2022
ESTATE PLANNING ASSET PROTECTION
LONGEVITY
INCLUDING GIVING
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Messenger-Inquirer Friday, May 6, 2022
WHY IS IT IMPORTANT TO PLAN YOUR ESTATE? If you don’t, someone else will. People shrug off estate planning for a variety of reasons: They don’t own property; they believe their assets are too few or insignificant; they feel the magnitude of those decisions is too daunting. But if you have any assets, health needs and, particularly, any loved ones, it’s vital to map out a plan while you’re still in a position to do that. In this publication, local leaders in finance, education and elder law present thorough, thought-provoking plans to analyze your assets, determine your long-term care needs, set your goals, and define and preserve your legacy, whether it be supporting students with scholarships to your alma mater or ensuring your family will have a comfortable life. Most importantly, it’s best not to delay. Tomorrow isn’t guaranteed, so seize this opportunity to commit your wishes to plan. Because peace of mind truly is your most valuable asset.
INSIDE Asset protection........... 3 Financial plan now........ 4 Planned giving.............. 5 Special needs trusts..... 6 Wills vs. trusts............. 7 Spouses...................... 9 Life insurance............ 10 Longevity................... 11 Young adult planning... 13 Creating a will............ 15
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OWENSBORO ESTATE PLANNING COUNCIL For more than 50 years, this group of professional advisors has met regularly to study and educate themselves on a variety of estate planning subjects! Please visit the following web address to access a list of our local members.
Nick Volk President
Heath Greenwell Vice President
Dylon Cecil Secretary
HTTP://WWW.OEPC.COUNCIL.NAEPC.ORG/
Friday, May 6, 2022 Messenger-Inquirer
Asset protection is so much more BY NICOLE HAWKINS PRESIDENT AND CEO ELDER ADVANTAGE, LLC
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o say that handling your loved one’s assets (and health care decisions) in the face of a need for long term care is “difficult” is a tremendous understatement. The daughters, sons, wives, husbands, and many times, grandchildren and in-laws that have either undertaken this task or tried to assist someone else to do the same can affirm that this is one of the most difficult and emotionally exhausting journeys that a person is likely to encounter in life. So, to all those caregivers and stand-in financial quarterbacks — we want you to know — WE HEAR YOU. We understand how time consuming this project can be, to manage the income, bills and resources of an entirely separate household in addition to your own. We understand how exhausting it is to work a full-time job and still must make sure that home caregiver shifts are covered, medicines are correctly distributed and doctor appointments are scheduled an attended as needed. With all of this on your plate, the added stress of the extreme cost of long-term care for your loved one — whether they are in a nursing facility or at home — can be overwhelming. It is important to seek out support from groups and advisors who can identify with your unique struggles and offer advice and counsel that will lift your spirits and lighten your burden. Experience and compassion are not just unnecessar y “frills” when it comes to handling your loved
one’s asset protection case — they are the bridge that carries you and your family from the chaos to the calm. You do not need someone to experiment with your lives while they attempt to learn how to help you. You do not need someone that tells you they are protecting you but just wants to sell you a highly commissioned annuity product which benefits themselves far more than it benefits you; and you do not need only a few legal documents but no degree of day-to-day support and understanding of someone assigned specifically to assist YOUR family. I tell my team often that our mission in our business is not simply to “do a job” or “earn a fee”, but to change lives. The work that we do will make the difference, at times, between a family losing everything (including their minds, maybe) or saving everything. Asset protection is so much more than any one piece of this puzzle. We know what is necessary to help you, and we know that you are tired. Nicole Hawkins is the founder, president and CEO of Elder Advantage, LLC and an Accredited Agent with the Department of Veterans Affairs. She is also a Certified Senior Advisor (CSA) in good standing with the Society of Certified Senior Advisors and former Owensboro Walk to End Alzheimer’s Chairman. She has been a featured speaker at the Estate Planning Council of Owensboro multiple times and continues to be involved with multiple support groups and charity organizations.
