Estate Planning

A Special Publication of the Messenger-Inquirer • Friday, May 13, 2016

Estate Planning

2 Estate Planning

Messenger-Inquirer Friday, May 13, 2016

Have the talk about estate planning L

BY GLENN FUNERAL HOME

et’s be real about this. We’re sometimes reluctant to talk about ourselves about the really important things, the things that mean the most to us. The deeper things, like how we want to be remembered.

Is it modesty, genuine or other wise? Who knows? Perhaps it’s like saying we don’t want a birthday party, but having our hearts touched by the shouts of surprise, the cake, the candles.

Having a talk with those about whom we care most, learning how they wish to be remembered, can be awkward to bring up. It may not be a priority right now. Maybe that’s the best time. But having had “the

talk” will be priceless when it’s time to honor and commemorate their life.

It’s simple really — it’s just a talk. Sharing stories with those who matter most. About fondest memories. What lessons have been the most important. Of what are they most proud. What legacy do they wish to pass on to future generations?

It could be a good idea to have “the talk” with others about yourself — unless you really don’t like birthday cake.

Glenn Family Ser vices can make it easier. Call or drop by for your complimentar y copy of “The Talk of A Lifetime.” You can assure that “one of these days” doesn’t slip away.

HILLARY CLARK

GLENN FUNERAL HOME

Friday, May 13, 2016 Messenger-Inquirer

Estate Planning

3

An Introduction to Estate Planning

BY JEREMY EDGE AND RICK HOBGOODÂ

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HOBGOOD FINANCIAL GROUP

state planning is designed to help you manage and preserve your assets while you are alive, and to conserve and control their distribution after your death according to your goals and objectives.

Many factors determine your particular estate planning needs. For example, if you have a small estate and are concerned only that certain people receive particular things, a simple will is probably all you need. If you have a large estate, minimizing potential estate taxes may be your foremost goal and you may need more sophisticated techniques.

Incapacity can strike anyone so we generally recommend that adults over 18 consider having a durable power of attorney, which allows you to name someone to manage your property in case you become incapacitated. And an advanced medical directive is a fairly simple document that can be an important part of a basic estate plan. Obviously, if you have material possessions, you should write a will if you want to have a say in where your possessions go upon your death.

For committed unmarried couples, a will is critical.

Without a will, according to state law, your closest relatives will inherit your property at your death and

your partner will not be entitled to anything. If you share property, you may consider titling the property in such a way that when one of you dies, the property passes to the surviving partner automatically.

A will is particularly important if you are married and have children because you can name a guardian for your minor children. Otherwise, someone in the

court system may be deciding for you who is going to raise your kids. If you pass before your spouse and do not have a will, many states dictate that part of your property goes to your children and not your spouse. If that child is a minor and inherits directly, your surviving spouse will need court permission to manage money for them. Along those lines, you may want to consider a trust in the event that you and your spouse die at the same time so that the assets can be managed according to your wishes. We highly recommend that couples with children take a serious look at their life insurance situation. If a two income family suddenly becomes a one income family or the primary caregiver or primary breadwinner were no longer around, life insurance is of extreme importance. Life insurance is a relatively simple estate planning tool that can make a significant long-term impact on your family.

Not ever yone needs a complicated estate plan involving QTIP’s, QPRT’s, or ILIT’s, but we think everyone does need to do some basic planning. Once that planning is done, it makes some sense to review it from time to time. Keep in mind that any changes like a new baby or a change in marital status are definite reasons to revisit all of your estate and financial planning needs.

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4 Estate Planning

Messenger-Inquirer Friday, May 13, 2016

Understanding life insurance policies

BY METRO CREATIVE CONNECTION

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ife insurance is a product few people want to think about. That’s perfectly understandable, as life insurance forces men and women to consider their own mortality. But life insurance is not something adults should avoid, especially if they have dependents.

Many people should consider life insurance when estate planning so they can provide security for their loved ones.

But life insurance is a purchase unlike any other, and people may be confused or intimidated when attempting to purchase life insurance policies.

DECIDING IF YOU NEED COVERAGE

BUYING LIFE INSURANCE

Much like various other types of insurance, life insurance can be purchased from an insurance agent or via an insurance company’s website.

