In our last post, we busted two of the three most common estate planning myths about only the rich needing estate planning and that you don’t need to plan because your spouse will get everything. If you didn’t catch that post, give it a read to learn why those statements are totally false! Today, let’s bust the third and fourth most common myths.
Many business owners can’t imagine a life without the business they built, so they often postpone planning for their own retirement and the sale or transfer of the business. That doesn’t work out well.
There are steps to take when business owners decide to actively engage in planning for their business to continue to thrive after they step down. This article from Forbes, “Eight Factors to Consider before Retiring from Your Business,” offers some useful tips. [Read more…]
People, who own their own homes, especially when the mortgage is paid off, often think they should add their adult child or children to the deed so the asset passes to their heir(s) without going through probate. However, this seemingly simple step could lead to a few issues, one of which is making you ineligible for Medicaid for a period of time. That is just the beginning, as reported in a recent article from nj.com, “The risks of changing your home’s deed.”
Why not spend some time now, while the year is young, taking the steps that will bring you closer to your financial goals for 2018 and beyond? Kiplinger has some great pointers to share in the recent article, “12 Smart Financial Moves for the New Year.”
1. Increase your retirement-savings contributions. If you’ve been maxing out your 401(k) or are turning 50 this year, up your automatic contributions to take advantage of higher limits and catch-up opportunities. You should also set up automatic monthly contributions from your bank account or paycheck into an IRA. This will allow you to save before you have an opportunity to spend it.
2. Make a charitable-giving plan. When you earmark funds for charity, think of the ways you can contribute—by writing a check, giving appreciated securities, giving to a donor-advised fund, or making a tax-free transfer from your IRA (if you’re older than 70½). Ask your estate planning attorney how the new tax law may impact your charitable-giving strategies.
3. Make the most of the new tax law. Speaking of the new tax law changes, look at how it may affect your charitable giving, IRA conversions, home-equity loans, medical-expense deductions and 529 college-savings accounts. There are some key financial strategy changes. Speak with your estate planning attorney to learn if there are new opportunities for your estate plan. Don’t miss out!
Outdoorsman Carl Bergstresser made it very clear by signing a will, days before he died in July 2016, that stated that he wished his 11.6 acre property, located on the Braden River to be maintained in perpetuity as a nature preserve.
The Sarasota Herald-Tribune reported in its recent article, “Outdoorsman’s siblings contest how trustees managed his estate,” that Bradley Magee, the attorney who drafted the will, said the Osprey-based Conservation Foundation of the Gulf Coast assumed ownership of the land. However, Bergstresser’s dying wish remains the subject of a prolonged legal battle. This question is further complicated by the uncertain outcome of an effort by Manatee County to acquire adjoining land from a developer to create an even larger nature preserve.
Bergstresser’s siblings, Diana and Phil Bergstresser, brought a probate court case that questions how the executors of their brother’s estate managed the assets which he left in addition to his homestead. They claim they’ve been deprived of most of the assets that would’ve remained in the estate, other than the donated land. Aside from his home and land, Carl’s estate is valued at $314,516.
Dated July 16, 2016, Bergstresser’s will states: “My homestead and all acreage owned adjacent to my homestead shall be donated or otherwise transferred to a nonprofit organization or government entity that will maintain such property for wildlife conservation and general conservation purposes on a perpetual or long-term basis.”
Bergstresser permitted his “personal representatives” named in his will—Magee, Phillip St. John, and Donald “Troy” Smith—to choose the nonprofit that would receive his property. The trustees paid a $32,000 mortgage and a $59,000 line of credit that Bergstresser owed from his remaining estate. The siblings say the will doesn’t state that Bergstresser wanted the debt paid out of the money that otherwise would’ve gone to his heirs and that his executors made the payments “without getting a court order.”
Their lawyer also claims the executors took $46,000 from the estate for their “personal representatives’ fees” and about $66,000 for attorney fees—an amount of attorney fees paid by the estate they feel is “excessive.” He also said the court ordered the foundation to return $47,000 to the estate that the trustees paid it as a “stewardship fee” for costs from the closing on the property and putting it in a conservation easement.
Another unknown is an effort to get Manatee County to acquire 32.38 adjoining acres for which a developer received approval for a subdivision. When initially proposed, residents in the neighboring area strongly objected. They argued that the heavily wooded site on the Braden River is an oasis for an abundance of wildlife. They asked the county to acquire it for a nature preserve.
The developer granted the Conservation Foundation an option to buy that land for $3 million, and the foundation is willing to transfer that option to the County.
When Bergstresser learned that he was terminally ill, he decided that he wanted his land to be part of the proposed Braden River Nature Preserve. Now that the foundation has ownership of his property, it will classify it as a “conservation easement” and it will be preserved as he had wished.
