estate planning http://www.wisebread.com/taxonomy/term/8328/all en-US 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-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/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-2 views-row-even"> <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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-saving-tricks-to-know-before-buying-an-engagement-ring">12 Money-Saving Tricks to Know Before Buying an Engagement Ring</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-fun-games-that-teach-your-kids-about-money">6 Fun Games That Teach Your Kids About Money</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-ways-to-stop-your-spouse-from-overspending">4 Ways to Stop Your Spouse From Overspending</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-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/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-2 views-row-even"> <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-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/a-simple-guide-to-planning-for-a-loved-ones-long-term-care">A Simple Guide to Planning For a Loved One&#039;s Long-Term Care</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-reasons-you-need-to-include-pets-in-your-will">6 Reasons You Need to Include Pets in Your 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-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/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-2 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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-should-single-people-get-life-insurance">When Should Single People Get Life Insurance?</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/make-these-7-money-moves-now-or-youll-regret-it-in-20-years">Make These 7 Money Moves Now Or You&#039;ll Regret It in 20 Years</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-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/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</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/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-3 views-row-odd"> <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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</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/forget-saving25-place-to-look-for-spare-change">Forget Saving...25 Places to Look for Spare Change</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-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/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-2 views-row-even"> <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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/unique-ways-to-save-money-in-december">Unique Ways to Save Money in December</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/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> <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-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</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-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/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</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/5-financial-moves-now-that-youll-regret-when-you-retire">5 Financial Moves Now That You&#039;ll Regret When You Retire</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/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-4 views-row-even"> <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> <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-of-the-fastest-ways-to-go-broke-in-retirement">4 of the Fastest Ways to Go Broke in 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/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</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/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</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/is-it-ever-okay-to-cosign-a-loan">Is It Ever Okay to Cosign a Loan?</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-10"> <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/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/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/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-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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide to Retire</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/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/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</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 What You Need to Know About Writing a Will http://www.wisebread.com/what-you-need-to-know-about-writing-a-will <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-you-need-to-know-about-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/family_piggy_bank_000035216904.jpg" alt="Learning what you need to know about writing a will" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As many as 40% of Americans over the age of 45 <a href="http://www.aarp.org/money/estate-planning/info-09-2010/ten_things_you_should_know_about_writing_a_will.html">don't have a will</a>. Don't fall into this statistic. It's imperative that you have a will to ensure that your wishes are carried out and your heirs avoid unnecessary hassles and costs after you're gone. Here's what you need to know before you get started.</p> <h2>What Is a Will?</h2> <p>A will is a legal document that declares how your estate will be divided after you pass away. It can also provide you and your family with the peace of mind in knowing that your property will go into the right hands. Writing a will may seem like a complicated, daunting process, but it may be easier and more affordable than you think. (See also:&nbsp;<a href="http://www.wisebread.com/6-things-i-learned-about-money-from-famous-peoples-wills?ref=seealso" target="_blank">6 Things I Learned About Money From Famous People's Wills</a>)</p> <h3>What Happens If You Don't Have a Will?