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During an already difficult time, it is easy to get lost when confronted with long term care. What choices to make? What to do? Who can help? At Elder Advantage, we believe wise choices are why you accumulated your assets. Working with the RIGHT professionals will ensure that you keep them. When you have questions, we have answers. Elder Advantage, LLC & Meghan P. Johnson Law, PLLC the wise choice in asset protection.
OUR SERVICES ASSET PRESERVATION: you spend a lifetime accruing assets and building legacies. We help keep those safe, so they don’t get trapped by nursing home expenses and income restraints. MEDICAID REPRESENTATION: with everchanging laws, many applicants can be taken advantage of or misled. We help maximize benefit procurement and become an advocate who stands up for your rights.
benefits by working within the system to get veterans the help they deserve. We also help veterans who have previously been denied; allowing them to receive their benefits. WHY CHOOSE ELDER ADVANTAGE? This is one of the most difficult situations for you and your loved one. We take time for you to clearly understand the process and overload of information. We help ease your mind, provide guidance and help alleviate some of the stress.
WE HELP VETERANS Let us help you or your loved one get the Many veterans and their spouses are unaware of benefits they could be receiving. benefits you deserve. Call today for a FREE We help veterans maximize their VA pension consultation.
270.684.6757 | 866.896.3466 | info@elderadvantage.org elderadvantage.org | 1500 Frederica Street, Owensboro, KY 42301
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Messenger-Inquirer Friday, May 6, 2022
Start thinking about financial planning now
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inancial planning has become a catchphrase in recent years, and it’s something many consumers may not fully understand. Learning some key components of financial planning can help people have more capital on hand to help them achieve their shor t- and long-term goals. A 2018 study commissioned by GuideVine that polled 1,000 Americans 30 and older about their finances found that many lack knowledge of basic financial terms. In addition, the study found that numerous people feel completely lost in regard to having a solid plan with their money. Financial planning can be intimidating, but learning the basics of sound money management can help people secure their financial futures. According to the online learning resource WiseGeek, financial planning is a process of setting
Learning some key components of financial planning can help people have more capital on hand to help them achieve their short- and long-term goals. objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve financial goals. Investing, risk management, retirement planning, tax requirements, and estate planning are key components of financial planning. To get star ted with financial planning, the financial guide and online resource Ramsay says individuals will need to see where they stand financially, establish financial goals and create a plan
“Life gets complicated; how can complicated; money I keepLife upgets with the estate taxis tight. I need to get smarter about law changes everyone is talking about?ourI finances need a–plan to protect and taxes. Not just my family and someone to help for April 15th, but for our future. me make the right decisions.”
Alexander spends years preparing for moments just like these.
For tax & financial advice based on exceptional knowledge, experience & education, ask Alexander.
•Need help planning your estate? Ask Alexander •Does your estate plan need amending? Ask Alexander •Looking for gifting strategies? Ask Alexander •Do loved ones need assistance with daily finances and business duties? Ask Alexander •Need Estate and Trust tax preparation? Ask Alexander
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to reach those goals. While a person can create his or her own financial plan, oftentimes the help of a financial planner can make sure that all avenues are being explored, especially for financial novices. It’s impor tant to note that financial planning may mean dif ferent things to dif ferent people. For some, planning may revolve around saving for a child’s college tuition but still having enough money left to retire. Another person may be looking to save extra money to invest in a business venture. Others who are living paycheck to paycheck may need help reevaluating their spending so they can grow their savings. One of the key components of financial planning is to begin doing it as soon as possible. A financial plan can be instituted at any age, and goals can be revisited as life changes occur.
