The Johnson Journal Newsletter

‌

The Johnson Journal

MAY 2021

Hello, friends! What a year! It has definitely been a tough year for all, but there is excitement in the air as we hope to get back to "normal" soon. While CDC restrictions are loosening, our office is still requiring masks and will continue to observe social distancing guidelines through the summer. If you need an appointment, we are here for you and can schedule a phone or zoom conference to discuss your needs.

Upcoming Zoom Webinars

Successor Trustee Workshop

Hosted by Richard Johnson

Who is going to take care of you and your Living Trust if you die or are disabled? In your Living Trust, you named your Successor Trustee, someone to whom you placed your confidence, to manage your affairs when necessary. This may be your son, daughter, or your friend. Have you ever sat down with your Successor Trustee and told them what is expected of them? Do they know what their responsibilities and liabilities are?

This is an opportunity to refresh your memory about how your Living Trust protects you and your family, as well as an opportunity to explain the required duties to the Successor Trustees whom you have named.

Are You Prepared for the Cost of Long-Term Care?

One thing COVID-19 has taught us is that we are not as prepared as we thought we were. Long-term care is becoming an important issue for our nation to address. We have 78 million aging baby boomers. The costs of long-term care to these baby boomers can be catastrophic and few people have sufficient resources to pay for needed long-term care.

More than two-thirds of older adults will need some assistance before they die and nearly half will have a high enough need that they will require Medicaid or private long-term care insurance to pay the bill. More than 6 million older adults need that level of care today and nearly 16 million will need it in 50 years.

Many people are in denial about the possibility of needing long-term care someday and choose not to plan. While it is encouraging that the nationwide issue is being studied more and taken more seriously now, the problem is far from resolved. Until there is a firm solution, individuals must take responsibility and plan ahead.

If you or someone you know has questions about how to plan for the costs of long-term care, please feel free to contact our office.

Tax Planning Under The Biden Administration

Under the Biden Administration you can expect major changes in the tax laws as we know them now. Several proposals are currently being considered which will affect your estate and income tax planning. Senators Sanders and Van Hollen have proposed legislation that will greatly affect the transfer of assets both during lifetime and at death. You can expect other bills to come from the House of Representatives. Specifically, Estate, gift and GST (Generation Skipping Transfer Tax) rates may rise from 40% up to 65%, effective next year under the Sanders plan. Estate and GST exemptions could be reduced to $3.5 million and gift tax to $1 million, effective next year. You can expect the step-up in basis for transfer of assets to be eliminated for transfers exceeding $1 million for individuals and $2,500,000 for married couples. The marginal income tax rate would be restored to 39.6% for income over $400,000 per year.

We expect the tax environment to change dramatically but much uncertainty remains.

Because new laws can be made effective retroactively, it is important for you to review your estate planning and income tax planning with your legal team as well as your accounting team as soon as possible.

Congratulations!

Your Child Has Entered Adulthood

Did you know that after your child reaches the age of 18, parents no longer have access to their child's medical or financial information? Once your child enters adulthood, you no longer have the ability to make medical decisions or act in a financial capacity if your child is unable to act for themselves.

If your child is in an accident or contracts an illness and is unable to make medical decisions, a Medical Power of Attorney will provide you the authority to make those decisions for your child. A HIPAA Authorization will allow you to get information about your child from medical personnel. If your child loses their purse or wallet, a Financial Power of Attorney can help you notify their financial agencies, contact banks, and order replacement credit cards, as well as make financial arrangements regarding their debts and obligations.

So as you prepare to send your child off into the world of the unknown, make sure you have the documents in place to help them in a time of need. The Johnson Firm is here to help you achieve that sense of security and peace of mind by introducing our "Graduate Package" which includes a Financial Power of Attorney, Health Care Power of Attorney and HIPAA Release. Call us to find out more.

Update Your Contact Information

Have you recently moved or changed your email or phone number?

Call our office or send us an email with any updates we should know about.