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Comedian Lewis Isn’t the Only One Disinheriting His Kids

Maybe it’s a trend—a number of high profile people have chosen not to leave their kids an inheritance. For legendary comedian Jerry Lewis, six kids from his first marriage won’t see a dime.

Because his estate used a will, which became a public document, we know that Jerry Lewis very deliberately excluded all of the children from his first marriage to Patti Palmer, from inheriting anything from his estate.

People Magazine’s recent article, “Jerry Lewis and 10 Other Celebrities Who Left (Or Plan to Leave) Their Kids Nothing,” explains that Lewis’s potentially vast estate will be passed to his widow, SanDee Pitnick, and the second in line to inherit his fortune, if something happens to his wife, is his 25-year-old daughter Danielle. The rest of Lewis’s seven kids will join the club of other famous children not getting a dime from their famous parents:

Mickey Rooney had a strained relationship with his wife and children for some time before his death in 2014, at the age of 93. There was infighting within the family right after his death, with his children bringing a lawsuit asking that his will be invalidated, claiming the legendary actor faced “undue influence” when he signed it just before his death. Seven of his eight surviving children weren’t named as beneficiaries to his estate, which was valued at just $18,000, a small sum for one of Hollywood’s most iconic stars. The estate would be potentially worth more in the future because of licensing rights and memorabilia (including an Oscar). However, his fortune had been diminished from years of mismanagement. The beneficiary was Mark Aber, Rooney’s stepson and caretaker in his final days. The other children claimed that Aber and the estate’s executor, attorney Michael Augustine, Rooney’s court-appointed conservator in the last years of the actor’s life, took “advantage” of him.

In another lawsuit, Rooney’s estranged wife Jan also contested probate of the actor’s will, claiming it “blatantly misquotes the terms of the settlement agreements [previously] reached between Janice Rooney and Mickey Rooney.” In fact, the battles were so intense that Rooney’s body had to be refrigerated for two weeks after his death, while his family fought in court over burial arrangements. By 2015, the last of Rooney’s children had dropped her objections, and his final will and testament stood as written.

In another case, one year after his death, The Tony Curtis Estate held an auction to sell off memorabilia and other items he owned. The estate raised more than $1 million during the online auction—all of which went to his widow and fifth wife, Jill Curtis. A portion went to the couple’s charity, according to Forbes. But Curtis’s five children, including actress Jamie Lee Curtis, received nothing from the sale. Forbes reported that Curtis had rewritten his Will and Trust just a few months before his death to exclude all his children. Like Lewis, Curtis reportedly listed all children by name, stating that he wished to intentionally disinherit them. No reason was given in the will.

Jackie Chan. No, he’s still alive and well.  However, he has publicly stated that he will disinherit his only son, Jaycee, after his death. Chan told the media in 2011 that half of his then-$130-million fortune would go to charity—and the other half would not be going to his kid.

Like Chan, Sting said that his children wouldn’t be getting an inheritance. He told England’s Mail on Sunday newspaper in 2014 that he wasn’t planning on leaving any trust funds for his kids. “I told them there won’t be much money left because we are spending it,” he reportedly said.

After selling the Star Wars franchise to Disney for $4.5 billion in 2012, George Lucas, a father of four, said the proceeds from the sale would be donated to charities to improve education. TV talent judge Simon Cowell, the father of a three-year-old son, said he doesn’t believe in passing on wealth from one generation to another, according to Time. Instead, he said he plans to leave his estimated $500 million fortune to charity, something benefiting “kids and dogs.” Ted Turner, estimated to be worth $2.2 billion, set up the Turner Foundation to provide grants for environmental causes. It’s set up as a family foundation so his children can be involved in charitable work. Canadian businessman and investor, Kevin O’Leary, also a judge on the ABC series Shark Tank, said in an interview that he won’t pass any wealth to his kids.

Warren Buffett, the genius behind Berkshire Hathaway, said that he is “not an enthusiast for dynastic wealth,” and pledged to give away 99% of his fortune to charity. He has been instrumental in encouraging other billionaires to do the same through “The Giving Pledge,” asking other billionaires to give away at least half of their wealth. He inspired Bill Gates, founder of Microsoft, who plans to leave most of his fortune to charities, including The Bill & Melinda Gates Foundation.

