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​You’ve worked in your career to accumulate assets, fund your retirement and perhaps even build a legacy to pass on to the next generation. As you enter retirement, you may be considering just how to leave an impactful legacy for your loved ones.
 
Traditionally, legacies are the types of things that are managed through an estate plan. Many people use trusts or wills to distribute assets to children or grandchildren. You don’t have to wait until you pass away to distribute assets to your kids and grandchildren, however. In fact, according to a study from Merrill Lynch, nearly 60 percent of those age 50 and older say they would prefer to give assets to loved ones today rather than in the future.1
 
You are allowed to give up to $15,000 per year to an individual without facing gift taxes. If you’re married, that exclusion amount is doubled, so as a couple you can gift as much as $30,000 without facing gift taxes. Also, gifts don’t count toward the exclusion if they’re used to pay for tuition or medical expenses.2

If there’s a chance your gift will exceed the exclusion amount, you may want to work with a tax and financial professional to develop a strategy. However, even if you aren’t going to hit the exclusion limit, you still may want to develop a strategy. It’s possible that your legacy may be best delivered after your death rather than as an early gift. Below are a few questions to consider:

Could your loved ones use the money now?
 
It’s possible that your children or grandchildren would be better served by receiving their inheritance now rather than in the future. For instance, maybe you have a grandchild heading to college who could use his or her inheritance for tuition. That gift may help them avoid student loans. Maybe you have a grown child facing financial difficulties, like unemployment or divorce. Or perhaps your children could simply use the windfall to pursue some big goals.
 
There’s also the added benefit of getting to see your gift put to good use while you’re alive. Although it may feel good to know that your family will receive a windfall after you pass away, you may find it more satisfying to see how they use that money while you are relatively young and healthy.

Is there a chance you’ll need it in the future?
 
Before you embark on a gifting or early inheritance strategy, consider the possibility that you may need the money in the future. Most people enter retirement with more assets than they’ve ever had. It’s easy to assume that those funds are more than you will need.
 
However, there are potential costs in retirement that may cause unexpected challenges. Fidelity estimates that the average couple will need to spend $280,000 on health care in retirement.3 The U.S. Department of Health and Human Services estimates that 70 percent of retirees will need long-term care, which can often cost thousands of dollars per month.4 If you haven’t addressed these risks, you may want to do so before you implement a gifting strategy.

Will the gifts cause conflict in the family?
 
Finally, think about what kind of issues your gifts could cause within the family. Have you provided financial help in the past to children or grandchildren? Will other children feel that the gift amount is unfair? Are there children or grandchildren who may not be able to handle the responsibility of a large windfall?
 
These are important questions to consider. You want your gift to have a positive impact, not create conflict and tension. If there are risks associated with your gift, you may want to consult with a financial professional to develop a strategy.
 
Ready to create your gifting plan? Let’s talk about it. Contact us today at Capital Management Group. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.
 
1https://www.ml.com/articles/why-make-your-heirs-wait.html
2https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
3https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs
4https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18274 - 2018/11/27

​You likely know that long-term care is a possibility in the later years of retirement, but just how likely is it? And what kind of threat does it pose to your assets?
 
Long-term care is extended assistance with daily living activities such as bathing, eating, mobility and cleaning. It sometimes includes medical treatment, but often the objective is simply to maintain a comfortable standard of living.
 
According to the U.S. Department of Health and Human Services, today’s 65-year-olds face a 70 percent chance of needing long-term care in the future.1 Of course, even though care may be likely, there’s no way to predict the type or level of care you may need. That makes it difficult to budget or plan for long-term care costs.
 
Below are a couple of important factors that impact long-term care costs, along with strategies to pay for the care. If you don’t have a plan in place, now may be the time to create one. A financial professional can help you get started.

Type of Care
 
Long-term care can be provided several different ways. You could receive assistance in your home, from either a family member or a hired in-home aide. You could also move into an assisted living facility where staff is readily available to help.
 
Costs vary based on your location and the type of care you receive. In 2018, Genworth conducted a comprehensive study of nationwide long-term care services and found the following average monthly costs:2

• Adult day care: $1,560
• Assisted living facility: $4,000
• Homemaker services: $4,004
• Home health aide: $4,195
• Semiprivate room, nursing home: $7,441
• Private room, nursing home: $8,365

 
Unfortunately, this care usually isn’t covered by Medicare. You may get partial, temporary Medicare coverage if the care is a result of a specific ailment and includes medical treatment.
 
However, long-term care is usually needed as a result of a chronic condition, like Alzheimer’s. Often when people need care, treatment is no longer effective. The goal is simply to support the individual in his or her final months or years. That kind of custodial care usually isn’t eligible for Medicare benefits.
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Duration of Care
 
Another important factor to consider is how long you will need the care. Obviously, the longer care is needed, the more it will cost. You can’t predict how long you’ll need care, but you can make an informed estimate.
 
The U.S. Department of Health and Human Services estimates that a third of seniors will never need care, but 20 percent will need care for more than five years. Also, on average, women need care for 3.7 years, while men need it for 2.2 years.1
 
Consider the average costs above and the fact that you may need care for several months or even years. It’s easy to see how care could drain your assets, potentially leaving your surviving spouse or heirs in a difficult situation.

Fortunately, you can take steps to minimize your out-of-pocket costs. Long-term care insurance can be an effective tool. You pay premiums today, and an insurer pays some or all of your long-term care costs in the future. Many insurers cover care provided in the home, and some even offer a death benefit for unused coverage.
 
Ready to discuss your long-term care strategy? Let’s talk about it. Contact us today at Capital Management Group. We can help you analyze your needs and develop a management strategy. Let’s connect soon and start the conversation.
 
1https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
2https://www.genworth.com/aging-and-you/finances/cost-of-care.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18148 - 2018/10/17