2014

Estate

Planning

An advertising supplement produced by Peninsula Daily News and Sequim Gazette

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Estate Planning October 2014

advertising supplement to

Peninsula Daily News and Sequim Gazette

HAVE YOU HEARD THE NEWS? Harper Ridgeview and Sequim Valley Funeral Homes along with Mt. Angeles Memorial Park and Crematory, Sequim View and Dungeness Cemeteries are now locally owned and operated.

We want to celebrate by inviting you to pre-plan your funeral and cemetery needs today. But what’s a celebration without a great deal too? That’s why we are offering you

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Whether your plans include burial or cremation, planning ahead ensures not only that your memorial, whether big or small, will be just the way you like, but also that your loved ones won’t have to guess how to make these important decisions for you.

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Estate Planning October 2014

Peninsula Daily News and Sequim Gazette

The basics of estate planning With regards to finances, the future is a big part of many people’s financial planning efforts. Be it the kids’ college tuition or the day when retirement finally arrives, financial planning is all about the future. Though college and retirement funds garner the most attention, estate planning cannot be ignored. Estate planning is the process of arranging for the disposal of an estate and is done to help minimize uncertainty upon an individual’s death. This planning reduces taxes and additional expenses that might arise when someone dies without leaving a will or other means of disposing of his or her estate. Regardless of the size of an individual’s estate, there’s no reason not to have an estate plan in place. Following are some of the basics of estate planning, which should be a priority for both young and old. More than just a will An estate plan is more than just a will. Though an up-to-date and specific will is an important element of a good estate plan, there are other elements as well. In addition to a will, an estate plan should assign power of attorney, which gives a designated agent the right to manage an individual’s financial affairs when he or she is unable to do so. Power of attorney should be assigned in the case of a person’s death or when an unforeseen medical issue arises and a person is no longer capable of managing his or her affairs.

There are two types of power of attorney that are essential to know when estate planning. Springing power of attorney goes into effect when circumstances that the individual specified, such as incapacitation, occur. In order for this to go into effect, the agent designated must typically produce proof of an individual’s incapacitation. Durable power of attorney goes into effect immediately, and the agent does not need to prove incapacitation. When choosing an agent to assume power of attorney, individuals need to be sure the agent is someone they trust who can competently manage their affairs. Assessing your assets Assets include a host of things, from investment accounts to real estate to retirement savings. Individuals must take careful inventory of all of their assets and determine to whom these assets should go if they die or who should gain control of them if they become incapacitated. Leave no stone unturned. If there are any questions about specific assets, legal wrangling or government taxation upon these assets is likely to take place. Understanding trusts Many people hear the word “trust” associated with financial dealings and immediately assume it only applies to the wealthy.

Nothing could be further from the truth. A trust enables men and women to put conditions on the distribution of their assets upon their death, including when and how these assets will be distributed. In addition, a trust may protect these assets from creditors or lawsuits and help any heirs avoid probate court, which can be a costly and tedious process. Though trusts aren’t necessarily for everyone, they also aren’t exclusive to the very wealthy. Allocation of assets Many people make the mistake of leaving all of their assets to their spouses upon their deaths. While wellintentioned, it doesn’t always work out for the best. Individuals can leave an unlimited amount of money to their spouse upon their death, and that money cannot be taxed. However, when the surviving spouse dies, and leaves that money to their surviving children, they will have to pay significantly more in estate tax. In addition, when deciding to leave all assets to a surviving spouse, this is, in a sense, leaving the difficult decision of asset allocation to the surviving spouse. What’s more, if both husband and wife pass away in an accident at the same time and all assets are left to a spouse, this can make it very difficult, contentious and costly for surviving family members to divide up any assets left behind. Although few people embrace estate planning with open arms, it is a necessary step for adults who want to secure their own futures and the futures of their loved ones.

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Estate Planning

 Where the safest place is to protect your money from bank failure and a turbulent stock market?  Why your IRA, 401K, VIP or Deferred Comp is a time bomb for your beneficiary when you die and how to defuse it?  Why a Living Trust may be more effective than a regular Will?  How you can make your current Life Insurance and Annuities pay for Long Term Care expenses tax free.

