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Nothing is certain in life, the old saying goes, but death and taxes. And we’ll admit that, under most circumstances, neither subject is very uplifting to talk about. They can be pretty boring topics, too: Skimming through a stack of IRS paperwork may make you wish you were dead, and that’s even before you find out what you owe. Nonetheless, both death and taxes – and the financial and legal intersection of the two – are critical topics for all of us. Making sure we’ve planned well, financially and otherwise, can ease our anxiety and make our lives more comfortable and fulfilling … at least until the inevitable happens. Until then, you’ve got this guide.
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THREE VITAL STEPS IF YOU’VE LOST A LOVED ONE, SURROUNDING YOURSELF WITH THE RIGHT PEOPLE CAN MAKE A BIG DIFFERNCE WO RDS : H A N N A H WA L S H / C L I F TO N L A RS O N A L L E N W E ALT H A DV I SO RS LOSING A LOVED ONE IS ONE OF LIFE’S MOST TRAUMATIC EVENTS, AND NOTHING MAKES MOURNING MORE OVERWHELMING THAN BEING THRUST INTO MAKING FINANCIAL DECISIONS. There are things that will demand your immediate attention, like funeral arrangements and costs (if you have not already preplanned). Many other decisions can wait for weeks or even months, but some administrative wheels, such as those of WA LSH insurance companies, investment firms, and creditors, begin turning right away. Whether you are the executor or trustee of someone’s estate, a surviving spouse, or a family member, you will be faced with gathering a long list of documents; contacting banks, insurance companies, and other organizations; and making decisions. There are a number of things you can do to prepare yourself for the choices that lie ahead. 1. EDUCATE YOURSELF ON FINANCIAL CONCEPTS You are likely to come across language and terminology that you are not familiar with, or you’ll encounter terms you have heard before but you’re not entirely sure what they mean: estate, trust, and probate, to name a few.
TAX PROFESSIONAL (OFTEN A CPA) • Complete and file tax returns (individual, joint, and estate tax). • Develop tax strategies (filing status, tax bracket, and other changes resulting from the death). PROBATE ATTORNEY • Create or dissolve trusts. • Represent you in will probate proceedings. • Represent your interests in disputes and settlements. FINANCIAL PLANNER (CFP) • Coordinate legal and tax issues. • Advise on Social Security strategies. • Assist with notifications to financial institutions, insurance companies, brokerages, and others. • Manage investments and insurance proceeds.
There are tons of online resources to help guide you through the unknown, and checklists that can help walk you through your specific situation. In addition, you should engage a team of professionals to help you understand the vocabulary and concepts of personal finance. 2. SURROUND YOURSELF WITH THE RIGHT PEOPLE Before making any major decisions, assemble a team of trusted professionals to help with planning and paperwork. Obviously, you want to find people who will put your best interests first. If your loved one or spouse didn’t already work with an attorney, accountant, and financial planner, you will quickly find that their specific experience and resources are invaluable. Some of the most experienced and knowledgeable financial planners will have their Certified Financial Planner or CFP designation, and will work closely with your Certified Public Accountant and attorney on any planning that needs to occur. CFP professionals are held to a fiduciary standard to put your best interests first. What can each of these professionals do for you?
Even the simplest estate will have many moving pieces that will require the attention of people with resources and experience that you may not have. Unfortunately there are many professionals looking to take advantage of those who are undereducated on finan-
THE FINANCIAL AND EMOTIONAL BURDEN OF LOSING A LOVED ONE CAN BE TAXING. SURROUNDING YOURSELF WITH THE RIGHT PEOPLE ON A PERSONAL AND PROFESSIONAL LEVEL CAN MAKE A WORLD OF A DIFFERENCE.