</h3> <p>If you don't have a will, your estate will be settled based on your state's laws. A judge will appoint an administrator to make decisions on your estate based on your state's probate laws. Their decisions may not be in line with what you would have wanted, which is why a valid will is so important.</p> <h2>Name an Executor of Estate</h2> <p>First, you will need to name an executor, who is the person who will manage your estate and execute your wishes. They will also deal with any outstanding debts and file your tax returns. Make sure to clearly specify in your will that your executor has the power to deal with any debts and related issues that are outlined in your will.</p> <p>In most cases, the executor is a spouse, child, relative, close friend, attorney, or bank. You can also name joint executors, and may want to consider naming your attorney as one of the executors. Administering an estate is a complicated process, so you'll want to select an organized, trustworthy person for the position.</p> <p>An attorney will charge to serve as your executor, which is usually 2%&ndash;4% of your estate's assets. If you are designating a friend or family member as executor, you want to be clear about whether they'll be receiving compensation. Serving as executor can be a long, daunting process, so it may be a good idea to compensate the executor. You will want to state very clearly in the will what type of compensation they can expect to receive.</p> <h2>Choose Beneficiaries and Guardians</h2> <p>It's imperative that you know what your assets are, so that you can assign them to the right people. Take note of all your assets, including bank accounts, investments, retirement accounts, property, jewelry, and anything else in your possession.</p> <p>Your will specifies the beneficiaries for your assets, so you will need to decide who gets what. Very clearly state who will receive your assets, and make sure to also specify if someone in your family will receive nothing. If you do not mention that they are getting nothing, your will may be contested in court. You can also specify conditional gifts, which will be distributed if the beneficiary meets certain conditions.</p> <p>Your will also names guardians for any minor children and dependents. While you don't need to get permission to name someone as a guardian for your children, you definitely will want to ask. When the time comes, they don't have to accept the responsibility, so make sure they are okay with it. It can be difficult to choose a guardian for your children, but you should carefully make this decision now because if you don't, a judge will make the choice later.</p> <p>It's also a good idea to specify how your pets should be cared for. You may also want to leave money to whomever you designate as the new caretaker so that your pets can be well taken care of.</p> <h2>Review Beneficiary Designations</h2> <p>Certain accounts, such as retirement accounts, life insurance, and annuities won't pass through probate, so they don't need to be specified on the will. For these types of accounts, you will specify the beneficiaries on a document called a beneficiary designation.</p> <h2>Write a Letter of Instruction</h2> <p>A letter of instruction will be kept with your will and is a more informal write-up of which properties should be assigned to which beneficiary. It can also include instructions on paying any outstanding debts, account numbers, passwords, and other information that will help your executor settle your estate. You can also include instructions regarding your death and burial.</p> <h2>Choose a Witness</h2> <p>You will need to have at least one witness present when signing the will (some states require two or three witnesses). It is advised that you do not select a beneficiary or your attorney as your witness(es) as this can potentially create a conflict of interest. Some states also require that the will be notarized.</p> <h2>Choose a Safe Spot for Your Will</h2> <p>You should keep your will in a secure place, such as a fireproof safe in your home. Many people also have their attorney hold onto it for safekeeping. Make sure you let someone you trust know where the will is. You can also give signed copies to your attorney, executor, or a family member that you trust. However, the original signed will is usually required in order to avoid any unnecessary issues.</p> <h2>Updating Your Will</h2> <p>You can update your will whenever necessary. In most cases, a will is adjusted after major life events, such as marriage, divorce, the death of a beneficiary, or the addition of a new dependent. It's a good idea to revisit your will at least every five years to ensure nothing has changed. If there have been significant changes, or you have moved to another state, you may want to write a new will instead of simply updating the old one.</p> <h2>Do You Need a Lawyer?</h2> <p>Having an attorney to walk you through creating a will and testament can be invaluable. Writing a will is already a stressful, unusual process, and having a skilled professional on your side will ensure you have no questions at the end and that all of your assets are appropriately accounted for. They can also review your will, help prevent simple mistakes (like signing something in the wrong place, which can invalidate the will), and provide you with witnesses.</p> <p>Every state also has different requirements, which can be difficult to keep up with on your own. Most websites that offer DIY wills aren't state-specific. An attorney will ensure that you meet the requirements of your state and that you don't make any unintended mistakes. Keep in mind that your will is determining where 100% of your assets will go, so it may not be something you want to deal with on your own.</p> <h3>Writing a Will On Your Own</h3> <p>On the other hand, if you have a very simple, straightforward financial situation, you may not need a lawyer. Many people choose to prepare their own will, which is why do-it-yourself will kits are so popular. Some online service providers, like LegalZoom, can walk you through the will and testament process, with complete customer support, all at an affordable price. You can also choose estate planning software, like the Quicken WillMaker, which will provide the legal documents you need to plan for your future.