Estate Planning Tips – your choice

Whether you own a home, have some savings, or own any goods such as a car, furniture, or other form of personal property, you have an estate. If you don’t take part in estate planning to choose what happens to your estate upon your death, the government and/or a judge will make those decisions for you. Here are some tips you can use.

Estate planning with an attorney

Speaking to an attorney regarding estate planning can help assure documents such as your will make sense for your situation and are legally executed. Planning with an attorney can help make sure your will is validly drawn, executed, and attested.

Create a will/living will

By creating a will, in essence, you tell the court in writing, with certain formalities, how you want your assets distributed and who will be responsible for the distribution. We help our clients draft their wills. Living wills and health care powers of attorney give instructions on issues such as life support and medical treatment. Through a Living Will you can communicate your choices regarding your end-of-life care even if you are incapacitated or facing life support.

Power of Attorney

We help you ensure that your wishes are known and that you have a legally binding power of attorney. A power of attorney is a means of choosing someone to manage your affairs or make decisions on your behalf or even transact business for you if you are unable to do so for yourself.

The Law Offices of Lora Fausett P.C. provides real estate law services including loan modifications, buying and selling legal assistance, short sales and deeds in lieu, mortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPage, Cook, Kane, Will, and Kendall Counties.

For Information Call 630-858-0090

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Mortgage delinquencies surge according to MBA

According to a recent report by the Mortgage Bankers Association (MBA), the delinquency rate for mortgage loans rose to a seasonally adjusted 8.22% rate in the second quarter of 2020. The results marked the highest rate in nine years. The nearly 4% increase was also the highest spike from the previous quarter in the survey’s history. In addition, the survey indicated a record high delinquency rate for FHA mortgages, reserved for first-time homebuyers.

Some homeowners are having difficulty making their mortgage payments amid the COVID-19 pandemic. The report states that the mortgage delinquencies track closely with the availability of jobs. The five states with the largest rises in mortgage delinquency rates were those that have a large number of leisure and hospitality jobs, which were hit hardest by the pandemic: New Jersey, Nevada, New York, Florida, and Hawaii.

The pace of recovery in the US is affected by uncertainties including unemployment and stimulus measures, numbers in COVID-19 cases, and reopening. “Certain homeowners, particularly those with FHA loans, will continue to be impacted by this crisis, and delinquencies are likely to stay at elevated levels for the foreseeable future,” said Marina Walsh, MBA’s vice president of industry analysis.

However, Walsh continued, “Fortunately, there are several mitigating factors that make this current spike in mortgage delinquencies different from the Great Recession. These factors include home-price gains, several years of home equity accumulation, and the loan deferral and modification options that present alternatives to foreclosure for distressed homeowners.”

Home Ownership Expo

Home Ownership Expo – November 3, 2018

The City of Aurora and community partners want to help you prepare for homeownership.

We’re offering educational workshops to help you prepare for homeownership! Industry experts will provide presentations during two concurrent workshop tracks; one in English and one in Spanish. Over 20 exhibitors will be available to answer your questions throughout the morning.

Don’t miss out on:

Free continental breakfast
Trolley tours around Aurora
Raffle prizes (must be present to win)

THIS IS A FREE EVENT!

Workshops include:

Understanding Credit
Down Payment Assistance Programs
Mortgage Loan Process
Home Selection Process

Event Details:

Date: November 3, 2018
Time: 9:00 AM – 12:00 PM
Address: Prisco Community Center – 150 W. Illinois Ave., Aurora, IL 60506

Registration is required and must be completed by October 31st

>>> Click here to register for free

Home Buying Expo - Event Details

Join us for FREE educational workshops (concurrent tracks in English and Spanish) and over 20 exhibitors that can help answer all your home buying questions!

We’ll provide FREE continental breakfast and trolley tours of local businesses and initiatives coming on-line in Aurora.

Doors open at 9:00 a.m. at Prisco Community Center located at 150 W. Illinois Ave., Aurora, IL.

While this event is offered at no charge to you, registration is required for each attendee over the age of 18. Each attendee over the age of 18 is entered for a chance to win a raffle prize. Other requirements may apply. Must be present to win.

Thank you to our sponsors!

Gold Sponsors:
Fifth Third Bank
First National Bank
Huntington Bank
The Neighbor Project

Silver Sponsors:
Country Financial
NICAR

Bronze Sponsors:
Adriana Hartmann, Allstate
Associated Bank
Ponce & Reyna Agency, Farmers Insurance

>>> Register Now!

* Advertising Material: To the extent that the information in this post is interpreted as attorney advertising in accordance with the Illinois Rules of Professional Conduct or within the meaning of state bar rules from all other localities, this statement is made pursuant to those rules.

Specialties: Specialization claims are prohibited by Illinois Supreme Court Rules and we do not claim to be specialists. The content of this e-mail is organized and presented for the sole purpose of general information. None of the included content should be construed as legal advice. Viewing this e-mail or e-mailing the account holder does not create an attorney-client relationship. NOTICE: This page may be considered advertising material.

Located in Glen Ellyn, Illinois and serving clients in DuPage, Cook, Kane, Will, and Kendall Counties.

For Information Call 630-858-0090

How to Maximize Social Security Benefits for Surviving Spouses

Retirement Benefits

This story originally ran in Chicago Tribune:

Retirement: How to maximize Social Security benefits for surviving spouses

Many retirees know that spouses can coordinate their claims to boost their total benefit payout from Social Security.

But many may not realize that if they are widowed before claiming benefits, they may also have options to maximize Social Security by coordinating the timing of claims for their own retirement benefit and a survivor benefit.

Unfortunately, the Social Security Administration isn’t likely to fill them in on this strategy.

