When you pass away, your debts, including your mortgage, do not simply vanish. If your will or trust leaves your property, which still has a loan against it, to a beneficiary, they will inherit both the real estate and the remaining debt. The beneficiary might have the option to assume the mortgage, allowing them to retain ownership of the house, or they could opt to sell the property and use the proceeds to settle the debt. The specific outcomes depend on the terms of the mortgage and the directives laid out in the estate plan. Planning ahead for the transfer of your real estate assets can significantly simplify the process for your heirs, making it a smoother transition during a challenging time.

American Housing Debt: A Growing Concern

In recent years, American housing debt has soared to unprecedented levels. According to the US Census Bureau, the homeownership rate was approximately 66 percent in 2022. By the end of September 2023, the Federal Reserve Bank of New York reported that Americans were carrying $12.14 trillion in mortgage balances. This figure represents a significant portion of US consumer debt, emphasizing the crucial role of real estate in personal finance. The increase in mortgage debt highlights the importance of addressing how these obligations are managed after the homeowner's death.

The Prevalence of Unpaid Mortgages

With housing debt constituting a substantial part of consumer debt, it's not surprising that many Americans pass away while still owing on their mortgages. A survey by CreditCards.com revealed that 37 percent of Americans died with unpaid mortgages. This situation poses potential complications for heirs and underscores the need for comprehensive estate planning.

Inheritance Trends and Real Estate

The inclination to leave a home to one's children is strong among American parents, with a 2023 Charles Schwab survey indicating that more than three-quarters of parents intend to do so. However, the reality of inheriting a home is complex, especially given the current real estate market dynamics. Nearly 70 percent of potential heirs express a preference to sell the inherited property, often due to financial considerations or the rising costs of real estate.


Managing Mortgages in Estate Planning

When it comes to estate planning, one of the critical concerns is how to handle mortgages on inherited properties. The process varies significantly depending on the decedent's estate plan, the terms of the mortgage, and state laws.

Scenario 1: Single Beneficiary Inheritance

When a property is left to a single beneficiary, whether through a will, trust, or deed, several outcomes are possible. The beneficiary might assume the existing mortgage, pay off the mortgage with other funds, or sell the property and use the proceeds to settle the debt. Some lenders may also allow for the refinancing of the loan under the new owner's name, potentially offering more favorable terms.

Scenario 2: Multiple Beneficiaries

In cases where multiple beneficiaries inherit a property, the situation becomes more complex. These beneficiaries must agree on how to manage the inherited mortgage, whether by assuming it jointly, selling the property, or using other funds to pay off the debt. Disagreements can lead to legal challenges, potentially resulting in a court-ordered sale of the property.

Scenario 3: Inheritance through Probate

For those who die without a will or trust, the probate process determines the distribution of their assets, including real estate. The executor of the estate is responsible for managing the deceased's debts and assets, which may involve using estate funds to maintain mortgage payments until the property can be sold or transferred.

The Importance of Planning

Estate planning goes beyond merely distributing assets; it's about ensuring that your legacy is passed on according to your wishes without imposing undue burdens on your loved ones. For homeowners, this means considering the implications of mortgage debt and making arrangements to ease the financial strain on heirs.

Crafting a Thoughtful Estate Plan

An effective estate plan addresses all aspects of your assets, including your home and any outstanding mortgage. It might include setting aside funds to cover mortgage payments, instructions for the sale of the property, or provisions for refinancing the mortgage to benefit your heirs.

Consulting with Professionals

Given the complexities of estate law and the intricacies of mortgages, seeking advice from an estate planning attorney is advisable. They can provide tailored guidance that aligns with your goals and ensures your estate is handled smoothly.

As American housing debt continues to climb, the importance of incorporating real estate into your estate planning cannot be overstated. Understanding how your mortgage debt will be managed after your passing is crucial to ensuring your heirs can navigate their inheritance without undue stress. Through careful planning and professional advice, you can secure your legacy and provide for your loved ones even after you're gone.


Every child is a precious gift, and as parents or grandparents, we strive to plan for their future, anticipating their needs and aspirations. However, families with special needs children or grandchildren face additional responsibilities in ensuring their loved one's future is secure, fulfilling, and supported. To ensure a flourishing future for your special needs child or grandchild, estate planning measures focused on their unique circumstances are essential. We recommend the following steps:


Have a Special/Supplemental Needs Trust Prepared

When it comes to estate planning, creating a Special or Supplemental Needs Trust (SNT) for your special needs child or grandchild should be a top priority. An SNT is a specialized trust designed to set aside funds and assets for the benefit of a beneficiary who may qualify for public assistance due to their disabilities. It can be established as a standalone trust or added to your existing trust.

