Tax-free Retirement?

CNBC has this helpful article about how to plan for a tax-free retirement with lots of good tips and portfolio ideas. Many retirees can expect lower income tax bills than those of us still working (and earning more income), but the article wisely points out the wild card – the Congress/tax wild card.

Thoughts? What are your ideas for planning a tax-free retirement?

If my law firm, Johnson Law KC LLC, can help you or your family on your estate planning or other legal needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient and free consultation.

(c) 2013, Stephen M. Johnson, Esq.

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Elder Law 101

What’s the deal with elder law? With America’s aging population, elder law is important both for older clients and younger folks too. My law firm, Johnson Law KC LLC, includes elder law provisions standard in all powers of attorney.

Your financial power of attorney should include elder law clauses like:

  • Gifts
  • Medicaid planning
  • Veteran’s benefits
  • Social Security
  • Social Security disability
  • Balancing tax/estate planning with elder law planning

Beyond your financial power of attorney, what about your retirement income? Long term care insurance to pay for an assisted living facility or nursing home? Life insurance? Disability insurance?

Elder law a complex field that affects everyone. You need an experienced elder law attorney on your team. Call (913-707-9220) or email (steve@johnsonlawkc.com) my law office, Johnson Law KC LLC, for a free, convenient consultation and let’s discuss your elder law needs.

(c) 2013, Stephen M. Johnson, Esq.

Elder Law and Finances

CNBC has this interesting article about a dilemma many people face – when to take over an elderly parent’s checkbook and finances. To pay bills for an elderly parent, you must have a durable financial power of attorney in place. There are a myriad of elder law issues to examine as well. You need an experienced estate planning and elder law attorney to help guide you and your loved ones.

If my office, Johnson Law KC LLC, can help you or your elderly parent with your estate planning or elder law needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient, free consult.

(c) 2013, Stephen M. Johnson, Esq.

Cross posted to The KC Elder Law Blog.

Kansas City Wealth

The Forbes annual billionaire list has many old names and a few fresh faces. This year, 4 Kansas City area residents made the list – Neal Patterson, of Cerner, Donald Hall, of Hallmark, and Min Kao and Gary Burrell, of Garmin. Congratulations to each of them on successfully building and preserving wealth amidst a challenging economic environment.

Most of us won’t be making the Forbes billionaire list any time soon. But most of us do have homes, cars, bank accounts, stocks, or a retirement plan. Everyone from Bill Gates to Joe Six Pack needs estate planning documents. Don’t bet on legal forms from the Internet or library. Two things to think about: (1) if you’re an adult, you need a will, living will, and durable medical and financial powers of attorney, and (2) if your family’s future well being is at stake, you want to be sure everything will work smoothly when it’s needed. If my firm, Johnson Law KC LLC, can serve your estate planning or business transition needs, call (913-707-9220) or email (steve@johnsonlawkc.com) me for a convenient, free consult.

(c) 2013, Stephen M. Johnson, Esq.

Reading Your Trust (and Estate Plan)

Read your trust. Yes, I know, reading a will, trust, or almost anything written by a lawyer (except John Grisham or Scott Turow) sounds as appealing as doing your taxes, having a root canal, getting caught in a blizzard, or spending the night in an airport. And understanding “legalese” is even more daunting. Let’s face it: most lawyers don’t write well, and when they do write, they level forests, producing 50 page “briefs”and minor novellas by the hour. Lawyers speak legalese and often leave a trail of misplaced participles, dangling modifiers, and bizarre archaic phrases (e.g. “hereafter,” “heretofore,” “said party of the first part,” “such party of the second party,” “inter alia,” “res ipsa loquitor,” “stare decisis et non quieta movera,” “cy pres,” “stipulated,”  “subsequent,” “give, bequeath, and devise,” and “situate”). Most people don’t read the small print, we all just want to get it done (and leave the details to the professionals). People hire lawyers to apply their wishes and desires for the future to their family’s legal landscape: clients tell lawyers “we want X,” now figure out how to do it. And lawyers are the professionals who what you need in a will, trust, living will, powers of attorney, and who can answer your tax issues, and other vital questions.

If you’d like to work with a lawyer who speaks and writes in plain English and can help you decipher the legalese of your trust and other estate planning documents, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient free consult with my firm, Johnson Law KC LLC. We practice law differently.

(c) 2013, Stephen M. Johnson, Esq.

Selecting a Trustee

So you’ve decided it’s time to do some estate planning and you’ve talked with you estate planning attorney. And the lawyer asks who you want to serve as trustee. A friend or family member? Your bank or a trust company? Here’s a helpful article on some non-legal issues to think about when selecting a trustee.

