Oregon Estate + Business Planning Blog

Estate Planning is about Parenting with Purpose.

I had a major a-ha moment this week when I watched a video about estate planning at a web show called The Intentional Parent. It hit me that this is what estate planning is all about: Intentional Parenting, or Parenting with Purpose. 

I often try to pin down what my clients all have in common, and while they have varying incomes, careers, lifestyles, and values, what they DO have in common is that they are all seeking to parent their kids with purpose. The purpose is not always the same. I have clients whose kids go to the most academically recognized schools in Oregon and I have clients whose kids go to schools that are centered around the environment, religion, student democracy, and many other variations of those. I have clients whose kids go to public school and clients whose kids are homeschooled. Of course, parenting isn't all about what school you choose, but I bring up school choice to show you that while values may vary, all of my clients put a lot of thought and energy into their kids' education and upbringing. They're not just plowing through life hoping for the best. They're making decisions with purpose and intention.

Estate Planning is for parents who are parenting with intention and who want to protect the purpose that they have for their family. What will happen to all of the thought you put into parenting if something happens to you? Consider the following scenarios:

• You are injured and are out of work for many months;
• You are incapacitated and can't make health or financial decisions for yourself;
• You and your child are both incapaciated and there is no one to make decisions;
• You die prematurely without a plan in place.

What will happen to your purpose for your family in each of these scenarios? Who will take care of your kids? Who will make health decisions for you and your kids? Who will pay the bills? Who will ensure your kids complete their education? Who will pay for your kids upbringing? How much money will you have to pay to go through the various court processes if any of these things happen?

There are a lot of people who have the attitude of, "If I die, I die, but I'm pretty sure I'm not going to die." This is not the attitude of someone who parents with purpose. Someone who parents with purpose sees what they have in their power to do, and does it. You may not be able to ensure that the decisions that you make for your family will lead to a certain outcome, but you can ensure that if something bad happens to you, that your family has the best chance possible to continue life as you wanted them to live it.

It just so happens that right after Christmas comes the New Year, and that's the time to take action and make changes. If you haven't named guardians or prepared a will or trust (or if your current plan is more than a couple of years old), it's time to make sure that your precious family is protected. 

Happy Holidays to you and yours!

To your family's health & prosperity,

Candice N. Aiston

P.S.  Want to get started on the most important planning you'll ever do for your family?  Give our office a call at (503) 235-5150 to get started.  You'll be glad you did.

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Want to use this article in your newsletter or on your blog or website?

 

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Candice N. Aiston is an Estate Planning Attorney for families in the Portland, Oregon area.  She helps loving parents to prepare their families for a lifetime of security, prosperity, and guidance.  If you would like to receive her free report, "The 9 Common Planning Mistakes Parents Make," please visit http://candiceaistonlaw.com/.

 

5 Ways to Make 2012 the Year You Finally Get Your Finances in Order.

Have you felt a nagging desire to get your finances in order for the past few years?  Have you made resolutions every New Year, only to put them on the back burner when life happens?  Many of us have done so, and to help you to make sure that this is FINALLY the year you make it happen, I have put together 5 Ways to Make 2012 the Year You Finally Get Your Finances in Order:

1. Schedule a meeting with your spouse (or alone or with a friend if you're not partnered) to discuss and write down your goals.

The first step to achieving your goals is to set them and organize them.  If you have a spouse, you are not the only decision-maker, so it's important to get your spouse on the same page in order to get started.  I recommend setting a specific time to sit down together without kids and hash these things out.  If you're not partnered or married, set a meeting up with yourself or a friend to help you to get started.

2.  Make sure you have covered the Key 5 Financial Areas.

To make sure that you have a financially healthy family, remember PRICE: Protection, Retirement Savings, Investment, College Savings, Emergency Savings.  These five elements are the PRICE of financial health.  Make sure that you have goals in all of these areas.  Protection is important because you want to make sure your assets always stay in your hands and that you always have the income your need to care for your family.  Retirement Savings is important because there will come a day when you can't work anymore and you don't want to be living in destitution. Investment is important because you have the opportunity to see your wealth grow.  College Savings is important because financial debt is a huge burden for college graduates entering the workforce.  Emergency Savings is important because you just never know when you'll be laid off, injured, or have some sort of expensive emergency.  Paying attention to PRICE will ensure that your family is financially healthy.

