Oconee Estate Planning Blog

Serving Oconee County Georgia and the Surrounding Area

Federal Government Helps with COVID-Related Funeral Costs

The Federal Emergency Management Agency (FEMA) — the government agency handling the burial cost program — released its policy for the program, reports AARP’s recent article entitled “FEMA to Help Cover Funeral Costs for COVID Victims.”

“The COVID-19 pandemic has caused immense grief for so many people,” Acting FEMA Administrator Bob Fenton said in a statement. “Although we cannot change what has happened, we affirm our commitment to help with funeral and burial expenses that many families did not anticipate.”

Note that FEMA has already had reports of scammers reaching out individuals claiming to offer help applying for this funeral assistance. If anyone contacts you about this program before you have personally registered for aid, it’s a scam. FEMA says it won’t reach out to people prior to registration.

The maximum amount of financial aid available is $9,000 per funeral. This assistance can be used to help with expenses for funeral services and interment or cremation. FEMA has said that a death must meet at least these criteria to qualify for aid:

  • The death certificate must state that the death was caused by COVID-19
  • The death happened in the U.S.; and
  • The person applying for funeral assistance must be either a U.S. citizen, a non-citizen national, or a qualified alien, who incurred the funeral expenses after January 20, 2020.

FEMA is taking calls for assistance applying for funeral aid at 844-684-6333 between the hours of 8am and 8pm Central time, Monday through Friday.

FEMA says if you had any COVID-19 funeral expenses last year, you should make sure to collect all the documentation for all of your costs. This includes:

  • An official death certificate that links the death directly or indirectly to COVID-19 and shows the death occurred in the U.S.
  • Funeral expense documents, like receipts or a funeral home contract that include your name, the deceased person’s name, the amount of the funeral expenses and the dates those expenses were incurred; and
  • Proof of funds received from other sources that went specifically toward the cost of the funeral.

This assistance program won’t be able to give you money for costs that were paid for by burial or funeral insurance or with financial aid received from voluntary agencies, government agencies, or other sources.

If you qualify for funeral assistance, you can receive a payment by mail or through direct deposit when you apply for aid.

Reference: AARP (April 7, 2021) “FEMA to Help Cover Funeral Costs for COVID Victims”

Suggested Key Terms: Elder Law Attorney, Elder Care, Funeral Arrangements, Burial, COVID-19 (coronavirus)

What Is Science Doing About Hearing Loss?

Thanks to advances in technology and medicine like artificial intelligence and gene therapy, hearing research is producing significant innovations. AARP’s recent article entitled “Three Game-Changing Innovations for Those With Hearing Loss” looks at a couple of them, in various stages of development.

  1. Eyeglasses That Turn Speech into Subtitles. With these, you’ll be able to read what people are saying. An app on your smartphone would listen to a conversation and transcribe the speech into sentences in real time. The text would be sent instantaneously to your enhanced eyeglasses, which would create subtitles. Vuzix, a tech company, recently released smart glasses that work with transcription software. Automatic speech-to-text programs have proliferated in recent years, and live computer-generated captions are now available on most videoconferencing platforms. Smartphone apps can also generate real-time transcriptions for in-person conversations. However, the issue is that users have to be in front of a PC or looking at a phone, which detracts from full social engagement. However, companies are making subtitles more natural, by using “smart glasses” technology, which can project text to a user’s field of vision in a comfortable, nonintrusive way. We may see this in a few years.
  2. An App That Lets You Hear Someone in a Crowded Room. This technology can isolate a person’s speech in a noisy environment, which would solve what scientists call the “cocktail party problem.” An app would “listen” to the soundscape surrounding you and separate out different streams of sound, including voices, ambient music and other background noise. It would then isolate the sound you want to hear based on the direction you’re facing — and reduce everything else. The cleaned-up sound would then be delivered straight to your ear through your hearing aid, cochlear implant, or earbuds. Powerful de-noising programs look to be available on hearing technology within five years.
  3. Drug Therapy That Regrows Cells That Help Your Hearing. Your body would repair damage to your inner ear — like when a salamander regrows his tail. A drug delivered into your inner ear would turn on chemical switches to regrow the cells responsible for hearing and most hearing loss. Those born with hearing loss or those who lose hearing later in life would get injections to restore some or all of their hearing. This hair cell regeneration would be ideal for anyone who’s lost hearing because of missing or damaged hair cells. However, this isn’t anticipated to be available very soon. Some hair cell regrowth therapies using different methods are currently in human clinical trials. There are trials being conducted at Novartis, Eli Lilly, Frequency Therapeutics, and Pipeline Therapeutics. However, most of this work is still being tested in the lab.

