S. economy coupled with increased health care costs and lack of personal savings have put millions of American workers at financial risk as they approach their retirement years. According to a study published online at cnbc.com, nearly 40% of America’s middle-class will experience poverty in retirement. Why?

One reason is that few Americans clearly define what financial freedom means to them. The definition is a wide array of personal opinion, but there is an economic equation that can easily encompass the most basic standard set for financial freedom; P.I ≥ L.E. Translated it means passive income = lifestyle expenses. An individual’s passive incomes from assets need to be equal to or higher than the income you require to afford your chosen lifestyle. Many people retire poor because they did apply this fundamental equation to their financial future. Some individuals are too disinterested to engage in financial planning or too lazy to be proactive and productive. The adage, “failing to plan is planning to fail” sadly applies to many Americans’ retirement strategies. Hoping things will work out is not a strategy any more than planning on winning the lottery is. Individuals must establish their goals and ruthlessly and relentlessly pursue them.

Every American has a different financial reality, and much of it is derived from the mindset they choose to adopt regarding finances. Consciously, as well as subconsciously, rich people think like rich people and poor people think like poor people. What you manifest is what you see and in turn, what you become. This mindset is why so often lottery winners go bankrupt after “hitting it big” and why wealthy people who go bankrupt often go on to develop a new fortune. Keep your mindset focus positive and reinforce your short- and long-term financial goals daily. Your attitude can determine your altitude.

Many Americans who retire poor chose the “let’s just wing it” path or did not attain sound and conservative financial management help. Do not be influenced by other poor people. Surround yourself with successful friends and family and learn from them. You can model their behavior in your own life. Retain a trusted accountant, banker, or financial advisor who can tailor your individual financial needs into an easy to follow set of steps and apply them. It does not have to be overly complicated and sometimes, the more straightforward the approach, the better. If you learn from successful people and sound financial consultants, you stand a better chance of becoming financially free.

Some Americans stick their heads in the sand and never confront the facts of their financial reality. These are the people with stacks of unopened bank statements in their homes. While it can be painful to address a bleak economic reality, it is worse to have an inherent aversion to tackling the task at hand. You cannot abdicate your financial situation to anyone. You can receive trusted advice and help but do not avoid facing the truth of your finances. Oversight avoidance is how some famous athletes and performers have made vast fortunes but managed to squander every last cent. No one should care more about your financial freedom than you do.

Many people who retire poor did not save any money, and those who inherited wealth squander instead of saving in the name of immediate gratification of a new car, or large home. Extravagant expenditures feel great at the moment, but the goal is to live beneath your means. Make saving money your number one habit. People who are successful at saving sometimes make a game of it like shopping online for the best deals or using coupons. Small savings during purchasing not only add up over time, but they also reinforce the habit of saving money. When you save money, you can apply the power of compound growth. Many people who retire poor do not understand how valuable the concept of compound growth is. It can take modest savings and in time, create wealth. Sadly, many Americans understand the concept of compound growth from the wrong side of the equation. Generally speaking, Americans are debt slaves. They rack up credit card debt and pay services charges, which are the bank lending industry’s compound growth money maker. People retire in poverty because they are on the wrong side of the compound growth equation.

Without the saving habit, compound growth equation, living beneath your means, and acquiring as little debt as possible you wind up working for money instead of money working for you. It is essential to assess the three following ways income can manifest itself in your life. There is earned income, which generally is in the form of a paycheck or salary for services or products provided. Then there is portfolio income which represents stocks, investments, and pensions. Finally, there is passive income, which comes in the form of royalties, patents, online services, or rental revenues, to name a few. These multiple streams of income can make retirement far more comfortable than relying on a modest pension and ever declining social security benefits check. People who retire rich have multiple streams of income, giving them a real path to financial freedom. People who retire in poverty continue working for money without the benefit of alternative sources of revenue.

