estate planning http://www.wisebread.com/taxonomy/term/8328/all en-US Don't Make These 5 Common Mistakes When Writing a Will http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-make-these-5-common-mistakes-when-writing-a-will" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/blue_ballpoint_pen_and_a_last_will_and_testament.jpg" alt="Blue ballpoint pen and a last will and testament" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's a task no one likes to think about: With everything going on in our lives, do we really want to add our own mortality to the list of our concerns? As unpleasant as it may be to consider, having a will is a critical way to take care of your family should you pass away. It will also ensure that your wishes are carried out in a way that aligns with your values. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will?ref=seealso" target="_blank">What You Need to Know About Writing a Will</a>)</p> <p>For most of us, it's a fairly straightforward process. We have the options of free online kits, using a service like <a href="https://www.legalzoom.com/sem/ep/last-will-and-testament.html?kid=a32c64dc-b16f-422e-bdfd-cc47896bf276&amp;utm_source=google&amp;utm_medium=cpc&amp;utm_term=+wills_on_line&amp;utm_content=204280076284&amp;utm_campaign=EP_%7C_LWT&amp;gclid=CjwKCAjw5PDLBRB0EiwAh-27Mu9zeexWTPYuaCbSnpbP3828RuJ0dJ0x4mT0AbnOJHtPkqJltQzFlxoCaGMQAvD_BwE" target="_blank">LegalZoom</a>, or consulting with an attorney. No matter which option you choose, here are some common mistakes to avoid when creating a will.</p> <h2>1. Not giving anyone responsibility</h2> <p>When a will is executed, there must be a person assigned to settle the will when the time comes. This person is known as an executor, and that person makes sure that your wishes are carried out exactly as you intended. It's very important for you to select a responsible person you trust, and get that person's permission to name them as the executor. This is not something you want to be a surprise.</p> <p>Also, you may want to strongly consider naming a second executor in the event that something happens to the first person you name, or if he or she is unable to serve as executor for any reason. (See also: <a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate?ref=seealso" target="_blank">The Fair Way to Split Up Your Family's Estate</a>)</p> <h2>2. Not taking care of the kids</h2> <p>If you have children, it's critical that you select who will become their guardian(s) and communicate that to the named guardians as well as to other family members. I have seen this become a bone of contention before and after someone's passing, and it's a heartbreaking ordeal for everyone involved. Unfortunately, the people who suffer most in the battle are the children. It can be a difficult thing to communicate these wishes to your family, but it is far easier to deal with that difficulty now than to have a potential custody battle unfold after you're gone.</p> <p>You must also consider how to give your assets to your children if they are still minors. This is a very complicated financial and legal issue, though there are a number of different options that you can put in place to properly take care of it. Creating trusts or accounts under what's known as the Uniform Transfers to Minors Act (UTMA) are avenues worth exploring.</p> <h2>3. Not knowing your state laws</h2> <p>Wills are state-specific and different states have different laws for them. The state that executes your will should be the state where you claim legal residence even if you have homes or spend significant amounts of time in different states. FindLaw provides a clear overview of <a href="http://statelaws.findlaw.com/estate-planning-laws/wills.html" target="_blank">laws that govern wills</a> in the different states.</p> <h2>4. Not signing the will or having a witness</h2> <p>You've done all of the work to create a will. Make sure to sign it and have a witness sign it in accordance with your state's specific laws. If a will is left unsigned by you or a witness, there is a high risk that it won't be honored. Also bear in mind that you must be of sound mind and body, and you must create this will without being threatened or pressured by someone else to do so. If either of these points could be disputed, a legal battle could ensue before the will is executed.</p> <h2>5. Not making it accessible</h2> <p>Make sure your completed and signed will is easily accessible when the time comes, particularly by your executor. There are a few options for this. You can keep it in a secure location such as a safe in your home or a safe-deposit box. You may also choose to provide a copy of your will to your attorney, accountant, or financial adviser if you feel comfortable doing so. Though you are not required to file your will with the court or place it into public record, some courts may provide the option to store it for you. This last possibility is a good option if the court in your local jurisdiction allows it.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/christa-avampato">Christa Avampato</a> of <a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-reasons-you-need-to-include-pets-in-your-will">6 Reasons You Need to Include Pets in Your Will</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-before-you-remarry">8 Money Moves to Make Before You Remarry</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will">What You Need to Know About Writing a Will</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-things-i-learned-about-money-from-famous-peoples-wills">6 Things I Learned About Money From Famous People&#039;s Wills</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family assets beneficiaries estate planning executor last will and testament minors state laws will Tue, 19 Sep 2017 08:30:10 +0000 Christa Avampato 2021475 at http://www.wisebread.com 9 Things to Know Before Retiring Abroad http://www.wisebread.com/9-things-to-know-before-retiring-abroad <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-things-to-know-before-retiring-abroad" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/senior_couple_on_a_vacation.jpg" alt="Senior couple on a vacation" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For an increasing number of Americans, moving abroad to enjoy retirement is an enticing idea. There are lots of reasons that lead people to make this choice, including better weather, cheaper health care, and an increased standard of living at a lower cost. But it's not a decision to be taken lightly. There are a number of important considerations that retirees sometimes overlook. Here are nine things you must know before retiring abroad. (See also: <a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month?ref=seealso" target="_blank">5 Countries Where You Can Retire for $1,000 a Month</a>)</p> <h2>1. U.S. tax laws are still applicable</h2> <p>Some retirees are under the impression that if you skip the country, the IRS somehow magically stops requiring you to file your income taxes. However, regardless of where you decide to live in the world, if you remain a U.S. citizen, your worldwide income is subject to U.S. taxes. Failing to pay your taxes is a serious offense with sometimes dire consequences that aren't worth risking, and ignorance is not a mitigating factor. (See also: <a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad?ref=seealso" target="_blank">Don't Let These Expenses Spoil Your Retirement Abroad</a>)</p> <p>If you are a U.S. citizen or green card holder who lives outside of the U.S. for 330 days during any period of 12 consecutive months, you may be able to apply for the Foreign Earned Income Exclusion. This allows you to exclude from your taxable income a certain amount of income that you earn abroad. The exclusion amount changes each year as it adjusts for inflation. For 2017, the amount is $102,100.</p> <p>So, if you live abroad for 330 or more days in 2017 and earn under $102,100, you may not have to pay taxes. This exemption is not automatic and you must apply for the exclusion. Check the <a href="https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion" target="_blank">IRS website</a> for more details. Keep in mind that even if you don't owe any money, you are still required to file a U.S. tax return every year.</p> <p>In addition to U.S. taxes, you'll need to find out if you're subject to taxes in the country you move to. Check with local tax authorities to learn more. (See also: <a href="http://www.wisebread.com/5-countries-that-welcome-american-retirees?ref=seealso" target="_blank">5 Countries That Welcome American Retirees</a>)</p> <h2>2. Medicare doesn't cover you outside the U.S.</h2> <p>The first thing to be aware of is that, except in rare instances, any medical expenses you incur when you're not in the United States cannot be paid for with Medicare. That said, it may still be worthwhile to sign up for Medicare Part A (hospital coverage) because it is free. If you plan to move back to the U.S. or make frequent trips back, it may also be worth paying the premium for Medicare Part B, which covers doctor visits and outpatient care. To determine whether this will be of benefit to you, you should thoroughly check the information provided on the <a href="https://www.medicare.gov/people-like-me/outside-us/outside-us.html" target="_blank">Medicare website</a>.</p> <p>Keep in mind that health care is often much less expensive in other countries. Mexico, for example, is more than 50 percent cheaper for doctor visits, prescription drugs, and health insurance. (See also: <a href="http://www.wisebread.com/how-almost-anyone-can-afford-to-retire-in-mexico?ref=seealso" target="_blank">How Almost Anyone Can Afford to Retire in Mexico</a>)</p> <h2>3. Currency fluctuations may affect your bank balance</h2> <p>Even if your monthly income remains the same, the amount that this translates to in your local currency may go down. This is entirely dependent on the strength of the U.S. dollar at any given time, which could have a large impact on your finances, particularly if you're on a fixed income.</p> <p>Remember, however, that this could also work in your favor if the dollar strengthens against your local currency, allowing you to purchase more of the local currency. Though you can't control currency fluctuations, you should have a contingency in place for if and when they do happen. (See also: <a href="http://www.wisebread.com/retire-for-half-the-cost-in-these-5-countries?ref=seealso" target="_blank">Retire for Half the Cost in These 5 Countries</a>)</p> <h2>4. You can probably get Social Security &mdash; and maybe more</h2> <p>You can still receive Social Security payments in most countries around the world but it's important to check the <a href="https://www.ssa.gov/pubs/EN-05-10137.pdf" target="_blank">list of excluded countries</a> before settling on a location. If you've lived and worked abroad for part of your career, you may also be able to combine retirement credits from the U.S. and another country where you worked, for a larger benefits payout. The other country must be among more than two dozen that has a <a href="https://www.ssa.gov/international/" target="_blank">reciprocal agreement</a> with the U.S.</p> <h2>5. You need to put a plan in place for when you die</h2> <p>There are two main considerations for putting a plan in place for the event that you pass away while you're abroad. First, you should know that the U.S. State Department will not pay for the return of your remains or ashes. Second, different countries have different regulations around what happens to your assets.</p> <p>You need to have funds in place if your wish is to have your remains repatriated to the U.S., as this can be a costly and time consuming process. You should make yourself familiar with local succession rules, as some countries won't automatically honor your wishes for assets that lie within them unless you have an eligible will.</p> <h2>6. You can probably still vote in the U.S.</h2> <p>Just because you no longer live in the U.S. doesn't mean you don't take an interest in the U.S. political situation. In the vast majority of circumstances you are still eligible to vote absentee in federal primary and general elections. In some states, you're even able to vote for state and local office candidates and referendums.</p> <p>You will need to <a href="https://travel.state.gov/content/passports/en/abroad/legal-matters/benefits/voting.html" target="_blank">submit a new Federal Post Card Application</a> each year in order to qualify, and you should do so at least 45 days before an election. But from there it's a simple process. You'll be able to submit your vote either by mail or electronically depending on where you're registered.</p> <h2>7. You might not like it</h2> <p>Unfortunately, the reality doesn't live up to the dream for some retirees relocating abroad. There are so many factors to consider that it's almost certain that issues will arise that you've not even thought about, from financial problems to culture shock.</p> <p>It's best to try a place out for a while before taking the plunge and relocating your whole life. Even if it's a location you know well from having visited over the years, residing somewhere permanently is different from vacationing there. Just bear in mind that it may not work out as you hoped.</p> <h2>8. Relocation can be extremely expensive</h2> <p>When it comes to calculating just how much it's going to cost you to live in a foreign country, it's important to include relocation costs. Shipping possessions like furniture can be costly, but not transporting them may also be expensive if you have to buy new items when you arrive.</p> <p>If you have pets there may be <a href="https://www.cdc.gov/features/travelwithpets/index.html" target="_blank">vaccinations and quarantine</a> periods that you have to shell out for, as well as separate transport costs. In addition, your own visa application could be expensive and complicated depending on the location. Look out for those hidden costs.</p> <h2>9. Things will be different</h2> <p>It's stating the obvious, but no matter how familiar the country is that you're retiring to, things will be different from the U.S. Everything from the local customs, to what groceries you can get in the supermarket will be new.</p> <p>You'll more than likely be away from close friends and family and there will probably be a sharp adjustment period. It's important not to underestimate the effects this could have on your happiness when making what will be one of the most significant decisions of your life.