Economics Finance

A slow market is a good time to tidy up your personal affairs. In the past 6 months, five long time subscribers have died without any warning to speak of or long illness. Some of their lucky widows had no difficulty settling their estates because they had taken the time to up the Real Property into Land Trusts and their Personal Property, including Land Trust shares, stocks, bonds, and valuables into Personal Property Trusts. All Trusts funneled down through their Living Trusts to their designated heirs without the need for the delay and expense of Probate.

In contrast, a couple of people had held title to their property in their individual names and had done nothing to arrange for the passage of their estate. In their mid-50s they reasoned that they had plenty of time to do their estate planning later. As a consequence, their widows and families are destitute because they can’t prove that they have any right to the property.

Continue reading ‘Why You Need to Set Up a Living Trust Now’ »

Pre-Need Funeral Planning

For survivors, the hours and days following a loved one’s death is no time for weighty decisions. For many Americans, however, this will be the first time they think about preparations for the loved one’s funeral. Given the expense and painful emotions often involved, survivors may be in no condition to make choices for themselves or their loved one.

According to a survey of its membership by the National Funeral Directors Association, the average cost of a funeral today is $6,500. That’s an expense that can quickly escalate as survivors confront a bewildering range of options on everything from the kind and quantity of flowers to the quality of their loved one’s casket. A premium casket alone, for example, can exceed $15,000. Add in the expense of roses over carnations and live music over recorded, and survivors can end up paying triple or quadruple the average funeral’s cost. Yet, without advanced planning to guide them, survivors may feel guilty about saying anything but “yes” to the best for their loved one.

Leaving these emotionally charged decisions to grieving family and friends can pose an unfair burden on them in their time of loss. That’s why a growing number of Americans are choosing to take matters into their own hands with pre-need funeral arrangements. According to the American Association of Re-tired Persons, over 21 million U.S. consumers age 50 and over have made pre-arrangements for their own or a loved one’s funeral, representing a total of over $25 billion in prepaid funeral expenses. The National Funeral Directors Association reports that nearly 98% of all funeral homes have instituted some kind of pre-need planning program, making it easier than ever for Americans to plan their funeral well in advance. Today, most funeral homes offer several pre-need planning options. Generally, the process begins when individuals sit down with a funeral director to discuss the plans available to them. Once they’ve reviewed their plans with their spouse and their loved ones, they purchase a funeral package that reflects their wishes down to every possible detail. Consumers have several alternatives for pre-payment for their funeral plans. One is to purchase a life insurance policy with the funeral home named as beneficiary. Or consumers can make payments in installments over months or years. With yet another alternative, they may work with a licensed funeral director to establish a regulated Trust which will pay their funeral expenses. Lastly, consumers may prepay for their funeral in an account which earns interest, and which can be designated “payable on death” to the funeral home. After death, if there’s more money in their fund than required to pay for their funeral, the family will receive a refund.

The benefits of a prepaid funeral package go beyond cost savings, however. For many families, it provides an important opportunity to talk about sensitive issues and concerns that might otherwise have gone unspoken, and it allows the family to decide together which funeral options will be most meaningful to them. In many ways, prepaid funeral arrangements allow families to lay the foundation for a faster process in the future. For many Americans, the discussion of their own funerals conjures up unwelcome thoughts of death. But once they overcome their initial resistance, most will find more peace of mind than discomfort in knowing that all the details of this important task have been handled as they want them to be. Continue reading ‘Seniors Overcome Fear, Obtain Peace of Mind Through Estate Planning’ »

If someone dies without leaving a will, there’s a certain way which their estate is handled, according to the laws of intestacy. In most cases it’s a long drawn out process but something that has to be done. The fact is that, although the people nearest to them, but not related, may not get anything at all (even if the deceased person would have wished them to benefit) there are enough close relatives to be able to sort out the distribution of the estate. We stress though, that this may not have fitted in with the deceased persons wishes.

Where there are no relatives to be found, the estate may come to the attention of a solicitor who is in charge of the estate of the deceased or from a firm of heir hunters. Heir hunters make every effort to track down family members and work on a commission basis if they are successful.

Some 300,000 estates produce around 85 million pounds to be shared out in this way, where there is no will and no apparent heirs. Heir Hunters is a general name for professional probate genealogists – although somewhat easier to get your tongue round – who make a living by finding surviving relatives of the deceased persons family and signing them up to act for them in making the claim. Continue reading ‘Could Heir Hunters Be Coming Your Way?’ »

Nowadays, when the term “married couple” crops up, this refers to registered civil partners as well as married couples. This includes civil partners of the same sex. If you don’t leave a will, then unless your partner falls into this category, they won’t inherit anything. No matter how long the relationship and the period of co-habiting.

There will be talk of Nil Rate Bands when it comes to Inheritance Tax. Although Inheritance Tax has its complications, there are basic rules which are easy to understand. The Nil Rate Band is the part of the total estate which someone leaves when they die, which does not attract Inheritance Tax.

The Nil Rate Band is subject to change but in 2009 the figure or 325,000 pounds applied. So when an estate has been valued at a figure of less than this amount, no Inheritance Tax will be due. Since the end of 2007 if the first person in the couple is deceased and has left the estate to their spouse or legal partner, then that partner will leave two Nil Rate Bands. This is quite straightforward, but if gifts have been made in the last seven years of the life of the first to die, then the amount of Nil Rate Band will be reduced. Continue reading ‘Inheritance Tax, Intestacy and More’ »

Dependent children require resources for health, maintenance, support and education. Some support is provided through guidance while other support requires money. Parents must provide both but what happens if the parents aren’t there to provide either?

The first step is crucial: have reasonable life insurance.

Could you imagine raising someone else’s child if the parents left no money? Most current statistics state raising a child to the age of 18 costs $250,000. Costs are higher in the earlier years due to doctor visits, diapers and daycare. On the back end, higher education could require additional money beyond age 18.

Even if only one parent is gone can the remaining parent alone afford mortgage payments, taxes, utilities and the costs of raising children?

What would the quality of life be for the surviving parent?

A family with one young child should consider having $500,000 in coverage.

What are your life insurance options? Three common forms are term, universal and whole life. Universal and whole life insurances are more expensive because they never terminate if you properly pay your premiums. Part of the premiums builds cash value, which one can borrow against or withdraw.

For many families term insurance is the best option because it is much cheaper and ends when needs for life insurance often diminish. It does not continue indefinitely nor does it build any cash value. If the term is 20 years, you pay the same premium for 20 years and after 20 years the policy ends.

How much does term insurance cost? $500,000 of coverage for a healthy, non-smoking parent is often less than $40/month.

It’s a good idea to have coverage on a stay-at-home spouse to help cover child-care costs and future retirement earnings if that parent were to return to work when dependent children are older. Continue reading ‘3 Estate Planning Steps For Young Families’ »