Reference: AARP (August 2, 2021) “Three Game-Changing Innovations for Those With Hearing Loss”

Suggested Key Terms: Senior Health

Who Inherited from the Painter Bob Ross?

Like many painters before him, Bob Ross’s image only took hold after his untimely death. He’s now a pop culture icon, and is featured as bobbleheads, Chia pets and has his own cereal.

However, there’s a reason why we see so much more of the gentle painter than ever before. That’s because of a legal battle for ownership of Ross’s name. That was the only item of value in his estate, which is rare for celebrities of his caliber.

Wealth Advisor’s recent article entitled “Here’s Who Inherited Bob Ross’ Estate, And Where They Are Now” reports about what happened to his estate, who controls it and where they are today.

The Daily Beast wrote that Ross is “a smash hit on social media, where he feels more like a Gen-Z influencer than a once semi-obscure PBS celebrity who rose to fame in the 1980s on the back of his bouffant hairdo, hypnotic singsong baritone and a timeless message about the beauty of the world around us.”

However, he wouldn’t have become a household name, if not for Bob Ross Inc. The battle began when the artist met Bill Alexander, a celebrity painter who had a show on PBS, in 1978. Alexander gave him a job as a traveling art instructor. Ross met Annette and Walt Kowalski at a class, who recently lost their son, and who wanted to learn how to paint.

The Kowalskis convinced him to come to Washington, D.C. to teach. They eventually made a deal: they’d give him a stipend and room and board, if he’d teach more classes that they’d arrange in the area. PBS then asked Ross to do a show like Alexander’s, and Dennis Kapp, the owner and CEO of the art-supply company Martin F. Weber, wanted to develop a line of supplies with him too. Soon, The Joy of Painting was born. However, to look after the supply company with Kapp, Ross and his wife Jane, and Annette and Walt signed documents to create Bob Ross Inc., with all four of them being equal partners.

At the end of the 1980s, all four partners were making $85,000, and in the early ’90s, Ross made around $120,000. However, he wanted to branch out, and when he did, the happy days were at an end. When Ross’s health started to decline, Walt “declared war” and sent Ross documents saying the Kowalskis owned everything, but they’d agreed that Ross and his heirs would get 1% of the revenues for the next decade. Ross never signed anything, and in fact, he quickly changed his last will to make it harder for the Kowalskis to steal his name and likeness.

Those changes to his last will included “a clause specifically addressing his name, likeness and the rest of his intellectual property. All of those rights were to go to Steve and one of Bob’s half-brothers.” His third wife replaced Annette as the administrator of his estate. In July 1995, the painter lost his battle to cancer.

When Ross died, Bob Ross Inc. was totally owned by the Kowalskis. However, they wanted it all, including his name and likeness. Then what one of Ross’s good friends calls “Grand Theft Bob” began.

Steve did not know about the final amendment until 20 years later when his uncle Jimmie, the estate’s executor, informed him. When Ross died, he was worth $1.3 million. Half of that was his third part of Bob Ross Inc., and there was also cash, stocks and property to divide.

The Kowalskis went after Ross’s art supplies and artwork and made “claims against the estate for business and personal reimbursements,” charging Ross’s widow with hefty lawsuits and suing PBS and the children’s show Ross guest-starred on. In 1997, Jimmie, Ross’s brother, settled the lawsuit, practically handing over everything to the Kowalskis. In 2012, their daughter Joan took over, opening up the realm of merchandising for the company.

However, there was still a “grey zone” in how Bob Ross Inc. could truly own Ross’s name and likeness. After learning about that amendment in Ross’s will, Steve went after Bob Ross Inc. but didn’t win his case against Bob Ross Inc.

Joan did strike a deal with him: if he surrendered his rights to Ross’s name and likeness, he could print his name on anything he wanted.