You don’t have to be a celebrity or a billionaire to disinherit your children.  However, if you plan to do so, it would be best to work with an estate planning attorney to minimize the likelihood of any legal challenges to your intentions.

Reference: People (September 22, 2017) “Jerry Lewis and 10 Other Celebrities Who Left (Or Plan to Leave) Their Kids Nothing”

Suggested Key Terms: Estate Planning, Inheritance, Charitable Giving, Will Contest

 

Here’s a World-Famous Artist with a Planned Approach to Creating a Legacy

Not all creative souls chose to ignore the details of their eventual passing. Famed painter Jasper Johns has created a plan that will foster creativity and continue his support for the arts in the future.

A recent article in US News, “Jasper Johns to Leave Connecticut Estate for Artists Retreat,” reports that Jasper Johns, one of America’s most famous artists, has mapped out a plan for his country estate in Litchfield County, Connecticut to become an artist’s retreat.

The 87-year-old painter, who has lived and worked in the town of Sharon for the last twenty years, received approval recently for his property to host as many as twenty-four artists at a time to live, share meals together and work on their craft.

In the small Connecticut town, some see his decision as a boost for the lively local arts scene,  since art studios are present in the community of 3,000 people where Johns is a towering, if seldom-seen, figure.

"I really think that's the best use of that property, because it extends his legacy," First Selectman Brent Colley said. "A lot of us never see him. He never comes out.  However, he employs a lot of people and he's been a great asset to the town."

Johns is thought of as a major influence on pop, minimalist and conceptual art through his work dealing with themes of perception and identity. His textured images of American flags became icons of modern art, and he was honored by President Obama with a Presidential Medal of Freedom in 2010.

The town planning commission approved the proposal this summer after the artist’s representative asked for the exception to zoning rules now. This was because he knew that the town's position woulde help with his estate planning, according to the minutes from the planning commission’s hearing.

The estate plan details a design for a retreat, set up as a charitable or nonprofit organization, with twenty employees. The property is close to the town's main marketplace and consists of six parcels of land, including some with residences.

Planners said there’s no additional construction planned, although some barns may need to be converted to studios. In addition to the property, Johns plans to provide an endowment for the artist retreat.

In recent years, Johns has been buying and improving his property. His efforts have been welcomed and appreciated by members of the town.

Reference: US News (September 20, 2017) “Jasper Johns to Leave Connecticut Estate for Artists Retreat”

Elder Abuse Legislation Headed to President’s Desk

Iowa Senator Chuck Grassley is hoping that legislation boosting both enforcement and penalties for those who target seniors will become law as soon as possible. The proposed law would also improve how enforcement is coordinated between the Justice Department and Federal Trade Commission.

Sparked by what happened to a local couple who were scammed into buying more than $40,000 worth of dubious nutrition supplements, Senator Grassley is hoping for a quick signature from President Trump, according to an article in The (Cedar Rapids IA) Gazette, “Grassley elder abuse legislation awaits Trump's signature.”

“Exploiting and defrauding seniors is cowardly, and these crimes should be addressed as the reprehensible acts they are,” the 84-year-old Grassley said. Legislation that the Senate Judiciary Committee chairman sponsored with Sen. Richard Blumenthal, D-Conn., will send a “clear signal from Congress that combating elder abuse and exploitation should be a top priority for law enforcement.”

The Elder Abuse Prevention and Prosecution Act of 2017 passed the House of Representatives and the Senate by voice vote. One of the challenges of protecting seniors from scams is that technology changes quickly and “criminals are constantly coming up with new scams,” Grassley said. “None of us are completely immune.”

