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Financial advice from local experts Common misconceptions about estate planning Making a lasting legacy through charitable giving

produced by the Peninsula Daily News Advertising Department

2  Estate Planning 2011

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Getting through the jargon: The basics of estate planning What is a will?

A will is a document by which you make a disposition of your property to take effect after death. It allows you to designate the people and charitable organizations that will receive your by alan millet assets upon your death and name the person you wish to be in charge of settling your estate. A will can also name the person you want to be appointed as legal guardian for your minor children and create trusts for them so they do not become entitled to receive large sums of money or assets when they turn 18. If you do not make a will, the statutes of the state where you live direct how your assets will be distributed (generally to your closest living relatives) and

list who has priority to be appointed as the executor of your estate. A will is required to be in writing and signed by two witnesses who declare that the will signer is competent. Most people who are older than 18 years of age and own any type of property should make a will.

What is probate?

Probate is the court proceeding that validates your will and formally appoints an executor to administer your estate, pay your debts and transfer assets to your heirs upon your death. Probate is necessary in each state in which you own real property, and is usually necessary to transfer any asset which has a title or registration. Washington state probate procedures are relatively simple and inexpensive compared to most other states.

Alternatives to probate

Probate may be avoided by several methods: 1A5135523

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titled with joint tenancy with survivorship rights that take effect automatically at death. This type of ownership creates a present ownership interest in the account however, and is usually not recommended except for spouses. Beneficiary designations: Bank, financial and retirement accounts and life insurance policies can designate a beneficiary who is entitled to receive the account on death, without probate. Revocable living trusts: A revocable living trust is a legal arrangement that continues through death until your estate is distributed. A trust is a legal fiction which separates legal ownership of property from the right to use or enjoy the property. A trust has a maker or trustor, a trustee and a beneficiary. The same person or persons usually fills all of these positions upon the formation of a revocable Some things can wait. living trust. Insurance isn’t one of them. Assets must be re-titled from your individual name to the name of the A lot of people put off thinking about disability trustee. For example, real income and life insurance, assuming they’ll never need it or that they already have adequate coverage. property would be deeded Don’t guess whether your future is protected—know to the trustee and finanfor sure. We’ll help you get the insurance protection cial accounts would be set you need to help keep your dreams on track. up to show the trustee as the account holder. Upon death, your successor trustee has the Stephen C. Moser, FIC Lisa H. Pierson authority to distribute Financial Associate Financial Associate your assets to benefi261032 Hwy 101 • Sequim, WA 98382 •360-681-8882 ciaries you have named in the trust document. NOT A DEPOSIT • NOT FDIC INSURED • NOT INSURED BY ANY A will is still necessary FEDERAL GOVERNMENT AGENCY • NOT GUARANTEED BY THRIVENT to cover the possibility FINANCIAL BANK • MAY LOSE VALUE that some assets may not For additional important disclosure information, have been transferred to please visit the trustee. Appleton, Wisconsin • Minneapolis, Minnesota 800-THRIVENT (800-847-4836)

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Community property agreement: The state of Washington has enacted a unique statute, even among community property states, which allows a husband and wife to transfer community property (a form of marital property ownership) to each other at death, by means of an agreement (“Community Property Survivorship Agreement”). No probate is necessary when the first spouse dies, but may be necessary when the surviving spouse dies. Small estate affidavit: Estates with a total value of $100,000 or less consisting of only personal property can be transferred by an affidavit of the successor 40 days after death. Joint tenancy with right of survivorship (JTWROS): Real property and most financial accounts can be

continued on Page 9 >>

Estate Planning 2011  3

advertising supplement to the Peninsula Daily News and Sequim This Week

Working with personal pension plans and annuities Working with clients as they are approaching retirement always leads to the concept of people creating their own lifetime pension or monthly income they cannot outlive. The only investment by phil castell vehicles that are designed to fulfill this desire are annuities. Annuities, in one form or another, have been around for centuries. In the U.S., they can only be issued by insurance companies, after they have been approved by the individual state’s Office of the Insurance Commissioner (OIC). Washington state has a very protective and consumer-oriented OIC, and it has a reputation for not allowing many plans to be marketed in the state that may be available elsewhere. This protective stance has one very important benefit to the consumer.

