May 2022

Friday, May 13th, 2022
by William Erhart
Beneficiaries are common designations in retirement accounts, wills, and trusts so it is likely that you have one. In the event of a person's death, a beneficiary receives the proceeds from a financial product or vehicle. When life changes such as divorce, death, wealth accumulation, threshold qualifications for government programs, etc. occur, a simple directive to name a beneficiary can suddenly become complex.

Updating your beneficiaries is a part of your estate planning and financial wellness routines. However, reviewing your plans may be overlooked during emotional challenges, such as in a divorce case. Existing policies for life insurance, IRA, or an old 401(k) may still list your ex-spouse as the beneficiary. Some states now automatically terminate a former spouse’s beneficiary status when the marriage is legally dissolved, but others do not.
After a Divorce
If you are or plan on becoming divorced, the accumulation of wealth in these account types may be best to use as a supplement to your retirement, or the account may have a death benefit that increases over time, and you prefer to keep it. Also, check for employer-provided policies that may have a former spouse designated as a beneficiary, as many people forget about them.
Distributing Assets Among Beneficiaries
When naming your beneficiaries, consider if receiving the money is genuinely beneficial, as there are cases when it may inadvertently have negative financial impacts. One example is the case of a special-needs individual. A beneficiary status and eventual inheritance may disqualify them from government support programs. Or a person on Medicaid may have to leave the program until the asset is spent down, and then they re-apply for the benefits program. 

Another example of a negative financial impact is inheritance by multiple siblings where one is affluent, and the others are not. While equally splitting your estate among the three siblings may seem the fairest option, it may not be the case. The affluent sibling may see an increase in their tax liability because of the inheritance and lose money if moving into a higher tax bracket. Meanwhile, the other two siblings may have greatly appreciated and benefitted from inheriting extra money. The wealthier child can receive a family heirloom or other physical asset to offset the others’ additional payout.

Some estate plans are very straightforward with a single-person beneficiary. For example, this individual can receive a death benefit tax-free, or a retirement account switches directly into the surviving spouse’s name. But personal situations and families are often more complicated. Or you may want to distribute assets unevenly or differently.

Life Insurance Beneficiaries

An estate planning attorney can help you understand how to use a life insurance policy as a benefit to your estate. Without careful planning, a life insurance death benefit left to an estate may trigger probate and tax issues and become attachable by creditors. It can become even more complex to include retirement accounts or other financial assets, especially if they exceed the federal estate tax exemption threshold of $12.06 million in 2022.

Using Trusts to Protect Beneficiaries

Naming your children as beneficiaries, particularly on life insurance policies, is very standard, yet there are potentially negative consequences without proper planning. If your children are 18 to 21 years old (depending on the state), they may directly inherit a benefit. Often a younger individual does not know how to handle a sudden inheritance of a large sum of money. Legal oversight through a trust can be a beneficial solution. 

A trust can also permit children who are not of age to inherit the death benefit later. A trust can properly structure your minor children’s finances with a named trustee, much like a will names a legal guardian. A legal entity to provide for your minor children is far better than leaving money to another family member to care for your children. There is no legal guarantee the individual with the inherited money will use it for the benefit of your children.

Communicating with Beneficiaries

A lack of communication creates problems. Make family members and loved ones aware that you are making them a beneficiary as it can increase a tax bill or disqualify a loved one from a government support program. Financially well-off inheritors may prefer that family heirloom over money.
Advising inheritors of beneficiary status and subsequent changes also manages their expectations. If someone you love believes they will receive a death benefit but do not, they are generally upset by the change. Communicating changes in beneficiary status will help avert hurt feelings and family conflict.
As the value of your assets grows, questions as to who is beneficiary to what and how your estate plan complements your family system grow increasingly complex and often require changes. Make sure to arrange beneficiary status in your estate plan in a truly beneficial way and review it often to be sure it reflects changes in your life circumstances. For more information and further inquiries about your personal situation, please contact our office at 302.651.0113.

