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estate &financialplanning

No legal advice is given in this section and none of the information should be so construed. For legal advice, please contact your attorney.








Morrison & Balukas Law Firm, PLLC 1/DVW&KDQFH*XOFK6XLWH%+HOHQD07



2011 Estate & Financial Planning Guide

Bringing back the estate tax..........................................3 important 2011 Tax Dates.................................................4 Test your financial savvy...............................................5 An Estate plan... Who, Me?................................................6 Power to the People.........................................................8 AsseT Allocation................................................................9 Credit Check......................................................................10 Veterans’ Aid & Attendance...........................................11 Retirement Income and Outgo......................................12 Exploring Alternatives to Powers of Attorney.....14 Charitable Gifts Still on the Table............................15 Giving that Lasts more than a lifetime.....................16 Endowment gifts that keep giving..............................17 Made in Montana—MSU extension montguides.......18 Estate planning & Planned giving Seminars............18 Financial planning Time line.........................................20 Estate Planning is published by the Independent Record a division of Capital City Publishing Group 317 Cruse Avenue, Helena, MT 59601 • (406) 447-4003.


Bringing Back the Estate Tax When Congress extended the Bush tax cuts in 2010, it also resurrected the estate tax. What does this mean for you? Thomas C. Morrison, J.D. and LL.M. MORRISON & BALUKAS LAW FIRM, PLLC

The federal estate and gift tax is a unified tax on the value of all gifts made by individuals during their lives and upon their deaths. Small annual gifts (typically those under $13,000) are not counted. Qualified gifts to charities and qualified gifts to spouses are also tax-free.The estate/ gift tax is imposed on all remaining gifts to the extent exceeding an allowable exemption. Didn’t the estate tax die in 2010? On January 1, 2010, the estate tax died. But in late 2010, when Congress extended the Bush tax cuts, it also resurrected the estate tax. It did so retroactively, reviving it for persons dying in 2010! The new law raised the estate and gift tax exemption to $5,000,000, made the exemption “portable” between a husband and wife, and lowered the tax rate to 35 percent! Unfortunately, these favorable changes “sunset” (expire) in 2013, causing the estate tax to revert back to what it was in 2002, with a lower $1,000,000 exemption, higher maximum 55 percent rate, and no portability.   What does this mean for me? The estates of decedents dying in 2010 will benefit from the increased $5,000,000 exemption, even though those estates have the option of electing out of the estate tax

altogether.This is a win/win. When the estate tax is in effect (whether or not any tax is due), the assets in a decedent’s estate usually take an income tax basis at date-of-death values (usually resulting in a step-up). For example, if Harry bought his ranch for $250,000 in 1952 and it increased in value to $4,000,000 on his death in 2010, his children could inherit the ranch, claim an income tax basis of $4,000,000, sell it for $4,000,000, and pay no income tax. At the same time, Harry’s estate would not suffer from any estate tax, because of the $5,000,000 exemption (assuming Harry’s total taxable estate remained under $5,000,000)! For the above reason, most decedent’s estates under $5,000,000 should not elect out of the estate tax. Fiduciaries for estates over $5,000,000 should seek professional tax advice before electing out. Estate tax returns are now generally due for estates over $5,000,000. They should be filed within nine months after death. Due to the retroactivity of the new law, estates of decedents dying before December 19, 2010, have until September 18, 2011, to file. Uncertainty with portability The new law made exemptions portable between a husband and a wife.These portability rules provide relief from bunching (aggregating the estates of a husband and wife). Assume Harry and Mary each has $5,000,000 in assets with a bunched $10,000,000 estate. If Harry dies first, he can give his $5,000,000 to Mary as a tax-free marital gift without using his exemption. If Mary dies before 2013, she can then give her bunched $10,000,000 estate to only son, John, without adverse tax consequences.The new portability rules allow Mary to aggregate Harry’s unused exemption with her own exemption. Her estate will have a continued >>



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Mary’s estate by his gifting it to a trust or by Mary’s use of a disclaimer.Then Harry’s estate can take advantage of his own $1,000,000 exemption. When Mary dies, her own $1,000,000 estate will pass tax-free, because of her own exemption. Until the 2010 changes in the estate tax are made permanent, the possibility of bunching remains a significant estate planning problem. Uncertainty with formula gifts Many estates have “bypass” trusts, which typically use formulations that withhold a portion of Harry’s estate from passing to Mary, and vice versa. These formulations generally withhold the maximum amount or the maximum percentage possible without causing Harry’s estate to pay an estate tax.The withheld property is commonly called a bypass gift, or a nonmarital gift or a credit shelter gift. However, these formulations, if not properly written,

$10,000,000 exemption, when she dies. However, an estate plan must be flexible in order to deal with the potential sunsetting of the portability rules in 2013! Uncertainty with bunching and lower rates Assume Congress does not change the estate tax in 2013 and Harry dies in 2013, leaving Mary his $1,000,000 estate to combine with her own $1,000,000 estate. Mary will inherit Harry’s $1,000,000 as a tax-free marital gift. But on Mary’s death, her now combined $2,000,000 estate will exceed her $1,000,000 exemption by $1,000,000, resulting in an unnecessary $435,000 estate tax from her bunched $2,000,000 estate, when she passes her estate to John! A proper estate plan could avoid the tax.To do so, Harry should have his $1,000,000 bypass

could also cause unwanted consequences. For example, assume Congress permanently eliminates the estate tax. A typical formula clause in Harry’s estate plan would prevent property from passing directly to Mary, even if that is what Harry might have otherwise wanted in the absence of any threat of estate taxes.This problem also results if Congress should raise the estate tax exemption or should permanently allow portability so that Harry’s estate would no longer be threatened with estate taxes, even if he should pass his property to Mary. What will happen in the future? Already in January, the Republicans have introduced several bills in the House to permanently repeal the estate and gift tax! These actions appear more politically motivated than realistic. With a Democrat in the White House, these efforts will likely fail for lack of



C O M P R E H E N S I V E L E G A L S E RV I C E S !

Important Tax Dates April 18, 2011. Individual Tax Returns Due for Tax.Year 2010. Need more time to prepare your tax return? File your request for an extension by April 18 to push your deadline back to October 17, 2011.

C R OWL E Y F L E C K P L L P is a multi-service firm with more than 100


being able to override a presidential veto, which would require a two-thirds vote in both the House and Senate. In 2013, if the Democrats fail to stay in the White House, the future of the estate tax is less clear, depending on the strength of the Republicans in the House and the Senate. If the estate tax is not then permanently abolished, Congress will most likely reach a compromise and make some of these changes permanent. Challenges lie ahead In the meantime, dealing with the uncertainties in the estate tax law is challenging. However, these challenges are no different than dealing with the continuing uncertainties within a family (divorces, deaths, etc.). Skilled estate planners can deal with these uncertainties and minimize risks. Smart clients will want to have their estate plans periodically reviewed.

attorneys practicing in the areas of estate planning, trusts, estate and trust administration, elder law, commercial litigation and transactions, insurance defense litigation, natural resources, mining and energy law, banking and finance, creditors rights, real estate transactions and development, tax planning, intellectual property matters, employment law, healthcare law, governmental relations and lobbying. With over a century of legal expertise, our firm provides a tradition of uncompromising service to our clients.