Each state has a guaranty association which protects consumers in the case of a company defaulting on its obligations. Connecticut, New York and Washington are the only states in the whole country that protect you up to $500,000 in your fixed annuity account. Many states will only protect you up to $100,000. My reason for all this background is really quite simple. For a number of years, the OIC has approved guaranteed lifetime income riders (GLIRs) only on variable annuities, which are investments where your principal and interest are at risk to the movement of the stock market or other investment vehicles. Recently, however, the OIC has started approving the guaranteed lifetime income riders for fixed annuity accounts. These plans are a perfect method in which to create your own personal lifetime pension plan. Much ink has been used in the national financial press (Barrons and The Wall Street Journal) about the value of these plans. People in their 50s and 60s

are holding large sums in their retirement accounts and are flummoxed about the future after they have seen such wide swings in the stock market over their working career. Who can forget the 500-point drop of 1987, the dot-com boom of the late 1990s and the financial turmoil of the past three years? Many financial experts recommend holding 25 percent to 33 percent of your retirement assets in these plans. The chairman of the Federal Reserve, Ben Bernanke, has the vast bulk of his retirement funds invested in two annuities from TIAA/CREF, which is a plan administrator for many institutes of higher learning. Here is a rough outline of how these plans work: A 64-year-old deposits $100,000 of retirement funds (IRA/401K/403B) into an annuity. The annuity value is calculated in two different ways. The first method will be the interest rate value, like traditional plans, and the second method will be the income rider method. Under the income rider method, in

just six years time (when the 64-yearold is now 70), and that person has to start taking funds out of the account, he or she would be able to take out more than $10,000 every year (or $850 per month) for the rest of his or her life. If that person passes away before all the funds in the account have been disbursed, the balance would be paid out to the beneficiary. However, if he or she enjoys a long life, then that income would continue even after the value of the annuity had been depleted. These plans can also be funded with funds that are not already in retirement accounts like bank CDs of savings accounts. This is a great way to turn a passive investment into a source of income that is guaranteed for your lifetime. Phil Castell of Castell Insurance has been an independent insurance agent for more than 20 years. His office is located at 426 E. Washington St., Sequim. Contact him at 360-683-9284 or visit his website at

Named Funds

Donors who want an active role in grant making decisions can establish a donor Named Fund which allows you to recommend charitable organizations to receive grants from your fund. The Clallam Community Foundation helps you by verifying the charitable status and mission of the organizations and identifying organizations you may want to support. Other family members can also be named as advisors, thereby encouraging children and grandchildren to carry on family philanthropy.

Giving that lasts forever...

Scholarship Funds

The Clallam Community Foundation is a collection of separate funds established by individuals, families and charitable organizations - a community of donors. When you make a gift to the Clallam Community Foundation, you have the option of establishing one or more types of funds from which grants will be made for charitable purposes, including:

Donors specifically interested in promoting education often establish scholarship funds - a type of Donor Named Fund. Scholarships may support any level of education and can be directed towards students attending a particular school, studying in a particular field, or coming from a specific geographic area. The Clallam Community Foundation helps you administer the funds within the tax laws regarding scholarship grants. We can also help establish selection criteria, publicize the scholarship and choose recipients.

For more information on the Clallam Community Foundation, contact United Way of Clallam County.


PO Box 937, Port Angeles WA 98362 360-457-3011

4  Estate Planning 2011

advertising supplement to the Peninsula Daily News and Sequim This Week adver

From donation to park One couple’s long-term planning benefits family and community In 1992, the McCool family made a decision to include United Way in their will. Many North Olympic PenThey were also considering a insula residents are familiar donation of property. with Clallam County’s Robin In discussions with United Hill Farm Park, perhaps havWay staff and board members, ing visited the 195 acres of the idea emerged to sell that trails, picnic areas, meadows, property — Robin Hill Farm — wetlands and forest, or enjoyed to Clallam County to benefit its native trees and plants and the public. It was sold for $1 milfresh air. lion to use as a county park. But not all visitors know the That property would become story behind the park — one of Robin Hill Farm Park, located patience, generosity and longbetween Port Angeles and term decision-making. Sequim off Dryke Road. Robert and Lettie McCool of The McCool Family Trust Sequim were long-time supwas created from the proceeds porters of the United Way of of the property sale, with RobClallam County. ert McCool and his daughter, They regularly received and Carryl Ogden, as beneficiaries. read the Clallam Community Jim Hallett, adviser to the Foundation newsletters, all the Clallam Community Founwhile thinking about how they dation, met with Robert in might continue their support August 1997 to discuss dispobeyond their lives. sition of the trust. In the final

