Basis about trusts

What Do I Need to Do To Get Financially Fit in My 30s?

Whether you’re 30 or 39, retirement will come up faster than you think. Many people are surprised when they see how much they need to put away to keep their current standard of living in retirement.

Once you decide when you want to retire, you need to calculate how much money you’ll need and how you’ll get there. Of course, you should take advantage of company matching and various tax deductions, when saving for retirement. But, don’t wait until your 40s or 50s to try to catch up. That will be painful, or worse, impossible.

Forbes’s recent article, “3 Steps To Financial Fitness In Your Thirties,” advises that when you start to accumulate wealth, be sure someone is watching your investments and that those investments are suitable for your time frames and financial goals.

Working with a fiduciary advisor can help improve your situation. This should be someone you trust, and most important of all, who you feel has your best interests at heart.

If you are accumulating assets, make sure they’re protected. Be certain you and your family are covered by having the correct insurance policies. Of course, in a perfect world nothing would happen. For instance, most people on disability would much rather be healthy. They’d love to be able to joke and say that having that disability insurance was a “bad investment”. However, those who are disabled and aren’t covered with a disability insurance policy, most likely wish they’d made sure they had this income protection in place.

Another form of protection is an emergency fund. If you don’t have one, start by regularly putting some amount of money into a non-retirement account. Even if it’s a small amount, something is better than nothing. If you were to be laid off, chances are that your unemployment benefits would not be enough to pay the rent or make a mortgage payment.

If you’re single, you should protect yourself—even more so than someone who has a partner to rely on. Many life insurance policies have living benefits that can protect you, if an emergency happens.  You may also be able to use cash value life insurance to partially fund your retirement.

Finally, it’s critical that you think about estate planning. You should have an estate plan, including a will, Powers of Attorney, health care power of attorney and, if you have minor children, a guardian should be named in your will.

Let’s say you’re living with someone. If something happens to either of you, the living partner will most likely be treated as a roommate—and have no legal rights to your property. An estate plan can be prepared to provide your partner with legal protection.

Reference: Forbes (December 17, 2018) “3 Steps To Financial Fitness In Your Thirties”

Are You or Will You Become a “Solo Ager”?

“Solo agers face unique challenges, as their needs begin to change.”

Did you know that a study from the Pew Research Center says about 20% of the 75 million baby boomers don’t have children—a figure that’s double what it was in the 1970s and one that’s expected to keep rising.

MP900427632We mention this because these people need someone to count on to always be there, if they need help making decisions and managing their affairs as they get older.

NH Magazine’s recent article entitled “The Difficulties That Come With Solo Aging” says that, for those without children or parents who’re estranged from them, it’s frequently a tough question to answer.

Our country’s 15 million “solo agers” or “elder orphans” now comprise a demographic that’s unprecedented in American history. This relatively new segment of society has a unique set of challenges.

As your physical, intellectual, and emotional capacities diminish, a person on his own must determine how he will be able to make sound decisions on financial and legal issues, relationships, housing and healthcare. There are also more cases being reported of elder fraud, and new scams are designed to take money from seniors. An elderly person could also wind up lonely and penniless.

However, there is help. Professional guardians can assist the elderly in reviewing their financial statements, creating budgets, paying bills, keeping keep them organized and sorting mail and email to see what’s a legitimate bill or a solicitation or potential scam.

A guardianship, which is also known as a conservatorship, is a legal process that’s used when a senior can no longer make or communicate safe or sound decisions about himself person and/or his property, he’s become susceptible to fraud or undue influence. The fact that establishing a guardianship can remove substantial rights from a person means that it should only be considered after other alternatives have proven ineffective or are unavailable.

In addition to a court-ordered guardianship, there are other options. There are also certified geriatric care managers, certified daily money managers, as well as attorneys who specialize in elder law.

Solo agers should arrange a future legal guardianship for themselves, a person who will assume control in a fiduciary capacity, if they’re unable to make decisions for themselves. This may be a relative or a friend, as well as a professional fiduciary or private guardian.

In addition, everyone should have a healthcare directive and an estate plan. However, solo agers have a more urgent need to have these important documents in place, while they’re still somewhat young and healthy—because they don’t have an adult child who will fly in from the other side of the country to provide that assistance and guidance.

Talk to several potential guardians or fiduciaries and go with the one whose skills most closely fit your needs and with whom you feel the most comfortable. Check their references and credentials thoroughly. You can also select different people for different tasks, which gives you a critical system of checks and balances. Be certain that you understand exactly what services each will provide and their fees and get it all in writing.

