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.

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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.

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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.

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 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
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We prepare and provide the proper documentation to secure your benefits.

We always follow through with your application for your benefits.

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

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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

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