Bielski Law Office, Ltd.

Review Your Retirement Plans

On the whole, Americans are woefully unprepared for retirement. If current trends continue, it will be an even bigger problem than you might imagine.

When it comes to Americans and retirement savings, study after study shows the same thing. The average American saved far less than experts think they will need.

There are many reasons for this situation, but the reasons for not saving are not as important as what it means for future senior citizens.

The biggest problem is that even people who think they have saved more than enough might need to evaluate their own plans and save more. This warning is provided by the New York Times in "Rethinking Retirement for Longer Lives With Fewer Safety Nets."

The biggest issue is simply that people are living longer than ever before, on average. That trend is expected to continue as medical science progresses. No one is certain just how long people will live after retirement in the future.

People who have planned to save for 20 years of retirement living might actually need to save for 30, 40 or even more years. This also creates problems for elderly safety nets.

Social Security, Medicare and Medicaid are already under financial stress because of the large number of Baby Boomers entering their retirement years. The longer people live, the more that those programs will need to pay out. Many people believe the programs will have to offer substantially fewer benefits in the future.

If you want to retire comfortably and still have an estate left for your children and grandchildren to inherit, then it is important that you review your retirement plans and make sure you really are saving enough.

Reference: New York Times (Feb. 27, 2017) "Rethinking Retirement for Longer Lives With Fewer Safety Nets."

HEAR Act Gets Early Test

A federal law passed late last year, designed to make it easier for families to recover art stolen by the Nazis, is getting its first test in a New York court.

While the Nazis were plundering Europe, one of the many things they did was to steal artwork from the owners and keep it for themselves. Under international law, artwork is supposed to be returned to the original owners or their heirs.

Since the Nazis were defeated a long time ago, many people might think that has been done by now. They would be wrong in many cases.

The current holders of many contested works have successfully defended themselves against the heirs for technical reasons, such as the statute of limitations. To address this problem, last year the U.S. Congress passed the Holocaust Expropriated Art Recovery Act, known as the HEAR Act.

It is about to get its first use, according to the New York Times in "A Suit Over Schiele Drawings Invokes New Law on Nazi-Looted Art."

The case is over two drawings by Egon Schiele that were once owned by Fritz Grunbaum. The Nazis took Grunbaum's artwork from his home in Vienna in 1938 and sent him to a concentration camp where he died.

His heirs claim the Nazis stole the artwork.

However, that has been disputed by dealers, current owners and museums, who claim the Nazis only inventoried the works. They also claim that Grunbaum's sister-in-law sold some of the works, including the two drawings in the current dispute, to a dealer in the 1950s.

Grunbaum's heirs have previously lost in court trying to recover this artwork.

They claim they have lost for the very technical reasons the HEAR Act was designed to prevent.

Since this is the first time the Act will be used in court, how the court uses the Act will be closely monitored.

Reference: New York Times (Feb. 27, 2017) "A Suit Over Schiele Drawings Invokes New Law on Nazi-Looted Art."

The Costs of Alzheimer's

Alzheimer's is so expensive to treat, that it presents a very real threat to both Medicaid and Medicare.

The mostly costly disease to treat is Alzheimer's. A total of one out of every five dollars is currently spent by Medicaid and Medicare to treat the disease.

If the costs are not brought down dramatically, the future of both programs could be in jeopardy. Why? Americans are living longer and longer, which means that more people are or will be in need of Alzheimer's treatment.

If the current trends continue, in the future one out of every three dollars spent by Medicaid and Medicare will go toward treating Alzheimer's, according to FOX News in "Could Alzheimer's really bankrupt Medicare and Medicaid."

Both programs are already extremely expensive and face financial difficulties in the future. With their present funding, they will not be able to afford a large increase in Alzheimer's diagnoses and treatments.

What does this mean?

Research into preventing and curing the disease is more important than ever. The development of new less expensive treatment methods would also be helpful.

This is another of the many ways that an aging population could threaten the country's current institutions and practices, unless action is taken. Our programs were not designed with a substantial increase in longevity in mind.

Other issues include paying for nursing home care, the health of the Social Security system, the availability of home health aides and a cultural change brought on by people having to wait longer to receive their inheritances.

Reference: FOX News (March 1, 2017) "Could Alzheimer's really bankrupt Medicare and Medicaid."

Jackson Estate Saga Continues

The long family feud that is the Michael Jackson estate battle continues. This time it involves allegations of elder abuse.

Were Leo Tolstoy alive today and wanted to write another long novel about family drama, he could use the Michael Jackson estate battle as a template. The estate still has not settled its dispute with the IRS over the estate tax. His family also has still not come to terms with and completely accepted the decisions he made about his estate.

Jackson chose to cut his siblings and his father completely out of his estate.

Instead, the estate goes to his mother, Katherine Jackson, and to his children. The estate pays Katherine monthly. The remainder will be divided between his children and charity, when she passes away.

The latest battle centers around allegations that Jackson's other relatives are trying to use Katherine to get to Michael's fortune, according to TMZ in "Katherine Jackson Proposal For Grandson To Settle Family War."

Katherine Jackson recently filed a complaint against Trent Jackson, Michael's cousin, accusing him of elder abuse and taking her money. Trent claims that she is being pushed to do so by other relatives, who want him out of the way so they can get to her money.

Trent is proposing that Katherine have a meeting with a nephew, TJ Jackson. He believes that TJ will be able to figure out the truth. Trent promises to get out of the way, if TJ believes there was elder abuse.

Regardless of how this turns out, it is doubtful that it will be the last battle over the fortune Michael Jackson left behind.

Reference: TMZ (March 3, 2017) "Katherine Jackson Proposal For Grandson To Settle Family War."

Estate Tax Repeal and Insurance

To help offset the costs of the estate tax, many wealthy people purchase survivorship insurance. Now that a repeal of the federal estate tax is possible, some might be considering dropping those insurance policies. However, that might not be a good idea.

Paying the federal estate tax has never been easy, because it normally requires selling assets to come up with the cash. For estates that have relatively few liquid assets compared to their total value, it can sometimes seem almost impossible.

To get around this, many wealthy people purchase survivorship or second-to-die insurance policies. These policies pay a death benefit when one spouse passes away. As a result, liquid cash is available to pay the estate tax out of the insurance proceeds.

With Republicans now in control of the government, many people anticipate that it is only a matter of time until the estate tax is repealed. This new political reality has led many to consider dropping their expensive survivorship insurance policies.

On the other hand, dropping the insurance might not be the wisest decision as Financial Advisor discusses in "Eliminating Estate Tax Could Torpedo Survivorship Insurance Market."

After all, there is no guarantee that any repeal of the estate tax will be permanent. Political winds can shift quickly and, if the Democrats retake control of the federal government in a few years, the estate tax could come back.

People who cancel their survivorship policies now, will likely find that premiums have gone up significantly later, if they need the insurance again.

In the end, it is still possible that the estate tax will not be repealed at all. This is because Congress could get bogged down in other things and never get around to repealing the estate tax.

Reference: Financial Advisor (Feb. 28, 2017) "Eliminating Estate Tax Could Torpedo Survivorship Insurance Market."