Getting A Handle on Planning After the Birth of a New Baby

Congratulations on your newest addition. There are many different things to think about in the wake of becoming a new parent but one of the most important is putting an emergency fund. The U.S. Department of Agriculture shares that the cost of raising a child up to age 18 is more than $230,000 for a married couple of little income with two children. Your own financial house needs to be in order before you can provide for your children. A starter emergency fund of $500 or so can help you in the event that a sudden and small expense crops up.       
You’ll eventually want a bigger fund but it could take several years to get there. You will also likely need life insurance as well. Young parents will typically need up to 10 times their income in terms of coverage. You can boost your emergency and retirement savings until those accounts are on track. If you still have money left over after that, consider contributing to a 529 college savings account.
Furthermore, you will want to update all of your estate planning documents after welcoming a new loved one into your family. You’ll need to ensure that your will includes stipulations about who should step in in the event that you pass away to care for your minor child. A will is the only way to name such a person and it needs to be formally documented in case something ever happens to you and/or your spouse. Consulting with an experienced estate planning attorney is recommended.

Having Trouble Talking Estate Plan with Your Family?

For most people, they recognize that relationships that they’ve built over the course of their life are more important than anything else. However, no matter how good of a saver, planner or investor you consider yourself to be, other people are almost always impacted by your actions and decisions including your failures and your successes. Those people are often the same ones you care the most about.

  • ThinkstockPhotos-610966362      What is in the will?
  •       What others need to know about your end of life choices?
  •       Who is empowered to make healthcare decisions for you if you are unable to do so?
  •       Are you currently living within your means?

A good introduction to a crucial family conversation is about values. This is because it is much easy for people to approach the subject talking about values than money. Relationships matter more than money and more than things and establishing your values gives you preliminary opener to talk about your long-term goals that you hope to achieve. Spouses and partners should also be prepared to openly discuss their savings, their retirement dreams and their plans.
Family values should be discussed with younger family members as well. Money related talks can be difficult to broach but can be extremely important for establishing a conversation that allows your loved ones to know your intentions. Finding the right estate planning lawyer in Virginia Beach can help you with your own decision-making.

More Americans Are Passing Away with Debt Than Ever

A recent study of 220 million consumers in Experian’s File One database, indicated that up to 73% of consumers are passing away with debt in high numbers. For those individuals who do not have a home loan, the average debt was $12,875. However, consumers with a mortgage carried approximately $61,554 in debt.
You may assume that debts are no longer your issue if you pass away, but that’s not true if there are assets inside your estate that may cover a portion or all of these debts. If you have communicated to your loved ones that you intend to give them particular assets, but those are seized and sold as part of your estate plan, you may wish to discuss your options for changing your estate plan with an experienced lawyer.
thumb_alternateThe types of debts most common included credit card balances, mortgage debt, auto loans, personal loans and student loans. Debt belongs to the deceased individual when he or she passes away. That means that creditors can pursue asset sold in the estate as part of their payment.
If there aren’t enough assets to satisfy debts, then creditors may lose out on all or some of their payments. But in the event that there are assets in the estate to pay out creditors, then your beneficiaries may actually receive nothing. This is why it may be important to discuss other opportunities such as a life insurance policy or advanced planning strategies with your knowledgeable estate planning attorney.

Three Changes in Your Life That Should Prompt You to Schedule an Appointment with Your Estate Planning Attorney

Aged copule is falling out and cannot reach the agreement
There are so many different circumstances that should warrant a meeting with your estate planning attorney. As estate laws or your individual life circumstances change, it is appropriate to update your estate planning documents to ensure that they are in line with your intentions. What follows are three of the most common changes in your life that could prompt a meeting with an estate planning attorney.
First of all, if you intend to access your retirement savings, whether it’s your 401(k) or your IRA, you should update your estate plan if these assets have previously been included in your estate planning. The second common reason that you wish to update your estate plan has to do with changing trustees or beneficiaries.
In the event that you wish to revise any of this information due to a family dispute or whether one of the trustees has passed away, you will need all of your documents to reflect these changes.
Finally, significant changes in your healthcare or the health condition of your spouse may require that you update your estate plan. Health care costs can impact your assets, so it is a good idea to review documents with the help of an experienced estate planning lawyer.

When It Comes To Relatives, More May Not Be Merrier But Are Welcome

Sharing shows caring.
A somewhat surprising survey conducted late last year by the website found that a majority of Americans would be willing, if not exactly thrilled, to share their home with either adult children or older parents.

