Articles Posted in Financial Planning

An article this week from West Fair Online explained how professionals working with residents on financial issues have seen a significant increase in demand for their services as of late. While there may be a tendency among some to become paralyzed when the economy is so volatile, many others view the instability as a time to act prudently and plan ahead as much as possible. The article reports what our New York estate planners have long known: the need to have an estate plan remains strong regardless of the circumstances.

Experts know that the need for prudent planning is perhaps even more important at times like these, when there tax and policy uncertainties at the local, state, and federal levels. One planner interviewed for the story explained how in turbulent financial times “the area’s residents should have a vested interest in knowing what the stakes are for their assets.” While those residents at the top income levels are often more aware of how the laws affect them, many middle class families have just as much to gain by using the legal tools available to plan their financial future and save taxes in the long-term.

Most observers have applauded the steady rise in estate planning awareness. However, there are still a few groups which continue to neglect their planning needs. For example, many local small business owners continue to miss out on opportunities to visit with a New York estate planning lawyer to take care of long-term financial goals. Of course, small business owners wear many hats. Rarely do they have time to accomplish everything on their “to do” list each day. Yet, many benefits have been reported by those who have carved out time to visit with financial professionals to protect assets, create a succession plan, and conduct similar tasks.

An experienced New York estate planning attorney has likely come to appreciate how asset preparation issues are particularly important for women. Demographics play a role in this reality. Women tend to outlive men, and a wife is more likely than a husband to be left alone after a disability or death. In addition, men frequently take charge of handling family financial affairs while alive and risk leaving their wives in an unfamiliar position if preparation is not conducted ahead of time.

Yet polls continue to reveal that it is only a minority of women who admit prioritizing estate planning or familiarizing themselves with family financial issues. A Forbes article yesterday discussed this disconnect between the importance of financial preparation for wives and their prioritization of it. The story mentioned that women are much more likely to experience a decline in their standard of living following the death of a spouse because of their longer life expectancy, tendency to marry older spouses, and lower lifetime earning average. Interestingly, this also means that wives frequently have the last word about where a couple’s assets ultimately end up–either to the family, charity, or tax coffers–particularly when the family had conducted no prior planning.

This makes it essential for women to become equal participants in the estate planning process or to take charge of the process if no preparation has yet been completed. While talking about mortality is rarely easy or light hearted, it is a topic that cannot be avoided in the end. The story’s author suggests that it is often helpful to have a series of conversations about the topic instead of trying to cover everything at once. Of course every couple will have their own ways of communicating. However, it may be useful to mention the need to consider the children, refer to someone who recently passed away, or bring up a news article that discussed estate plans.

On Monday the Metro West Daily News discussed some myths about retirement. Popular culture, water-coolers chats, and other daily interactions often spread misconceptions about what it means to plan for retirement and what it takes to be financially secure in the future. Many area residents put in a lifetime of hard work, and it is important that theirs effort not be compromised through misunderstandings about the retirement process or failure to conduct proper New York retirement planning.

The article noted that one of the biggest misunderstandings relates to the overall cost of retirement. It is often a mistake to believe that reaching a certain net worth or portfolio value will mean that one can retire in luxury. The expanding length of retirement is one of the main reasons that this is no longer true. Sixty years ago, most individuals retired at sixty-five years old and usually lived until they were seventy. With life expectancy now at eighty years and beyond, the total money needed to retire at a certain lifestyle has increased.

There is a significant difference between funding a five year retirement and one that may be twenty years or more. Most will not have a “magic number” that will guarantee decades of luxurious retirement. Instead, residents need to take what they have accumulated and conduct proper planning to maximize their retirement value while preparing for contingencies.

Another of the myths shared was that individuals need not worry about planning for nursing home costs, because Medicaid will cover it. However, as anyone who has had to go through the process can attest, it is not that easy. Various requirements of need must be shown before the program will provide aid. In particular, if nursing home care is needed, there is a five year “look back” period. That means that Medicaid investigators will examine the asset transfers that have been made in the last five years to determine if property was given to others that could have been used to fund long-term care. Area residents can avoid this issue by having a proper New York Medicaid strategy in place to protect assets while ensuring access to the care they need.

The importance of preparation is why the article mentioned that perhaps the most harmful myth about retirement is that someone does not need any help in planning for it. Retirement planning encompasses a variety of components, each of which may require complex understandings of tax, financial, and legal issues. Without assistance strategic mistakes are often made.
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by Michael Ettinger, Esq.

Let’s face it, life insurance is a mystery to most people. Few know whether they have the best insurance for the money.

Here are some changes that may require you to review what you have.

Investor Business Daily reports, “Choosing a financial adviser can be akin to a stroll through a minefield. If you don’t prepare, your wealth could get blown up by a Bernie Madoff or wounded by someone whose skills are mediocre or simply not suited to your needs. But with proper preparation, chances are you’ll find one of thousands of advisers who can help you set and achieve your goals.”

Meeting with a prospective adviser to understand how they get compensated for their services as well as determine your comfort level with that individual is essential. Addition insight into an adviser can be found in promotional materials, websites and professional certifications. You may also look up an adviser’s Form ADV, which lists complaints and disciplinary actions, online with the Securities and Exchange Commission or your state regulators.

A New York Estate Planning attorney would be a good referral source for a qualified financial adviser.