Estate Planning With A Second Family In Mind

More and more people are getting married a second time and find themselves with two families. Estate planning for one family is hard enough, but it can be quite complex if you have a second one to provide for.

That’s why I thought it would be helpful for me to post this article I found on Yahoo Finance last week. It deals with the issues that families with a mix of biological children, stepchildren, first spouses and second spouses must face.

(Photo credit: Wikipedia)

(Photo credit: Wikipedia)

If you find yourself in this position, you don’t want to leave your heirs from the two families to fight it out over who gets what. The article lists the six most important things to remember when estate planning for a blended family.

Here are the six things to keep in mind, at least as outlined in the article:

  • It depends on how long your family has been together. If you and your second spouse married when your children were still young, or you had children together, you are really one big family. You should proceed with your will as if all your children were your biological children and your second spouse is your first spouse. But if your children were teenagers or adults when you remarried, things are different. You may want to make separate provisions for your biological children and your stepchildren.
  • Make provisions for your second spouse, but first make plans to provide for your children immediately. They should not have to wait until your second spouse dies before getting an inheritance.
  • Make a plan for your home. If your children grew up in your home, they may have more of a claim to it than does your second spouse. If they never grew up there, it belongs to your second spouse.
  • Taxes are less important than family harmony. Equal distribution may trump taxes, If you leave everything to your spouse to save on taxes, your children won’t be happy.
  • Communicate with everyone, either one at a time or as a group. It may be uncomfortable, but it will work out better, especially if you tell them your ideas and ask for their input.
  • Make sure you have the right experts. The right estate planning lawyer and financial planner are critical. You may even need a family therapist.

Planning for blended families can be challenging. But each family’s circumstances are different. I would be happy to review the options that best suit your family’s particular situation.

Posted in Blended Families, Estate Planning, Remarriage, Wills | Leave a comment

Get Your Estate Plan Right

A column I came across in the Wall Street Journal the other day got right to the point when it comes to estate planning.

Last Will And Testament (Photo credit: Ken_Mayer)

Last Will And Testament (Photo credit: Ken_Mayer)

Start out by making a will.

The column quotes a financial advisor from Illinois who says he has clients in their 40s and 50s who have never done a will.

But it says there is now a “growing urgency” among Baby Boomers to get their estate plans in order. And this is especially important for those who have children with disabilities.

The will, the column says, is the foundation of any estate plan. It says who gets what and appoints guardians for children or adult children with disabilities.

Without a will, the state will decide these things for you.

Estate plans may also include trusts in the will to take care of children and name trustees to oversee those trusts. Without a trust, the children would get their inheritance right away once they are of age.

A special needs trust is a must if you have a child with a disability who is unlikely to be able to support himself or herself, the column points out. If your assets were to go right to the child, he or she might be disqualified from government benefits. The trust gets around that.

One reason many parents delay setting up trusts is that they don’t know whom to name as the trustee. The column’s advice for these people: name someone and you can revisit it later if you want.

If the child is one with disabilities, you may want to consider naming more than one person to handle different duties for the child.

There are many things to think about. The message of the column — and of this blog post — is that you need to get on this if you haven’t already.

You never know what is going to happen in life. Better to be prepared.

Posted in Baby Boomers, Estate Planning, Special Needs Children, Trusts, Wills | Leave a comment

Actor Hoffman Made Mistakes With His Will

I came across an interesting article recently about the actor Phillip Seymour Hoffman and how he made numerous mistakes in his estate planning that are going to impact his partner and kids.

English: Philip Seymour Hoffman at a Hudson Un...     English: Philip Seymour Hoffman at a Hudson Union Society event in September 2010. (Photo credit: Wikipedia)

Philip Seymour Hoffman at a Hudson Union Society event in September 2010. (Photo credit: Wikipedia)

I thought his story could serve as a cautionary tale.

Hoffman, who died of a drug overdose earlier this year, supposedly did not want to make “trust fund kids” out of his three children. That may be admirable, but the way he went about it will actually do harm to his long-time partner and kids.

According to the story on, probate court documents reveal that Hoffman’s wishes were that his kids get no part of his $35 million estate and that all of it go to his long-time partner Mimi O’Donnell, the mother of his kids but to whom he was not married.

When a wealthy person dies, he or she can do one of three things: leave the money to their family; leave it to charity; or leave it to the IRS in the form of estate taxes.

Hoffman’s lack of planning maximized the IRS’s take with no benefit to his family or to charities.

