Mid-June Update

An Unintended Consequence of the 2017 Tax Act: Estate Planning

 The big change to the recently passed tax and jobs act of 2017 is the doubling of the integrated federal estate and gift tax exemption to ~ 11.2 Million for descendants dying and gifts made in 2018. And this can have an unintended consequence for you, particularly if you are semi- affluent.

It is common for folks like you to have a will that creates a trust at death for the amount of property “that would be exempt from estate tax at the creator’s death”. Most of this amount is expressed in a formula based on tax law that is currently in effect, not an exact amount. Check your will. If your document contains a clause with a formula related to the US estate and gift tax exemption, the doubling of this exemption may have created an unintended consequence for you.

To illustrate:  a person who leaves the “federal exemption amount” to children either outright or in trust – with the balance payable to her spouse or partner – will have a dramatically different result based on the tax law that would have been the case last year (2017). And even more different if your will was drafted many years ago when the exemption was much lower.

If you have not reviewed your estate planning lately, the tax and jobs act of 2017 provides a reason to meet with your estate attorney or financial advisor for an update.


Medicare Supplemental Insurance Purchase On The Rise – Healthcare Overview

Supplemental insurance coverage that pays for medical expenses not covered by Medicare is on the rise. Over 500,000 new supplemental policies were purchased in 2017, with over 13.6 million retirees carrying supplemental insurance coverage as of December 2017. Over the past ten years, the number of retirees with supplemental coverage increased 40%, driven by demographics and cuts in Medicare covered services.

Retirees can optionally enroll in private individual insurance policies that supplement original Medicare. These plans are standardized and identified by plan letter (Plans A-N). Also called Medicare Supplemental Insurance, retirees have the ability to choose their doctors, specialists, and care facilities.

Sources: Congressional Research Service, American Association for Medicare Supplement Insurance

Mid-June Update

The 3 Places to Travel with Very Good Exchange Rates in 2018:  Travel

A good exchange rate can be an advantage when planning your travel. If the currency of your destination country is falling against ours (USA), what you pay for Hotel, meals transportation et. cetera., will be discounted. Of course, you wouldn’t put the cart before the horse and visit somewhere solely because of the exchange rate, but if you were planning on heading to one of the 3 spots anyway, doing it soon offers the kicker of a discount.

The following countries have a 3 year history of falling currency against our greenback. Such a pattern represents a noticeable swing rehear than a momentary blip – unlikely to change before you book a trip.

  1. Canada (USD has gained 4.8%)

While the Canadian dollar has lost almost 5% in the last 3 years it has also lost 19.2% over the last 10. Spectacular scenery and world class cities: Toronto, Montreal and Vancouver. Wonderful national parks and of course:  Quebec City. When I went there it felt like being in “Europe without the jet lag”.

  1. Peru (USD has gained 7.5%)

Machu Pichu in Peru occupies many of our bucket lists. But there is more: Summits of the Andes and the Amazon rain forest. And the busting city of Lima.

  1. New Zealand (USD has gained 8.0%)

New Zealand has a reputation as one of the world’s most scenic countries. In addition to its vibrant major cities; Auckland and Wellington, there is Queensland, a relatively new favorite of backpackers with bargain accommodations and outdoor activities galore!