Independent, Fee-Only Financial Advisor

Independent, Fee-Only Financial Advisor

Friday, August 31, 2018

Ain't No Way you should die without an estate plan

Aretha Franklin, the Queen of Soul, died August 16, 2018. In her funeral, not a detail was overlooked: she had three outfit changes before her final burial and the six and a half hour service itself featured an impressive roster of artists performing and VIPs eulogizing. Unfortunately, not every aspect of her passing was so well planned.

Aretha Franklin died without a will.

According to her children, there was no will, no trust and otherwise no plan for her estate when she died. If you have ever sat down with Nancy or I for a financial planning session, you know that this is NOT a good situation to leave your loved ones in when you die.

When you die without a will (known as "dying intestate" in legal terms) your assets are subject to state laws. Not only do these vary depending on where you die, but they can change without anyone bothering to tell you! For terminology, please note that your estate is generally the collection of assets that you leave behind. If you die intestate, your property would be divided up by a court, in accordance with the state law. In many states, this means that your spouse and children, if you have any would share in what you leave behind. If you don't have a spouse or children, it moves generally to your next of kin. If nobody can be located that has a claim on your estate, your property goes to the State.

While you may not care too much about what happens to your assets when you die, it makes sense that you exercise some control over it besides leaving it up to the courts. Even if you don't think your estate will be worth anything, you should make a plan. Leaving matters up to the courts will undoubtedly incur high fees and drama. If you're worried about your children fighting over and squandering your assets, just think about what will happen when each of their lawyers gets to take a generous fee too!

How do you start estate planning? While this post is by no means an in depth guide to estate planning, carefully consider the assets you have: bank accounts, real property, business interests and future earnings like music royalties. Also consider who will be the beneficiaries of your estate: children, spouses, friends or charities! Depending on how large or complex your situation is, you will want to get a will or possibly et up a trust.

While this post is also definitely not legal advice, my general considerations for when you need a trust are when your estate includes complicated assets like business interests, hard to sell assets like collectibles or less common things like contracts and music royalties. You may also need a trust if your beneficiary arrangement is complicated - if you have children from multiple marriages, the amounts people receive are contingent on future estate values, you want to set up a foundation, or needing to provide for care of special needs children. Even if your estate is simple and your beneficiaries easygoing, a trust may make sense if you have a very large estate and you anticipate it being over the estate exemption for tax purposes. Extra careful planning and a third party trustee are very useful in all three of these situations.

Aretha Franklin died without a will or a trust. Her $80,000,000 estate will now be in the hands of a court, subject to state law that were not crafted with her needs in mind. Her beneficiaries will have to pay lawyers and negotiate over details, even in the most amicable family, these are not easy discussions to have. If you have ever heard nightmare stories of family disputes - it is likely that they came from insufficient or out-dated estate plans.

So, (please Queen Aretha forgive me) R-E-S-P-E-C-T the importance of estate planning and start thinking about the afterlife of your assets now!

Also enjoy this beautiful classic: I Say A Little Prayer.

Please remember that absolutely no part of this post should be considered personal financial or legal advice. Please consult a financial advisor or lawyer for such advice.

Friday, August 03, 2018

Money Notes Episode 8 - What Is An Annuity?

Here is the eighth episode of our podcast series: Money Notes!

What is an annuity and do you really need one? In this episode of Money Notes, Nancy and Ryder dive into the idea of an annuity providing a lifetime income, and how that works out in the real world. They discuss the structure and limitations of annuity products such as high fees and surrender charges, which may make them far less desirable than face value. 

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Money Notes Episode 7 - Scams

Here is the seventh episode of our podcast series: Money Notes!

How to buy oceanfront property in Arizona and more in this episode of Money Notes! Susan and Jackie discuss different types of scams and how to look for them. They begin with talking about email scams, credit card scams, and how to avoid such atrocities. As Susan likes to say, “if it’s too good to be true, it’s not true.” They explain the differences between using credit cards instead of debit cards for protection and the benefits to credit reports, along with how to avoid false charities. 

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Money Notes Episode 6 - Wills and Advance Directives

Here is the sixth episode of our podcast series: Money Notes!

Death is inevitable, but let’s not talk about that. In this episode of Money Notes, Nancy and Susan  look forward to that sweet surrender while discussing wills and advanced directives. They explain the importance of wills and what can happen if you don’t have a will, paired with what is not apart of wills, TODs and PODs. Then they show importance of advanced directives, what they are, and why you need one. 

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Money Notes Episode 5 - Interest Rates

Here is the fifth episode of our podcast series: Money Notes!

How do the bond market and Federal Reserve control the world? Ryder and Jackie break down the complicated topic of interest rates and make it both digestible and entertaining in this episode of Money Notes. They discuss the correlation between the bond market and the interest rate securities along with the impact of supply and demand. 

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Money Notes Episode 4 - Credit Score

Here is the four episode of our podcast series: Money Notes!

Credit makes your world go around! In this episode, Nancy and Ryder explain how the credit system works and how lenders look into risk. The episode covers FICO score, credit monitoring companies such as Equifax, and how to develop strong credit. Nancy and Ryder clarify the credit utilization ratio, credit limits, and credit lines. 

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Money Notes Episode 3 - The End Of The World!

Here is the third episode of our podcast series: Money Notes!

Should you be a gold bug and prepare your portfolio for the end of days? In this episode of Money Talks, Ryder and Susan look into how to diversify a portfolio in case of an economic or world disaster. They explain options like the Swiss Franc, long-term US Treasuries, along with the world coming to an end by an asteroid. 

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Money Notes Episode 2 - PIGGY Plan-It!

Here is the second episode of our podcast series: Money Notes!

What is a Prudent Investor and why do they Getting Going Young? In this episode of Money Notes, Nancy, Susan, and Ryder dive into the overview of their book P.I.G.G.Y. Plan-It. Through the episode, they explain topics such as how to choose a financial advisor, commission vs. fees and how a fiduciary serves your best interests. 

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Money Notes Episode 1 - Social Security

Here is the debut episode of our podcast series: Money Notes!

Is Social Security the “Sacred Cow” of American Politics and will it last?  In this episode of Money Notes, Nancy and Jackie dive into the ins-and-outs of Social Security. Find out about full retirement age, delayed retirement credit, and hear about its sustainability. 

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Podcast Tease...

It's coming...

Please note that this post is solely for me to learn how to host these files.

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