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-countries-where-you-can-retire-for-1000-a-month">5 Countries Where You Can Retire for $1,000 a Month</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-questions-financial-advisers-hear-most-often">8 Questions Financial Advisers Hear Most Often</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-these-expenses-spoil-your-retirement-abroad">Don&#039;t Let These Expenses Spoil Your Retirement Abroad</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-age-milestones-that-impact-your-retirement">6 Age Milestones That Impact Your Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-airline-rewards-programs-for-trips-to-europe">The Best Airline Rewards Programs for Trips to Europe</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement Travel abroad currency estate planning international laws mediare overseas politics social security taxes voting Mon, 11 Sep 2017 08:30:05 +0000 Nick Wharton 2017865 at http://www.wisebread.com Are You Putting Off These 9 Adult Money Moves? http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-you-putting-off-these-9-adult-money-moves" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-499784815.jpg" alt="stop putting off these adult money moves" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You are not a kid anymore. It's time to start acting like an adult, especially with regard to your money. Procrastination won't help you on the path to financial freedom, so it's time to grow up, and examine whether you've been avoiding these adult money moves.</p> <h2>1. Bolstering your emergency fund<strong> </strong></h2> <p>When you are young, you may not need a lot of extra cash on hand. After all, you may feel like your life is simple enough that very few emergencies would result in financial ruin.</p> <p>As you get older, though, there are more costly events that can crop up. You may own a home and face major, unexpected repairs. You may have children with unexpected medical needs. And because your overall expenses are higher, you'll be hurt more if you or a spouse loses their job.</p> <p>While it's important to invest for the long-term, it's also crucial that you keep enough cash on hand to cover emergencies. At least three to six months' worth of income is a good rule of thumb. Without this savings, you may find yourself in debt or tapping into retirement savings to get by. (See also: <a href="http://www.wisebread.com/4-new-reasons-you-need-an-emergency-fund?ref=seealso" target="_blank">4 New Reasons You Need an Emergency Fund</a>)</p> <h2>2. Tracking your money</h2> <p>When you're young and living large, you have no idea where your money is going. You are too busy having fun to worry about it. But now you're an adult, and it's time to actually assess what you are spending your cash on.</p> <p>It's impossible to budget and save if you have no idea where to cut expenses. To begin tracking your money, analyze your bank and credit card statements to view all of the purchases you've made. Enter these into a spreadsheet, or use an account consolidation website such as Mint.com to help you. Once you start tracking, you'll have a good idea of where you've been wasting money and where you can start cutting down on your costs. (See also: <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=seealso" target="_blank">Build Your First Budget in 5 Easy Steps</a>)</p> <h2>3. Sticking to a budget</h2> <p>Once you get a handle on where your money is going, it's time to develop a system that will allow you to save money. The only way to avoid debt and save for the future is to keep expenses below what you earn. This may mean making tough decisions and reducing nonessential spending.</p> <p>You may have to eat out less. You may need to cancel your cable TV or baseball season tickets. You may need to forgo that trip to the Caribbean. Set a budget for groceries each week, drive less, and clip more coupons. None of this is fun, but it's what adults do if they want to achieve financial freedom.</p> <h2>4. Getting your credit card debt under control</h2> <p>Early on in life, your credit card debt may just seem like a number you can hide from yourself. But at a certain point, it's something that truly impacts your ability to build wealth and obtain financial freedom.</p> <p>When your debt is high, this impacts your credit score, which in turn impacts what you will pay for things like a mortgage and auto loan. In essence, debt can become a downward spiral of pain if you don't nip it in the bud early. Be an adult, and start paying down that credit card debt.</p> <p>Try to go after the debt with the highest interest rates first, then go from there (otherwise known as the avalanche method). Begin using cards more sparingly and rely instead on good old cash as much as possible. Soon, you'll see your credit score rise and your overall financial picture will look much rosier. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>5. Saving for a home</h2> <p>Homeownership isn't for everyone, but there will likely come a time in your life when it makes sense to build equity in real estate rather than spend money on rent. Owning a home gives you a sense of pride, a sense of stability for your family, and is a good financial move in the long run &mdash; as long as you can manage the monthly payments.</p> <p>To make a sensible home purchase, traditional expertise has advised saving enough money for a down payment of at least 20 percent. So if you are eyeballing a $250,000 home, for example, that means amassing $50,000 &mdash; a sizable amount. While you aren't required to put 20 percent down, doing so can help you avoid having to pay private mortgage insurance, or PMI, until you build up equity in your home. Saving for a down payment is not an easy task, and may take many years, so it's best to start as soon as possible. (See also: <a href="http://www.wisebread.com/4-easy-ways-to-start-saving-for-a-down-payment-on-a-home?ref=seealso" target="_blank">4 Easy Ways to Start Saving for a Down Payment on a Home</a>)</p> <h2>6. Investing toward retirement</h2> <p>The notion of saving for your 60s might seem ridiculous when you're in your 20s. But you can't put off retirement savings forever, and this procrastination can really hurt you down the line. The earlier you start saving, the more money you will have when it's time to leave the workforce.</p> <p>If you're into your 30s or 40s and have little saved for retirement, you need to start socking money away right now. Take advantage of your employer's 401(k) plan and any of your company's matching contributions. You can also open an individual retirement account (IRA). Max out these accounts, if possible. The sooner you start investing, the more time your money has to grow. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>7. Saving for your kids' education</h2> <p>It's hard to imagine saving for college when you have no children yet, or your kids haven't even left elementary school. But with college costing tens of thousands of dollars, and getting more expensive every year, you shouldn't put off saving for too long if you plan to help your children with some of the expense.</p> <p>It's possible to begin saving before your child is even born, and there are many investment accounts, including the popular 529 college savings plans, that offer great tax advantages to those that save for education. It's not wise to save for college costs at the expense of your own retirement, but if you have the ability to put aside money for both, do it sooner rather than later. (See also: <a href="http://www.wisebread.com/5-smart-places-to-stash-your-kids-college-savings?ref=seealso" target="_blank">5 Smart Places to Stash Your Kid's College Savings</a>)</p> <h2>8. Getting properly insured</h2> <p>Proper financial planning isn't just about accumulating wealth, but protecting it. The best way to protect your assets is by insuring them at appropriate levels. Do you own a home? Make sure you have homeowners insurance to protect the structure and everything inside. Do you and your family members have health insurance to protect against illness or injury? And do you have life insurance so that your family will be financially OK if something were to happen to you?</p> <p>Insurance can sometimes seem like a waste of money if you don't use it. But when something bad does happens, you'll be massively grateful you have it. (See also: <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people?ref=seealso" target="_blank">5 Reasons Why Life Insurance Isn't Just for Old People</a>)</p> <h2>9. Crafting a will</h2> <p>Do you know who gets your assets if you unexpectedly pass away? Do you know who will take care of your children if you are no longer around? Have you given any thought to whether you'd like to be kept on life support if you are the victim of an accident? These are unpleasant things to think about, but they are important considerations.</p> <p>In the absence of a will or other documents that outline your wishes, family members may be left to make challenging decisions. The money and assets you wished to pass on to specific relatives may not be passed on according to your plans. Writing a will may not seem like a crucial thing to do when you are young, but it becomes more important as you get older, expand your family, and accumulate assets. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will?Ref=seealso" target="_blank">What You Need to Know About Writing a Will</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fare-you-putting-off-these-9-adult-money-moves&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FAre%2520You%2520Putting%2520Off%2520These%25209%2520Adult%2520Money%2520Moves-.jpg&amp;description=Are%20You%20Putting%20Off%20These%209%20Adult%20Money%20Moves%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Are%20You%20Putting%20Off%20These%209%20Adult%20Money%20Moves-.jpg" alt="Are You Putting Off These 9 Adult Money Moves?" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-let-outdated-money-advice-endanger-your-money">Don&#039;t Let Outdated Money Advice Endanger Your Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-best-free-financial-learning-tools">9 Best Free Financial Learning Tools</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-online-forums-thatll-help-you-reach-your-financial-goals">9 Online Forums That&#039;ll Help You Reach Your Financial Goals</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting college costs debt down payments education estate planning investing life insurance money moves retirement saving wills Fri, 18 Aug 2017 08:00:05 +0000 Tim Lemke 2005241 at http://www.wisebread.com 7 Critical Money Mistakes People Make in Their 40s http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-critical-money-mistakes-people-make-in-their-40s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_calculating_budget.jpg" alt="Couple Calculating Budget" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The younger you are, the more time you have to bounce back from a financial mistake. As you inch closer to those retirement years, however, and as financial obligations expand, it's increasingly important to safeguard the assets you have &mdash; and to prepare for costly expenses that inevitably crop up as youth glides into middle age.</p> <p>The experts agree: Even 40-somethings who feel confident about their finances are likely to make a few money mistakes. Which are the most common? Here, the financial pros tell all.</p> <h2>1. An expensive home remodel</h2> <p>The average cost to remodel a few rooms is upward of $37,000, according to data compiled by Home Advisor. It could cost even more &mdash; as much as $125,000 &mdash; depending on the size and location of the home.</p> <p>Michael Frick, president of Promenade Advisors LLC, thinks that money could be much better spent by paying down an existing mortgage. &quot;Forty-somethings need to realize that retirement is only 20 to 30 years away in most cases,&quot; he said. &quot;Do they still want to have that large mortgage payment while they are retired on a fixed income? Will they even have enough retirement income to continue making those payments?&quot;</p> <p>Even worse, he added, is that many homeowners finance those pricey home renovations by borrowing from their existing home equity or &mdash; even worse &mdash; by raiding their 401(k) funds. The added monthly payments from a 401(k) loan can crimp the amount of money available to boost retirement savings during critical, high income-earning years.</p> <h2>2. Prioritizing kids' college over retirement savings</h2> <p>Most kids today expect their folks to pony up for the full cost of college, no matter which institution they choose. So says a 2016 <em>Parents, Kids &amp; Money</em> survey released by investment firm T. Rowe Price. Most parents want to comply.</p> <p>Still, midlife is &quot;a period in which you should assess whether you're on track to fund the subsequent stages of your own adulthood,&quot; said Anthony M. Montenegro of Blackmont Advisors. As children age, &quot;it's not uncommon for parents to continue putting kids ahead of themselves &mdash; even at the expense of their own needs.&quot;</p> <p>&quot;One way to look at this trade-off is to ask yourself, 'Am I willing to delay retirement and keep working another five to 10 years to fund my children's college?'&quot; said Alex Whitehouse, president and CEO of Whitehouse Wealth Management. Plus, he added, a student who works to help pay for school will have &quot;skin in the game,&quot; which can create a greater appreciation for the value of the education.</p> <p>If there's an additional need for tuition funds, &quot;money can be borrowed through student loans,&quot; Whitehouse added. &quot;You can't borrow money for retirement.&quot; (See also: <a href="http://www.wisebread.com/why-saving-too-much-money-for-a-college-fund-is-a-bad-idea?ref=seealso" target="_blank">Why Saving Too Much Money for a College Fund Is a Bad Idea</a>)</p> <h2>3. Skipping the estate plan</h2> <p>&quot;The term 'estate planning' sounds like something old, rich people need to transfer their mansion and paintings,&quot; said Whitehouse. Still, anyone with basic assets they want to share with a loved one (or even with a chosen charity) should have, at minimum, a basic will.</p> <p>No one wants to consider their own eventual demise but, even so, &quot;lack of planning can lead to painful consequences for heirs, including a lengthy probate process, loss of control, and potentially even disinheritance,&quot; added Whitehouse.</p> <p>For a straightforward will, there are inexpensive online DIY options available like <a href="http://store.nolo.com/products/quicken-willmaker-plus-wqp.html" target="_blank">Quicken WillMaker</a> and <a href="https://www.legalzoom.com/personal/estate-planning/last-will-and-testament-pricing.html" target="_blank">LegalZoom</a>. An attorney can help create a more comprehensive estate plan or set up a trust.</p> <h2>4. Not saving enough</h2> <p>&quot;Lifestyle creep can be a major problem for those in their 40s. As they earn more, many families increase their spending on luxury items or dinner at expensive restaurants, rather than save the extra income,&quot; said Andrew Rafal, founder and president of Bayntree Wealth Advisors.</p> <p>Small spending increases can be detrimental because they tend to happen slowly over time, and tend to mirror pay raises, so it's easy to not take notice.</p> <p>Instead of spending those pay raises, Joshua P. Brein, president of Brein Wealth Management, suggests splitting the difference. &quot;I always say it's a good idea to give your savings a raise if you get a raise yourself,&quot; he said. &quot;If your savings habits don't match your increased income and instead stay small &mdash; even though your income grows &mdash; you could be underfunding retirement and falling behind inflation. When you retire, things will undoubtedly cost more than they do today, so save like it!