Many people are surprised to learn that their Social Security benefits can be subject to federal taxation. Whether your benefits are taxed depends on what is known as your “provisional income.” This is your adjusted gross income (not counting Social Security benefits) plus nontaxable interest and half of your Social Security benefits.

For people filing as individuals or heads of households with provisional incomes of less than $25,000, Social Security benefits are not taxed. For couples filing joint returns, the figure is $32,000. Unfortunately, individuals with provisional income of between $25,000 and $34,000, or couples filing jointly with provisional income of between $32,000 and $44,000, up to 50% of Social Security benefits may be taxable. In the case of individual filers with provisional incomes above $34,000 or joint filers whose provisional incomes exceed $44,000, up to 85% of Social Security benefits may be subject to taxation.

The information above concerns federal taxes. 13 states levy their own taxes on Social Security income, although they do so in varying degrees. These states are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, North Dakota, Vermont, Utah, and West Virginia. (Taxation of Social Security benefits is being phased out in West Virginia. Most residents won’t be taxed on their benefits as of the 2021 tax year.)

An article on kiplinger.com offers some strategies to avoid, or at least mitigate, taxes on Social Security benefits.

Withdraw money from your tax-free Roth IRAs

Tax-free withdrawals from a Roth IRA or Roth 401(k) are not included in your adjusted gross income. Rolling over money from your traditional IRA or 401(k) to a Roth IRA years before you start receiving Social Security benefits is an excellent way to avoid taxes later in retirement. Of course, you will have to pay income taxes when you make the conversion, but you can tap the account tax-free after that.

Purchase a Qualified Longevity Annuity Contract

You can invest up to $130,000 from your IRA or 401(k) in a deferred-income annuity called a Qualified Longevity Annuity Contract (QLAC). The money in your QLAC is ignored when figuring your required minimum distribution, so you can reduce the size of your distribution, lower your income and cut your tax bill.

Give your required minimum distribution to charity

If you are 70½ or older, you can give up to $100,000 per year to charity from your IRAs tax-free.

Your gift counts as the required minimum distribution but is not included in your adjusted gross

income.

Be careful with income investments

You can structure your portfolio to minimize the income it generates. This approach makes particular sense if your portfolio’s income is being reinvested.

Save money, use financial strategies, and get help from Washington Elder Law.

Your best option is attending two helpful workshops provided by the Edmonds Elder Law team, at Washington Elder Law. The workshops are online, and they are free. Advice is offered for seniors and their families. We answer your questions about how to refrain from paying taxes on your income. Find out how you can avoid the Washington State long-term care tax.

We tell you how to access the funds provided by the state of Washington. We prepare the documents you require to receive benefits. Then, we follow through with the documents to make sure your information is complete.

Benefits available in King County are over $9,000 a month if you know how to access them. We can access these benefits for most people. Find out how you can maximize your money and pass it down.

We teach families how to access Medicaid benefits to pay for medical and long-term care costs while preserving their wealth.

Washington Elder Law workshops include:

Medicaid – Medicaid planning helps pay for long-term care. It is a federally funded health insurance program based on income. Even if you make more than the exceeded amount, you still may qualify. We can help you understand possible exceptions and discover the aid you require.

Estate Planning – You want to protect the legacy that goes to your family. Without proper estate planning, money is often collected and distributed to the government. We teach you how to maximize the money you have. We make sure you have Power of Attorney to avoid losing control of guardianships. You’ll learn how to protect your assets from the government. We will even show you how to receive a higher quality of long-term care. All of these very important financial choices are available to you. Attend our free workshops to find out more.

Perhaps you have considered selling your current home, buying a smaller one, and using the difference to help fund your retirement. A recent article on Investopedia.com explores this approach and details the mistakes you must avoid. Here are some of the highlights.

Overestimating Your Current Home's Value

Many people overestimate how much their current home is actually worth because of what friends and neighbors say they received for the sale of their homes. To get a realistic sense of your home’s value, visit websites like Zillow.com and Realtor.com to learn the prices of recently sold properties in your area. Online “estimators” from banks like JP Morgan Chase and Bank of America will also provide useful information. Bear in mind that prices and estimates shown on these and other sites may not take into account the specific features sought by prospective buyers. Consulting local real estate agents or independent appraisers can address this problem. You should also ask these real estate professionals about inexpensive spruce-ups that will increase your home’s curb appeal and value. Most experts agree that the cost of major renovations will not be recouped unless your home is in extremely poor condition.