submitted by united way of clallam county

plan, family members would enjoy use of the trust assets during their lifetimes, and they stipulated that the Clallam Community Foundation would receive the final distribution. This plan provided for the needs of the family, while honoring the charitable interests of the McCools. In September 2010, United Way received assets from the McCool Family Trust — which had been divided into two trusts — totaling $1 million. The United Way Board of Directors has committed initial earnings from the McCool Trust donation to support its new Early Learning Initiative, which will focus on helping parents participate in and facilitate their child’s learning from the first day of life. The Planned Giving Committee is also working on a

policy for the distribution of future earnings. The McCool family, perhaps by virtue of their farming background, had the understanding and ability to think far into the future as they considered a long-term gift. Advanced planning allowed the family to have use of financial assets during their lifetime, enabled Clallam County residents to enjoy a wonderful county park today, and ensures community needs will be met through the resulting gift to the Clallam

Community Foundation. Robert and Lettie McCool’s foresight and careful planning achieved their desired results quietly, privately and without much fanfare. The Clallam Community Foundation is an endowment fund for United Way and other partner agencies administered by the United Way of Clallam County. For more information on United Way and the Clallam Community Foundation, phone 360-457-3011.

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Estate Planning 2011  5

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•  Unbiased advice and support from an experienced professional committed to guiding you toward longterm financial well-being.

DON’T ROLL THE DICE Take control of your financial future The pace and complexity of managing modern finances leaves many people unprepared to achieve a successful financial future. If you are feeling less than confident about by casi fors your future, having a wellprepared financial plan will help put you in control. To manage your income and expenses effectively throughout your lifetime, consider partnering with your financial adviser, who has the experience to help you create a plan that strategically addresses your unique goals and needs.

Risk management

Risk can take many forms: illness, accident, liability and natural disasters, to name a few. Failing to manThe key to creating a successful finan- age risk properly can jeopardize your cial plan is ensuring that it covers your financial future. That’s why smart financial plancurrent and future financial needs. ning evaluates the various levels and The best way to determine your types of insurance you carry to make particular needs is by spending time with your financial adviser considering sure they are aligned with your overall your options, defining your goals and goals and needs. evaluating your resources. In many cases, insurance can also be The following are some common used effectively as an alternative revareas to consider when planning your enue stream and a hedge against inflafinancial future: tion and riskier types of investments.

What your financial plan should include

Monthly budget

interconnectedness of your financial activities. •  Identify your long-term financial goals and the steps needed to achieve those goals. •  Track your progress and make adjustments as you experience new life events or develop different perspectives.

Your financial adviser, your partner in planning

Creating an effective financial plan takes time, know-how and experience. Even if you are using popular consumer financial tools, planning on your own can be overwhelming and frustrating. Consulting with a financial adviser not only reduces your workload, but also helps ensure that your plan is comprehensive and based on current trends and data. When you partner with a professional, you’ll gain: •  Knowledge of options and alternaWhy people say ‘yes’ to financial tives tailored to your specific financial planning situation. Financial planning pulls all your •  Connections to a network of finances together, organizing them and professionals (accounting, legal, real making management easier and more effective. The more you understand and estate, insurance, trusts) when additional expertise is needed. better manage your wealth, the more likely you are to achieve your goals and dreams.

Addressing your monthly budget is an important first step in successfully managing your overall finances. Failing to have a clear picture of your regular recurring bills and expenses can dramatically reduce your ability to meet your financial objectives.


Fundamental to building a secure, manageable future is saving for the unexpected as well as the expected. Saving is easier if you “pay yourself

Education funding

The costs of education for children and grandchildren can be staggering and are seemingly always on the rise. Education is often one of the largest expenses you will incur. Arm yourself with current information about the variety of proactive education savings vehicles that can help you reach your funding goals while avoiding big surprises or longterm debt. continued on Page 9 >>

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6  Estate Planning 2011

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Best laid-to-rest plans

Everyone knows he or she should have a will, yet knowledgeable people continue to put off making that appointment month after month, year after year. by amanda wilson These people already know having a will can benefit their children, protect their estate and give them peace of mind. So why do they keep putting it off? The answer is that people do not really know what estate planning can do for them, nor do they know what can happen if there is no estate plan in place. These are five very common misconceptions:

2. Stepchildren are treated the same as biological or adopted children.

False. This is another case where the consequences of under-planning can come as quite a shock. Stepchildren do not receive anything from step-parents without a will or other estate plan in place. The law assumes that stepchildren will inherit from their own biological parents, but this is not always the case, especially when the biological parents have remarried. It means that two children who are raised in the same house can receive substantially different inheritances if one is born from a previous relationship. It is imperative that couples with blended families pick-up the reins and make an estate plan that fits their own situation.