There is little excuse to lack the knowledge and skillsets to become financially solvent in the digital age. Americans who struggle financially in retirement did not take the time to become financially educated. Being ignorant about finances is a sure way to retire poor. Online and for free, you can find many websites that generate articles about financial education. It comes as no surprise that people who retire with financial problems have the worst reading habits. If you don’t enjoy reading, try financial literacy games for adults or learn through online seminars to boost your financial understanding. Even with financial knowledge if you lack a plan and the will power to follow it, you will retire without economic freedom. The practical application of your plan is crucial. Most Americans do not make a plan for their retirement, and many that do begin too late to affect a substantial change because compound growth and accrual of wealth take time. However, it is better to start your retirement plan late than not at all.

Ultimately the choice rests with the individual. Most Americans would rather retire with adequate incomes for a comfortable retirement lifestyle. Remember that you are not a product of your circumstances; you are a product of your decisions. Make the right decision today for your financial freedom in retirement.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Norman, Oklahoma office by calling us at (405) 241-5994.

Successfully addressing and legally formalizing inheritance of family values and assets can be challenging, especially if parents wait too long to begin instilling family values. Undoubtedly the best time to teach and empower your children as eventual inheritors of your family legacy is during childhood, then continuing throughout adulthood. Waiting until your later stages in life to discuss family values as a guide to handling inherited worth is often ill-received as grown adult children prefer not to feel parented anymore, particularly when they are raising children of their own.

There is value in the spiritual, intellectual, and human capital of rising generations, and it is incumbent upon older generations to embrace this notion and work with their heirs rather than dictating to them their ideas about how to facilitate better outcomes. While the directions taken by newer generations will likely differ and can sometimes be downright frightening than that of their elders, there can still be a deep sense of service and responsibility to family values and stewardship of inherited wealth. Allow your children to exert their influence over the family enterprise early on in life and make adjustments that create synergy, connection, and like-mindedness.

If this description of a somewhat ideal family system does not resemble yours, take heart. Most families do not conform to perfect standards of interaction. The more affluent a family is, the higher the failure rate to disperse assets without severe fallout. The Williams Group conducted a 20-year study and determined there is a 70 percent failure rate that includes rapid asset depletion and disintegration of family relationships during and after inheritance. Establishing inheritable trusts can provide real benefits. Benefits include avoiding probate, reducing time to handle estate matters, privacy protection, the elimination or reduction of the estate tax, and can be effective pre-nuptial planning. A parent who wants to control outcomes should focus on these benefits of the trust instead of trying to legislate their future adult children’s behavior.

It is imperative not to allow your values and legacy to become weaponized within the family system. A sure-fire way to inspire conflict is via “dead hand control,” meaning trying to control lives from the grave. Most often, if you put excessive trust restraints on adult children, they will act accordingly to your perception that they are not adult enough to handle wealth. Instead, consider enrolling them in a few classes about managing wealth. Spark an interest in them to learn how you have created wealth, the mechanisms you used, and what their future endeavors may look like long after you are gone. Formally educate your children about finances, the earlier the better, and instead of talking about who gets what the conversation can shift to the mechanics of managing wealth. This tactic resets the context of the issue and aligns purpose and intended long term outcomes.

Estate planners try to encourage trust choices that lead to flexibility. If a beneficiary is genuinely incapable of making the right decisions, a trustee can be appointed to make distributions in the beneficiary’s best interest. This trustee discretionary power of money management can help a well-funded trust survive for generations.

You can also write a letter of wishes or provide a statement of intent to your children. Though these are not legally binding, it gives you a platform to remind them of family values and your desire for these values to be maintained for future family generations. This type of letter is an opportunity for you to convey your vision for how your wealth can bring growth and chance for fulfillment to beneficiaries.

Prosperity should positively shape lives. Family trust beneficiaries hopefully already have a self-driven life that includes purpose, responsible behavior, and a basic understanding of personal finance. If you worry your children may squander inheritable assets, create the opportunity for them to succeed through classes that teach them about managing legacy family values and wealth. Address your concerns legally and directly through a detailed trust that can help but not overly constrain them to achieve what you envision they can become. Start an honest conversation early on, but remember it is never too late to make good choices and create positive family value influences for the coming generations. A well-known Ann Landers quote sums it up neatly, “In the final analysis it is not what you do for your children but what you have taught them to do for themselves that will make them successful human beings” – a worthy goal of any family value system.

If you are interested in establishing a trust to pass wealth on to your children, we can help. We can also guide families on how to pass on family values in a meaningful way.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Norman, Oklahoma office by calling us at (405) 241-5994.