It's important to note that government programs providing aid to disabled individuals have strict criteria regarding the amount of money and property a person can own while receiving benefits. Structuring any inheritance your special needs beneficiary may receive in a way that doesn't disqualify them from obtaining government benefits is crucial. Even if they are not currently receiving government benefits, considering the possibility of future needs is essential. To ensure all opportunities are available, it is vital that the trust is meticulously drafted by a lawyer well-versed in the eligibility requirements for government benefits.

An SNT not only provides financial security but also allows you to appoint a care manager or advisory committee. The care manager serves as an advocate for your special needs beneficiary, overseeing their well-being periodically or daily, depending on their level of care requirements. An advisory committee, comprising family members, friends, and professionals, can provide guidance to the trustee on the beneficiary's needs and the best use of the funds.

Additionally, the SNT can include a statement of intent, outlining the trust's purpose and how the funds should be utilized. This section acts as a safety net in case changes in the law make the beneficiary ineligible for government benefits. It allows for modifications to ensure your original intentions are met, even in the face of unforeseen circumstances.


Write Down Your Instructions

In addition to establishing an SNT, putting your instructions in writing is crucial to ensure your wishes are carried out as intended. Consider creating a letter or memorandum of intent that provides guidance to your trustee on managing the trust after your passing. Although not legally binding, this document offers valuable insights into your true intentions. You can include details on how the funds should be used in accordance with government rules, specific goals you would like the beneficiary to achieve, and the standard of living you envision for them.


Explore Life Insurance as a Funding Option

Supporting a special needs child or grandchild can be financially demanding, and it's important to consider how to sustain their care once you pass away. Life insurance can be a valuable tool in ensuring there will be sufficient funds for the trustee to use for their benefit. By designating the SNT as the beneficiary, you can provide a lump sum payment that is not subject to the same tax liabilities as retirement accounts.


Assess Your Retirement Account Distribution Options

The SECURE Act has brought changes to how beneficiaries can receive distributions from inherited IRAs, potentially impacting the financial support available to your special needs beneficiary. However, the Act also recognizes "eligible designated beneficiaries," including individuals with disabilities, who can still receive distributions over their life expectancies. Congress has established rules that allow the life expectancy of disabled beneficiaries to be used for certain types of trusts. If you have a substantial retirement account, it is crucial to discuss your distribution options to maximize benefits for all your beneficiaries.


Contact Us for Assistance!

We understand that securing a bright future for your special needs child or grandchild is of utmost importance to you. Our priority is to work with you in developing a comprehensive plan that will guarantee continued care and well-being for your loved ones. Please do not hesitate to reach out to us to schedule an appointment so that we can begin this process together.

By the time they are in their 30’s, many people are already dangerously behind in saving enough for a secure retirement.  If you do not begin saving when you are younger, catching up later could mean investing much more money. Worse, you may never end up with as much money as you would have if you had started sooner.  This is why it is so important to talk with an IRA and retirement planning lawyer as soon as you can when your career begins.

Anderson, Dorn & Rader, Ltd. work with people who are embarking on their professional lives and who want to make smart choices from day one with their retirement plans. Our Reno retirement planning lawyers also provide assistance to people throughout their lives to ensure that they take age-appropriate steps toward a secure retirement. We also ensure that the steps you take within your retirement plan work in harmony with your overall estate plan.

If you are a senior who wants to make your nest egg last, someone who needs help catching up on retirement savings, or a saving guru who wants help protecting your retirement wealth, our firm can help you.  Give us a call today to talk with an attorney and get personalized assistance as well as answers to questions you have about IRAs and retirement planning.

Retirement Planning Isn’t What It Used to Be

There was a time when retirement planning referred to deciding where you wanted to live when you retired. That’s because a retiree could expect to live comfortably on the income generated from an employer-sponsored pension coupled with Social Security retirement benefits. Unfortunately, those days are long gone. Today, employer-sponsored pensions are rare and Social Security retirement benefits have not kept up with the cost of living increases, resulting in the need for pro-active retirement planning. Consequently, self-funded retirement options such as Individual Retirement Accounts (IRAs), 401(k)s, and other tax-deferred retirement accounts have become increasingly popular in recent years.