Estate planning is only for the 1. Everything goes to my spouse 3. very wealthy. or partner anyway because this is a community property state.

False. One reason low-income groups can stay in a cycle of poverty False. Washington is a community is because of a lack of estate planning, property state, but that does not which fosters transferring property mean the surviving spouse or partfrom one generation to the next. ner inherits everything. Estate planning can prevent disAny portion of the deceased’s estate that is separate property (i.e., putes between heirs which devastate moderate estates. Blended families property brought into the marriage have unique estate planning needs, or obtained by inheritance) will be regardless of their income levels. divided between the spouse and the In some circumstances, estate next of kin. planning can protect one spouse’s For example, if the deceased has assets when the other spouse needs children, the deceased’s separate to go into long-term care. property will be divided 50 percent But most importantly, all parents to the surviving spouse and 50 perwith minor children, regardless of cent among the children. income, need to have an estate plan You should consult an attorney to find out the specifics for your marital to provide for their minor children if something happens to them. or partnered estate.

4. Powers-of-attorney are only

something I need in the hospital.

False. A power-of-attorney lets an agent act in your place in any manner you set out. You may want a blanket power-ofattorney for your spouse, or a limited power-of-attorney to let someone you trust handle things while you are traveling. You may want your agent to act only when you are incapacitated (such as in a coma), but even for that to happen, you must have your power-of-attorney in place before you are incapacitated.

5. Once my estate plan is in place, I do not need to deal with it again.

True and false. It is true that once you have your estate plan in place, it stays in place. If no major life changes take place, you can rest assured. When a major life change does happen, it will likely be much cheaper and less involved to make any necessary adjustments to your estate plan. Major life changes include having a child or that child becoming an adult, retirement, acquiring new real estate, divorce, remarriage or monetary windfalls. You should touch base with an estate planning attorney every 10 years or so to see if there are any new laws that apply to your estate. But it is true that once you have a plan in place, you are well ahead of the game. Amanda Wilson is an estate planning attorney in Port Ludlow. She may be reached at 360-437-4172, or at Olympic Peninsula Law Offices, 9481 Oak Bay Road, Suite G, Port Ludlow.

Creating a prearranged funeral or cremation plan for yourself is a gift of kindness to your family and loved ones. It lifts the burden of your family having to guess what you may have wanted, and can also provide the by douglas ticknor means to pay for its future use at today’s cost. If the above paragraph seems familiar, it’s because I wrote it for Estate Planning last year. Each year, I try to convey the importance of making prearrangements with a licensed funeral director in a funeral home you trust. Beware of the strip-mall guys and the ones who call you on the phone but are not local. They aren’t going to be the ones who show up to your home when you need them. In past years, I shared why you should plan ahead. This year, I thought I would share from my 20 years of experience in the funeral service profession what can happen if you don’t. The story I am about to share is not uncommon. The names have been changed. Roy was a well-liked man in his mid70s. He enjoyed fishing and working in his yard. Retired and widowed, he lived with his companion of four years, Alice. He had many friends but was estranged from his two sons who lived in other states. He did not have a prearranged funeral plan. He also hadn’t seen a doctor in quite a while. He was just painting his house when he had a heart attack. 9-1-1 was called and paramedics and police responded, but he was gone. Since it had been a long time since he had seen a physician, there was no one to sign a death certificate. Because of this, the county coroner was contacted and an autopsy was needed to determine the cause of death and to sign the death certificate. continued on next page >>

Estate Planning 2011  7

advertising supplement to the Peninsula Daily News and Sequim This Week

How much life insurance do you need? Life insurance can be a complicated subject. You may be wondering, “How much life insurance do I need?” That question has a lot of variables that are unique to you and your family. I have found that there is no “right” amount of life insurance to own. Rather, it is what you by matt elwood want to have happen financially if you were to die prematurely. Typically, these wants fall into three major categories.


Paying off your debts is something you should consider when planning for life insurance. One of the most common debts is the mortgage on your home. Would you want your spouse or family to be able to pay off your


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mortgage in the event of your death so they are not saddled with the payment? Life insurance provides income-tax free money to the beneficiary to pay for these types of scenarios. Other common debts include credit cards, student loans and home equity lines of credit.