Reference: NH Magazine(October 2018) “The Difficulties That Come With Solo Aging”

What are Pastors Doing about Estate Planning?

You might think that pastors, who lead congregations in occasions of birth and death, would be a little more aware than the rest of us of the events of life, and by extension, the need for an estate plan. However, a recent survey shows otherwise.

A survey of Southern Baptist pastors conducted for the Southern Baptist Foundation has revealed that more than half of them don’t have the estate basics, including a will, trust, living will, electronic will, legacy story or durable power of attorney with health care directives.”

MP900390083 (1)In its recent article on the survey, TheBaptist Pressreports, “Young or old, many pastors lack a will, survey finds,”that 74% of the pastors surveyed think estate planning should be considered part of a person's complete financial stewardship.

However, executives at LifeWay Research say the survey shows a lack of awareness about estate planning and the laws which may be factors in pastors not having a plan in place. Procrastinating is common, but failing to have an estate plan in place can have a devastating impact on an estate.

Of course, basic estate planning saves a lot of trouble for family and loved ones. However, in addition, taxes can be minimized and assets protected.

According to the survey, pastors age 18-44 are the least likely to have a will (31%) or a durable power of attorney with health care directives (14%). Only about half of those pastors closest to retirement (age 55-64 and 65-plus) have a will (54% for both groups). Likewise, few of those closest to retirement (age 55-64 and 65-plus) have a health care durable power of attorney (25% for both groups).

It’s a bit of a surprise that so many pastors don’t have a plan for their families and property after their death, especially those that should be most likely to be thinking about this issue—the ones with young families. They seem to be the least prepared.

About 64% of the clergy surveyed, agree with a statement that the court decides who will care for a child, if the last parent dies without a will; 16% percent disagree, with 21% saying they didn’t know. When asked about assets, the survey showed that 48% of pastors said that if someone dies without a will, their family decides what happens with the assets of the deceased; 33% disagree, and 19% "don't know."

However, both with property and children, it’s the court that decides what happens to them, if there’s no will.

The survey reflects the data from more than 1,100 completed surveys that were conducted, both by mail and online, this past spring.

Reference: Baptist Press (August 31, 2018) “Young or old, many pastors lack a will, survey finds”

Can Someone Become My Guardian Without My Knowing It?

Let’s start by understanding what guardianship is, and how it works.

What would happen if someone who you don’t know—or someone you do—decides you are not competent and tries to become your legal guardian? Could it happen?

MP900289434The concept of guardianship for a senior is a difficult thing to consider. Maintaining your independence and remaining in charge of your own life would be at risk, if someone wanted to become your legal guardian, says ,“Worried someone may want to be your guardian? Here's what you need to know.”

Let’s start by understanding what guardianship is, and how it works.

Guardians are appointed by a judge, for both minors and incapacitated individuals. An application is required to be made to the court in the state and county where the minor or alleged incapacitated person lives or where his or her property is located. In either situation, once the minor becomes 18, she receives the property. If the incapacitated person returns to full or partial competency, the court (upon application) may restore that person’s rights, which would dismiss or limit the guardianship.

A guardianship can be of the person. This is limited to making medical or similar decisions on an incapacitated person’s behalf, or concerning the person's property, or both. A guardianship can also be limited. This means that the guardian is appointed to only make certain decisions, like financial ones. A guardianship can also be plenary, which means the guardian can be appointed to address all issues.

When a guardian of an individual's property is appointed, the property is usually re-titled into the name of the guardian for the benefit of the incapacitated individual. This gives third parties notice of the guardianship.

In New Jersey, prior to an individual being appointed as the guardian of an alleged incapacitated person, that person has to be given notice of the proceedings. That person is also appointed an attorney by the court to advocate for them or to report to the court on their situation. Therefore, a senior would be given notice and legal representation.

The records of these types of proceedings aren’t open to the public, because of the confidential information in them, like certifications from physicians on the physical and mental condition of the alleged incapacitated person.

But, information on the name of the guardian who has been appointed to represent the incapacitated person should be available, so that third parties, including creditors, can know who to contact if they are providing good or services to that person.

Speak with an estate planning or elder law attorney, if you are concerned that someone may be considering applying for guardianship for you. They’ll know how to find out if this is true, and how you can protect yourself.

Reference: (August 24, 2018) “Worried someone may want to be your guardian? Here's what you need to know”

When Was the Last Time You Reviewed Beneficiary Designations?

Most people fill out beneficiary forms when they start a new job, open an investment account and open bank accounts. Then they forget about those forms—often for decades.

