How To: Family Estate Planning Tips

We have been busy preaching the benefits of estate planning. Our last post focused on elderly estate planning and now we are bringing our tips full circle with overall family estate planning guidelines.

Estate planning is a part of financial management. There is no difference in making wise financial investing decisions, paying your monthly bills and planning for your estate. In fact, you can often tackle some of the most difficult decisions of your life now, while you are young with a family so that later, your goals can be achieved. There are many things to look at, but some of those mentioned below are most important for the family unit.

Plan for Your Children

Planning for the care and well-being of your children is very important. If something, happened to you, who would care for your children?

• List a guardian for your children.
• Put in place a trust fund for each of your children to pay for their care should something happen to you.
• Ensure any wishes you have are clearly defined in your will and in the trust fund requirements.

This is something you need to do if you have children under the age of 18, under the age of 21 and you want to put stipulations on their access to money, or for any disabled children of any age.

Focus on Life Insurance

Life insurance is critical when you have a family. Right now, you may have a mortgage to pay. You may have debt and higher financial responsibilities then you will later on. If something happened to you, could your family continue with the lifestyle that they are comfortable with? A life insurance policy can pay off your mortgage and debts and provide your family with the money they need to make ends meet for several years.

Reduce Your Taxes

By establishing the right type of estate plan, you can take control over your financial investing and overall financial management after you are gone. One of the things you can do is to set up trusts that will shelter your assets from estate taxes, which are levied on virtually everyone when they die. You can reduce the amount of money that your family pays to the probate courts.

Make End of Life Decisions

Do you want to your life to be sustained through machines? If you become ill with a life threatening disease, do you want intense and invasive procedures to be taken to extend your life? Do you  have specific wishes about the medical care you receive such as surgical procedures, religious beliefs or others? Do you want your organs to be donated? All of these decisions only you can make, but you cannot make them later. These are decisions you can make now and clearly put in your will.

If you have a family, you do not want to leave them with these financial management decisions. Rather, if you start planning now for your retirement years and beyond, you will find yourself in a position to achieve the goals you have and to help your family to cope in one of the most difficult times of their lives. Make these decisions now before you cannot make them.

This includes providing this information on your pension, your retirement accounts, your investments and your life insurance policies. Verify that those beneficiaries are accurate.

• Do you need to appoint guardianship for anyone? If you have a disabled or minor child, this should be listed in your documents.

When you take the time to make these formal decisions now, you ensure that your estate planning goals are in line. Take some time to consider all of your options before making these decisions. To ensure that your wishes are legally provide, simply work with an experienced estate planning attorney to handle them.

Ask Joseph Leonard and Coastal Investment Advisors for additional personal finance advice or learn money management tips on financial management by downloading this free financial management guide.

Don't forget to see Joseph Leonard in person during an upcoming financial management seminar!

How To: Estate Planning for the Elderly

You have lived your life without a play, but one of the worst financial management decisions you can make is not having an estate plan in place. In many ways, this plan not only cares for you right now but it also gives you the power to make decisions after you are gone. For many, it is a critical step to take long before you are elderly but even if you are older, now is a great time to make some key decisions.

Decisions to Make Now

The following are some of the most important decisions you can make for yourself:

• Who is your durable power of attorney? This person ensures your wishes occur. They hold on to your will. They provide guidance for medical decisions if you cannot make them yourself. They also provide you with someone to rely on after you die to carry out your last wishes.
• Do you have a trust set up? Trusts can help your family to avoid at least some of the estate taxes they are likely to pay. Trusts also allow you to move property from yourself to others without having to worry about the legalities of doing so. Further, trusts can be in use to care for specific goals you have such as taking care of children, leaving money behind for young adults or even caring for your pet or favorite charity.
• Talk to your estate planning attorney, tax accountant or another professional to find out how you can minimize your taxes. Many times, there are instances when you can reduce the amount of tax paid to the government on your estate. It takes only a few minutes to make these decisions but it can make a big difference later.
• Do you have a formal will in place? Is that will updated to include any of the major life changes in your life? You will want to update your will often and you want to have several copies including one with an attorney, your durable power of attorney and another with your family.
• Do you have life insurance in place? While your estate may be tied up in probate for up to a year, your family may need money to pay for their needs throughout that time. A life insurance policy can provide this to your loved ones.
• Have you updated and assigned beneficiaries? This includes providing this information on your pension, your retirement accounts, your investments and your life insurance policies. Verify that those beneficiaries are accurate.
• Do you need to appoint guardianship for anyone? If you have a disabled or minor child, this should be listed in your documents.