“Additionally, most of those who have let an adult child move back home say they are glad they did so,” according to an article on the study by Richard Barrington, a senior financial analyst. “Americans’ apparent willingness to share their homes with other generations makes sense given recent trends in multigenerational living. The number of Americans in multigenerational households doubled between 1980 and 2012, reaching an all-time high of 57 million people, according to the Pew Research Center.
“Still, respondents to the study indicate that there are some limits to their willingness to accept these arrangements.”
Some of the findings of the survey included:

  • A third of parents say their kids will never be too old to live at home.
  • The vast majority would let a 30-year-old move in due to hardship.
  • The maternal instinct runs especially strong. If you’re an adult child who needs to ask about moving back home, your chances are pretty good with either parent. But for the best results, you may want to start with your mother.
  • Only about half are OK with an indefinite stay.
  • Most say a son-in-law or daughter-in-law is welcome, too. Parents don’t just welcome their own kids with open arms. Of those who would let a 30-year-old child move home, 72 percent say it would be OK if that child brought a spouse or other partner along as well.
  • Nearly a third of parents have already taken in adult offspring.
  • Few regret the experience of having an adult child at home. Of those who tried it, just 17 percent say they regret it.
  • Elderly parents evoke more stress than adult children. Forty-six percent say taking in either an adult child or an elderly parent would be equally stressful, but 39 percent say having a parent move in would be more stressful, compared with just 15 percent who say an adult child would be more stressful.

“In part, the lingering impact of the Great Recession continues to affect people’s living arrangements in the U.S.,” the article concludes. “Still, it seems that most American families are up to the challenge of dealing with these hardships.”

Caregivers Can Use Checklist For Loved One’s Legal Affairs

Caregivers have so very many responsibilities toward their loved ones, but some may not realize that keeping track of their legal affairs is almost on a par with watching out for their physical health, a recent article on the website of the AARP points out.
“The ultimate goal is to make sure you have all the decision-making rights you need to manage your loved one’s affairs,” Charles Sabatino, director of the American Bar Association’s Commission on Law and Aging, was quoted as saying.

Sabatino offered six tips to protect a relative’s legal rights as well as those of the caregiver.
Have the right documents
In addition to a will, make sure your loved one has a health care power of attorney as well as a power of attorney for financial decisions. These legal documents will allow an appointed person to make decisions for a frail or incapacitated relative.
Make a family plan
Discuss caregiving matters with all involved members of your family. Have your loved one put in writing who will be responsible for which caregiving roles — and have all parties sign. This is not a legal document, but it will help keep peace within the family by making everyone’s role clear
Organize important papers
Most people don’t realize how many legal documents they already have, or how many they will need for matters that arise. Important ones include birth and marriage certificates, divorce decrees, citizenship papers, death certificate of a spouse or parent, power of attorney, deeds to property and cemetery plots, veteran’s discharge papers, insurance policies and pension benefits.
Explore potential financial help
Investigate public benefits such as Social Security and Supplemental Security Income disability programs, veterans’ benefits, Supplemental Nutrition Assistance Program, formerly known as food stamps, Medicare and Medicaid. Also, examine your loved one’s private disability or life insurance coverage, their pension benefits, long-term care insurance and employee health insurance policy to see whether any of them cover home health visits, skilled nursing, physical therapy or any kind of short-term assistance that could include a mental health therapist or physical therapy.
Think beyond your loved one
If your parent is unable to take care of people who depended on him or her, you may need to take care of that role. This includes assuming responsibility for adult children with special needs.
Look for tax breaks and life insurance deals
Keep all medical expense receipts for tax deductions. Your family member may claim federal deductions for many medical expenses including a hospital bed or wheelchair, out-of-pocket expenses not covered by health insurance (drug costs and copayments), remodeling the home to make it handicapped accessible and a respite caregiver to give the main caregiver a break.

Divorce Should Trigger Automatic Estate Update

Divorce is often the most major disruption people will experience in their lives.

It need not also disrupt things after their deaths.
“If you have just gotten divorced, you may be focused on getting on with your life,” notes a recent story in The Wall Street Journal by Liz Moyer. “But make sure you also have updated the financial arrangements that kick in at your death. Failure to do so, or to alert all relevant parties to the changes, could result in certain assets and benefits unintentionally going to your former spouse or his or her family upon your death.”
The story focuses on a specific example, that of a court case in New York involving a woman who died in 2009, two years after divorcing her husband.
“The family of Robyn Lewis, who died five years ago at the age of 43, is battling her former in-laws, who stand to inherit a $200,000 home in Clayton, N.Y., even though she and her husband divorced in 2007,” according to the story.
Robyn Lewis executed a will in 1996 in which she left everything to her then-husband with his father named as second beneficiary.
“While under New York law the divorce automatically cut her ex-husband out of her will, it didn’t cut out her father-in-law, who presented a copy of the 1996 will to the court,” Moyer writes. “Ms. Lewis, according to her family, wrote a new will after her divorce that changed the beneficiaries, but family members were unable to locate it to offer it as evidence.”
“The lesson is to stay on top of your estate plans,” Elizabeth Devillers Moeller, a lawyer at D.J. and J.A. Cirando in Syracuse, N.Y., the firm representing the Lewis family, was quoted as saying. “That means drafting a new will—and making sure that appropriate people have copies of the document or know where to find it.”
“The key is to make sure your estate planning documents, not only your will but also your power of attorney and health-care proxy, clearly reflect your intentions,” stated Julian Modesti, a lawyer at Syracuse firm Menter, Rudin and Trivelpiece who is representing Ms. Lewis’s former in-laws.