When choosing a company from which to buy a life insurance policy, look for a company with a strong rating, as no one wants to end up being burned by a life insurance provider who goes out of business. Some people prefer to work with independent brokers who can share information about products from various providers rather than just the ones offered by the firm company-affiliated agents work for.

CHOOSING COVERAGE

When choosing coverage, you will no doubt be asked if you prefer term insurance or permanent insurance. Term insurance is the least expensive life insurance, and such policies only last for a predetermined number of years. Men and women may purchase life insurance

policies if they only want life insurance until they retire or until their children reach adulthood. Permanent insurance is more expensive and will last from the moment you purchase the policy until your death. Many people choose permanent life insurance policies so the money their beneficiaries receive upon their death can be used to pay estate taxes. In addition, there is an investment component to permanent insurance policies, as a portion of the premiums on such policies is invested (policies will spell out how the money is invested) and allowed to grow tax-free so long as the policy is open. Term insurance only provides protection with no investments.

When choosing how much coverage to purchase, it’s easy to go overboard and aim for as much as possible. However, many financial advisors suggest purchasing enough coverage to pay for funeral costs and a level of income replacement you can comfortably afford. If your spouse does not work, you should consider purchasing enough coverage so he or she can afford to pay the family’s day-to-day cost of living expenses.

Life insurance merits serious consideration, and adults should do their homework and fully understand a policy before signing any contracts.

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While life insurance seems like the kind of thing every person should have, that’s not necessarily the case. For example, single men and women with no dependents and no tax or debt concerns generally do not need life insurance. If you are single but have tax issues or a considerable amount of debt, then a life insurance policy can be used to pay those debts upon your death. Adults with dependents, such as a spouse and/ or children, should consider purchasing life insurance, which can help your surviving dependents maintain their quality of life and pay their bills in the wake of your death.

Friday, May 13, 2016 Messenger-Inquirer

Estate Planning

5

War-time Veterans, widows are eligible for benefits Most can receive pay for elder care services

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BY DARRON L. BRAWNER

pproximately 33 percent of all seniors in this country are eligible to receive a special pension from the Department of Veterans Affairs. This little-known special pension provides up to $2,120.00 per month for Veterans, and their surviving spouses, to pay for the cost of elder care services. To be eligible, the Veteran must have at least 90 days of active duty service with at least 1 day beginning or ending during a period of War. Additionally, the Veteran, or their surviving spouse, must require the assistance from another person in performing the activities of daily living such as eating, bathing, dressing, undressing or taking care of the needs of nature.

The special pension can be used to pay for home services to assist the Veteran, or their surviving spouse, with

the activities of daily living, and can also be used to pay for the costs of an assisted living facility or nursing home facility.

There is no place like home, and with this special pension, Veterans, and their surviving spouses, can stay at home or move to an assisted living facility and receive the care they need.

The VA typically does not tell eligible Veterans about this special pension. In fact, the VA does little to help Veterans obtain this special pension. If you believe that you may be eligible for this special pension, you need to contact an accredited attorney with the Department of Veterans Affairs to assist you with your application for this special pension.

Mr. Brawner is the founder of Western Kentucky Elder Law, PLC, and is an accredited attorney with the Department of Veterans Affairs. Â Darron L. Brawner Western Kentucky Elder Law 2645 Frederica Street, Suite 200 Owensboro, KY 42301 (270) 684-4811

6 Estate Planning

Messenger-Inquirer Friday, May 13, 2016

Five questions about long-term care

BY THE SETTLE’S GROUP HILLIARD LYONS

1. WHAT IS LONG-TERM CARE?

Long-term care refers to the ongoing services and support needed by people who have chronic health conditions or disabilities. There are three levels of long-term care: • Skilled care: Generally round-the-clock care that’s given by professional health care providers such as nurses, therapists, or aides under a doctor’s supervision.

• Intermediate care: Also provided by professional health care providers but on a less frequent basis than skilled care.

• Custodial care: Personal care that’s often given by family caregivers, nurses’ aides, or home health workers who provide assistance with what are called “activities of daily living” such as bathing, eating, and dressing.

Long-term care is not just provided in nursing homes--in fact, the most common type of long-term care is home-based care. Long-term care services may also be provided in a variety of other

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settings, such as assisted living facilities and adult day care centers.