The lawyer walks you through some of the pros and cons of each option – a friend or family member probably won’t expect to be paid for their service, but they may not know anything about investments or administering the trust for you and your family, so they could jeopardize your financial legacy to your descendants. A bank or trust company will usually serve for a fee of 1%/year of assets under management and they have professional investment and advising services included (so you’ll be getting a good return on investment and monthly or quarterly financial statements), but they might not want real estate or closely held (and non-diversified) business interests or other assets in the trust. And banks and trust companies often change through mergers and other business deals over the years, not to mention the internal turn over of trust officers and employees that you actually work with.

Even if you don’t set up a trust, the lawyer will ask a similar question about your will (who’s your executor?), your living will and your financial and medical powers of attorney (who’s your agent/attorney in fact?). Who’s going to be making decisions on your behalf? Who do you trust to handle your last affairs and settle your estate? The law doesn’t provide many answers, but a good estate planning lawyer can walk you through your options, and help you select the person or institution best suited for your unique situation and your needs. If I can help you on your estate planning journey or answer any other questions, please give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient appointment with my firm, Johnson Law KC LLC.

(c) 2013, Stephen M. Johnson, Esq.

Time to Sell?

Thinking of selling your business, transitioning it to the next generation, retiring, or moving onto the next great entrepreneurial idea? Bloomberg has this interesting article noting that many financial advisors are recommending that their wealthy clients sell their businesses by the end of 2012 to avoid tax hits in 2013. As we approach the expiration of the Bush tax cuts (on the estate, gift, generation-skipping, and capital gains taxes), the Obama tax cuts (on payroll taxes), and massive planned spending cuts to the federal budget on the one hand, and a potentially historically close election on the other hand, we’re entering a perfect storm. While no one can predict what will happen with taxes, the economy, or the election, if you’ve got a business and you’re looking to sell, now’s a good time to get out and enjoy the fruits of your labor. The article also recommends some good ideas on stock options, capital gains, and Roth IRAs.

Our firm, Johnson Law KC LLC, has the depth and breadth of legal and business expertise to advise you and your family on arranging a sale or other exit from your small business, as well as serving you and your family’s estate planning needs. If we can serve you, please call me (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient appointment.

(c) 2012, Stephen M. Johnson, Esq.

What’s Your Number?

The WSJ has this interesting article about retirement planning. What’s your number? The Wall Street 2: Money Never Sleeps clip features a Wall Street mogul replying with a smile to the young trader’s proverbial “how much is enough” question “more.”

In the WSJ article, Fidelity Investments suggests that folks should save “at least 8 times their final annual pay” for basic retirement living expenses. So if your final salary before retirement is $100,000 per year, you need $800,000 in your IRA or Roth IRA to retire. For younger workers, like myself, Fidelity says that by 35, aim for “an amount equal to your annual pay.” So if you earn $50,000 a year by 35, have $50,000 in your IRA. Fidelity says by 45, you want “three times your salary,” and “five times your salary by 55.” If you’re like me, those numbers are daunting, but it’s not too late to start saving and investing to enjoy your future with your family. After all, compound interest is the 8th wonder of the world. Harnessing the power of compound interest in your IRA or Roth IRA will explode your retirement savings as you go through life.

The WSJ article rightfully recommends “The more you make, the more you need to save, not just in dollars but as a multiple of your final salary.” Lifestyle and standards of living also matter – one person’s comfortable life is another’s posh lifestyle or “slumming it” for yet another person. You don’t have to only use an IRA or Roth IRA for your retirement – stocks, downsizing your house, and other options work fine too – but IRAs and Roth IRAs are among the most tax efficient investments for funding retirement, so you’ll be working less and making more, paying fewer taxes, getting more bang for your buck.

If you don’t have an IRA or Roth IRA, you’re letting a golden opportunity to save and invest money tax free for retirement slip away. If your employer matches your IRA contribution, contribute at least as much as your employer’s match amount. We work with a number of top retirement, insurance, and investment professionals around KC to provide holistic estate planning services for you and your family’s unique needs. If Johnson Law KC LLC can help you review or implement your estate plan, give us a call (913-707-9220) or email (steve@johnsonlawkc.com) at your convenience. We’d love to work with you no matter where you’re at in the process – young professional just getting started in life, mature worker plugging away at work and home, or retired couple trying to leave a legacy for the grandkids. You want our firm’s legal and business expertise on your team and you can rely on our 50 years of combined experience for all your legal needs.

(c) 2012, Stephen M. Johnson, Esq.

The Demographics of Wealth Concentration

The Wall Street Journal has this story about the latest demographic study of wealth concentration. The WSJ notes that (1) the concentration of multi millionaires mainly tracks the population and (2) the number of high network individuals in a community and their relative concentration within that community may be very different. As always, if we can help with your estate planning or small business needs, call or email us for a convenient appointment.

(c) 2012, Stephen M. Johnson, Esq.

Increasing Retirement Income

CNBC offers some interesting tips for retirees looking to increase their income in 2012.

(c) 2012, Stephen M. Johnson, Esq.