1st Quarter 2011 Estimated Tax Payment Due. If you are selfemployed or have other first-quarter income that requires you to pay quarterly estimated taxes, get your Form 1040-ES postmarked by April 18, 2011. Last Day to make a 2010 IRA Contribution. If you haven't already funded your retirement account for 2010, do so by April 18, 2011.That's the deadline for a contribution to a traditional IRA, deductible or not, and a Roth IRA. However, if you have a Keogh or SEP and you get a filing extension to October 17, 2011, you can wait until then to put 2009 money into those accounts.


Pop Quiz

Procrastination is one of the main ways the average Joe and Jane get in trouble with their finances. Break the bad habit starting now! Answer these basic questions and see how you rate.

Test Your Financial Savvy CTW features



According to actuarial charts, how many years can you expect to live? QUESTION


At what age is a worker born between 1943 and 1954 eligible for full social security benefits? a. 62 c. 66 b. 64 d. 68





What percent of a retiree’s income will be spent on healthcare, on average? a. 5 percent b. 10 percent c. 15 percent d. 20 percent

How many years, on average, will a U.S. citizen spend in retirement? a. 10 b. 15 c. 20 d. 25

QUESTION 4: Income taxes go away after a worker retires. True or false?

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9 CORRECT: Close… but we are not playing horseshoes! 8 OR LESS CORRECT: It’s time to do some homework!


Your credit score is: a. a snapshot of your credit risk b. an objective measurement used by lenders c. available to you on request d. all of the above





Insurance is a way of: a. saving for a rainy day b. preventing unplanned events c. handling risk d. all of the above

You can improve your credit rating by a. correcting inaccurate information as soon as possible b. disputing negative information c. correcting only the worst report d. asking that negative information not be included in your credit report

1. The U.S. Social Security Administration estimates that a man reaching age 65 today can expect to live, on average, until age 83. A woman turning age 65 today can expect to live until age 85. To calculate your expected lifespan, go to: 2. C: 66 years old 3. D: 20 percent 4. False. Pre-tax money a worker contributed to a retirement plan is subject to income taxes when it’s withdrawn during retirement years. 5. C: 20 years 6. D: 47 percent 7. False. Every U.S. state has unique laws governing who will own the property. To calculate the outcome in your state, go to 8. C: Handling risk 9. D: All of the above 10. A: Correcting inaccurate information as soon as possible




An Estate Plan ‌ Who, Me? You don’t need to live in a fancy house in a gated community to have an estate. Establishing a solid financial plan, with documents that govern what you own and bequeath, is key to moving ahead in life with confidence and security DAWN KLINGENSMITH CTW FEATURES


PEOPLE TEND TO delay or avoid estate planning as though drafting a will might somehow hasten their demise. But thought of another way, estate planning actually pro-

longs one’s presence among the living.An estate plan allows for calling shots from the grave. The value of property at the time of its owner’s death is an estate. Estate planning begins by taking inventory of someone’s assets, including invest-

ments, retirement savings, insurance policies, real estate and business interests, and then deciding to whom these assets should go. Individuals also must decide who should handle financial and medical affairs if they are incapacitated and ask if they’ll serve as

financial and health care powers of attorney, respectively. It’s smart to work with a qualified lawyer to create the legal documents that govern the process of protecting the estate and passing along assets as planned. Take time to get educated on the basics before choosing a professional and sitting down to work on a plan. A WILL The centerpiece of a comprehensive estate plan is a will.The reason a will is important, regardless of net worth, is so assets go to the right people, says Alexandra Armstrong, certified financial planner with the Washington, D.C.-based investment advisory firm Arm-


strong, Fleming & Moore. Die without one, and in most cases each state applies its standard formula to decide who gets what, without regard to wishes or the needs of heirs. For example, in the absence of a will in the District of Columbia, only one-third of the deceased’s assets not jointly held will go to a surviving spouse; twothirds goes to the children. In most places, when a single dies without a will, his or her parents inherit all assets or, if Mom and Pop are dead, the siblings inherit in equal measure.That means the brother who won the lotto gets the same amount as the brother

who went into social work and the estranged sister with a gambling addiction. A will is also the best place to name guardians of children. Standard forms are available for the simplest of situations.“But most people should consult an estate-planning lawyer�for will preparation,Armstrong advises. Leave a copy of the will with a lawyer, and keep a copy. A LETTER OF INSTRUCTION A letter of instruction to survivors includes bequests not specified in the will, including sentimentally valuable possessions like Grandma’s china and the oil

painting over the mantel. Here’s where to communicate to family members the type of memorial service wanted, including “in lieu of flowers” specifications and wishes to be cremated or buried. Individuals might even write down key points for their obituary in case loved ones omit one of our prouder accomplishments.

A Living Will A living will or advance medical directive spells out wishes regarding life support or medical intervention and care. For someone in a coma who does not want to be kept alive on life support, a living will spells that out. A health care proxy names a person to carry out those wishes. A lawyer can create this document. Keep signed copies at home; give signed copy to those entrusted to make decisions. Because of strict privacy rules that govern doctors and hospitals set forth by the Health Insurance Portability and Accountability Act, a HIPAA waiver also should be considered.This lets people name individuals with whom health care providers can discuss condition and care. Unlike a power of attorney, folks named in the waiver are not entitled to make medical decisions on someone else’s behalf.

Power of Attorney A durable power of attorney names a person to act on an individual’s behalf in all financial matters: investing money, signing checks, selling real estate. Keep a signed copy at home and give a copy to the person designated.

A Trust In some cases, individuals decide to create a trust, which puts conditions on how and when assets will be distributed.Trusts are designed to achieve different goals. Often, they allow the wealthier among us to reduce estate taxes.They can also be used to hold money for underage children; provide care for disabled children; or equalize inheritances. A financial adviser can help determine whether it makes sense to set up a trust, Armstrong says. Keep in mind that retirement accounts such as IRA and 401k plans,

INDEPENDENT RECORD n FEBRUARY 27, 2011 D n ESTATE AND FINANCIAL PLANNING have designated beneficiaries apart from what it says in someone’s will, Armstrong says. So it’s important to review and amend these accounts periodically – along with a will, pension plans and life insurance policies – especially if marital status changes. A rainy day fund of three to six months’ expenses is also a key component of an estate plan.“Settling an estate doesn’t happen overnight,”Armstrong says,“and meanwhile a surviving spouse needs something to live on, a cash reserve to carry them through.” A final and crucial step in estate planning is assembling pertinent documents and making sure a survivor is aware of and has access to them. “You’d be surprised by the number of life insurance policies that are issued but never paid because the survivors don’t even know they exist,” says Wayne Copelin, president, Copelin Financial Advisors, Sugar Land,Texas. Get Organized Assemble and store these documents in a bank safe deposit box and/or a fireproof safe to which a trusted individual besides your spouse has access. • Will, trust agreements and letter of instruction • Contact information for advisers including attorney, accountant, financial planner and stockbroker • Powers of attorney (financial, health care) • List of retirement, bank and brokerage accounts with PINs • Investment documents (certificates of deposit, stock certificates, etc.) • Life insurance policies • Health and long-term care insurance policies • Social security and pension information, and military discharge papers (if benefits transfer to survivors) • Marriage certificate • Funeral prearrangements and cemetery plot deed • Real property documents, such as deeds • Titles and extended warranties to cars, boats, travel trailers, etc. • Safe combinations • List of stored or loaned valuables

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Power to the People

You are the archer. What target are you aiming for?