The National Institute of Health (NIH) Library of Medicine reports the most common form of dementia is Alzheimer’s disease, accounting for approximately two-thirds of all diagnosed cases of dementia. Alzheimer’s is also one of the most expensive diseases to treat and often results in financial strain on families trying to find and pay for the best care. In the past, care in facilities often resulted in Alzheimer’s patients being separated from others. However, as you’ll read below, facilities are now exploring better ways to treat Alzheimer’s patients while living in a facility.

Medical breakthroughs that increase our understanding of how to best treat and introduce disease modification therapies for people living with Alzheimer’s and other neurodegenerative diseases provides future hope. However, according to the Alzheimer’s Association, there are already more than 5.8 million Americans living with Alzheimer’s disease. These individuals may not live long enough to benefit from new therapy discoveries since new treatments must undergo rigorous testing and clinical trial phases. Current projections indicate that unless some of these medical breakthroughs have practical applications very soon, more than 14 million Americans will be clinically diagnosed to be living with Alzheimer’s by 2050, with many more struggling in the long-preclinical phase of the disease.

As senior living facilities become more saturated with dementia patients in all stages of progression, there is a shift underway towards non-segregated memory care living. Alzheimer’s patient reintegration into general senior living residence status is shifting dementia care into a human-centric model. It provides insights and lessons into eldercare facility living, its providers and staff, family members of residents, and all of the patients, not just memory care patients. This human-based approach is a kinder, more medically practical and appropriate, and in the long term, a more cost-effective method for facility residents who have dementia.

Before there were outcome-based clinical research findings to support the segregating of dementia patients care facilities began creating stand-alone memory care units, floors, and facilities.  Families knew their loved ones were safely locked away in a highly monitored unit, and staff could focus their training and efforts in a more specified range of care. Because this isolation model became overwhelmingly profitable for business operators, it became the de facto standard of memory care operation. Profits were trumping the human condition. At the outset, it seemed rational enough to put like-patients together, yet because everyone’s memory disease progression is unique, the concept was flawed. Living circumstances for humans is an emotional experience, and the sad outcome for assembled memory care patients was faster disease progression in their isolated, shrinking worlds. This accelerated mental decline was partially due to the lack of broader social and emotional connection with non-dementia residents. It seems integrating patients of all types and generations enriches and expands what residents can do, creating a diverse human model focusing on the positive aspects of life and personal interaction.

Some of the conditions all aging adults share, not just those living with dementia, include difficulty hearing and seeing, finding mental focus more demanding, becoming more concerned about being in large crowds, and noises that increase their stress levels. For a community of residents, no matter what the patient illness, facilities can create an atmosphere that addresses these common concerns. These shared needs include not only medical care but activities that are available in a 24-hour cycle and the encouragement of socialization in smaller, quieter circles. Interactions among residents in this calming style of environment tend to create friendships organically and provide enriching connections among patients irrespective of their illness type. The overall common conditions of aging require sameness in approach, no matter how varied the residents’ medical conditions are.

Technology that allows for digital wrist monitoring of patient location and vital signs permits ease of monitoring residents, particularly as they wander their living space.  Even the proper lighting, carpeting, and circular hallway architecture reassure residents’ feelings of safety, comfort, and familiarity, which appeals to all, regardless of diagnosis. When an entire senior living facility is dementia friendly, and all staff is trained in memory illness and care, every employee can add value to a resident’s enjoyment of life from the medical professionals to the social workers to the landscapers.

A diagnosis of Alzheimer’s can strike fear and worry in America’s aging population because of the emotional, physical, and financial upheaval associated with it. An older person might recognize the onset of some memory problems and become terrified, thinking about Alzheimer’s and the possibility of being relocated from their home and community to a dementia unit. There is a sense of dread that you may never feel seen, heard, and loved again by other people. Interpersonal relationships and connectedness are a hallmark of the aging communities in America. AARP reports large percentages of technology use in older Americans is related to interpersonal connections like email, viewing photos of family and friends, and using social media and the internet. Even in digital spaces and experiences, elderly community residents are looking to create personal networks, connecting to the world at large. The human spirit inclines to be expansive.