Underestimating the Cost of Your New Home

You can use the online tools and real estate professionals mentioned above to get a sense of what you’ll have to pay for the type of home you want to buy. If you plan to move to a new area, such as a place you’ve always enjoyed visiting, it’s important to spend a significant amount of time there. This will give you a feel for what it’s like to actually live in the area. Renting a property for a year or so before buying may be the wisest approach.

Ignoring the Tax Implications of Your Move

Most couples are currently able to exclude up to $500,000 in gains from the sale of their home, while singles can typically exclude up to $250,000. Your tax bracket and the length of time you’ve lived in your current home could impact whether taxes will be due upon its sale. You can find detailed information about this issue in IRS Publication 523.

You should also consider factors beyond income taxes on your home’s sale, particularly if you are moving to a different state. Lower property taxes in your desired destination could be offset by higher sales and income taxes. Similarly, pensions and withdrawals from retirement accounts could be taxed at a higher rate than where you live now. A particular state’s revenue or tax department website is a good source for this important information.

Ignoring Closing Costs

If you haven’t bought or sold a home in quite a while, you may have forgotten about all of the closing costs involved. Title insurance, recording fees, legal fees… the list of miscellaneous charges can seem endless. In addition, if you use a real estate agent, commissions can be as high as 6%, according to Realtor.com. In addition, don’t forget about the cost of moving your belongings to your new home.

The bottom line is this: Do your research and run the numbers carefully before downsizing. You may find ways to save a significant amount of money on your move, or perhaps you’ll realize that you should stay where you are for now.

What to do next…

Now that you or a loved one has chosen to retire, managing your/their finances is mandatory. We help you with retirement, Medicaid, and long-term care planning.

Washington Elder Law, PLLC, is dedicated to providing our clients peace of mind.

There are two easy steps that you need to plan your retirement finances. We will show you the way.

1.) An easy way to start is by downloading our complimentary guide—Understanding Medicaid.

Our FREE Report Reveals the Steps You Should be Taking Right Now to Protect Your Hard-Earned Savings and Provide the Best Possible Care for Your Loved Ones.

2.) Register for our free Medicaid online workshop. Our workshops teach you how to access your Medicaid benefits to pay for medical and long-term care costs.

Washington Elder Law provides the #1 Medicaid services in Snohomish and King Counties.

We create the documents that enable you to receive maximum benefits.
We show you how to decrease your income tax on inherited retirement accounts and other assets.
Provide families with peace of mind.
Design plans that protect you.
We follow through on all items required for families to receive benefits.

One of the first questions many clients ask is whether they need a Revocable Living Trust? It’s a great question, but it leads to another: What do you want your plan to accomplish? Let’s begin with a brief discussion of what trusts are and how they work. Then we’ll explore their benefits, which should give you a better idea of whether a trust is right for you and your family.

What is a Revocable Living Trust?

There are many different types of trusts and they can accomplish a wide range of goals. However, when most people think about trusts, the one they have in mind is a Revocable Living Trust.

A Revocable Living Trust is a legal document that allows the grantor (the person who creates the trust) to take personal assets and transfer them to the ownership of the trust. While the trust technically owns the assets, the grantor can continue to use them as he or she normally would.

When a Revocable Living Trust is established, the grantor names a trustee to manage the assets in the trust during the grantor’s lifetime. Most grantor’s name themselves as trustee, giving them complete control over the trust’s assets. Typically, a successor trustee is also named to take over management of the trust and distribute trust assets after the grantor passes away.

What are the benefits of a Revocable Living Trust?

One of the primary benefits of a Revocable Living Trust is that it enables assets held in the trust to avoid probate after the grantor’s death. This allows trust assets to be distributed to heirs quickly. The costs associated with probating the estate are also avoided. In addition, a Revocable Living Trust protects the privacy of the grantor (and beneficiaries) because the trust’s provisions are confidential. A Last Will and Testament, on the other hand, is a matter of public record. Anyone can access information about the decedent’s assets, creditors, debts, and more.