cial matters or emotionally vulnerable. Ask your close friends and family for referrals. 3. KEEP LOOKING TO THE FUTURE No matter your age or health, there are people who are counting on you. It’s okay to grieve and be vulnerable, but you need to continue looking to your future. Don’t jump into any decisions that could alter yours or someone else’s retirement plans, cause financial hardship, or have negative tax implications. Give your emotions time to settle before you make any big financial decisions. At the end of the day, your peace of mind and health should be your top priority. Once you are ready to take the next steps, you will have successfully surrounded yourself with the right people to propel you forward into living the rest of your life. HOW WE CAN HELP Like many things in life, the death of someone you love is an opportunity to learn. Think about what you might do to make sure your affairs are in order so those who come after can avoid the financial challenges that you have encountered. CLA wealth advisory and tax professionals help people in all stages of life manage difficult financial decisions. Our experienced professionals will take the time to know you and help preserve a personal and financial legacy. Hannah Walsh, CDFA, is a wealth advisor with CliftonLarsonAllen in Eau Claire. She can be reached at Hannah. walsh@claconnect.com or (715) 8521100.
DISCLAIMER: The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting, investment, or tax advice or opinion provided by CliftonLarsonAllen LLP (CliftonLarsonAllen) to the reader. Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor. For more information, visit CLAconnect.com. WWW.VOLUMEONE.ORG
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FINAL CONSIDERATIONS AMERICANS’ APPROACH TO FUNERALS IS CHANGING, AND PLANNING AHEAD CAN BE KEY WO RDS : TO M G I F F E Y AN OPEN-CASKET VIEWING, A RELIGIOUS SERVICE, AND BURIAL IN A CEMETERY, ALL FOLLOWED BY HAM SANDWICHES IN A CHURCH BASEMENT. For decades, this was the formula for a Wisconsin funeral. Yet as our ways of life have changed, so have our ways of death. Funeral directors are at the forefront of these adaptations, and the products are services they offer have to adapt, too. “You have to be open,” explained Mike Hulke, who owns Hulke Family Funeral Home & Cremation Services with his wife, Kari. “You can’t treat every family the same. And I tell this to every family that walks in here: We try to treat every family as if they’re the only one we’re assisting, and all we care about is what they want.” Mike, who graduated from the University of Minnesota with a degree in mortuary science, has been a funeral director for 24 years, the last 19 of them in Eau Claire. He married into the trade: Kari Hulke is the daughter and granddaughter of funeral directors. Two of the couple’s children – Garrett and Brandon – are also now part of the business. The building that now houses Hulke Family Funeral Home, 3209 Rudolph Road, was originally built as Oak Park Dairy in 1918. In 1979, it was converted into Fuller Funeral Home by George Fuller, and in 1987 it was purchased by Harold “Jerry” Speckien. After later ownership by a conglomerate, the funeral home was purchased by the Hulkes in 2006. Being a family owned business is important to Mike Hulke. “We’re in this community,” he said. “We run into these people every day after serving them, so there is more of a sense of responsibility.” “When it’s your name on the line,” Mike continued, “you tend to ...” “Go the extra mile,” Garrett chimed in, finishing his father’s thought.
BY THE NUMBERS
CREMATION MORE COMMON For many Americans, what it means to go that extra mile – literally and figuratively – has changed dramatically in recent years. Fewer funerals involve religious or other formal
by the Beatles, Vince Gill, or Ozzy Ozbourne.
