Take A "Selfie" of Your Home

No one wants to think about losing household possessions to natural disaster, but the job of recovery can be made easier if you take time in advance to record your home and its contents. Walk through the rooms taking pictures of furniture, appliances and fixtures. You can even record a video narrating your journey through the house, pointing out electronic equipment, artwork and other objects that might need to be replaced.

Once you’ve completed this “family album,” keep it in a safe place. For example, you might store various photos or video on flash drives, keeping one in a safe deposit box, giving one to a friend or family member, or even storing one at work. Make sure you add to your photo collection by taking new pictures when you acquire assets.

Having an up-to-date digital record of your possessions will help with any insurance claims that you will have to file in the event a disaster does strike.



When a Family Member Needs Extra Help

Parents continue to worry about their children long after they’ve left the nest, but that is especially true for parents of children with special needs.  Special needs trusts, which hold assets without jeopardizing any federal and state benefits, have long been a part of the estate planning options available to parents.  Often, the trusts are left unfunded during the parents’ lifetimes, with life insurance or other assets passing to the special needs trust at the parents’ death.

But couldn’t parents simply leave assets to other children, knowing they will care for the child with a disability?  One drawback to that is that assets held by a sibling are subject to the claims of their creditors in the event of bankruptcy, divorce or litigation.  Or the siblings may die “out of order,” resulting in the disabled child either inheriting the funds or having them pass to other beneficiaries.

Some parents who have established special needs trusts find that a charitable remainder trust is a thoughtful way to augment the resources available for the child.  For example, the charitable remainder trust can make payments for life to the child’s special needs trust, which will hold the funds for future needs.  At the child’s death, the special needs trust may even be structured to distribute remaining assets to charity, similar to the charitable remainder trust.

The language used to create a special needs trust must specifically state that the trust’s purpose is to provide “supplemental and extra care.”  An estate planning attorney can explain the features of a special needs trusts and draft the necessary documents.


Are You Ready For Retirement?

Those nearing retirement should consider the next phase of their lives as a new “job.”  In preparing for that new career, there are several questions to ask yourself:

How much is in my portfolio and how is it held? Your investing goal up to now might have been growth, or growth with some fixed income, but in retirement, the focus may shift.  Now is the time for a review, with the help of your financial adviser, to see if changes are needed.  You want to avoid investing too heavily in one company.  That may be a concern for those who have significant stock of their employer in a 401(k) account.

Do I have enough to cover any long-term care needs? A long-term care policy may offer peace of mind that some of the costs of a nursing home or home health services will be covered.  Ask your insurance agent not only about a long-term care policy, but for a review of all your insurance coverage, including home and auto.  An umbrella policy provides added protection against any liability that would deplete your nest egg.

Do I need to update my estate plan? As you near retirement, you should review your estate plan, or have a will drafted if you don’t already have one.  This is especially true if you plan to relocate to another state.  Although federal estate taxes are not a concern for most people (only estates in excess of $5.34 million in 2014), the state in which you live or relocate to might have an estate or inheritance tax for you to consider in your planning.  This is also the time to review all your beneficiary designations, including life insurance, investment accounts and retirement accounts, such as IRAs and 401(k)s.  These assets generally pass to the designated beneficiary, not through your will, so it’s important to coordinate these with the rest of your planning.  Keep in mind that assets such as IRAs, 401(k)s, and U.S. savings bonds are subject to income tax at death.  If you name a charity as the designated beneficiary, or leave the bonds to charity in your will, the income tax can be avoided.


Raising Philanthropic Children and Grandchildren

Children aren’t born with a philanthropy gene; generosity has to be taught from an early age.  Some parents give an allowance that is divided into three parts — savings, contributions and spending money.  Often, however, children learn the joy of giving by watching their parents.  To encourage thoughtful giving, a parent or grandparent could discuss why they give, which charities they support and why and how to make gifts in a tax-smart way.

A grandparent could establish an informal “donor advised fund” that is the grandchild’s to contribute (grandma and grandpa would get the charitable deduction).  The grandchild could be encouraged to research various organizations or causes to determine how charitable gifts are used.  The child should be able to explain why a particular charity’s mission is important to him or her.  Or the grandparent could offer to match a grandchild’s own gifts, making the grandchild’s contribution even more valuable to the charity.


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The materials contained on this website are intended only to show some ways by which you can make a charitable gift or bequest and thereby minimize federal tax liabilities, as authorized by the Internal Revenue Code. All examples are of a general nature only and should not be applied to your specific situation without first consulting your attorney or other advisers.