</p> <h3>How Much Does It Cost?</h3> <p>Drafting a will is not expensive, especially when you consider how important this document is. In most cases, it costs around $40&ndash;$100 to file a will on your own, and approximately $200&ndash;$2,000 to hire an attorney to do it for you (depending on the complexity of your finances).</p> <p><em>Do you have other tips for writing a will? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/what-you-need-to-know-about-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-6"> <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/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-2 views-row-even"> <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-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/5-things-you-should-know-about-debt-relief-lawyers">5 Things You Should Know About Debt Relief Lawyers</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/its-the-21st-century-why-is-your-money-stuck-in-the-20th">It&#039;s the 21st Century — Why Is Your Money Stuck in the 20th?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets beneficiaries estate planning family lawyers will and testament writing a will Wed, 20 Apr 2016 09:00:10 +0000 Andrea Cannon 1690614 at http://www.wisebread.com Should You Set Up a Trust for Your Child? http://www.wisebread.com/should-you-set-up-a-trust-for-your-child <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-set-up-a-trust-for-your-child" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/mother_daughter_hugging_000076004239.jpg" alt="Woman wondering if she should set up a trust for her child" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you think of trust funds, what comes to mind? Spoiled rich kids, living off the money set aside for them by their uber-wealthy parents? If so, you may be surprised to learn that you don't need to be a gazillionaire to benefit from a trust.</p> <p>Read on to see if a trust might be right for your kids.</p> <h2>Estate Planning</h2> <p>Estate planning runs the gamut, from the basic to the complex, depending on your wealth and the complexity of your life. To put various estate planning documents, such as wills and trusts, into context &mdash; and to determine which ones you may need &mdash; consider the following three levels of estate planning.</p> <h2>Titles and Beneficiary Designations</h2> <p>For some of your assets, making sure they end up where you'd like them to requires very little effort on your part. You just need to make sure they are titled correctly or that you've designated the right beneficiaries. A will is generally not required. Even if you have a will, <a href="https://www.soundmindinvesting.com/articles/view/are-you-sure-your-beneficiaries-will-benefit-as-you-intend">titles and beneficiary designations</a> take precedence.</p> <p>If you're married and want property to go to the surviving spouse should the other spouse die, simply titling the property in both of your names &quot;with rights of survivorship&quot; will accomplish that. This includes your home and car. For other assets, all it takes to transfer ownership as you'd like upon your death is to name the right people as beneficiaries. This includes life insurance, individual retirement accounts (IRAs), 401K accounts, and bank accounts. These are relatively simple steps with important implications, so make sure you've made the right choices on titles and beneficiary forms.</p> <h2>A Will</h2> <p>For everything not specifically earmarked via title or beneficiary designation &mdash; property titled in your name only, and everything that doesn't come with a beneficiary designation form (jewelry, art, a baseball card collection, your prized parakeet) &mdash; <a href="http://www.wisebread.com/6-things-i-learned-about-money-from-famous-peoples-wills">you'll need a will</a> to get it where you want it to go. Otherwise your state's &quot;intestate&quot; laws will dictate who gets what. (Trust me, your state probably isn't interested in finding the best home for your bird.)</p> <p>It is all the more important to have wills once you have children. This is the document in which you name a legal guardian for your kids in the event that you and your spouse both die, and you specify who will manage money for your children until they turn 18 (or 21 in some states).</p> <h2>Why Try a Trust?</h2> <p>For many people, a will is enough, especially if they don't own a lot of assets and don't have a very complicated financial life. For others, a will isn't enough; they also need a trust.</p> <p>Once you accumulate more wealth, or if your life becomes more complicated (you have kids from a prior marriage, have property in another state, own a business), a trust may be in order. A trust does not replace a will; it is used in addition to a will. Here are some of its main benefits.</p> <h3>It Gives You More Control</h3> <p>Leaving a lot of money to an adult child can do more harm than good. With a trust, you can create a distribution schedule, perhaps giving them a quarter of the balance starting at age 25, and then another quarter every five years until it is all distributed. You can also name someone to manage the money while it is still owned by the trust and approve any early distribution decisions (perhaps you'd allow money to be accessed early for education or other purposes).</p> <h3>It Keeps Your Estate Out of Probate</h3> <p>Probate is a court-supervised process of validating your will, inventorying your assets, having property appraised, making sure assets are distributed according to the terms of the will, paying the bills of the deceased, and more. It is required if you have a will only, can take a year or longer, and can end up costing 2%&ndash;8% of the total value of the estate once you're done paying attorney's fees and court costs. A trust enables your heirs to bypass probate, freeing the trustee to wind down the estate without court supervision.