ceremonies, and In addition to “THOSE WHO HAVE more and more being less costly people choose – Mike estimates EXPERIENCED A to be cremated that cremation DEATH WITHOUT instead of havcan save a faming a traditional ily as much as PREARRANGEMENTS casket-and-vault $4,000 because burial. Accordthey don’t need a UNDERSTAND THE ing to the most casket, vault, or BENEFITS OF IT.” recent statewide related items and statistics, 59% of services – crema- M I K E H U L K E , H U L K E F A M I LY F U N E R A L deaths in Wiscontion opens a wide H O M E & C R E M AT I O N S E R V I C E S sin are followed range of options by cremation. to the bereaved: That’s higher According to the than the nationwide cremation rate, funeral directors’ group, 39% of the which was estimated by the National time, cremated remains are returned Funeral Directors Association to be to families while 37% of remains are 55% in 2019. (The latter rate is virtuburied at cemeteries. About 20% of the ally identical to what the Hulkes see in time, remains are scattered at nontheir business.) cemetery locations. The Brookfield, Wisconsin-based And cremation doesn’t preclude association projects that the cremation having a traditional viewing of the derate will reach 80% by 2035 because of ceased: The association notes that 27% a variety of factors, including “changof families chose a funeral service and ing consumer preference, weakening viewing before the cremation. religious prohibitions, and environBeyond the cremation-vs.-traditionmental concerns.” al burial decision, there are countless Mike Hulk added that cremation other ways that final arrangements can has also become more popular because be personalized. Over the years, Mike families and friends live farther apart Hulke has seen horse-drawn hearses, now, and sometimes funeral services motorcycles, and firetrucks involved are delayed for weeks or even months in funerals. And these days traditional to accommodate travel considerations hymns such as “Amazing Grace” might and mourners’ schedules. make way for more contemporary tunes
MAKING PLANS But whether you want to be buried in a vault, have your ashes shot into space, or exit the world to Ozzy’s wails, you have to let your wishes be known. Nationally, only about 21% of funerals are pre-planned, a rate similar to what the Hulkes see in the Chippewa Valley. They encourage people to let their families know exactly what they want to happen when they die. Preplanning can range from simply talking about arrangements with your family to actually prefunding your funeral. In the case of prefunding, the Hulkes said, an individual will outline his or her plans in detail and then receive an all-inclusive quote – tallying the cost of everything from embalming or cremation to flowers, death certificates, and obituaries – all based upon current prices. The necessary amount is then set aside in an account with a holding company, where it grows with interest until it is needed. “Then what we basically try to do is at the time of need, if the family has kept the exact plan and (made) allowances for all the costs, they won’t have to pay another dime for their funeral expenses,” Mike Hulk said. Why do only one in five Americans plan their funerals? “Some people feel that as soon as I plan it, it’s going to happen,” Mike said. However, he added, “Those who have experienced a death without prearrangements understand the benefits of it.” Nationally, there is a trend toward not having a service at all. Mike Hulke often hears people say “don’t make a big fuss” when they die. This might have something to do with Midwestern modesty. “I don’t know if that person really means don’t celebrate, don’t gather,” he said. “They’re just saying, ‘Don’t make a big deal of it.’ ” And while considering the deceased person’s wishes is important, Garrett Hulke notes that ultimately, those left behind make the call. “Funerals aren’t for the dead,” he said, “they’re for the living to move forward with the grieving process.”
44%
55%
36%
37%
Share of American adults who say they have a will, according to a 2016 Gallup survey.
Share of Americans 55 and older who have a will, according to a 2019 study by Merrill Lynch.
Share of Americans with children under 18 who have a will, according to a January 2018 survey for Caring.com.
Share of Americans who have advance directives, according to 2017 research by a University of Pennsylvania doctor.
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21% Share of Americans who have prearranged their own funerals, according to the National Funeral Directors Association.
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LIFE INSURANCE 101 W H Y DO YOU NE E D I T ? BE C AU S E I T ’ S T HE BE S T WAY T O P RO T E C T YOUR L O V E D ONE S WO RDS : J E N E K B L A D LIFE INSURANCE IS NOT EXACTLY THE MOST UPLIFTING TOPIC TO DISCUSS, but it is an important one. For this piece, I sat down with an expert in the matter: my husband, Dan Ekblad. Dan was a licensed insurance agent in Eau Claire for over 35 years. He was licensed in all lines of insurance and securities license 6 and 63. WHO NEEDS LIFE INSURANCE? Everyone. And you shouldn’t wait any longer. Life insurance will never be cheaper than it is right now: Life insurance goes up in price with age. And, the longer you wait to get life insurance, the greater the chances of something happening to you before you are covered. WHY SHOULD CHILDREN HAVE LIFE INSURANCE? Children should have it for a couple of reasons. First, purchasing a policy on a child can guarantee and lock in a rate for the rest of their life. And second, if it is purchased when they are young and healthy and things change in life, they are still guaranteed that insurance. Parents with children should have 5-10 years of their annual income in an insurance policy. IS LIFE INSURANCE A GOOD INVESTMENT? Yes, life insurance is a good investment because it can protect your assets and give you the ability to pass on your assets. It also can protect your family from inheriting debt upon your passing. It is important to note that the life insurance death benefit is tax-free; there are scenarios where it can become taxable, but that is not common. WHAT ARE THE DIFFERENT TYPES OF LIFE INSURANCE? There are five main types of life insurance: • Term Life • Universal Life • Whole Life • Variable Universal Life • Group Life The type of life insurance you choose really depends on how much you want to spend.
