The current recession has had dire consequences for a large part of the population. While some people have lost jobs and homes, others have lost fortunes in the stock market and watched as their real estate values crashed. As you can imagine, this domino effect has created some serious problems for seniors. In fact, even those who have not yet retired are suffering major financial setbacks. Recent surveys show that a large number of people over the age of 50 have had problems with late mortgage payments, and many have lost their homes.

This makes planning for retirement even more frightening. And although the economy will recover eventually, it will take a lot more for those that have suffered from the recession to bounce back, especially for senior citizens with limited income and earning potential.

The following tips can help you successfully plan for retirement, and the possible need of long term care, even during a recession.

• Know what you want to do in case you do need long term care. Do you want to go to a particular facility or would you prefer to stay at home as long as possible? To cover these costs you can purchase long term care insurance, and the younger you are when you buy this insurance, the less expensive it will be.

• Take some time to calculate what it will cost you to retire, as well as what your projected income will be after retirement. While you are doing this, you will also want to consider the cost of assisted living in you own home, if that should be needed.

• Protect your assets. If you should be in a position to where you cannot make your own financial decisions, you will need to have some legal documents in place so that someone else can manage your affairs. These documents include a Living Will, a Durable Power of Attorney and Medical Power of Attorney, as well as a Living Trust and a Pour-Over Will. If you have a solid estate plan in place, your loved ones can take care of you, and your assets, without having to gain the approval of the court.

• Understand what resources are available to you. Do you have any pensions or retirement accounts that you can draw from? Social Security, Medicare and Medicaid can also help alleviate some of the financial burden and additional options such as Reverse Mortgage loans and even part-time jobs can help close the gap even more. Take full advantage of any financial planning tools that you have now to ensure that your later years are as secure as possible.

The point is, starting to plan now is better than not planning at all and with some creative planning, you can get through a recession.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

One of the most common methods of leaving assets to a minor child is through the Uniform Transfers to Minors Act or the Uniform Gifts To Minors Act and a custodial account. These acts allow assets to be held for the benefit of minors in an account that behaves in much the same way as a trust.

There are however, some important differences.

A custodial account is fairly simple to open and extremely inexpensive. All that’s required is that you open a bank account in the child’s name, and designate a custodian for the account. Anyone of legal age can act as custodian. You will then need to deposit assets into that account for the benefit of the minor. The assets will remain in the account until the child reaches legal age and can manage his or her own financial affairs. If the account is a UTMA account, the custodian can invest the money in real estate, as well as other types of assets.

The main disadvantage is that once the child reaches legal age, the custodian is removed and has no access to the funds. This means that if you deposit $10,000 for Johnny’s college fund and then Johnny decides to spend it on a sports car instead, you can’t take the money back.

In addition, any assets in the custodial account will count against the child’s financial aid application because there are considered assets of the child.

When a custodian resigns or dies, a new custodian is assigned to the account. If the minor child dies before reaching legal age, the assets in the account then become part of the child’s estate and are subject to probate.

A trust is a bit more expensive to set up, but may also require more accountability from the trustee. In addition, a trust does not require the child to take control of all the assets upon reaching the age of majority. This is an important feature that allows the grantor to structure the trust so that the assets are gradually released as the child matures.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

For most people, retirement is a time to relax and enjoy life. But it is also a time when being budget conscious is especially important. After all, you don’t want to squander your retirement and then be forced to return to work.

Granted, being budget conscious does not necessarily mean that you have to deprive yourself of an enjoyable retirement, but it does mean that you will have to spend your money wisely. Of course the more money you have to retire with, the less you’ll have to worry and the best way to boost your retirement fund is to start saving early. But even those with limited retirement funds can benefit from some smart planning.

Create a Retirement Spending Plan

The most important thing to consider when you create your retirement spending plan is whether or not the plan is reasonable. If it’s not, you probably won’t stick to it. So, give yourself some “wiggle room” without depleting your savings so that you have the ability to enjoy those golden years.