25 Years Experience 20

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Estate Planning October 2014

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Selecting a funeral home by Douglas R. Ticknor, licensed funeral director and embalmer, Drennan & Ford Funeral Home and Crematory, Port Angeles Most people wait until a death occurs to even think about selecting a funeral home. For 23 years, I have begun all of my funeral arrangements with families the same way. I try to help the family regain a sense of control by letting them know they are in charge. I ask them to start with the questions or concerns Douglas R. Ticknor they have before I get to the many questions that I have. Since most of us only make two to three funeral arrangements in our lifetime, the blank stares I get are to be expected. Family members usually ask me, “What questions should I be asking?” I’d like to answer that important question and give you a few tips on how you can better prepare for when you are sitting across from a funeral director. Not all funeral directors are the same, and certainly not all funeral establishments are reputable. It is a sad truth in any service-oriented business.

Here is a list of “10 Things You Should Know Before You Make Funeral Arrangements:” • First, you are in charge. When making funeral arrangements, if you are not satisfied at any time, you can ask the funeral director to hold off while you consider the matter. You can get up, drive to another funeral home and ask them to take over. Your preferred funeral home will go to the first funeral home to transport your loved one immediately, and you can proceed. This applies even if the deceased has a pre-arranged funeral or cremation plan at the other funeral home. • Second, if your loved one served in the U.S. military and was honorably discharged after his/her service or was married to someone who had served, you should ask your funeral director about benefits. Many funeral homes that are affiliated with cemeteries neglect to inform you that you may be eligible for burial at a national cemetery. Some run ads advertising Veterans Day sales on grave spaces or headstones. However, if you use a national cemetery, there are no cemetery costs to you. Veterans have earned the right for themselves, their spouses and any dependent child or developmentally challenged dependent adult child to be buried in a national cemetery.

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In Washington, there is only one — Tahoma National Cemetery in Kent. You can choose to use another, such as one in your loved one’s home state. For burial at a national cemetery, you will not be charged for the grave space or niche for cremated remains, the placement, the grave liner and the headstone or marker. Your funeral director should have the latest information on these and other veterans’ benefits such as a burial flag, a Presidential Memorial Certificate, scheduling military honors at the funeral or graveside (even if burial is not at a national cemetery) as well as applying for survivors’ benefits. • Third, ask where your loved one’s body is and, if you desire, to view the body. Many funeral home owners who operate more than one location centralize operations. You may be in one funeral home while your loved one may be at another facility miles away. If your loved one is not at the funeral home you are at, arranging to see your loved one is more difficult. I have often had families request to see their loved one at the very last second, as we are concluding arrangements. This is not a problem if your loved one is already at the funeral home at which you are making arrangements. Ask if there is a charge for viewing the body. If the funeral home can’t allow you to see your loved one without additional expense and a separate appointment, maybe you should call another funeral home. Ask if you will be required to place the body in a casket or alternative container for the viewing. Many funeral homes see this as a way to enhance revenue. Ask how the funeral home will make the body presentable. Some funeral homes use this as a way to market embalming. • Fourth, ask if embalming is required and why. There are only two scenarios where embalming is required: (a) if the body is to be transported across state lines and (b) if you request to have a public (beyond just immediate family) viewing or open casket service. A legal disclosure of this should be on the funeral home’s general price list. • Fifth, understand that funeral homes are required by law to answer your questions about prices over the telephone or if you come in personally. See “Burial arrangements” on Page 7 >>

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Peninsula Daily News and Sequim Gazette

advertising supplement to

Estate Planning October 2014

Peninsula Daily News and Sequim Gazette

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The good feeling of giving through your estate plan by Jamie Maciejewski, executive director, Habitat for Humanity of East Jefferson County