The good news was that Steve was able to return as an art instructor, and thanks to Bob Ross Inc., Ross was bigger than ever. That helped class sizes, and students came in masses to learn the iconic style. Steve gets to run his father’s estate, and fans welcomed him back to the painting world. Despite the fact that the Kowalskis got everything, they were the only ones who could have kept Ross’s name from disappearing.

As for all of Ross’s paintings the Kowalskis seized, they ended up in an unprotected warehouse until the Smithsonian took a collection of them.

Reference: Wealth Advisor (June 28, 2021) “Here’s Who Inherited Bob Ross’ Estate, And Where They Are Now”

Suggested Key Terms: Estate Planning Lawyer, Wills, Inheritance, Asset Protection, Executor

How Do You Keep Inheritance Money Separate?

Families with concerns about the durability of a child’s marriage are right to be concerned about protecting their children’s assets. For one family, where a mother wishes to give away all of her assets in the next year or two to her children and grandchildren, giving money directly to a son with an unstable marriage can be solved with the use of estate planning strategies, according to the article “Husband should keep inheritance in separate account” from The Reporter.

Everything a spouse earns while married is considered community property in most states. However, a gift or inheritance is usually considered separate property. If the gift or inheritance is not kept totally separate, that protection can be easily lost.

An inheritance or gift should not only be kept in a separate account from the spouse, but it should be kept at an entirely different financial institution. Since accounts within financial institutions are usually accessed online, it would be very easy for a spouse to gain access to an account, since they have likely already arranged for access to all accounts.

No other assets should be placed into this separate account, or the separation of the account will be lost and some or all of the inheritance or gift will be considered belonging to both spouses.

The legal burden of proof will be on the son in this case, if funds are commingled. He will have to prove what portion of the account should be his and his alone.

Here is another issue: if the son does not believe that his spouse is a problem and that there is no reason to keep the inheritance or gift separate, or if he is being pressured by the spouse to put the money into a joint account, he may need some help from a family member.

This “help” comes in the form of the mother putting his gift in an irrevocable trust.

If the mother decides to give away more than $15,000 to any one person in any one calendar year, she needs to file a gift tax return with her income tax returns the following year. However, her unified credit protects the first $11.7 million of her assets from any gift and estate taxes, so she does not have to pay any gift tax.

The mother should consider whether she expects to apply for Medicaid. If she is giving her money away before a serious illness occurs because she is concerned about needing to spend down her life savings for long term care, she should work with an elder law attorney. Giving money away in a lump sum would make her ineligible for Medicaid for at least five years in most states.

The best solution is for the mother to meet with an estate planning attorney who can work with her to determine the best way to protect her gift to her son and protect her assets if she expects to need long term care.

People often attempt to find simple workarounds to complex estate planning issues, and these DIY solutions usually backfire. It is smarter to speak with an experienced elder law attorney, who can help the mother and protect the son from making an expensive and stressful mistake.

Reference: The Reporter (Dec. 20, 2020) “Husband should keep inheritance in separate account”

Suggested Key Terms: Inheritance, Irrevocable Trust, Estate Planning Attorney, Community Property, Medicaid, Unified Credit, Gift Tax Return, Assets, Comingled Funds

What are Most Costly Mistakes with Social Security?

Motley Fool’s recent article entitled “5 Social Security Oversights That Could Cost You Thousands” says that these five Social Security mistakes could cost you thousands in your retirement.