In direct response to the increased need for self-funded options, a wide variety of IRAs and other retirement accounts have evolved. With new options popping up on a regular basis, the tax rules and regulations as well as state and federal laws that govern them become increasingly difficult to understand and navigate. For example, do you know the difference between a tax-free and a tax-deferred retirement account? Do you know when you are allowed to begin distributions from your retirement accounts? How about when you must begin distributions to avoid penalties? When are those distributions taxed and how do you report them? Because the answers to all those questions will directly impact your retirement plan and your estate plan, it is imperative to work with an attorney who knows the answers.

The Relationship between Your Retirement Plan and Your Estate Plan

During the early part of your working years you may keep your estate plan and your retirement plan completely separate; however, as you near retirement age, it becomes increasingly important to integrate those two plans. Your retirement plan has a fairly narrow goal of providing you with sufficient income to live comfortably during your “Golden Years” while your larger estate plan has a broader goal of preserving your assets so they can be passed down to your loved ones at the end of your life. Although the two are not competing goals, they do need to work in harmony with each other for both to be successful. Withdrawals from your retirement plan, for example, can cause undesirable tax consequences that impact your overall estate plan. The key to ensuring that you have sufficient income in the short run, while still protecting your assets in the long run, is to work closely with an experienced attorney who can help you integrate your retirement plan with your estate plan.

Contact a Reno IRA and Retirement Planning Lawyer Today

Retirement planning is more complex and complicated than ever before, increasing the need to plan early and plan well. As the tax rules and regulations that apply to IRAs and other tax-deferred retirement accounts change, your retirement plan must be updated accordingly. Finally, your retirement plan should work together with your estate plan to preserve and protect your assets. The retirement planning attorneys at Anderson, Dorn & Rader, Ltd. understand the complex and ever-changing tax laws that impact your retirement plan.  We are dedicated to ensuring your retirement plan provides you with financial security during your “Golden Years” without depleting your entire estate.  Give us a call at 775-823-9455 or contact us online to find out more.

It can be quite an exciting and challenging adventure to go into business for yourself.  As we all know the majority of start-ups do not succeed in the long run so you have to defy the odds to gain traction and become successful.
Because of the demands involved in starting up a business how you will be exit the business may not be the first thing on your mind.  However, once you know that you are in fact going to be in it for the long haul you should ask yourself how you or your estate will proceed when it is time to retire or after you pass away.
The way you approach this is going to vary depending on the type of business you are in. Some businesses are owner driven, such as professional practices and they are not really viable after the exit of the owner.  Other businesses will continue to operate after the owner steps away. Some plan on handing the business off to the next generation. Others intend to sell the business to finance their retirement years.  Partners in small businesses have yet a different set of circumstances to address.
The best way to explore your options and ultimately devise an exit strategy is to sit down with an experienced Reno NV estate planning attorney.  Your lawyer will gain an understanding of your unique situation, listen as you explain your objectives, and give you the appropriate advice.

The liklihood that you will need long-term care towards the end of your life is relatively high.  Budgeting for this cost is important because contrary to the beliefs of some people, Medicare does not pay for long-term care.  If you think you can just simply write a check and be done with it you may not be aware of the extent of the costs associated with long-term care.
Every year the MetLife Mature Market Institute releases a survey that contains a great deal of information about long-term care expenses in the United States. They have just put out their 2011 version, and once again long-term care costs have gone up significantly.
If you were to spend a single day in a private room in a long-term care facility in 2011, the national average cost was $239, which is a $10 increase over 2010 figures or a 4.4% increase.  A year in a private room in a nursing home in 2011 averaged $87,235. According to the United States Department of Health and Human Services the average length of stay is between two and four years.
When you see the facts it becomes clear that these are no trifling expenses. To devise a plan that prepares you for all eventualities, including the possibility of long-term care, simply take a moment to arrange for a consultation with a good Reno financial planning attorney.

There are people who think that things will take care of themselves as the years pass, but the reality is that each of us must take responsibility for our own futures. There is more to planning for the latter stages of your life than simply anticipating your Social Security check and drawing up a last will.
You will eventually have to fund your retirement years if you do in fact expect to retire, and Social Security, even if it still exists in its present form by the time you retire, is probably not going to be enough. So if you want to be truly prepared you must anticipate your expenses and devise a plan that enables you to meet them comfortably.
There's also the possibility of incapacity. Approximately four out of every ten people who reach the age of 85 are suffering from Alzheimer's disease according to the Alzheimer's Association. Alzheimer's causes dementia, which can make it impossible for its victims to render sound financial, personal, and medical decisions. If you were to become incapacitated without making any advance plans, the court could appoint a guardian of its choosing to act in your behalf and you would become a ward of the state. This is a possibility that can be circumvented through the execution of the appropriate durable powers of attorney.
Of course there is also the matter of your legacy. Do you have specific things in mind that you would like to be able to do for your family members as your final act of giving? Do you perhaps have the desire to give something back to your favorite charitable organizations? If you do, these intentions will have an impact on your budgeting for the period of time that precedes your passing.
Because of all the different matters that must be addressed, it is a wise idea to tap into the expertise of an experienced estate planning attorney who has a thorough understanding of retirement and estate planning. He or she will advise you appropriately so that you can be sure that all of your bases are covered as you enter the latter portion of your life.