Income replacement

If you are the sole breadwinner in your family with children, what happens to your children if you are no longer there? By providing enough life insurance to replace your income, you can be sure that they will be able to maintain their standard of living. Consider how much after-tax income you bring in each month minus the debt payments that will hopefully be gone. This will give you a starting point of how much you need to plan for. Other factors to consider are the age of your children and how long you want to provide for them after you are gone.

partner, then to all adult children, then to parents, then to siblings, etc. Roy had two sons. Even though they hadn’t spoken in years, we had to try to contact them as they had right-ofdisposition. It was extremely distressing to Alice that she could not move things along quickly to accomplish what she understood to be Roy’s wishes. And so, we could only refrigerate Roy’s body and wait. Nearly three weeks passed until we finally contacted one

of Roy’s sons, Roger. He then gave us the phone number for Roy’s other son, James. With Alice now out of the decision-making process, we talked with the two sons. Both had right of disposition but neither agreed on what to do next. Roger wanted his dad to be buried in a national cemetery since Roy was a veteran. James wanted his dad cremated and thought it was ok to allow Alice to scatter the ashes. Since there was disagreement, we still could not proceed. Roger refused to sign a

College savings plan

Do you want your children to attend college without the burden of graduating with student loans? Depending upon how old your kids are and the school they wish to attend, you may need to budget several hundred thousand dollars considering the inflation rate on attending college. A great website to visit is www.savingforcollege. com, which has lots of information on how much college will cost in the future. These are just a few areas to consider when getting a life insurance quote. Speak with an insurance agent for help going through your personal situation and determining the correct amount for your family. Matt Elwood is the owner of Elwood Benefits, an Allstate agency located at 707 E. Front St., Port Angeles. Contact him at 360-452-9200. Also visit for more information as well as to sign up for a monthly newsletter.

cremation authorization. Ultimately, Roger offered to pay for the burial and James agreed. Roy was laid to rest at Tahoma National Cemetery. It was a beautiful service, but according to Alice, it was not what Roy wanted. Do yourself and your lovedones a favor by creating a prearranged funeral or cremation plan. By doing so, you eliminate unwanted or unnecessary spending, and have the peace of mind of knowing your arrangements are complete. You will be lifting a heavy

burden from your loved ones at a truly emotional and challenging time.

Since Roy had no prearranged funeral plan, Alice Douglas Ticknor is a licensed didn’t know which funeral funeral director and embalmer home to call. at Drennan & Ford Funeral The county coroner uses a Home and Crematory in Port “funeral home rotation” and Angeles, the only locally owned Drennan & Ford Funeral Home funeral home and crematory was “on rotation” that month. in Clallam County. He may We were called, and Roy be reached at 360-457-1210 was taken to the funeral home or where his autopsy would be Visit the funeral home website performed. at or on Alice came in the following Facebook. day to meet with me. She knew that Roy wanted to be cremated and scattered at his favorite fishing spot, but he didn’t have a prearrangement plan. Unfortunately, since they weren’t married and weren’t registered domestic partners, I couldn’t proceed based on her word. In Washington state, GET PROFESSIONAL INVESTMENT ADVICE AND SERVICE the right of disposition • Professional, Independent Financial Services (who controls what is • Holistic Life Planning • Fee-Based Asset Management done with a body, if the • Solid, Unbiased Advice decedent did not specify Casi J Fors, AIF® Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC in writing prior to death), falls first to a spouse 330 East First Street, Suite #9 | Port Angeles | 360-457-6116 | Email: or registered domestic



8  Estate Planning 2011

advertising supplement to the Peninsula Daily News and Sequim This Week adver

Common factors affecting retirement income ings far sooner than planned. When it comes Reinvestment risk is the risk that proto planning for ceeds available for reinvestment must your retirement be reinvested at an interest rate that’s income, it’s easy lower than the rate of the instrument to overlook some that generated the proceeds. of the common This could mean that you have to factors that can reinvest at a lower rate of return, or affect how much take on additional risk to achieve the you’ll have availsame level of return. This type of risk is able to spend. often associated with fixed interest savIf you don’t ings instruments such as bonds or bank consider how submitted by certificates of deposit. your retirement kevin tracy When the instrument matures, comincome can be parable instruments may not be paying impacted by the same return or a better return as investment risk, inflation risk, catastrophic illness or long-term care and the matured investment. Interest rate risk occurs when interest taxes, you may not be able to enjoy rates rise and the prices of some existthe retirement you envision.