TERM LIFE INSURANCE is a life insurance policy for which the premium remains the same for the term of that policy (e.g., 10 years, 20 years, 30 years, etc.). The policy does not end at the end of the term, but the premium increases. UNIVERSAL LIFE INSURANCE is a permanent policy that locks in your premium until the age of 120 or until you die. While it may cost a little bit more and normally does not build cash value, you are locking in your premium. There are no dividends paid. WHOLE LIFE INSURANCE is the most expensive life insurance there is. The most common whole life policies are the Gerber Life policies. This type of life insurance is expensive because the insurance company is offering a guarantee of a specific interest rate and the money that you are putting into the policy. So why do it? Because it is a
WHO NEEDS LIFE INSURANCE? EVERYONE. AND YOU SHOULDN’T WAIT ANY LONGER. LIFE INSURANCE WILL NEVER BE CHEAPER THAN IT IS RIGHT NOW: LIFE INSURANCE GOES UP IN PRICE WITH AGE. WWW.VOLUMEONE.ORG
permanent policy that can build cash value and can pay dividends. VARIABLE UNIVERSAL LIFE INSURANCE is a unique policy. You pay one premium, but the money is split up. Part of the money goes to the guaranteed death benefit. The other part of the money goes into a subaccount which is being invested in mutual funds inside the policy. Why do this? People who have this type of life insurance can loan themselves money out of the subaccount without affecting the death benefit and there is no penalty for doing this. But, here’s the catch: If you overfund this policy too much, it becomes a Modified Endowment Contract (MEC) which basically turns it into an annuity and makes a portion of the death benefit taxable. GROUP LIFE INSURANCE is a policy you can receive as an employee benefit. It is inexpensive, as it does not require much underwriting. Typically, with a life insurance policy you are required to answer questions about your health history, height, weight, and current medical conditions and you are subject to a blood test and urinalysis. But a group life insurance policy usually means guaranteed issue with limited underwriting. The
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drawback is that you can’t take it with you. Once you leave the company, you lose your policy. CAN I BE TURNED DOWN FOR LIFE INSURANCE? It is possible. People can be turned down for many reasons such as excessive weight, tobacco use, drug use, diabetes, high cholesterol, kidney failure, and cancer. When you purchase a life insurance policy (not including group life insurance), the underwriting tests are paid for by the life insurance company. WHERE CAN YOU BUY LIFE INSURANCE? There are three basic ways to buy a life insurance policy: you can buy it directly from a life insurance company; through your local insurance agent; or online. With online options, life insurance has become very affordable and easily accessible to all. One company, Bestow, offers term life coverage starting at $5 per month. A few other companies who offer instant life insurance policies online include Ethos, Haven Life, and Ladder. Life insurance is the best way to protect your loved ones. Don’t wait another day to buy your life insurance policy.
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TAX SEASON IN WISCONSIN WHAT YOU SHOULD KNOW ABOUT WHAT YOU OWE
WO R D S : W I S C O N S I N D E PA R T M E N T O F R E V E N U E
WISCONSIN’S TAX SEASON, LIKE THE FEDERAL TAX SEASON, officially began on Jan. 27. Filing activity is typically most brisk during the first few weeks and the last few weeks of the season. This year’s individual income tax filing deadline is Wednesday, April 15. The Wisconsin Department of Revenue reminds taxpayers not to file until they have all their tax documents. Having to file an amended return later will significantly delay a refund. “Of the more than three million individual income tax returns the department received last year, just under 88% were filed electronically,” says Wisconsin Department of Revenue Secretary Peter Barca. “We would love to see that number at 100% because electronic filing is more secure, accurate, and almost always results in a faster refund.” People may use the free and accurate Wisconsin e-file online tool to file their state income taxes, or they may choose to use third-party software from an approved vendor. Like other online tools, Wisconsin e-file does the
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required math to prevent errors and allows direct deposit or withdrawal from a bank account. “Providing excellent customer service is very important to us,” Barca said. “We encourage taxpayers with questions to submit them online or call DOR’s individual customer service line at (608) 266-2486.” Barca noted that last year, 98.99% of callers rated their phone service as professional and knowledgeable. Taxpayers will find helpful re-
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sources available on DOR’s website (revenue.wi.gov) including: • A list of free tax help sites across Wisconsin and more information about them. • An online application that checks your refund status. • A free mobile app available through Apple and Android app stores. • DOR’s video center, with information on e-filing, free tax help and tax credits.