John Lennon and estate planning

By giving us charitable deductions, governments allow some of our tax money to go to the organizations and causes we think are important. We have the control to take back some of our taxes every year! Power to the people, right on.

Mike Munck, Executive Vice President ST. PETER’S HOSPITAL FOUNDATION

The Montana Legislature is in town. Political discourse on the national level is heated. What services will government help fund and who will pay? These issues generate strong feelings. Fortunately, there is a power we all have, regardless of what services government entities fund. It is the power to invest our own wealth— however meager or grand—in the things we value. And we can do it in

ways that take back some of the taxes we pay to governments, and gives it to the organizations and causes we think are important. I’m talking about estate planning—and the charitable part. Things That Matter Family, spiritual belief and practice, food, shelter, clothing, education, health, theater, art, dance, history, animals … the list goes on. Good estate planning encompasses so much.You are shooting an arrow into the future.The arrow is your assets.You are the archer. What target are you aiming for? Life and Taxes Most of us aren’t too worried about taxes after we die. It’s while we’re alive and paying. So it’s important to know how current charitable tax law works.

Your Cake Yes, you can eat it and have it too. We are talking estate planning. A nontaxable estate (currently less than $5 million single, $10 million couple) enjoys no tax benefit by leaving charities in a Will. But if you make that same gift a current gift, you can receive current tax deductions (some of your tax money back).You can also keep the income from that gift—eating your cake—for the rest of your life, that of your spouse or beyond.There are many

different ways to give you, your spouse or heirs that income. Karma—Instant or Regular We are all mortal beings. Our bodies will die. How we live on in this world, in our loved ones, the values we nurtured, the things we cherish, depends on many things.Take aim into the future. Pick your arrows carefully. There are some tax-advantaged arrows. Aim thoughtfully. Release your loves and aspirations smoothly into the future.That’s good estate planning. Mike Munck, Executive Vice President, St. Peter’s Hospital Foundation never met John Lennon. He looked a little like him when he still had hair and does believe in all manner of Karma.


Asset Allocation Sean Sturges, Vice President Director of Financial Planning D.A. DAVIDSON & CO.

Asset allocation, or the process of dividing your investable dollars among different investments, is something most of us are familiar with. It’s the idea behind the common idiom “don’t put all of your eggs in one basket.” It’s also a tacit acknowledgement of the certainty of uncertainty when it comes to investing. If we were absolutely certain that a specific investment were going to outperform all other investments over a given period, the logical response would be to direct all of our dollars into it. However, history has repeatedly shown us that predicting the best investment over a given period of time can be difficult, if not impossible. Additionally, while concentrating all of our investment dollars in a single investment (or even a few) can increase our possibility for significant gain in the event we are correct, it also drastically increases our risk of considerable loss in the event we are wrong. Finding the proper balance between risk and reward is the purpose of asset allocation. In the most traditional sense, asset allocation is achieved by spreading investment dollars among stocks, bonds and cash. Drilling down deeper, our stock allocation would likely be further divided by market capitalization (i.e., company size), geography (e.g., U.S., developed international markets, emerging markets), and investment style (e.g., growth or value), while we would likely sub-divide our bond exposure by issuer type (e.g., government, corporate, etc.), credit quality (e.g., investment grade, high-yield), and maturity. In addition to the stocks, bonds and cash that make up most portfolios, it may be prudent to include other asset classes such as commodities and managed futures. Choosing the appropriate mix of

these components can be difficult, and there isn’t a single right combination. Whether an asset allocation is good or not depends largely upon how it fits with the goals you are trying to achieve, your time horizon for doing so and other specifics of your situation. It is important to point out that asset allocation is not a one-time event. Just like building a home, there is ongoing maintenance and upkeep. Seeking professional advice in this area can be one of the most important decisions you make because a financial consultant can help you first outline your goals and then discuss which asset allocation options will help you achieve them. Finally, it is important to dispel the notion put forth by numerous pundits during the recent financial crisis that asset allocation and diversification are dead, as it highlights a common misconception. Asset allocation and diversification are in no way a guarantee of positive investment returns. Rather, asset allocation and diversification are a means by which to reduce the potential for catastrophic loss. To illustrate this, consider the results of two portfolios during 2008--arguably the worst year for the financial markets since the Great Depression. Over the course of that year, a portfolio that was


Finding the balance between your financial investing risk and reward equally-weighted among foreign, small growth, small value, large growth and large value stocks* lost approximately 37 percent of its value. Contrast this with a portfolio that had 40 percent allocated to bonds* and 60 percent divided evenly among the five equity asset classes mentioned previously.The second portfolio, though down at the end of the year, only lost approximately 20 percent of its value, a difference of 17 percent.This is not to suggest that losing 20 percent in a single year is a hoped-for result. However, it highlights the benefit of having a well-balanced portfolio, as well as the fact that to achieve diversification, you need to invest in things that are truly different and that respond differently to potential risks. Having professional guidance can go a long way toward

helping you do so. *The asset classes in our example are large growth stocks as represented by the Russell 1000 Growth Index, large value stocks as represented by the Russell 1000 Value Index, small growth stocks as represented by the Russell 2000 Growth Index, small value stocks as represented by the Russell 2000 Value Index, foreign stocks as represented by the MSCI EAFE Index and bonds as represented by the Barclays Aggregate Bond Index. Please note that any reference to a specific security or strategy does not represent an offer to buy or sell a security and is not intended to be investment advice. It is important to note, as well, that it is not possible to invest directly in an index. Finally, past performance should not be considered an indicator of future performance.

Consider the importance of the fine-tuning that improves your financial engine’s performance. Market fluctuations may mean it’s time to update your assets allocation so that it’s geared toward today’s conditions, not yesterday’s. Your D.A. Davidson & Co. financial consultant can help you get back on track.