One of my favorite telephone calls to estate plan and further the mission you want to see continue. make is to thank a donor. Most assets can pass to your This is an opportunity to share the work that Habitat is doing in East Jef- intended beneficiaries by the terms of your will. ferson County and experience the joy Other assets, such as retirement and enthusiasm that the donor feels plans, life insurance and insurance after making a contribution. annuities are not controlled by the It doesn’t matter if the contriterms of your will. bution is $25 or $25,000. Donors These assets instead require separepeatedly tell me that giving makes rate beneficiary forms and can be easthem feel good. Research suggests that giving with ily modified at any time to meet your changing needs. a sense of purpose not only makes Consider naming your favorite you happy but it improves your charity as the beneficiary of your: health as well. • IRAs and retirement plans John D. Rockefeller is an example of • Life insurance policies a person whose health improved after • Insurance annuities. he became a philanthropist. This is a straightforward and efAt age 54, he was a rich businessfective way to include your charity man focused on making money when of choice in your estate plan, and a he received the news that he had one wonderful way to preserve the simple year to live. goodness of giving. It was then that Rockefeller began looking outward and started to share his wealth. He lived until the age of Since its founding in 1998, Habitat for 98 and is known as the greatest getter Humanity of East Jefferson County has and giver of money during and after built 33 houses and recycled five, providhis lifetime. ing simple, decent, affordable homes for Unfortunately, when it comes to 38 families with 77 children. giving through an estate plan, the Habitat also has repaired 11 homes process often is viewed as complicated in Quilcene through the Neighborhood Providing the and highest home careInitiative. to seniors and stressful, the goodquality feeling Revitalization gets lost in the number crunch and Habitat is funded by donations and by and people with disabilities for the more than 30 years paper shuffle. volunteer-operated Habitat Stores at However, there are simple ways to 2001 W. Sims Port Townsend • We are licensed by the state and • We provide careWay, from one hour toand include your favorite nonprofit in your 294963 U.S. Highway 101, Quilcene.

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Your legacy is an expression of your personal values, intentions and priorities towards that which you care most about. To ensure that the money you’ve worked a lifetime to acquire is protected for the next generation, there are several options you can discuss with your investment professional: • Money set aside for your beneficiaries may be invested in an annuity, possibly one with a death benefit • Life insurance options • Long-term care insurance • Performing a Beneficiary review of your investments Make an appointment today with Travis Berglund, a financial professional with First Federal Investment Services by calling (800) 800-1577 to discuss your legacy.

accept insurance, private pay and twenty-four hour live in. We offer DSHS. We serveHome all income levels. respite as well as overnight care Care Is Our Mission and bathing services. • Services range from housework to personal care including medication • We pride ourselves on employing reminders, incontinent care, the highest caliber of staff assuring Providing the highest quality home care to seniors transportation,andbathing, dressing, clients people with disabilities for more our than 30 years the best quality in-home We are licensed by the state and • We provide care from services. one hour to transfers and• accept protective supervision. care insurance, private pay and twenty-four hour live in. We offer

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Estate Planning October 2014

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Converting savings to retirement income by Kevin P. Tracy, financial adviser, Tracy Wealth Management, Port Angeles

Kevin P. Tracy

During your working years, you’ve probably set aside funds in retirement accounts such as IRAs, 401(k)s,or other workplace savings plans as well as in taxable accounts. Your challenge during retirement is to convert those savings into an ongoing income stream that will provide adequate income throughout your retirement years.

Setting a withdrawal rate The retirement lifestyle you can afford will depend not only on your assets and investment choices, but also on how quickly you draw down your retirement portfolio. The annual percentage that you take out of your portfolio, whether from returns or both returns and principal, is known as your withdrawal rate. Figuring out an appropriate initial withdrawal rate is a key issue in retirement planning and presents many challenges. Why? Take out too much too soon, and you might run out of money in your later years. Take out too little, and you might not enjoy your retirement years as much as you could. Your withdrawal rate is especially important in the early years of your retirement, as it will have a lasting impact on how long your savings last.

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Kevin Tracy

Financial Planner FSC Securities Corporation 105½ East First Street, Suite A Port Angeles, WA 98362

(360) 452-9080 www.tracywealthmanagement.com Securities and advisory services offered through FSC Securites Corporation, member FINRA/SIPC. Tracy Wealth Management is not affiliated with FSC Securities Corporation or registered as a broker-dealer or investment advisor.