2. WHY IS IT IMPORTANT TO PLAN FOR LONG-TERM CARE?

No one expects to need long-term care, but it’s important to plan for it

nonetheless. Here are two important reasons why: The odds of needing long-term care are high: • Approximately 70% of people will need long-term care at some point during their lifetimes after reaching age 65* • Approximately 8% of people between ages 40 and 50 will have a disability that may require long-term care services* The cost of long-term care can be expensive: For many, the cost of long-term care can be expensive, absorbing income and depleting savings. Some of the average costs in the United States for long-term care* include: • $6,235 per month, or $74,820 per year for a semi-private room in a nursing home • $6,965 per month, or $83,580 per year for a private room in a nursing home • $3,293 per month for a one-bedroom unit in an assisted living facility • $21 per hour for a home health aide *U.S. Department of Health and Human Services, December 1, 2015

3. DOESN’T MEDICARE PAY FOR LONG-TERM CARE?

Many people mistakenly believe that Medicare, the federal health insurance program for older Americans, will pay for long-term care. But Medicare provides only limited coverage for long-term care services such as skilled nursing care or physical therapy. And although Medicare provides some home health care benefits, it doesn’t cover custodial care, the type of are older individuals most often need.

Medicaid, which is often confused with Medicare, is the joint federal-state program that two-thirds of nursing home residents currently rely on to pay some of their long-term care expenses.

But to qualify for Medicaid, you must have limited income and assets, and although Medicaid generally covers nursing home care, it provides only limited coverage for home health care in certain states.

SEE QUESTIONS/PAGE 11

Friday, May 13, 2016 Messenger-Inquirer

Estate Planning

7

Estate planning idea: Make tax-free gifts of tuition

BY MITCH SETTLE

MITCH SETTLE

• Have a place where it regularly carries out its educational activities Example(s): The Correspondence School of Radio Broadcasting offers a correspondence course to students. It is not a qualified educational organization because it has no place where it regularly carries on educational activities. Tuition paid to this school does not qualify for the exclusion.

3. When payment is made directly to the educational organization The payment can be made on behalf of anyone (i.e., it need not be a relative), but you must make the payment directly to the educational organization.

Payments you make to the student will not qualify.

educational organization You must make the payment to an educational organization that meets conditions set out by the IRS. Each of the following requirements must be satisfied.

The organization must: • Maintain a regular faculty • Offer a regular schedule of courses • Enroll students on a regular basis

• Allows you to make a tax-free gift — The IRS considers payments for tuition made to a qualified educational organization on behalf of a student to be nongift gifts, which are not subject to gift tax or the generation-skipping transfer tax. This can be a great way to transfer wealth to your children

SENIOR VICE PRESIDENT, FINANCIAL CONSULTANT, CHARTERED WEALTH ADVISOR

WHAT IS IT?

Your payment of someone else’s tuition is a qualified transfer (a nongift gift). You are allowed to make this type of gift without incurring federal gift tax or federal generation-skipping transfer tax (GSTT). The payment must be: (1) for tuition, (2) made to a qualified educational organization, and (3) made directly to the educational organization.

This exclusion allows you to pay an unlimited amount and is in addition to the annual gift tax exclusion. Often overlooked, this exclusion is a great way to transfer wealth to children and grandchildren.

WHEN CAN IT BE USED?

1. When payment is for tuition To avoid it being a gift for gift tax purposes, the payment must be for tuition only. Payments for costs such as supplies, books, dormitory fees, and board do not qualify for the exclusion.

2. When payment is to a qualified

STRENGTHS

and grandchildren.

• Allows you to save your applicable exclusion amount — Because gifts of tuition are not subject to gift tax, you don’t need to use the applicable exclusion amount to offset these gifts.

• Allows you to stretch the annual gift tax exclusion — Because gifts of tuition are not considered gifts for gift tax purposes, you can still give the student up to $14,000 (in 2015 and 2016) tax free under the annual gift tax exclusion.

• May reduce estate tax liabilities — Making a gift of tuition can reduce your estate tax liability by removing the value of the payment from your gross estate.

• Applies to both full-time and part-time students — The gift qualifies if it is in payment for the tuition of one or more courses.

• Applies to a foreign educational organization — Unlike other types of charitable gifts that must be made to organizations located in the United States, a gift of tuition on behalf of another person can be made to a foreign educational institution.

