Thursday, June 25, 2015

Human-Only Cemeteries May Soon No Longer Discriminate Based on Species in Massachusetts

If Massachusetts state Representative Nick Collins, a Democrat from Boston, gets his way, you will soon have the option of being buried alongside your dearly beloved . . . cat.

A bill currently under consideration at the State House would allow for cemeteries to designate an area "for the co-internment of both human and animal remains," making Massachusetts the fifth state to allow for such inter-species burial arrangements. At present, human cemeteries in the state are not permitted to bury animal remains; likewise, humans cannot opt to be buried in an animal cemetery. This prohibition forces pets and owners to be ripped apart for all eternity, defying the heavenly edict "What God has joined together, let no man put asunder"--that was about pet ownership, yes?

Not surprisingly, perhaps, there is some opposition to the proposed legislation. Guy Glodis of the State Cemetery Association expressed that there were "environmental concerns, sanitary concerns, religious concerns" to consider. However, the bill's legislative sponsor claims that no cemetery would be forced to accept animal burials. Arguing for the other side, Cheryl Traversi of the Animal Rescue League of Boston, makes this point: "This is your daily companion. It makes sense that you would want to be buried with your animal." 

To learn more about this recent trend in other states, check out this NPR coverage

Thursday, June 18, 2015

Renewed Interest in an Old Advance Directive

VSEDs--short for "voluntarily stopping eating and drinking"--are being reconsidered as a method for managing the end-of-life care of patients who die with some form of dementia. With one in three seniors facing dying with mental impairments, finding strategies to allow for a humane death are becoming increasingly important. Historically, VSEDs have been used to hasten death in terminally ill patients suffering from conditions such as Lou Gehrig's disease, though in those cases patients are able to maintain cognitive function as they physically decline.

Presently, VSED requests for those with Alzheimer's are uncommon and untested as they may present legal and practical problems. A caretaker, for example, may want to honor a patient's request for a drink. Additionally, in many states, asking for water--even if the patient is demented--functions as a revocation of the advance directive. Nevertheless, ABA Journal predicts that with 5 million patients currently suffering from Alzheimer's disease, VSEDs will likely play an increasing role in advance directive plans.

Thursday, June 4, 2015

Retirement Taking on a Cyclical Pattern Today

According to a recent piece in Financial Advisor Magazine, the model of retirement to which we've all grown accustomed will soon go the way of the dodo thanks to a number of unseen forces over which we have no control.

The model of retirement that came about in the 1940s and 1950s looked like this: retire at 62 and receive a gold watch, a pension, and a Social Security check. Today's model varies from that for a good reason and a bad reason. The good reason is that people are living longer than they ever have, with the average life expectancy for a man in good health at age 65 now at 86.6 years and 88.8 years for a woman. This means, though, that people must postpone their retirement dates in order to have the funds needed to support themselves into their longer lifespans.

The bad reason is that automation is destroying traditional jobs, with one University of Oxford study predicting that half of today's occupations will be displaced by automation in the next decade or two. This means that individuals' work lives will out of necessity take on a cyclical character: as careers become obsolete, new skills must be learned and new occupations must be taken on. People can expect to be in and out of the workforce for much of their lives and as a result will have to retire later in life.

The author of the article managed to express this rather grim news pretty cheerily when he reached this conclusion: financial planners should expand their traditional areas of expertise--saving for college for children, buying houses, handling insurance needs, etc.--to include a form of retirement planning which will help their clients "thrive in their new cyclic lifelines."

Wednesday, May 20, 2015

People Should Expect Smaller Inheritances in the Future

According to a recent estate planning survey conducted by HSBC, only 9 percent of individuals plan to save as much money as possible to leave to their descendants. This doesn't mean that they're unconcerned with younger generations, though--just that they're more inclined to give money in the form of a "living inheritance." 43 percent of U.S. retirees actually continue to provide regular financial support to at least one other person, with 10 percent of those dependents being adult children. 

