Articles Tagged with protect

A couple came in that had been referred by another financial advisor. The couple had a teenage child and wanted to make sure that their “legal affairs were in order” because they had done no estate legal planning in the past. We will be setting up an estate program for this couple to make legal matters easy or nonexistent when one spouse dies, and then making sure that guardians and trustees are named for their minor child should something happen to the parents before the child is an adult.  The simple goal to protect and organize is accomplished.

Planning for unfortunate situations is a real concern for families.  Rather than relying on good fortune and the law of averages, prudent families plan for contingencies.  While the time and expense of estate planning seem like a “not fun” endeavour, dealing with the mess of having no plan in place is a difficult and expensive process for those left behind.

In this case, our “Essentials Plan” was put in place.  A set of legal documents to provide guidance and authority for this family and their trusted agents in the event of an unfortunate event.

Probate obstacles can start with being able to locate and notify all “persons interested.” Everyone must be notified before the probate can begin. An investigation and special hearing would have to take place in order to have a probate move forward if not everyone has been made aware.

“Persons interested” are the people named in a will as beneficiaries, and the Personal Representative. But, the persons interested also include all people who would inherit if there were no will (according to the law of intestate succession). This means that even if a will was left that said “Everything goes to my sister Laura,” interested persons would include all of the people who would inherit if there were no will. This could be parents and all other siblings including any unknown half-siblings from a father who disappeared when the decedent was a small child. It could also include nieces, nephews and cousins.

probateAs you can see, when families are not close, or when a person is very old and the last surviving sibling, it is often difficult to trace a family tree and locate a missing interested person.

Another obstacle people may face in probate is the fact that the courts are located in the county seats. This can mean travel for some people who find travel difficult. Sometimes people are intimidated by going to the court in order to file documents or to figure out which documents need to be filed, etc.

A third barrier in the probate process is knowledge barrier. People need to know about the taxing of estates, court procedures, court processes and the probate process in order to make this happen smoothly. As many people go through probate only once in their lifetime for a loved one, they don’t have time to spend learning all of these particular pieces of knowledge that they need to know.

Lastly, is the fact that people who are dealing with these matters are probably not their best after they have lost a loved one. Sometimes they don’t have the patience or the time to deal with the intricacies involved in the probate process.

What Actually Happens During The Probate Process? Continue reading

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The Most Important Thing You Can Do For Your Aging Parents

How to Ensure Your Parents Don’t Lose Their Home, Bank Accounts, & Assets To Long Term Care Costs

A friend relayed a story that is one I hear all too often when it comes for caring for aging parents.

Over half of American adults and approximately 92 percent of adults under the age of 35 have not written a will. Most assume they do not need a will because any assets left behind will automatically be inherited by family members. Although assets may be distributed according to state intestacy laws, the process can be lengthy. With proper estate planning, however, you Designating a Guardian for Your Childrenmay be able to avoid placing any additional emotional or financial burden on your family after your death.

It is a good idea to create a will once you begin acquiring assets or start a family. In addition to designating how your assets will be distributed upon your death, your will designates an executor who will manage them until they are distributed. If you are a parent, you should also select a guardian who is likely to survive until your minor children reach the age of majority in the event both parents pass away.

Other useful estate planning documents include a durable power of attorney and a healthcare proxy. A durable power of attorney will allow your designee to make financial and legal decisions on your behalf if you become unable to do so. Similarly, a healthcare proxy allows a designee to make medical decisions for you if you become incapacitated and cannot do so yourself. By designating a power of attorney or healthcare proxy, you may save your family from being required to take the matter to court in the midst of an unexpected healthcare crisis.

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Traveling? The Eight Estate Planning Must-Dos before Departure

airplaneIn 2014, the World Health Organization revealed that globally, there were 1.24 million road deaths, 1,320 deaths from airplane crashes, 78 deaths from train crashes, and over 4,000 deaths from motorcycle accidents. Statistically, though, motorcycle travel is the most dangerous, while train and air travel are safer.

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Your Funding Options

The first part of planning for long-term care is realizing that, a) most of us will need this kind of care for at least some time before we die and b) the cost of this care can be financially devastating for a family if it is not planned for in advance. This was covered in Long-Term Care Planning, Part 1.

The next part is determining how you will pay for long-term care that may be needed for you, your spouse or another family member.