One widely used rule of thumb on withdrawal rates for tax-deferred retirement accounts states that withdrawing slightly more than 4 percent annually from a balanced portfolio of large-cap equities and bonds would provide inflation-adjusted income for at least 30 years. However, some experts contend that a higher withdrawal rate (closer to 5 percent) may be possible in the early, active retirement years if later withdrawals grow more slowly than inflation. Others contend that portfolios can last longer by adding asset classes and freezing the withdrawal amount during years of poor performance. By doing so, they argue, “safe” initial withdrawal rates above 5 percent might be possible. (Sources: William P. Bengen, “Determining Withdrawal Rates Using Historical Data,” Journal of Financial Planning, October 1994; Jonathan Guyton, “Decision Rules and Portfolio Management for Retirees: Is the ‘Safe’ Initial Withdrawal Rate Too Safe?,” Journal of Financial Planning, October 2004.) Don’t forget that these hypotheses were based on historical data about various types of investments, and past results don’t guarantee future performance. There is no standard rule of thumb that works for everyone — your particular withdrawal rate needs to take into account many factors, including but not limited to your asset allocation and projected rate of return, annual income targets (accounting for inflation as desired) and investment horizon. Which assets should you draw from first? You may have assets in accounts that are taxable (such as CDs, mutual funds), tax deferred (such as traditional IRAs) and tax free (such as Roth IRAs). Given a choice, which type of account should you withdraw from first? The answer is, it depends. For retirees who don’t care about leaving an estate to beneficiaries, the answer is simple in theory: Withdraw money from taxable accounts first, then taxdeferred accounts and, lastly, tax-free accounts. By using your tax-favored accounts last and avoiding taxes as long as possible, you’ll keep more of your retirement dollars working for you. For retirees who intend to leave assets to beneficiaries, the analysis is more complicated. You need to coordinate your retirement planning with your estate plan. For example, if you have appreciated or rapidly appreciating assets, it may be more advantageous for you to withdraw from tax-deferred and tax-free accounts first. This is because these accounts will not receive a step-up in basis at your death, as many of your other assets will. However, this may not always be the best strategy. For example, if you intend to leave your entire estate to your spouse, it may make sense to withdraw from taxable accounts first. This is because spouses are given preferential tax treatment with regard to retirement plans.

Peninsula Daily News and Sequim Gazette

A surviving spouse can roll over retirement plan funds to his or her own IRA or retirement plan, or, in some cases, may continue the deceased spouse’s plan as his or her own. The funds in the plan continue to grow tax deferred, and distributions need not begin until the spouse’s own required beginning date. The bottom line is that this decision is also a complicated one. A financial professional can help you determine the best course based on your individual circumstances. Certain distributions are required In practice, your choice of which assets to draw first may, to some extent, be directed by tax rules. You can’t keep your money in tax-deferred retirement accounts forever. The law requires you to start taking distributions — called “required minimum distributions” or RMDs — from traditional IRAs by April 1 of the year following the year you turn age 70½, whether you need the money or not. For employer plans, RMDs must begin by April 1 of the year following the year you turn 70½ or, if later, the year you retire. Roth IRAs aren’t subject to the lifetime RMD rules. If you have more than one IRA, a required distribution is calculated separately for each IRA. These amounts are then added together to determine your RMD for the year. You can withdraw your RMD from any one or more of your IRAs. (Your traditional IRA trustee or custodian must tell you how much you’re required to take out each year, or offer to calculate it for you.) For employer retirement plans, your plan will calculate the RMD, and distribute it to you. (If you participate in more than one employer plan, your RMD will be determined separately for each plan.) It’s important to take RMDs into account when contemplating how you’ll withdraw money from your savings. Why? If you withdraw less than your RMD, you will pay a penalty tax equal to 50 percent of the amount you failed to withdraw. The good news: You can always withdraw more than your RMD amount. Annuity distributions If you’ve used an annuity for part of your retirement savings, at some point you’ll need to consider your options for converting the annuity into income. You can choose to simply withdraw earnings (or earnings and principal) from the annuity. There are several ways of doing this. You can withdraw all of the money in the annuity (both the principal and earnings) in one lump sum. You can also withdraw the money over a period of time through regular or irregular withdrawals. By choosing to make withdrawals from your annuity, you continue to have control over money you have invested in the annuity. However, if you systematically withdraw the principal and the earnings from the annuity, there is no guarantee that the funds in the annuity will last for your entire lifetime, unless you have separately purchased a rider that provides guaranteed minimum income payments for life (without annuitization). See “Converting savings” on Page 7 >>

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Estate Planning October 2014

Peninsula Daily News and Sequim Gazette

If you elect to annuitize, the periodic payments you receive are called annuity payouts. You can elect to In general, your withdrawals will be subject to inreceive either a fixed amount for each payment period come tax — on an “income-first” basis — to the extent or a variable amount for each period. your cash surrender value exceeds your investment You can receive the income stream for your entire in the contract. lifetime (no matter how long you live), or you can The taxable portion of your withdrawal may also be receive the income stream for a specific time period subject to a 10 percent early distribution penalty if you (10 years, for example). haven’t reached age 59½, unless an exception applies. You can also elect to receive annuity payouts over A second distribution option is called the guaranyour lifetime and the lifetime of another person teed income (or annuitization) option. Guarantees (called a “joint and survivor annuity”). are subject to the claims-paying ability of the issuing The amount you receive for each payment period insurance company. will depend on the cash value of the annuity, how If you select this option, your annuity will be “anearnings are credited to your account (whether fixed nuitized,” which means that the current value of your or variable), and the age at which you begin receiving annuity is converted into a stream of payments. This allows you to receive a guaranteed income stream from annuity payments. The length of the distribution period will also affect the annuity. how much you receive. The annuity issuer promises to pay you an amount For example, if you are 65 years old and elect to of money on a periodic basis (e.g., monthly or yearly).