Grassley explained that six million seniors are victims of abuse and exploitation each year. In 2016, Karl and the late Marlene Sibert of Cedar Rapids were among them, spending $44,000 on nutritional supplements over a period of twenty months for health and nutrition-related products, when her mother was hospitalized. Their daughter, Karla Sibert, became aware of the spending and contacted the Iowa Office of Attorney General’s Consumer Protection. She filed a formal complaint. The investigation discovered telemarketers’ handwritten notes indicating that Sibert’s mother had “memory” issues and her father had “dementia,” according to Attorney General Tom Miller. Luckily, in the Sibert’s case, the telemarketer complied with his office’s demand to repay the money the couple spent on the supplements.

Grassley called those who exploit seniors “cowardly” and said those crimes should be prosecuted “as the reprehensible acts they are.” Even though elder exploitation may not be a “prominent or popular issue,” Grassley said it’s “an important kitchen table issue for America’s seniors, families and caregivers.”

The goal is to help families nationwide by giving law enforcement, seniors, caregivers and family members the ability to be more effective in fighting back against scammers. The hope is that stronger enforcement and increased penalties will deter some perpetrators.

Reference: The (Cedar Rapids IA) Gazette (October 5, 2017) “Grassley elder abuse legislation awaits Trump's signature”

Net Gifting Court Decisions Highlights Potential Risks

The use of net gifting in estate planning can be effective, but in the case of Estate of Sommers v. Commissioner, 149 T.C. No. 8, a good plan did not have the intended result.

Unexpected changes, including untimely death, incapacitating illness and evolving family relationships can undo even the best estate planning tools. A cautionary tale concerning the use of net gifting is presented in a recent article in BNA Bloomberg, “Net Gifts: When Estate Planning Goes Wrong.”

In Estate of Sommers, the decedent made lifetime gifts to his three nieces by transferring artwork to an LLC and then membership interests to the nieces over a two-year period to take advantage of valuation discounts and annual exclusion amounts. The nieces signed an agreement stating that they’d be responsible for any gift taxes on the gifts of membership interests (otherwise known as a net gift).  The decedent then remarried his ex-wife and died five months later.

Before his death, the decedent started a lawsuit against his nieces arguing that the gifts were not completed gifts. After the court held that the decedent made completed gifts, the nieces paid the gift tax liability of $274,000. Because he gifted the membership interests within three years of his death, both the value of the membership interests and the $274,000 gift tax payment was included in the value of the decedent’s gross estate. But the executor of the decedent’s estate, the surviving spouse, claimed that the gift tax payment was deductible.

The court held that the gift tax payment wasn’t deductible because “an estate is entitled to deduct a claim under §2053(a)(3) only to the extent that the amount owed exceeds any right to reimbursement to which payment of the claim would give rise.” The court found that the estate would have had an enforceable right to reimbursement from the nieces, if they hadn’t paid the gift tax. The court found that the nieces served only as conduits, and the decedent was the ultimate gift tax payer. If not for the three-year claw back, the decedent would’ve withdrawn from his potential estate the value of the taxable gifts and the amount of tax on the gifts. The gross-up rule is necessary to prevent such excess value (the gift tax on the net gift) from escaping, and, therefore, the decedent’s estate from circumventing, the transfer tax system.

If net gifting is something you are considering, speak with a qualified estate planning attorney so that you understand the potential risks as well as the rewards. It is also important to remember that if there are changes in your life, your estate plan will need to be reviewed and possibly updated.

Reference: BNA Bloomberg (September 14, 2017) “Net Gifts: When Estate Planning Goes Wrong”

It’s Time to Stop Putting It Off and Put it in Writing

No one likes to consider their own death, or that of a loved one. But imagine having to cope with grief and loss at the same time that you have to tackle settling an estate, when there’s no plan in place.

When there is no estate plan in place, the stress that accompanies dealing with a loved one’s becoming incapacitated or passing becomes even more overwhelming. What’s surprising is, while people rationally understand this, an article in the New Jersey Herald, “Put your plans in writing,” reports on a survey that says that only 42% of Americans have estate planning documents. What’s worse? Only 36% of parents of minor children have an estate plan.

About 47% of those who responded to a survey from Caring.com, said they hadn't gotten around to it. That’s not too surprising, since people are often reluctant to deal with the idea of their own mortality, or they think they have a lot of time to address it before they die.