Talk about a train wreck waiting to happen: beneficiary designations from three or four decades ago can really create a problem for your heirs—or those you thought were your heirs.

Bigstock-Financial-consultant-presents--14508974Most people fill out beneficiary forms when they start a new job, open an investment account and open bank accounts. Then they forget about those forms—often for decades. Those people named as beneficiaries way back when, are now their heirs—whether they want them to be or not.

Wealth Advisor’srecent article, “Designated Survivor: Beneficiary Designations Can Make–or Break–Your Estate Plan,” reminds us that beneficiary designations override the terms of your will or trust. To avoid any unintended consequences, it’s very important to review your designations with your estate planning attorney. Think about the following:

Children. Many people name their children as beneficiaries on their accounts and other assets, without knowing the consequences of this choice. If a minor inherits an asset in this way, a guardianship proceeding will likely be required to appoint a guardian to receive and manage the inherited assets on behalf of any minor child. The court proceedings are costly and time-consuming. In many states, the court will place restrictions on how and when the money can be used for the beneficiary during the guardianship. When you designate a person with disabilities as a beneficiary, it may impact his or her ability to qualify for public benefits. These issues can be avoided by naming a trust as the beneficiary.

Major Life Changes. We all experience changes. They can include major changes like birth, death, marriage, divorce, a new home, or a job change. However, people frequently neglect to look at their estate plans and beneficiary designations, when these events occur. Coordinating your beneficiary designations with your estate plan, can eliminate the need to update your beneficiary designations with each life change. At the very least, it will give you with some guidance on the types of situations that should cause you to conduct a review and to update these forms.

Trusts. You may have, or want, a revocable trust in your estate plan. This will give you additional privacy, flexible administration and important protections for your beneficiaries. Beneficiary designations are an ideal way to transfer your assets into your trust and to leverage the benefits of trust planning, without impacting the ownership of assets during your lifetime.

Retirement Accounts. When it comes to selecting beneficiaries for income tax deferred assets, like IRAs or 401(k)s, it’s usually a spouse who is named as the primary beneficiary. This maximizes the income tax deferrals and other administrative privileges provided to surviving spouses. Deciding on the contingent beneficiary is a little harder, because there are income tax and other considerations that should be evaluated when making this decision.

The best way to preclude problems, is to review all of the accounts that have a beneficiary designation to ensure that they still reflect your wishes. Doing so will save your heirs a great deal of time and stress and eliminate any surprises. Talk with your estate planning attorney to ensure that all of your assets will transfer to the heirs you want, not the ones you forgot about years ago.

Reference: Wealth Advisor (August 6, 2018)“Designated Survivor: Beneficiary Designations Can Make–or Break–Your Estate Plan”

Not Wealthy? You Still Need an Estate Plan!

If you die without a will, you won’t have the opportunity to designate the guardian you want to care for your minor children. Instead, a judge will decide this.

There’s a saying about people who don’t have an estate plan created. They have a will, it’s just not the one that they want. Decisions are made by the state, and that includes who raises their kids.

Bigstock-Extended-Family-Outside-Modern-13915094If you’ve got young children under the age 18, says CNBC in a recent article, “You don’t have to be wealthy to put this estate plan into place,” you really need to make sure that you have a will. That’s where you can convey your wishes as to who should raise your children, in case tragedy hits and both you and your spouse are not able to.

If you die without a will, you won’t have the opportunity to designate the guardian you want to care for your minor children. Instead, a judge will decide this. It may be someone you really never considered for that essential responsibility.

That’s why a will is so critical for families with young children. You can also avoid or at least lessen conflicts between relatives by adding a guardianship clause in your will.

Without a will, the state’s intestacy laws will dictates how your cash and assets will be distributed when you die. Typically, the intestacy laws say that your estate will pass to your closest living relative—your spouse, your kids, your parents and your siblings.

These laws also stipulate how assets are divided among your family members. For example, in New York, your surviving spouse gets 50% of the balance, and your children get everything else.

But what if that's not what you want? Then you better have a will.

It’s also important to know that your will won't override your beneficiary designations for your retirement accounts and life insurance.

While you’re at it, a couple of other documents you'll need to get your basic estate plan together, are your financial power of attorney and medical directives. Power of attorney grants a person that you name to oversee your finances, if you're incapacitated. Medical directives allow you to state how you want to receive health care, if you’re unable to communicate your wishes.

An estate planning attorney can help you create the documents you need, to ensure that your children and you and your spouse are protected, before and after death. It’s an important part of your responsibility and will also provide you with peace of mind.

Reference: CNBC (August 8, 2018)“You don’t have to be wealthy to put this estate plan into place”

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