<< “Converting savings” continued from Page 6

cemetery affiliated with a funeral home, look to locallyowned cemeteries. As soon as the topic of costs begin, your funeral direcIn Clallam County, Ocean View Cemetery is owned tor is required by law to give you a general price list to by the city of Port Angeles and offers both a spectacukeep. lar view of the Strait of Juan de Fuca and prices that Be wary of multiple-page price lists that are confusing and package services. They are often used to bundle can be less than half of other area cemeteries. • Eighth, ask if the funeral home hires only Washservices that you would not normally need or want and ington-licensed funeral directors. Some funeral homes then offer a discount. hire staff without any experience and place them with Ask your funeral director if the charges at each of your family at a difficult time when you need knowltheir locations are identical. edgeable and professional assistance. • Sixth, ask your funeral director if their establish• Ninth, check with the state Department of Liment operates other funeral or cremation facilities nearby. Some funeral homes conceal affiliated locations censing to see if the funeral home, funeral director or cemetery you selected has ever been fined or had its and do not advertise their joint ownership. This is done to make one location the “premier price” license suspended. Also, check to see if there have been any consumer complaints lodged. and the other the “discount cremation” facility. • Tenth, ask where the cremation will take place. • Seventh, don’t assume that one-stop shopping saves money. Rather than automatically using the Some funeral homes use a third-party crematory

<< “Burial arrangements” continued from Page 4

4A1159749

Wills • Trusts • Probates Review your estate plans

receive annuity payments over your entire lifetime, the amount of each payment you’ll receive will be less than if you had elected to receive annuity payouts over five years. Each annuity payment is part nontaxable return of your investment in the contract and part payment of taxable accumulated earnings (until the investment in the contract is exhausted). Kevin Tracy established Tracy Wealth Management in 2002. With more than 21 years in the financial services industry, Tracy is a registered representative, financial planner with FSC Securities Corp., one of the largest independent broker/dealers in the country. Tracy Wealth Management is located at 105 E. First St., Port Angeles. Securities and investment advisory services offered through FSC Securities Corp., member FINRA/SIPC and a registered investment adviser. Tracy Wealth Management is not affiliated with FSC Securities Corp. or registered as a broker-dealer or investment adviser.

located in another county. Ask if you can see the crematory. Ask what the crematory does with medical device implants. Some crematories sell the metal to recycling businesses. Lastly, ask if the crematory collects and retains gold teeth. While deplorable and unethical, it is legal in Washington as long as it occurs after cremation. Unfortunately, people never think to ask these questions. It makes it that much more important to visit your local funeral home and talk with the owner or a licensed funeral director before you need their services. Douglas Ticknor is a licensed funeral director and embalmer at Drennan & Ford Funeral Home and Crematory in Port Angeles, the only locally owned funeral home and crematory in Clallam County. Ticknor can be reached at 360-457-1210 or douglas@drennanford.com. For more information, go to www.drennanford.com or find it on Facebook.

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Estate Planning October 2014

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Peninsula Daily News and Sequim Gazette

Overcoming the challenges of marrying household finances Money-merging strategies for young couples Among the many decisions newlyweds must make, deciding how to combine their incomes and share financial decision-making is at the forefront. Even in single-income households, individual assets and debts are typically merged, requiring couples to work together to determine their financial future. Here are a few suggested strategies for a successful money merger: Honesty is the best policy. Along with trust and honesty, open communication about finances is important in building a strong marriage. Without these components, it’s difficult to work together as a team toward common financial goals. Each person needs to be aware of any assets or outstanding debts belonging to his or her spouse. It’s all right for couples to have separate accounts so long as there are no secret accounts. Having joint checking, savings and credit card accounts creates transparency and requires couples to communicate clearly and work together. Even if only one partner generally signs the checks

and balances the accounts, ideally both partners should have a clear sense of the financial picture. Make a plan. Create a budget that you can stick to that realistically reflects future spending. Decide who is going to have primary responsibility for writing checks or how you’re going to share them. Set a time to sit down together every month when it’s time to pay bills to talk about current and future spending so you’re on the same page. Agree on discretionary spending and saving after bills and expenses have been paid. The easiest way to keep money from undermining your marriage is to make a plan together, agreeing on where the funds will come from and how they will be spent each month. Balance the bills. More often than not, couples merging their finances will have varying incomes and different amounts of accumulated debt. Couples need to agree on how much each person should contribute to the household and how past debts are to be paid off.