Another benefit of Revocable Living Trusts is they not only allow the grantor to control trust assets during life but also after he or she passes away. The grantor can stipulate when, how, and under what circumstances the successor trustee is authorized to distribute trust assets to beneficiaries. This is particularly important if the beneficiaries are not yet mature enough to manage an inheritance on their own, or in situations involving blended families. For example, the grantor could stipulate that children from a first marriage receive assets from the trust, not just the children from a more recent marriage.

Revocable Living Trusts can also be used to protect the grantor and the grantor’s family from a stressful and expensive guardianship proceeding if the grantor becomes incapacitated.

As we mentioned earlier, there are many different types of trusts. If one of your primary goals is to protect assets from long-term care costs, creditors, lawsuits, and other threats, an Irrevocable Trust or an Asset Protection Trust may be a much better option then a Revocable Living Trust. If you have a loved one with special needs, a Special Needs Trust can allow you to create a fund for goods and services not provided by Medicaid or Supplemental Security Income while protecting eligibility for these vital programs. A Charitable Trust allows the grantor to set aside money for both a charity and beneficiaries, realize certain tax advantages, and generate an income stream.

These are but a few examples of various trusts and what they can accomplish. If you’re still not sure whether you need a trust, we welcome the opportunity to explain your options in detail and, if appropriate in your particular circumstances, design and implement the trust that’s right for you and your family.

Washington Elder Law provides information about securing your legacy and providing your family with peace of mind.

Washington Elder Law is a caring and trustworthy team of Lynnwood/Edmonds Elder Law professionals who offer the tools to easily and understandably guide you through estate planning. The team is motivated to educate and give clients the tools needed to make the best choices to positively impact their future finances.

We teach you how to build a positive legacy for your loved ones in our Free Estate Planning Workshops. We also include Medicaid workshops to help you claim the benefits that you can use to plan your future financial goals. Registration information is available below.

After a completed workshop, vision meetings are available to you. Ask how you can prepare for your vision meeting.

Workshop Benefits

It is important to us that your current plan meets your goals. We can help you understand what it takes to protect you and your family. Our workshops allow you to maximize your plan and get the most out of your finances.

Included Estate Planning information

Add significant value to financial benefits by talking about it early
Avoid losing control of guardianships by creating a Power of Attorney
Understand how trusts simplify the administration of your estate
Access higher quality long term care
Maximize money for yourself and your family
Avoid probate
Protect your assets from the government

Strong solutions to financial issues.
A structured family committee that keeps members informed
Access to benefits
We prepare and provide the proper documentation to secure your benefits.

We always follow through with your application for your benefits.

For more information see:

Join an Estate Planning Online Workshop scheduled every Tuesday at noon.

Join a MEDICAID Online Workshop every Wednesday at noon.

Lynnwood/Edmonds Elder Law resources for Estate Planning, Long Term Care Planning, and Trusts.

When we hear the word legacy, many of us think of money left to people and institutions that have come to mean the most to us throughout our lives. But your legacy is much more than that. It includes your memories, values, wisdom, family history, and more that do not necessarily have a monetary value. How can you pass those on to future generations?

You could begin by writing down or making a recording of yourself sharing stories about your parents, grandparents, and other relatives. Don’t just talk about where they lived and what they did for a living. Try to convey a sense of who your family members were, what was important to them in life, and the values they held dear.

You’ll want to take a similar approach in telling your own story. Describe why you made certain decisions, what you learned from mistakes, how you achieved success, and what you would do differently if you could. It’s been said that a picture is worth a thousand words, so be sure to preserve photos that depict your history and that of other family members. You might even want to create a website featuring your stories and photos and invite family members to contribute to it.

Now let’s consider items that may not be worth much money but have a great deal of sentimental value: an old watch owned by your uncle, for instance, or the rocking chair that your mother used for many years. You’d be surprised at how many family disputes arise over items like these. If one of your children has shown interest in such an object, you could specify in your will that he or she receives it when you pass away. Regarding sentimental objects that have not been “claimed” by your children, consider using an estate planning letter to designate the person you would like to inherit it and why.