When you take the time to make these formal decisions now, you ensure that your estate planning goals are in line. Take some time to consider all of your options before making these decisions. To ensure that your wishes are legally provide, simply work with an experienced estate planning attorney to handle them.

Ask Joseph Leonard and Coastal Investment Advisors for additional personal finance advice or learn money management tips on financial management by downloading this free financial management guide.

Don't forget to see Joseph Leonard in person during an upcoming financial management seminar!

Top 10 Estate Planning Tips

Estate planning is one of the best decisions you can make for yourself, your property and for your family. Estate planning is simply the process of organizing your assets, bills and wishes so that when you die, everything is planned out. That way, your family does not have to handle the financial management of your estate without being able to know what your wishes are. Further, estate planning helps you to save money.

However, there are many factors that play a role in estate planning to think about. The following 10 tips can help you to make the right decisions about planning your estate.

      

1. Hire an attorney to do the legal work of establishing trusts and management wills for you. While you can do some of this yourself, it is critical to realize that without the proper wording, you are unlikely to have the results you want to have.
2. Monitor estate tax laws and tax laws in general that affect your estate. You will need to come back to your plans from time to time to make changes so that your goals are still met.
3.  Update your will and your estate documents anytime a major change occurs in your life whether that be getting married, divorced, having a child, adopting a child or buying new property.
4. Plan to avoid taxes. Through trusts and other methods, you can safely protect the property you have worked so hard to build from costly estate taxes. In fact, many people can avoid probate altogether.
5. Look over your estate plans each year, especially towards the end of the year. Have you made wise financial decisions and can you make changes now that would be helpful later, such as adding more to your IRA before the end of the year.
6.  Do invest in life insurance. The right type of life insurance is an easy way to provide your family with a near immediate payment that they can live off of while your estate is being probated. Purchase an affordable plan that pays your families expenses for a year, which is the length that probate can hold up your estate.
7. Do more than just take a video message. Did you know that a video message of your will is simply not enough? You need to have a formal document that outlines what your wishes are. Further, you can use the video to explain why you made the decisions you did.
8. Put in place an element in your estate plan for medical emergencies and long term care. You need to have a living will put in place and you should also appoint someone to make key decisions for you, based on your needs, when you cannot.
9. Care for your minor children and disabled children now. Any parent with a child under the age of 18 needs to have a will that outlines what should happen to the children should the parents die. It should also provide for their financial well being if possible.
10. Take the time to put a plan in place. As simple as this estate planning tip sounds, it is the most important piece of estate planning advice. You do have assets and wishes that should be heard.

Ask Joseph Leonard and Coastal Investment Advisors for additional personal finance advice or learn money management tips on financial management by downloading this free financial management guide.

Don't forget to see Joseph Leonard in person during an upcoming financial management seminar!

Joseph Leonard Financial Seminar Schedule and Dates

Do you want to learn more about financial management?

Do you wish to increase your retirement savings?

Do you want to hear independent, unbiased information?

Are you ready to be successful with your investment strategy?

These in-person financial seminars will help you learn how to receive the most benefit for the time and money you invest. If you are involved in investing, regardless of your portfolio size; whether you use a portfolio manager, manage your investment personally or just wish to learn more about financial management - these seminars are for you.

Seminar Dates for 2010

• March 10th - Fayetteville, NC - Lone Star Steakhouse - 11:00am to 1:00pm
• March 11th - Southern Pines, NC - Vito's Ristorante & Pizzeria - 6:00pm to 8:00pm
• May 13th - Southport, NC - SJP Member Club - 6:00pm - 8:00pm

We'll keep you updated on additional seminars as they become available!

Ask Joseph Leonard and Coastal Investment Advisors for additional personal finance advice or learn money management tips on financial management by downloading this free financial management guide.