The first step to estate planning is to get some professional advice. You should hire an experienced estate attorney to assist with setting up a trust, wills, living wills, health care directives and powers of attorney.

One of the biggest mistakes that people can make is thinking they need to have a large estate or be ultra-wealthy to have an estate plan. No, everyone needs an estate plan. If you’re married with kids, you need a will, because without the appointment of a guardian, a judge will make the decision regarding who will care for your children. Surprisingly, relatives may fight over who should rear your children. It’s critical to have this spelled out in your will to keep peace in your family.

People die without a will all the time. Their assets are distributed via the intestacy laws of their state of residence. For example, if a person with a spouse and no children, grandparents or parents passes away, everything will go to the spouse. In some states, like New Jersey, when that couple has children, and  one parent dies, leaving a spouse and children who are also the children of the spouse, the spouse will get the first $50,000 plus one-half of the balance of the estate. The children would receive the other one-half of the balance divided equally among the siblings.

An experienced estate planning attorney will go through your plan and make sure that it suits you and your unique situation. If you decide to have a will created online, bear in mind that it may be vulnerable to challenges. A will needs to be written to address the nuances of your personal life, and should be reviewed regularly to ensure that it reflects your wishes and takes advantage of any changes in the tax or estate laws.

Having a plan in place will not cause your family to grieve any less, but it will provide you with some peace of mind and it will make life easier for those left behind.

Reference: New Jersey Herald (September 8, 2017) “Put your plans in writing”

Are You Prepared for Health Care Costs During Retirement?

People think that Medicare covers all of their health care after they retire.  However, there are many gaps and you’ll need to get the timing right on what insurance products to buy and when to buy them.

Medicare does not cover 100% of health costs.  As a result, many seniors get an unpleasant surprise when they learn just how many out-of-pocket expenses they will have. That’s why it’s important to have a clear understanding of what kind of health insurance you’ll need to buy to cover the gaps. Timing is important too: if you make the wrong decisions, certain costs will be permanently higher.

Kiplinger’s recent article asks, “How Much Will You Spend on Health Care in Retirement?” A new study by Fidelity Investments found that the average 65-year-old couple retiring this year, will need $275,000 to pay for medical expenses during retirement. This includes Medicare premiums, co-payments, and deductibles (or a policy to fill coverage gaps).  They will also need Medicare Part D prescription-drug coverage, plus out-of-pocket drug costs over the next 20 years for the man and 22 years for the woman. That number doesn’t include the potential costs of long-term care.

Medicare premiums can be as much as several thousand dollars a year. Medicare Part A, which covers hospitalization, is free for most people.  However, you'll pay a monthly premium for Part B (doctor visits and outpatient care). Those who sign up for Medicare in 2017 will pay about $134 per month for Part B, while individuals who have had Medicare premiums deducted from their Social Security benefits in previous years pay less.

If your adjusted gross income plus tax-exempt interest income is more than $85,000 for singles or $170,000 for married people filing jointly, you'll have to pay even more. The monthly premiums can range from $187.50 to $428.60 per person per month in 2017.

Remember that, along with these numbers, Medicare will leave gaps. You will need to pay deductibles and co-payments for hospitalization, doctors' visits, procedures and other medical care. Medicare also doesn't cover prescription drugs. Some fill in these gaps with retiree health care coverage from a former employer. However, that’s not that common today. Instead, you'll need to buy a Medigap policy to cover these out-of-pocket expenses, as well as a Part D prescription drug policy to cover drugs, or purchase a Medicare Advantage plan to pay both medical and drug expenses.

You can reduce these extra costs by implementing these strategies:

Shop for a Medigap policy when you're first eligible. You have six months after signing up for Medicare Part B to choose any Medigap plan. Insurers can charge more or deny coverage because of preexisting conditions. Plans with the same letter provide the same coverage, but the price can vary significantly by insurer.

Select the best Part D policy. This can vary every year, because your prescriptions change, and insurers revise their coverage. You can change Part D prescription drug policies every year during open enrollment from October 15th to December 7th for coverage starting on January 1st.