Credit Check For better or worse, there’s a number associated with your name. Make sure your credit score is all it can be DAWN KLINGENSMITH CTW FEATURES

NOW MORE THAN ever, it pays to have an excellent credit score.The best interest rates on auto loans go to folks with scores of 730 and above.And 60 percent of employers pull credit reports for some or all of their prospective hires, according to the survey by the Society of Human Resource Management.The rationale: people with a pattern of mismanaging their own finances exhibit poor judgment, an indication that they may lack the maturity and sense of responsibility it takes to be a trusted employee. Don’t let a low number hold you back in life. It can take months or even years to boost a low score, but there are steps you can take to gain a few points

and perhaps qualify for a lower interest rate. Get your credit history for free from—the only authorized source for the free credit report that’s yours by law.The report does not include your credit score, which costs a few dollars to obtain. What you’re looking for is negative information that could be lowering your score. Correct any errors or inaccuracies, such as accounts that aren’t yours or old information that should no longer have any bearing on your score. Under the Fair Credit Reporting Act, credit bureaus must investigate any disputed items and remove them from your credit report if they cannot be verified. Though there is no quick fix for poor credit, paying down credit card balances can boost your score, says Gail Cunningham, vice president of public relations, National Foundation for Credit Counseling. A history of late payments will hurt you, but you can start to mend your credit by paying every bill on time from now on.“Time is your best friend.Treat your debt obligations responsibly and your score will start to reflect that,� Cunningham says. Although closing unused accounts may seem like a good idea,“That’s shooting yourself in the foot,� Cunningham says. The amount of your total debt relative to your total available credit has a significant impact on your score.Ten thousand dollars in credit card debt looks better if your line of credit is $100,000 vs. $15,000, she says, because

you’re not as close to maxing out your accounts. The length of your credit history also affects your score, so don’t close your oldest accounts. Use those cards occasionally to keep the accounts active and avoid cancellation. Borrowers should pay off any overdue bills or old debts they forgot about, and pay down high credit card balances to improve their credit utilization ratio (how much of their available credit line they owe.) Credit card balances in excess of 50 percent of their limits will raise eyebrows, while 30 percent or lower is seen as responsible, says Cunningham.

will check your credit to determine the interest rate for which you are qualified. Multiple credit checks from dealerships will be reported as a single inquiry provided the inquiries all occur within a 14-day period. “It’s critical that you have your ducks in a row so you can do your shopping within that time frame,� Cunningham says. If you end up shopping over a longer period, bring a printout of your credit report and see what dealerships have to say before they check your credit, since each inquiry can decrease your score by five points, says financial planner Joel J. Ohman, founder of, a credit card

MIND YOUR FINANCES TAKE THIS AWARD-WINNING ONLINE E-LEARNING SERIES AT YOUR OWN PACE, AND PUT YOURSELF ON THE ROAD TO FINANCIAL WISDOM: UNDERSTANDING CREDIT REPORTS, CREDIT TERMS AND DEFINITIONS, APPROPRIATE LEVELS OF DEBT, CREATING SPENDING PLANS, GOAL SETTING AND OTHER CORE FINANCIAL SKILLS. INCLUDES A CERTIFICATE OF COMPLETION. HTTP://ELEARNING.MINDYOURFINANCES.COM/ Credit bureaus generally don’t like to see too many inquiries about your credit history because it suggests you are desperate for money. However, the bureaus realize that if you’re shopping around for a major purchase, such as car, you may go to several dealerships in search of the best deal. Each of those places

comparison site that promotes responsible credit management. Only time and discipline can mend a damaged credit record.“Don’t fall for credit doctoring or credit repair services. Start treating your debt obligations responsibly, and over time, your credit report will improve,� Cunningham says.








Veterans’ Aid and Attendance Special Pension An introduction to a rarely used Veterans’ Administration benefit Bert Gailushas, Community Sales Leader Hunters Pointe Independent Retirement Living

The Veterans’ Administration offers a Special Pension with Aid and Attendance (A&A) benefit that is largely unknown. Most find it hard to believe it exists, but it does. This special pension allows for veterans and surviving spouses who require the regular attendance of another person to eat, bathe, dress or provide personal care to receive additional monetary benefits. This benefit is also extended

to individuals who are blind, live in a nursing home due to mental or physical incapacities or residents of assisted living facilities. Housekeeping, respite or part-time care recipients do not qualify for this program. A&A is overlooked by many families with veterans or surviving spouses who need additional money to help care for ailing parents or loved ones. This is a “pension benefit” and is not dependent upon service-related injuries for compensation. Most veterans who are in need of assistance qualify for this pension. For example, a veteran is eligible for up to $1,644 per month, while a surviving spouse is eligible for up to $1,056 per month. A couple is eligible for up to $1,949 per month, which include costof-living increases each year. Qualifications are:

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n Veterans must have served one day during an active war and had no less than a 90-day service.

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n Surviving spouses must still have been married to the veteran when they passed. n You must have a doctor’s order stating you need the aid and attendance of another every day. n You must have less then 80K in checking and savings; less if you are applying as a single. IRAs and CDs are included as income; your home and vehicles are not. n You must have received an honorable or general discharge. n You can choose where you want to live as long as it is a credible

n You may not qualify if you are on state assistance (Medicaid or another subsidized program due to your low income). It is hard to speculate on what you will experience while filing for the Aid & Attendance Special Pension. Each case is unique and carries its own set of challenges. One thing you can expect is that it will take between 4-6 months for your application to be processed. Fortunately, all benefits are retrodated back to the original filing date. However, if you or your loved one is ill and having trouble filing paperwork, it can be a challenge to get everything done quickly.


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Retirement Income and Outgo Dispelling the myths of Long Term Care Insurance Ron Iverson

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By far,the most expensive item in retirement costs, for most people, are related to health care.This item breaks down in two waysâ&#x20AC;&#x201D;normal medical costs, and the costs of long term careâ&#x20AC;&#x201D;either at home, in an assisted living facility, or in a nursing home/Alzheimerâ&#x20AC;&#x2122;s unit. Long Term Care Insurance has been discussed at length for over twenty years, but recently the issue has come

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â&#x20AC;&#x153;front and centerâ&#x20AC;? in Americansâ&#x20AC;&#x2122; minds. There are two reasons. First, the costs of long term care needs keep rising, and secondly, the Baby Boomer generation has now seen what long term care needs have done to their parentsâ&#x20AC;&#x201D;and themselves. To start a discussion of Long Term Care Insurance (LTCI), we must first dispel some myths about the product. There are four.

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LTCI is just for nursing home care. Wrong—not anymore.The beauty of today’s policy is that the insurance will cover you at home, or in an assisted living facility, and yes, if need be, in a nursing home or in an Alzheimer’s/memory unit. So, you can receive care at home for the same help you would need in a nursing home. LTCI is just for older people. Wrong again—simply not true. Suppose you are “T-boned” at an intersection, can’t work, and are laid up for a year or so at home recovering from a broken back. Comprehensive LTCI will pay for someone to come into your home and help you with the normal activities of daily living. Same thing for a stroke, or heart attack, or Alzheimer’s, among thousands of other reasons. Here’s a surprise. 40 per cent of long term care needs are provided to people under 65. And the greatest incidence of stroke is rising for under age 65 people. LTCI is just too expensive. Wrong again—depending on your age, and as compared to the alternative— paying for care yourself— insurance is the least costly option. Working age people have a great chance to protect the assets they are building with affordable rates. Waiting to purchase at an older age is what creates high premiums, as well as other problems—such as inflation in the cost of the care, and the onset of preexisting conditions, which could lead to a decline of policy issue.


