Bob Carlson

Medicare continues to change, including new Part B coverage for GLP-1 weight loss drugs starting July 1st, priced at $50 monthly until 2027. This benefit is subject to prior authorization. There are concerns it could lead to supply shortages and patients will not receive sufficient counseling. In other news, a study found the three largest Medicare Advantage plans denied inpatient rehabilitation and long-term nursing hospital requests at higher rates than other plans. After years of financial strain from surging post-pandemic care, inflation, and stricter government policies, Medicare Advantage insurers are now reporting improved financial health. More predictable demand and favorable government reimbursement rates for 2026/2027 suggest a more stable MA market is on the horizon.

Estate planning is crucial, and now is a stable time to act. Begin by reviewing beneficiary designations for assets like IRAs and life insurance, as these often bypass wills and can lead to unintended heirs if neglected. Next, meticulously document all your assets and debts to aid your estate planner and future executors. Ensure essential documents like durable powers of attorney and advance medical directives are current and recognized by relevant institutions. Strategize your approach to probate, considering whether to use a living trust to avoid this lengthy process. Carefully select executors and trustees, anticipating and mitigating potential beneficiary conflicts. Don't forget to plan for digital assets and sentimental personal items, perhaps even leaving a non-financial legacy. Finally, commit to regularly reviewing and updating your plan, especially after significant life events, to ensure it remains effective.

It usually is not a good idea to name a trust as beneficiary of an IRA, because heirs often are penalized with higher taxes.

The IRS is actively penalizing IRA owners for not taking full required minimum distributions (RMDs), having enhanced its detection systems. Fortunately, the SECURE Act 2.0 has reduced the penalty for missed RMDs from 50% to 25%. This penalty can be further lowered to 10% if the RMD is distributed timely, typically before an IRS notice or within two years of the missed distribution. Taxpayers may also apply for a complete penalty waiver for reasonable cause by filing Form 5329, though approval is not guaranteed and the IRS's leniency with the new lower penalty is unknown. A denied waiver could mean missing the 10% window, resulting in the 25% penalty. While custodians often calculate RMDs, taxpayers should verify these amounts, as errors can still lead to IRS penalties.

Key Features, Benefits and Considerations Explained

Medicare beneficiaries should prepare to spend more time analyzing their options during the upcoming Medicare Annual Enrollment Period.

Investors can increase their net returns by considering tax reduction strategies all year round. Neglecting tax strategies causes serious leaks in investment returns.

Estate executor are responsible for discovering and paying all legitimate obligations of the estate before distributing assets to beneficiaries.

Medicare Advantage members can lose access to hospitals, hospital systems and other providers at any time during the year. Such changes are happening more frequently.

Every estate plan needs a will. Most estate owners do not know enough about wills. Knowing more can reduce the cost of the estate plan and deliver better results.