&nbsp;</p> <h3>It Keeps Information Private</h3> <p>Your will becomes public record upon your death. By contrast, the terms of a trust are not required to be made public.</p> <h3>It Helps Customize Estate Distribution</h3> <p>Depending on the complexity of your situation, a trust may help you customize the distribution of your estate more easily than a will. For example, you may want to leave more to an adult child in a low-income profession than another who works in a high-income profession. Or, you may want to keep a tight rein on how inherited money is used by a beneficiary known for his or her free-spending ways.</p> <p>There are many types of trusts, but the most common type is a revocable living trust, which simply means you can make alterations if your circumstances change. Creating a trust requires the help of an attorney and could cost up to $3,000 to set up versus less than $1,000 for a will. However, the money-saving benefits of avoiding probate, and the added controls available for complex situations, may ultimately make a trust less expensive.</p> <p>There are many variables involved in determining whether you need a trust. If, after reading this article, you suspect you may, talk with an experienced estate-planning attorney to further weigh the pros and cons.&nbsp;</p> <p><em>Have you considered a trust for your heirs?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/should-you-set-up-a-trust-for-your-child">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/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/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-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/debunking-common-estate-planning-myths">Debunking Common Estate Planning Myths</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/wills-the-basics">Wills: The Basics</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance beneficiaries estate planning heirs inheritance probate trusts wills Thu, 25 Feb 2016 11:00:09 +0000 Matt Bell 1660232 at http://www.wisebread.com 12 Financial Moves to Make When a Loved One Dies http://www.wisebread.com/12-financial-moves-to-make-when-a-loved-one-dies <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/12-financial-moves-to-make-when-a-loved-one-dies" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_holding_hands_000067142067.jpg" alt="Couple making financial moves after loved one dies" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are few things more challenging than a loved one's passing. In addition to being emotionally difficult, there is an enormous amount of work required to handle the person's estate.</p> <p>No one likes to discuss the finances of your departed loved ones, but there are many key things that should be done shortly after their passing. These 12 items are the most common financial priorities during a difficult time.</p> <h2>1. Do as Little as You Need To (At First)</h2> <p>Losing a loved one is a stressful, tiring, and emotional experience. That's why it's wise to avoid making any key financial decisions immediately. Decisions about money and property should be made with a clear head, psychologists say. It's important to begin collecting some documentation and making funeral plans, but many key decisions can wait a while.</p> <h2>2. Find the Will &mdash; and Its Executor</h2> <p>If your loved one planned properly, he or she outlined their wishes in a will and tasked a trustworthy person to carry things out. This is known as probating the estate. Things can get complicated if there is no will, or if the executor has passed away or is otherwise unavailable. But start by finding out if your loved one's wishes were written down. If you are the executor, you will need <em>letters testamentary</em> that prove you have the right to handle the affairs of the deceased.</p> <h2>3. Collect as Many Documents as You Can</h2> <p>Hopefully, your loved one had some sort of filing system for bills, tax receipts, and other financial information. Collect as much of this paperwork as you can, including anything associated with his or her estate planning, plus credit card statements, bank statements, life insurance policies, car titles, and any similar things you can think of.</p> <h2>4. Determine If the Funeral Was Prepaid</h2> <p>You may find that your loved one had already made plans with a funeral home to have arrangements paid for. But if not, you'll need to determine if there is money available from the deceased to pay for the funeral. This may require opening a special checking account for the estate.</p> <h2>5. Get Copies of the Death Certificate</h2> <p>As you work through the complicated financial matters after a loved one dies, people and institutions will request copies of the death certificate as evidence of the person's passing. Obtain dozens of copies from the state, as many organizations will require an original document. Always have a copy handy any time you deal with a bank or brokerage house.</p> <h2>6. Get in Touch With Financial Institutions</h2> <p>This is often a challenge, because most people have multiple bank accounts, plus various investment accounts, pension providers, loans, credit cards, and insurance companies. Start with the the life insurance company, as the policy may mean that there will be a payout that can be used toward final expenses. Then check with banks to stop any automatic payments, such as regular contributions to charity. Brokerage companies may freeze accounts once notified of a death, so plan in advance if you think this may pose a problem.</p> <h2>7. Call Utility Companies</h2> <p>If a loved one lived alone, it will be important to call the electric company, water provider, cable provider, and phone company to stop service and avoid any additional charges. (Make sure you clean out the fridge before cutting off the electricity.)</p> <h2>8. Contact Government Agencies</h2> <p>You need to contact the Social Security Administration to stop payments, and see if you are eligible for any death benefits. If your relative served in the Armed Forces, call the Veterans Administration. There are many state and local agencies that may also need to be notified, in order to stop payments from things like pensions or legal settlements.