As estate and retirement planning attorneys, part of what we do is help our clients prepare for some of the challenges that go along with aging; things like possible incapacitation and addressing long term care costs. Preparing for these contingencies is necessary and prudent, but there is a lot of quality time left after your working years are behind you. Opportunities abound during your retirement years, and the fact is that seniors can use their free time to accomplish some truly amazing things.
One case in point involves a now 68-year-old fellow from Costa Mesa, California named Bill Burke. Bill is an adventurer, and as part of his goal to scale the world's highest peaks he tackled the grandest challenge of them all in 2007 when he attempted to climb Mount Everest in Nepal. He made it to within one hundred yards of the summit when he had to make a decision. He was concerned that he may not have the strength to make it back to the bottom safely if he pushed on those last grueling 300 feet, so he turned back.
Making it to within 100 yards of the top of Mount Everest as a 65-year-old is quite an accomplishment, but Bill was in it to win it. He returned the next year with the added experience under his belt, but he didn't make it as far. After suffering from pulmonary edema he had to be evacuated off the mountain by helicopter.
One might expect that this senior citizen would recognize the limitations of age at that point, but Bill Burke is not set up that way. He went back to Everest for the third consecutive year in 2009, and he reached the summit. It is believed that at 67 years of age he was the oldest American to do so.
The suggestion here is to consider all that is possible, aim high, tune out the naysayers and make the most out of your retirement.

A large part of retirement planning involves trying to predict the costs that you will be facing in the future. This is very challenging because there are many variables at play that are totally out of the control of the individual. Things like potential changes in the tax laws, how Medicare will look in ten or twenty years, whether or not health care reform will be repealed or altered, and just how high long-term care costs will rise are all unknowns. All you can do about the things about which you have no control is to make intelligent estimates and be as prepared as you can possibly be financially.
What we want to highlight here is a major financial factor that many people don't see in the proper light, and it is something that is totally within your own control. When you are considering what your future medical expenses and long-term care costs may be, it is important to recognize the fact that for the most your health is by your personal choices. Of course we have all heard about the guy who never smoked a day in his life who got lung cancer, but this is certainly the exception rather than the rule.
As you get older it is statistically more likely that you will have health problems, but to a large extent this is due to an accumulation of damaging lifestyle choices. Too many people depend on their doctors to make them well and kind of pretend that their health problems are a matter of bad luck or an inevitable part of aging when in fact they are making themselves sick.
If you are obese, largely sedentary, eat without any type of plan in mind, and smoke and/or drink to excess you are essentially driving your future medical expenses up by the day. If you do all the right things it is very likely that you are saving yourself a lot of money while you enjoy a higher quality of life. The choice is yours, but the message here is that you do have a great deal of personal control over your future health care costs and it all depends on how well you take care of yourself along the way.

There is an old saying that goes something like "Give a man a fish, he eats for a day; teach him to fish, he eats for a lifetime." This is some profound food for thought when you are planning your estate. Passing along the assets that you have accumulated during your lifetime is certainly going to be helpful to your heirs, but if you could impart your knowledge to them you may be able to plant a seed that leads to a pattern of success can continue across the generations.

Any time a high profile, successful person writes his or her autobiography it is usually on the non-fiction best sellers list. Why do you suppose this is? Do you think that most people necessarily find the details of the personal lives of these businesspeople to be all that interesting? The primary reason why people want to read the autobiographies of people who were able to generate wealth is because they want to find out how it was done so that they can implement these strategies themselves.

The fact is that you don't have to be famous to write your autobiography and share the secrets of your success. You too can sit down and write your memoirs and pass them along to your family as part of your legacy, and this is a gift that may be more valuable than anything else you can provide for them. Aside from the pathway to financial success, you can also honestly and earnestly share stories from your youth and give your loved ones, and even future generations, some insight into the family tree.

As much as your family will benefit from having the opportunity to read your life story, it can be cathartic for you as well. And it's a satisfying feeling to look at your finished manuscript and recognize that you did indeed have that book in you after all.

Wealth Counsel
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