SEE TUITION/PAGE 11

8 Estate Planning

Messenger-Inquirer Friday, May 13, 2016

How it works disclaiming all or part of an inherited IRA or retirement plan

BY SHANNON RAINES

pass directly to a contingent beneficiary with greater financial need. Or, you may want to disclaim in order to minimize your taxable income or for estate planning purposes. IRA and retirement plan distributions are generally treated as taxable income for federal (and possibly state) income tax purposes and can be subject to estate tax, too. Or you may want to disclaim to allow the IRA or retirement plan account to pass to a younger contingent beneficiary who can stretch out distributions over a longer period of time.

MBA, FA, CHARTERED RETIREMENT PLAN SPECIALIST

WHAT IS IT?

If you are a beneficiary of a traditional IRA or employer-sponsored retirement plan account, and the account owner dies, you generally have several options.

In most cases, one of your options is to disclaim the inherited funds. When you disclaim all or part of a traditional IRA or retirement plan account, you voluntarily refuse to accept some or all of the inherited funds.

WHY WOULD SOMEONE DISCLAIM?

As you might guess, disclaiming is not common. Most beneficiaries opt to receive the inherited IRA or employersponsored plan funds in one form or another. However, disclaiming a benefit

REQUIREMENTS TO MAKE A DISCLAIMER

SHANNON RAINES

may actually make sense in certain circumstances. For example, you may decide to disclaim so that the funds

To disclaim funds from a deceased IRA owner’s or plan participant’s account, you must have a claim on those funds in the first place. In other

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SEE DISCLAIMING/PAGE 10

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words, you must be a beneficiary of the IRA or plan account. When you disclaim the account, it passes to the contingent beneficiary. You may disclaim the entire IRA or retirement plan or just the portion that you do not want, but either way it must be a “qualified” disclaimer to avoid being classified as a gift from you to the contingent beneficiary for federal gift tax purposes.

A qualified disclaimer is (1) irrevocable and unconditional, (2) in writing, (3) given to the plan custodian or administrator within nine months of the creation of the interest (or, if later, nine months after you turn 21) and before you have access to, or use or enjoyment of, the funds, and

You’ve had a great career. The kids are through college. The mortgage is paid off. Things are going well. But what happens when it’s time to retire? Hilliard Lyons can help with a solid plan designed to fit your current needs and meet your future objectives. Talk to us today.

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Friday, May 13, 2016 Messenger-Inquirer

Estate Planning

Plan in advance for death and taxes

BY HALEY MCGINNIS FUNERAL HOME

A

lthough no one likes to think about it, dying is the one certain thing that will eventually happen to all of us. Are there really any good reasons to prepare in advance for this life event? Who benefits? What kind of preparation makes sense? And finally with whom should you prepare?

GOOD REASONS TO PLAN IN ADVANCE Control

Most of us believe we make better, sounder, decisions with a cool head. Emotions are bound to run high when death takes a close family member or friend. Do you really want your spouse or children to make the decisions that determine the cost of your funeral within hours of your death? Planning ahead allows you to control the type of ser vice,

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your final disposition (burial or cremation), and the quality and cost of the products that will be needed to support the ser vice and disposition you select.

Take a moment close your eyes and visualize. Who will be sitting at the arrangement conference table with the funeral director a few hours after your passing? Will all of these people agree? Will they all have the same needs? Will the person in charge (usually your spouse, or oldest adult child) be the most verbal? Would your family benefit from knowing exactly what you wanted? For most of us the answer is a clear yes.

You absolutely will want to think about those you care about when you make your decisions. After all, the type of ceremony you choose should reflect your values and beliefs, but it must also provide comfort to those you leave behind.

A funeral professional can give you the guidance you need to make these

important decisions.

Cost Savings

Planning in advance of need can also save you dollars. The cost of funerals, like bread, cars, and pretty much everything, tends to increase over the years. So while you are procrastinating costs are rising.

Many funeral homes offer inflation protection programs that allow you to eliminate the impact of inflation on your funeral cost.

The best time to complete your funeral plan is 3-5 years before retirement. That’s when advance preparation will save you the most money. If you missed that deadline don’t worry you can plan at any age, sooner is always better than later.

Options

Several choices are available to those who plan in advance that are not available at the time of death.

When death occurs not only will decisions need to be made within a

short time frame but payment in full will also need to be made quickly.

This may leave family members in a tough position while they wait for insurance claims or the estate to be settled. Most funeral homes will offer payment options when you choose to both plan and pay for your funeral in advance.