The Key Takeaways

  • Long-term care is not covered by health insurance, disability insurance or Medicare.
  • You have limited options when considering how these expenses could be paid.
  • The best way to plan for the possible expense of long-term care is to accept it as a central requirement in your overall financial planning and seek professional assistance.

Who Pays for Long-Term Care?money

Many people are surprised to learn that long-term care is not covered by health insurance, disability income insurance or Medicare. Health insurance plans cover nursing home expenses only for a short period of time while you are recovering from an illness or injury. Disability income insurance will replace part of your income if you are not able to work after a specified time, but does not pay for long-term care. Medicare, which covers most people over age 65, provides limited coverage for skilled care for up to 100 days immediately following hospitalization. After that, you’re on your own.

How Will You Pay for Long-Term Care if Needed? Continue reading

A Central Requirementold man

Health care has been the topic of discussion lately, but the greatest threat to your financial health is long-term care. This is the kind of care you need if you are not able to perform normal daily activities (such as eating, dressing, bathing and toileting) without help, and it is expected that you will need this help for an extended period of time, often for the rest of your life.

Long-term care is often needed due to aging, chronic illness or injury, and with people living longer, most of us will need it for at least some time before we die. But it is not just for the elderly—a good number of younger, working-age adults are currently receiving long-term care due to accident, illness or injury.

The Key Takeaways

  • The cost of long-term care is the greatest threat to your financial health.
  • Most of us will need long-term care for at least some time before we die.
  • It is better to assume you will need long-term care and plan for it than to just hope it doesn’t happen to you or a family member.

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Minor Children as Beneficiariesmoney

No parent wants to think about leaving their minor children behind in the event of a tragedy; however, because terrible things do happen, it is better to be prepared. Estate planning ensures that your children will be taken care of in the event of your death. Estate planning also ensures that you are in control of the decisions regarding your child’s future. If you fail to plan, a stranger, who does not know anything about your children, will make the decision for you.

Naming a legal guardian is not sufficient to handle the financial aspect of an inheritance. Most parents believe that if they name a guardian for their children in their Will, this will be sufficient to provide for their children after their death. However, a guardian does not have access to your child’s inheritance.

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Making Awkward Financial Discussions Easier for Everyone

Do you have someone in your life such as a spouse, a parent, your child or a close friend that is making unwise financial decisions that are destructive or unproductive? Most of us have someone like this in our lives. We want to help that person achieve financial well-being but we do not know where to begin. It may seem impossible to help them get on a good, solid financial track without appearing condescending or judgmental. It is not our intent to put our loved ones on the defensive or to make them feel inadequate but we cannot stand by and watch them continue to make their financial situation worse.

Two Key Financial Concepts You Need to Teachtools

If you can impart any financial wisdom to your loved ones, there are two key concepts you should try to teach them. Through these two concepts, you can help them understand wise money management and key financial principles.

Living within your financial means allows you to have more money for high-priority purchases and discretionary spending; and, Having discipline to correct your bad money behaviors and habits leads to financial security.

Learning to Live Within Your Financial Means Usually Corrects Bad Behavior
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Is a Revocable Living Trust Right for You?     Trust

Revocable Living Trusts have become the basic building block of estate plans for people of all ages, personal backgrounds, and financial situations. But for some, a Revocable Living Trust may not be necessary to achieve their estate planning goals or may even be detrimental to achieving those goals.

What Are the Advantages of a Revocable Living Trust Over a Will?

Revocable Living Trusts have become popular because when compared with a Last Will and Testament, a Revocable Living Trust offers the following advantages:

  • A Revocable Living Trust protects your privacy by keeping your final wishes a private family matter, since only your beneficiaries and Trustees are entitled to read the trust agreement after your death. On the other hand, a Last Will and Testament that is filed with the probate court becomes a public court record which is available for the whole world to read.
  • A Revocable Living Trust provides instructions for your care and the management of your property if you become mentally incapacitated. Since a Last Will and Testament only goes into effect after you die, it cannot be used for incapacity planning.
  • If you fund all of your assets into a Revocable Living Trust prior to your death, then those assets will avoid probate. On the other hand, property that passes under the terms of a Last Will and Testament usually has to be probated. A probate could add thousands of dollars of costs at your death.

Why Shouldn’t You Use a Revocable Living Trust?

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