There are no tax incentives for me to do this Wrong again—especially in Montana.The State of Montana was (and is) light years ahead of the Federal government in offering tax breaks for purchasers of Long Term Care Insurance. Montanans receive an hon est “line item deduction.”The federal tax break is pretty anemic, except for those who are owners of a C-Corp. There are several other factors to consider.The notion that “Medicare will pay for it,” has forever been wrong. Medicare was designed for medical needs, not care needs. Or,“We’ll just go on Medicaid (welfare).” OK. Perhaps. But there are qualification requirements, some recovery statutes after receiving the care, and a serious problem for state budgets to continue to pay for long term care, as Medicaid money struggles to keep up with the demand. The State of Montana has also created the “Partnership Policy” certification, which qualifies policyholders for an important Medicaid benefit designed to help against asset depletion.This is very important. So, back to the costs and the “Retirement Outgo” issue. In the Helena area, Home Care will run about $20.00 per hour. Assisted Living will cost between $3,000 and $4,000 per month depending on the level of care contracted. And nursing home care will be pretty close to $5,000 per month, with possible additional charges for Alzheimer’s patients.

the most expensive item in retirement costs, for most people, are related to health care

Since 1973 SPECIALIZING IN ESTATE PLANNING We are a Montana law firm specializing in estate planning and closely related areas of law. By focusing our prac�ce in a par�cular area of the law, we are able to offer our clients the experience and exper�se of professionals who dedicate their careers to providing competent, professional legal advice.


Debbie M. Churchill, Attorney at Law

• Developing a process for transferring your property from one genera�on to another • Crea�ng trusts for estate tax reduc�on, people in second marriages, leaving property to disabled persons • Naming guardians for minor or disabled children • Coordina�ng your assets with your estate plan • Upda�ng your estate plan • Planning for handling of medical and financial decision if you become disabled, advanced direc�ves • Exploring op�ons for long-term care, including Medicaid eligibility

We serve our clients by providing an ongoing personal rela�onship with them over the course of their lives. 2728 Colonial Drive, Suite 202 • Helena, MT 59601 Located in the Mountain West Bank Building on the Corner of Colonial Drive and Broadway Phone 441-5401 • Fax 441-5402 • Office Hours: 8am–5pm, Monday–Friday

Connecting with Our Community Everyday Your donation enables us to significantly improve the lives of those we serve. Programs supported by charitable giving to West Mont include: Caldwell House Farm in the Dell in Helena Melodee House Vocational Training Cheer Squad Recreational Activities Client Needs Fund (medical, personal, funerals) To make a donation or for additional information, please call Arlene Flynn at

447-3100 or donate online at


Exploring Alternatives to Powers of Attorney Understanding what happens when you ‘turn over the keys’ to your rights and authority Frank C. Crowley, M.S.


In our estate planning practice, we frequently have clients present us with powers of attorney (POAs) which they executed years before, granting to the designated agent (usually their spouse) full authority to deal with all their property, including personal property, real property, investments and retirement benefits.There is nothing in these POAs that delays the effective date of the grant of power and so these POAs, in a sense,“turn over the keys” to all of a person’s rights and authority

over property many years before. Usually, the only reservation in these powers is that the agent cannot execute a will for the person granting the power.These powers are usually “durable” powers of attorney, meaning if the person granting the power becomes incapacitated or incompetent, the POA “endures” during this period of incapacity and is not invalidated due to the incapacity. There are alternatives to these immediately effective grants of power. First, there is a so-called “springing” power of attorney which, by its terms, takes effect (springs up) only upon the incapacity of the person granting the

power (the Grantor). Incapacity is defined in the POA to exist when a conservatorship or guardianship is imposed regarding the Grantor’s person or property, or when a licensed physician certifies in writing that the Grantor lacks the capacity to reasonably tend to their own affairs. Another alternative is for a person to create and sign a POA and designate an agent, but make the POA effective only if the person later signs a certificate that is attached to it at the time the POA is signed.This way, the person himself or herself determines when the POA becomes effective.This certificate should require notarization for security. Other ways to protect your assets are to require your agent to provide regular accounting statements to a third party, such as a lawyer or accountant.You may want to appoint a co-agent for

transactions in excess of $10,000, or designate a “protector” or advisor who could replace the agent in the event of self-dealing by the agent.You may also want to limit the agent’s power to gift your property, transfer real estate, or liquidate investments. Attorneys can prepare interpersonal agreements signed by the principal and agent which describe the do’s and don’ts of the agent. None of these protections are completely flexible or fail-safe. However, in the unfortunate case of an agent’s abuse of a POA, there are legal and equitable remedies for families or other beneficiaries. In the case of an elderly person, abuse of a POA constitutes exploitation for which Department of Public Health & Human Services may pursue remedies.

DONEY CROWLEY BLOOMQUIST PAYNE UDA P.C. Providing Estate Planning and Probate Services Planning tools for clients: Wills and Trusts Gifts

You’ve worked hard to build your estate. Will your protection strategy reciprocate?

Living Wills Powers of Attorney Advance Health Care Directives Marc G. Buyske, LL.M.

Frank C. Crowley, M.S.

Diamond Block Building, Suite 200 44 West 6th Avenue • P.O. Box 1185 • Helena, MT 59624-1185

(406) 443-2211 email: fcrowley@done • www.done

Without a proper estate-protection strategy, your loved ones may not receive all you’ve worked so hard to achieve. *ÀœÌiVÌÊޜÕÀÊ>ÃÃiÌÃÊvœÀÊ>ʏˆvï“i° ˜ÃÕÀiÊޜÕÀÊ>ÃÃiÌÃÊ«>ÃÃÊ>VVœÀ`ˆ˜}Ê̜ÊޜÕÀÊÃÌÀ>Ìi}Þ° Transfer assets with the least amount of cost to your heirs.

Rick Elhart, FIC ˆ˜>˜Vˆ>Ê œ˜ÃՏÌ>˜Ì ΣÎäÊ->``iÊ À]Ê-ÌiÊÈ ii˜>]Ê/Êx™Èä£ 406-442-6091

I can show you how. Call today. Thrivent Financial for Lutherans and its respective associates and employees cannot provide legal, accounting, or tax advice or services. Work with your Thrivent Financial representative, and as appropriate, your attorney and/or tax professional for additional information.

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© 2011 Thrivent Financial for Lutherans



Charitable Gifts Still on the Table Income tax increase may take effect after 2012

Harlen & Parish, P.C. Attorneys at Law

Marc G. Buyske, LL.M.


The 2010 Tax Relief Act enacted by Congress and signed into law by the President in mid-December assured (at least until December 31, 2012) that Montana estates valued at $5 million or less would not be subject to an estate tax, and that the lower income tax rates adopted during the Bush Administration will continue for two more years. However, with the deficit and entitlement programs growing, an income tax increase may be on the horizon after 2012. Charitable giving as part of an estate plan can help reduce income taxes and satisfy a wish to help others. Charitable gifts can be structured to provide an

income stream to the donor as well as an income tax deduction, and if a personâ&#x20AC;&#x2122;s estate is large enough, provide deductions for estate tax purposes. Most established charitable entities (for example, churches, Carroll College,Yellowstone Boys and Girls Ranch) have resources and information regarding charitable giving. Charitable gifts can be made, for example, with investment assets (including IRAs), land (including a personal residence), and oil, gas and mineral interests. It is not too early to consider this strategy which benefits both the taxpayer and those causes held dear by the taxpayer.