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POWER OF ATTORNEY: FOR MONEY, FOR HEALTH WHAT ’S THE DIFFERENCE BE T WEEN A HE ALTHCARE AND FINANCIAL POWER OF AT T ORNE Y? WORDS : AG I N G & DI SA B I L I T Y RE S O U RC E C E N T E R O F E AU CLA I RE CO UNT Y
“POWER OF ATTORNEY” SOUNDS SIGNIFICANT AND COMPLEX, BUT IT DOESN’T HAVE TO BE. Designating this power to a trusted spouse, family member, or friend is essential to making sure your interests are protected in the case of severe disability or deterioration of mental function.
HEALTH CARE
FINANCIAL
WHAT IS IT?
A health care power of attorney document makes it possible for adults in Wisconsin to authorize other individuals (called health care agents) to make health care decisions on their behalf only if they are no longer able to so.
A financial power of attorney document authorizes another person (called an agent or attorney-in-fact) to handle the financial affairs of the person creating the document (called the principal).
HOW DOES IT HELP ME?
This is an extremely important pre-planning tool to allow you to set out some of your wishes and pick your own decision-maker. If you do not have this document and need someone to make decisions on your behalf, a costly guardianship will have to be pursued in court. Having a proper power of attorney for health care can prevent the need for guardianship and save your family money.
This is an important pre-planning tool to allow you choose a person you trust to handle your financial affairs. If you do not have this document or other suitable arrangements made (e.g., a trust or the appointment of a representative payee), a Guardian of the Estate must be appointed if the principal loses the mental ability to make financial decisions.
WHO NEEDS ONE?
Everyone over the age of 18. Loss of ability to make health care decisions can happen at any age; likelihood increases with age or illness.
Everyone over the age of 18. Loss of ability to handle financial affairs can happen at any age; likelihood increases with age or illness.
WHEN DOES IT GO INTO EFFECT?
Only when you are no longer able to make complex medical decisions by reason of “incapacity.” Incapacity means two doctors have examined you and determined that either temporarily or permanently you are not able to make your medical decisions. This is when the document is activated. Note: It can also be deactivated if you regain your abilities.
It is effective immediately unless otherwise specified. It must be “durable,” meaning your agent has the authority to act on your behalf even if you become temporarily or permanently unable to make your own decisions. The current statutory state form for a power of attorney for finance is automatically durable.
WHAT DOES IT COST?
FREE! An attorney can also complete the document, but they will charge a fee. It does not need to be notarized, but it must be witnessed at the same time you sign it by two nonfamily adults who are not providing health care to you.
FREE! An attorney can also complete the document, but they will charge a fee. It does need to be notarized at the time you sign it.
Keep the original for yourself in an easily-accessible location. Provide a copy to each of the “agents” and your doctor’s office and/or hospital.
Keep the original for yourself in an easily-accessible location. Provide a copy to each of the “agents” so they can provide this to financial institutions upon request.
• • •
ADRC does not provide this form • gwaar.org/guardianship-resources • www.dhs.wisconsin.gov/forms/advdirectives/ adformspoa.htm
WHO SHOULD HAVE A COPY?
WHERE CAN I GET THE FORMS?
Aging & Disability Resource Center gwaar.org/guardianship-resources www.dhs.wisconsin.gov/forms/advdirectives/ adformspoa.htm
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