My Items

Let's Face It: You Need a Will

According to a 2015 Rocket Lawyer estate-planning survey by Harris Poll, 64% of Americans don't have a will. Of those without an estate plan, about 27% said there isn't an urgent need for them to make one and 15% said they don't need one at all. Many people wonder if they really need a will. Over years while practicing as a CERTIFIED FINANCIAL PLANNER™ professional, I've seen that regardless of wealth or socioeconomic status, that is the average sentiment of people when it comes to estate planning. Based on that survey, the number one reason people don't have a will is because they haven't gotten around to it yet, but that doesn't tell the whole story. I would submit that one of the main reasons why Americans don't have an estate plan is because "nobody likes to talk about death" and many seem to believe that you only need a will or formal estate plan if you have amassed huge amounts of wealth. So, let's discuss in detail: WHAT IS AN ESTATE PLAN? An estate plan is a collection of documents that specify how you want your money and other assets distributed, making it easier for your loved ones to handle your affairs during a time of grief. WHO NEEDS AN ESTATE PLAN? Nearly everyone does. If you're young and single, you may need only a few relatively simple items, such as beneficiary designations and medical and financial powers of attorney. If you have children, you need a will to name a guardian. If you've been married before and have since remarried and have children from the previous marriage or relationship, you need a will. If you have substantial wealth, you may need one or more trusts to help control how your assets are taxed, managed, and distributed. WHERE DO I START? Hire a good estate-planning attorney. If you don't already have an estate-planning attorney, ask your CFP® professional or CPA for a recommendation. It's important to interview attorneys to ensure that you feel comfortable with the professional you select to help you customize your estate plan. When my staff and I sit down with clients to review their estate planning needs, we draw a triangle on a blank sheet of paper and at each oint we list Church/Charity, Beneficiaries, and Government. When one passes away, all of their assets will go to one of these three places. Having a sound estate plan ensures that your determine what happens with your assets. I believe the government has taken more than its fair share of my earnings through taxation during my life and I'm not interested in giving them any more than necessary at my death. So, the only way to avoid that scenario is to take action and get a will.

'Til Debt Do Us Part

Most of us have had to deal with debt at some point in our lives, yet it still seems to be one of those taboo subjects no one wants to talk about - whether with friends, family, or significant other. All the while, it may be more common for couples today to enter into relationships with debt from student loans, credit cards, or loans for large purchases like cars or homes. Whatever each party's situation may be, being up front early on can help you avoid unnecessary financial and personal conflict down the road. There are many cases when working with clients during financial planning meetings that advisors find that they don't share information on certain financial matters for various reasons. DEBT IS A FOUR-LETTER WORD Financial stress and disagreements have long been cited as leading causes of tension in relationships. Couples don't just argue about money. They hide transactions from each other. One in five Americans in a relationship say they have spent $500 or more and not told their partner, and six percent maintain secret accounts or credit cards, according to a poll conducted for CreditCards.com. This is why financial stress is one of the leading causes of divorce in this country. Wealth is a highly personal matter, touching all facets of our lives, so it's not hard to understand why differences could hurt a relationship. Establishing an open line of communication when it comes to managing wealth is important, not only for your financial well-being, but for your relationship too. THE AIRING OF (FINANCIAL) GRIEVANCES Being open about your financial histories and debt, especially with a spouse or significant other - including past mistakes - is crucial to your combined, long-term success and a comfortable retirement. Not doing so could lead to a variety of complications down the road, including bad credit, trouble getting a loan or a less-than-ideal retirement. Beyond being forthcoming about your financial standing, it's also worth noting that most of us have different ideas of what is normal or acceptable in terms of how we manage our finances and debt. Or, we could have different outlooks on what the future should hold. For example, while one partner may be comfortable renting an apartment for several years, another may be eager to become a homeowner. If one of you is carrying a lot of credit card or other debt, it could be more difficult to get a loan for such a purchase. BETTER TOGETHER The good thing about having a partner who is on the same page financially is that you benefit from a support system and accountability partner. Just as many people have a gym buddy to help encourage them to stick with an exercise regimen, having someone who understands your financial goals - and weaknesses - can help you stay on your path toward a bright financial future. Remember to make time to have those difficult financial conversations. In doing so, you and your spouse or significant other are better off.