Appropriate social and physical environments play a significant role in healthy aging. Compartmentalizing memory care patients into homogeneous units will increase their memory decline, isolate their human connection, and spiral the patient into an ever-shrinking world of interaction, often making them non-verbal. Alzheimer’s patients who experience higher levels of social integration respond conversely, expanding their horizons as they experience and feel the extension of human love and support. There is no one set of symptoms for Alzheimer’s patients, and all patients are on their own trajectory of the disease. Mistakenly putting them together in a one size fits all approach of care has been a disservice to their health and well being and to the future care of others who will become afflicted with Alzheimer’s. The memory care model is shifting for the better and not a moment too soon.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Norman, Oklahoma office by calling us at (405) 241-5994.

For many people, real property, including their home, is a big part of their overall net worth.  How the home and other pieces of real property is titled deserves careful consideration. Real estate constitutes the land and any structure, including vegetation, livestock, crops, and other natural resources that sit on the land under the state’s law. Real estate can be commercial or residentially owned. Ultimately how you hold a property title has far-reaching consequences for liability, and when it comes time for sale or the bequeathing of it as an inheritable asset.

The title is a reference to the document that lists the legal owner(s) of a piece of property and can depict ownership of both personal and real property. Real estate titles are regarded as real property as it is a tangible asset. The title for real property, by law, must be transferred if the asset is sold or inherited and must be clear for the title transfer to take place. A clear title is free of liens or any other encumbrance posing a threat to proper ownership. The most common types of real estate titles are joint tenancy, tenancy in common, tenants by the entirety, sole ownership, and community property. Less common property ownership titles are corporate, partnership, and trust ownership.

Individual name or sole ownership allows for a single person to hold title, even if you are married. If the person becomes mentally or physically incapacitated due to injury or illness, a spouse or family member typically will need to conduct business with regards to your property. Your family member will not be able to do business transactions like refinancing or changing lines of credit, and they will be unable to act until a court appoints someone to act on your behalf. Many people assume if they have a will it will address the problem, yet a will does not go into effect until after you die and is not in effect if you become incapacitated.

Joint tenants (some may have rights of survivorship) occur when two or more people hold the title to real estate jointly. This type of title is widespread among but not exclusive to married couples. Unmarried couples may also hold joint tenant title as can parents and their adult children. It is a fair, uncomplicated, and free way to hold the title. In the case of a couple, the death of one automatically transfers full ownership to the surviving owner without probate. However, probate is more than likely just to be postponed. In the event the surviving owner dies without adding another owner, or if both owners die at the same time, probate is almost certain to occur before the property can go to the heirs.

Being a co-owner means that to sell, refinance, or take any action to the property, both owners must agree to the business action. If there is disagreement or in the event your co-owner becomes incapacitated, the court will become involved to resolve the disagreement or to protect the interest of the one who has become incapacitated. Court involvement will occur even in the event the incapacitated owner is your spouse. Joint tenants also expose the property to both of the co-owners obligations and debts. If a creditor successfully sues your co-owner, you could lose your home. In the case a co-owner is not a spouse, there can be income tax or gift tax problems. A will does not control any jointly owned assets, and you may mistakenly disinherit your family when your co-owner inherits your share, particularly in the case of second marriages with children from a previous union.

Tenants in common (TIC) allows for two or more people to hold title to real estate with equal rights during their lifetime to enjoy the property. A tenant in common title creates shares of ownership, and those shares will be distributed as directed in a will upon an owner’s death. In the absence of a will, the property goes to the heirs of the owner. As a tenant in common individually holds title for a respective part of the property, they are at liberty to dispose of said owned property or encumber it at will. Owners of their respective shares are permitted to use their portion of the property as collateral or in financial transactions. They may also be sued or have creditors place liens on only their portion of the property.

Tenants by entirety (TBE) are only permissible if the owners are legally married. This title, for purposes of ownership, treats the couple as one person for legal action and interpretation. Upon the death of one person, the TBE title is transferred in its entirety to the other spouse. This is advantageous as no legal action is necessary upon the death of one’s spouse. It does not require a will and probate is unnecessary.