Friday, May 6, 2022 Messenger-Inquirer
ESTATE PLANNING
PLANNED GIVING 101: Make a lasting impact BY ASHTIN WARREN
CHARITABLE GIVING COORDINATOR HOSPICE AND PALLIATIVE CARE OF WESTERN KENTUCKY
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t may sound obvious, but if you haven’t created a will — you need one! Having an up-to-date will facilitates the process of distributing your proper ty and belongings. Without a will, the cour t will make the decisions on your behalf. It is best to have a legal professional create your last will and testament. Hospice of Western KY has several local resources if you need help choosing a financial planner or estate planning attorney. In creating a final will and testament, it is impor tant to
identify your priorities through planned giving. If there is a charitable organization you hold near and dear to your hear t, make sure you distinguish what you want to be left to them as your legacy. There are several benefits of planned giving. By making a planned gift, you not only make a lasting impact on a cause that is impor tant to you, also help to secure the future of the charity you suppor t. An estate plan may of fer tax savings for the donor or the donor’s heirs. Gifts of stock and real estate are two types of planned gifts that can be a real benefit to the donor and the charitable organization. A qualified charitable distribution (QCD) allows individuals who are 70½ years old or older to
donate to qualified non-profit organizations directly from a taxable IRA instead of taking their required minimum distributions. An easy way to make a planned gift is by naming your favorite charity as the beneficiar y of an insurance policy or bank account. Check with a financial planner to see if any of these options might be beneficial to you! Many non-profits like Hospice and Palliative Care of Western Kentucky make it easy to give now, and also in the future. You may choose to do a one-time gift (no gift is too large or too small!), or you could give on a recurring (monthly) basis — which is helpful to those on a limited budget, but who have a big hear t for their charity’s
mission. For example, you might consider giving a monthly gift that costs about the same as a cup or two of cof fee — that adds up and benefits the non-profit receiving it! You can also utilize planned giving to ensure that YOU make the determination of how your assets are distributed — not the cour ts. Please consider naming a gift to Hospice and Palliative Care of Western Kentucky, a 501 (c) (3) organization, in your will or estate plan. If your financial planner or attorney is in need of our EIN, it is: 31-1010160. To learn more about making a legacy or planned gift, please contact our Charitable Giving Coordinator, Ashtin Warren at 270.926.7565.
Contact us: 270-926-7565
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Messenger-Inquirer Friday, May 6, 2022
SPECIAL NEEDS TRUSTS: A primer BY JESSE T. MOUNTJOY, ESQ. SULLIVAN MOUNTJOY, PSC
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Special Needs Trust (sometimes called a “SNT” or “Supplemental Needs Trust” but herein termed simply a “Trust”) is a Trust created under a testamentar y instrument (such as a person’s Last Will) or under an “Inter Vivos” (during a person’s lifetime) Trust Agreement, primarily to preser ve government (public assistance) benefits for the beneficiar y of such Trust. 1. Assets of the Trust are not counted as “countable resources” of the “disabled”
beneficiary for eligibility for means-tested public assistance benefits. The Trustee of the Trust is authorized (but not required) to makes discretionar y distributions of income and/ or principal of and from the Trust in such a manner as to not adversely af fect (i.e., disqualify) a disabled Trust beneficiar y’s eligibility for public-assistance benefits; and Assets from the Trust are then available to supplement the care and ser vices needed for the beneficiar y that are not provided by public assistance programs. 2. Public Assistance Benefits. What do we mean by public assistance benefits? Examples
to be protected by and with the Trust (and the Trustee’s discretion) include: • SSI and/or SSA; • Medicaid; • HUD/Section 8 housing allowances (in various states and sometimes local assistance programs). 3. First Party Special Needs Trust. A First Par ty (sometimes called a “Self-Settled”) Special Needs Trust is a form of a solely discretionar y, spendthrift Trust designed to preser ve a disabled person’s eligibility for public assistance benefits. The public benefits may include means tested programs where eligibility is based on financial need (such as Medicaid, Supplemental
Security Income (“SSI”) or food stamps, or even insurance programs where eligibility is based on criteria other than financial need, such as Medicare or Social Security Disability Income. The Trust must be established by a disabled beneficiar y, his or her parent, grandparent, guardian or the district cour t and can only be established for individuals under the age of 65. Any assets that remain in the Trust at the Trust beneficiar y’s death must first be used to repay Medicaid for any payments made on behalf of the beneficiar y during his or her lifetime. CONTINUED ON PAGE 8
RONALD M. SULLIVAN JESSE T. MOUNTJOY MICHAEL A. FIORELLA R. MICHAEL SULLIVAN BRYAN R. REYNOLDS MARK W. STARNES CHARLES E. MOUNTJOY L. CHRISTOPHER HUNT From the Boardroom to the Courtroom. From Personal Planning to Personal Injury.