</p> <h2>9. Get the Credit Report of the Deceased</h2> <p>It will be important to contact credit bureaus to protect against a case of identity theft. But it's also helpful to review your loved one's credit report to see if there were any major errors or cases of fraud.</p> <h2>10. Hire an Accountant</h2> <p>Dealing with taxes can be very challenging following the death of a loved one. There may be inheritance taxes, and if they worked in the year of their death, they may owe taxes or at least have required tax forms you'll need access to. Let an accountant do a lot of the heavy lifting here. (See also: <a href="http://www.wisebread.com/14-reasons-why-an-accountant-is-worth-the-money">14 Reasons Why an Accountant Is Worth the Money</a>)</p> <h2>11. Change Online Passwords</h2> <p>If you have access to the online accounts of the deceased, you may want to consider changing the passwords for access. This will guard against anyone looking to steal your loved one's identity, and prevent others from gaining access to account information they should not have.</p> <h2>12. Roll Over Their IRA</h2> <p>If your wife or husband passed away, you are the beneficiary of his or her retirement account and can roll it into yours. Or you can tap the money immediately and you won't have to pay a penalty for early withdrawals. If your spouse was over 70 &frac12;, you may have to take a required minimum distribution.</p> <p><em>What steps have you taken to prepare for the loss of a loved one?</em></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/12-financial-moves-to-make-when-a-loved-one-dies">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/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-2 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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-you-need-an-estate-plan">Do You Need an Estate Plan?</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/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</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/is-it-time-to-talk-with-your-parents">Is it Time to Talk with your Parents?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family death estate planning inheritance probate taxes wills Wed, 03 Feb 2016 18:19:01 +0000 Tim Lemke 1649195 at http://www.wisebread.com 6 Things I Learned About Money From Famous People's Wills http://www.wisebread.com/6-things-i-learned-about-money-from-famous-peoples-wills <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-things-i-learned-about-money-from-famous-peoples-wills" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/william_shakespeare_000049023568.jpg" alt="Learning about money and finance from William Shakespeare&#039;s will" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>I've always been fascinated by William Shakespeare's will. Specifically, by the way he left his wife his &quot;second-best bed,&quot; especially since historians are at odds over what he meant by it. Was this an insult to a spouse he didn't get along with, or a tender gesture? After all, since everything was handmade, furniture was much more valuable back in the 1600s than it is today.</p> <p>Thinking about Shakespeare's seemingly odd bequests made me realize that what people list in their wills says a lot about what they value.</p> <p>So when Ancestry made a searchable database of 170 million will and probate documents available to its subscribers, I eagerly dove in. Of course, most Ancestry members use this information to learn more about their family members; the site touts these records' value in particular for African Americans searching for family history, since wills from the slavery era may <a href="http://blogs.ancestry.com/ancestry/2015/10/12/finding-a-name-why-probate-records-are-a-gold-mine-for-african-americans/">name their ancestors as property</a>.</p> <p>In fact, when I started searching well-known names, the first one I found was a slave owner: George Washington, whose will calls for the freeing of his slaves after Martha's death. (He also called for one, named William Lee, to be freed as soon as he died, which makes sense because Lee was Washington's personal valet.)</p> <p>What can we learn from the wills of notable dead people? Here's what famous people's taught me about money and finances.</p> <h2>1. Furniture Was Really Valuable</h2> <p>Like Shakespeare, Paul Revere made specific plans for his household furniture after his death; he left it all to his only unmarried daughter &mdash; but only if she was still single by the time he died. Revere no doubt figured that if his daughter had already established her own household, she'd have no room for dad's tables, chairs, and beds, second best or otherwise.</p> <h2>2. Families Held Onto Silver No Matter What</h2> <p>Louisa May Alcott's family often went hungry in her childhood; in fact, poverty drove Alcott to start writing. Yet, they never became desperate enough to sell the &quot;family silver&quot; &mdash; Alcott left her share to a niece in her will.</p> <p>Alcott's will also made me wonder if the famous author, who never married, had a love affair or some other skeleton in her closet to cover up, because she called for all her letters and manuscripts to be burned upon her death.</p> <h2>3. Intellectual Property Has Been Valuable for Hundreds of Years</h2> <p>Shakespeare's will makes no mention of his plays, because with no copyright law, intellectual property was not a thing yet. Shakespeare might not have even had copies of his own works.</p> <p>Not so for Nathaniel Hawthorne, who died intestate in 1864. An inventory of his estate includes copyrights estimated at a $2,500 value &mdash; much more than his $200 book collection, his $800 worth of household goods, or any of his investments, which included 10 shares in Boston National Bank ($1,020) and two shares of Jamaica Plain Gas Company ($200).