These payment plans can be for a short term, six months to five years, or a longer term, seven or ten years.

The advantage to planning is choice.

You decide if you will pay in advance and you decide the term (how long you will pay).

It is important to note that with funeral home based plans you do not have the burden of paying ever y month for the rest of your life to keep the benefit in force. This can become ver y important as you age and health concerns could make continuing payments difficult or impossible resulting in loss of coverage for your final expense.

SEE PLAN/PAGE 10

Did You Know...

If you plan your funeral in advance, you don’t have to pay the entire cost co ost at once.

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10 Estate Planning

Messenger-Inquirer Friday, May 13, 2016

DISCLAIMING FROM PAGE 8

(4) causes the IRA or plan to pass directly to the secondar y (contingent) beneficiar y without you directing where it goes.

Tip: In most cases, the nine month period starts on the date of the account owner’s death for purposes of disclaiming IRA and retirement plan benefits.

If you have already elected to take distributions from the account, you may not later disclaim in most cases.

If you are considering disclaiming the inherited funds, you should seek professional advice before taking any action with respect to the inherited account. Even exercising investment control over the account could jeopardize a future disclaimer.

ADVANTAGES OF DISCLAIMING

1. You will not pay income tax on the disclaimed funds When you disclaim inherited IRA or plan funds, you pay no income tax on those funds because you never actually receive them.

Instead, the party that receives the funds as a result of your disclaimer (usually one or more contingent beneficiaries) will pay income tax on distributions of those funds.

Disclaiming can thus be a beneficial strategy if you do not need the inherited funds, and one of your goals is to minimize your taxable income. This may be especially true if the inherited funds would push you into a higher income tax bracket, causing the funds to be taxed at a higher rate.

2. Your estate will not pay estate tax on the disclaimed funds With a qualified disclaimer, the disclaimed funds are not part of your estate for gift or estate tax purposes.

Depending on the estate tax bracket of your estate, this can result in a significant tax savings.

3. You can decide how much to disclaim You may opt to disclaim your entire share of the inherited funds for tax reasons. Or, you can disclaim a portion of the funds and receive the other portion as distributions.

4. A disclaimer may benefit others with greater need

Typically, if you are a primar y beneficiar y of the IRA or plan, the portion of the funds that you disclaim will pass to one or more contingent beneficiaries (assuming there are contingent beneficiaries named in the IRA or plan documents). This may be a ver y desirable outcome if the contingent beneficiaries are family members or other loved ones who have greater financial need than you. For example, this might be the case if you are the child and primar y beneficiar y of the account owner, and your children are the contingent beneficiaries. Allowing the funds to pass to contingent beneficiaries can also be advantageous if those individuals are in a lower income tax bracket than you, and/or if they can take post-death distributions over more years than you would be able to.

DISADVANTAGES OF DISCLAIMING

1. You will not receive the inherited funds 2. If you have already received a distribution, you may not disclaim later If you have had access to, or use or enjoyment of, the funds, you may not change your mind later and disclaim the funds.

3. You may not choose who will receive the assets in your place If you elect to disclaim an inherited IRA or retirement plan, the funds typically pass to the contingent beneficiaries. This outcome may be desirable if you want the contingent beneficiaries to benefit, but that may not be the case. Further, if there are no contingent beneficiaries (or if they too disclaim), the disclaimed funds will typically pass to the account owner’s estate. This is usually not desirable because post-death distribution options will be limited and the funds will have to go through probate before being distributed to the beneficiaries and/or heirs of the estate. Being named as a beneficiary of an IRA or plan does not give you the power to decide who should receive the inherited funds if you choose to disclaim--that is determined by who is named as the alternate takers on the beneficiary designation form or, if there is a gap in the designations, who the takers are under state law.

PLAN FROM PAGE 9

WHO BENEFITS?

You benefit, your end of life remembrance will be just as you wanted nothing more and nothing less. Your family benefits they will have time to focus on each other, sharing memories, and making their own contributions to your service.

They will not be trying to figure out what to do, debating with each other what should be done, or juggling finances.

What kind of preparation should you complete? • Your plan should be written and on file at the funeral home of your choice with a copy retained with your next of kin. • Preparation should include the tone and specifics of the gathering / service. • If you plan to be cremated you should include guidance regarding the final disposition of the remains (buried, scattered, or retained). • If you are to be buried include the location of the burial.

