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5 Emergency Documents You Should Have Now

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Emergency Documents

While no one wants to think an emergency will strike, they happen to people every day. You could become ill or injured unexpectedly, or even die.

Yes, it’s hard to think of these things happening to you. But, the truth is, it happens to everyone eventually. That makes it wise to have specific documents in order, in case the unthinkable happens to you. It’s also wise to have life saving devices like the best medical alert system within your budget if you live alone or have special needs.

With that in mind, here are five emergency documents everyone should have right now. [Read more…]

What are the Responsibilities of a Power of Attorney?

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Power of Attorney

At some point in your life, you may either need to issue or act with a power of attorney. But, unless you’ve are already familiar with the arrangement, you likely have questions regarding what it can and can’t do.

Essentially, a power of attorney is a legal document. It allows one person, the agent, to act in the name of another, the principal. However, with these authorities also come responsibilities.

If you’re wondering about the responsibilities of a power of attorney, here’s what you need to know. [Read more…]

Create A Financial Plan Without Hiring A Professional

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You’ve probably heard lots of advice about how you need a financial plan for your future so that you can retire with a healthy bank account.  But have you listened to that advice and started investing?  If not, it’s time to get started.

Many people avoid investing because they think a professional financial planner.  And most of people don’t want to spend the time or money to hire someone.

But, if you do your research, the only person you really need is you. A financial plan is not as complicated as you might think; you can create one on your own.

In basic terms, a financial plan should include your current and future financial situations and a plan for getting from one to the other based on your income, expenses, and any assets you have.  Here’s how to get started:

Know your current status

Create a list of your income streams, monthly expenses, and current assets to get a clear understanding of where you are and what you can expect to have for the future.  Review your annual budget and the most current credit card and bank statements to get the big picture of your debts, income, and monthly expenses.

Plan for the future

It’s hard to know what the future will hold, but you’ll need to make a plan based on what you expect to happen.  Sit down with your spouse or a friend and talk about your financial goals.  It always helps to have someone to talk about these things with and bounce ideas off.

As you’re creating your plan, work toward 5-, 10-, and 15-year goals to start.  What do you want financial picture to look like at these marks?  For instance, if you’re planning on buying a home in 5 years, you can start making a plan now to save for the down payment.

Mapping it out

Once you know where you are and where you want to be, the hard part is done.  Now it’s time to do some math and make a plan.  Your plan needs to include the financial goals you’ve set for yourself and how much you will need to reach these goals so you can lay out your map.

What are some small financial steps you can take to reach your goals?  Determine how much you need to set aside each month to reach your 5-10 year goals.  Follow this same step for all your future financial planning.  Be sure to calculate about 5-8% a year for inflation.

Now you’re able to make smart choices about your spending and saving habits based on your goals and your financial plan.

Review the plan yearly

Make time to review your plan each year as your goals, income, expenses, and assets may change. The numbers you used last year may no longer be current. Your plan may need to be adjusted to account for these changes.

Having a plan for your future is important so that you make informed decisions about how you spend and invest your money. Without a plan, you’re just hoping for the best and you’re not able to make good decisions that will benefit you in the long run.

Having “The Talk”: Another Awkward Holiday Dinner Conversation

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Have you had “the talk” yet?  Ya’ know, the really awkward conversation we all dread?  I’ve thought about having it during our Thanksgiving dinner, but I just don’t know how to begin. They’re so young…maybe I can wait a little while longer. I mean, really, how many their age are actually doing it?

Of course, I’m sure you know “the talk” I’m referring to: a discussion with your parents and grandparents about their financial and healthcare wishes should they become too sick to make them on their own.  It’s an awkward conversation to bring up (hey, pass the potatoes…by the way, what would you do if you can’t manage your own money anymore?), and even more awkward to continue (Uh huh. Can you give my brother all the bills but me all the cash? Great turkey, mom!)–but what’s the cost if you DON’T bring it up?

I’m writing this tonight while driving (read: riding shotgun) from Chicago with a world-class estate planning attorney who’s so busy he can’t keep his head on straight. With so many changes looming around the fiscal cliff and government tax plan, people are battening down the hatches. I thought I’d take this time to interview this young man as we barrel down the freeway.

So, Mr. Estate Planning Attorney, what are the most important things you need to discuss with your parents about money?

Can they give you some? Ha ha ha.  Well, first of all, with the estate tax going up, seriously, should they be giving you some money through a gifting strategy?  Also, have they grandfathered their estate exemption?

What the heck is “grandfather their estate exemption” mean?

It basically means: Have they taken advantage of the existing laws to benefit them, compared to their new laws expected in 2013?

What about “the talk?”  What kind of healthcare questions should we, as their children, know?

First, they need to know every state has a healthcare power of attorney and the forms can be found at the local public library. That POA lets them dictate who can make medical decisions if they’re not able.  Secondly, they should probably let you know, or you should ask, what their long-term health wishes are.  I mean…the weird questions like “Do you want life support” and stuff like that.  But all of that can be handled in their healthcare POA.

So, what happens if someone doesn’t have a healthcare POA?  And, while we’re on it, when should someone get one of these things?

Everyone of legal age should have one. If you don’t have one, doctors cannot follow your specific wishes regarding your healthcare. Also, if you’re unconscious, doctors cannot make healthcare decisions for you, unless it’s an emergency. For example, we had a client who went in for surgery, routine-type stuff, when the doctors found a small tear in his kidney. Without a POA, the doctors would have had to wake him up to get his permission. Now, thankfully his wife was waiting in the waiting room, and was his POA, so they were able to fix it no problem.

So we all need these things no matter what. Got it. Anything else we should know before year end?

The fiscal cliff is going to affect estate and income taxes. If you have more than $2 million,  you need to talk to your attorney immediately. Remember, that $2 million includes the death benefits from your life insurances through work and outside policies–it’s not just your assets.

Sounds like your calendar is filling up fast!  Thanks for your insight. Maybe we can get you on our podcast?

Would love it.