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Friday, May 6, 2022 Messenger-Inquirer
ESTATE PLANNING
EXPLAINING WILLS AND TRUSTS I BASICALLY t’s never too early for adults to think about estate planning. Estate planning is an impor tant par t of money management. While it’s easy to think of estate planning as just a way to dictate how your assets are allocated after your death, estate planning also can protect people and their money should accidents or injur y make them incapable of managing their finances on their own. Some familiar terms may come up when people begin planning how they hope to transfer their assets. Two more common terms are wills and trusts. Understanding the distinctions between the two can help people as they begin estate planning.
The online financial resource Investopedia notes that wills are legally enforceable documents that dictate how people want their affairs handled and assets allocated in the wake of their deaths. A trust is a relationship in which another party is given authority to handle a person’s assets for the benefit of that person’s beneficiaries. When making a trust, a person will need to designate someone as a trustee, who will be tasked with distributing assets in accordance to the terms dictated in the trust. Estate planning can be tricky, which is why many people turn to attorneys to get the job done right. Attorneys who specialize in estate planning will no doubt discuss the following topics with their clients. • Assets owned • Guardianship • Pets • Funeral instruction • Executor
to ser ve and be capable of executing the will. People who die without a valid will become intestate. This means the estate will be settled based on the laws of where that person lived, and a cour t-appointed administrator will ser ve in the capacity to transfer proper ty. This administrator will be bound by laws and may make decisions that go against the decedent’s wishes. To avoid this outcome, a will and other estate planning documents are crucial.
W H AT I S A T R U S T ?
A trust is a relationship in which another party is given authority to handle a person’s assets for the benefit of that person’s beneficiaries. When making a trust, a person will of 45 do not have one. cover other assets, such as W HAT I S A WILL? Putting wishes down on photographs, clothing, cars, and need to designate someone as a The online financial resource paper helps avoid unnecessar y trustee, who will be tasked with jewelr y. Investopedia notes that wills are work and sometimes hear tache distributing assets in accordance • GUARDIANSHIP: legally enforceable documents to the terms dictated in the trust. upon the death of a loved one. Parents’ wills should include that dictate how people want There are many types of trusts, Wills allow heirs to act with a declaration of who they their af fairs handled and assets the decedent’s wishes in mind, and working with an attorney who want to become guardians allocated in the wake of their specializes in estate planning can and can ensure that assets and their underage children or deaths. help men and women determine possessions will end up in the dependents. Wills should include a host which type of trust, if any, is best right hands. • PETS: Some people prefer of information, including for them. Estate planning can be tricky, to use their will to also dictate who a person wants to which is why many people turn guardianship for their pets and assume guardianship of I S I T B E T T E R T O H AV E A to attorneys to get the job done to leave money or proper ty their minor-aged children W I LL OR A T R U S T ? right. Attorneys who specialize to help care for those pets. should they pass away. Both wills and trusts can be in estate planning will no doubt However, pets do not have the This is especially impor tant useful when estate planning. discuss the following topics legal capacity to own proper ty, information to include in a In fact, wills are often used with their clients. so one shouldn’t gift money will, as sur viving relatives may to establish trusts, and many • ASSETS OWNED: Make a directly to pets in a will. have to go to cour t to contest list of known assets and figure • FUNERAL INSTRUCTIONS: people have both a will and a guardianship if parents do not trust. out which assets are covered Settling probate will not dictate who they want to ser ve Estate planning is an by the will and which will have happen until after the funeral. as guardians in their wills. important part of managing to be passed on according Therefore, funeral wishes in a Drafting a last will and one’s finances. A qualified to other estate laws, such as will often go unnoticed, states testament is an essential attorney who specializes through joint tenancy on a deed the legal advisement resource component of estate planning. in estate planning can help or a living trust. For example, Find Law. Despite the impor tance of people write their wills and, if life insurance policies or • EXECUTOR: An executor having a will, a recent sur vey necessar y, establish trusts that retirement plan proceeds will is a trusted person who will from AARP found that two out can help sur viving loved ones in be distributed to your named carr y out the terms of the will. of five Americans over the age the wake of their death. beneficiaries. A will also can This person should be willing