Irrevocable Trust Could Have Saved Fuss Over Novelist’s Estate

The late Tom Clancy’s novels showed he had a remarkable grasp of military strategy.

His muddled estate shows he did not bring the same kind of acumen to his own personal financial affairs, according to a recent article on the website
Clancy passed away in Baltimore on Oct. 1, 2013. He was 66. Even after his death, the writer’s estate continued producing bestselling books and video games.
It also produced a great deal of rancor among his survivors, some of which could have been avoided by better estate planning, according to the article.
“Less than a year after Clancy passed away, a heated battle over his estate unfolded in a Maryland probate court,” states the story. “The estate, which is estimated to be worth $83 million and could gain even greater value as Clancy’s works continue to be produced and sold, is being contested by Clancy’s widow and his adult children who were born to his former first wife. Among the probate issues being deliberated in court, there’s a monetary amount adding up to $18 million in state and federal taxes, which Clancy’s widow is petitioning to transfer over to the late author’s four adult children.
“Furthermore, The Wall Street Journal reported on the existence of a family trust set up by Clancy to leave his widow about 66 percent of his estate. However, Clancy’s widow claims that the wrongful execution of the estate caused a miscalculation that called for $6 million in taxes assigned to the family trust. There also appears to be will left by Clancy as well as a codicil executed a few months before the author passed away. Apparently, Clancy’s widow also sought to replace the executor of estate, who in Maryland court is known as a personal representative, since the current attorney serving in that capacity wishes to spread the tax burden equally amongst all heirs.”
“It seems as if Tom Clancy did not plan his estate as carefully as the highly organized military operatives in his novels,” Rocco Beatrice, Managing Director of Estate Street Planners, LLC, a financial planning firm focusing on asset protection, wealth management and estate planning, was quoted as saying. “It appears that Clancy left a will that created separate trusts for his widow and his four children from his first marriage, and the presence of a codicil suggests that he may have changed his mind at one point. With this in mind, it is not too surprising to learn that the Clancy estate is now going through probate.
“The fact that there is probate battle over estate taxation tells us that Clancy did not use an irrevocable trust, which could have prevented the current courtroom fight and the unwelcome media attention into his family’s finances.”

Parents, Children Need To Have That Other ‘Talk’

When it comes to parent-child relationships, “the talk” isn’t only from mom and dad to their offspring, and it doesn’t only deal with the facts of life.

As noted in an article by Jane Bryant Quinn in the January AARP Bulletin, an important communication among family members involves financial matters.
“What should you tell your adult children about your money?” Quinn writes. “That’s a question all of us confront. Some people think it’s none of the children’s business. A few tell all. Most of us are probably somewhere in the middle, revealing some things and reserving others, depending on our own feelings about money and whether the facts might cause anyone distress.”
The author consulted members of the National Association of Personal Financial Advisors, who are all fee-only financial planners, and found, she writes, that they “lean strongly toward having ‘the talk.’ ”
“Start by telling the children where to find your will, health care directive, financial records and any life insurance policies,” Quinn advises. “If the will leaves them uneven shares, explain your decision. Often, the children will understand. If you can’t bring yourself to discuss their shares in person, at least leave a thoughtful, explanatory letter so that the siblings won’t start blaming each other for secretly currying your favor. Tell them, too, if one of your children has power of attorney or is the executor of your will.
“They should hear this from the parents,” Marc Roland of Dean Roland Russell Family Wealth Management in San Diego was quoted as saying. “If they learn only after your death, they might think that mom and dad loved one kid over another.”

Devices Make It Easier To Monitor Mom And Dad’s Activities

When adult children live far from their older parents, they’re likely worried about how active mom or dad is being.
As the saying increasingly goes, there’s an app for that.
“Technology is making it easier for us to monitor our loved ones,” according to a recent story in The Washington Post by Matt McFarland.

The story goes on to examine products from two companies that enable caregivers a way of remotely staying on top of how well older loves ones are doing.
“GreatCall, which offers devices that keep the elderly in touch with their caregivers, has partnered with an artificial intelligence company to send automated reports to concerned children and grandchildren,” according to the story. “The idea is to empower the elderly to live more safely on their own, while easing the worries of caregivers.
“Automated Insights, which specializes in turning mountains of data into plain English, will be providing weekly recaps to caregivers, so they have a better idea of how their loved one is doing. While a grandparent might at times be reluctant to share bad news, the device and automated emails never mince words. Automated Insights’ algorithm is currently used for generating everything from snarky fantasy football recaps to write-ups on”
“We’re able to show some of the promise of what is going to be possible in the future as we get access to data that’s available on other devices, sensors or things of that nature,” Automated Insights chief executive Robbie Allen told the writer. “We’re able to tell a story about data in a way that’s engaging and provides a layer of value on top of that data.”