3.  Protect your financial goals first.

Your financial goals are at risk of being devastated if you don't plan for incapacity, injury, or death.  Most families are just one medical crisis away from bankruptcy.  Planning now could mean the difference between financial devastation and financial prosperity for your family.  The very first thing that you should do to keep your goals safe is to talk with an estate planning attorney. The attorney should be able to help you with planning for your incapacity, injury, and death, as well as recommending a financial advisor to meet with who can walk you through disability and life insurance.  

4.  Hold yourself accountable.

There are a few ways to make sure that you get your goals accomplished, such as telling your friends and family about your goals, setting mini-deadlines for yourself on your calendar, and getting together with a group of similarly goal-oriented friends to hold one another accountable.  Make sure that you have some way of making sure that you don't let another year go by without reaching your goals.

5.  Celebrate your successes.

Each time you meet one of your goals, it's important to celebrate that.  I don't mean that you have to spend a bunch of money to celebrate, but just make sure to acknowledge it in some way. If it's a big goal that you've reached, then by all means, have a nice dinner to celebrate it.  You can also celebrate just by telling someone that supports you how you made a goal and reached it.  The continued support you feel from your community will encourage you to keep going.

If you keep these 5 ideas in mind when you're setting out to achieve your financial goals, you'll be setting yourself up for success!  Good luck to you and have a Happy New Year!

To your family's health & prosperity,

 

P.S.  Want to get started on the most important planning you'll ever do for your family?  Give our office a call at (503) 235-5150 to get started.  You'll be glad you did.

___

Want to use this article in your newsletter or on your blog or website?

 

You can!  Just please be sure to use this complete blurb with it:

 

Candice N. Aiston is an Estate Planning Attorney for families in the Portland, Oregon area.  She helps loving parents to prepare their families for a lifetime of security, prosperity, and guidance.  If you would like to receive her free report, "The 9 Common Planning Mistakes Parents Make," please visit http://candiceaistonlaw.com/.

 

Moms: Will you end up like her?

I recently heard the story of a Mom whose husband died. I know it happens all the time, but this story was particularly sad, because the woman ended up having to walk away from their house and allow it to be foreclosed on, because she couldn't afford to keep up with the mortgage payments and it would have cost too much to fix up and sell, if it would even sell in this market.

This is what estate planning is all about - it's about taking care of the people you love, even after you're gone.

I can't imagine having to grieve my husband's death, take care of my grieving children, and have to let go of our family home all at the same time. And the poor kids - they must be so devastated. I know the home is just a material possession, but if they love their home as much as my family loves our home, I know they're probably really hurting.

The sad thing is that it would have been so easy to take care of this with estate planning! A life insurance policy of just a few hundred thousand dollars could have bought this poor woman a couple of years until the market improved and she had healed enough to better her income situation.

One of the problems was that because of the way certain assets were titled, the husband's estate had to go through probate. So, a lot of assets were tied up and couldn't be used to help with paying bills. This could have been easily avoided with the proper planning. Probate is totally optional, and it pains me to see anyone not doing the planning they need to do to avoid it.

So Moms, what about you? Could this happen to you?

To your family's health & prosperity,

 

Candice

P.S. My May offer is almost over! You have to call today to get your free Family Wealth Planning Session (normally $750) and your $50 Hopworks gift certificate when you set an appointment and engage with our firm! (503) 235-5150.

5 Surprisingly Safe Investments during the Recession

Many of my clients are not sure where to put money right now! Normally, they'd put money into their retirement account or brokerage accounts, but when they keep seeing the numbers go down, it seems pointless to keep throwing money at those accounts. I won't speak to the legitimacy of these fears. There is plenty of commentary out there about how it's good for you and it's good for everybody if you keep investing. I'm not going to debate that here, but what I will do is show you 5 Surprisingly Safe Investments during the Recession.

1.  Term Life & Disability Insurance

As long as you are working with a company that is conservative in their investments and has not been terribly affected by the recession, you lose nothing by buying new policies now. Every parent needs life insurance. You must make sure your loved ones are going to be taken care of, even if you're not here. Every financial expert from the frugal-minded (Dave Ramsey & Suze Orman) to the entrepreneurial (Alexis Martin Neely) agrees on this one point. While everyone agrees that we need life insurance, the odds that you'll be disabled prematurely are about 4 times higher than the odds that you'll die prematurely. You should be looking into disability insurance at the same time you're looking into life insurance.

