A recent study completed by Greenwalt Research and the Employee Benefit Research Institute determined that employees are facing significant anxiety and stress when it comes to their financial futures.
Over 1,000 workers in the United States between the ages of 21 and 64 were interviewed for this study. 2 out of 3 employees cited concerns about being worried about their household’s financial wellbeing and their own financial futures. Employees also stated that efforts in the workplace are critical to their physical as well as financial wellbeing.
Just over one third of employees who participated in the study said that their employer offers a financial wellness program, which did indicate an increase from previous studies. However, when it came to furloughed workers, the outlook was less positive. Fewer than 1 in 4 furloughed workers said that their employer’s efforts were very good or excellent when it came to improving their financial or emotional wellbeing. The survey specifically dove into topics, such as traditional defined benefit plans, retirement savings and health insurance and how this affects workers in terms of financial security.
Now is a good time to consider the benefits of comprehensive estate planning and financial planning to update your documents and strategies to adapt to changes in your life and in the world at large. The pandemic has prompted many people to think about how to best protect themselves and their future, so you’re not alone if you’re ready to discuss your options.
If you are curious about planning for your own financial future or have questions about the process, schedule a consultation with an experienced estate planning lawyer to protect your interests.
You’ve heard about an estate plan and you might have even referenced an elder care plan, but do you know how your financial plan fits in with the rest of these documents and strategies? Your financial plan is somewhat distinct, although it is definitely linked to your overall estate plan. Your financial plan is a document that takes a comprehensive look at your financial picture and helps you to determine how you’ll achieve specific financial goals.
You’ll need to think about your wishes, wants and needs and also understand your overall comfort level with risk when creating your own financial plan. More often than not a person who is confronting their financial plan for the very first time will use financial planning software, such as an analysis showing the impacts of taking money out of your different retirement accounts and how to invest aggressively to save for retirement.
A detailed cash flow analysis or net worth statement can also help you to get a 30,000 ft view of some aspects of your financial life that you should remain focused on immediately. As part of your overall financial plan, this helps you see when you need to make changes to existing strategies and how to adapt when challenges or unexpected windfalls like inheritances come your way.
You’ll also need to document all investible assets that could be used to achieve your individual goals as well as your current and anticipated spending and your detailed liabilities. Once you know where you stand financially, you’ll be able to craft a plan that is in line with your unique goals and priorities.
If you’ve done any financial planning at all, it’s common to feel like it’s a bit overwhelming to keep track of all the things you need to do or feel like you should be doing. But don’t let that keep you from taking these important steps to protect your interests and even your family in the future. Now is the perfect time to take a deeper look at how you can incorporate holistic estate planning and financial plan into your future.
The pandemic has encouraged many people to take a deeper look at their financial plans and uncover potential problems. Some people might not have even looked at their financial and estate plans over the past ten years because there have not been significant changes in account value. However, since the impact of the pandemic, many account values decreased tremendously.
The pandemic has brought forward a focus on end of life planning but other reviews of your estate plan can assist you with discovering ways that you need to alter your existing planning. For example, executives should be looking at opportunities to convert their traditional IRAs to Roths as long as they are considering the taxes that a client might have to pay for the conversion.
A consultation with your estate planning lawyer can be especially valuable right now given the challenges that have been presented by the pandemic and the opportunity to align and update your estate planning materials to ensure that they have your best interests and your intentions for your family members in mind.
Looking at the big picture financially, it’s good to have someone else review your existing retirement, asset protection, and estate plan. Another person’s insight can help you see some of the gaps where you need to step up your planning efforts. No matter where you’re at now, our lawyers can help you put together a plan that helps protect you into the future.
If you recently got remarried and you have joint ownership of your home and a joint bank account, you might suddenly discover that your new spouse is making payments toward unpaid taxes and credit card debt. Understanding how this affects your estate planning, as well as your life after this person, passes away is important.