• Your intentions for payment of costs associated with your plan should be communicated. Your preparation may or may not include funding with the funeral home program. Either way the choice is yours however; it should be reflected in the planning documents so that there is no confusion at the time of your death.

WITH WHOM SHOULD YOU PLAN?

Wills are read after the funeral.

Estates are settled after the funeral.

Personal papers are reviewed and cleaned out after the funeral. Your funeral plan should be made with a funeral professional.

This professional should be willing to spend time with you learning about your thoughts, beliefs, family, and community connections. He or she should be willing to offer you professional advice about the best service options for you, your family, and your budget. If you didn’t wake up tomorrow morning whom would your family call? That’s the place to start, call a funeral professional and ask for a no cost advance planning consultation.

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Friday, May 13, 2016 Messenger-Inquirer

QUESTIONS FROM PAGE 6

4. CAN’T I PAY FOR CARE OUT OF POCKET?

The major advantage to using income, savings, investments, and assets (such as your home) to pay for long-term care is that you have the most control over where and how you receive care. But because the cost of long-term care is high, you may have trouble affording extended care if you need it.

5. SHOULD I BUY LONG-TERM CARE INSURANCE?

Like other types of insurance, long-term care insurance protects you against a specific financial risk--in this case, the chance that long-term care will cost more than you can afford. In exchange for your premium payments, the insurance company promises to cover part of your future long-term care costs.

Long-term care insurance can help you preserve your assets and guarantee that you’ll have access to a range of care options. However, it can be expensive, so before you purchase a policy, make sure you can afford the premiums both now and in the future.

The cost of a long-term care policy depends primarily on your age (in general, the younger you are when you purchase a policy, the lower your premium will be), but it also depends on the benefits you choose. If you decide to purchase long-term care insurance, here are some of the key features to consider: • Benefit amount: The daily benefit amount is the maximum your policy will pay for your care each day, and generally ranges from $50 to $350 or more.

• Benefit period: The length of time your policy will pay benefits (e.g., 2 years, 4 years, lifetime).

• Elimination period: The number of days you must pay for your own care before the policy begins paying benefits (e.g., 20 days, 90 days).

• Types of facilities included: Many policies cover care in a variety of settings including your own home, assisted living facilities, adult day care centers, and nursing homes.

• Inflation protection: With inflation protection, your benefit will increase by a certain percentage each year. It’s an optional feature available at additional cost, but having it will enable your coverage to keep pace with rising prices.

The Settle Group of Hilliard Lyons can help you compare long-term care insurance policies and answer any questions you may have.

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TUITION FROM PAGE 7

TRADEOFFS

• Does not apply to some types of educational expenses — The IRS will not allow the exclusion if you make a gift for expenses that are not direct tuition costs. The most common examples include: • Fees • Books • Living expenses • Supplies • May have negative income tax consequences for third persons — If a dependency relationship exists between the student and another person, the tuition payment that you make will count in the calculation of the student’s support. This could affect who can claim a dependency exemption for the student and could affect the parent’s or student’s ability to claim a personal exemption.

Example(s): If by making tuition payments, Grandma provides more than half the support for her granddaughter during the year, Grandma would be entitled to claim a dependency exemption on her income tax return for the year of the payment.

Estate Planning

11

HOW TO DO IT

• Make the gift directly to the educational organization — To qualify, you must make the payment directly to the educational organization. Giving the payment to the student or to a trust on behalf of the student will not qualify.

• Get a receipt — If the IRS audits you, you may have to prove that you made the payment directly to the educational organization. Therefore, get a receipt and keep it with your tax records for that year.

TAX CONSIDERATIONS

Avoids gift and generation-skipping transfer taxes — Payments of tuition for another person, no matter for whom and no matter the size, are not gifts and are not reported at all on the federal gift tax or federal generationskipping transfer tax returns, as long as the payment is made directly to the educational organization.

It also allows you to stretch the annual gift tax exclusion.

May reduce estate tax liabilities — Making the gift can reduce your estate tax liability by removing the value of the payment from your gross taxable estate. It also allows you to save your applicable exclusion amount.