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Finally, there are two different types of First Party Special Needs Trusts, namely “Pooled Special Needs Trust” and Private Special Needs Trust, the details of which cannot be covered fairly and accurately within the short space allotted for this Article. 4. Third Party Special Needs Trust. The purpose of a Third Party Special Needs Trust is to preserve public benefits for an individual or family member with physical or mental disabilities. These are established under common law form the viewpoint that no one is required to leave anyone (except a spouse) any assets or properties at death and so accordingly restrictions may be placed on the Trust if the decedent (in Last Will for example) or Grantor (in a lifetime Trust) desires to create a Trust Fund for a disabled
While these types of Trusts are useful financial and estate planning “tools” in maximizing public assistance benefits for a beneficiary of such a Trust; nevertheless, like many “tools” they should be “handled with care” and utilized with the clear written instructions of a testamentary trust (under a Last Will) or a Trust Agreement. beneficiary that will supplement his or her means tested government benefits. Assets and monies are provided to a Trust for the benefit of a disabled individual by means of lifetime gifts or testamentary inheritance. This type of Trust must be purely discretionary spendthrift Trust that grants the Trustee the discretion and authority to determine if and when a distribution (to the disabled beneficiary) is appropriate and to deny a requested
distribution if such a distribution could negatively impact the beneficiary’s eligibility for benefits and/or overall wellbeing. Third Party Special (sometimes Supplemental Needs) Trusts can be testamentary or lifetime Trusts and can be revocable or irrevocable. Most importantly, the decedent (in the case of a testamentary instrument) or the grantor (in the case of a lifetime agreement) can determine how
the remaining Trust assets are to be disbursed at the death of the beneficiary (i.e., to such beneficiary’s children, lineal descendants, or brothers or sisters, etc. There is no repayment to Medicaid when the beneficiary dies. While these types of Trusts are useful financial and estate planning “tools” in maximizing public assistance benefits for a beneficiary of such a Trust; nevertheless, like many “tools” they should be “handled with care” and utilized with the clear written instructions of a testamentary trust (under a Last Will) or a Trust Agreement. Before utilizing this type of “tool”, please contact someone experienced in drafting and putting into place a Special Needs Trust, including an experienced estate planning professional (i.e. an attorney, tax accountant and/or benefits advisor).
Friday, May 6, 2022 Messenger-Inquirer
ESTATE PLANNING
For peace of mind, your spouse needs to understand your estate plan BY LAURA FAULK
TRUST OFFICER FIRST UNITED BANK AND TRUST COMPANY
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ou probably have taken great steps to ensure your spouse will be financially secure after your death. However, a lack of understanding about how available assets will meet his or her future needs may cause your spouse to live either well above or well below the affordable level of comfort. Make sure your spouse understands what resources will be available after your death and how your estate plan will be implemented. This can help provide some peace of mind for your spouse—and possibly for you, too. Understanding the Estate Plan
In many marriages, one spouse is more financially astute than the other, and he or she typically holds the majority of the financial planning responsibilities. At your death, you probably don’t want your sur viving spouse to have to quickly learn how to manage finances at such a difficult time. Better for him or her to learn now— while you are alive. Preparing your spouse to take a more active financial role includes a review of the family’s assets, liabilities, income and expenses. Make clear what income will be available, especially if your death will substantially impact cash flow. Make your spouse aware of which resources will provide income, such as retirement plan distributions, life insurance proceeds, and earning on investments and annuities. Also, be sure your spouse understands what tax,
expenses, and debts will be incurred after your death. If your spouse is not interested in learning financial details, then arrange your estate plan with sufficient structure—such as a marital trust—to provide for his or her needs. And select a trusted adviser or professional trustee to assist in managing your spouse’s financial affairs. Also, make sure your spouse has a basic understanding of what will happen to special assets, such as business interests, and the extent to which he or she will be involved with such interests. If your spouse isn’t, and doesn’t wish to become, actively involved in your business, then arrange your estate plan so that he or she is not burdened with the responsibility of managing it. CONTINUED ON PAGE 10
Your wealth. Your vision. Our commitment. Managing and protecting your assets is our primary focus. We understand your needs and desires are unique and we tailor our services to meet your individual goals, with protection and growth of assets as a primary focus.