2.  Financial Planning

As everyone realizes the need for unbiased financial advice, the fees for financial planners are only going to go up! The value of getting your financial act together and getting a clear direction of where your family is headed financially is never going to be lost. And acting now could save you thousands in the long run and get you headed to financial wealth a lot sooner than if you meander through life without a plan to guide you. A financial planner will tell you what your retirement situation will look like and whether you are paying for any financial products that are unnecessary. They can also develop clear plans to help you see what you need to do to get to where you want to be.

3.  Estate Planning

A lot of smart people are investing in a relationship with an attorney for their family who will be there for their families when they can't be. At the same time, they are having their attorney develop plans that will protect their families if something happens to them. An estate plan that is done right and properly updated by the family's attorney is never going to lose its value. It is an extremely popular time to do estate planning right now, since low real estate and investment values bring certain planning advantages, and so you can expect that attorneys' rates will only increase. Don't wait!

4.  Your Physical Well-Being

Now is a great time to invest in your physical well-being. Take advantage of special offers by gyms and weight-loss centers. Getting healthy now could mean saving money later, by avoiding the health crises that often come as a result of not taking care of one's self. It's also a great time to make that dentist appointment and get that check-up. People don't often think about their health as something to invest in, but you'll be doing your family a huge favor by seeing it that way.

5.  Your Emotional and Mental Well-Being

It's also a great time to invest in your emotional and mental well-being! You could be a busy and overwhelmed Mom who needs a sitter once a week to make it to a much-needed meditation class or knitting circle. You could be an overworked business owner who needs to invest in a coach to help bring the business to the next level. Maybe you need to take a parenting class. Maybe you need to see a therapist to finally rid yourself of baggage from childhood. Now is the time to invest your emotional and mental well-being.

I think the idea behind each of these 5 investments is that they are not traditionally seen as investments, when that's exactly what they are. You put a little bit of time and money into these areas today, and you save a whole lot later on in life.

To your family's health & prosperity,

Candice

What you need to know about insurance companies in today's economy

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Insider secrets on choosing a financial adviser

My friend, Kim, is a fee-only for-services financial advisor.  This means that she is not selling a product, she is there to advise her clients on what their financial situation looks like, and to make recommendations to help them achieve their goals.  I asked her to write a post about what to look for when you are choosing a financial advisor who is affiliated with a company (because you will have to at some point if you'll be purchasing life insurance or other financial products and investments). Her post follows, but I'd add to what she said that company stability is very important.  Choose someone who works with a conservative company.  (NW Mutual and NY Life come to mind.)  Also, equally important, choose a person who you like, who understands your financial and personal goals, and who you feel that you can trust.  Here is Kim's post:

Does size matter?

 

Does size or affiliation matter when picking firms?  There are some advantages to working with a financial adviser at a large firm.  Firms like Merrill Lynch, Morgan Stanley, Smith Barney, and even Charles Schwab offer the convenience of finding almost everything you may need in one place.  From mutual funds to mortgages, business lines of credit to life insurance, and a wide range of services in between; all found by making “one-stop”.  There are also some disadvantages.  Here are some things to watch out for when working with an adviser at a large firm.

 

First, be aware of proprietary funds.  If your Ameriprise adviser only recommends Ameriprise funds, then your adviser is using proprietary funds.  This can be a problem for two reasons.  First, conflict-of-interest may be a problem.  Often the firm will pay the adviser more for using the firms’ funds. This “pay” difference may be indirect.  For example, they may receive additional or matching bonuses for selling “x” amount of the fund.  Additionally, internal peer pressure to sell the company fund may also create a conflict-of-interest.   So, the adviser may be making recommendations based on what is better for him/her.  Second, tax consequences may be a problem if you move to another adviser.  Proprietary funds can only be held at the issuing firm.  As a result, if you (or your adviser) leave the firm all funds will need to be sold.  Any gains will be taxed as capital gains.  Other funds are more easily transferred between firms.  Transferring a fund does not trigger a tax consequence.