A report this year by the Social Security Administration’s Office of the Inspector General found that 82 percent of surviving spouses taking benefits could have received a higher monthly benefit by restricting their application to survivor benefits only and delaying their retirement benefits up to age 70.

As a result, the Social Security Administration underpaid about $132 million to more than 9,000 beneficiaries age 70 and older, and it will underpay about 2,000 more beneficiaries who are under age 70 about $9.8 million annually once they reach age 70, according to the report’s projections.

While changes in the law a few years ago affected strategies for coordinating spousal benefits, those changes didn’t affect survivor benefit strategies.

“You do still have the option to take one benefit and delay the other benefit,” says James Mahaney, vice president of strategic initiatives for Prudential Financial.

Surviving spouses need to consider whether they can maximize benefits by taking the survivor benefit first and later switching to their own benefit or by taking their own benefit first and then switching to a survivor benefit.

You can claim a survivor benefit as early as age 60 (age 50 if disabled), but it is reduced if claimed before the survivor’s full retirement age.

It won’t grow past the survivor’s full retirement age — the most a surviving spouse receives is 100 percent of the benefit the deceased spouse received or was eligible to receive at his death.

But the survivor’s own retirement benefit — which can be taken as early as 62 at a reduced amount — can grow beyond her full retirement age. Each year she delays her own retirement benefit past full retirement age, her benefit grows 8 percent a year up to age 70.

Once you figure out which benefit could grow the largest, you’ll likely want to delay that benefit. Be aware, the benefit amounts and the age you claim will make a difference.

Example

End of Life Planning Let’s say a widow at her full retirement age is due a $2,000 survivor benefit or her own benefit of $1,800.

With a full retirement age of 67, she could earn 24 percent in delayed-retirement credits if she takes her own benefit at age 70.

She could claim a reduced survivor benefit worth $1,430 a month as early as age 60 and take that until she switches to a boosted benefit of her own at age 70, worth $2,232 a month.

If she lives to age 90, she would receive a total of $707,280 in benefits. (All totals exclude annual cost-of-living adjustments.)

If she instead takes her own reduced monthly benefit at 62 worth $1,260 and then switches to the full monthly survivor benefit of $2,000 at age 67, her total payout by age 90 would be $627,600.

That’s about 11 percent less than the first scenario, in which she earned the delayed-retirement credits.

(Rachel L. Sheedy is editor of Kiplinger’s Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com. And for more on this and similar money topics, visit Kiplinger.com.)

This story originally ran in Chicago Tribune and was written by Rachel L. Sheedy, Kiplinger’s Personal Finance

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The Law Offices of Lora Fausett P.C. provides estate law representation, including power of attorney, living wills, probate law services, trusts, wills, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPage, Cook, Kane, Will, and Kendall Counties.

For Information Call 630-858-0090

The Most Common Estate Planning Mistake

Estate Planning This Way

Estate Planning is an important step for planning how your assets are distributed to your heirs.

In the article below, we discuss how to avoid one of the most common estate planning mistake so your loved ones can avoid this costly headache.

This story originally ran in Forbes:

How To Avoid One Of The Most Common Estate Planning Mistakes

There’s a mistake families at every level of wealth often make when they go through their estate planning process, and decide how to allocate money to their heirs and to charity.

An extremely common practice is to list charities as part of a will, or revocable trust, and in many cases (perhaps most)—that’s a mistake.

Property tax bills Kane & DuPage County What you need to consider is the inherited value of the holdings after tax. Throughout their working lives, most people have some form of retirement account: an IRA, 401k, thrift savings plan (TSP), etc. Those assets usually don’t pass through a will or a trust but by beneficiary designation.

So let’s examine how most people have set up their plans, and look at an alternative tweak that can make sure as much of their assets as possible go where they intend.

Most people leave their IRA assets to their spouse and kids, and if they are charitably inclined they allocate some dollars to charity through their wills or trust.

Here’s how that looks:

Common Scenario

A couple has a $1 million home, $1 million in after-tax savings account, and $1 million in an IRA. And upon the second spouse to pass, the $1 million in an IRA and the house to go the kids. Of the after-tax savings, the estate donates $100,000 to charity, and the remainder ($900,000) goes to the kids.

The problem here is that as the children receive the IRA funds, and whether they take the IRA distributions immediately or over time, these funds are income-taxable to the kids. What if they handled this an alternative way?

Alternate Scenario

First Time Home Buyer Mortgage Workshop Same couple – $1 million home, $1 million after-tax account, and $1 million IRA. The couple leaves $100,000 of the IRA to charity. The kids receive the $1 million in savings and the home and $900,000 of the IRA.

Why is this special or better? By donating to charity from the IRA, the couple is donating the least tax-efficient assets to charity. What most people don’t realize is that when a charity receives these dollars, they don’t pay any tax on the funds.

If this family makes this change, they accomplished the same result of the charity receiving 100K, but ensure that the kids will receive more on an after-tax basis.

Keep in mind there are two forms of coordinating this. The will or trust is typically drafted or amended by an estate planning attorney. The IRA beneficiary designation is a simple form filed with the brokerage firm or through their employers. It’s important to make sure you coordinate the two to prevent confusion and make your intentions clear.

One important disclaimer—this change doesn’t make sense with a Roth IRA of a Roth 401(k). Since these distributions to the heirs will be free of income tax, it does not make sense to leave these funds to a charity.

The purpose of estate planning is making sure that your money flows where you intend. Usually the government is last on that list. By tweaking not who gets what, but who gets which, there’s a chance for more to pass to the people and organizations most important to you.

Related post: End of life planning essentials

This story originally ran in Forbes
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The Law Offices of Lora Fausett P.C. provides estate law representation, including power of attorney, living wills, probate law services, trusts, wills, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPage, Cook, Kane, Will, and Kendall Counties.