Written by Jessica Norris 
April 20, 2022, for Medical News Today

  • Good cholesterol or high-density lipoprotein (HDL) is essential to health. Still, the impact of HDL on the brain is not fully understood.
  • Alzheimer’s disease is a disorder that impacts people’s ability to think and function in everyday life. Researchers are still working on developing treatments and understanding the condition.
  • A recent study suggests that higher levels of small high-density lipoproteins might decrease the risk for Alzheimer’s disease.

Alzheimer’s disease is a debilitating condition that primarily affects older adults. People who have it can become forgetful and become unable to carry out tasks of daily living. Currently, the disorder has no cure. Researchers are still trying to understand how the disease develops, how to prevent it, and how to best treat it.

A recent study published in Alzheimer’s & Dementia: The Journal of the Alzheimer’s Association offers new insight. Researchers studied the connection between small HDLs or “good” cholesterol in the cerebrospinal fluid and the risk for Alzheimer’s disease. The results suggest that higher levels of small HDL were associated with a lower risk of developing Alzheimer’s disease.

What is “good” cholesterol?

Cholesterol is a substance that your body needs. For example, the body uses cholesterol to make certain hormones, properly digest food, and make new cells. The body makes cholesterol, but people can also get it from food sources.

As noted by the American Heart Association, cholesterol exists in the body in two primary forms: low-density lipoprotein (LDL) and high-density lipoprotein (HDL). LDLs can build up in the bloodstream and increase the risk of strokes and heart attacks, so it is essential for your LDL count not to be too high.

The body’s HDL or “good” cholesterol helps to carry cholesterol back to the liver so that the liver can break it down. But HDLs can impact other areas of health in ways researchers do not fully understand. For example, researchers are still trying to understand how HDL levels affect the brain. The study authors note that the HDL in the brain is slightly different from the HDL in the rest of the body.

What is Alzheimer’s disease?

Alzheimer’s disease is a disorder that impacts the brain, and it typically occurs in adults over the age of sixty. It impacts the brain’s nerves and is related to the buildup of specific proteins in the brain. Ultimately, the neurons in the brain die and lose their ability to communicate with other brain cells.

This damage causes people with Alzheimer’s disease to have memory, language, and decision-making problems. It can be debilitating, and those with Alzheimer’s disease often slowly lose their ability to function independently.
Research is ongoing about what causes Alzheimer’s disease and how we can best develop treatments.

Good cholesterol and Alzheimer’s disease

The study in question included 180 participants aged 60 or older. Participants engaged in the study through the University of Southern California (USC) Alzheimer Disease Research Center (ADRC) and the Huntington Memorial Research Institute (HMRI) Aging Program.

Researchers looked at participants’ cognitive functions through a variety of cognitive tests. They took cerebrospinal fluid (CSF), the fluid surrounding the brain and the spinal cord, and plasma samples from participants and isolated the DNA. Researchers tested for the APOE ε4 gene from the DNA, a potential risk factor for Alzheimer’s disease.

Researchers then examined the levels of small HDL particles in the CSF. They found that higher levels of the small HDL particles were associated with better cognitive function among participants. They found this result to be the same even after accounting for the APOE ε4 gene, age, sex, and amount of education.

Results of the study may lead to the development of new treatments for Alzheimer’s disease. Study author Hussein Yassine noted the following to Medical News Today:

The discovery of lipid particles (LDL, HDL) in [the] blood led to several advances in drug discovery for cardiovascular disease treatment and prevention. Here for the first time, we measure HDL particles in cerebrospinal fluid as a surrogate of brain HDL and find that greater levels of small HDL correlate with better performance on cognitive measures.

Now that we have this biomarker, our next step is to figure out what promotes the formation of these small HDL particles in the brain. Such new discoveries could then lead to a new list of medications in our fight against Alzheimer’s.

Monday, May 30th - The office will be closed in observance of Memorial Day.