  1. Claiming Social Security early while you’re still working. You can claim your Social Security retirement benefit as young as age 62, but your benefits will be permanently reduced when compared with the amount you would receive if you waited until your full retirement age. Social Security will also penalize you for continuing to work while collecting benefits, if you are younger than your full retirement age.
  2. Failing to claim Social Security by your 70th birthday. Once you hit age 62, your benefit increases the longer you wait to claim, until you reach 70. You don’t have to claim your benefit by your 70th birthday, but there is no more benefit for waiting at that point.
  3. Delaying past your full retirement age to claim Social Security spousal benefits. If you’re claiming Social Security benefits based on your own income record, it’s smart to wait past your full retirement age to start taking benefits. However, if you’re claiming based on your spouse’s benefits, there’s no benefit to delay beyond your full retirement age to claim. As a result, married couples of similar ages who have vastly different earned incomes have a dilemma: for you to claim spousal benefits, your spouse also has to have begun claiming benefits based on his or her own earnings record. This combination makes it less worthwhile for the primary breadwinner spouse to wait to collect benefits, if the spouse is expecting to take spousal benefits.
  4. Taxes on Social Security benefits are not adjusted for inflation. Originally, Social Security benefits weren’t taxed. However, in 1984, the government started taxing Social Security benefits once a person’s combined income reached $25,000. Even now, the income level where Social Security starts to get taxed is still at $25,000. Because there is no adjustment for inflation, this makes more of people’s Social Security income taxable. This easily costs even moderate-income retirees thousands of dollars of spendable income over the course of their retirements.
  5. “Tax free” income counts toward making Social Security taxable. Even traditionally tax-free sources of income, like the interest from in-state municipal bonds, is included in the calculations to see how much of your Social Security will be considered taxable. Therefore, seniors who own tax free municipal bonds as part of their retirement portfolio may be surprised to find that those bonds are what’s causing their Social Security to be taxed. Seniors who find themselves in that situation may want to reevaluate their choice to be invested in those tax-free municipal bonds.

Despite how simple Social Security may appear, these five situations show how mistakes can cost thousands of dollars.

Reference: Motley Fool (March 14, 2021) “5 Social Security Oversights That Could Cost You Thousands”

Suggested Key Terms: Elder Law Attorney, Social Security, Retirement Planning, Tax Planning, Financial Planning

Estate Planning for Couples with Big Age Differences

Seniors who are married to younger spouses have a special situation for estate planning, a situation that’s become more common, according to Barron’s recent article “Couples with Big Age Gaps Require Special Attention.”

This kind of family requires planning for the older spouse’s retirement needs and healthcare costs, while determining how much of the older spouse’s wealth should go to the children from any previous marriages while balancing the needs of a future child with a younger spouse. Beneficiaries for all financial accounts, last wills and all estate documents need to be updated to include the new spouse and child. The same goes for medical directives and power of attorney forms.

Social Security and retirement account considerations differ as well. The younger spouse may begin receiving their own Social Security at age 62, or a portion of the older spouse’s Social Security, whichever is greater. If the older spouse can wait to file for Social Security benefits at age 70, the younger spouse will receive more spousal benefits than if the older spouse claims earlier. Social Security pays the survivor’s benefit, typically based upon the older spouse’s earnings.

Pension plans need to be reviewed for a younger spouse. If the pension plan allows a survivor benefit, the surviving spouse will receive benefits in the future. IRAs have different beneficiary distribution rules for couples with significant age differences. Instead of relying on the standard Uniform Lifetime Tables, the IRS lets individuals use the Joint Life and Last Survivor Expectancy Table, if the sole beneficiary is a spouse who is more than ten years younger. This allows for smaller than normally Required Minimum Distributions from the IRA, allowing the account a longer lifetime.

Families that include children with special needs also benefit from trusts, as assets in the trust are not included in eligibility for government benefits. Many families with such family members are advised to use an ABLE Savings Account, which lets the assets grow tax free, also without impacting benefit eligibility. There are limits on the accounts, so funds exceeding the ABLE account limits may be added to special needs trusts, or SNTs.

A trustee, who may be a family member or a professional, uses the SNT assets to pay for the care of the individual with special needs after the donor parents have passed. The child is able to maintain their eligibility.

For same sex couples, revocable or irrevocable trusts may be used, if the couple is not married. Nontraditional families of any kind with children require individual estate plans to protect them,  which usually involves trusts.

Trusts are also useful when there are children from different marriages. They can protect the children from the first marriage and subsequent marriages. A wisely constructed estate plan can do more than prevent legal battles among children—they can preserve family harmony in the non-traditional family after parents have passed.

Reference: Barron’s (July 27, 2021) “Couples with Big Age Gaps Require Special Attention”

Suggested Key Terms: Nontraditional Families, Social Security, Beneficiaries, Special Needs Trusts, Estate Plans, ABLE Savings Accounts, Pension Plans, Uniform Lifetime Tables, Joint Life and Last Survivor Expectancy Table, Revocable, Irrevocable

When Should You Use a Charitable Remainder Trust in Estate Planning?