&quot;</p> <p>Still, Brein still gives income earners carte blanche to spend half their raises. That means you can save more while also increasing your standard of living over time. (See also: <a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion?ref=seealso" target="_blank">8 Money Moves to Make the Moment You Get a Promotion</a>)</p> <h2>5. Being underinsured</h2> <p>Many 40-somethings have children or other family members who are financially dependent upon them. Even so, &quot;many people in their 40s are underinsured,&quot; said Rafal. That means an unexpected injury, disability, or even death has the potential to torpedo even the most seemingly stable situation.</p> <p>Rafal recommends taking advantage of any group life and disability plans offered by an employer, but also maintaining personal policies that are opened outside of the workplace. &quot;That way you have the peace of mind that your family is properly insured even if you switch employers,&quot; he said. (See also: <a href="http://www.wisebread.com/4-things-you-need-to-know-about-disability-insurance?ref=seealso" target="_blank">4 Things You Need to Know About Disability Insurance</a>)</p> <h2>6. A skimpy emergency fund</h2> <p>That three to six months' worth of expenses you set aside in your 20s may not be enough to replace your income today, if you were to need it. &quot;Pretty much everything you own today is more valuable than it was 10 or 15 or 20 years ago,&quot; said Charles C. Scott, co-creator of FinancialChoicesMatter.com and founder of Pelleton Capital Management. &quot;Your house is worth more. Your car is worth more. It costs more to take care of your health at this age than years ago, both because you're older, but also because health care costs are a lot higher.&quot;</p> <p>Many midlife workers fail to adjust their emergency safety cushion to account for those increased expenses and earnings. If an unexpected emergency were to arise, and you haven't recalculated in a while, a meager account balance may not stretch as far as expected.</p> <h2>7. Paying too much for investment advice</h2> <p>Lower investment fees and higher performance returns go together like peanut butter and jelly. That's according to the recent research paper<em> Predictive Power of Fees</em>, released by investment researcher Morningstar. Still, many investors, even the most intelligent ones, don't fully understand the investment fees they're paying.</p> <p>&quot;What you don't know could be greatly hurting you,&quot; said Matthew Jackson, president of Solid Wealth Advisors. Fee information is often hidden deep within a mutual fund's prospectus or annual shareholder report. If you don't know what you're looking for, the information can be difficult to find.</p> <p>Then there are the fees you're paying your financial adviser or broker. &quot;Take the time to learn exactly how much you are paying for advice. Often, commissions and fees are obscure and not easily understandable.&quot;</p> <p>The good news is that even &quot;the worst money mistakes people make in their 40s can be fixed rather easily,&quot; said Jackson. First, he suggested, get engaged with your money. &quot;Take the time to learn the basics. In the information age, it's never been easier to learn about asset allocation, maximum portfolio drawdowns, and portfolio volatility.&quot; In short, a little knowledge can go a long way. By learning a little, &quot;people in their 40s can avoid a lot of pain in their portfolios,&quot; Jackson added. (See also: <a href="http://www.wisebread.com/the-surprising-truth-of-investing-mediocre-advice-is-best?ref=seealso" target="_blank">The Surprising Truth of Investing: Mediocre Advice Is Best</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/alaina-tweddale">Alaina Tweddale</a> of <a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 40s college funds emergency funds estate planning inflation life insurance midlife money mistakes retirement saving money Thu, 15 Jun 2017 09:00:10 +0000 Alaina Tweddale 1961115 at http://www.wisebread.com 8 Questions Financial Advisers Hear Most Often http://www.wisebread.com/8-questions-financial-advisers-hear-most-often <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-questions-financial-advisers-hear-most-often" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/business_communication_connection_people_concept.jpg" alt="Business Communication Connection People Concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>No one goes to a financial adviser if they already know everything there is to know about retirement planning and investing. So most people will, logically, come armed with a variety of questions when they meet with an adviser, especially if it is for the first time.</p> <p>Financial advisers say they hear many of the same questions repeatedly from clients looking to build their retirement savings or live large in retirement. Most of the questions center around the ability of clients to retire, or the information needed to build wealth in the hopes of retiring comfortably.</p> <p>This list of common questions for financial advisers was compiled with the help of Greg Hammer of Hammer Financial Group in Northwest Indiana, and Willie Schuette, financial coach with JL Smith Group in Ohio.</p> <h2>1. &quot;Can I retire?&quot;</h2> <p>This is really the ultimate question posed to most financial advisers. Clients want to know if they can afford to stop working. And if not now, when?</p> <p>A financial adviser will help you determine how much money you have and how much more you'll need, based on your life expectancy and retirement plans. Both Hammer and Schuette said they often have to break the news to clients that they need to keep working, but that's better than telling them after they&rsquo;ve retired that their money is likely to run out.</p> <h2>2. &quot;Can you help me avoid paying taxes?&quot;</h2> <p>The Internal Revenue Service can take a chunk out of your earnings, and often leave you with less cash than you originally planned. Financial advisers say they get a lot of questions about how to avoid a big tax hit, especially from retirees looking to preserve every dollar they have.</p> <p>Advisers field many questions about Roth IRAs, which allow investors to invest money and withdraw it tax-free upon retirement. Many investors turn to financial advisers for advice on the tax implications of converting traditional IRAs into Roth IRAs. There are also a multitude of other tax questions relating to municipal bonds, inheritance taxes, and tax deductions.</p> <h2>3. &quot;How can I preserve my money?&quot;</h2> <p>Financial advisers say clients are generally aware that they need to invest more conservatively as they get older to protect against market downturns, but aren't quite sure how. What's the right investment mix based on their age, their money saved, and retirement date? What's the best way to go about shifting away from stocks to cash and bonds?</p> <p>Hammer and Schuette say they get questions like this all the time, and are happy to walk clients through the best approach to keeping their retirement nest eggs secure.</p> <h2>4. &quot;When should I collect Social Security?&quot;</h2> <p>Retirees can begin collecting Social Security benefits as early as age 62, but will get larger monthly payments the longer they wait. Financial advisers will usually work with retirees to develop income sources that will allow them to delay collecting Social Security. But both Hammer and Schuette said their recommendations depend on the individual client's circumstances and financial needs. (See also: <a href="http://www.wisebread.com/5-sobering-facts-about-social-security-you-shouldnt-panic-over?ref=seealso" target="_blank">5 Sobering Facts About Social Security You Shouldn't Panic Over</a>)</p> <h2>5. &quot;What's the deal with health care?&quot;</h2> <p>With Congress working to repeal and replace the Affordable Care Act, many clients are wondering how their health care may be affected. Financial advisers have received this question from retirees who are not old enough to collect Medicare, as well as younger clients who don't get insurance through an employer. Advisers say they will walk clients through the cost of health care and the proper plans, as well as assist with setting up things like <a href="http://www.wisebread.com/how-an-hsa-saves-you-money" target="_blank">health savings accounts</a> and emergency funds.</p> <h2>6. &quot;I know I need life insurance, but what kind? And how much?&quot;</h2> <p>Financial advisers say clients usually know they need some sort of life insurance to protect their families, but are often bewildered by the offerings. There's whole and term life insurance, and policies with varying sizes, lengths, and premiums. An adviser can help find the right kind of insurance for each person and their unique situation. (See also: <a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough?ref=seealso" target="_blank">Why Your Group Life Insurance Is Not Enough</a>)</p> <h2>7. &quot;My spouse just died. What do I do?&quot;</h2> <p>Many people feel confident in their financial planning, until something changes in their life that throws things out of whack. A loss of a spouse or other major change cannot only be challenging emotionally, but it can drastically change a person's financial needs. There may be a sudden loss of income when a spouse dies, and there are endless concerns about taxes, life insurance, and even real estate.</p> <h2>8. &quot;How do I take care of my heirs?&quot;</h2> <p>For most people, the main financial goal is amassing enough wealth to last their full retirement, and there's not much consideration for the next generation. After all, saving for your own several decades of life after retirement is hard enough.</p> <p>But Hammer and Schuette say there is a segment of clients seeking the best approach to passing wealth onto to their children and other relatives. Financial advisers say that in these cases, the conversation centers not only on amassing wealth, but taking into account things like inheritance taxes, and performing full, in-depth estate planning.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-questions-financial-advisers-hear-most-often">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad">9 Things to Know Before Retiring Abroad</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do">If You&#039;re Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-your-financial-planner-isnt-telling-you-about-retirement">5 Things Your Financial Planner Isn&#039;t Telling You About Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-costly-mistakes-diy-investors-make">9 Costly Mistakes DIY Investors Make</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-save-for-retirement-while-caring-for-kids-and-parents">How to Save for Retirement While Caring for Kids and Parents</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement estate planning financial advisers financial planning health care life insurance questions saving money social security taxes Fri, 02 Jun 2017 08:00:10 +0000 Tim Lemke 1957430 at http://www.wisebread.com 6 Things You'll Encounter When Taking Over a Loved One's Finances http://www.wisebread.com/6-things-youll-encounter-when-taking-over-a-loved-ones-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-things-youll-encounter-when-taking-over-a-loved-ones-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/i've_always_been_able_to_count_on_her.jpg" alt="taking over an older relative&#039;s finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Your parents took care of you for much of your life. It's not a comfortable moment when you realize that they need <em>you</em> to help care for <em>them</em>.</p> <p>Ideally, when it's time to take the financial wheel for aging parents or other loved ones, you've already done some advanced planning. If not, the process may be more onerous. Here's what you need to know.</p> <h2>1. It's relatively easy if the person's assets are in a revocable trust</h2> <p>A decade ago, I received a letter from an elderly cousin informing me that she'd met with a lawyer to set up a revocable living trust, and that she wanted to name me the successor trustee. At the time, this was mumbo jumbo to me. But a couple of years ago, when my relative's health robbed her of the ability to conduct her own affairs, I was very grateful for her foresight.</p> <p>Because my name was already on her accounts as successor trustee, it was relatively easy to have the banks promote me to &quot;trustee,&quot; which gave me the legal power to manage nearly all her finances. All I needed to do was to provide the banks with a copy of the trust and a signed statement of incapacitation from her physician. Then I was able to set up online banking with my own passwords, giving me the power to pay her bills, deposit her checks, and renew her certificates of deposit as needed.</p> <p>Having this trust also made settling her estate easier when my relative eventually passed away.</p> <h2>2. A financial power of attorney is helpful, too</h2> <p>Having your assets transferred to a trust is a long process. In most cases, a durable financial power of attorney is almost as helpful, and creating one is much quicker and easier. The person who may need your future help simply fills out a few pages of paperwork and signs it in front of a notary. Their bank may have the necessary forms on hand.</p> <p>This power may be set up to kick in only if the account holder has become incapacitated, or can be for anytime use; for example, if your mother wants you to handle finances for her while she travels overseas once a year. It gives you the power to sign checks and tax returns, collect and deposit Social Security checks, sell real estate &mdash; pretty much everything. The main difference between the revocable trust and the power of attorney, in my experience, is that a power of attorney ends when the person dies, while a revocable trust continues after death.</p> <p>Even if you already have a revocable living trust, it's good to also get a financial power of attorney, for several reasons. First, not everyone recognizes a living trust, but pretty much every bank employee is familiar with a POA. Second, your loved one may have forgotten to put some assets into a living trust, in which case the POA can be a backup means for you to handle those assets. Third, there are a few powers, like signing tax returns, that trustees don't have.</p> <h2>3. It can be hard to talk to Social Security on their behalf</h2> <p>Once I took over my relative's finances, I noticed that her Social Security payments seemed low for the number of years she had worked. I wanted to talk with the Social Security Administration about whether she was getting everything she was due, so I took my POA and trust documents to a local service center, took a number, and waited for my turn at the window.