What about your values, is there a way to increase the likelihood that these will be passed on as well? One approach is to use an estate planning tool, such as an Incentive Trust, to encourage certain behaviors while discouraging others. For example, your trust could reward your children for graduating from college, entering a certain profession, purchasing a home, or doing charitable work.

In the end, you may be surprised by how much your values, wisdom, and family history—the nonmaterial aspects of your legacy—mean to the people you love and future generations.

Call Washington Elder Law for more information about securing your legacy and providing your family with peace of mind.

We teach you how to build a positive legacy for your loved ones in our Free Estate Planning Workshops. We also include a Free Medicaid workshop to help you claim the benefits that you can use to plan your future financial goals. Registration information is available below.

After a completed workshop, vision meetings are available to you. Ask how you can prepare for your vision meeting.

Workshop Benefits:

OUR GOAL:

– Identify if your current plan meets your goals.

– Understand what it takes to protect you and your stuff.

– Show you how to get what’s missing.

-Let you know what Washington Elder Law offers.

Included Estate Planning information

Add significant value to financial benefits by talking about it early
Avoid losing control of guardianships by creating a Power of Attorney
Understand how trusts simplify the administration of your estate
Access higher quality long term care
Maximize money for yourself and your family
Avoid probate
Protect your assets from the government

Strong solutions to financial issues.
A structured family committee that keeps members informed
Access to benefits
We prepare and provide the proper documentation to secure your benefits.

We always follow through with your application for your benefits.

For more information see:

Join an Estate Planning Online Workshop scheduled every Tuesday at noon.

Join a MEDICAID Online Workshop every Wednesday at noon.

Free online estate planning workshops are available now!

Washington Elder Law makes it easier than ever to start estate planning for yourself or an elderly relative.

Workshops are important and practical ways to receive free information. Our free workshops offer a great deal of advice for seniors and their families.

Our online workshops create a different approach to estate planning that eases your concerns about estate planning. Sometimes, family members might be caught off guard or are shy about estate planning details. It may be because they don’t often have enough information. We are happy to share with you how to communicate with your family about their concerns in our workshops.

Estate Planning Workshops are Free

You can plan to join our virtual workshops by calling us. We will assist you with anything you need to know about participating in virtual online meetings. (206) 448-1011

You can also register for an online workshop here.

An Introduction to Washington Elder Law

Let us start from the beginning and tell you a bit about ourselves. We want you to meet Brian Isaacson. Brian is a member of the American Academy of Attorney – CPAs. The Academy of Attorney- CPAs is an American organization that “has a mission to promote and support the work of attorneys nationwide as they pursue justice for their clients.” You can find out more about them here.

As soon as you log on to your estate planning workshop, Brian guides you step-by-step through an amazing process that answers questions about how to start estate planning and how to access financial help for long-term care in Washington.

How To Protect “Your Stuff” in Three Easy Steps

We understand that you want to keep your stuff. What we mean by that is that you want to limit the amount of money that goes to things such as long-term care, probate, attorney fees, or pending lawsuits. In the event that you can not sustain decision-making or self-care, we know that your priority is to take care of your children and those you love.

The Washington Elder Law approach to estate planning and asset protection focuses on actual studies based on how people spend their money on important and necessary expenses.

The studies focus on the amount spent on medical assistance, long-term care, and other essential senior and family needs. Most families worry about running out of money if a family member needs long-term care.

A current study reports that King County residents pay over $10,000 a month in long-term care expenses. 98% of the population are concerned about running out of money when a family member needs extending medical care or services.

Long-Term Care (LTC) Costs

Stay home ($500 – $18,000/month)
Assisted living ($2,500 – $5,500/month)
Nursing Home ($9000 – $14,000/month)

Knowing the problem yields the solution

The solution is knowing how to access available financial resources, which we provide in our workshop.

Benefits available in King County are over $9,000 a month if you know how to access them. For a lot of people, we can help you receive these benefits.

Find out how you can maximize your money and pass it down.

Our workshop goal is:

To teach families how to access Medicaid benefits to pay for medical and long-term care costs while preserving their wealth.

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Solutions are assured with our three step approach.

