Monday, July 23, 2018

Avoid Family Strife with the Proper Documentation

Times are hard. 

  Many of our adult children come home to get back on their feet. Many of our clients want to help their family and friends by loaning money or guaranteeing and/or co-signing a loan. This can cause a disaster. Don't Assume Anything. When adult children come home, there needs to be a "plan" that everybody understands. How long will the child stay? Will the child be responsible to cover any expenses? Will the child be expected to help with maintenance, repairs, cleaning, etc. Discussing these matters up front and openly will help avoid misunderstandings; and memorializing this will avoid arguments later. Sometimes a family counselor is helpful, or even necessary.

Is it a Loan or a Gift?

 Many people are "loaning and/or gifting" monies to adult children for a variety of reasons. Please make sure that these money transfers are properly documented. If it is a gift, have a gift letter and file a gift tax return, if required. We have seen too often when a parent dies and one child demands repayment of a "loan"; and the other child insists that it was a "gift". Feuds break out and families are broken.

 If it is a loan, have a Promissory Note or other agreement memorializing the terms. When is it due? What is the interest? What if the parent or child dies? Memories fade and family members can argue in good faith. But, these arguments can destroy your family.

Co-Signing/Guaranteeing

 Life Insurance is to "guarantee your guarantee". Many parents are co-signing college, home and car loans for their children. It is recommended that you require your children to have sufficient life insurance in place, dedicated to paying this/these debts, just in case tragedy strikes. If your child dies, you still have to pay these debts. Insurance can protect your family from further disaster.

 You should also have an written understanding that the child will pay the loan on or before the due date. If a payment is late (even by one day), the loan will last longer. The child must tell you immediately if he/she cannot make a payment so that the parent can decide whether or not to cover the payment. The child must sell his/her car or house if he/she cannot make payments timely and regularly.


Friday, June 1, 2018

What is “Bitcoin” and how do I include it in my Will or on my Taxes


What is “Bitcoin” and how do I include it in my Will or on my Taxes

Bitcoin is legally known as cryptocurrency. It is an Internet Asset.

As the world expands and “real” life becomes intertwined with the internet, more and more people are going to have internet assets. One of the most popular forms of internet assets is cryptocurrency, for example, “Bitcoin.”

Cryptocurrency actually refers to a code with a unique number that takes immense computer power to generate. This code can be traded, much like money, and keeps a digital record of every transaction it has been a part of. Many people will accept this in lieu of centralized, government backed money, making it a potentially valuable asset that should be protected accordingly. Although Bitcoin is the most popular type, there are over a thousand different forms of cryptocurrency and growing.

Taxes

The IRS considers cryptocurrency to be property, rather than money for tax purposes. Therefore, if you are have not been reporting either selling your cryptocurrency or using it to purchase goods or services as you would with money, or have been reporting it incorrectly, now is the time to change it! Start reporting your income correctly using IRS guidelines. That means keeping track of what you sell and report the gain. Though buying or possessing cryptocurrency and not making any money off of it does not require you to report it, all other transactions do. Visit https://bitcoin.tax/ and https://www.irs.gov/pub/irs-drop/n-14-21.pdf for more information on the specifics of cryptocurrency and taxes.

Wills

Similarly, you should make sure to protect your cryptocurrency assets during Estate Planning. You must include this in your asset list. You should keep extensive written records on your cryptocurrency, including how much you have, where you got it, where it currently is, and the digital key to access it. This will make it much easier when the time comes to pass your cryptocurrency on.

Additionally, the cryptocurrency could be set up so that it goes directly into a Trust as soon as you die. This will make it significantly easier for your heirs to protect and control the assets. Ideally, you want to make it as easy as possible for your beneficiaries to take full advantage of the assets you leave them.

Whatever you choose to do to protect your assets, we can help.

Tuesday, December 1, 2015

Wreaths Across America Blog Post

In this season of giving, I want to share with you an organization I have a special fondness for.

Wreaths Across America honors U.S. military veterans by placing wreaths on the graves at Arlington National Cemetery.

As you probably know, Arlington houses thousands of fallen soldiers and deceased veterans dating back to the Civil War, as well as memorials like the Tomb of the Unknown Soldier.

The work Wreaths Across America does ensures that even in death we continue to pay our respects to the servicemen and women who fought for our country.

But as of this weekend, they will be about 30,000 wreaths short of fulfilling their commitment and they need us to donate whatever we can to make up the difference.

If you are able, please consider helping out at www.WreathsAcrossAmerica.org. For just $15 you can sponsor one wreath. It makes a thoughtful holiday gift for the person who has everything.

Thank you.

Thursday, October 22, 2015

Warning Signs of a Heart Attack and Stroke

It’s important to catch potential heart attacks and strokes as soon as possible. Below are some indicators that together or separately warn of these medical emergencies.

Heart Attack
  • Chest Discomfort: Pressure, squeezing, fullness, or pain in the center of your chest that lasts for several minutes and occurs intermittently
  • Upper Body Discomfort: Could occur anywhere from either arm to back, stomach, neck, or jaw
  • Shortness of Breath Cold sweats
  • Nausea
  • Lightheadedness
Stroke
  • Numbness or weakness in the face, arm or leg, often focused on one side of the body
  • Confusion, trouble speaking or understanding
  • Trouble seeing in one or both eyes
  • Trouble walking/dizziness/loss of balance
  • Severe headache

As part of our practice, we advise everybody to have a well-planned estate, including a Power of Attorney (“POA”) for finances and health. It is important to have an updated POA just in case you ever suffer either of these situations or some other illness or injury.


We hope this information is helpful. Feel free to contact The Paton Law Firm with any questions.

Friday, October 9, 2015

Holocaust Reparations Can Be Protected from Medicaid



As part of our Elder Law practice, we know things that others don't. Here's some important information:

Holocaust Reparations and Medicaid

You may already know that your assets and income are a big factor in the Medicaid you receive. Almost any money you have can be taken by Medicaid. However, Holocaust reparations are often exempt from Medicaid, but you must follow certain rules.

Note that in New Jersey, Medicaid will protect your reparations while you are alive, but seek recovery from them after you die. There is a bill pending to change this.

Separate Bank Account

Reparations should not be co-mingled with other assets. Therefore, you will need to keep your reparations in a separate bank account.

This can be any type of account or multiple accounts of various types. The account(s) simply must not contain funds from other sources of income. Any interest made on the account is not exempt from Medicaid.

If you have previously received reparations and did not put them in a separate bank account, that's okay. However, you must rectify this before applying for Medicaid by separating the money out. To separate out the right funds, you'll need to figure out the total amount of you've received in reparations.
 
Figuring Out The Amount of Reparations You've Received

You must retain proof of the total reparations you've received from their source, which will be a foreign government agency.

To do this, write a letter to that agency requesting your payment history. Include your name, address, date of birth, and case reference number. The case reference number, along with the agency to contact should be listed on any communications you receive along with your reparations.

There are many possible agencies from which your payments could originate so if you are unsure of where to send your letter, speak to the bank from which they are sent.

Your payment history will likely be provided to you in the currency of the originating country, which means you'll need to calculate the American dollar equivalent according to the conversion rate when each payment was made.

You can find historical conversion rates by selecting the country of origin (likely Austria or Germany) and year received and entering the amount here: http://fxtop.com/en/currency-converter-past.php

If you need help, please contact us at The Paton Law Firm.