Investment risk

Different types of investments carry with them different risks. Investment or market risk is the risk that fluctuations in the securities market may result in the reduction and/ or depletion of the value of your retirement savings. You might base the anticipated rate of return of your investments on the presumption that market fluctuations will average out over time, and estimate how long your savings will last based on an anticipated, average rate of return. Unfortunately, the market doesn’t always generate positive returns. Sometimes there are periods lasting for a few years or longer when the market provides negative returns. During these periods, constant withdrawals from your savings combined with prolonged negative market returns can result in the depletion of your sav-

ing investments drop. For example, during periods of rising interest rates, newer bond issues will likely yield higher coupon rates than other bonds issued during periods of lower interest rates, thus decreasing the market value of the older bonds. You also might see the market value of some stocks and mutual funds drop due to interest rate hikes because some investors will shift their money from these stocks and mutual funds to lowerrisk fixed investments paying higher interest rates compared to prior years.

Inflation risk

Inflation is the risk that the purchasing power of a dollar will decline over time, due to the rising cost of goods and services. If inflation runs at its historical average of about 3 percent, the purchasing power of a given sum of money will be cut in half in 23 years. If it jumps to

4 percent, the purchasing power is cut in half in 18 years. To outpace inflation, you should try to have some strategy in place that allows your income stream to grow throughout retirement.

Long-term care expenses

Long-term care may be needed when physical or mental disabilities impair your capacity to perform everyday basic tasks. Paying for long-term care can have a significant impact on retirement income and savings, especially for the healthy spouse. If you decide to buy long-term care insurance, don’t forget to factor the premium cost into your retirement income needs.

The costs of catastrophic care

As the number of employers providing retirement health-care benefits dwindles and the cost of medical care continues to spiral upward, planning for catastrophic health-care costs in retirement is becoming more important. Despite the availability of Medicare coverage, you’ll likely have to pay for additional health-related expenses out-of-pocket. You may have to pay the rising premium costs of Medicare optional Part B coverage (which helps pay for outpatient services) and/or Part D prescription drug coverage. You may also want to buy supplemental Medigap insurance, which is used to pay medicare deductible and co-payments and to provide protection against catastrophic expenses that either exceed Medicare benefits or are not covered by Medicare at all.

Otherwise, you may need to cover Medicare deductible, co-payments and other costs out-of-pocket.


The effect of taxes on your retirement savings and income is an often overlooked but significant aspect of retirement income planning. Some income, like interest, is taxed at ordinary income tax rates. Other income, like long-term capital gains and qualifying dividends, currently benefit from special, generally lower, maximum tax rates. Some specific investments, like certain municipal bonds, generate income that is exempt from federal income tax altogether. You should understand how the income generated by your investments is taxed so that you can factor the tax into your overall projection. Taxes can impact your available retirement income, especially if a significant portion of your savings and/ or income comes from tax-qualified accounts such as pensions, 401(k)s and traditional IRAs, since most, if not all, of the income from these accounts is subject to income taxes. Kevin Tracy established Tracy Wealth Management in 2002. He may be contacted at 360-452-9080. Securities and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment adviser. Tracy Wealth Management is not affiliated with FSC Securities Corporation or registered as a broker-dealer or investment adviser.

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Estate Planning 2011  9

advertising supplement to the Peninsula Daily News and Sequim This Week

Make financial goals with values in mind What distinguishes financial winners from losers? While few people would argue that how much one owns or how well it submitted by performs stephen moser doesn’t matter, those who view these measures as standards for success may be forgetting an important aspect: Money is a tool, not an end, in life. Following the tragic events of Sept. 11, 2001, life insurance sales surged as people turned their focus to caring for their families and communities. Those values generally superseded gathering wealth. But it should not take tragedy to bring our values into our financial decisions. Instead, they should be integrated throughout our financial decision-making. Asking the right questions upfront can help. For example: • What is my mission or mission statement in life? • What mindset do I bring to my possessions: scarcity or abundance?

• What values are the guiding forces in my life? • What activities give me energy and make me feel alive? • How do I want people to remember me? • What organizations and causes do I care about deeply? • Does the way I manage my money truly reflect my life’s priorities? Knowing the answers to these questions can assist people in integrating their personal values with their financial decisions. How do people integrate their personal values with their personal finances in the real world? Some choose to express their support of particular issues and organizations through charitable gifts. Others leave a legacy to their children or grandchildren. Still others allocate dollars for their personal development through education and training to bring their skills or passions to a higher level. And some people are better at monitoring their spending to focus on long-term needs. Those who tend to be most satisfied with life — whether enormously wealthy or just scraping by — usually have successfully connected how they manage their money with their values. They understand that money is a tool, not an end, in their life.

take control:

continued from Page 5

Retirement planning

Social Security benefits, employer-sponsored plan and personal retirement saving, including investments, IRAs and annuities, typically combine to comprise the retirement income for most Americans. Deciding which retirement choices will serve you best can be daunting, but your financial professional can guide you to the options that will support and enhance your overall investment and tax strategies.