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Jason Hawkins President/CEO 270-824-1633
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Before you implement or change any financial or estate planning strategy, always consult with your attorney and tax advisor first. Investments offered through First United Bank and Trust Company are not bank guaranteed, are not FDIC insured, and may lose value.
Laura Faulk Trust Officer
270-643-1653
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Messenger-Inquirer Friday, May 6, 2022
WHAT TO KNOW ABOUT
LIFE INSURANCE Millions of adults go to great lengths to protect their assets. Those measures run the gamut from simple everyday efforts like utilizing two-factor authentication when accessing financial accounts via online or mobile banking apps to more complicated undertakings like estate planning. EXPLAINING LIFE INSURANCE Life insurance is both similar to and different from other types of insurance. Like homeowners and auto insurance policies, life insurance provides financial protection in difficult circumstances. A life insurance policy is a contract between an insurance provider and a policy holder that guarantees a payout to beneficiaries designated by the insured individual in the wake of that individual’s death.
COVERAGE Coverage needs vary depending on the individual. Life insurance is intended to provide for loved ones in the aftermath of a policy holder’s death. How much money will those individuals need to pay their bills? Young adults who are just starting their families may want more coverage than aging adults who have already paid off their homes and saved a considerable amount for retirement. The National Association of Insurance Commissioners recommends that individuals ask themselves how much of the family income they provide and if anyone else, such as an aging parent, depends on them for financial support. Answering these questions can help individuals determine how much coverage they need.
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Documentation Assemble all relevant documents and information in one place so your spouse has easy access to the necessary information, including: • Wills, and any Codicils. • Trust Agreements and any amendments. • Financial statements, including retirement plan information, investment accounts, bank accounts, and CDs. • Liabilities • Life insurance information. • Information regarding the titling (or registration) of assets. • The key to and site of any safe deposit boxes. • A list of trusted advisors.
PERSONAL HISTORY Insurance providers differ, but individuals interested in life insurance can expect to be asked about their medical histories and lifestyle habits when discussing policies. Prospective policy holders will often be asked to sign waivers that allow providers to access their medical records. This is necessary so companies can get an idea of the health of the person applying for life insurance, which will determine the cost of a policy. That information, as well as family history, is important because it can serve as an indicator of future health risks. Some variables, including lifestyle habits like smoking, won’t necessarily appear on an individual’s medical history. In an effort to address that, insurance providers typically ask prospective policy holders to answer a variety of questions about their lifestyle, including whether or not they smoke and how much alcohol they consume. It’s vital that individuals answer these questions honestly, as companies can deny payouts to beneficiaries if they determine policy holders misled them during the application process.
No surprises Make certain your spouse understands how his or her financial needs will be met and who will provide assistance. This will not only increase his or her sense of security, but will also give you both what estate planning is really about—peace of mind. Laura Faulk is Trust Officer at First United Bank and Trust Company. First United’s Trust Department offers various services in trust, estate administration, and investment management. Before you implement or change any financial or estate planning strategy, always consult with your attorney and tax advisor first. Investments offered through First United Bank and Trust Company are not bank guaranteed, are not FDIC insured, and may lose value.