</p> <p>No dice. The staff there informed me that the SSA doesn't recognize POAs, and that the only way I'd be able to get any information about her account was to apply to have them appoint me as a representative payee. Representative payees are given the authority to receive the Social Security payments belonging to a relative, friend, or other loved one, and use the money on the beneficiary's behalf.</p> <p>Upon further examination, I decided my relative probably would not qualify for any further Social Security payments, so I didn't go through this rigmarole. If you need to manage a loved one's Social Security benefits, however, be aware that you'll need to apply for this designation.</p> <h2>4. If you need to sell investments, you may have some digging to do</h2> <p>If you sell stock on behalf of your loved one, that person may owe capital gains taxes. Figuring out how much they owe can be a real challenge if they've held the asset for many decades. My relative held some stocks in online brokerage accounts, which sounded like they would be easy to manage. Soon I realized that she'd transferred these stocks to the brokerage after holding them for years as stock certificates.</p> <p>Some of the companies had gone through mergers and takeovers since she'd first invested. She probably had the paperwork showing when they'd originally been purchased somewhere &mdash; but her home contained many, many boxes of papers and I didn't know where to find the stock purchase records.</p> <p>If your loved one is expected to live a long time and will need investments to be liquidated, you'll have to do the legwork to get at least your best estimate as to when stocks were purchased and at what price. But if the account owner is not likely to need those assets in their lifetime, I learned from a financial adviser it may be wise to just leave them be. Why? Because cost basis &mdash; the cost at which the IRS views you to have acquired the asset &mdash; is reset at death. If your loved one passes away, those stocks can be liquidated without worrying about what they originally cost.</p> <h2>5. You must prepare carefully for financing nursing home care</h2> <p>Before I began helping my loved one with her finances, I lived in a fantasy land where Medicaid or Medicare would pay for all U.S. citizens' nursing home care if needed. A meeting with an elder lawyer set me straight.</p> <p>Medicaid will indeed pay for nursing home expenses &mdash; but only after nearly every other asset belonging to your loved one is gone. Once admitted to a nursing home, unless they purchased <a href="http://www.wisebread.com/is-long-term-care-insurance-worth-it" target="_blank">long-term care insurance</a>, they'll be expected to pay market rates, which can be <a href="https://www.genworth.com/about-us/industry-expertise/cost-of-care.html" target="_blank">$3,600 to $7,600 a month</a> <em>or more</em>. Once their money and assets run out, <em>then</em> Medicaid takes over.</p> <p>There are ways to shield some assets from going to the nursing home, and it's wise for you and/or your loved one to consult a lawyer who specializes in Title XIX planning in your state. One surprising rule in most states is that the person needing care can't simply give all their money away and expect Medicaid to pay for the nursing home. In fact, if your mother gives you $10,000 a few years before going into a nursing home, and then runs out of money, you can actually be compelled to give back that $10,000 gift &mdash; and if you've already spent it, well, now you're $10,000 in debt.</p> <p>Only a qualified attorney can walk you through all the rules for your state, but in general, what I learned was that it's important to start keeping records. Track money spent and gifts given as early as possible to prevent the system from trying to take back money already given away or spent. (See also: <a href="http://www.wisebread.com/a-simple-guide-to-planning-for-a-loved-ones-long-term-care?ref=seealso" target="_blank">A Simple Guide to Planning For a Loved One's Long-Term Care</a>)</p> <h2>6. Check recent statements carefully</h2> <p>Elderly or ailing people can be victimized by everything from outright scams to petty fees that they shouldn't have to pay. Once you have access to your loved one's accounts, look over the past year's worth of financial statements. When I did this, I found that my relative had been unwittingly signed up for some membership programs she never used, and was still being billed for a phone line that had been disconnected months before. I was able to get all these charges reversed with some persistent phone calls. On the same tack, be alert for any signs that your loved one has been the victim of identity theft or other fraud. (See also: <a href="http://www.wisebread.com/what-to-do-when-you-suspect-a-scam?ref=seealso" target="_blank">What to Do When You Suspect a Scam</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/6-things-youll-encounter-when-taking-over-a-loved-ones-finances">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-before-you-remarry">8 Money Moves to Make Before You Remarry</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-power-of-attorney">What Is Power of Attorney?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Don&#039;t Make These 5 Common Mistakes When Writing a Will</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-things-to-know-before-retiring-abroad">9 Things to Know Before Retiring Abroad</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance aging parents estate planning long term care nursing home care power of attorney representative payee revocable trusts social security take care of loved ones Tue, 30 May 2017 08:30:13 +0000 Carrie Kirby 1955479 at http://www.wisebread.com 6 Things You Should Know About Joint Checking Accounts http://www.wisebread.com/6-things-you-should-know-about-joint-checking-accounts <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-things-you-should-know-about-joint-checking-accounts" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-646688660.jpg" alt="Couple learning things about a joint checking account" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Joint checking accounts offer convenient money management for many different types of relationships, including married and cohabiting couples and adult children and their parents.</p> <p>But the convenience of joint checking accounts potentially comes with a cost that families need to consider before signing up. Here are six issues you need to think through before you open a joint checking account with a spouse, a significant other, an adult child, or a parent.</p> <h2>1. There is no accountability for withdrawals</h2> <p>Generally, couples tend to open joint accounts because they are sharing a home and expenses. That means that it's in their best interests to be responsible with the money, since it will affect them both if the rent money is spent on a weekend in Vegas. However, if one person is unreliable with money, or planning to leave the relationship suddenly, a joint account can be dangerous for the other account holder.</p> <p>This issue can be more difficult when the two account holders are parent and child. Often, an adult child will request that they be added to their elderly parents' checking account to help protect dear old Mom or Dad. They can help pay bills, and make sure that there is no fraudulent activity on the account. The problem is that both account holders have every right to withdraw money from the account &mdash; which an unscrupulous adult child could take advantage of.</p> <h2>2. Joint accounts are vulnerable to the financial mistakes of both owners</h2> <p>If either account owner has unpaid debts that go into collection, the creditor has every right to use the joint account to satisfy those debts. This means you might potentially find your joint checking account completely drained in order to pay off debts you are unaware that your co-owner has run up.</p> <p>In addition, if there is a legal judgment against either account owner, the money in the joint account could be considered part of the assets awarded in the judgment. For instance, if Jane is sued because she crashed into a bus, then the assets in the joint account she holds with her elderly father are considered part of Jane's assets in terms of the lawsuit &mdash; even if the account was originally solely in Dad's name.</p> <h2>3. A joint account could hurt your credit</h2> <p>Although your spouse or child's credit rating can't ding your score, the way they handle their money can hurt your credit if you share a joint account with them. Since creditors are required to report joint account information, an account holder who struggles with debt and paying bills on time will negatively affect the co-owner's credit rating &mdash; unless and until the money behavior improves.</p> <h2>4. A joint account can affect eligibility for financial assistance</h2> <p>If either account owner needs to qualify for any kind of financial assistance, from financial aid for college to Medicaid, the money in a jointly held account is included in the eligibility calculations for the financial aid. That means you might end up forfeiting your ability to qualify for the financial assistance if your account co-owner holds more cash in the account than you would as a sole account owner.</p> <h2>5. Your co-owner can close the account without your permission</h2> <p>Certain banks require consent from both parties to close a joint checking account, but most do not. Typically, state laws dictate that any person who can write checks on the account can close it, at any time, regardless if their co-owner is present or even aware. The benefit to this is if one party relocates, passes away, or otherwise becomes incapacitated, there are very few issues the remaining co-owner must go through to close the account. The danger, however, lies in the potential for one co-owner to simply deplete the funds, close the account, and disappear. Always make sure you're sharing a checking account with someone you trust.</p> <h2>6. Parent/child joint accounts can have estate implications</h2> <p>A joint account holder retains sole control of the money in the account in the event of the co-owner's death. In the case of spouses or other cohabiting couples, this kind of financial transfer in case of death is not a problem. However, if the account owners are a parent and child, the issue is much more complicated.</p> <p>That's because the money in the checking account stays with the surviving account holder, bypassing whatever the deceased account holder may have put in their will. For instance, Loretta has three children and has specified in her will that her assets will be distributed evenly among them. But Loretta has a sizable joint account with her son Jason, and upon her death the money in that account will be solely under his control. Unless Jason feels like splitting up the money in the account three ways, his siblings are not going to see that portion of their inheritance.</p> <h2>Merge with caution</h2> <p>While joint checking accounts offer convenience to couples and parent/child relationships, they also come with a number of potential headaches. Make sure you know what you are signing up for before you and your potential co-account owner start picking out your personalized checks.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/6-things-you-should-know-about-joint-checking-accounts">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-reasons-average-people-should-consider-a-prenup">6 Reasons Average People Should Consider a Prenup</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-your-taxes-will-change-after-you-have-a-kid">Here&#039;s How Your Taxes Will Change After You Have a Kid</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-put-your-spouse-on-a-budget-without-ruining-your-marriage">How to Put Your Spouse on a Budget Without Ruining Your Marriage</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Don&#039;t Make These 5 Common Mistakes When Writing a Will</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-conversations-couples-should-have-before-retirement">5 Money Conversations Couples Should Have Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Family children credit score debts estate planning joint checking accounts marriage parents shared finances spouse withdrawals Mon, 17 Apr 2017 08:30:13 +0000 Emily Guy Birken 1927307 at http://www.wisebread.com The Fair Way to Split Up Your Family's Estate http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-fair-way-to-split-up-your-familys-estate" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-185267899.jpg" alt="Learning the fair way to split up a family&#039;s estate" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>I've seen many family rifts created over an estate. Without clear guidance on your wishes, heirs and relatives may descend into fights over your belongings, sometimes taking grudges to their own graves. Don't let that happen to your family. Here are a few tips on how to smooth out the kinks of your will before you take your last bow.</p> <h2>Determine Beneficiaries in Your Life Insurance Policy Ahead of Time</h2> <p>If you have a life insurance policy, you have the option to name beneficiaries before you die. You can divide the payout evenly among those you'd like to name, or you can assign a particular percentage of the payout to each individual. Either way, you spare your beneficiaries the unpleasant conversation of who gets how much.</p> <p>If there are any hurt feelings after the fact because this person or that person didn't receive the payout they feel they deserve, it's really not your problem anymore. At least you spelled out your wishes legally and ahead of time.</p> <h2>Involve Your Beneficiaries in Inheritance Decisions While You're Alive</h2> <p>If you want to involve your family in the asset-dividing task while you're still alive, there are a couple ways to make this work. Certified financial planner Jody Giles &mdash; author of <a href="http://amzn.to/2kFEX8m" target="_blank">Missing Pieces Plan</a>, a guide to help people plan for their final wishes &mdash; offers two options for family participation in asset assignment to avoid infighting when you pass.</p> <h3>Round Robin</h3> <p>One way to give away heirlooms now, Giles says, is to hold a &quot;round robin&quot; where each beneficiary gets a turn picking an asset or heirloom.</p> <p>&quot;I suggest making a list of all the items you deem sentimental and circulate it to your loved ones,&quot; says Giles. They can then choose from the list, or add items you may not have even thought about. &quot;You might find they really care about a coffee mug that you don't see as valuable, but they do,&quot; she says.</p> <p>Once you have a complete list, you may consider separating sentimental items (coffee mugs, trophies, a wine opener, nostalgic popcorn bowl) from valuable items, like furniture, silver, jewelry, and art.</p> <p>Drawing names is a great way to determine who starts the round robin, or you can easily go by birth order or other creative option for deciding who goes first. Then have each loved one choose an item off the &quot;sentimental&quot; list, then the &quot;valuable&quot; list, and so forth.