You are typically not liable for debts that were incurred by your spouse prior to marriage. After your spouse passes away, the debt becomes the responsibility of that person’s estate. State laws may require you to pay debts out of the spouse’s property if you were named as the administrator or executor of the estate and this can include joint assets such as real estate and bank accounts.
It may be a good idea for you to keep your individual real estate holdings and bank accounts separate from your husband. Discussing estate planning tools and options with a knowledgeable attorney is strongly recommended if you want to outline your own plans for the future. The support of an experienced estate planning lawyer is instrumental in outlining what you intend to accomplish and helping you to understand your various roles and responsibilities. Failing to keep in touch with your estate planning lawyer as your life circumstances change could be a big mistake. For example, increasingly people are experiencing a phenomenon known as grey divorce or getting remarried or divorced in their older years. This can have significant estate planning repercussions if you don’t involve your lawyer in the planning process and the revision of your estate planning documents as needed. An attorney is a vital component of your overall strategy.
If you’ve already made an appointment to discuss your estate planning options, it’s possible that your estate planning attorney recommended that you have other professionals in your corner, such as a CPA or accountant or even a financial advisor.
The truth is, much like estate planning professionals, not everyone thinks the same way about the financial planning process. It’s in your best interests to do appropriate due diligence and research to figure out whether the financial advisor you intend to work with is the right fit for you.
One of the easiest places to start in your search for financial advising support is to ask your estate planning attorney directly. If he or she is active in the community, they may already have a relationship with a financial advisor they trust.
This can be beneficial to you because since your estate planning professional already has a regular and ongoing relationship with this other party who has the expertise, it will be easy for them to coordinate together as you develop or change your estate and financial plans.
Entrusting your future plans to a team of people who are thoroughly supportive of you and aware of any changes in the laws will be critical for you as you go forward and it can be much easier for you to accomplish your goals knowing that multiple people are looking out for your best interests. Getting a referral from your current estate planning attorney is often the first stage for identification of a financial advisor and you can continue to do research on your own and ask friends and family members who have had a good experience with other financial advisors if you are not able to come up with someone you are interested in working with.
Do you have your finances in order? Do you know where you’d start if you wanted to make this a goal for the future? Most people get confused by the prospect of financial literacy and choose to put it off entirely. Others are not sure what financial literacy encompasses and get overwhelmed when they look into the basics. The good news is that foundational financial literacy doesn’t have to be difficult, but engaging in the process can have positive and far-reaching consequences for you.
Most people put off the process of estate planning to begin with, due to the belief that it doesn’t affect them or that they are not at risk of a sudden incapacitation or death. However, financial literacy development now can benefit you in numerous different ways. In order to be independent financially and to have a long-term plan that considers your retirement, long term care and estate planning needs, you must be financially literate.
It’s never too late to improve your knowledge about financial issues. Searching the internet, taking a financial literacy class and reading magazines and newspapers can also help you get a better understanding of money matters. Purchasing financial tools will also assist you with determining where in your financial life you are maybe falling short. For example, a financial calculator can help you to determine interest rates, loan payments, cash flow and percentages.
A financial dictionary can give you a better understanding of many of the most common terms used in relation to financial advice. Starting an investment club or asking for expert advice can also be instrumental in giving you a better method of understanding critical financial issues.
When your financial literacy improves, you would better understand not only how to protect yourself now and well into the future with your retirement but also how to support your loved ones and beneficiaries if something were to suddenly happen to you. Most people wrongfully assume that estate planning is only about assisting your loved ones after you have passed away. However, the truth is that estate planning also serves an important purpose in the process of planning for incapacitation. Incapacitation documents should be drafted by an experienced estate planning lawyer.
Many people are confused about investment basics and this can cause problems when they approach financial or estate planning. Financial planning unfortunately, usually isn’t taught in schools and investing or financial management are not necessarily intuitive, but it is critical to know how to plan for your own financial wellbeing. Many people believe that they should be doing all of these various things related to their investment and retirement planning and often become overwhelmed by so much information.