Reference: (Sarasota) Herald-Tribune (December 15, 2017) “Outdoorsman’s siblings contest how trustees managed his estate”
It’s hard to imagine during your 30s or 40s that retirement will actually arrive. Life is busy, with careers, raising families and saving for retirement, including investing in IRAs, 401(k)s and other savings vehicles. During those years, your estate plan is a necessary part of planning for retirement and protecting your family with documents that include a will, health care proxy and power of attorney.
As Marco Eagle’s article, “Money Talks: Estate planning tools” explains, the next phase is the retirement stage, when the focus shifts from accumulation to preservation and maintenance of the nest egg.
Blended families are no longer limited to television sitcoms. The Pew Research Center reports that 41% of all Americans have at least one step-relative of one kind or another. As many as 1,300 new stepfamilies or blended families are created daily, according to the Stepfamily Foundation. But blending families includes decisions about finances, and that includes estate planning issues.
The Miami (OK) New-Record’s recent article, “4 tips to resolve financial concerns in stepfamilies,” provides some tips and answers for issues within stepfamilies.
The younger you are, the more time you have to make all the right moves when it comes to your 401(k) retirement savings accounts.
There’s good news and bad news when it comes to statistics about retirement and American’s use of 401(k) accounts, as reported in Kiplinger’s article, “The 7 Most Common 401(k) Mistakes to Avoid.” The good news starts with a report from the Investment Company Institute: the entire 401(k) system had $4.8 trillion in assets as of March 2016, representing 52 million active plan participants, former employees and retirees. There’s also good news from Vanguard also, which reports that the average 401(k) balance reached $101,650— which is a record high.
Today’s guest blogger is Kim Carpentier, the owner of Valley Credit Builders. You have undoubtedly heard the news of the Equifax data breach. Kim shares some of the background and nuances of the credit industry and the immediate steps you need to take to ensure your credit is best protected for years to come.
Unfortunately, the Equifax data breach is something that will affect the American credit system for years to come. Whether you have been comprised or not, chances are that the original figure of 143 million affected consumers is likely to grow as the investigation moves forward.
Here are four easy steps that you can take to protect yourself:
1. Freeze or lock your credit file. This, I believe, is going to be the new normal and I consider this mandatory. You can add and remove a credit freeze very easily through the credit bureaus’ websites. A security freeze will prevent potential lenders from accessing your credit file, without your permission. This will stop fraudsters from creating additional credit accounts, on your credit, for their use. There is a charge for these freezes which varies based on state residency. In Massachusetts, the charge is $5 per freeze and unfreeze. I would suggest, that due to the extent of this breach, future consideration may end up reducing – if not eliminating – this charge. Your credit report will only be accessible by unfreezing the account. Do not allow the nominal charge to prevent you from freezing your accounts. Keep in mind that if your credit file or identity is compromised, it will end up costing you much, much more.
Information on how to initiate a security freeze for the three major credit bureaus may be found here:
The Chicago Tribune also has a helpful article on freezing your credit file, which may be found here: “Here’s how to freeze your credit to protect your identity.”
An important note: calling the credit bureaus will only end up in frustration. I strongly suggest using the links above. Also, DO NOT FORGET YOUR PIN NUMBER. This can be really frustrating in the future.
2. Monitor your credit reports. Credit monitoring services typically provide you with an updated credit report every 30 days. It is critical that you review these reports carefully and update them as necessary. In addition, please ensure that whatever monitoring service you use monitors the “dark” web.
3. Monitor your financial accounts. Visit your online bank and financial accounts, and set up any alert features they may have, if you have not already done so. This could help save some time and keep you notified of any unusual events when they occur.
4. Stay alert. Pay attention to and retain any mail you receive that is unfamiliar to you, such as notices from the IRS regarding your taxes or any bills from unknown lenders.
The threat of identity theft posed by the Equifax breach is likely to affect all of us for years to come. Please don’t hesitate…protect yourself!
Kim Carpentier is the owner of Valley Credit Builders. Since 2010, he has assisted hundreds of individuals, helping them to “balance the score” against the unfair practices of the three major credit bureaus. It is estimated that over 25% of all credit reports have significant errors. These reporting errors negatively impact the individual’s credit score, thereby impacting their ability to qualify for proper financing, potentially costing them thousands of dollars in extra interest charges.
He understands the importance of the recent Equifax data breach, one of the 3 major credit bureaus, and how it will affect every aspect of the American credit system, for years to come. Not only will this affect the individual’s world of credit but will negatively impact many other sectors of the credit world such as; the banking industry, auto industry, credit card industry and small businesses.
Seventy may not exactly be the new 50, but it’s not that far off. According to a recent article in Money,“Happy 70th Birthday, Boomers!” researchers say that members of this generation – born from 1946 through 1964 – are healthier from a physical and mental standpoint than previous generations. This also means that the oldest boomers, who will turn 70 in 2016, are more likely to see their 85th birthday. Their grandparents at 70 had only a 28% chance to reach age 85. Want to feel even better? More than one in 10 of the oldest members of the baby boom generation will live to age 95, compared to their grandparents’ generation of only three in 100. [Read more…]