</p> <p>At the round robin's completion, your loved ones have intentionally and thoughtfully selected your heirlooms. Then, you can decide what you give away now or what you intend to keep until you pass. Most importantly, you have a documented list indicating to whom all your sentimental and valuable items shall pass &mdash; as they deem fair.</p> <h3>Play Money</h3> <p>Another idea, according to Giles, is to give an equal amount of &quot;play money&quot; to each intended beneficiary. If necessary, you can hire an appraiser to value and price all of your assets. Each heir is then given the opportunity to &quot;buy&quot; items from the estate.</p> <p>&quot;If you want to downsize,&quot; Giles says, &quot;you can certainly make the transfer during your lifetime or keep track of the 'purchases' to reduce tension and make the transfers seamless after you're gone.&quot;</p> <p>You can also have the satisfaction of knowing that heirlooms you hold dear will continue to be treasured by the next generation.</p> <h2>Include a Letter of Explanation in Your Will</h2> <p>Unless you have the good fortune of being part of the &quot;perfect&quot; family, your assets may not be divided equally &mdash; perhaps for good reason. It's your right to divide your assets however you wish, but you can bet it may leave a sour taste in the mouth of whomever gets the short end of the stick.</p> <p>To quell the hurt feelings, include a letter of explanation in your will. It can go a long way toward helping your loved ones understand your decisions. Maybe you're giving less money and property to a more successful child so some of the less successful ones can turn their lives around. Whatever the reason &mdash; if you think an explanation is necessary, provide one.</p> <p>&quot;Most people say that they allocate money based on need and not love,&quot; says Illinois-based attorney Evan Randall. &quot;Obviously a disabled child requires more money in the long run in addition to possibly not being able to work. It gets harder when the needs are on the same level.&quot;</p> <h2>Assign Assets and Let Loved Ones Swap Rights to Them</h2> <p>Nobody wants to contest a will, but siblings and other close family members often end up doing that if your will isn't watertight.</p> <p>Estate-planning attorney Ashley L. Case with Tiffany &amp; Bosco in Phoenix, Arizona, offers a method to eliminate broken hearts and temper tantrums ahead of your death. It involves creating groups of items that you think are equal in monetary or sentimental value.</p> <p>&quot;Each heir could be assigned a group of items at random, which would represent the inheritance of the heir,&quot; explains Case. &quot;In the event that the heir was interested in an item belonging to another heir, the two can negotiate separately.&quot;</p> <p>This allows you to distribute your assets equally while lowering the chances your heirs will have to resort to litigation upon your death. Because, really, who wants to go to court to duke it out over a dead person's stuff?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Don&#039;t Make These 5 Common Mistakes When Writing a Will</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies">12 Financial Moves to Make When a Loved One Dies</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will">What You Need to Know About Writing a Will</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family beneficiaries death estate planning heirs inheritance last will and testament legal life insurance valuables Fri, 17 Mar 2017 10:30:24 +0000 Mikey Rox 1907104 at http://www.wisebread.com 8 Money Moves to Make Before You Remarry http://www.wisebread.com/8-money-moves-to-make-before-you-remarry <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-moves-to-make-before-you-remarry" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-158851087.jpg" alt="Making money moves before remarrying" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>Every year, about three per 1,000 Americans <a href="https://www.cdc.gov/nchs/fastats/marriage-divorce.htm" target="_blank">divorce from their spouse</a>. Since about seven per 1,000 Americans marry every year, there is a chance that some divorcees will eventually tie the knot again with a new partner.</p> <p>But before you remarry, you should evaluate your finances. Let's review eight money moves that will set you both up for financial safety and success.</p> <h2>1. Make Amendments to Your Will (or Make One!)</h2> <p>The joy of finding love again can make you look at everything through a rosy filter. While no one likes thinking about their mortality, especially close to a big wedding day, the reality is that not updating your will could leave your new partner (and potential dependents) with a messy court battle for your estate. Review your current will and update it as necessary. For example, you may redistribute your estate to include your new dependents and choose a different executor &mdash; a person who will manage your estate and carry out the orders in your will.</p> <p>If you don't have a will, then setting one up should become the top priority of all money moves before you remarry. In the absence of a will, a judge will appoint an administrator who will execute your estate according to your state's probate laws. What is legal may not be the ideal situation for your loved ones, so plan ahead. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-writing-a-will?ref=seealso" target="_blank">What You Need to Know About Writing a Will</a>)</p> <h2>2. Update Beneficiaries Listed on Your Retirement Accounts</h2> <p>Even after setting up or updating your will, you still need to update the list of beneficiaries listed for your retirement accounts. This is particularly important for 401K plan holders. The Employee Retirement Security Act (ERISA) stipulates that a defined contribution plan, such as a 401K, must provide a <a href="https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/qdro-drafting" target="_blank">death benefit to the spouse</a> of the plan holder.</p> <p>Your beneficiary form is so important that it can supersede your will under many circumstances. When updating your beneficiary form before you remarry, there are three best practices to follow:</p> <ul> <li>Get written consent from your previous spouse, if applicable, to make changes;<br /> &nbsp;</li> <li>Second, designate only children who are of legal age so they can actually carry out their wishes;<br /> &nbsp;</li> <li>Third, find out the tax implications for beneficiaries other than your spouse as a large windfall could unintentionally create a financial burden.</li> </ul> <h2>3. Consider Setting Up a Trust</h2> <p>Since we're talking about potential financial burdens, many of them could come out of an estate with lots of valuable assets being divided among many beneficiaries, many of them very young.</p> <p>When you have accumulated a lot of wealth over the years, you could be better served by a trust than by a will for several reasons, including keeping your estate out of a court-supervised probate, maintaining the privacy of your records, and allowing you to customize estate distribution. While the cost of setting up a trust can be up to three times that of setting up a will, it can be a worthwhile investment to prevent costly legal battles. (See also: <a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child?ref=seealso" target="_blank">Should You Set Up a Trust for Your Child?</a>)</p> <h2>4. Be Aware of Potential Spousal Benefits From Social Security</h2> <p>If your previous marriage ended on very unfriendly terms, you and your spouse may feel that you don't want to leave a penny to each other. Regardless of how you feel, the Social Security Administration (SSA) may still legally entitle your ex-spouse some benefits under certain circumstances.</p> <p>If your former marriage lasted at least 10 years, your previous spouse can receive benefits on your SSA's record as long as he or she:</p> <ul> <li><a href="https://www.ssa.gov/planners/retire/divspouse.html" target="_blank">Remains unmarried</a>;</li> <li>Is age 62 or older;</li> <li>Is entitled to Social Security retirement or disability benefits; and</li> <li>Has an entitled benefit based on his or her own work that is less than the one that he or she would receive based on your work history.</li> </ul> <p>Even when you have remarried, your ex-spouse could receive a check from the SSA based on your record. This is a conversation that you should have with your new partner before you tie the knot so that you're both on the same financial page.</p> <h2>5. Set Up Mail Forwarding With USPS</h2> <p>Depending on how long ago you got divorced and whether or not you kept the same home from your previous marriage, you could still receive some correspondence addressed to your ex's name. While getting a letter from an aunt isn't a big deal, receiving a large monetary gift, important bill, or legal notice could create discussions that you don't want to have.</p> <p>To avoid such issues, spend $1 to set up <a href="https://www.usps.com/manage/forward.htm" target="_blank">mail forward</a> with the USPS so that all correspondence under your married name (and maiden name, if applicable) is forwarded to a new address. Chances are that your ex-spouse already did this, but it's better to be safe than sorry. This service costs $1 per name, so you would need to spend $1 for a married name, and another $1 for a maiden name.</p> <h2>6. Put Your Debts on the Table</h2> <p>Transparency is a pillar in any relationship. No matter how large your financial obligations may be, your new spouse will truly appreciate finding out now rather than when you're struggling to cover monthly bills, applying for a mortgage, or trying to finance a new car.</p> <p>Sit down with your soon-to-be spouse and go through your debt payments, such as student loans, credit card balances, mortgages, car loans, and installment plans. Going over your debts will allow you to have an idea of where the money is going every month, start talking about the potential commingling of finances, and be aware of each other's liabilities. (See also: <a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die?ref=seealso" target="_blank">What Happens to Your Debt After You Die?</a>)</p> <h2>7. Disclose Any Alimony and Child Care Payments</h2> <p>Whether you're the issuer or recipient of court-mandated spousal support, spousal maintenance, or child care, make sure to disclose those moneys to your spouse and the corresponding expenses that they cover. Failing to help cover certain expenses while making large payments somewhere else could cause tensions between you and your new partner when not previously discussed.</p> <p>Be upfront with your partner and tell the whole story. It helps you establish clear expectations about your joint financial future.</p> <h2>8. Evaluate a Prenuptial</h2> <p>Depending on your own financial plans, you may want to fully combine your finances &mdash; or not at all. For example, you may have accumulated some serious joint credit card debts from your previous marriage and you wouldn't want to transfer that responsibility to your new spouse or start a new string of similar debts. Evaluating a prenup before tying the knot is a necessary conversation for any couple with large differences in individual net worths, levels of retirement savings, and stakes in businesses. (See also: <a href="http://www.wisebread.com/5-ways-to-protect-your-business-during-a-divorce?ref=seealso" target="_blank">5 Ways to Protect Your Business During a Divorce</a>)</p> <p>While thinking that your second marriage may fail like your first one did may sound a bit pessimistic, the reality is that it does happen. In 2013, four out of 10 new marriages <a href="http://www.pewsocialtrends.org/2014/11/14/four-in-ten-couples-are-saying-i-do-again/" target="_blank">involved remarriage</a>.</p> <p>Consult with your financial adviser, lawyer, or accountant about your unique financial situation and determine whether or not you need to present a prenup agreement to your soon-to-be spouse. Keep a positive attitude, and remember that this is a time for celebration. Once you've done your homework, you'll be able to fully enjoy your marriage without any financial worries holding you back.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/8-money-moves-to-make-before-you-remarry">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Don&#039;t Make These 5 Common Mistakes When Writing a Will</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">Should You Set Up a Trust for Your Child?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance beneficiaries dependents estate planning money moves prenup remarried retirement Second Marriage social security trusts will Wed, 15 Mar 2017 11:00:15 +0000 Damian Davila 1906387 at http://www.wisebread.com 8 Money Moments That Should Be On Everyone's Bucket List http://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-moments-that-should-be-on-everyones-bucket-list" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_happy_woman_161954601.jpg" alt="Woman celebrating money moments on her bucket list" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The big house. The fancy car. The 'round-the-world vacation. When you think of a bucket list, and mention money, it's easy to start daydreaming about things that cost a fortune.</p> <p>However, you don't have to have your head in the clouds to achieve a bucket list of money moments. Here are eight of the big ones. Many of them are already within your reach.</p> <h2>1. Becoming Debt Free</h2> <p>Let's start with the most obvious money moment we should all be striving for &mdash; <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal">eliminating our debt</a>. It's certainly not easy, and it's not something that can be done quickly. This requires careful planning, a lot of willpower, and the willingness to forgo the little luxuries we all like to have in our daily lives. But, it can be done.</p> <p>One way to do this is by <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0" target="_blank">snowballing your debt</a>. You take the smallest debt you have, perhaps a store card or a loan, and you figure out a way to pay as much off that balance as you can each month. While you're doing this, you pay the minimum on your other debts. When that small debt has been paid off, you apply that to the next debt on your list, and just keep going. Eventually, you'll have everything paid off, including the car and the mortgage. What does &quot;eventually&quot; actually mean? It might be a few years, but if you stick to it, you'll achieve your goal.&nbsp;</p> <h2>2. Putting Work That You Love Ahead of Salary</h2> <p>All too often, we do work that doesn't really fulfill us, but gives us the money to pay the bills, save for a college fund, and go away on vacation every year. However, as we spend most of our lives working, it makes sense that the job should be one that really brings us happiness.