Community property is only in effect in nine states (AZ, CA, ID, LA, NV, NM, TX, WA, and WI) and is a form of joint ownership between spouses commonly referred to as community property. When you die, your share of the community property is automatically transferred to your surviving spouse unless your will provides otherwise. Both tenants, by the entirety and community property titles, can find the remaining owner with several new co-owners, who, upon their death, can have their heirs inherit the property. Also, issues of incapacity and lawsuits are magnified if several property owners are trying to reach a consensus about the sale of the property or other business actions.

Corporate ownership allows a legal entity, a company owned by shareholders, to hold title to property. Partnership Owners can own real estate as a partnership. This title constitutes two or more people who transact business for profit as co-owners. There are also limited partnerships where an investor has limited liability because they do not make management decisions regarding business transactions of the property. In the case of limited liability, a singular general partner will typically be responsible for making business decisions on behalf of the identified limited partners.

Trust ownership, most often in the format of a revocable living trust, is a legal entity that owns the real property, which is managed by a founding or designated trustee on behalf of all trust beneficiaries. In the event you become incapacitated, your named successor trustee can seamlessly take control of your trust without court interference. A successor trustee is legally obligated to follow the instructions put forth in your trust. If you recover from incapacitation, you resume control of your trust. If you were to die, the property would be distributed according to your trust instructions and without probate. Holding real estate in trust ownership has challenges regarding benefits that surround financial and legal liability, managerial influence, and tax considerations. A real estate trust document can provide significant advantages to property owners but only if created by competent legal staff who take into account the complexities surrounding the trust and its interaction with the liabilities listed.

Methods of holding and owning title to real estate property are determined by state law and, as such, must be considered when researching and determining the best method to acquire and hold title to real property where you live. Depending on the complexity of your situation, assessing the best way to title your real estate may require professional real estate, legal and tax guidance.  We help clients determine the best way to hold title to property, and whether a trust would be beneficial.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Norman, Oklahoma office by calling us at (405) 241-5994.

According to the American Association for Retired Persons (AARP), every single day 10,000 baby boomers are turning 65 years old. The deluge of aging Americans and the increase in longevity in the already 65 plus population are the main reasons why the Social Security and Medicare programs are expected to have financial insolvency issues in the coming decades. Unsurprisingly, the vast majority of baby boomers agree that it is critical to preserve Social Security benefits even if it requires an increase in taxes paid into the system by working Americans. Payroll taxes by far account for the majority of monies available to pay for social security benefits.

The boomer generation is keen to preserve social security benefits as many of them are not well prepared for retirement. The financial retirement picture for nearly half of the younger boomers (ages 55 – 64) is bleak with reportedly no retirement savings at all. The US government is also unprepared to sustain full benefit payments. By the Social Security Administration’s admission in 2034, the program will run out of reserves at which time benefits would have to be reduced by 25% unless the government can fix the program’s long-term funding shortfall.

This same group of unprepared boomers also appears to have uncertainty as to how much of their income health care costs are projected to absorb. Health View Services states “HealthView Services’ Retirement Healthcare Cost Index, which calculates the percentage of Social Security benefits required to address total lifetime retirement healthcare expenses, reveals the impact of expected healthcare costs on retirement budgets. The index shows a healthy 66-year-old couple retiring today will need 48% of their lifetime Social Security benefits to address total lifetime healthcare expenses.” Additionally, about half of baby boomers believe Medicare will cover the cost of long-term care, but that is not the case.

How federal government institutions face the challenge of covering the costs of social insurances like Social Security benefits and Medicare costs to a burgeoning boomer population will determine whether many citizens will be able to age successfully.  Beyond the more significant problem of funding these social programs, the government is looking to technology to cut costs for senior care. Virtual assisted living that can help families care for older adults and smart devices appear to be some of the technological saviors for the American baby boomer population.

Joseph Coughlin, Ph.D., director of the MIT AgeLab in Cambridge, MA, and others testify before the Senate Special Committee on Aging as debate about policy and program funding for American seniors can no longer be put off. Coughlin recommends that virtual reality (VR) become a standard device among senior living communities, assisted living and nursing homes. Not only did residents engaging with VR have fun, but there is also less depression and more engagement in active conversations with other residents as a by-product of the technology.

