$tart financial and estate planning early BY SUE WEBBER • CONTRIBUTING WRITER Financial and estate planning might sound like to-do items for people approaching retirement. In reality, however, it’s never too early to start. In fact, such planning begun in your 30s or 40s might make your golden years even brighter. FINANCIAL PLANNING Mary Kusske, owner of Kusske Financial Management in Burnsville for the last 28 years, said it is imperative to ensure that you are working with a certified financial planner. She encourages prospective clients to go to a website and check the credentials of a financial planner on CFP.org. “A well-established financial planner has no marks against his or her record,” she said. “You’ve got to do some research. A good planner will help you sort out some of the issues about what you’re going to do with the rest of your life.” She starts by asking clients to fill out a questionnaire, and asking them what they’re trying to accomplish. “I’ll ask them to tell me about their family and what they’re going to do when they don’t have to get up and go to a job every morning,” Kusske said. “People who retire at 60 could live until they’re 90. What do they plan to do for the next 30 years? We see a lot of people in their 70s who are still working. Others like to garden, golf or travel or go to the cabin.” As they work on financial planning, Kusske said, it’s important for people to have available basic documents: copies of tax returns, a will, a health directive and possibly even an employee handbook that will explain retirement benefits from their place of employment, life insurance and medical insurance for their job, as well as information about trust funds, 401Ks, IRAs, and pensions. They should
know who is named as the primary and contingent beneficiaries for their investments. A topic that Kusske spends some time discussing with clients is long-term care. “People put their heads in the sand, but I ask them whether their children know where their things are,” she said. Another important decision is when to take Social Security. “Most people retire and take Social Security when they’re 62,” she said. “I encourage them to wait until they’re 66, or even 70.”
One big mistake many people make is not having their assets titled properly and naming beneficiaries, Kusske said. ESTATE PLANNING “You probably have an old will in place that you had drawn up when your kids were toddlers, but you may not like what it does,” cautions Terrence Merritt, an elder-law attorney at Dougherty, Molenda, Solfest, Hills & Bauer in Apple Valley. He advises people to do a will sooner, rather than later. “If you’re having major surgery or tak-
ing a long trip, you need to get it done ASAP so you have one less stressor on your plate,” Merritt said. “Once it’s done, you can relax.” Assigning someone power of attorney is like filling out a health care directive in that you don’t know when it will be needed, Merritt said. Potential need for nursing home care or medical assistance needs to be considered, as well. “If something bad happens, you’ve prepared for your loved ones,” he said. Regarding wills, Merritt said, “It’s a common misconception that people do a will to avoid probate. Wills go to probate. Probate is not a bad thing, but trusts avoid probate.” He suggests that people put together a summary of their assets, how they’re held, and whether they’re in joint tenancy. It’s helpful to have a copy of their deed and information about any property held in other states. A family history also is useful for estate planning. “We’ll ask about how mom and dad died,” he said. Deciding whom to name to handle the estate involves assessing different skill sets, Merritt said. “If there’s no health care directive, the doctor will look to the spouse. But if the spouse has been diagnosed with Alzheimer’s, that person probably is not a good choice.” He advises parents to think about which of their children would handle the task well. “You want to make sure you name a child who can handle it,” Merritt said. “Some are good with money and terrible with health care stuff. People don’t like to think about this. They’re awfully tough discussions. We all like to think we’re going to live forever and die in our sleep.”