Learning about the basic types of investments and determining what you would like to achieve in your retirement, is a great way to begin with your end goal and then reflect backwards about the steps that you could take to protect your best interests.
Scheduling a consultation with a knowledgeable financial advisor and an experienced estate planning attorney can help you to understand all of the various assets that make up your current estate and how these should be considered together when you approach the future. The support of an estate planning attorney in particular, is very valuable because many people underestimate the volume of the assets inside their individual estate.
If you fail to include all of the necessary assets, you could expose yourself to unnecessary tax consequences and problems for your loved ones in terms of the state making decisions on your behalf because you chose not to engage in estate planning.
Far too many Americans have put off appropriate financial planning and this means that they find themselves in the midst of a financial planning catastrophe when it is too late to take many steps to protect yourself. Thankfully, there are ways to avoid financial procrastination and these can be greatly assisted along by scheduling a consultation with an experienced estate planning attorney and financial advisor. A new study by Career Builder found that nearly eight out of ten Americans live paycheck to paycheck. If you want to remove yourself from the common challenges faced by people in this situation, you need to recognize that missed financial opportunities abound.
You know you need to take action and you may plan on taking action someday, but without putting a plan in place, you’re simply procrastinating. Many people assume that they won’t fall subject to any of the most common issues that could put them in need of immediate financial help. Some of the most common mistakes that you can make that could cause you to become a financial procrastinator include:
Paying only the minimum on your credit card.
Not having emergency savings.
Ignoring estate planning basics such as setting aside time to put together critical documents for while you’re still alive and after you pass away.
Not getting serious about retirement, including ignoring the most beneficial retirement planning opportunities.
Setting aside a time to consult with an experienced estate planning professional and other financial advisors is strongly recommended.
So you’ve already got to the point where you recognize you could benefit from a conversation with an experienced financial advisor. Along with a CPA and an estate planning attorney, a financial advisor can become an important component of your team of trusted professionals. You’ll want to interview several different options for a financial advisor and look into their backgrounds and references from other clients before making a final decision.
The initial interview can help you clarify whether or not this person has served as a fiduciary before, their individual certifications, and the types of services they offer. You can also ask more about their specialties and areas of focus.
The advisor’s minimum investable asset requirement is something you should also ask about during the initial interview. Anyone will want to know exactly how they will be charged by a financial advisor, including how much you’ll pay for advisory services and fees associated with underlying holdings if this person manages your portfolio. Advisors charge by different models, including by the hour or as a percentage of assets under management.
You can verify that the appropriate planner has the CFP certification if this is important to you, and it is strongly recommended that you consider working with someone who has done the extra work to achieve this certification. Hiring an experienced financial advisor is just one piece of the puzzle. Make sure you identify a knowledgeable estate planning lawyer so that the documents and strategies you put together can all be reviewed in full and work with one another.
Finding the right people to help you with your estate and your financial affairs is more than just good advice- it can help protect everything you have worked so hard to build. Make sure you investigate the background of any professional you intend to work with so that you have peace of mind about your future.
It is always important to carefully vet and obtain references and testimonials for individuals that you wish to include in any aspect of your future such as your retirement planning, your financial planner, and your estate planning attorney. A new story has emerged indicating that an individual in New Jersey stole approximately $900,000 that a client had given that person to invest in mutual funds.
Money was given to a financial advisor in March 2011 to be invested in mutual funds overseen by an investment firm. Instead the individual spent the money on business and personal expenses including funds spent in a car dealership, a country club, lending institutions and a private school.
The client requested updates and statements on his investments and fictitious financial statements were provided. It is always important to ensure that you are working with someone who is reputable and committed to carrying out your best interests. But when it comes to your finances you will need to do this for both you as well as any aging parents who may have similar concerns.