Other technologies on display include smartphone apps with health functions, smart glasses that can help prevent accidental falls for seniors with limited eyesight, and a pen that can help people with reduced vision identify items. Using these and other tech devices can create a better aging experience and reduce the need for hospitalization for many seniors. Technology provides a net benefit for programs like Medicare that routinely pay for hospitalization costs that include injuries due to falling, reactions from incorrect prescription dosages, and other emergent care needs that can be avoided with practical technology applications.

While no one can discount the importance of funding social programs that benefit aging Americans, applications of specific technologies for seniors can reduce overall costs associated with the baby boomer generation. As the federal government begins to tackle the issues at hand for seniors, there is a lesson to be learned. Putting off planning for or relying on some other entity to solve retirement and health care issues is a dangerous proposition.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Norman, Oklahoma office by calling us at (405) 241-5994.

You and your spouse live together, you work together, and chances are you spend a lot of your free time together. Having a successful marriage and business takes a lot of hard work and dedication but can also be among the most rewarding things in life. To help keep you on the right track, here are a few tips.

• Create a budget for your family and your business. Money can be a very tense topic even for the average married couple. With a family and a business to run, it is important for the two of you to sit down and agree upon a budget for your family, as well as a budget for your business. By having open and honest communications about your finances, both personally and professionally, you can stave off more heated conversations later.
• Keep work at work. While your business is probably the main source of your income, it is important to create a boundary between your work lives and your home lives. If your business has a physical location outside of your home, this can be accomplished by establishing a rule that you and your spouse will only discuss business while you are at work. If you and your spouse are running a home-based business, you can establish “business hours,” and any time outside of those hours is personal time when business will not be discussed. No matter which approach you use, it is important that you allocate enough time to accomplish your work.
• Have your own hobby. Because you probably spend almost every waking moment together, it is important to take time to do something that you enjoy alone. This can be as simple as carving out time to take a long relaxing bath or joining an indoor soccer team. Having your own hobby allows you to access another part of yourself and take a break from the usual routine. Studies have also shown that individuals who have hobbies they enjoy tend to have lower blood pressure, are less stressed, and are overall happier.
• Have your estate planning prepared or reviewed. Just like any other couple, estate planning is important for business-owning spouses in order to protect each other and ensure a future that is financially stable and prosperous for the family and loved ones you leave behind. When a couple works in a business together, things can become even more complicated, making proper estate planning an even greater necessity. Below are some of the basic estate planning tools you need to protect yourself, your family, and your business.
  • Trust: By having a trust, you are able to have your money, property, and your business owned by an entity other than yourself. While this may seem scary, in most circumstances, transferring the ownership does not mean that you are giving up control. In creating the trust, you can name yourself as the trustee (the one in charge of managing the money and property, including the business, in the trust) and name yourself as the current beneficiary (the person who gets the enjoyment from the money, property, and business). The major benefit of having the trust own your money, property, and business is that when you die, you do not own any of these things (the trust does), and therefore, they do not have to go through probate court proceedings. This will save your family time and money, and can keep your personal affairs private.

In addition to avoiding probate, a trust can give you a place to write down your instructions for the future of the business. Who will run the business if you are unable to or if you die? Is the next generation ready to step up and run the business? Will everyone participate in the business, or does money need to be provided to a beneficiary who does not work in the business?

Lastly, a trust offers additional protection for your business by allowing you to select an individual to run the business if you are unable to make decisions for yourself, thereby allowing for the continuous operation of your business.

• Financial Power of Attorney: By default, no one (not even your spouse) can make decisions for you unless you formally select someone (through the creation of a financial power of attorney), or if you do not make this choice yourself, someone is selected by the probate court in a very public and costly proceeding. Although your spouse may be the best positioned person to make decisions about you and your business, he or she needs the appropriate authority to do so. Executing a financial power of attorney can facilitate a smooth transition during a stressful and emotional time if, for some reason, you are unable to make decisions for yourself.

This document is incredibly important if only one of you is the legal owner of the business. Although the other spouse may be intimately familiar with the operations, without the proper authority, he or she cannot make any decisions that may be necessary to keep the business going.