One commentator has pointed out that retirees aren't planning to spend the money on themselves. Instead, they want to "live and experience the results of their legacy planning, be it with their children, grandchildren, or others." They are also concerned with losing money to estate taxes. 

Individuals seem to be unaware of this trend, though, with 29 percent of those surveyed expecting their inheritance to fully or partially fund their retirement. Additionally, 59 percent of working-age Americans plan to leave a legacy for their children, but less than a third actually report receiving one. 

The takeaway from the survey is that individuals should not rely on an inheritance when financially planning for their own retirement.

Wednesday, May 6, 2015

New Legislation Allows Disabled Individuals to Save Money in Tax-Free Accounts

In December of 2014, Congress passed and President Obama signed a law called the Achieving a Better Life Act (ABLE), which went into effect in 2015. This piece of legislation allows individuals with disabilities to set aside money in a tax-free account to be used towards their long-term disability expenses. The account's benefit is that it allows for tax-free growth for savings and tax-free distributions when funds are used towards disability expenses. 

So long as the money in this account does not exceed $100,000, it does not jeopardize Medicaid or other federal benefits, like SSDI payments. 

In order to qualify to set up an account, one must be entitled to benefits based on blindness or disability under one of two titles of the Social Security Act and the blindness or disability must have occurred before the age of twenty-six. Alternatively, an individual can apply for a "disability certification" verifying that he or she has a "medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months" or is blind and that the blindness or disability occurred before the age of twenty-six. 

An ABLE account can only be used for qualified disability expenses. These include but are not limited to: education, housing, transportation, health, and prevention and wellness. 

There are some limitations to ABLE that are worth mentioning. For example, earnings from the account that are not used on disability expenses are treated as income, in addition to a ten percent tax penalty. Nonetheless, this legislation is still considered a big step forward for disability advocates. 

Wednesday, April 22, 2015

House Votes to Repeal Estate Tax

Last week, the House voted to repeal the federal tax levied on estates worth more than $5.43 million for an individual or $10.86 million for a couple. Estates valued at levels higher than these are taxed at rates of up to forty percent. The vote came out to 240 to 179; as expected, it was divided largely on party lines. In reality, though, this tax will almost definitely remain on the books. Even if the Senate voted in its favor--which is extremely unlikely--the President would certainly veto it.

Republican opponents of what they refer to as "the death tax" argued that farmers and small-business owners were unfairly burdened. John A. Boehner, the House Speaker, argued that it deprived them of the opportunity to pass something on to their children and grandchildren. Proponents of the estate tax, however, argued that repealing it would cost the Treasury $14.6 billion in the year 2016 alone, and $269 billion over 10 years.

At the end of the day, though, the tax's repeal would offer little for the majority of Americans. It only accounts for 0.2 percent of deaths anticipated in the United States.

Thursday, April 16, 2015

Regulations Proposed to Protect Retirement Accounts

Federal regulators have proposed rules intended to protect investors' retirement savings accounts from investment planners who do not always act with their customers' best interests in mind. Drawing on academic research, the White House has found that lack of investor protection has cost investors $17 billion annually. Proposed rules would close some of the loopholes which allow brokers to avoid taking on fiduciary responsibilities when giving advice on retirement accounts.

These rules would would update the Employee Retirement Income Security Act, which was enacted in 1974, when many retirees could still rely on pensions. Today, retirees are increasingly dependent on a 401(k). They become especially vulnerable when they turn a 401(k) account, previously managed by their employer, into an individual retirement account. Brokers who advise them on that transaction do not necessarily have to act with their customers' best interests in mind; this can lead to the loss of thousands of dollars for retirees who may end up paying higher commissions as a result. Erisa, as it is currently written, does require that brokers act according to a fiduciary duty when dispensing advice, but "advice" is narrowly defined. The proposed rules would broaden the meaning of advice to include any professional receiving compensation for providing individualized advice.