</p> <h2>4. The Price of Property in Florida Has Gone Way Up</h2> <p>Harriet Beecher Stowe was an early snowbird, <a href="http://www.wisebread.com/buying-your-first-home-what-to-do-and-when-to-do-it">buying property</a> in Mandarin, Florida, where she enjoyed wintering with her husband. An inventory of her estate at her death in 1896 values a six-acre orange grove in Mandarin at $0.</p> <p>Nowadays, according to Zillow, a lot of similar size in the area is <a href="http://www.zillow.com/homes/for_sale/Mandarin-Jacksonville-FL/pmf,pf_pt/land_type/2118327479_zpid/125198_rid/lot_sort/30.204784,-81.572714,30.111424,-81.729956_rect/12_zm/?3col=true">listed for $799,000</a>.</p> <p>By the way, Stowe, whose book <em>Uncle Tom's Cabin</em> was a record-breaking bestseller, also had nearly $2,000 cash on hand when she died &mdash; more than $50,000 in today's dollars.</p> <h2>5. Parents Love Their Kids Equally &mdash; Except for Their Favorite</h2> <p>Booker T. Washington left his three children the future royalties from his books to &quot;share and share alike.&quot; But he also left his gold watch and chain to his namesake, Booker T. Jr., while failing to bequeath any personal effects to the other two.</p> <h2>6. Ernest Hemingway Wrote a Tight Will</h2> <p>In life, Papa was known for short and meaty sentences, and his books are no longer than they need to be. So I guess we shouldn't be surprised that Hemingway's will, written from Finca Vigia, his house in Cuba, six years before he took his own life, is only one page long and contains a minimum of legalese.</p> <p>Hemingway left everything to his spouse, designating nothing for his children, merely saying, &quot;I repose complete confidence in my beloved wife Mary to provide for them according to written instructions I have given her.&quot;</p> <p><em>What does your will say about you?</em></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-i-learned-about-money-from-famous-peoples-wills">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/10-fun-books-that-will-get-your-kids-excited-about-money">10 Fun Books That Will Get Your Kids Excited About 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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-surprising-way-birth-order-decides-your-money-habits">The Surprising Way Birth Order Decides Your Money Habits</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/leave-marley-in-the-movies-why-buying-a-trendy-pet-makes-no-sense">Leave Marley in the Movies: Why Buying a Trendy Pet Makes No Sense</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Family budgeting estate planning inheritance money will Wed, 04 Nov 2015 16:15:36 +0000 Carrie Kirby 1605685 at http://www.wisebread.com What Happens to Your Online Stuff After You Die? http://www.wisebread.com/what-happens-to-your-online-stuff-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-online-stuff-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/laptop-178793917.jpg" alt="laptop" title="laptop" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Many people write wills for their physical property, but few even think about creating a plan for their <em>digital</em> estates. Without such a plan, your loved ones might be unable to access your digital files or the accounts could be deleted before they see them.</p> <p>A digital estate plan can help ensure that every online account will be accessed or transferred to the right person. And for those with networks of online-only friends and work colleagues, a digital estate plan can help inform those virtual friends of one's actual demise.</p> <p>Let's start with a look at the nature of the problem, and then we'll look at some solutions.</p> <h2>Terms of Service Agreements</h2> <p>Remember those &quot;I agree&quot; boxes you checked next to Terms of Service Agreements without so much as glancing at the fine print? They typically restrict &quot;non-authorized users&quot; (in other words, your survivors) from accessing your accounts.</p> <p>Plus, they often say accounts are nontransferable. While people violate service agreements all the time without repercussions, the agreements are legal contracts and <a href="http://computer.howstuffworks.com/internet/basics/web-site-terms-of-service.htm">violating them is a crime</a>, although a misdemeanor. Social media companies often say they allow heirs to <em>delete</em> the deceased's account and not much else. Photos, comments and stories, everything else (good and bad) is lost.</p> <p>A digital estate plan will help your executor access and manage your online possessions. While they do not guarantee access (because of those service agreements), they often persuade a service provider to approve login access, especially since the contracts can change.</p> <h2>Creating Your Digital Estate Plan</h2> <p>Experts recommend following these steps.</p> <h3>1. Create an Inventory</h3> <p>Make a list of your online accounts with their usernames and passwords. Include social media sites, online bank accounts and credit cards, and utilities paid online. Remember to update them when changing accounts and passwords or at least once a year.</p> <h3>2. Save It</h3> <p>Store them in a secure location like a safe deposit box, CD, flash drive, or encrypted computer file. Password managers such as <a href="https://lastpass.com/">LastPass</a> or <a href="https://agilebits.com/onepassword">1Password</a> make it easy to encrypt and securely store such data. Another popular password manager &mdash; PasswordBox &mdash; includes a feature called &quot;<a href="https://help.passwordbox.com/customer/portal/topics/319767-legacy-locker/articles">Legacy Locker</a>&quot; that stores logins and passwords and shares them with designated people upon your death.</p> <p>Don't include your logins and passwords in your actual will, which becomes part of probate court's public records.</p> <h3>3. Name a Digital Executor</h3> <p>Your digital executor can be different from your regular executor. The digital executor should be digitally adept and, like your traditional executor, be impartial and trustworthy. Be specific and name accounts the executor will be able to control, delete, and maintain.