Understanding Mutual Funds Investing

Mutual funds are professionally managed, which makes them preferable to managing your own investments. These funds pool money from investors, usually a very large number of investors, and then invest it in stocks, bonds, money-market instruments, or securities of some kind or other. The mutual funds manager is the one who does the trading. Proceeds or losses are usually distributed to investors annually.

Mutual funds are a wise way to go in most investment situations. One advantage is that the costs are borne by all the shareholders. This makes cost-effective diversification possible. Also, a professional fund manager will use his/her expertise and dedicated time to do the research and make management decisions. Even so, a mutual fund that invests in stocks will be subject to the same ups and downs as the stock market.

You may be able to choose from several classes of shares in any mutual fund. The major difference is in the services the shareholder enjoys and the distribution arrangements that entail a range of fees and expenses. The differences are generally presented as the different costs involved in the various classes. If the shares are sold through brokers with a front-end load, the costs will reflect that. On the other hand, if the shares that are sold directly to the public with no load, the costs will also reflect that. It’s even likely that one class will be $10-million-minimum investors, generally only financial institutions. For all of these reasons, various classes will perform differently.

Front-end load or sales charge means the commission a broker will charge at the time that the mutual fund purchases shares. However, some funds have a back-end load, which means the sales charge is deferred. In other words, the investor pays no charge up front but will pay the charge out of proceeds when the shares are sold. A level-load fund is one whose sales charge is due if the shares are sold within a year of purchase.

Bond Funds

Eighteen percent of mutual fund assets are bond funds, including term funds (fixed time before they mature). Municipal bond funds tend to have lower returns; however, the tax advantages are significant and there is lower risk with these funds. At greater risk are high-yield bond funds. These are corporate bonds and will include high-yield or junk bonds.

Money-Market Funds

Twenty-six percent of mutual funds are in money markets. These carry the least risk, but the rate of return is lower. Money-market shares can be redeemed at any time; they are different from CDs in this.

Funds of Funds

It’s not uncommon for a mutual fund to invest in other mutual funds. In other words, these are funds made up of underlying funds. Actually, the investor could invest in these underlying funds if he so chose. The fees in these funds of funds are lower and the fees charged by the underlying funds are only disclosed in the fund’s annual report or prospectus. Both fund expenses and the underlying fund expenses impact the return, so this is important information.

A variation is a fund of funds is one that invests in another fund with the same manager, called an affiliated fund. The costs are typically lower when this is the case.

Hedge Funds

These are pooled mutual funds that have little regulation by the SEC. The adviser doesn’t have to follow or avoid any investment strategies. Also, no requirements are made regarding which investments may be purchased. These funds usually charge a management fee of 1% or more. Also, a performance fee of 20% of the fund’s profits is usually charged. Some hedge funds declare a period during which shares cannot be cashed in.

Ask Joseph Leonard and Coastal Investment Advisors for additional personal finance advice or learn money management tips on financial management by downloading this free financial management guide.

How to: Research an Online Stock Purchase

There are many ways to go about financial investing. A number of well-known companies sell stock directly to individuals. If you’re making a direct stock purchase yourself, you’ll find that most companies will not charge you a commission or if they do, the commission charges will be much lower than if you’re buying through a broker. If you’re interested in financial investing in only a small number of shares and want to keep your costs as low as possible, this is a good way to go.

There are many things to know about a particular stock. Remember that in financial investing, when you buy a share, you are buying a share of ownership in this company.

Types of Stocks to Purchase

Blue Chip Stocks

These are the oldest companies that have been continuously profitable. They usually pay a dividend. Many of the thirty Dow stocks are blue chips. For financial investing, many of the lowest-risk stocks are in this group.

Growth Stocks 

These are expected to have the greatest yields for financial investing. They typically don’t pay dividends because they tend to reinvest their earnings. When they’re growing, they tend to be pricey. However, if they’ve had a setback, the price can go down—a lot. If you choose to buy these, be prepared for the roller-coaster.

No-Load Stocks

If you go to a company’s website, you can usually find out if it participates in no-load stocks. These are inexpensive for purposes financial investing; in fact, sometimes you can invest for no cost at all. On the company’s website you can learn how to invest directly.