 

Typically these advisers at large firms are managing anywhere from 200 to 400 plus clients.  As a result, many clients do not get annual reviews.  Annual reviews are an important tool.  Not only does it highlight investment performance against benchmarks, but also tracks progress to your goals.  Additionally, client service may also suffer greatly with a heavy client load.  It may take a day or two for a phone call to be returned, if it is returned. It is up to you to clearly communicate your expectations to the adviser.  Explain your expectations early in the process to help decide if he/she will be a good fit.

 

Another pitfall is that these firms do have so much to offer.  As a result, clients may be sold products they don’t need.  As an example, an adviser may recommend permanent insurance when term would be more appropriate; or a bond fund when treasuries or cd’s would be a better fit. 

 

Hiring a financial adviser is an important task.  They manage your money which ultimately impacts every aspect of you life.  If you do work with an adviser at a large firm then you need to do one of two things, or both.  Commit to educating yourself on financial investments.  The internet, books, seminars and workshops are good places to start.  Alternatively, you could hire a third party (conflict-free) fee only Certified Financial Planner™ (CFP®).  A CFP®  who is a fee only planner does not sell mutual funds, stock, life insurance or any other investments.  Typically, a fee only planner will work on an hourly basis.  Not only do they help ensure that you are on track for your goals, but they also make recommendations based solely upon your need for them.  A CFP® will work as your advocate.  To find a CFP® in your area go to www.cfp.net and click on “Search for a Financial Planning Professional”.

 

Kimberly Perreira is passionate about working with families and business owners (including professionals).  Kim is a conflict-free financial planner.   She lives in Hillsboro with her husband, son, twin daughters, and two dogs. When not playing with family, she enjoys reading, yoga, and trying new classes.  You can contact her at 971.226.8926. For more information about her services visit www.cawaring.com.

Parents: Take this test to find out if your estate plan protects your kids!

OK, parents!  I developed the following test to help you determine whether your current estate plan will protect your kids.  This is really important stuff to figure out now!  You don't want your family to have to pick up the pieces after you're gone.  So go ahead and take the test to see how you measure up!

Give yourself a point for each question that you answer "yes" to:

1. Have you executed a will or other estate planning documents?

2. Have you named a long-term guardian for your kids?

3. Have you named at least 4 alternate guardians?

4. Do you have a fail-proof plan to cover the immediate care of your kids if something happens to you?

5. Have you eliminated the possibility of someone contesting your guardian appointment?

6. Have you eliminated the possibility that your kids are involved in custody & child support battles after your death?

7. Do you have life insurance or sufficient assets to care for your child if something happens to you?

8. Have you named someone responsible to handle your kids' finances and inheritance?

9. Have you made sure that your estate will not be eaten up with unwanted medical and legal costs?

10. Have you made sure that your estate will not be eaten up with probate costs, as well as the time and publicity that entails probate?

RESULTS

0-4  Your kids are probably in danger if something happens to you!  See the explanations for the questions below.  You may want to consult an estate planning attorney to review your plan and add to it or revise it, if necessary.  Call our office at (503) 235-5150, and we can either set up a free Initial Planning Consultation, or, if you live outside the Portland, Oregon are, we can refer you to an attorney who is experienced in Estate Planning for Families with minor children.

5-9  You are very close to developing a perfect estate plan that will protect your kids.  You may want to consult an estate planning attorney to review your plan and add to it or revise it, if necessary.  Call our office at (503) 235-5150, and we can either set up a free Initial Planning Consultation, or, if you live outside the Portland, Oregon are, we can refer you to an attorney who is experienced in Estate Planning for Families with minor children.

10  Congratulations!  You must feel great, knowing that your kids are protected if something happens to you!  If you have the time, I'd really like it if you could give me a call at (503) 235-5150 or shoot me an email at [email protected] to give me the name of the attorney who prepared your plan.  I'd like to see about adding that attorney to my referral list, as I do get contacted from time to time by people who are not in my area, or people who would work better with a different personality.

EXPLANATIONS

1. Have you executed a will or other estate planning documents?

A common saying in estate planning is that everyone has an estate plan.  You may not have a will, and so your estate plan is whatever your state's law says it is.  It will be up to a judge to determine what happens to your kids and what happens to your assets.  Most likely, your kids will be placed with the "next-of-kin," with some exceptions, and your money and assets will be held in a court-appointed trust.  The court will also appoint someone to handle the trust, and that person will be entitled to be paid from your estate (the trust).  Each child will receive his or her share of the trust on his or her 18th birthday.