Estate planning

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Other estate planning documents

Their finances typically surround and support their values linked to family, time, legacy, care for others, leisure, faith and everyday living. Real financial success comes from examining both what is in one’s heart and what is in one’s portfolio. When people’s values and money are in alignment, they can be assured that the way they manage their money is supporting who they are and what they believe in.

Durable power of attorney: A document in which you assign someone to legally act for you to manage your property, pay your bills and make health care decisions while you are alive. All powers of attorney terminate at death. A durable power of attorney continues during incapacity. A power of attorney can be made effective immediately or only upon disability as certified by your doctor. Health care directive. Sometimes referred to as a “living will,” a health care directive is a document in which you express your wishes as to whether, and under what conditions, artificial life support and tube feeding will be administered if you have a terminal condition or are in a permanent unconscious state.

How do I make a will?

Stephen Moser, FIC, is a financial associate with Thrivent Financial for Lutherans in Sequim. He may be reached at 360-681-8882.

The process of preparing a will or trust involves a short consultation with a lawyer to determine what assets you have, or may acquire; to whom and under what conditions you want those assets distributed upon your death; and whether or not a trust is advisable for your unique situation. The lawyer then prepares a draft of the documents he or she recommends for you to review. A basic estate planning package will include a will, a durable power of attorney, health care directive, and if married, a community property agreement. When you are satisfied with the documents they are signed, witnessed and notarized.

This column was prepared by Thrivent Financial for use by this representative. Neither Thrivent Financial for Lutherans nor its respective financial representatives and employees provides legal or tax advice. For complete details, consult your tax adviser or attorney. Securities and investment advisory services are offered through Thrivent Investment Management Inc., Minneapolis, Minn., a SIPC member and a wholly owned subsidiary of Thrivent Financial for Lutherans. Thrivent Financial representatives are registered representatives of Thrivent Investment Management Inc. They are also licensed insurance agents of Thrivent Financial. Read disclosure information at www.

Alan Millet is a lawyer who has maintained a law office in Sequim since 1981, with a general civil practice emphasizing estate planning, estate tax planning, wills, trusts and probate. He may be reached at 360-683-1119.

we can help you

Casi Fors is an independent financial adviser with LPL Financial. To schedule an appointment to begin the process of your personalized financial plan, contact Casi at her local office at 330 E. First St., Suite 9 in Port Angeles, or at 360-457-6116. Securities and Financial Planning through LPL Financial, a registered investment adviser. Member FINRA/SIPC.

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Your legacy is in your hands. Only through diligent monitoring can you be assured that your assets will be transferred effectively and according to your wishes to the people and charities you care about most. Establishing trusts, regularly reviewing your legal documents and beneficiary designations, and examining tax implications for survivors are vital to establishing a plan that provides you and your loved ones with greater confidence and security.

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10  Estate Planning 2011

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forge a legacy for generations taking on a mortgage, Holly has been able to return to school part-time. She recently reflected with me on her journey: Planned gifts provide creative and flexible strategies for donors. Some planned gifts provide you with “Being a homeowner continues to change my life and the way I think about life. The sense of stability in income. Many of them can reduce your taxes. The greatest benefit, however, lies in knowing you my home has given me the courage to take leaps in other areas of life, knowing I have a solid foundation are supporting work you believe in, beyond your to build on.” lifetime. So many of our donors can relate to the joy Holly’s grandmother felt, knowing her great-grandchildren One person’s story When I first met Holly and her daughters, she was would have a safe and decent home to grow up in. Donors often say they love Habitat for Humanity living in a small, unheated cabin with no electricity and enjoy making annual contributions — and they or running water. She worked as a waitress in Port Townsend, and this was the housing she could afford. wish they could give more. Thanks to a time-limited tax incentive, they can. Holly was accepted into Habitat for Humanity’s sweat-equity program and began working right away Tax-free contribution from your IRA on the homes of other participants. The IRA Charitable Rollover Act allows an indiWhen a long-time Habitat family moved to another state, we bought back their house to recycle it for Hol- vidual age 70½ or older to donate up to $100,000 to a ly and her family. She worked side-by-side with volun- public charity (such as Habitat for Humanity of East teers to fill nail holes, paint, repair a leaky faucet and Jefferson County) from a traditional or Roth IRA without having to pay federal income taxes on the money. do other tasks that made the house new again. Another benefit is that charitable distributions The day we turned the keys over to Holly was a count toward the IRA owner’s mandatory withdrawals. wonderful celebration. Her grandmother traveled The IRA rollover was reinstated for 2011 as part of all the way from Alaska to thank the volunteers and the 2010 Tax Relief and Job Creation Act. There is no donors who had made it possible for Holly and her guarantee that this powerful giving opportunity will daughters to have a safe, warm home. be available beyond 2011, so the time to act is now! Her emotional and heartfelt words brought tears To qualify for the federal IRA rollover benefits, the to the eyes of many who were there. donor must ask the IRA manager to transfer funds Since becoming a homeowner two years ago and