Look at your Medicare Advantage plans every year. If you choose a Medicare Advantage plan, you can also shop for a policy every year during open enrollment. Use the Medicare Plan Finder to compare the cost for drugs and health care for plans in your area.

Medicare surcharges. Your Part B and Part D premiums will be higher if your income is higher (more than $85,000 if single or $170,000 if married filing jointly). The Social Security Administration uses your most recent tax return to figure the premium. However, if your income has dropped since that time because of certain life-changing situations, like divorce, death of a spouse, or retirement, then you can substitute your more recent income.

Use generics or cheaper treatments. With Part D prescription-drug coverage, you will still have some out-of-pocket costs for your medications. You could also pay thousands of dollars for your share of the cost of expensive specialty drugs. Ask your doctor if there are cheaper generic drugs, or if there are therapeutic alternatives to treat the same condition for less.  You should also check if you can save money by using a preferred pharmacy or a mail-order pharmacy.

Remember to make the most of your tax-free health savings account. This can be a big help during retirement. While you cannot add any new money to an HSA once you’ve signed up for Medicare, the money in the account can be withdrawn—tax-free—for medical costs. Funds in the HSA can be used to pay premiums for Medicare Part B, Part D, and Medicare Advantage plans. Note that you cannot use HSA funds to pay for Medigap plans.

Reference: Kiplinger (September 20, 2017) “How Much Will You Spend on Health Care in Retirement?”

Making Philanthropy Part of the Family Tradition

The numbers are staggering—an estimated $30 trillion is expected to transfer from baby boomers to their heirs in the coming decades. How can your family ensure that this happens in a meaningful way?

The adage is well known: “The first generation earns it, the second generation maintains it and the third generation loses it.” But this doesn’t have to happen. By bringing all generations of a family together through philanthropy, it is possible to build a legacy that is not based on consumption and luxury, but instead on generosity and compassion for others.

The Pacific Coast Business Times, in its recent article, “Involve your children in philanthropy,” notes that the best way to involve children in philanthropic activities is to start early. You should identify opportunities at every age to include them in your family’s giving and volunteer work.  Many younger families are already giving of their time and money, with 84% of millennials making a charitable donation and 70% volunteering their time in 2014.

Creating a more formal charitable giving plan helps emphasize the impact of giving and can create a culture of philanthropy that will carry on the family’s legacy. Start by laying the groundwork with these ideas:

Document the family’s giving history. This will lead to better engagement by the family of your philanthropic strategy and help to build interest for family causes.

Create a family mission statement. Developing family mission statements can be valuable. Work with your children to define the family’s mission and purpose for giving, and use it to outline the principles and behaviors that will guide your charitable giving now and in years to come.

Include everyone in philanthropic work. Start involving kids in volunteer work and decision making, as early as possible. Allow children to direct philanthropic funds. You can ask your kids to select a cause they’re passionate about and encourage them to research charitable organizations to develop a plan focused on how they will use donation dollars. Do research on charities and then, as a family, discuss a charity’s merits to decide whether or not to donate your funds.

Teaching your children that there’s more to philanthropy than writing a check is a valuable lesson. Volunteering time and taking leadership positions can be combined with making direct donations or using donor-advised funds. An estate planning attorney will give you the full picture of how charitable giving can be a strategic part of your family’s estate plan, including what it can and cannot achieve in terms of tax savings and transferring wealth across multiple generations.

Reference: Pacific Coast Business Times (September 8, 2017) “Involve your children in philanthropy”

When the Going Gets Tough, The High-Net Worth Advisors Show Their Strengths

Let’s face it: high net worth clients already know how to earn money. Their advisors need to deal with other issues that can be more challenging than generating income.

For the average person, a financial advisor who knows how to generate good returns on their investments is pretty much all they need.  However, for professionals whose practices focus on high-net worth clients, wealth management is just one part of the job, according to Motley Fool’s recent article, “High-Net-Worth Wealth Management: 5 Tough Issues Most Advisors Can't Handle.” These advisors have to be able to handle far more complex issues than those who work with ‘regular’ clients.