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There are a number of basic ways to divide the financial pie. If a couple have similar incomes and debts, a 50/50 split is a simple solution. A couple can decide to each contribute a set percentage of their incomes toward expenses and purchases. Previous debts can be absorbed to become a shared expense or remain the responsibility of the spouse who accumulated them. Discretionary spending toward the household or things like vacations can be treated the same as other household expenses, while personal purchases might be considered the responsibility of the individual. There are countless ways to determine how finances are shared, but the important thing is that you and your partner are clear about each other’s expectations when it comes to spending and saving.

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Estate Planning October 2014

Peninsula Daily News and Sequim Gazette

Free long-term care insurance?

You may already have coverage and not know it, or you may be able to get it for free by Paul Stevick, CFP, Allstate Financial Services As a Certified Financial Planner, I regularly come across situations where people have protection against the costs of long-term care and aren’t aware of it. Many do not realize they can get protection simply by asking for it. We can either die too soon or live too long. There is a change in our protection needs as we Paul Stevick age. When young, our family needs to be protected against the financial impact of loss of income or a caregiver. At this time in our lives, our children are small and our mortgage is big. As time passes, our children get bigger and, ideally, so does our income. If all goes reasonably well, we

reach a point where we have less to worry about as children go off to their own adult lives. Our mortgage slims down and may even disappear. What we may not notice — or want to admit — is that as this protection need recedes, another threat advances and grows. As we age, our ability to care for ourselves may diminish to the point that we need assistance. Since we don’t die from good health, we all face the prospect of becoming debilitated or incapacitated by whatever is pushing us to the end of our life. Some of us will become victims of diminished mental capacity and may live with this condition for years. The cost of care can be devastating. What many do not know is that help can often be found in their life insurance policy, and it is usually free. To understand the long-term care protection embedded in many life insurance policies, we need to review a little history. In the 1980s, the AIDS epidemic was a new and little-understood cause of death. Many people were

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destitute as they awaited their end. Some did have life insurance, but that would only pay out after they died. Enterprising individuals offered to purchase these life insurance policies from terminally ill patients at a price far below the death benefit that would be paid out. This, the purchasers claimed, provided the terminally ill patient with much needed cash. In return, the investor became the owner and beneficiary of the death benefit to be paid out in the near future. The business of “viatical settlements,” long a tiny niche, grew and flourished Life insurers became concerned about individuals purchasing policies purely for speculative purposes. Today, many states regulate viatical and life settlements, and many more are developing legislation and regulations. The insurance companies also took action by developing the “accelerated death benefit” rider. This rider was attached to most new life insurance policies at issue, and many companies allow it to be attached to existing policies no matter when they were issued. The owner of the policy may withdraw a portion of the death benefit if the insured is terminally ill. The benefit may vary among insurers and states. Since insurance companies are regulated by the states in which they do business, there is some difference in how and when this benefit may be accessed. In Washington, there is a very generous definition of “terminally ill.” See “Long-term care insurance” on Page 10 >>

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Paul J. Stevick, CFP®, Personal Financial Representative

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EstatE Planning OctObEr 2014

<< “Long-term care insurance” continued from Page 9 In fact, this definition, which is written into law (WAC284-23-620 Definitions), turns many life insurance policies into a form of protection against the costs of care near the end of life. The accelerated death benefit rider is usually put on existing or newly issued policies at no cost. Why would an insurance company do this? To keep life insurance policies, which were designed to protect the purchaser’s beneficiaries, from being used as a speculative tool. Washington defines terminally ill as having the “reasonable expectation” of fewer than 24 months to live. The law goes on to name several specific medical conditions that would trigger this benefit, no matter how long the life expectancy. It even requires the benefit to be available when the insured has “any condition which requires either community-based or institutional care.” It also allows the benefit to be available when “any condition which usually requires continuous care in any eligible institution … if the insured is expected to remain there for the rest of his or her life.” This includes coverage, for example, for an institutionalized dementia patient. There are many other specific designations in this law, all of which provide access to a life insurance death benefit for the insured. The money accessed from the policy does not have to be used specifically for long-term care costs. It can be used for anything. The big advantage of long-term care protection inside a life insurance policy is that a benefit is guaranteed to be drawn from a life policy.