Rising prices for investments and real estate is making owners of these assets concerned about paying exorbitant taxes amid discussions of possible changes in the near future. According to a recent article from The Street titled “Retirement Saving and Charitable Remainder Trusts,” having a strategy on hand to prepare for or even avoid these taxes is a wise move.

People who are charitably inclined may want to take a closer look at how Charitable Remainder Trusts, or CRTs, can potentially reduce taxes and provide a generous gift to worthy charities.

There are two basic types of CRTs: the Charitable Remainder UniTrust, or CRUT, and the Charitable Remainder Annuity Trust, or CRAT. In both types of trusts, the charity receives the “remainder” of the principal once the income interest ends. Income from the trust is given to a non-charity beneficiary for a certain period of time, or as in many cases, for the entire life of the beneficiary until it’s time for the remainder principal to be donated.

The key difference between the CRAT and the CRUT are how the income payment is calculated. In a CRUT with a 5% payout, the 5% is based on the value of the CRUT each and every year. Obviously that payment amount fluctuates according to the performance of the assets held by the CRUT. In a CRAT, payments are fixed based on in the initial contribution made to set up the account. Your estate planning attorney will be able to recommend the right vehicle for you and your family.

A CRT may be funded with highly appreciated assets because selling within the CRT results in no capital gains to the donor. Any proceeds may be reinvested to generate the needed income, while at the same time potentially growing the remainder asset for charity.

An administrator is hired to evaluate the trust to ensure its compliance, and the administrator’s role is to advise the trustee on the amount of the distribution annually to the beneficiary.

Since the charity is the remainder beneficiary, the grantor is not able to deduct the entire amount of the contribution to the CRT. The deduction is determined by the income payments selected and the terms of the CRT. There are software programs used to calculate the approximate deduction based on the input. The higher the income payment, the lower the deduction.

Note that if you are giving highly appreciated long-term capital gains assets, only 30% of the adjusted gross income can be given. The rest may be carried forward for five years. This should be considered when determining how much to contribute to the CRT.

The choice of CRTs lets you design a desired income stream from the trust. The taxability of the CRT is based on the types of assets used. There are four tiers, as defined by the IRS: ordinary income (which includes current year and accumulated income) and qualified dividends; capital gains; other tax-exempt income; and return of principal.

To solve the problem of choosing a charity, many prefer to use a Donor Advised Fund as a beneficiary. The DAF can be treated like a charity for tax purposes. The DAF lets you control how the account is funded and the timing of distribution of assets. The charities do not need to be named when the CRT is first created.

The CRT can be a very useful tool in estate planning for people who would be making gifts to support meaningful causes with or without tax benefits. Your estate planning attorney will be able to help you set up a CRT to work in tandem with the rest of your estate plan.

Reference: The Street (June 25, 2021) “Retirement Saving and Charitable Remainder Trusts”

Suggested Key Terms: Charitable Remainder Trusts, CRTs, UniTrusts, Charitable Remainder Annuity Trusts, CRATs, Charitable Remainder Unitrusts, CRUTs, Estate Planning Attorney, Giving, Charities, Assets, Donor Advised Funds, DAF, Ordinary Income, Capital Gains

Key Dates for Planning Retirement

Just as there are many types of retirement benefits, there are many dates to keep in mind when creating a retirement plan. Some concern when you can make larger contributions to retirement accounts and others have to do with withdrawals. Knowing the dates for each matters to your retirement planning, according to the recent article title “10 Important Ages for Retirement Planning” from U.S. News & World Report.

When should you max out retirement savings contributions? The sooner you start saving for retirement, the more likely you’ll retire with robust tax-deferred accounts. Tax breaks and employer matches add up, as do compounding interest returns. The 401(k) contribution limit in 2021 is $19,500. Wage earners can deposit up to $6,000 in a traditional IRA or Roth IRA. If you’re in your peak earning years, traditional IRAs and 401(k)s may be better, since your tax bracket is likely higher to be higher than when you started out.

Catch-up contributions begin at age 50. Once you’ve turned 50, you can make catch up contributions to 401(k)s—up to $6,500—and up to $7,000 in traditional IRAs. That’s for 2021. If you’re able to take advantage of these contributions, you can put away additional money and qualify for even bigger tax deductions.