Insurance. Once a person has enough money, the greatest challenge is managing the risks that threaten to take it away. Traditional insurance products can only help high-net-worth individuals to a certain extent. That’s because the high policy limits required for true protection, often require customized underwriting from insurance companies. In addition, special kinds of insurance are necessary to provide full protection against the wide variety of risks that high-net-worth individuals can face.

Asset Protection. High-net-worth clients, like all of us, want to protect their assets from potential creditors and other claims.  However, for high-net-worth wealth management, there’s no need to make risky investments.  Therefore, threats such as litigation, theft, and damage are even more significant. This is particularly true for those in risky professions, like medical professionals. Creating creditor-protection trusts and understanding the protection bankruptcy and debtor-rights laws grant to high-net-worth individuals, can ensure that they retain their wealth.

Estate Planning. With the estate tax exemption at about $5.5 million, the threat of estate taxation isn’t an issue for many wealthy individuals.  However, high-net-worth individuals still face the potential for estate tax rates of up to 40% on the federal level, plus some state estate and inheritance taxes. That’s where access to a qualified estate planning attorney comes into play.

Family Interpersonal Relationships. High-net-worth can create opportunities for discord and misbehavior that can threaten family relationships. Consulting with trained professionals allows wealth management advisors to play a deeper role in working with high-net-worth families. It enables them to become a type of family counselor to help create a unified vision of the strategic goals and what's necessary from each member of the family to make that vision a reality in the future.

An estate planning attorney who routinely works with high-net worth clients will be knowledgeable about tax planning, transferring wealth across generations, charitable giving and the use of complex trusts for multi-generation asset management.

Reference: Motley Fool (September 8, 2017) “High-Net-Worth Wealth Management: 5 Tough Issues Most Advisors Can't Handle”

Football Season is Here: Avoid These Fiscal Fumbles

Nothing’s more frustrating to a football fan than watching a terrific play turn into an epic disaster because someone fumbled the ball. Financial fumbles can be just as maddening, especially when you get really close to most people’s end zone: retirement.

You know it is fall, when Saturdays are all about college football and Sunday brings the NFL to living rooms across the country. Now that football season is underway, twincities.com is expanding on the football metaphor with this personal finance article, “Your Money: 4 financial “fumbles” to avoid.”

No Game Plan. Pro football players and their coaches spend hours looking at tape of themselves and their opponents to prepare for game day. Reviewing past games lets them more effectively and efficiently prepare for the next Sunday. The same is true with financial planning: reviewing past performance of certain asset classes and indexes, lets you forecast potential returns for your investments. That can help to dictate an appropriate withdrawal rate that works with your time frame.

Too Many “Hail Marys.” A Hail Mary or the long pass at the end of the game for a score is thrilling, but its success rate is 50-50 at best. Think of a Hail Mary pass like pursuing the hot stock—it can be fun to watch it go up, but its consistency is all over the board. It’s not a strategy for every play, if you want to see long-term, sustained success. A diversified portfolio should instead be thought of as a well-planned game plan to take you down the field to the end zone. You’ll mix up runs, short passes and a few long bombs in an attempt to outsmart the defense. Your portfolio should also have a mix of asset classes and risk factors to withstand any market volatility.

No Backup or Second-String Team. Every position on an NFL team has a backup, in case of injury or other circumstances. The same should hold true for your financial plan. While it may appear to be rock solid, can it stand a “sack” from another recession? Create a contingency plan for every piece of your financial picture. You should be just as confident in your contingency plan, as in your primary financial plan.

No Specialists on Your Team. There is a reason why NFL teams have 53-man rosters and are constantly on the lookout for specialized positions. A wide receiver has different skills than a defensive end or a safety, and a punter has different skills than a quarterback, but they’re all essential for success. With your finances, you should have specialist knowledge in every area: Social Security, investment management, financial planning, estate planning, insurance and more.

You’ll have an even better chance of avoiding these financial fumbles, if you have a great coach, by which we mean an experienced estate planning attorney who can help you create a game plan for your family’s future.