In the even that a foreign partnership owns foreign bank accounts with aggregate balances over $10,000 (US) on any particular date, the business owner should be aware of FBAR filing requirements. A financial interest in a mutual fund, trust, brokerage account, or any other foreign financial account may require an annual filing known as the Report of Foreign Bank and Financial Accounts through the Internal Revenue Service.
Some of the stipulations of who meets this requirement include that if the owner of record or the holder of a legal title is a partnership in which a US person owns (either directly or indirectly)
An interest in more than 50 percent of the partnership’s profits
An interest in more than 50 percent of the partnership capital.
There are a few exceptions as far as the reporting goes. Those who may be able to avoid filing an FBAR include:
Some foreign financial accounts jointly owned by a spouse
Foreign financial accounts owned by government entities or international financial institutions
IRA owners and beneficiaries
Certain individuals with signature authority but no financial interest in a foreign financial account
Participants in and beneficiaries of tax-qualified retirement plans
Trust beneficiaries (so long as a US person reports the account on an FBAR on the trust’s behalf)
Foreign financial accounts maintained on a United States military banking facility
As you might expect, IRS rules in this category can be highly complex and subject to specific terms. That’s why it’s helpful to meet with your tax law and accounting professional to determine your filing requirements. To learn more, email us at firstname.lastname@example.org or contact us via phone at 732-521-9455
Many business owners have a buy-sell arrangement set up for the future. It’s helpful to draw out these directions in advance, especially when there is the potential that future owners or part-owners might get gridlocked with one another. In these situations, buy-sell directions can help disputing parties move forward.
It’s possible that you’ve already heard about a shotgun buy-sell arrangement, but a quick draw agreement is a bit different. Under a shotgun, the offering individual stipulates a price. The offerree then has the option to buy those shares or to sell their own shares to the offeror. The exact timing isn’t a major issue in this situation, since the offeree retains the option to either buy or sell. In some ways, this can even be seen as a disincentive to pull the trigger.
All that changes under a quick draw arrangement. Under a quick draw, either side can provide a notice to purchase the other’s shares at a price that is determined through an appraisal process. This can happen after a contractually defined “trigger event”, but the timing of the trigger pull is essential in quick draw. Simply put, timing is everything.
Under quick draw, buyer and seller designation is determined simply by who submits their notice to purchase the other’s shares first. A difference of even just minutes can determine who gets to buy and who gets to sell. This complex process was recently held up in Mintz v Pazer, in which the judge supported this out of the box buy-sell arrangement.
If you’d like to learn more about your buy-sell options and put a plan for the future in motion today, reach out to us at 732-521-9455 or email us at email@example.com
If you or someone you know is planning a wedding anytime soon, there are many things to consider. One of the most important of which is finances. You must discuss money with your future spouse, even if doesn’t sound romantic.
Talking about finances is at least as important as discussing the reception or honeymoon. Maybe more important.
Talking about finances — budgets, insurance, savings and so forth — could be critical to ensuring a happy marriage, says a story on cnbc.com.
Setting a specific time to sit down and talk about how you want to organize your finances after marriage is key. Will you have joint checking accounts or separate ones? Who is going to manage the money and pay the bills? These are just some of the questions that must be asked.
It is also critical to set a budget and put your expenses and financial goals down on paper. It is important that each partner be okay with the other’s spending habits.
If there are disagreements, the couple may want to obtain the advice of a marriage counselor or financial advisor.
Other areas to discuss are life insurance ( a “must” for most couples, according to the article); debt, if there is any; disability insurance; homeowners insurance; health insurance; and an estate plan, or at least a plan to designate beneficiaries in case of one’s death.
More and more, elderly parents are moving in with their grown children. With the increasing costs of nursing homes, this makes financial sense for many people. But what should you and your parents do to prepare for such a dramatic move?