Thomas K. Harlen Richard L. Parish Ada J. Harlen, retired Quality estate planning for over 30 years... Wills, Trusts, Powers of Attorney, Living Wills, Wealth Strategies.


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Giving That Lasts More than a Lifetime Do your homework before making a legacy gift David Smith, CEO Helena Family YMCA

When people are hurting, community projects need assistance, or youth need after school programs, you help. Your charitable gift touches those in need today.The charitable organizations you support also touch the futureâ&#x20AC;&#x201D;and the best part is that you can help right here in your local community. Many organizations, such as the YMCA have an international reach. But through bequeaths to local organizations, you can create your local vision for a better world long after your lifetime. We rely on charitable organizations and they rely on us. While many charities receive some support from government agencies, 80 percent of

their funding comes from individualsâ&#x20AC;&#x201D; people like you who give generously throughout their lives. Part of that generosity can be through a legacy gift. Whether you think of yourself as rich or poor, or somewhere in between, your gift can make a difference. Some people think they must choose between leaving a gift to their family or their favorite charity, however,you can leave money to your family and to your favorite charity. Some charitable gifts may actually save your family money by decreasing inheritance taxes. Many organizations build up various trusts and legacy gifts to help with a building project, provide scholarship endowments, or just assist with ongo-

ing administrative costs. An added benefit is that you can designate, or restrict, its uses. Helena has many worthwhile organizations. If youâ&#x20AC;&#x2122;re not associated with one, but still want to make a lasting gift, you can give to organizations such as United Way, the Montana Community Foundation, or the Lewis & Clark County Community Foundation.Those organizations review requests from other non-profit organizations, and handle charitable gifts from individuals and businesses. Here are a few things to consider: â&#x20AC;˘ Check out their mission statement. Do they support the causes you believe in? â&#x20AC;˘ Are they truly a non-profit organization? They should be able to provide you with an IRS â&#x20AC;&#x153;letter of determinationâ&#x20AC;? proving they are a 501(C)

(3) corporation.You may ask to see the organizationâ&#x20AC;&#x2122;s 990.This is the equivalent of a tax return. â&#x20AC;˘ Ask how much of the donations are used for the actual purpose stated. The Better Business Bureau (BBB) recommends the charity should spend at least 65 percent of total expenses on program service activities and spend no more than 35 percent of related contributions on fund raising expenses. You can start helping today by making sure you have an up-to-date will (or living trust) that reflects your charitable objectives.Think beyond cashâ&#x20AC;&#x201D;you can leave stocks, real estate, insurance policies and personal property to charitable organizations. Go visit with the local CEO or board members to hear the stories about what the organizations are doing.

-$&.621085'2 *5$173& Iris H. Basta John H. Grant David L. Jackson Robert M. Murdo Scott M. Svee

Jackson, Murdo & Grant, P.C. was established in 1967. The firm serves a broad range of individual and corporate clients and practices in a wide variety of areas of law, including administrative, banking, business, collections, contracts, estate planning and probate, employment, civil litigation, land use and planning, liquor and gambling, real estate and securities law. 203 N. Ewing Street

Helena, MT 59601

(406) 442-1300



Endowment Gifts That Keep on Giving If only 20 percent of Americans left a charitable gift, the current number would more than double Montana Community Foundation

Among his many attributes, Benjamin Franklin was known for the virtue of frugality. He also understood the benefits of thinking in terms of forever. Through his estate, Franklin left 1,000 pounds of sterling—roughly $4,000— to the cities of Philadelphia and Boston. His will included detailed instructions to grow the funds over the long term, as well as generate annual earnings for the charitable activities he supported over his lifetime. Franklin’s gift was unique, not for its size but for its structure, which guaranteed that the value of his bequest would more than keep pace with the growth and vitality of the cities he loved. By 1990—200 years after his death— Franklin’s bequests had grown into multi-million-dollar endowments that still fund scholarships, fire departments, libraries, job training and symphonies. Franklin demonstrated the capacity of a structured gift to provide a permanent link between a Founding Father and forever. Forever is a concept most of us have difficulty grasping, especially as it relates to our own actions. Is it possible that a decision we make today will have an impact on generations yet to be born? How can we understand the meaning of permanent, lasting and enduring? The Montana Community Foundation was created in 1988 to provide a permanent source of funding to respond

to the needs of Montana’s communities as they emerge and change over time. By encouraging individuals, families, businesses and organizations to create endowment funds at the Foundation, the foundation has succeeded in building forever into Montana’s charitable future. An endowment fund is permanent — the initial investment that creates the fund, along with the gifts that are added over the years, will always be at the community foundation to generate income to meet future needs. To demonstrate the power of endowed giving, consider T. Eugene Young. When Mr.Young passed away in 2001, he left a bequest of $500,000 to establish the T. Eugene Young Scholarship Fund at the Montana Community Foundation.The fund awards $25,000 per year to students at five of Montana’s technical schools. Since it awarded its first scholarship in 2001, the T. Eugene Young Scholarship Fund has awarded $250,000—half of Mr.Young’s initial investment—in scholarships, all while preserving the principal of the fund as a permanent endowment. By 2020, the total amount granted from the fund will exceed the value of Mr.Young’s initial contribution. The simplest way to provide perpetual support for charities after death is through your will. Directing that a distribution from your estate be made to your favorite charity will provide ongoing support for their work, especially if you direct the gift to an endowment. Only 40 percent of all adults and 70 percent of adults over the age of 55 have wills.Those who do not have wills forfeit the decision of how their estate will be managed.They also forfeit opportunities to reduce estate taxes and leave potentially leave more money to heirs and charities. Including a charitable bequest in a

will is a simple way to make a lasting gift to your community. Using a bequest to establish or give to an endowment is a way to create a personal legacy that will permanently support Montana’s charities. If only 20 percent of

Americans left a charitable bequest, the current number of charitable bequests would more than double. Have you remembered charity in your will?

rancher student retired teacher tech entrepreneur family business owner young anyone can be a professional retired teacher entrepreneur financier empty nester philanthropist farmer family nurse lawyer rancher civic leader college professor engineer waitress family let us teacher empty nester young parent show you how lawyer entrepreneur grandparent manager college student doctor ar tist business owner farmer ar tist athlete financier civic leader family business owner Helping Montanans plan and carry out their charitable giving since 1988. | 406-443-8313


Made in Montana Montana State University Extension’s MontGuides provide up-to-date estate planning information

On serious issues like estate planning and family financial issues, Montana State University Extension is the organization that fills the pipeline with useful information for Montanans. The information is often in the form of MontGuides, which are short fact sheets put out by MSU Extension Specialist, Marsha Goetting.These guides can be found in banks and credit unions, as well as law and accounting offices around the state. “MontGuides are perfect for many of those topics,” says Karen Smith, director of outreach services for Montana Credit Unions for Community Development. There are over 65 publications on family finance and estates that Goetting updates regularly. Among those are over 30 titles relating to estate planning. “Estate planning can seem threatening personally and confusing legally,” Goetting said.“I write the MontGuides to provide a simple entry point for people trying to understand Montana law and how various choices can affect their family.Then, when they go to an accountant or attorney, they have an understanding and know which questions to ask.” Bev Wallace, a retired Gallatin County