</p> <h3>4. Say What You Wish to Happen</h3> <p>Define what you wish to happen to your accounts. Do you want your Facebook account deleted or memorialized? Let your executor know if you're using <a href="https://support.google.com/accounts/answer/3036546?hl=en">Google's Inactive Account Manager</a>. Your executor is obligated to follow your instructions.</p> <h2>What Google, Facebook and Others Will Do</h2> <p>Google recently introduced its Inactive Account Manager. You can use the tool to name a &quot;trusted contact&quot; to be contacted if a Google account, such as Gmail, YouTube, or Blogger, becomes inactive for any reason. If your account is inactive for a period of time, which you choose, Google sends you a text or email. If you don't respond, Google can &mdash; based on your instructions &mdash; delete the accounts or allow trusted contacts &quot;to receive data&quot; from the accounts.</p> <h3>Facebook</h3> <p>Facebook won't release login information but will delete or &quot;<a href="https://www.facebook.com/help/www/150486848354038">memorialize</a>&quot; an account on the request of heirs. Memorialized accounts are essentially frozen in time. No one can login or add or change photos or anything else. Depending on the privacy settings of the deceased person's account, friends can share memories on the memorialized Timeline.</p> <h3>LinkedIn</h3> <p><a href="http://help.linkedin.com/app/answers/detail/a_id/2842/~/deceased-linkedin-member---removing-profile">LinkedIn</a> says it will shut down profiles of deceased members on request. It asks heirs to complete and electronically sign a form via DocuSign. If heirs have login information, they may want to download the deceased's contacts, although it's legally unclear if the contact lists belong to the LinkedIn members or their company.</p> <h3>Twitter</h3> <p>Twitter will shut down accounts of deceased users on request. According to <a href="https://support.twitter.com/articles/87894-how-to-contact-twitter-about-a-deceased-user">Twitter's policy</a>, heirs have to mail or fax a signed statement, a copy of the death certificate, and a copy of a government-issued ID like a driver's license.</p> <h3>Digital Media</h3> <p>When consumers purchase digital music and e-books, they technically only buy licenses to view or hear them. For instance, the iTunes terms of service agreement says accounts are nontransferable and will end if users don't meet the terms. But if agreements allow multiple computers per account, heirs could use that loophole to claim the purchased media.</p> <h2>Missing Login Information?</h2> <p>If a relative passes away without leaving login information, heirs <em>might</em> be able to obtain access with the proper documentation and patience.</p> <p>Google says it might provide <a href="https://support.google.com/mail/answer/14300?hl=en#1">Gmail access</a> if heirs send a copy of the heir's government-issued ID and the death certificate. But it makes no promises and warns the wait can be long.</p> <p><a href="https://support.google.com/youtube/answer/3306113?hl=en">YouTube</a> says it might grant access &quot;only after a careful review&quot; if heirs provide a copy of the death certificate and power of attorney document.</p> <p>Because the concept of digital wills is relatively new, it's unclear how the issue will evolve. Internet firms could change policies after more requests from grieving families. Few states have laws on digital estates but more may address the topic in coming years. Despite the uncertainty &mdash; or maybe because of it &mdash; creating a digital estate plan can help your family access your virtual self before it, too, expires.</p> <p><em>Have you considered what will happen to your digital self &mdash; and your digital property &mdash; after you pass? What steps have you taken? Please share in comments (which are forever, unless something happens to the server, or an heir asks that they be removed).</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/what-happens-to-your-online-stuff-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-5"> <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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/post-divorce-finances-7-steps-to-rebuilding-your-financial-house">Post Divorce Finances: 7 Steps to Rebuilding Your Financial House</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/is-it-time-to-talk-with-your-parents">Is it Time to Talk with your Parents?</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/estate-planning-why-me">Estate Planning: Why Me?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance digital will estate planning online property wills Tue, 20 May 2014 08:12:16 +0000 Michael Kling 1139916 at http://www.wisebread.com Life and Death: The Related Taxes, and How It Affects Your Family http://www.wisebread.com/small-business/life-and-death-the-related-taxes-and-how-it-affects-your-family <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/life-and-death-the-related-taxes-and-how-it-affects-your-family-tom-harnish" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/life-and-death-the-relate...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/life-and-death-the-related-taxes-and-how-it-affects-your-family" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000006796696XSmall.jpg" alt="Mother and baby" title="Mother and baby" class="imagecache imagecache-250w" width="250" height="165" /></a> </div> </div> </div> <p>Death and taxes, Ben Franklin wrote, are the only things that are certain in this world. Margaret Mitchell indirectly added babies to the list when she wrote in&nbsp;<em>Gone With The Wind</em> that&nbsp;there's never a convenient time for death, taxes, or childbirth. But even if taxes are inconvenient and death is certain (or the other way around), there is much we can do to make them easier on our family.</p> <h3>Kids and Taxes</h3> <p>If your business isn&rsquo;t incorporated, hiring your kids can produce substantial tax savings. You can deduct what you pay them, and you won't pay Social Security or Medicare tax, and you usually won't have to pay state unemployment or disability taxes on the money, either. Together, your family will send less to Uncle Sam.