</p> <p>By&nbsp;following some of the advice mentioned earlier, it is possible to put salary and benefits second to job satisfaction. And when you don't need the money, the job market looks very different. Suddenly, your options are wide open. If you love working with animals, you can leave the rat race to care for dogs and cats. If you love working with children, or the elderly, you can find careers in those fields. They don't pay as much, but the rewards to your soul are much greater.</p> <h2>3. Building a Solid Emergency Fund</h2> <p>Some 50 years ago, you could start a job at a company in your youth, and with hard work and dedication, retire from that same company 40 years later. That time has passed. These days, corporations are constantly looking for ways to cut costs and give greater value to their shareholders. That means mergers, streamlining, and of course, layoffs.</p> <p>When the worst happens (and it will probably happen more than once in your lifetime), you need to be adequately prepared. Experts say your emergency fund should have three to six months' living expenses in it. Some say more, especially when the economy tanks and jobs are scarce.</p> <p>How do you do that, especially when you're trying to pay down debt? You need to first set a target &mdash; how much will be in the fund? Then, you need to take advantage of great interest rates, low or no-fee accounts, and apps like <a href="https://www.acorns.com/" target="_blank">Acorns</a> that invest the change from every transaction. Put a dedicated amount to one side each month, and stick to it. If that means no eating out, or no trips to the cinema, so be it. Once your fund is established, you can loosen the reins a little.</p> <h2>4. Creating a Last Will and Testament</h2> <p>Very few people like the idea of creating a will. The whole idea of planning for a life that does not have you in it is morbid to say the least. But, it's essential, especially if you have family and have specific ideas about who gets your possessions.</p> <p>With a will, you can ensure that your last wishes are met. You can name an executor, who will take on the task of wrapping up your affairs. You can be very specific about who gets what, and how it is all divided. You can name a guardian for your children and pets, and a property manager. This is all very important. If you do die without a will in place, it can lead to a lot of infighting and malice. And in some cases, it can split families apart. The state will decide how to distribute your belongings, and it will not be done with the delicacy or care that you would like.</p> <h2>5. Earning Passive Income</h2> <p>Passive income is a way to earn money using little-to-no effort, usually from a business or venture you have set up yourself. Examples of passive income include earnings from rental properties, royalties from intellectual property (books, songs, software, etc.), investment portfolios, renting out tools and equipment, and even interest from lottery winnings. The latter is not something you have much control over, but everything else is achievable.</p> <p>Look for ideas on ways to <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job" target="_blank">make lucrative money on the side</a> without the need for a lot of regular work. It may take some serious elbow grease on the front end, but once that's established, you can sit back and watch the money come rolling in.</p> <h2>6. Buying Something Big With Cold, Hard Cash</h2> <p>This one is certainly not as important as the money moments preceding it, but it's worth aiming for. When you can buy something big (a car, a house, a boat, an RV) with cash, you have so much more power to negotiate. And you will save a staggering amount of money because you are not paying compound interest.</p> <p>Let's look at a home. Cash buyers usually get a discount, and even if it's only 3%, that can mean $6,000 on a $200,000 home. So let's say the cash price is $194,000, versus the $200,000 mortgage price, and the mortgage buyer puts down 10%. Over 30 years at 4%, that $180,000 loan has become around $310,000! By paying cash up front, you are literally saving the cost of another smaller home. It's not easy, but once you pay off your debts, you can quickly accumulate income. With some savvy investing, you could one day feel the satisfaction of saying &quot;And how much if I pay cash&hellip; right now?&quot;</p> <h2>7. Negotiating a Higher Salary&nbsp;</h2> <p>Some people work hard, put in the hours, and accept the 3% raise they get each year, which&nbsp;barely covers the rising cost of living. Other people grab life by the throat, and get a bump in pay simply by asking for it. Before you do it, you'll need some good data on your side.</p> <p>First, look at the position you are in on Salary.com and Glassdoor. What are people being paid at other companies in your area? Are you earning a competitive salary, or are you underpaid? (If you're overpaid, you may want to hold off on asking for even more&hellip;that could backfire).</p> <p>Next, assemble all the reasons that you believe you are owed more money. Did you save the company a lot of money? Did you bring in new accounts? Did you work 70-hour weeks all year long? Just like buying a car, you want to do your homework. Then, call a meeting with the boss, and lay it all on the line, politely but assertively.</p> <h2>8. No Longer Living Paycheck to Paycheck&nbsp;</h2> <p>The number of people living paycheck-to-paycheck in America may surprise you. It's not one in four, or even half of us. No. Three out of every four Americans are <a href="http://money.cnn.com/2013/06/24/pf/emergency-savings/index.html" target="_blank">struggling to make ends meet</a>.</p> <p>For many, it's a case of not being paid enough, or having crippling debt repayments. For others, it's more about bad budgeting and excessive spending. Whatever the reason, you should have a plan to get beyond living paycheck to paycheck. Have a big enough cushion in the bank to make life more comfortable. And, cut out the expenses that are dragging you down. With dedication, you could be&nbsp;one of those people who&nbsp;doesn't&nbsp;count the days to the next check going in the bank.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bucket lists cash debt free emergency funds estate planning goals jobs passive income salary saving money Mon, 02 Jan 2017 10:00:07 +0000 Paul Michael 1865345 at http://www.wisebread.com 13 Financial Gifts to Give Yourself This Holiday Season http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/13-financial-gifts-to-give-yourself-this-holiday-season" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_wrapped_gift_77878153.jpg" alt="Woman giving financial gifts to herself this holiday season" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The holiday shopping season is around the corner. And while the average holiday shopper will dole out more than $800 for gifts, about half will also spend an average of $132 on non-gift items for themselves. Hey &mdash; there's nothing wrong with treating yourself, especially when discounts are steep and shopping centers are extra cheery.</p> <p>But, you might want to consider putting that buck thirty toward something more substantial, such as your fiscal health. Read on for our guide to the top financial gifts you should consider giving yourself this holiday season. We promise, there will be no buyers remorse involved.</p> <h2>1. Boost Your Retirement Fund Contribution</h2> <p>The best time to start investing is now. Case in point: If you start maxing out your IRA contributions at age 25, you will have saved $1.6 million by the time you're 70. But if you were to start at 35, you'd save about half that sum. So whatever the form of your retirement savings, be it IRA, 401K, or 403(b), consider boosting your contribution this holiday season. Even a 1% increase can go a long way to making your golden years more comfortable.</p> <h2>2. Pay Down Your Debt</h2> <p>When it comes to personal debt, even $100 can make a sizable dent. Without a doubt, every little bit counts. Use a <a href="https://www.calcxml.com/calculators/how-long-will-it-take-to-pay-off-my-credit-card">minimum payment calculator</a> to determine just how long it will take your to pay down your credit card debt &mdash; and precisely how much mileage that $100 can get you.</p> <h2>3. Reassess Your Investments</h2> <p>How are your investments faring? Are you on track to meet your earnings expectations? Or do you have too much riskily tied up in a single company's stock? Gift yourself an hour spent reassessing your investments. Rid yourself of risk you can't shoulder and sour gambles.</p> <h2>4. Invest in Professional Advice</h2> <p>In the Internet age, getting good investment advice is easy and affordable. <a href="https://www.wealthfront.com">Wealthfront</a>, which boasts a stable of world-class financial experts that excels in making small money grow, offers free accounts totaling $10,000 or less. And you can open an account with <a href="https://www.betterment.com/">Betterment</a> even if you have no money.</p> <h2>5. Deposit an Extra $100 Into Your Savings Account</h2> <p>It's simple enough: Rather than buy yourself a couple of new sweaters, take that holiday cash and stow it away as savings. And if you think $100 won't make much difference, think again: If you were to sack away an extra $100 quarterly for the next 10 years, you've have an extra $4,000 in your savings account. That's more than the average down payment for a new car.</p> <h2>6. Boost Your Emergency Fund</h2> <p>It's smart to have funds stowed away for the kinds of emergencies life sometimes throws at us. Natural disaster. Illness. Job loss. If you've got an emergency fund, consider funneling some more funds into it. And if you don't, consider setting one up, even if you inaugurate it with a modest $100 investment. It's far better to be prepared than dumbstruck by a bad set of circumstances.</p> <h2>7. Draft a Financial Plan</h2> <p>A third of Americans have taken no steps <a href="https://www.northwesternmutual.com/about-us/studies/planning-and-progress-2015-study">toward financial planning</a>. If you don't have a plan, invest a day to join yourself among the ranks of the minority of Americans who do. It can be as simple as stating your financial priorities and then mapping out what you need to do to achieve them. Yes, it's drudge work. But you stand to benefit greatly by slogging through.</p> <h2>8. Purchase a Book on Finance</h2> <p>Whether it's the stock market or saving for retirement or paying down debt, most of us have a weak spot in our financial literacy. Why not help yourself close that gap by purchasing a book on your weakest link? For inspiration, check out our list of <a href="http://www.wisebread.com/the-8-classic-personal-finance-books-you-must-read">classic personal finance books</a>.</p> <h2>9. Write a Will</h2> <p>The hardest part about will-writing is getting yourself to actually sit down and write it. No one wants to rationalize their own death by taking time out of their life to plan for it. Nonetheless, it's an important tool that can help to ensure that your property and wishes are carried out according to your liking when you're no longer around to dictate. If your finances are uncomplicated, consider creating an online will, which is perhaps the quickest and easiest way to complete the process.</p> <h2>10. Review Your Credit Score</h2> <p>It costs nothing to check your credit score, but the price of ignoring it can be huge. Your credit score determines critical stuff such as your insurance premium rate and your ability to get a loan. If you're unfamiliar with your credit score, it's probably a good idea to take a pause and get acquainted with it &mdash; and then commit to reviewing it annually. (Be on the lookout for any errors, which could be preventing you from getting lower rates).</p> <h2>11. Donate to Charity</h2> <p>It pays to help others in need. Not only can making a charitable donation give you the feel-good fuzzies, it can also <a href="https://www.irs.gov/uac/eight-tips-for-deducting-charitable-contributions">lower your tax bill</a>. Just remember to keep good records.</p> <h2>12. Cash in on Your Credit Card Rewards</h2> <p>Airline miles, hotel rewards, and cash are just a few of the amazing incentives available to those who swipe responsibly. But if you don't use 'em, you lose 'em, so take a moment to assess what rewards you've got, when they expire, and whether now's a good time to cash in. (See also: <a href="http://www.wisebread.com/cash-back-vs-travel-rewards-pick-the-right-credit-card-for-you?ref=internal">Cash Back vs Travel Rewards: Pick the Right Credit Card for You</a>)</p> <h2>13. Review Your Account Statements</h2> <p>Remember all those account statements you've been filing away? Now's the time to actually read and analyze the charges. A bogus charge is a tried and true sign of identity theft, so it'll serve you well to review all your statements thoroughly. Painstaking though it may be, giving your financial records a good read affords you the opportunity to correct any improper service fees that may have been mistakenly docked from your account. If you find a faulty charge, you can get reimbursed from your bank or credit card company. If you don't, then you can rest assured that all is in order. Think of it as a game with no chance to lose.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/13-financial-gifts-to-give-yourself-this-holiday-season">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list">8 Money Moments That Should Be On Everyone&#039;s Bucket List</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-on-christmas-shopping-with-this-clever-gift-card-strategy">Save on Christmas Shopping With This Clever Gift Card Strategy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/many-happy-returns-5-tips-for-getting-what-you-really-want-this-holiday">Many Happy Returns: 5 Tips for Getting What You Really Want This Holiday</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills charity Christmas emergency funds estate planning gifts Holidays investments paying debt saving money Mon, 07 Nov 2016 09:00:08 +0000 Brittany Lyte 1827215 at http://www.wisebread.com 12 Money Moves to Make the Moment You Decide to Retire http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-money-moves-to-make-the-moment-you-decide-to-retire" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retired_couple_happy_86773289.jpg" alt="Couple making money moves the moment they retire" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You deserve a big pat on the back, a rousing rendition of <em>He's a Jolly Good Fellow</em>, and a fat slice of cake when you decide to retire. You should enjoy it, too, because it's not necessarily all perfect bliss from that day forward. Rather, you have to devise a plan to keep yourself fed, clothed, housed, and healthy until the day you die, and that prospect is perhaps more daunting than the 45 years of solid work you put in.</p> <p>To help you along the way without having to breathe into a brown paper bag for the rest of your life, here are a few suggestions on what to do with your money when you set a date to punch your final card.