Extension agent, used Goetting’s expertise years ago, and said she is glad she did.“We needed the guidance she provided,”Wallace said.“We had the desire and the follow-through, but we needed the guidance.” Generally, the MSU program makes the MontGuide fact sheets available on web or at county extension offices. Some people pay a $10 fee for the entire financial planning series while other pick up one or two at a time. Those who purchase the entire series are sent updates when the laws change. Smith said her use of the estate planning MontGuides is not limited to the professional realm. “I find them personally useful,” said Smith.“There are a lot of topics.There is one pamphlet that is awesome on caring for family members. I definitely look at all of them.They are very useful tools.” Smith said any time a new estate planning or financial management MontGuide becomes available, Montana Credit Unions for Community Development sends out an e-mail to notify their organization’s members. “I look for available consumer resources, preferably those that are free,

2011 Estate Planning & Planned Giving Seminars The Lewis & Clark County Community Foundation (LCCF) is offering in September free estate planning seminars that are open to the general public at three locations throughout Lewis & Clark County. Please mark your calendars for one or more of the following events closest to you: Lincoln – Wednesday, September 14, 2011; Augusta – Thursday, September 15, 2011; Helena – Wednesday, September 21, 2011. While the details for the seminars are still in the planning stages, the speakers have been finalized, and free educational materials are in the process of being developed for distribution to seminar participants. LCCF board members who are serving as volunteer local coordinators for the three seminars are Bridgitt Erickson (Lincoln), Julius Hayden (Augusta) and Aimee Grmoljez & Steve Browning (Helena).

and a lot of those are the MontGuides,” Smith said.“They go beyond how to set up a spending plan. When a member comes in and talks to a teller and says, ‘I have an elderly family member,’ we want to be able to point them in the right direction.” One of the most requested MontGuides is “Beneficiary Deeds in Montana,” which explains a new law that allows Montanans to use a beneficiary deed to arrange for transfer of real property after a death without the cost of probate.The second most requested publication was “Montana Medical Care Savings Accounts.” Other popular titles

The tentative agenda for the Lincoln and Augusta seminars will be as follows: • The morning will cover issues that people need to consider in planning for their estates. • The lunch hour will offer a closer look at the opportunities presented by the Lewis & Clark County Community Foundation to prospective donors and grantees. • The afternoon sessions will provide an in-depth examination of the technical issues and financial benefits related to “planned giving” in Montana. The morning sessions on estate planning will be lead by Marsha A. Goetting, a family economics specialist from MSU’s Extension Family Economics Department. Ms. Goetting is experienced in leading successful seminars offered to other communities throughout Montana. According to Heidi Goettel, LCCF board member, continued on page 19 >>

include “Transferring Your Farm and Ranch to the Next Generation through a QTIP Trust,”“Probate” and “Life Estates: A Useful Estate Planning Tool.” Estate planning MontGuides are available free from local Montana State University Extension offices or may be downloaded from the Web at http:// . Single printed copies are also free by writing to: MSU Extension Publications, P.O. Box 172040, Bozeman, MT 59717, or e-mailing them at Contact: Marsha Goetting (406) 9945695 or

Give a gift that lasts forever... Your contributions, memorials, bequests, and planned gifts to LCCF build a permanent endowment fund that provides annual grant making to quality charitable projects benefiting Lewis & Clark County and its residents in perpetuity. To find out how you can give a gift that will benefit our community forever visit . . . 406-441-4952

INDEPENDENT RECORD n FEBRUARY 27, 2011 D n ESTATE AND FINANCIAL PLANNING >> continued from page 18 “Ms. Goetting has perfected a most engaging presentation on basic estate planning questions. Marsha uses interactive communication tools, by which she can engage each member of the audience on fundamental questions that they should be asking themselves. Further, reviews from former participants in similar seminars taught by Ms. Goetting convinced me that the people who attend the LCCF seminars are in for a most worthwhile educational experience.” Aimee Grmoljez, a local attorney and member of the LCCF, board concluded: “Ms. Goetting’s presentation will contain many valuable lessons for the citizens of our county to help them with the planning decisions needed for their estates.” Among the estate planning issues that Ms. Goetting addresses in her workshop are: Who gets your property when you die depends on: • Contractual arrangements • PODs, TODs, other beneficiary designations • Beneficiary Deeds • Life Estates • Trusts • Wills • Montana Law of Intestate Succession-- Illustrations of family members who receive property using the Dying without a Will Web site and CD Descriptions of the legal implication of property

ownership: • Sole ownership • Joint tenancy with right of survivorship • Tenancy in common • Business arrangements Wills: • State requirements • Separate listing of tangible personal property • Rights of surviving spouse--augmented estate rules Information about the new federal law: • Federal estate tax law changes • Examples of marital portability of the applicable credit • Gift Tax law changes • Reunification of gifting with federal estate tax Methods to protect surviving spouse while leaving legacy for children • Qtip trusts • Life estates • Trusts Probate • Fees Montana’s statute computation vs. hourly fee • Duties of personal representatives Using annual exclusion for gifting to benefit family members: • MSA’s • First Time Home Buyer Accounts • IRA’s >> continued on page 23


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GOOD FINANCIAL habits start early. The very best last well into old age. For those somewhere in the middle and still trying to figure it all out, there’s help. No matter what stage of life, a person can always take steps to improve his or her finances, says Julie Jason, president of the Jackson, Grant Investment Advisors, Stamford, Conn. Here are tips on what family members need to think about and plan for at all stages of life, from childhood to retirement.

How to think smarter and plan better in money matters at all stages of life, from tots to retirees



If little ones start to learn the basics of money management as they grow, perhaps they can avoid the debt and exuberant spending habits that plague many adults. It’s important to teach children that every dollar they receive is not a dollar they can spend, says Manisha Thakor, personal finance expert for women and author of “Get Financially Naked,” (Adams Media, 2009). Kids should learn to divide allowances into three buckets: one for savings, one for charity and one for spending. Thakor recommends parents help children allocate 10 percent for savings, 10 percent for charity and 80 percent for spending.

As kids approach their teenage years, they can start to grasp the truth in the old adage “money doesn’t grow on trees.”Thakor tells teens to think about how many hours they would have to work to earn enough to buy an item they want.This way, they begin to understand how much labor really goes into an iPod or Xbox purchase. Encourage a teen to find a part-time job, and share your views on money matters and what you’ve learned about saving and spending.

tip Help kids learn to save: Fiddle with the online allowance calculator at to come up with a weekly sum that’s reasonable, based on the age of the child and the parent’s own experience.

tip Required reading: Jean Chatzky, award-winning financial journalist, wrote “Not Your Parents’ Money Book: Making, Saving and Spending Your Own Money,” (Simon & Schuster, 2010) to help start teens on a path to financial success.