12 Estate Planning

Messenger-Inquirer Friday, May 13, 2016

Explore options when Retirement saving planning a funeral for late bloomers

BY JAMES H. DAVIES FUNERAL HOME

E

ver y year, millions of Americans arrange their funerals in advance and make estate plans to provide instructions for their heirs. It is beneficial for the funeral to be planned ahead of time so ones wishes are expressed and financial obligations are met prior to the time of death. Advanced funeral planning allows a person to choose a funeral home, to explore their options regarding the funeral ceremony, to discuss costs, to set up a plan to guide their family and to insure their funeral arrangements proceed in the manner they have selected.

When planning a funeral, you will work with your funeral director to explore the options available for the funeral ceremony. The ser vice might be a traditional ceremony or a creative expression that is personalized to honor the deceased.

Personalization could be as simple as displaying family photographs or as elaborate as a “New Orleans style” funeral.

Another part of planning is choosing a final resting place.

Some choose a cemeter y plot or mausoleum cr ypt, while others might prefer cremation. Exploring these options and discussing these decisions with your family is much better than leaving your family with questions and with the necessity of making these choices when death has occurred.

Choosing a funeral firm might involve personal inspection of the facilities and staff to see if both meet with your approval. Some questions you might wish to explore are: 1) Does the funeral home have a good reputation in the community ? 2) Is the funeral home locally owned ?

3) Are the facilities clean, updated and presentable ? 4) Are the food ser vice/lounge areas adequate ? 5) Are smoking/non-smoking areas provided for the convenience and comfort of the families ? 6) Does the funeral home encourage and

assist the family in personalizing the visitation and ser vice, incorporating the deceased’s histor y, interests and hobbies ? 7) If cremation is chosen, where is the cremator y located and how is it super vised ? 8) Are their prices competitive and is an adequate range of ser vices and merchandise available ?

Once you have explored these options, the next step is to discuss costs. Most folks have had little experience pertaining to funeral expenses, so now is a good time to become better informed. Funeral homes are required to place prepaid funeral funds in either an insurance plan or in an interest bearing trust account, in order to comply with State laws. As with many purchases, inflation also increases funeral costs over time. (Average funeral prices have tripled in the last 15 years.) Paying for your funeral in advance can offset this inflation, allowing you to guarantee or “lock in” today’s lower prices. Prepayment will also protect your funds should you need to apply for state or federal assistance to pay for nursing home care. Your funeral ser vice professional can help you select a prepayment plan that fits into your budget.

You may also use existing life insurance policies or allow your estate to pay funeral expenses.

However, be advised that these methods do not allow you to “lock in” prices. Also, there may be some expenses that your family may be required to pay “up front”. Make sure you thoroughly discuss the funding method you have selected and know what charges are or are not guaranteed. If you do not fully understand, ask your funeral ser vice professional to explain this again to you and/or a family member.

Arranging and funding your funeral ahead of time will take away any uncertainty about your wishes, should eliminate potential disagreements and ease your concerns of financial obligation.

BY METRO CREATIVE CONNECTION

Today’s young professionals hear about the importance of saving for retirement seemingly from the moment they are hired.

In addition to discussions with human resources personnel about employer-sponsored retirement plans, young professionals are learning about the importance of saving for retirement thanks to the abundance of financial-planning advertisements on television, the radio and the Internet.

Older workers may not have been so lucky, and many may find themselves tr ying to play catch up as retirement age draws closer.

While it’s important to begin saving for retirement as early as possible, late bloomers whose retirement dates are nearing can still take steps to secure their financial futures.

PAY DOWN DEBTS

Eliminating debt is good for men and women of all ages, but especially so for those nearing retirement. Substantial debt may delay your retirement and can greatly reduce your quality of life during retirement. If you still have substantial debt, eliminate that debt before you start saving additional money for retirement. Once your debt slate has been wiped clean, you can then increase your retirement contributions.

ELIMINATE UNNECESSARY EXPENSES

If your retirement savings are low (many financial advisors now advise men and women that they will need at least 60 percent of their pre-retirement income each year they are retired), start cutting back on unnecessar y expenses and reallocate that money toward retirement saving. Cutting out luxur y items, such as vacations to exotic locales or countr y club memberships, is one way to save

money. But don’t overlook the simpler ways to save, such as canceling your cable subscription or dining at home more often.

EMPTY NESTERS CAN DOWNSIZE THE HOME

Many empty nesters downsize their homes as retirement nears, and doing so can help you save a substantial amount of money.