401(k) withdrawals could start at 55. If you left your job in the same year you hit the double nickel, you can take 401(k) withdrawals penalty-free from the account associated with your most recent job. The “Rule of 55” lets you avoid a 10% early penalty, but you’ll still have to pay income taxes on any withdrawals from a 401(k) account. However, if you roll a 401(k) account balance into an IRA, you’ll need to wait until age 59½ to take IRA withdrawals without any penalties.

When does the IRA retirement age begin? The magic number is 59½. However, traditional IRA distributions are not required until age 72. All traditional IRA withdrawals are also taxable.

Social Security eligibility begins at age 62. The earlier you start collecting Social Security, the smaller your monthly benefit. Your full retirement age depends upon your date of birth, when the benefit amount will be higher than at age 62. If you work after signing up for Social Security, your benefits could be temporarily withheld if your salary is higher than the annual earnings limit. If you retire before your full retirement age and earn more than $18,960 per year, for every $2 above this amount, your benefits will be reduced by $1. Benefits will be recalculated once you reach full retirement age.

Medicare eligibility begins at age 65. Enrollment in Medicare may take place during a seven-month period that begins three months before the month you turn 65. Signing up on time matters, because Medicare Part B premiums increase by 10% for every 12-month period you were eligible for benefits but failed to enroll. Are you delaying enrollment because you or your spouse is still covered by a group health plan at work? Make sure to sign up within eight months of leaving your job or health plan and avoid the penalty.

Social Security Full Retirement Age is 66 for most Baby Boomers. 67 is the full retirement age for workers born in 1960 or later. Millennials and younger generations qualify after age 67.

If you can wait until 70, you’ll max out on Social Security. Social Security benefits increase by 8% for each year you wait to start payments between Full Retirement Age and age 70. After age 70, the number remains the same.

RMDs begin for 401(k) and IRA retirement accounts at age 72. These mistakes here are expensive! Your first distribution must be taken by April 1 of the year you turn 72. After that, annual withdrawals from 401(k)s and traditional IRAs must be taken by December 31 of each year. Missing a required distribution and you’ll get hit with a nasty 50% of the amount that you should have withdrawn.

Reference: U.S. News & World Report (July 28, 2021) “10 Important Ages for Retirement Planning”

Suggested Key Terms: Retirement, Benefits, Penalties, Required Minimum Distribution, Full Retirement Age, Social Security, RMDs, 401(k)s, Catch-Up Contributions, Roth, Medicare, Eligibility

What Should I Know about Melanoma?

Melanoma usually presents as asymmetrical or rough-looking moles that aren’t defined by a border. A spot on the skin that continues to grow in size or change is another indication, and a once-monthly body scan is an easy way to keep track of any of these concerning characteristics. However, there are also some more unusual signs that could signal the presence of the skin cancer.

“Melanoma is such a rule breaker,” says Elizabeth Buchbinder, M.D., an oncologist at the Dana-Farber Cancer Institute in Boston and an assistant professor at Harvard Medical School told AARP in the article titled “4 Warning Signs of Melanoma That Are Easy to Miss.” The doctor notes that “little moles can cause big trouble, and new spots can grow and spread quickly, and so knowing what to look out for, it’s super important.” AARP gives us four warning melanoma signs to know about so no spot goes unnoticed.

  1. The “Ugly Duckling.” Folks with a lot of moles are at increased risk for melanoma, but don’t start counting your spots or panicking over every mark on your body. Rather, you should pay attention to the moles that stand out — those that are darker than the rest, have changed recently or are more oddly shaped. The doctor calls these “ugly ducklings.”

“If you have a bunch of dark moles, but you have 50 of them, they’re not all melanomas,” Dr. Buchbinder says. “But if you have one mole that really looks different than the others, and it’s kind of that ugly duckling, that’s the one that you really want to get looked at and checked.”