• Medical Power of Attorney: As is the case with financial matters, no one has the authority to make medical decisions for you unless you select them or they are appointed by the court. If you are unable to communicate your wishes when an emergency arises, it is important that the person who will be deciding your course of treatment is someone you can trust.

Having a successful marriage and business takes hard work. We are here to assist you in making sure that your family and business are protected in the event that unforeseen circumstances befall your family. Give us a call today to schedule an appointment.

A living will lays out your preferences for life-sustaining medical treatment.  It is often accompanied by a health-care proxy or power of attorney, which allows someone to make treatment decisions for you if you are incapacitated and the living will does not have specific instructions for the situation at hand.  “Living will” and “advance directive” are often used synonymously, but a living will legally only applies after a terminal diagnosis, whereas an advance directive is much more comprehensive and includes the health care proxy.

As of 2017, only around one in three American adults had an advance directive for end-of-life care prepared. Those who are older than 65 are more likely to have an advance directive prepared than those who are younger, as are those have chronic illness more likely than those who are not. People may be unwilling to prepare these documents because they fear that they won’t necessarily reflect their wishes at the time they become relevant; sometimes patients become more willing to undergo treatments they rejected when they were younger as they age and develop medical problems. However, the documents can be changed as long as they are witnessed and potentially notarized (depending on current law). And if you continue to communicate your values with your proxy, they can make decisions based on your most recent preferences.

So why is a living will important? It reduces ambiguity which can prevent family disputes during what is already a difficult time. It may seem like something that can be put off, but life is unpredictable; one never knows when these documents could become relevant. Furthermore, it needn’t be a hassle. A living will is a straightforward document, however it’s important to work with legal counsel to make sure your beliefs are properly stated. Other health care documents should also be prepared at that time, like a health care power of attorney that designates a person to make health care decisions for you if you are unable.  Once you have signed any documents make sure you keep them updated, especially if you change states, and be diligent in communicating with whomever you named to act on your behalf.

If you need a living will or health care power of attorney or already have one that you would like reviewed, get in touch with our Norman, Oklahoma office by calling us at (405) 241-5994.

Read more at:

• https://www.washingtonpost.com/national/health-science/even-healthy-people-need-a-living-will-but-many-people-dont-want-to-think-about-it/2017/08/04/121f99ac-76d3-11e7-8f39-eeb7d3a2d304_story.html
• https://www.fiftyplusadvocate.com/2010/05/26/7-important-things-to-know-about-living-wills/
• https://www.hrc.org/resources/living-will

With changes in medicine, technology, and socioeconomics, it’s no surprise that assisted living is changing, too. The rising cost of assisted living means that some families are looking to new alternatives, while those who consider traditional assisted living have new options to consider.

Alternatives to assisted living include multigenerational housing and in-home care. As these options become more popular due to the rising costs associated with other, traditional options, the home health care industry will boom in response; the Bureau of Labor Statistics predicts job growth of 70% in the next ten years for personal care aides and home health care professionals. Technology designed to assist in senior care will likewise play a role in alternatives to assisted living, from computer systems tracking medicine intake and remotes for windows, lights, and thermostats to reminiscence therapy and memory care to assist those suffering from dementia. And not only will technology designed for individual use continue to develop, so will platforms for home care agencies and other professionals engaged in the long term care process.

Meanwhile, the nursing home model of care will continue to decline, while other forms of senior living will take its place. These will include cultural- and lifestyle-based communities, green senior housing like LEED-certified homes and communities, senior-friendly neighborhoods in city centers, and senior co-housing with shared spaces and shared duties. Assisted communities are likely going to emphasize meaningful socialization and recreational activities, while the buildings themselves are likely going to include amenities that remind Boomers of home and improve their independence, such as kitchenettes. Certain design trends may arise for enriched living experience and wellness enhancement, from restaurant-style dining to wellness centers.

These changes are a part of the trend of a widening gap between the increasingly pricey assisted living options, and what people can pay for their long term care. As life expectancy lengthens and the quality (and therefore price) of assisted living rises, many will find the costs post-retirement to be beyond their means. That is one of many reasons why it is so important to plan in advance! There may be government programs available that can help with the costs of long term care.

If you have any questions or need guidance in your planning or planning for a loved one, please don’t hesitate to reach out to our Norman, Oklahoma office by calling (405) 241-5994.