Speculative Stocks

These are risky for financial investing. The likelihood that you might lose a lot of money is very high here and the likelihood that you’ll make a lot of money is low. Some of these are priced under $5 per share.

What to Look for When Evaluating Stock for Financial Investing

• Price-to-earnings ratio
• Earnings-per-share increase over the past year
• Earnings of the company
• Yearly increase in revenues and profits
• History of stock splits
• Dividends
• Debts
• Relative strength
• Business model
• Management
• Plans for the future
• News—past and present
• Price of share
• Price fluctuations
• Price over time
• Projections for five years (estimates, of course)
• Ranking in industry
• Number of broker recommendations

You can find this information in the following places:

• MsFinancialSavvy’s interactive charts, bookstore, and news.
• Online web portals; i.e., Yahoo, Google
• Hoover’s Online
• http://www.sec.gov/ (Edgar Online)
• Website for the company
• Annual Report for the company
• Financial newspapers

For purposes of financial investing, you will want to make a chart in order to keep track of the information you collect. It’s the diligent researcher who is most likely to make profitable investments in stocks. You will need to pay either short-term capital gains taxes or long-term capital gains taxes. However, the experts say your focus should be on profits and earnings, not taxes.

Ask Joseph Leonard and Coastal Investment Advisors for additional personal finance advice or learn money management tips on financial management by downloading this free financial management guide.

How To: Financial Management Basics

Financial management covers a wide range of money topics such as budgeting, expenses, debt, saving, and retirement planning. Seeing how they go hand-in-hand can help you lay a solid financial foundation for yourself and your family.

Budget

Unfortunately, many families skip right over this step in the financial management process, and that’s a big mistake. We are faced most days with many decisions about what to do with the limited money we have in hand, and it’s difficult to remember everything. It’s better to create a budget and commit it to paper to avoid overspending, debt problems, or spending on things you don’t need.

With a budget, you can see clearly how much money you have, where it goes, and whether you have any left over. Besides, once you have this picture, you can begin to think about ways to optimize spending and cut out waste. Financial management at this level is how you get ahead, no matter what your income.

Getting out of Debt

When you begin to be realistic in your financial management, you’ll probably find that you have debt that will limit how much control you can bring to the process. Using credit wisely isn’t a bad thing, but you need to be sure that the debt you have is the good kind and not the bad kind.

The mortgage or debt that you take on to buy a home amounts to a lot of debt. However, this is usually good debt. In the first place, you must have a place to live for yourself and your family, so you either must rent or buy. If you buy, you can usually get a low interest rate, and you will be investing in an asset that will become more valuable in time in addition to giving your family the security of owning their own home.

However, if you go to the mall and have a shopping spree using a credit card with 22% interest and don’t pay it off right away—this is bad debt. Once your financial management plan kicks in, you will want to avoid this kind of unnecessary spending and the burden it puts on your ability to get ahead.

Pay more than the minimum each month. This is the first step to getting out of debt. The second one is to lower your interest rate. Talk to your credit card company first and see if you can negotiate interest. If not, you might want to look at other ways to lower the rate such as getting a bank loan and paying off all credit cards.

Saving for Retirement

With fewer companies offering pension plans and the uncertainty of Social Security, it’s important for you to be realistic about planning for retirement as a part of your financial management plan. Many feel that they don’t have enough left over to put aside any money for retirement.

Retirement savings as a part of your financial management plan is not an afterthought. It’s a priority. The IRS offers special tax-advantaged accounts such as employer 401(K) plans. Also, individual retirement accounts and special retirement accounts have been set up by IRA for the self-employed. Included in the benefits that come with these are tax deductions, tax credits, and tax-free earnings on retirement savings.

Even if you are just starting a family and just beginning to earn your own living, don’t fail to devote time to financial management. Or if you’re half-way through your earning years or even later, it’s not too late to do this. Having a financial management plan will pay off in ways you may not have dreamed.

Ask Joseph Leonard and Coastal Investment Advisors for additional personal finance advice or learn money management tips on financial management by downloading this free financial management guide.