2. Have you named a long-term guardian for your kids?

If you haven't named a guardian, the court will appoint one for you.  It will most likely be the "next-of-kin."  This can be a problem if you would have picked someone different.

3. Have you named at least 4 alternate guardians?

You may have picked someone that you're really close with.  Well, what if you are in the same accident?  If you haven't named alternate guardians, you're right back to having the court pick on for you.

4. Do you have a fail-proof plan to cover the immediate care of your kids if something happens to you?

It may take the court anywhere from a few weeks to a year or more to finalize a guardianship appointment.  What will happen to your child in the meantime?  If you don't have a plan for the short-term, your child could end up in foster care, being cared for by strangers and being enrolled in a strange new school while everything is sorted out.

5. Have you eliminated the possibility of someone contesting your guardian appointment?

If there is anyone that you think would possibly challenge your guardian appointment, it is extremely important to eliminate the possibility that they contest the guardianship.  Otherwise, the best-case scenario is that your chosen guardian will spend thousands of dollars and hours defending the appointment; and the worst-case scenario is that your guardian can't afford to defend the appointment, so the person contesting it wins.  If you are not entirely sure the person will challenge the appointment and don't want to hurt their feelings over the matter, there are ways to eliminate the possibility that they challenge, while still keeping the matter totally private unless absolutely necessary.

6. Have you eliminated the possibility that your kids are involved in custody & child support battles after your death?

If you have named a married couple as guardians, you have brought on the possibility that your child will be involved in custody and child support battles after your death.  This could result in your child being raised by someone you wouldn't have chosen (such as, your sister's husband), and the person you would have chosen paying child support to that person.

7. Do you have life insurance or sufficient assets to care for your child if something happens to you?

The only people who don't need life insurance are the uber-wealthy, but I will bet you that even they have life insurance, because it adds so much value to an estate (and helps to pay estate taxes).  How will your guardian take care of your kids if something happens to you?  Be responsible, and get life insurance while you are young and healthy!  (And I don't sell it, so you should trust what I'm saying!)  You don't want your guardian to have to bow out because they can't afford it, and you want to make sure your kids don't have to live like Little Orphan Annie (before Daddy Warbucks stepped in) if something happens to you!

8. Have you named someone responsible to handle your kids' finances and inheritance?

If you haven't named someone to handle your kids' finances, the court will appoint someone for you, and they will be paid from your estate for their services. 

9. Have you made sure that your estate will not be eaten up with unwanted medical and legal costs?

Two words for you: Terri Schiavo.  You probably remember that her family fought for 13 years over whether or not she should be taken off life support.  That's 13 years of medical care and legal fees.  It all could have been solved ahead of time.  If she did want to be kept alive, she could have looked into a long-term care plan.  Whether she wanted to be kept alive or not, she should have properly documented her wishes to make them known.  Two more words for you:  Britney Spears.  You may remember that poor Britney was (allegedly) drugged by her manager and went coo-coo for a while.  Her parents had to initiate conservatorship proceedings to save her from her manager, who was looting her bank account while she was in her drug-induced daze.  It could have been solved a head of time.

10. Have you made sure that your estate will not be eaten up with probate costs, as well as the time and publicity that entails probate?

If you have assets worth over a certain amount ($200K in Oregon), a will-based plan will not save you from probate.  Your estate will be looking at thousands of dollars in costs, as well as a time-delay of several months (while assets may be frozen), and everything being a matter of public record.  That includes your kids' names and ages, the name and address of your guardian, and how much money your kids will inherit on their 18th birthdays.

How Much Life Insurance Do You Really Need?

Do you know how much life insurance you really need?  Use this simple calculator to get a good idea.  Things you need to take into account are:

-Your current earnings

-Your partner's current earnings

-Your kids' ages

-Your amount of debt

-Your family's yearly expenses

-Social Security expected

-New expense of childcare if you or your partner is a stay-at-home parent

You can get a pretty good idea about how much you need before you go to see an agent.  Consider what the agent says if he or she tries to encourage you to buy more, but don't be swayed unless it makes sense.  Was there an important factor that you forgot to consider?  Take the advice to heart.