By jamie maciejewski

Holly and her daughters outside the home they received through Habitat for Humanity’s sweat-equity program.

directly to the specific public charity. A planned gift can forge a legacy for generations to come. An IRA charitable rollover lets you make a gift — and you can watch its impact during your lifetime. Jamie Maciejewski is the executive director for Habitat for Humanity of East Jefferson County. When you give to Habitat through your estate or long-term financial plans, you are forging your life legacy with Habitat’s housing ministry and ensuring that later generations can secure decent, safe and affordable housing. For more information, contact Jamie at 360379-2827 or

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Estate Planning 2011  11

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For most help them monitor their finances. people, checkups However, most people can benefit are a regular part from the knowledge, experience and of life. Dental insight that financial services profesvisits, auto mainsionals offer. tenance appointQualified financial professionals ments and even can help people evaluate their present glances in the financial strategies and keep abreast bathroom mirror of new laws, regulations, products and all help people economic developments. monitor perforEven more important, financial mance, catch poprofessionals can challenge unrealistic submitted by tential problems assumptions people may have and help Lisa Pierson and assure that them overcome money management’s all is — or will be greatest threat: procrastination. — well. To live is to experience change. How What’s true of teeth, engines and and where change will appear is imposgrooming is also true of finances: Regu- sible to predict, but a financial checkup lar checkups are required. is one sure way to make certain a Why? Changes both great and small person’s financial objectives — and his affect the strategies people have devel- or her sense of financial confidence — oped to achieve their financial goals. keep pace with all that occurs. Unfortunately, too many people act as though once their financial program is in place their work is done. This isn’t so. Lisa Pierson is a financial associate As a general rule, people should with Thrivent Financial for Lutherans review their financial program at least in Sequim. She may be reached at 360once each year. Certain life changes 681-8882. — the birth or adoption of a child, a This column was prepared by Thrivent change in marital status (married, Financial for use by this representative. divorced, widowed), the death of a fam- Neither Thrivent Financial for Lutherans nor ily member or changes to one’s health its respective financial representatives and — should serve as reminders that a employees provides legal or tax advice. For financial tune-up is in order. complete details, consult your tax adviser or attorney. Securities and investment advisory Other changes in personal economservices are offered through Thrivent Investics can also have a huge impact on people’s financial programs. These may ment Management Inc., Minneapolis, Minn., a SIPC member and a wholly owned subsidiary include shifts in employment status of Thrivent Financial for Lutherans. Thrivent or salary (e.g. loss of job or a pay cut/ Financial representatives are registered reprefreeze), home ownership changes, sentatives of Thrivent Investment Management significant changes in total assets or Inc. They are also licensed insurance agents of debt, the receipt of an inheritance and Thrivent Financial. Read disclosure informatax law changes can all make previous tion at plans obsolete. It is a rare person who hasn’t been affected in the past 12 months by changes in the economic landscape, yet many people don’t stop to consider how these changes affect their overall financial program. How can a person perform a financial checkup? Annual Membership Available For those with a yourself mentality, a number of print and elec328 E. 7th Street, P.A. 360-457-7004 tronic resources exists to

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12  Estate Planning 2011

advertising supplement to the Peninsula Daily News and Sequim This Week

Free Estate Planning Workshop Straight Talk from the area’s most respected AFTER ALL THAT YOU’VE DONE, Experts DON’T LET IT BE UNDONE.

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What is Estate Planning and why should we plan? Steps of an effective estate plan. How to conserve your estate through estate planning. Important components of an effective will. Effective estate distribution strategies. What is probate and how does it affect you? Various types of trusts and what they can do for you. Wills vs. trusts, which is right for you? Are annuities a poor choice for estate planning?

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Estate Planning, 2011  
Estate Planning, 2011  

Estate Planning, 2011 - magazine produced by the Peninsula Daily News for Clallam and Jefferson Counties.