See these articles for more details.

• A Place for Mom
• The Senior List
• Assisted Living Facilities

You have searched for and found the love of your life, maybe your first love, or maybe after a previous marriage. As you have built your life together, you have probably weathered your fair share of storms and grown stronger because of them. To prepare for the future and the possibility of no longer being around for your spouse, it is important that you plan now to protect the surviving spouse later. As part of a married couple, you are uniquely situated to further protect your loved one upon your passing through the use of special planning techniques only available to married individuals.

Lifetime QTIP Trust

If you and your spouse individually own unequal amounts of money or property, this type of trust will allow the wealthier spouse to transfer money and property into trust for the benefit of the less wealthy spouse. This is a great alternative to outright gifts to the less wealthy spouse, as that would result in complete loss of control over the money and property and vulnerability to the money or property by the donor spouse’s potential creditors. A Lifetime QTIP Trust is also a helpful strategy for couples in a second or subsequent marriage. During the less wealthy spouse’s lifetime, he or she will receive all of the trust income and may be entitled to receive trust principal for limited purposes. When the less wealthy spouse dies, the assets remaining in the trust will be included in his or her estate, making use of that spouse’s otherwise unused federal estate tax exemption. If the less wealthy spouse dies first, the remaining trust property can continue in an asset-protected, lifetime trust for the wealthy spouse’s benefit (subject to state law) and the remainder will be excluded from the wealthy spouse’s estate when he or she dies. After both spouses die, the balance of the trust will go to the beneficiaries named by the wealthy spouse when the trust was originally created.

Spousal Lifetime Access Trust (SLAT)

This type of trust allows one spouse to gift money or property into a trust for the benefit of the other spouse, protecting the money and property from creditors and estate tax, while still allowing the gifting spouse the ability to enjoy the money or property through the beneficiary spouse. As opposed to a Lifetime QTIP Trust, this type of trust does not require that the beneficiary spouse be given income distributions but that spouse can be given access to principal during his or her lifetime. The goal of this strategy is to use the gifting spouse’s own estate tax exemption, not the beneficiary spouse’s. Additionally, other beneficiaries, such as children or grandchildren, can be named as current beneficiaries of the trust. An added benefit of this type of trust is that it can be drafted to take into account a potential divorce and remarriage. The trust can refer to the beneficiary as the “current spouse”, so if there is a divorce, the former spouse is no longer entitled to payments, and any new spouse will have access without changing all of the estate planning.

Note: If both spouses desire to use their own exemption during their lifetimes through estate planning, special attention needs to be paid to ensure that reciprocal trusts are not drafted, which could unwind all of the planning. As experienced attorneys, we can help ensure that both spouse’s goals are met in the most tax efficient manner.

Portability

With the Tax Cuts and Jobs Act of  2017 (TCJA) doubling the estate tax exemption to $10M adjusted for inflation ($11.58M in 2020), you may feel that you do not need to worry about estate tax reduction strategies. However, this provision will sunset on December 31, 2025, unless Congress takes additional action. If you die in 2026 or after, there is a possibility the estate tax exemption could be back down to $5 million adjusted for inflation. Unfortunately, without a crystal ball, there is no way to know what the exemption amount will be if you die after the sunset. However, portability is a handy tool to have in our belts to help us battle this uncertainty.

Portability allows a surviving spouse to use his or her deceased spouses’ unused exclusion (DSUE) for either gift or estate tax reduction. This means that the surviving spouse has his or her own exclusion plus whatever is left over from their deceased spouse. In order to take advantage of this, however, an estate tax return (Form 706) has to be timely filed (usually within 9 months, or longer if an extension has been granted) when the first spouse passes. Without this filing, the surviving spouse will only have his or her own exclusion amount to use.

Note: You can only use the DSUE for your most recent deceased spouse. If you remarry, you must use the DSUE from your first spouse before your second spouse dies or else you will lose it.

We Are Here to Help

You have worked hard to build a wonderful life for yourself and your family. We are here to help develop a plan to ensure that your spouse and family will be taken care of upon your passing according to your wishes. Give us a call today to schedule an appointment so we can discuss ways to help.