The Three Steps to Plan and Protect Your Estate

Know the rules
Asset protection
Know your options

Workshop Benefits:

Included estate planning information

Add significant value to financial benefits by talking about it early
Avoid losing control of guardianships by creating a Power of Attorney
Understand how trusts simplify the administration of your estate
Access higher quality of long term care
Maximize money for yourself and your family
Avoid probate
Protect your assets from the government
Strong solutions to financial issues.
A structured family committee that keeps members informed
Access to benefits

Estate Planning workshops are every Tuesday at noon. REGISTER HERE.

At Washington Elder Law, PLLC, we are dedicated to providing our clients peace of mind. Please call us (206) 448-1011 for more information regarding workshops, Estate, tax, and long-term planning.

Do-It-Yourself (DIY) projects are typically acceptable such as repairing a minor item in your home. You just Google whatever needs repairs, and there is a video or blog to tell you how to do it.

Sometimes the instructional video explains things right. Most often, important details are left out, and the project turns out wrong.

People believe they save money by using unreliable, non-lawyer owned websites. Cheap and easy is okay for certain situations, but making sure your loved ones are safe when you die is not one of them.

There is a high probability that it costs more to plan your living will online because you are trying to do a lawyer’s work with someone that is not a lawyer. The websites that advertise FREE will and testaments attach hidden fees, charge for required additional documents, and do not accurately finish legal filing or file wrong.

The only way to plan your trust carefully with a reasonable cost is to ask for guidance from a reputable estate planning attorney.

Problems with Do-It-Yourself Planning

With online Do-It-Yourself estate planning, there is no guidance or guarantee that your estate plans carry out your specific goals and wishes.
Estate Do-It-Yourself programs provide generic forms that do not cover specific concerns for the individual.
Families of the bereaved often end up paying out-of-pocket to take care of unattended business.
Some estate planning websites are scams. There is no one there to help you; just a website recording your personal information.
A professional attorney can soothe family bitterness or offer solutions when problems arise over a will. The Do-It-Yourself website might not even exist after the person died.

The American Bar Association (™) devised a task force team for an online Do-It-Yourself Estate Planning investigation. The task force found many inadequacies and drawbacks, including:

Not even a lawyer with experience in the field will use an online program for essential estate planning tasks. (Lawyers use other lawyers for personal business.)
Popular online “Legal” websites have had multiple lawsuits filed against them.
Emotional mistakes made while drafting an online document can confuse or damage family relationships. An older person might forget to include a niece, nephew or be unaware of newer family arrangements, which affect the family after they depart.
There is seldom a witness to a person doing online paperwork. If something is ambiguous later, and after the person dies, no one can explain the situation.

The Point of Wills and Estate Planning is for specific intentions and to protect your family.

Online forms are generic and do not cover specific concerns of the individual. A person plans a will and testament to pinpoint precisely where they want their money to go.

The risks of Do-It-Yourself Estate planning is incomprehensible. You are throwing away money by trying to save money. If any mistakes occur concerning your assets, property, or anything else, innocent people like those you leave behind will get hurt.

The worst part is there will be no one to fight for you or your family because there was no documentation provided, giving anyone permission to speak on your behalf.

Do-It-Yourself Documents tend to:

Not include information for all circumstances.
Not ask the appropriate questions that provide the right information.
Not advise on all of the person’s information, including other money aside from general accounts.
Not ask about family relationships and not concerned with them.
Not provide the information needed and does cost more than advertised.

A Do-It-Yourself example with painful implications:

A woman suffering from a life-threatening illness filed her own will online. Due to complications and not feeling well, she filed hastily, forgetting which money was in several accounts. She hadn’t remembered that years before her illness, she had left a beneficiary she no longer spoke to $50,000. Her wishes were that all of her money in her financial accounts go to a specific charity and a few select people. When she died, those close to her ended up paying to release the funds to a stranger and a person she didn’t want to receive the money.

Protecting Your Legacy. Planning Your Future.

Washington Elder Law is available to help you plan your estate with ease. We welcome you to join our webinar for an easy three-step process to estate planning. Preparing your will and trust can be comfortable with the right guidance.

Our mission is to:

Identify if your current plan meets your goals.
Understand what it takes to protect you and your stuff
Show you how to get what’s missing.
Let you know what Washington Elder Law offers.

Please call us so we can help you plan your future. (206) 367-1521