While I understand the desire not to create “trust fund kids,” there are ways to do it so they do not become spoiled layabouts.

Now, about 40 percent of Hoffman’s estate over the first $5.4 million will go to the IRS because he and O’Donnell were not married. That’s $12 million.

Much of that could have gone to charities he cared about.

And the matter of no trusts for his kids? What about their education? He could have set up trusts to fund just that. Or trusts to fund medical costs if ever necessary. Or he could have set up trusts that kick in only if the kids accomplish certain goals or earn a certain amount of money on their own. Apparently, he did include his first child in his will, but not the second and third since they had not yet been born when he made out the will.

Another reason why updating wills periodically is important.

Posted in Estate Planning, Estate Taxes, Inheritances, Trusts, Wills | Leave a comment

Caring For Spouse Tougher Than Caring For Parent

This blog post is one that many of us in a certain age group will find hits close to home.

(Photo credit: Ed Yourdon)

(Photo credit: Ed Yourdon)

I found this article on and it talks about the difficulties we encounter when caring for an ill parent or an ill spouse.

Many of us are finding that we have responsibilities for caring for one or the other or both.

One of the key messages of the story: caring for an ill spouse is more stressful than caring for an ill parent.

Basically, life changes. It is not ever going to be the same if you are caring for an ill spouse. People who find themselves in such a caregiving position experience stress, frustration and anger.

A poll conducted by AARP and reported on in the story showed 62 percent who cared for a spouse said it caused stress in the family, compared to about half who cared for a parent.

About 20 percent said caring for a spouse has weakened their marriage.

Caregiving includes driving your spouse to doctors’ appointments, and may progress on to bathing and other hands-on care.

Most in the poll said they favor more programs to help people care for ill spouses or parents, including tax breaks to encourage people to save for long-term care or to buy long-term care insurance.

It is an issue that we will continue debating for years, I’m afraid.

There is support for caregivers. Most councils on aging have support groups that meet weekly or monthly where caregivers can speak freely about the problems they face. Below are several councils:

Arlington Council on Aging:

Winchester Council on Aging:

Massachusetts Alzheimer’s Association Support Groups:

There are also many online support resources and forums where people can share information and seek guidance. AARP has a very informative and active website dedicated to caregivers: “Caregiving Resource Center

Posted in Caregivers, Married Couples | Leave a comment

Boomers Should Be Saving

I recently came across an article on that I thought would be important for baby boomers to read.


Retirement (Photo credit: Tax Credits)

The message: keep saving for retirement.

The article noted that many people who could be saving are not doing so.

One study cited in the article showed only one-third of people aged 50 and older have not saved for retirement. But it is never too late.

An important method for saving for retirement is taking advantage of employer savings plans such as 401(k) plans, according to the story.

The article also suggested taking advantage of financial seminars such as those run by the AARP Foundation. The study showed those who took the courses were able to cut spending and pay down debt better than those who had not taken such courses.

Another study cited in the article showed more disturbing news: American teens are less financially literate than youths from other nations.

Maybe our children are following in our footsteps. That may not be such a good thing.


Posted in Baby Boomers, Finances, Retirement Planning | Leave a comment

Tips On Getting A Good Night’s Sleep

If you have trouble sleeping, you might want to think about what—and when—you eat. One rule of thumb is to avoid eating anything 30 minutes before bedtime. Another is to make sure your after-dinner snacks are on the lighter side. For example, don’t reach for that slice of leftover pizza right before you go to bed. I recently came across an article in AARP Magazine describing the types of snacks that can actually help you sleep better, as long as you don’t eat them right before going to bed.

Our truest life is when we are in dreams awake...

(Photo credit: Lotus Carroll)

Almonds contain magnesium, a muscle-relaxing mineral that plays a key role in regulating sleep.

These contain tryptophan, an amino acid that has been linked to sleep quality. They also offer abundant amounts of magnesium and potassium.

Cereal and milk
Milk contains tryptophan, which the brain uses to make serotonin and melatonin, hormones that control sleep and wake cycles. Meanwhile, the carbohydrates in cereal make tryptophan more available to the brain.

Cherries, particularly the tart varieties, are one of the few foods containing melatonin, the sleep hormone that regulates your internal clock.

Green Tea
Green tea contains the amino acid theanine, which helps reduce stress and promote relaxation. However, make sure any green tea you drink at night is decaffeinated.

The main ingredient in hummus is chickpeas, which are rich in tryptophan, folate, and vitamin B-6. Folate helps to regulate sleep patterns and vitamin B-6 helps to regulate your body clock.

