Phillips and Blow - March 2020

the Phillips and Blow Monthly Bulletin

7700 E. Arapahoe Road, Suite 100 Centennial, CO 80112 303-741-2400 www.phillipsandblowlaw.com

03 .2020

To All the Caregivers outThere

Thank You for All You Do

While there are plenty of professional caregivers in the United States, according to data from the Pew Research Center, 40.4 million unpaid caregivers were working in the U.S. in 2015. Since then, that number has no doubt grown. At the same time, the costs of quality professional care remains out of many people’s price range. So, when a parent or elderly relative is suddenly in need of care, the family takes on the responsibility of caring for them. Caregiving is often a thankless job, but in honor of Caregiver Appreciation Day on March 3, we at Phillips & Blow want you to know you don’t have to do it alone. Professional caregivers tend to have a standard 40-hour workweek, and they get paid for their work. Family caregivers, on the other hand, take care of their loved ones for free while also working on their career and raising kids. Having a job and a family already leaves many people worn out at the end of the day. So, when you start taking care of an elderly loved one who might have various mental or physical disabilities, many caregivers grow ripe for burnout. We’ve seen too many people add caregiving to the already delicate balance of their life and burn out, and we wouldn’t want it to happen to you if you just became a caregiver. Luckily, a few options are available for caregiving besides taking all the responsibility for yourself. If it’s in the budget, some families will hire a professional caregiver to care for their elderly loved ones. If you’ve had a relative who suddenly needed care but lived in a different city hundreds of miles away, you might have

done this. Depending on your circumstances, you might even do this if your relative lives in the same city as you. In these cases, instead of becoming a caregiver, you become a care manager. You oversee your elderly loved one’s care routine, but a professional administers the actual care. Many families do this while staying close to the family member whose care they’re managing.

– John Phillips and Justin Blow We also want to let you know that whatever your caregiving situation, your estate planning attorney can help you figure out where to turn for help and get assistance with mapping out your caregiving plan. If you’re struggling to figure out your next steps as a caregiver, don’t worry. Give Phillips & Blow a call at (303) 741- 2400, or stop by our office! That being said, not everyone has the option of hiring a professional caregiver, or they choose to take care of their aging parent or relative by themselves. To all the family caregivers reading this, first of all, we just want to say thank you. You’ve taken on a tremendous and noble responsibility, and we at Phillips & Blow want to recognize your sacrifice.

“CAREGIVING IS OFTEN A THANKLESS JOB, BUT IN HONOR OF CAREGIVER APPRECIATION DAY ON MARCH 3, WE AT PHILLIPS & BLOW WANT YOU TO KNOW YOU DON’T HAVE TO DO IT ALONE.”

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Escape the Rental Property Tax Trap How to

Planting Seeds For the Next Generation

When you plant seeds in your vegetable garden in the spring, you don’t expect fresh tomatoes, squash, and zucchini to spring out of the ground the very next day. That would be crazy! Everyone knows vegetable gardens take months of sun, water, and good soil to produce the best summer vegetables. That’s why you don’t wait until the last minute to plant your seeds. Unsurprisingly, the same goes for planning your estate. While nobody likes to consider their own mortality, it’s better to be prepared for the inevitable before it happens rather than be caught off guard when it does happen. With that in mind, the next question might be when you should start estate planning. The short answer is it’s never too early to start planning. Whether you’re 65 and you have kids and grandkids to think about, or you’re 25 and you just have a savings account with $5,000, the time to start estate planning is now. When you’re younger, you’ll most likely have fewer assets for which to find beneficiaries. That prospect of having less work to do might be incentive enough for some of you to get the planning process started as early as possible, but you’ll have to do some parts of the estate planning process regardless of age. No matter how many assets you have, you should still name a durable power of attorney and a health care proxy. You should also name beneficiaries for any savings and retirement accounts you have. Young estate planners would also benefit from at least having a will. Every generation benefits from what the previous generation leaves behind but only if they leave it well. If you plant seeds in a garden but don’t bother to water them or make sure they have proper sunlight, your plants probably won’t grow very well. At Phillips & Blow, we’ll make sure your seeds are planted well and properly cared for. Give us a call at (303) 741-2400.

Owning a rental property (residential or commercial) can be a good investment and income option. However, a downside is that you will often face significant capital gains and depreciation recapture taxes when you sell the property. If you can hold the property until you die, the taxes go away, but what if you can’t wait or are just tired of the management hassle of a rental property? Section 1031 “like-kind” exchanges can allow an owner to sell a property and immediately reinvest the proceeds in another “like-kind” property without triggering the taxation. Even though the rules are rather specific as to timing, you remain as an active manager of the new rental property. Good news! In recent years, the IRS has approved the use of a specific type of trust to receive 1031 funds and then allow passive ownership (i.e., you don’t have to manage any more than you would with mutual funds or a real estate investment trust). These trusts usually pay you about a 5% annual return (subject to income taxation as any other source of income) as well as likely capital appreciation (depending on the specific property chosen and the overall market conditions). This way, you earn income from the entire value of the property, including the 30% or so that otherwise would have gone to the IRS upon a traditional sale. These trusts typically hold the underlying property for 3–10 years (e.g., commercial version of fix and flip). You can then take the money and pay the taxes or reinvest into another such trust and defer the taxes again. This way you can get lifetime income (including income generated on the money that otherwise would go to taxes), hold this, or some other trust until you die, and thus completely avoid the capital gains and depreciation recapture taxes altogether and let 100% of the value go to your heirs.