The first thing to consider is the financial details. If the adult children who are taking in their parents have siblings, they should work something out so that the other siblings (those not taking in the parents) contribute something towards the costs of rooming and boarding the parents.
Costs can mount up. Besides food, one may need to do renovations or hire a home care aide.
Consider having your parents sign a contract under which they pay their children for taking them in. Maybe the parents can contribute to the remodeling or gift their own house to their children. There may be tax consequences to these actions to consider.
To avoid or reduce resentment and guilt down, family members should discuss everything out in the open at the outset. An elder law attorney can help work these things out.
Once the decision has been made, one should consider making the home senior-friendly. This may involve putting on an addition to the home, installation of grab bars in the bathrooms, installation of ramps or conversion of a room on the first floor into a bedroom if necessary.
You may also be able to take a tax deduction by claiming your parents as dependants.
And make sure to seek out support from organizations such as local agencies that work on aging issues.
A recent article quoted financial planner Michael Joyce as saying, “There’s nothing magic about reviewing goals […], but it is a good time to refocus people on their financial goals.” Joyce’s statement could not be moretrue. It is good practice to periodically review financial and estate planning goals, and the end of the year or the beginning of a new year is a great time to check this off of the to do list.
Individuals should begin their review by checking the beneficiary designations on their retirement accounts, life insurance policies, 401(k) plans, and any other account with a beneficiary designation. It is important to not only ensure that a beneficiary has been named, but also that the named beneficiary is still appropriate.
Additionally, review the provisions in your will and trust documents. Consider whether any provisions need to be changed, added, or omitted. This is especially important if you have experienced a marriage, divorce, or the birth or death of a loved one since you first signed your will.
Individuals should also consider any tax law changes that will impact their assets. Tax laws are in constant flux, so a periodic review of applicable laws is the best way to plan to reduce anticipated taxes. This review should also include a review of gift tax limits, which may encourage an individual to increase year-end gift-giving in order to achieve a greater tax benefit.
The United States is home to thousands of charitable organizations that benefit everything from diabetes research to stray cats. These charities provide unlimited opportunities for people to contribute to organizations that support the causes that align with their philanthropic goals. A recent article describes how to plan for charitable giving.
An important part of charitable giving is balancing your philanthropic goals with your financial goals. Consider how to make your personal goals for charitable giving align with your overall financial plan. This consideration will help you determine how much you can realistically give.
Once you know what you can give, it is time to evaluate your giving options. Research various charitable organizations to find the one that best promotes your charitable goals. Realize that the best charity for you may be outside of your state, or even country, of residence. If you do not want to give funds directly to a charity, consider setting up your own foundation, donor-advised fund, or charitable trust.
It is also possible to donate your experience rather than money. Donations of time and human capital include serving on the board of a non-profit organization or sharing your professional expertise.
A majority of adults find it difficult to discuss financial issues with their aging family members. Although these are often difficult and uncomfortable conversations to have, they are often necessary. Moreover, it is important to have these conversations with your parents early, before they become unable to handle their financial lives. A recent article discusses how to start this conversation, and what topics to cover.
One way to ensure that you bring up this topic is to make an appointment with yourself to do so. A good idea is to plan the discussion for after a family gathering such as a birthday party. This way, other family members can join in the conversation. If you believe that your parents and family members will be receptive to the idea, select a date and time and then invite them to join in on the conversation.
During the conversation, it is important to discuss several different aspects of your parent’s estate. The first aspect is legal. Determine whether your parent has done any estate planning. If yes, ask where the legal documents are and what estate planning tools are employed, such as wills or trusts. Your parent may also wish to explain any distributions.
Another important aspect to discuss is healthcare. Determine what types of health coverage your parent has aside from Medicare. This may include long term care insurance, or simply some money set aside for anticipated health care costs. Finally, determine whether your parent has executed a health care power of attorney. If he or she has not, encourage him or her to do so. This will be an essential step should the time come when your parent is unable to make their own decisions on their healthcare.