The Family ATM

Over the years, my staff and I have seen many scenarios where people were engaged in behaviors that unbeknownst to them were detrimental to their financial and mental health. However, there is one situation that I’ve seen that can be harder to shake and can be extremely stressful and a huge financial threat. From my experience many people don’t actually realize that they in fact have this condition that I refer to as being THE FAMILY ATM. The Family ATM is simply a person whom has done well for themselves financially and has built somewhat of a reputation of being generous and has a big heart. Now before I go on, I believe it would be appropriate to state that there is nothing wrong with being charitable or being a giver however as with most things, it requires a balance. The Family ATM is a person whom has exceeded that balance so much so that it is potentially to their own or detriment of others. I wanted to share a couple of thoughts on how not to be THE FAMILY ATM. It’s Okay to Say No It’s important as one tries to establish a balance between financially helping out their family or close friends that saying “no “should always be an option. Saying no doesn’t make you a bad guy, it also doesn’t make you selfish, it makes you responsible. Consider this, if one finds themselves continuing to help someone pay a bill on somewhat of a regular basis and there appears to be no timeline for improvement, is that truly helping that person? I would submit to you that after too many occurrences it maybe enabling. Remember, it’s okay to hold others accountable for and to have expectations of progress when you are the person loaning the money. Before You Say Yes Again Ask that person to show you progress that they’ve made from the last time you gave them money. Specifically ask them to show you what efforts have been attempted to help better their own situation so they won’t continually be in need. For example, showing proof that they’ve sent out resumes or cut spending in certain areas to help themselves. For some this may seem a bit too personal of a request to ask of another, however if they’re asking for your money, its appropriate for you to have an understanding of their personal circumstances. If that bothers them too much, there are other options for them to consider. You owe it to yourself and your values to be a good steward of the finances you have accrued over time and learning how to say no at times, can definitely help you in the long term.

Not Having This Could Destroy Your Retirement

Picture this. You've worked hard for nearly four decades in a demanding industry and now it's time to transition your life into the next phase - retirement. You already have a few vacation spots picked out for you and your spouse. Your company retirement party was last week andnow you find yourself excited, but anxious, about what life will be like when you no longer have to set your alarm clock. More importantly, you have saved well and built a healthy nest egg that you intend to live on - life is good. I will submit to you that assets alone may not be enough to solidify a comfortable retirement. It's been my experience over the years working with clients, that many don't have a tangible plan for long-term care. So, I thought I would help by sharing the two most popular misconceptions about long-term care. MYTH 1 - My health or disability insurance will cover long-term care. In fact, many people incorrectly believe that "other health insurance" will pay for their long-term care. The truth is surprising: Long-term care is NOT covered by other kinds of insurance including HMO, health, or long-term disability insurance. Only long-term care insurance, that you typically purchase on your own, covers day-to-day personal care assistance when you are unable to perform everyday activities like bathing and dressing. MYTH 2 - Medicare or Medicaid will cover long-term care. Most people incorrectly think Medicare will pay for long-term care services. In reality, Medicare does not generally cover long-term care. Medicare pays for skilled care in a nursing home only for short periods (up to 100 days) when you are recuperating following a hospital stay for a related condition. Once your care needs stabilize, you may need personal or custodial care. Medicare will not pay these costs. Medicare will only pay for care at home under very limited circumstances. Medicaid pays for long-term care only for people with very low assets and limited income. I've met with many people who have had to care for a loved one, either by physically moving them into their home or financially subsidizing some of their living expenses. It can be a real challenge for a family to work through. Understand that nobody wantsto be a financial strain on their loved ones. Consider your personal situation with your CERTIFIED FINANCIAL PLANNER™ professional and, if necessary, take action to help secure your retirement.