Peanut Butter
Peanut butter contains plenty of tryptophan. As with some of the other foods I’ve mentioned, the body uses tryptophan to build hormones essential for sleep.

Pineapple is another fruit that can boost the level of melatonin in the body, thereby promoting sleep.

Pumpkin Seeds
Like peanut butter, pumpkin seeds are packed with substantial amounts of tryptophan.

A natural source of melatonin, walnuts also help your body respond better to stress.

To learn more about how these foods and others can help you sleep better at night, click here. I’ve also provided a second article which discusses a variety of foods that can interfere with your getting a good night’s sleep. Click here to read.



Posted in Activities, News, and Updates | Leave a comment

Some Thoughts About The Purchase Of Long-Term Care Insurance

The United States Department of Health and Human Services estimates that approximately 70 percent of Americans over the age of 65 will need some type of long-term care. Contrary to what many people believe, Medicare does not cover long-term custodial care. Given the cost of such care, it makes sense to consider your options, in advance, about how to obtain the care you might very well need without exhausting your life savings to pay for it.

Dad at Diamond Ridge Healthcare Center (Novemb...

(Photo credit: cseeman)

One such option is long-term care insurance. I recently came across an article in the Los Angeles Times with valuable information about purchasing long-term care insurance that I would like to share with you. Here are the highlights.

Your age and health matter.
The younger you are when you purchase long-term care insurance, the less expensive it will be. Unfortunately, if you have conditions such as diabetes or heart disease, your application might be rejected.

It is better to have some coverage than none at all.
The very best plans, such as those that adjust for inflation or cover the widest range of services, may be prohibitively expensive. Experts advise that policies with the option to add services in the future may be a better approach.

Know exactly what services are provided by your policy, and just as importantly, what services are not covered.

Take note of when the coverage begins.
Most policies have what is known as a waiting period. During the waiting period, you will have to pay for services on your own before the policy kicks in. As you would expect, the shorter the policy’s waiting period, the more expensive the policy will be.

Finally, if you buy your policy through an agent, ask him or her these three questions:

  • How long have you been selling long-term care insurance?
  • How many policies have you sold? Fewer than 100 is not enough.
  • How many insurers do you work with? The minimum should be three or four.

To learn more about long-term care insurance, I invite you to click here to read the entire article. I can also help you decide whether long-term care insurance is right for you. Simply call my office for a consultation.

Cost of Long Term Care (Genworth Survey 2014) 

Posted in Long Term Care, Medicare | Leave a comment

Should You Ever Borrow Money From Your 401(k)?

I recently came across an interesting article in USA Today about borrowing money from retirement accounts, and whether it is ever a good idea to do so. The article cited some surprising statistics. For example, a new study by TIAA-CREF showed that one in three Americans with a retirement plan have taken out a loan from the savings in their plan. Among those who did, 43% have taken out two or more loans. Another recent study indicated that one in five 401(k) participants who were eligible for loans had outstanding balances against their 401(k) accounts in 2012.

Scrabble Series Loan

(Photo credit:

Why are so many people adopting this strategy? According to Vanguard, 46% borrowed to pay debt; 35% to cover emergency expenses; 26% for the purchase of a home or to pay for a home renovation; 24% to pay bills following the loss of a job; 20% to pay for education; and 15% to pay for special events, such as a family vacation or wedding.

So, is borrowing against your retirement plan ever a good idea? According to the article, experts say it might be advisable to borrow to pay down debt or cope with emergency expenses, but you have to be fully aware of what you are doing and make sure that you are taking the money from the right place. “There are certainly situations where it is best to take out a 401(k) loan, for instance, when there is a medical emergency and a large expenditure on medical care cannot be covered using other assets,” says John Beshears, a Harvard University professor and co-author of a study on the subject, The Availability and Utilization of 401(k) Loans.

Others say 401(k) loans can be part of a sound financial plan. “I think loans, when used properly, can be a very important part of a successful plan,” says Mark Davis, a senior vice president with CAPTRUST Financial Advisors in Westlake Village, Calif. He adds that as long as the loans are repaid and participants continue to fully fund the plan while paying back the loan, there may not be a big downside.

Of course, loans such as these are not exactly “free.” Borrowers miss out on the capital gains they would have accrued, and loan repayments are subject to double taxation. And, if you are faced with the prospect of personal bankruptcy, it is advisable to keep the money in the 401(k) since it will be safe from creditors.

To learn more about this topic and read the full article, I invite you to click here.