Reference: twincities.com (September 9, 2017) “Your Money: 4 financial “fumbles” to avoid”

Talking About Your Estate Plan with Family

Being able to talk with your family about your estate plan is not easy,  since the underlying subtext—your own eventual death—is difficult for parents and adult children.  However, by having these frank discussions, you eliminate stress and often, promote a greater family bond.

People’s skills in saving for retirement, investing and managing finances are important to them and their immediate family.  However, when people are successful in these arenas, as well as when they are not successful, they have a direct impact on immediate and extended family members.

MarketWatch’s recent article, “How to talk to your family about your estate plan,” says that frequently those most affected are the ones about whom we care the most. Children, grandchildren, spouses and partners, perhaps even our own parents, all have an interest in our finances.

People are uncomfortable talking about financial matters, even with those loved ones and family members who have a legitimate right to know about it. Families will ask about what’s in a person’s will, who you want to make healthcare decisions if you’re unable, and what are your thoughts on end-of-life options and choices.

It’s hard to envision how you would actually sit down with your heirs and explain what’s contained in your will. If you have a “blended” household with multiple generations, you’ll need to attempt to peacefully negotiate the division of expenses and responsibilities.

What’s the secret to a successful family financial meeting?

Unfortunately, there are no magic answers to make this easy.  However, you can move the ball by taking the time to consider what’s most important to you. Although they seem to be about money, many critical family conversations center upon about values. This makes it a bit easier, because it’s much easier to talk about “values” than to talk about money.

You’ll need to cover the topics of both values and money. If you have children and grandchildren with different circumstances, who have achieved different levels of success in their lives, you’ll have to think carefully about how you want to distribute your assets. Do you want to make one-off gifts to each, depending upon their situations, or do you want to give an equal share to all? These are not easy decisions, but they are important.

These conversations with family members, which can have their challenges, can bring the family together with a closer understanding of who you are and the values you want your children and grandchildren to share.

Reference: MarketWatch (September 9, 2017) “How to talk to your family about your estate plan”

Would You Be Prepared to Become “Suddenly Single”?

We all know that someday we and our spouses will die, but knowing that and being prepared for what comes when one becomes suddenly single, either because of an unexpected death or divorce, is daunting, particularly for women.

Among the top five financial challenges facing women is the death of a spouse or divorce, says a recent report from Key Private Bank, as reported in CNBC’s article “How to prepare for being 'suddenly single.'” Those two are followed by estate planning, investment decisions and legacy planning.

Traditional gender roles may be slowly evolving, but experts say that many couples still adhere to them. Men typically oversee the finances, despite the fact that the average age of widowhood is 59, according to the U.S. Census Bureau. Many women live another decade or longer after their husband's death. Women may have a passive role in money and investing and hardly ever talk about money or investing.  They don’t discuss these topics with their friends or co-workers and perhaps not even with their spouse. Just 3% of married female clients lead wealth conversations, according to Key Private Bank's advisor poll.

A “Lifebook” can help women successfully take control of their finances. This book is a collection of important documents and data, such as a balance sheet, an investment summary and a will. It should also include contact information for attorneys, financial advisors, bankers, insurance agencies and accountants. Many of the professionals surveyed—about 80%—said very few of their married female clients have these types of plans in place in case they are suddenly single, according to Key Private Bank. This is even though there are often critical financial decisions that must be made immediately after the death of a spouse.

It’s important to have a strategy because navigating finances after the death of or divorce from a spouse can be confusing. The top three steps married women should take are the following:

1.      Identifying and documenting sources of income;

2.      Meeting with a financial advisor; and

3.      Determining the financial decisions that must be made immediately.

Getting divorced or losing a spouse means there’s less money flowing into the household and a newly single person’s lifestyle may have to change. Refusing to acknowledge this, and continuing to spend money on vacations, memberships or services that are discretionary in nature, will drain cash flow and emergency funds quickly.

Reference: CNBC (September 5, 2017) “How to prepare for being 'suddenly single'”