TYPES OF COVERAGE Insurance providers offer various types of life insurance policies. Term life policies are among the most popular because they tend to be affordable while offering substantial coverage. There are different types of term life policies, but policies tend to run for anywhere from 10 to 30 years and expire around the time individuals reach retirement age. That’s because many people save enough for retirement and don’t have the sizable expenses, such as a mortgage, to account for at this point in their lives. That means loved ones won’t necessarily need to be provided for in the wake of a policy holder’s death. Permanent life insurance policies last until the policy holder’s death so long as he or she continues to pay the premiums on time. Financial advisors can help individuals understand the ins and outs of the various types of permanent life insurance policies, which differ from term life policies because they can serve as investment vehicles and sources of loans in certain instances.
Friday, May 6, 2022 Messenger-Inquirer
ESTATE PLANNING
Will your money last as long as you do? BY EDWARD JONES MEMBER SPIC
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e all hope for long, healthy lives. But there’s a serious “side effect” of longevity — the possibility of outliving our money. How can you help prevent this? It’s useful to know the seriousness of the threat. Consider this: About 41% of all U.S. homes in which the head of the household is between 35 and 64 are projected to run short of money in retirement, according to the Employee Benefit Research Institute. While this statistic indicates a cause for concern,
it certainly doesn’t mean that you are necessarily headed for trouble — because there’s a lot you can do to help build and manage enough resources to last a lifetime. Here are a few suggestions: • Consider your estimated longevity. On average, a 65-year-old man can expect to live another 17 years, while a 65-year-old woman can anticipate about 20 years, according to the Centers for Disease Control. Of course, you’ll want to take into account your health and family histor y of longevity to arrive at a reasonable estimate. You can then use this figure to help determine how much money you’ll eventually need. To play it safe, you might even want to
tr y to build an income stream that can last beyond your estimated lifespan, possibly up to age 90. • Don’t overlook health care costs. When budgeting for retirement, allow enough for your health care expenses, which can be considerable. Even with Medicare, you can expect to spend anywhere from $4,500 to $6,500 per year, per person, for traditional medical costs. Also, you may want to prepare for two to three years of long-term care expenses, which currently range from about $50,000 per year for home health care to over $100,000 per year for a private room in a nursing home. CONTINUED ON PAGE 12
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• Revisit your strategy before you retire. As you near retirement, • Keep building assets for you may want to review your retirement. While you’re working, investment strategy, possibly constantly try to put away as adjusting your risk level so that much money as possible for your your portfolio would be somewhat retirement years. Each year your less susceptible to market salary goes up, increase your volatility. This is also a good time contributions to your 401(k) to review your spending needs in or similar employer-sponsored retirement. retirement plan. You may also want • Maintain a reasonable to contribute to an IRA, depending withdrawal rate. Once you are on your goals. And within your retired, you’ll likely need to start retirement savings, make sure you withdrawing from your 401(k), IRA devote a reasonable percentage and other investment accounts. To of your investment dollars to avoid taking out too much money growth-oriented vehicles that align too early in your retirement, with your goals and risk tolerance. you’ll need to set a reasonable, • Seek out sources of sustainable withdrawal rate based guaranteed income. As a retiree, on your assets, age and retirement you will receive Social Security lifestyle. A financial advisor can benefits — and the longer you help you determine an appropriate wait before claiming them, the rate. bigger your monthly checks will It will take dedication and be. But you might also consider determination to help ensure your investments that can provide a money doesn’t run out during your source of income you can’t outlive, lifetime. But you’d probably agree such as annuities. that it’s well worth the effort.
Make your next move to protect the ones you love.
Build an estate plan for peace of mind and provide for your future generations. With the guidance, support, and skills of our Wealth Management Team of professionals, you will find greater confidence in your financial plan.