Track How Much You Spend

Having a monthly budget will work better if you track how much you are actually spending each month. This way, you’ll know if you’re going over your budget, or if you’re spending less than you estimated and have extra to work with. There are a number of software programs that make it easy to track your spending. Many of these programs will also separate your necessities from other expenses so that you can easily see where you can cut back if it becomes necessary.

Re-Evaluate Regularly

Even though you might be living on a fixed income, there are still reasons to revisit your budget on a regular basis. Credit cards and other bills may be paid off during your retirement for example, giving you extra cash flow to work with. On the other hand, new medications or a change in your health might create some new expenses you weren’t covering before.

Evaluating your budget gives you the opportunity to adjust your spending before any over-spending occurs.

Retirement is a time in your life to look forward to, but only if you have the means to live comfortably. Plan your retirement early and then stick within a budget that will allow you to live on your retirement portfolio.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

These days, countless people are getting much-needed income during retirement with reverse mortgages. If you are over 62 years old, you can get money from the equity in your home, and you not have to pay back that money unless you move or sell your home. You can get the money in a lump sum, or choose to get monthly payments from the mortgage company. The money can be used for any purpose you choose, including travel, home medical care, remodeling, or paying medical expenses.

About Reverse Mortgages

The Reverse Mortgage is also known as a Home Equity Conversion Mortgage; with this type of mortgage what you are doing is trading some or all of the equity you have in your home, in exchange for income that is exempt from taxes. In most cases this type of mortgage comes with an adjustable rate, but some lenders are beginning to offer fixed rate loans on Revere Mortgages.

With this type of mortgage you will not have to worry about repaying the loan unless you sell your home or move. When you die, the home is sold and the lender is paid the total for the money you received, plus interest. Your heirs will receive anything that is left. If the home sells for less than what you owe, the Federal Housing Authority insures the lender for any potential losses.

Who Can Qualify for a Reverse Mortgage

If you are over the age of 62, and your home is paid off, or nearly paid off, you can qualify for a Reverse Mortgage. It is also required that if more than one person owns the home jointly, that all owners must be over 62 years old. Most lenders do not run credit checks or require a minimum income for this type of loan, but the borrower may be required to go through financial counseling.

Amount Limits

When you get a Reverse Mortgage the amount you can borrow will depend on the value of your home, as well as the current interest rate and your age. The rules regulating Reverse Mortgage will allow you to borrow up to 80% of the value of your home, but if the value increases over time, the amount you can borrow will also increase. There will also be a limit to how much you get each year through a Reverse Mortgage.

Who Should Consider a Reverse Mortgage

One thing to consider when deciding if you should get a Reverse Mortgage is how long you will live in the house. If you plan to sell in a few years it may not make a lot of sense to get this type of loan due to the high closing costs, which could be as much as 5% of the loan. Basically, Reverse Mortgages can be a good option if you own a home that is worth a lot of money, but have a low monthly income. Just remember that what you are “selling” is the equity in your home – if you have plans to leave the house to your heirs, you may want to rethink this strategy.

Your best bet – before you make any decisions – is to consult with a qualified financial advisor.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.

Medicaid is a type of financial support offered by the federal government to help pay for health care. It’s available to those in lower income brackets and can assist with the expenses of nursing home and disability care.

Even though Medicaid is federally funded, it is managed locally by the state and your eligibility will depend upon your assets and income. Not all assets are considered “countable” in calculating your eligibility and of those that are, some can be transferred to other family members to help you qualify. Some, but not all.

And this is where Medicaid gets complex. “Gifting” certain assets can delay your Medicaid eligibility while other transfers are allowed. If your transfer does cause you to be penalized, the delay will depend upon the value of the gift and the Medicaid expenses you’re trying to cover.

How will you know if you qualify or not?

Consulting with a good estate planning attorney who understands the Medicaid process before you start giving away assets can help you estimate your eligibility without causing problems in your estate later.

Byrd : Garrett, PLLC is a member of the American Academy of Estate Planning Attorneys.