If you or anyone you know has a rental property and are interested in learning about this opportunity, give us a call.

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Trusts • Probate • Long-Term Care Planning • Elder Law

Common Estate Planning Mistakes You Can Prevent

Estate planning is nothing to be afraid of, but the complexities of the process should not be overlooked. Time and time again, families get caught up in lengthy legal battles over the designation of their deceased loved one’s assets, which could have been prevented if the deceased had been more involved in the estate planning process. Here are three of the most common mistakes you should avoid when creating and maintaining your estate plan. FAILING TO FULLY UNDERSTAND THE PLAN While having a trusted estate planning attorney to guide you through the process is a good idea, they can’t be expected to do all the work for you. While it may sound absurd, many people fail to fully understand the implications of their estate plan because they just didn’t read it. It’s not your attorneys’ estate plan; it’s yours. Go through it with your attorneys to make sure you understand all the components. FAILING TO UPDATE YOUR BENEFICIARIES Deaths and divorces among beneficiaries can leave some gaping holes in previously watertight estate plans. In the past, estate holders have left assets to relatives who had since died, leaving the

fate of their assigned asset up in the air. Does it go to that relative’s children? To their spouse? Without an updated version of the estate plan, your family might lose part of their potential inheritance to legal fees. FAILING TO UPDATE ASSET OWNERSHIP The assets in your estate probably include real estate, vehicles, and bank accounts in your name or in a joint title with a spouse or other family member. The exact nature of asset ownership isn’t static, but if you sell an asset or enter into joint ownership of an asset that previously belonged solely to you, the latest versions of your estate plan should reflect the change. Estate planning mistakes are common if you’re not vigilant. Having a second pair of eyes on everything can help eliminate those mistakes. Phillips & Blow can be that second pair of eyes. Give us a call today!

Trivia

Pesto ChickenWith BlisteredTomatoes Inspired by CookingLight.com

INGREDIENTS:

When can you get an amendment for your trust once it is created?

• •

2 1/2 tbsp olive oil, divided 4 boneless and skinless chicken breasts, pounded to a 1-inch thickness Salt and pepper to taste 1/4 cup whole-wheat panko

• • • • • •

2 tbsp Parmesan cheese

1 tbsp unsalted butter, melted 6 tbsp spinach pesto 2 cups cherry tomatoes 1 garlic clove, thinly sliced 1 tsp red wine vinegar

a. One week b. 6 months c. 1 year d. All of the above

• •

DIRECTIONS:

1. In a large ovenproof skillet over medium-high heat, add 1 tbsp olive oil. 2. Season chicken with salt and pepper, and add it to pan. Cook chicken for 5 minutes on each side, then remove pan from heat. 3. In a bowl, combine panko, Parmesan cheese, and butter. 4. Spread pesto over chicken and top with panko mixture. 5. Broil chicken for 2 minutes on high heat until browned. 6. In a skillet, heat remaining oil over medium-high heat. 7. Add tomatoes and cook for 6 minutes. 8. Add garlic and cook for 30 seconds, stirring constantly. 9. Season tomato mixture with salt and pepper, and add red wine vinegar. 10. Serve tomatoes with broiled chicken.

Submit your answers to email@jrphillipslaw.com

Correct answers will be entered into a drawing on Mar. 31 for an Amazon gift card.

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inside

Appreciating All the Caregivers out There this issue

1 2 2 3 3 4

Escape the Rental Property Tax Trap

The Best Time to Plan Your Estate Is Now

Don’t Let These Estate Planning Blunders Happen to You!

Pesto Chicken With Blistered Tomatoes

Celebrating National Mom and Pop Business Owners Day

Giving Back to Local Companies On National Mom and Pop Business Owners Day

March 29 is National Mom and Pop Business Owners Day, which is huge for small businesses everywhere. Mom-and-pop businesses are the backbone of the U.S. economy; Small Business Trends reports that mom-and-pop businesses account for 64% of gross domestic product (GDP) and generate 78% of all new jobs. Furthermore, no matter what turns the economy takes, small-business owners are less likely to lay off their employees than big corporations. Mom-and-pop businesses support all communities, and you can support them by celebrating this unofficial holiday!

better value for your dollar. Take this day to shop for birthday and holiday gifts for your loved ones that will bring them great joy and last a lifetime.

GET SOCIAL AND SPREAD THE WORD! While small businesses utilize every form of marketing available, social media is essential for their success and growth. After shopping at your favorite mom-and-pop business, share that experience on your social media! When you write a post on Facebook or take a picture for Instagram, be sure to tag the business and use relevant hashtags so your friends, family, and everyone else in your community can shop there, too.

GIVE YOUR LOCAL ECONOMY A BOOST! Shopping locally has a massive impact on your community. Local businesses return three times the amount of money to the local economy than larger corporations do. With that big of a returned investment, your community can support even more small businesses that generate a wealth of jobs and keep the cycle going.

Writing reviews on Google Reviews and Yelp helps establish validity for the company. When another potential customer looks for reviews, they know they’re getting quality products and services from a well-established pillar of the community. The local businesses that are active on social media may post deals and sales for that day only, so keep your eyes peeled and be sure to follow all your favorite businesses!

In addition to the economic boost, products from small businesses are usually higher quality, which makes them a

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Trusts • Probate • Long-Term Care Planning • Elder Law

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