If the kids no longer live at home or if you simply have more space than you will need after retirement, downsize to a smaller, less expensive home. Monitor the real estate market before you decide to downsize so you can be sure to get the best deal on your current home. Downsizing saves on monthly utility bills, property taxes and a host of additional expenses. Downsizing also means less maintenance, which gives you more time to pursue your hobbies upon retiring.

TAKE ON SOME ADDITIONAL WORK

While you may have long felt you would slowly wind down in the years immediately preceding retirement, taking on some additional work outside of your current job is a great way to save more for retirement and perhaps even lay the foundation for a post-retirement career. Workers over the age of 50 can be invaluable resources to startups or other businesses looking for executives who have been there, done that.

Look for part-time jobs that seek such experience. Even if the initial jobs don’t bowl you over financially, part-time consultant work in retirement can make up for lost retirement savings and may even make your retirement years more fulfilling.

Men and women on the verge of retirement can take many steps to grow their retirement savings and make their golden years that much more enjoyable.

Friday, May 13, 2016 Messenger-Inquirer

Estate Planning

13

14 Estate Planning

Map

Messenger-Inquirer Friday, May 13, 2016

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To reserve your advertising space on the 2016/2017 Greater Owensboro Chamber of Commerce Official Map, is contact your Messenger-Inquirer Account This the official Chamber of Commerce Manager today! in cooperation with the map produced

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Estate Planning

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Estate planning for digital assets

BY JESSE T. MOUNTJOY, ESQ.

SULLIVAN, MOUNTJOY, STAINBACK & MILLER, PSC

K

entucky currently has no law on its books in regard to what happens to digital assets after death. In the 2015 General Assembly, Senate Bill 53 proposed to adopt the Uniform Fiduciar y Access to Digital Assets Act (hereinafter the “Digital Assets Act”), which would give you and your personal representatives (at your death) broad authority over your digital assets. Senate Bill 53 however, died in committee and did not become law. Until the Digital Assets Act (or a similar law) is adopted in Kentucky, no one will have statutor y authority to access or manage your digital assets. After you die, your on-line presence will continue without you. Unless you provide your personal representative with your user name and login information, and similar information,

there will be little that your personal representative can do to access your on-line accounts or files.

What are digital assets? They are any digital record that you own or control including e-mail accounts, websites, social media accounts, financial accounts, digital files (music, movies, photos,) apps and any other online or digital account or file. Your access to these accounts or files is usually limited by the “terms of ser vice” to which you agree when creating an account or buying or licensing a product online.

What will happen to your digital assets after you die? After all, they are or should be assets of your estate. In Kentucky what happens to your digital assets depends on whether you have formulated a plan. At present (as stated earlier) Kentucky law does not give your personal representative (or for that

matter your agent and attorneyin-fact under a durable power of attorney) any authority to access your digital assets. Unless you leave a list of your accounts (and instructions as to how to access these accounts) and guidance about what to do with these accounts and information, your digital assets will continue to exist without the right of anyone to access, modify or delete them. Believe it or not, most of such accounts and files will just continue untouched until the company that sponsors or manages them, terminates the account, at which point all of such data will be lost.

This inability to access your accounts is problematic because your personal representative, or agent and Power of Attorney, may need to access your digital assets to follow your wishes as to the disposition of your digital accounts

and files and/or to officially wrap up your affairs.

The best way to ensure that your personal representative will be able to access your accounts after your death is to ver y clearly provide instructions and access information so consider leaving a list of your accounts with user names and passwords with an explanation of what you want done with each one. Leave this information in a letter or memorandum to be found and put in effect at your death.

Make sure it is in a secure place and that your named personal representative knows where to find it (and remember to keep such writing updated and current.)

We hope to update you in respect of any laws (including the Digital Assets Act) that may be enacted in the future by Kentucky’s General Assembly.

Skill. Integrity. Efficiency

Ronald M. Sullivan Jesse T. Mountjoy R. Frank Stainback James M. Miller

Michael A. Fiorella John S. Wathen R. Michael Sullivan Bryan R. Reynolds

Tyson A. Kamuf Mark W. Starnes Charles E. Mountjoy K. Timothy Kline

100 St. Ann Street • (270) 926-4000 Owensboro KY 42303 smsmlaw.com This is an advertisement.

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