Tuesday, September 18, 2012

Legal Considerations for Retirement Part 7: My Assets

In the previous parts of this blog series, the overarching theme has been protecting your assets. In this, the final part, of the blog series, we will answer a few more questions about your assets, namely whether your heirs will have to pay taxes on your assets and how you can protect your assets from a nursing home. With these questions answered, entering retirement is not as worrisome as it seems.

Will my heirs have to pay an estate tax when they inherit my assets?
Unless you have a large estate, it is unlikely that your heirs will have to pay taxes on their inheritance. Currently, any amounts under $5 million are exempt from federal taxes.  Similarly, any amount of money left to a charity is exempt from the federal estate tax. Your spouse will not have to pay federal taxes on your estate if your estate is going to them.

While you may be exempt from federal estate taxes, you may still be liable for state estate taxes. States generally take much fewer taxes out of estates than the federal government. For example, New Jersey currently taxes estates of $675,000 or greater at 11% - 16%. The exact percentage that your heir is taxed depends on the state and how they are related to you.

How can I protect my assets from a nursing home?
When nursing home care becomes the only option, the cost can become overwhelming and protecting your assets1 can be a challenge. The nursing care facility or Medicaid may attempt to take your assets to pay for your nursing home care. So, in the event you should require nursing home care, proper planning can prove invaluable.

It is a good idea to retain an attorney that is familiar with the laws of your state as well as Medicare and Medicaid. This can be crucial in helping protect your assets and the assets of your spouse. A financial planner will also be an essential member of your planning team as he or she can assist you in taking an inventory of your assets. The key to protecting your assets is being informed both legally and financially. Most importantly, do not rely on the advice of non-professionals. Many people believe the only way to protect your assets from nursing home care is liquidating assets. This could prove to be very costly.

When you’re sure that your assets are adequately protected, entering retirement is no longer a scary step in life. At Kemp & Associates, we want to help you navigate through the difficult and exciting journey of retirement. If you need advice, contact us today.

All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.

Securities and investment advisory services offered through National Planning Corporation (NPC), NPC of America in FL & NY, Member FINRA/SIPC, and a Registered Investment Adviser.  Registered Representatives of NPC may transact securities business in a particular state only if first registered, excluded or exempted from Broker-Dealer, agent or Investment Adviser Representative requirements.  In addition, follow-up conversations or meetings with individuals in a particular state that involve either the effecting or attempting to effect transaction in securities, or the rendering of personalized investment advice for compensation, will not be made absent compliance with state Broker-Dealer, agent or Investment Adviser Representative registration requirements, or an applicable exemption or exclusion.  Kemp and Associates and NPC are separate and unrelated companies.  NPC PRIVACY POLICY.     NPC # 65165   08/14

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