</p> <p>Your children&rsquo;s income is taxed at the same rate as yours until they are 19 (or 24 if they're full-time students). You can help reduce the tax bite by encouraging them to put the money in tax-free municipal bonds or growth stocks they won't sell until they&rsquo;re 19 (or 24), when their tax rate probably will be much lower than yours.</p> <p>If your estate pays enough taxes to take a disproportionate hunk out of your kids' income (as discussed above), you might want to gift some of your money to them. You can give a gift to whomever you like, and as many people as you like, and you won&rsquo;t pay gift tax if the amount is less than $13,000 per recipient per year. This isn&rsquo;t to avoid inheritance tax, by the way &mdash; in 2010 there wasn&rsquo;t any thanks to President Bush&rsquo;s tax legacy &mdash; but in 2011 there will be a 35% tax on estates over $5 million as part of&nbsp;<a href="http://www.wisebread.com/how-will-the-obama-tax-cut-deal-affect-you">Obama&rsquo;s &ldquo;tax cuts.&rdquo;</a>&nbsp;Most people won&rsquo;t have to worry about that; but if you do, gifts today can avoid taxes tomorrow.</p> <p>Be careful if you loan your adult children (or anyone else) money. If they want to borrow more than $10,000, you have to charge them interest. If you don&rsquo;t, you have to report a certain amount anyway, just as if you&rsquo;d received it from them. Paying taxes on money you didn&rsquo;t receive doesn&rsquo;t seem fair, but that&rsquo;s the way the tax code works.</p> <p>Another way to help your kids is to help them earn the retirement savings credit. The retirement savings credit can be up to 50% of the first $2,000 they pay into an IRA or company retirement plan, but paradoxically it's only available to low-income taxpayers &mdash; the very people who are least able to afford to make the contribution. But you can help, if you have an adult child who's not a full-time student, by giving him or her the money to fund such a retirement contribution.&nbsp;</p> <h3>Death and Taxes</h3> <p>Now onto sadder topics: If you're terminally ill and want to keep your home in the family, think about selling it to your kids now. It won't help your taxes, but it could save them some after you're gone.</p> <p>If you have investments that have been losing money on paper, consider selling them, too, before you die. Their value will be &quot;stepped down,&quot; as it's called, on the date of your death, and your heirs won't be able to claim the loss, so you might as well do it now.</p> <p>If, happily, you aren't terminally ill but thinking about living a very long time, keep in mind that a portion of long term care insurance costs are deductible.</p> <h3>Business and Taxes</h3> <p>If you are a self-employed business owner, you have a number of options when it comes to income and expenses. If, for example, 110% of your income is over $150,000 you don't need to make estimated tax payments this year. And you can also push some income into 2012 if you wait to send out bills until December 31st. You can can also chose pay some business expenses before the end of the year to be sure you get the deduction this year.</p> <p>And now that we're thinking about shifting money, consider shifting some of your own compensation from salary to dividend. Your salary is taxed on the basis of your tax bracket, which is probably 25-35%, but dividends are taxed at a maximum of 15%.</p> <p>The tax bite on some expenses, like compensation, varies too. If you buy a new company car your first year write off is about $12,000. But Congress has provided a tax incentive for gas guzzling SUVs and pickups, believe it or not. They told the IRS to let you write off $25,000 of the big vehicles expenses the first year, and depreciate the balance over the next six.</p> <p>Keep track of medical bills carefully. If you have to make modifications to your home for medical necessities, such as wheelchair ramps or hand controls for your cars, for example, you can include those costs in your medical deductions.</p> <p>Travel expenses related to medical care can be deducted too &mdash; and not just car mileage. You can deduct $50 a night per person for lodging if you have to go somewhere for treatment.</p> <p>Finally, keep in mind that what you do and don't deduct from you taxes, and what income you do or don't report is a serious issue. The tax tips offered here are simply thought-starters. Be sure get advice from a tax accountant or tax attorney to know you're doing it right. Besides, if your taxes are prepared by a professional you are <a href="http://www.openforum.com/idea-hub/topics/money/article/8-invitations-to-an-irs-audit-kate-lister"><span>less likely to be audited</span></a>.&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tom-harnish">Tom Harnish</a> of <a href="http://www.wisebread.com/small-business/life-and-death-the-related-taxes-and-how-it-affects-your-family">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-6"> <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/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</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/save-money-with-a-dependent-care-tax-credit-and-fsa">Save Money with a Dependent Care Tax Credit and FSA</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/business-succession-planning-part-2-how-life-insurance-will-insure-the-life-of-your-business">Business Succession Planning Part 2: How Life Insurance will insure the Life of Your Business</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-lessons-from-tax-day-to-remember-for-next-year">7 Lessons From Tax Day to Remember for Next Year</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-big-business-accounting-tools-every-side-gig-needs">4 Big Business Accounting Tools Every Side Gig Needs</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center Taxes business taxes estate planning family finances small business Thu, 20 Jan 2011 01:22:57 +0000 Tom Harnish 455894 at http://www.wisebread.com