Posted in Finances, Retirement Planning | Leave a comment

Lessons In Estate Planning From Casey Kasem

If you have spent time online or watching the news recently, you have probably heard about Casey Kasem’s disturbing final weeks. The legendary host of American Top 40 and longtime voice of Shaggy from Scooby Doo passed away last weekend at the age of 82.

Photo taken at the 41st Emmy Awards 9/17/89 - ...

Photo taken at the 41st Emmy Awards 9/17/89. Photo by Alan Light. (Photo credit: Wikipedia)

There are so many lessons to be learned from Casey’s last weeks that it is hard to know where to begin. I have provided two links to articles about recent developments. The Forbes article discusses in detail the battle between Casey’s second wife, Jean, and his daughter Kerri over control of Casey’s care. The second article, from Find Law, discusses some of the estate planning tools and strategies involved in the case. In this post, I would like to focus on the latter article.

Health Care Proxy/Advance Healthcare Directive/Living Will. This document allows a person to give authority to another adult to make healthcare decisions on his or her behalf in the event of incapacity, and specify the types of treatment desired in an end of life situation. Casey signed such a directive in 2007, placing his daughter Kerri and her husband in charge of making healthcare decisions for him.

Power of Attorney. A Power of Attorney is different from an Advance Healthcare Directive, but it too authorizes another adult to make legal and financial decisions on behalf of an incapacitated person. Some Power of Attorney documents may include authority to make health care decisions, which can lead to conflict between the documents. In 2011, Casey designated his wife Jean as Power of Attorney, and this superseded Casey’s 2007 Advance Healthcare Directive.  This illustrates the problem of naming separate parties, at separate times, to make decisions on one’s behalf.

Guardianship and Conservatorship. Casey’s daughter was able to successfully argue for and obtain Conservatorship a month before Casey’s death. This gave her control over Casey’s financial and medical decisions. (It is important to note that in Massachusetts, Conservatorship names a person to make financial decisions on another’s behalf, while Guardianship can authorize a person to make medical decisions.) In this way, she was able to enforce Casey’s Advance Healthcare Directive, which stipulated that he did not wish to be kept alive if doing so “would result in a mere biological existence.”

While it is advisable to be more specific in making one’s Advance Healthcare Directive, Casey’s condition was so dire that his doctor concluded that continuing artificial nutrition and hydration would “at best prolong the dying process for him and certainly add suffering to an already terribly uncomfortable dying process.”

It’s a sad story, one that will no doubt get even uglier as the parties battle over Casey’s estate and allegations of elder abuse. But hopefully, it will serve as a reminder about the importance of open communication between family members and the need for comprehensive, consistent end-of-life planning.

Posted in Activities, News, and Updates, Advance Directives, Estate Planning | Leave a comment

Three Budget Proposals That Could Hurt Your Retirement Plan

A recent article in Forbes discusses three proposals in President Obama’s budget for fiscal year 2015 that could disrupt retirement plans nationwide. It’s a fairly long article, which I invite you to read in full by clicking here, but here are the “highlights.”


retirement (Photo credit: 401(K) 2013)

Mandatory minimum distributions on Roth IRAs.
Unlike traditional IRAs and other retirement planning vehicles, Roth IRAs are not subject to rules requiring minimum distributions at age 70 and a half. This change will reduce the amount of assets benefitting from tax-free growth, with the owner of the Roth IRA ultimately having less money available during the course of his or her retirement.

A cap on wealth inside an IRA.
This change would place a cap on the amount of contributions or accruals allowed in an IRA once the owner has achieved what the government terms a “secure retirement.” The cap is rather substantial, $3.2 million, but other retirement plans such as a 401(k) and 403(b) would count against the IRA cap. High net worth individuals should be aware of how this potential change will impact the way they use IRAs in their retirement plans.

A reduction in Social Security benefits.
The government has been exploring ways to protect the future viability of the Social Security system for years. According to the Forbes article, the current focus is on finding ways to eliminate aggressive Social Security claiming strategies, which allow wealthy beneficiaries to maximize delayed retirement credits by manipulating the timing of collecting Social Security benefits. The loss or reduction of certain claiming strategies could impact not only wealthy beneficiaries, but also middle and lower income families who were planning to use similar strategies in planning for retirement.

While it is impossible to predict which, if any, of these changes will be adopted, the prospect of changes to the law is one reason to have your plan reviewed over time.

Posted in Activities, News, and Updates, Retirement Planning | Leave a comment