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Friday, May 6, 2022 Messenger-Inquirer
ESTATE PLANNING
Estate planning isn’t just for seniors Estate planning not only sets forth a plan of how your assets BY JERRY GOETZ are managed or distributed if you PRESIDENT OF RETIREMENT & FINANCIAL STRATEGIES become disabled, incapacitated or die prematurely, but also sets forth a plan for your loved ones. ou should begin planning Who do you want caring for your now, even if you are a young children if you no longer can? adult! Estate planning commonly gets Who do you want making health care decisions on your behalf mistaken for planning seniors if you are unable to make them do when they begin to think about the latter parts of their life. for yourself? Who do you trust However, estate planning is for all to transact your financial affairs if you are unable? Will your adult age groups. children from a prior marriage Your estate consists of get anything? Will your assets ever ything that you own. A few go to a decedent of yours that examples include the vehicle is unable to manage their own you drive, the house you live finances? Will your assets be in, insurance polices you have probated and end up causing purchased, savings accounts emotional distress or hard you have built, investments you have made, and retirement plans feelings about the determined you have started. In most cases, distribution? All the above questions can be addressed many people already have many with estate planning. Do you of these items even when they really want the court in the are just in their twenties.
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state you live in to make these decisions for you and your family just because you failed to put anything in writing? Planning your estate early and reviewing it periodically as your situation and needs change will not only put you, instead of the courts, in charge of your estate plan, but it also will help you stay organized and aware of your situation today. It is likely to provide a framework to help you make decisions on your current financial and investment plan so that you can work to improve your chances of putting yourself in a more tax efficient and more favorable distribution position both during your lifetime and after. It is important to know that some things pass directly through contract instead of you last will & testament. Just a couple examples include your
retirement accounts and life insurance policies which can have a named beneficiar y on the contract. Things that pass by contract are equally important to plan and review as the things that pass through the probate process. You likely will benefit by coordinating your estate plan with both your financial advisor and attorney. Your financial advisor may be skilled in the planning and implementation, but most financial advisors are not attorneys and cannot draw up the legal documents. Attorneys are skilled in the legal aspects and will be able to help you with that part of your estate plan. Article written by: Jerr y Goetz, President of Retirement & Financial Strategies. Investment advice offered through Private Advisor Group, a registered investment advisor.
Building Your Retirement Foundation Jerry Goetz CFP®, CFS®, CRPC® www.retirementandfinancial.com View our website! Retirement & Financial Strategies 3402 Frederica St. Owensboro, KY 42301 270-215-2600 Investment advice offered through Private Advisor Group, a registered investment advisor.
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Things people should know about creating wills
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rafting a last will and testament is an essential component of estate planning. Despite the impor tance of having a will, a recent sur vey from AARP found that two out of five Americans over the age of 45 do not have one. Putting wishes down on paper helps avoid unnecessar y work and sometimes hear tache upon the death of a loved one. Wills allow heirs to act with the decedent’s wishes in mind, and can ensure that assets and possessions will end up in the right hands. Estate planning can be tricky, which is why many people turn to attorneys to get the job done right. Attorneys who specialize in estate planning will no doubt discuss the following topics with their clients. • ASSETS OWNED: Make a list of known assets and figure out which assets are covered by the will and which will have to be passed on according to other estate laws, such as through joint tenancy on a deed or a living trust. For example, life insurance policies or retirement plan proceeds will be distributed to your named beneficiaries. A will also can cover other assets, such as photographs, clothing, cars, and jewelr y. • GUARDIANSHIP: Parents’ wills should include a declaration of who they want to become guardians their underage children or dependents. • PETS: Some people prefer to use their will to also dictate guardianship
for their pets and to leave money or proper ty to help care for those pets. However, pets do not have the legal capacity to own proper ty, so one shouldn’t gift money directly to pets in a will. • FUNERAL INSTRUCTIONS: Settling probate will not happen until after the funeral. Therefore, funeral wishes in a will often go unnoticed, states the legal advisement resource Find Law. • EXECUTOR: An executor is a trusted person who will carr y out the
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terms of the will. This person should be willing to ser ve and be capable of executing the will. People who die without a valid will become intestate. This means the estate will be settled based on the laws of where that person lived, and a cour t-appointed administrator will ser ve in the capacity to transfer proper ty. This administrator will be bound by laws and may make decisions that go against the decedent’s wishes. To avoid this outcome, a will and other estate planning documents are crucial.
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