  1. “Where the sun don’t shine.” Most melanomas are thought to be caused by ultraviolet (UV) light. However, not all of them come from sun exposure. Melanoma can develop anywhere on the body, including in places where the sun doesn’t shine—the soles of your feet or the palms of the hand. It can also appear as a dark streak under a fingernail or toenail. Although it’s rare, melanoma can also develop on the eye, inside the mouth, or on the scalp.
  2. Red, white, and blue hues. This cancer is often depicted as dark-brown moles, but it can actually present in a variety of colors. The cancer may have a blue tint to it, from deeper pigmentation, or it can appear red, the result of an immune response. In addition, melanoma can also look like a rash and take on a pink hue. When the spot doesn’t get better with creams and other treatments that normally treat a rash, go see your doctor. Another sign of a melanoma can be lack of color. Some of these cancerous spots lose their pigmentation completely or partially, leaving a halo of white around a darker spot.
  3. Bleeding or Itching Skin Spots. If a mole on your body starts to itch or becomes more painful or tender, go see a doctor. Likewise, if the surface of a mole changes, such as oozing or bleeding, or if it becomes scalier and doesn’t heal on its own.

Preventing Melanoma. You should wear sun-protective clothing and UV-blocking sunglasses, and use plenty of sunscreen to help prevent melanoma. Plus, those on certain blood pressure medications, including diuretics such as hydrochlorothiazide and calcium channel blockers such as nifedipine, for example, need to be extra cautious when spending time outside. However, because not all skin cancers are caused by sun exposure, frequent skin checks are also a critical role in prevention.

Reference: AARP (July 9, 2021) “4 Warning Signs of Melanoma That Are Easy to Miss”

Suggested Key Terms: Senior Health, Melanoma

How Do Taxes Work If I Live in One state and My Spouse Another?

It’s not uncommon for one spouse to retire while the other spouse continues to work. It’s also not uncommon for a couple to own a home in two states (think primary residence and vacation home or cabin). Dick, the retired spouse in our example, stays in their Florida home more frequently than his wife, Jane, because of her job. She’s still in New Jersey. Dick’s now in Florida about half the year. He has a deferred salary he earned while working back in the Garden State, and it will be paid out annually over the next eight years. Dick will be required to pay federal and New Jersey income tax no matter where he lives, and he says he’s okay with paying his fair share. Should Dick become a Florida resident and what happens if Jane stays a New Jersey resident?

NJ Money Help’s recent article entitled “What happens to taxes if I move to Florida and my wife stays in N.J.?” says that the primary reasons why people change their resident state are taxes and retiring from their employment. Based on Dick’s willingness to continue to report his deferred income as a New Jersey source and pay New Jersey taxes, he should have no problem claiming Florida as his domicile if he takes the proper steps.

A domicile is the place you consider to be your permanent home, even if you may have multiple residences. Besides the test of your presence in a state, the other major factors in establishing a change in domicile are demonstrating intent to remain in the new state and to abandon your former domicile. These are more difficult to prove than physical presence. There’s also no one factor that tax authorities consider conclusive.

Since Jane will remain a New Jersey resident, Dick will have to plan carefully to prove his intentions. Some of the steps might include:

  • Transferring voter registration and voting in local elections in the Sunshine State
  • Changing the address on personal bank and investment accounts
  • Changing his driver’s license, car license, and registration
  • Establishing relationships with professionals, such as doctors or accountants, in Florida; and
  • Updating his legal documents such as wills, trusts, powers of attorney and living wills with Dick’s Florida address.

While no one thing will make or break Dick’s domicile claim, taxpayers are wise to provide as much evidence as possible to tax authorities. Although income taxes aren’t the primary reason for claiming Florida as his domicile, most taxpayers are motivated to change their domicile to a state with a lower tax or no tax rate like Florida. The state a taxpayer leaves, such as New Jersey, will focus on clear and convincing facts that support Florida as Dick’s new domicile state.

As for tax reporting, when it comes time to file Dick’s tax return, he has the ability to change his domicile to Florida while Jane continues to work in New Jersey and claim New Jersey as her domicile. They can continue to file a joint federal tax return, but Dick would then file separately for New Jersey state purposes.

Reference: NJ Money Help (Aug. 12, 2021) “What happens to taxes if I move to Florida and my wife stays in N.J.?”

Suggested Key Terms: Estate Planning Lawyer, Wills, Power of Attorney, Healthcare Directive, Living Will, HIPAA Waiver, Probate Attorney, Tax Planning

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