</p> <h2>1. Establish Your Income Goals and Needs</h2> <p>Money matters rarely work without a plan in place, and that's exactly what you'll need when you retire. In anticipation of this major life milestone and transition, you'll need to take a hard and honest look at your finances to see where you're at currently, and figure out where you want and need to be. That might mean cutting the proverbial fat from your current budget, or it might mean contributing to your savings at a higher, more rapid rate. Whatever the case, changes will need to be made to set yourself on the right track. Financial expert Steve Anzuoni, of Fairway Financial, details a few practical steps to achieve this.</p> <p>&quot;First establish your income goals and needs, and then list all your expenses and liabilities; then you need to make sure that your monthly recurring expenses are covered by guaranteed income, not potential income,&quot; he says. &quot;Once that is taken care of, it's then a matter of allocating monies to different 'buckets' to account for inflation, future income needs, emergencies, and fun/vacation money.&quot;</p> <p>That last piece of the puzzle is important. Retirees often plan based on their current needs in the current economy. To stay ahead of the curve, it's a good idea to think ahead and plan for those what-if scenarios that pop up from time to time and can, in a worst-case situation, decimate your finances. Inflation and emergencies in particular can bleed you dry if you're not prepared, and now's the time for that consideration.</p> <h2>2. Eliminate Your Consumer Debt</h2> <p>You want to be as financially prepared as possible when retiring, and that means freeing yourself from the grips of consumer debt. The last thing you want to worry about when you settle into retirement are credit card payments, so concentrate now on eliminating them altogether. If you have the extra cash on hand, pay them off. If not, look into ways to reduce the required monthly payments to make them more manageable with the goal of being payment-free by the time you say so long to your coworkers and colleagues. We cover a million and one ways to help <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">pay off your debt</a> here at Wise Bread.</p> <h2>3. Manipulate Your Mortgage</h2> <p>Along with your consumer debt, you should try to pay off your mortgage &mdash; if you can swing it. This feat may not be feasible if you've recently purchased a home, but if you've lived at the same residence for the past 20 years or more, you might be able to meet this goal. Otherwise, find ways to reduce the mortgage to make it fit better into your new, tighter budget.</p> <p>&quot;Owning your home not only means a lot less money going out every month, it means a lot less worry should things get tight,&quot; says financial adviser Scott Hanson of Hanson McClain Advisors. &quot;Conversely, if you are unable to pay off your mortgage before you retire &mdash; even if you have as little as five to seven years remaining on the note &mdash; you might consider working with your lender to lower your interest rate and extend your loan out 15, 20, or even 30 years. Simply put, not only is cash-flow king, but why spend what are likely to be the healthiest years (of your retirement) struggling to pay down a mortgage at the expense of maintaining your pre-retirement standard of living? Money not going out is the same as money coming in.&quot;</p> <h2>4. Downsize Your Living Situation to Cut Costs</h2> <p>If you have more space than you realistically need, it's time to downsize. You can (hopefully) take the money from the sale of your home and purchase a new place that better suits your lifestyle, perhaps even in cash if you've tended well to your existing mortgage over the years and you're savvy about your new purchase.</p> <p>Financial planner Charlie Reading, author of the book <em>The Dream Retirement: How to Secure Your Money and Retire Happy</em>, agrees.</p> <p>&quot;If you have a house where the mortgage is paid off, an easy way to boost your retirement income is to move to a smaller or a cheaper house,&quot; he says. &quot;Releasing this equity and moving into a smaller home can provide you with valuable funds that you can use to generate an income. You also have the option of equity release here, however financially downsizing is likely to be a more astute choice if that is practical.&quot;</p> <h2>5. Relocate to a More Affordable Area</h2> <p>Along with downsizing your home, take some time to think about where you want to live and the associated cost of living in that area. If you live in an expensive area now, maybe it's a more sensible to move someplace where you'll get more bang for your limited bucks. Of course, you'll need to be happy wherever you move, so along with the financial factors you'll also want to consider your quality of life. Are there things to do to keep you occupied and social? Is transportation nearby? Is it relatively easy for family and friends to visit? Will you get fast and easy medical attention when you need it? These are all important questions to answer when contemplating a move to a new area.</p> <h2>6. Invest in a Rental Property to Earn Additional Income</h2> <p>I'm an investor in rental properties, and I wholly plan to use those properties to bring in additional income for savings and retirement for as long as the properties make money &mdash; and sense. If going this route is a legitimate option for you, I highly recommend it. Just beware of the hidden costs. If you manage the property yourself, like I do, all the income is yours (but don't forget to set aside a decent stash for taxes). If you require assistance, however, like from a management company, you could be looking at fees between 30% and 50% of your net income. There are more affordable options, like through the Evolve Vacation Rental Network, which charges the lowest fees in the industry at just 10%.</p> <p>Consider this anecdote: Jim and Laurel Whillock <a href="http://evolvevacationrental.hs-sites.com/case-study-kona?__hstc=235270366.eb7f97e450deb1291f24fe4d5e0ac9ed.1460397740307.1466114738612.1466171762596.19&amp;__hssc=235270366.1.1466171762596&amp;__hsfp=877489778">invested in a vacation property</a> on the Big Island of Hawaii as a way to earn income in retirement. They purchased a one-bedroom condo on the beach and hired a property manager, who charged a 43% fee, to help with the logistics and operation. During the first six months, the condo was occupied 35% of the time, earning the couple only $6,500. After switching to Evolve, in a 12-month period, the couple booked 260 nights generating rental income of $48,199, an increase of 242%.</p> <p>In any case, what I'm saying is, do your research before thrusting yourself into the rental-income market; there are other management options out there. The goal is to make money, not lose it &mdash; especially when finances are tighter during retirement.</p> <h2>7. Phase Your Retirement Over an Extended Period</h2> <p>Not ready to go all in for retirement? That's perfectly okay. There's no &quot;right&quot; way to retire, and if you need more time to ease into the transition, by all means take it.</p> <p>&quot;Go down to three days a week and enjoy the benefit of not taking your pension as early, and the growth that comes with it,&quot; Reading suggests. &quot;This doesn't have to be your current job &mdash; why not start working in a role you have a passion for, even if it doesn't pay you quite as much as your current one does? Who knows, maybe this will become your new purpose, and you won't ever want to stop.&quot;</p> <h2>8. Develop a Strategy for Medical Insurance</h2> <p>We're starting to enter into territory that nobody likes talking about, especially those nearing or at retirement age. But ensuring that you have proper medical coverage while also getting all your other end-of-life ducks in a row isn't something you can put aside or overlook. This is reality, however harsh it seems, and these items must be addressed &mdash; the earlier, the better.</p> <p>&quot;Because medical insurance can be very expensive, it may actually prevent you from being able to retire,&quot; Hanson warns. I strongly suggest you check into your options before retiring. If you can't afford to purchase medical insurance, you may be forced to find another job until you can apply for Medicare at age 65.&quot;</p> <h2>9. Re-evaluate Your Other Insurances for Optimal Protection</h2> <p>While you're assessing your medical insurance situation, it's a good idea to check in with your other insurance plans to make sure you have the kind of coverage you need at this stage, but also to see where you may be able to cut costs &mdash; though the latter should never affect your quality of life. Don't reduce coverage you'll need down the road just to save a few bucks in early retirement. To make the right decisions, you may want to enlist the help of an insurance adviser.</p> <p>&quot;[Insurance advisers] can advise on ways to adjust your insurance profile &mdash; around both your home and auto policies,&quot; says insurance expert Angi Orbann. &quot;They may be able to find cost savings and they will help you ensure that you are adequately protected as you move into the next phase of your life. An insurance adviser may not be the first person you think of when it comes to your money and retirement, so it's an important tip to remember.&quot;</p> <h2>10. Create a Last Will and Testament</h2> <p>Fact: 41% of Boomer Americans don't have a will, according to USA Today &mdash; and if you're among them, it can spell big trouble for your estate when you pass.</p> <p>Licensed funeral director Kelli Hoodman explains.</p> <p>&quot;Creating a will tells loved ones how one's property should be distributed after one passes away,&quot; she says. &quot;Depending on how complex one's estate is, one may want to contact an attorney or simply create a will online. Without a will, one's finances and property are distributed by the state, and they may not land in the hands the deceased would've wanted them to be in.&quot;</p> <p>Don't overlook the funeral planning, either. Your last will and testament isn't just about who gets what. It's also as much about where you'll go when you pass. You should have the final say in that while you're alive and kickin'.</p> <p>&quot;Expressing final wishes for funeral planning in a will is important, but it should not be the only place they are documented,&quot; Hoodman adds. &quot;Funeral planning is best done with a local funeral home or cremation society. Otherwise it may take time for a will to be found, and one's final wishes might not adhered to.&quot;</p> <h2>11. Preplan Your Funeral Services</h2> <p>It probably won't be your best day ever, but preplanning your funeral is not only therapeutic, says Hoodman, but it's also fiscally intelligent.</p> <p>Funeral costs rise each year, and a traditional funeral and burial today can cost over $10,000. Cremation, which has recently become America's preferred method of disposition, is far less expensive at only a couple thousand dollars, depending on which services are selected.</p> <p>&quot;No matter which choice one makes, inflation and other factors raise the price of cremation, burials, and funerals over time,&quot; Hoodman says. &quot;Companies like Neptune Society offer preplanning services that allow retirees to create a legal document that states one's wishes for memorials, cremation, and other matters concerning death care planning. Over the many decades a retiree may live, preplanning now could save them hundreds or thousands of dollars.&quot;</p> <h2>12. Designate a Power of Attorney</h2> <p>Lastly, if you want to be in control of your life &mdash; and afterlife &mdash; choose someone close to you whom you trust implicitly as your Power of Attorney.</p> <p>A Power of Attorney (POA or attorney-in-fact) makes decisions for a person when that person can no longer make decisions for themselves. For example, if a senior is diagnosed with Alzheimer's, an attorney-in-fact would be legally permitted to make financial and medical decisions in that senior's stead.</p> <p>&quot;Choosing someone trustworthy is crucial for this role,&quot; says Hoodman. &quot;A retiree should ensure that their POA knows their preferences on medical dilemmas, like whether or not to use life support, and their financial information to ensure their money is spent properly.&quot;</p> <p>You don't like being taken advantage of while you're alive, so it's important to ensure that you won't be taken advantage of in death, either.</p> <p><em>Have you made any money moves to prepare for retirement?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-online-forums-thatll-help-you-reach-your-financial-goals">9 Online Forums That&#039;ll Help You Reach Your Financial Goals</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-of-the-fastest-ways-to-go-broke-in-retirement">4 of the Fastest Ways to Go Broke in Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-financial-moves-you-should-make-five-years-before-retirement">5 Financial Moves You Should Make Five Years Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement aging debt downsizing estate planning goals investing medical care money moves mortgages relocating rental properties Tue, 09 Aug 2016 10:00:14 +0000 Mikey Rox 1768664 at http://www.wisebread.com What Happens to Your Debt After You Die? http://www.wisebread.com/what-happens-to-your-debt-after-you-die <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-happens-to-your-debt-after-you-die" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hands_drawing_cash_32706966.jpg" alt="Finding out what happens to debt after you die" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>&quot;In this world nothing can be said to be certain, except death and taxes,&quot; wrote Benjamin Franklin back in 1789. However, more and more Americans are including &quot;debt&quot; in that famous quote. In 2015, one poll found that 21% of Americans believed that they would be in debt forever, up from 9% in 2013 and 18% in 2014. But what happens to that debt when you die? The answers may surprise you.</p> <h2>First &mdash; What Is an Estate?</h2> <p>Your estate includes all of your assets, including real estate, investments, insurance, and any other assets or entitlements. Since your debts and liabilities are also part of your estate, qualifying assets are liquidated upon your death to cover your debts before your beneficiaries can see any funds.</p> <p>Establishing a clear will is key to ensuring your estate is managed as you wish. Even when a will is available, executing an estate and administering a will is serious business. So, it's best to hire a legal professional to cross all t's and dot all i's. (See also: <a href="http://www.wisebread.com/dont-get-screwed-3-surprising-times-when-you-need-a-lawyer?ref=seealso">Don't Get Screwed: 3 Surprising Times When You Need a Lawyer</a>)</p> <p>So, what happens to the debts in your estate?</p> <h2>Credit Card Debt</h2> <p>Recent estimates put average American household credit card debt at $15,762, for those households with credit card debt. But unless your family or friends co-signed a credit card with you, they're all off the hook in the event that you pass away and your estate is too small to cover it. Even when your spouse is an authorized user on your credit card account, they won't be responsible for paying if they didn't cosign at the time of application.