The average collegeage credit card holder carries a balance of more than $3,000, according to Sallie Mae. Fortunately for frisky, young credit users, credit card reform measures that started rolling out in 2010 make it more difficult to overload on credit and debt, requiring anyone under age 21 to show proof of income or get parents to co-sign in order to get a credit card. College students shouldn’t avoid credit cards completely, however.A student should get one credit card in his or her name; monitor his credit record at the three major agencies; and pay off the bill every month. Used responsibly, a credit card can help young adults build a strong credit profile.


A new couple’s main financial goal should be to build a solid foundation that includes an emergency fund to cover three to six months of living expenses,Thakor says. However, this should happen only after each partner pays down any debts they may have accumulated before marriage.Thakor urges newlyweds to conduct financial check-ins on all assets at least semiannually. Couples should save 20 percent of their income,Thakor says.

tip Investment smarts: If your employer offers a tax sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. >> CONTINUED ON PAGE 22


Montana Supporting Soldiers sends care packages and letters throughout the year to our deployed troops. We also support our wounded warriors and our veterans. You can express your appreciation to our service members and veterans for years to come by including Montana Supporting Soldiers in you giving plans.


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Financial Planning Timeline Continued... from page 20 MARRIED WITH A FAMILY Once the storks start dropping baby bundles at the doorstep, it’s time to think about life insurance.Whole life insurance is expensive and unnecessary in Thakor’s opinion. She suggests acquiring term life insurance instead, which provides coverage for a set time period – usually five to 30 years – at a fixed rate. Keep retirement saving in mind, despite the focus on children.You can put $5,000 a year into an Individual Retirement Account (IRA) and delay paying taxes on investment earnings until retirement age. If you don’t have a retirement plan (or are in a plan and earn less than a certain amount), you can also take a tax deduction for your IRA contributions.

tip College planning: The College Savings Plan calculator at can help families develop or fine-tune a college savings plan, factoring in number and ages of children in the family. Click on “Financial Tools.”


“The challenge as you enter into these years is to avoid lifestyle creep,”Thakor says.“It’s very easy to start living beyond your means. The more you earn, sometimes the more you spend.”This presents a big problem for savings for a couple’s retirement and their children’s college education.Thakor has noted another dangerous trend in this age bracket: risky investments.An investment portfolio at this age should be a low-cost, high-quality mix of stocks, bonds and mutual funds that grows conservatively over time, she says.

tip Start early. Make retirement saving a priority. Devise a plan, stick to it and set goals. Grab a quick estimate of your retirement needs using the “Ballpark Estimate” tool at

IN YOUR 50s…

IN YOUR 60s…

“Fifty is the time of preparation and a time of opportunity,”says Julie Jason, author of“The AARP Retirement Survival Guide: How to Make Smart Financial Decisions in Good Times and Bad,”(Sterling, 2009). Make catch-up contributions, an extra amount those over 50 can add to 401(k) and other retirement accounts.At age 59 1/2 you will no longer be hit with tax penalties on withdrawals from retirement accounts, but leaving money in means more time for it to grow. Imagine you’re retiring on Monday and need to calculate how long your funds will last. Jason says this scenario forces people to look at their expenses, savings and income sources outside of work.“If you do the analysis, you can adjust your savings and investing,” she says.

The minimum age to receive Social Security benefits is age is 62, but delaying to a later year will mean a bigger monthly benefit. Generally, governmentsponsored Medicare health insurance is available to those age 65 and older.At 66, those born between 1943 and 1954 are eligible for full Social Security benefits. Jason says that those at age 65 must realize that they’re targets for every ambitious financial advisor.“Put on a skeptics hat,” she says. Retirees should interview professionals to make sure they have prior experience with retirement accounts and clients in financial situations similar. Making decisions for a $100,000 account is very different from making decisions for a million-dollar account, Jason says.

tip Get Going! Are you on track financially for a comfortable retirement? The Financial Planning Assoc. offers an interactive Financial Roadmap tool to help highlight areas where you need to improve: Go to www. and click on “Financial Roadmap” under Tools & Resources.

tip Learn what your estimated social security benefit will be at retirement by using the retirement estimator at www. or call 1-800-772-1213.

IN YOUR 70s…


“Now is the time to review assumptions and make adjustments to your cash flow and to your investments,” Jason says.At the outset of retirement, people assume that healthcare will be their greatest expense. It turns out that the largest expense is most often taxes. Plan to begin taking minimum withdrawals from most retirement accounts by 70 1/2 or you may be charged a penalty.

Healthcare and legacy planning should come into the picture around age 85, Jason says. Long-term care for husbands and wives should be determined.“At a certain point you have to bring in your spouse and see if you’re in sync with each other,” Jason says. She reminds retirees to include the desire to leave an inheritance in their planning. © CTW Features



>> continued from page 19 The afternoon sessions of the seminars will offer a more technical presentation on planned giving issues and opportunities. Kurt Alme from the Yellowstone Boys and Girl’s Ranch will be the presenter for the Lincoln seminar and Marilyn Parker from the Benefis Foundation will be the presenter for the Augusta seminar. According to Steve Browning, “Kurt Alme and Marilyn Parker are recognized as two of Montana’s most accomplished planned-giving specialists, who will provide great value to anyone who takes the time to attend these seminars.” Among the many participants who are expected one of more of the three seminars are members of the Helena Estate Planning Council [HEPC], an organization whose members are local professionals who specialize in various aspects of estate planning and wealth management. At this time, the details for the Helena seminar are in flux. According to Mr. Browning: “While the content for the Helena event might be similar to the seminars offered the previous week in

Lincoln and Augusta, its format may ultimately be altered to follow the Conversations on Endowed Philanthropy, based on statewide conversations held in Helena by former governors Marc Racicot and Judy Martz, and more recently by Gov. Brian Schweitzer, as well as local community conversations held in various areas.” Mr. Browning emphasized that these earlier Helena “conversations” were “a stimulating way to engage the public about the value of philanthropy.” “The benefits flowing from the earlier conversations not only significantly helped local charities but they also helped reduce taxes for people who pursued the planned giving suggestions that were made at those sessions”, concluded Mr. Browning. According to Curt Larsen, Chairman of The Lewis and Clark County Community Foundation, our foundation “provides financial support to quality charitable projects benefitting Lewis and Clark County and its residents.” Formed nearly twenty years ago, LCCF

awarded $20,000 in grants last year to 26 local non-profits in Lewis & Clark County. Since 1999, when LCCF began making grants, more than $100,000 in grants was awarded to scores of local non-profits. LCCF’s current endowment now stands at more than $300,000. According to Mr. Browning, “We at LCCF hope that with the kind of information that will be generated by the three seminars, more and more people in Lewis & Clark County will begin to recognize how stronger community endowments can help our local communities. Moreover, we hope that they will consider leaving part of their estates to Lewis and Clark County Community Foundation. Registration for the three seminars will be on a first come—first served basis, must be done with LCCF at the following contact numbers: Linda Carlson, Executive Director Lewis & Clark County Community Foundation P.O. Box 92, Helena, MT 59624 (406) 441-4952 or


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Estate Planning 2011  

Estate Planning 2011

Estate Planning 2011  

Estate Planning 2011