</p> <p>However, your survivors shouldn't be surprised if debt collectors <em>still </em>try to get a spouse or child to pay for the debt. The federal <a href="https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text">Fair Debt Collection Practices Act</a> (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to try to collect a debt. Let your spouse, children, and beneficiaries know that they can <a href="https://www.ftccomplaintassistant.gov/#&amp;panel1-1">file a complaint</a> against abusive debt collectors with the Federal Trade Commission (FTC). (See also: <a href="http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them?ref=seealso">4 Annoying Things Bill Collectors Can't Do &mdash; And How to Stop Them</a>)</p> <p>Of course, you and your family still need to refrain from tricky tactics, such as taking a $20,000 cash advance days before a death, or continuing to use the authorized credit card after the primary cardholder has died, that could provide a credit card company recourse to legally pass on the debt to the surviving relatives.</p> <h2>Mortgage</h2> <p>There are three main scenarios to consider with a mortgage.</p> <p>In the first, you were either required by the company issuing your mortgage or decided that it was a good idea to buy life insurance for the remaining balance of the mortgage. In this scenario, your death benefit clears the mortgage and the property goes to the beneficiary listed on the will or to the surviving property owner.</p> <p>In the second, there is no life insurance, and you and your spouse were &quot;tenants in common,&quot; meaning that each of you owned a stated share of the property. To be eligible to receive their share of the property, your spouse would need to first check that there is enough money in your estate to clear your debts and thus no need to sell the property to cover them. If there is enough money in your estate, your spouse would receive your share and take over the mortgage, if applicable.</p> <p>Finally, there are scenarios in which there was no life insurance and you and your spouse were &quot;joint tenants,&quot; meaning that both of you owned the entire property. In this scenario, upon your death the whole property passes automatically to your spouse. But again, the estate must clear any property-related debt first.</p> <h2>Student Loans</h2> <p>Besides credit card debt, student loans are another type of liability that is rapidly increasing among Americans. According to one estimate, the <a href="http://www.cbsnews.com/news/congrats-class-of-2016-youre-the-most-indebted-yet/">average student loan</a> for a Class of 2016 graduate is $37,173!</p> <p>In the event of your death, your federal student loans, including direct loans, Federal Family Education Loan (FFEL) Program Loans, and Perkins Loans, <a href="https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation#death-discharge">will be discharged</a>. Additionally, Direct PLUS loans are discharged in the event that the parent or student on whose behalf the loan was obtained passes away.</p> <p>But private loans are another matter, and your estate may be responsible for covering any balance. And if anybody co-signed a private loan with you, they'd be on the hook for payment.</p> <p>To learn more about what would happen to your liabilities upon your death, consult a lawyer.</p> <p><em>Have you ever take on debts from somebody that passed away? Share your experience in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/refinance-these-4-common-debts-before-year-ends">Refinance These 4 Common Debts Before Year Ends</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-if-youre-retiring-with-debt">What to Do If You&#039;re Retiring With Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/who-pays-when-loved-ones-leave-debt-behind">Who Pays When Loved Ones Leave Debt Behind?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management beneficiaries death estate planning federal trade commission loans mortgages spouses student loans survivors Thu, 28 Jul 2016 10:30:09 +0000 Damian Davila 1760584 at http://www.wisebread.com When Should Single People Get Life Insurance? http://www.wisebread.com/when-should-single-people-get-life-insurance <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-should-single-people-get-life-insurance" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_looking_up_29810428.jpg" alt="Woman wondering if single people should get life insurance" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know the typical market for life insurance: People with families to protect. When these people die, their life insurance policies make payments to their beneficiaries, whether that be their children or their spouse.</p> <p>But what if you're single without children? Is buying a life insurance policy ever a smart move?</p> <p>In most cases, no, you won't need life insurance if you don't have a spouse or any children who count on your income to pay for their daily living expenses. But as with most financial matters, there are exceptions.</p> <p>Here are some of the most common reasons why a single adult without children might consider buying life insurance:</p> <h2>Policies Are Cheaper When You're Younger and Healthier</h2> <p>If you are a healthy and a nonsmoker, you'll pay less for life insurance when you are 24 than you will when you are 30, 35, or older. That's because you're at more of a risk to die.</p> <p>According to Trusted Choice, an independent insurance agent, a 20-year-old male nonsmoker at a healthy weight would pay about $32.53 a month for a $500,000, 20-year term life insurance policy. That cost rises to $35.69 a month for that same healthy male at 35-years-old. And it soars to $111.38 a month when this same male reaches 50.</p> <p>So, it might make financial sense to buy a life insurance policy when you are in your 20s. Then, when you do get married and have kids, you can change the beneficiaries on your policy to your spouse and children.</p> <h2>You Owe Money With Someone Else</h2> <p>Have your parents co-signed on an auto loan with you? Maybe they've co-signed for that mortgage loan that you are paying off each month. What happens to that debt if you should suddenly die? Your parents will be responsible for paying it off.</p> <p>However, if you have a life insurance policy with your parents named as the beneficiary, they could use the payout from the policy to pay off the debt that they owed with you. Taking out life insurance in this case would serve as a form of protection for whoever was generous enough to take on the risk of co-signing a loan with you.</p> <h2>You're Providing Financial Support to Others</h2> <p>Just because you're not married and you don't have children, doesn't mean that you are not providing financial support to someone. Maybe an elderly parent lives with you and counts on your financial support each month. If you should unexpectedly die, what would happen to that parent? By naming that parent as a beneficiary, you can make sure that they are financially protected.</p> <p>You might even be providing financial support to siblings, nieces, or nephews. The right life insurance policy can make sure that this support continues even after your death.</p> <h2>You Want to Leave a Gift</h2> <p>Maybe you simply want to leave a financial gift to someone who holds a special place in your life, even if this person doesn't really need your financial support. By naming that special person as a beneficiary &mdash; it could be a niece, nephew, partner, or friend &mdash; you'll be leaving behind something of great value should you die.</p> <h2>Term or Whole Life?</h2> <p>Once you've decided that you do want a life insurance policy, it's time to determine what kind of policy you want and how large of a policy you need. There are two main <a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people" target="_blank">types of life insurance policies</a>: the cheaper term life, and the more expensive whole life.</p> <p>Term life insurance provides coverage for just a set period of time &mdash; usually 20 years &mdash; but can be bought for as little as one year, or as many as 30. Your premium will usually remain the same during the entire term. Whole life insurance instead lasts, as the name suggests, until you die. Whole life premiums also include an investment component, what is known as the policy's cash value. The cash value will grow during the life of your policy.</p> <p>It's best to meet with a financial planner to determine which type of policy makes the most sense for you. A planner can provide recommendations, too, on how much insurance you should take out to meet your financial goals and how best to structure your policy so that you can provide the most financial protection to your beneficiaries if you should die.</p> <p><em>Do you have life insurance?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough">Why Your Group Life Insurance Is Not Enough</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">Term vs Whole Life Insurance: Here&#039;s How to Choose</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beware-your-insurance-may-not-cover-these-8-losses">Beware: Your Insurance May Not Cover These 8 Losses</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-times-when-bundling-insurance-doesnt-make-sense">4 Times When Bundling Insurance Doesn&#039;t Make Sense</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Insurance beneficiaries dependents estate planning Health life insurance policies single unmarried Tue, 05 Jul 2016 10:00:09 +0000 Dan Rafter 1741536 at http://www.wisebread.com What Is Power of Attorney? http://www.wisebread.com/what-is-power-of-attorney <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-is-power-of-attorney" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/father_daughter_happy_91770401.jpg" alt="Woman learning what power of attorney is" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Struggling with money issues or big medical decisions can happen to all of us. Aging, illness, or other factors can contribute to the difficulty. You can get help, though, through a legal document known as a <em>power of attorney</em>.</p> <p>In a power of attorney, you sign a document stating that another person whom you trust, known as the <em>agent </em>or <em>attorney-in-fact</em>, has the power to act on your behalf to make certain decisions. Your power of attorney could limit this person to making only financial decisions on your behalf. But you can make the document broader, giving your agent the power to make a wide variety of decisions, including choices about medical care, or decisions regarding where you live, and when it's time to sell your home.</p> <h2>When You Need One</h2> <p>In most cases, it is elderly people in their retirement years who choose to enact a power of attorney. This is especially true for elderly people who are struggling with memory issues or other illnesses that make it more difficult for them to keep track of their finances.</p> <p>You might not think you need a power of attorney if you are married. After all, even if you can no longer handle the tasks of paying your bills on time, your spouse can withdraw funds from your joint bank accounts to make sure that your mortgage company, auto-financing company, or utility company are paid on time each month.</p> <p>But there are other financial decisions that can be complicated even for married couples. For instance, it might make sense to sell your home. But in many states, both spouses must agree to a home sale. If one spouse is incapacitated and unable to make this decision, the other spouse might not be able to put the home on the market.</p> <p>Also, your spouse will have no legal authority to make decisions regarding accounts or property owned solely by you. A power of attorney, though, can guarantee that important financial or property matters are handled by someone whom you trust.</p> <h2>Different Types of Contracts</h2> <p>There are several different types of power of authority contracts. What is known as a <em>durable power of attorney</em> might be the most powerful. This type of power of attorney remains in effect for your entire lifetime. This gives the agent free reign to manage your accounts on your behalf for as long as you are alive.</p> <p>Because a durable power of attorney lasts the rest of your life, though, you need to be clear about what you want it to say. If you want your agent, for instance, to only be able to make decisions regarding your home and its sale, spell that out in the power of attorney document. If you want your agent to have broader control over both your finances and your medical decisions, spell that out, too.</p> <p>A conventional power of attorney goes into effect when the document is signed and ends when that person becomes incapacitated.</p> <p>You can also create a <em>springing power of attorney</em>. This type goes into effect when a specific event takes place. In most cases, a springing power of attorney will become effective when you become mentally unfit to handle financial, medical, or property decisions.</p> <p>The challenge often lies in determining when this specific event has actually taken place.</p> <h2>Be Wary</h2> <p>Creating a power of attorney is a big decision, and one that you should only make after <a href="http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies" target="_blank">meeting with loved ones and legal professionals</a>. Remember, you are signing over your right to make your own financial, property, or medical decisions.</p> <p>Keep in mind your spouse, too. Your spouse can continue to make decisions on your behalf even after you have signed a power of attorney. But once your spouse becomes incapacitated, the agent you named in your power of attorney will take over.</p> <p>Deciding who will serve as your agent is the big decision here. You can choose a family member, your spouse, a friend, or another loved one. The key is to find someone you both trust and who is willing and able to take on this responsibility.</p> <p><em>Have you considered granting power of attorney? Has someone given you this responsibility? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/what-is-power-of-attorney">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-things-youll-encounter-when-taking-over-a-loved-ones-finances">6 Things You&#039;ll Encounter When Taking Over a Loved One&#039;s Finances</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-make-these-5-common-mistakes-when-writing-a-will">Don&#039;t Make These 5 Common Mistakes When Writing a Will</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fair-way-to-split-up-your-familys-estate">The Fair Way to Split Up Your Family&#039;s Estate</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance aging attorney-in-fact estate planning illness legal decisions legal documents power of attorney Mon, 20 Jun 2016 09:30:26 +0000 Dan Rafter 1732052 at http://www.wisebread.com