aDVErtising sUPPlEMEnt tO

Long-term care insurance is a form of term insurance. If you own a policy and pay premium for years, or even decades, and you die without drawing any benefits, you paid for something that has no value after your death. With a life insurance policy, you can draw the money out if you need it for end-of-life care. If you die without drawing anything out, the full death benefit is paid to your beneficiaries. Someone always benefits from the life policy strategy. Do you have an old life insurance policy? Would you like to find out if it contains this potential protection against end of life costs? Would you like to compare the cost of long term care insurance against the coverage by a life insurance policy? Have you been declined for long term care insurance? In many cases, you may still qualify for life insurance.

PENINSULA DAILY NEWS anD SEQUIM GAZETTE

estate Planning

is published by Peninsula daily news and sequiM gazette Publisher and editor John C. Brewer

For a no cost or obligation opinion on what your options are or a free copy of the law and its definitions, contact Paul Stevick at Bill Bailey’s Allstate office in Sequim at 360-683-3397 or email paulstevick@allstate.com.

advertising director Steve Perry special sections editors Sara Farinelli and Brenda Hanrahan Peninsula Daily News, 305 W. First St., Port Angeles, WA 98362, 360-452-2345, www.peninsuladailynews.com Sequim Gazette, 147 W. Washington St., Sequim, WA 98382, 360-683-3311, www.sequimgazette.com

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advertising supplement to

Estate Planning October 2014

Peninsula Daily News and Sequim Gazette

How do you want to be remembered? Can you provide for your heirs and also leave a portion of your estate to a cause you care about? Submitted by the United Way of Clallam County What matters to you? Do you want to see results from your charitable gifts while you are alive, or leave a gift in your will? The Clallam Community Foundation is a collection of separate funds established to provide health and human services to residents of Clallam County. The foundation is a tool to arrange gifts supporting a particular issue or agency you are passionate about. Even a modest bequest or a small gift can make a difference. You might choose to make annual distributions to nonprofit organizations or provide college scholarships. The foundation encompasses three types of funds — United Way funds, named funds and partner organization funds. Distributions are made from earnings of each fund, while the principal is preserved as a permanent endowment. United Way Funds Distributions from United Way funds are determined annually by the United Way Board of Directors.

Earnings from the undesignated fund are allocated among the partner agencies who receive year-round funding from United Way, or used as grants to help agencies identify new sources of support. Earnings from the McCool Fund are dedicated to early learning, funding Great Beginnings projects to help children and families be ready for school. The Orville Ninke Fund was established to assist low-income seniors with unmet needs; from basic utility bills to home repairs that will enable older folks to remain in their homes. Named Funds Named funds are created by individuals or families to honor a loved one and continue a legacy of giving. United Way works with representatives of the fund to make distributions in line with the donor’s wishes. A named fund can be directed toward a general purpose, such as services for youth, or toward a specific list of agencies. Many of the foundation’s named funds award scholarships to graduates of Clallam County high schools.

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Partner Organizations Twelve Clallam County nonprofit organizations have established funds within the Clallam Community Foundation. These organizations have committed to creating a permanent endowment to ensure a continued source of revenue to further their missions in support of Clallam County residents. United Way of Clallam County welcomes donations to the Community Foundation for the benefit of any of these organizations: • Clallam County Literacy Council • Dungeness Valley Health & Wellness Clinic • First Step Family Support Center • Juan de Fuca Festival of the Arts • North Olympic Library Foundation • North Olympic Timber Action Committee • Olympic Peninsula YMCA • Peninsula Behavioral Health • Port Angeles Food Bank • Serenity House of Clallam County • St. Andrew’s Place Assisted Living • Volunteers in Medicine of the Olympics Clinic What will your legacy be? There are many ways to create or contribute to an endowment fund. Your estate attorney, financial planner or insurance agent can help you determine which type of legacy gift best fits your wishes and needs. For more information on setting up a fund or making a contribution to an existing fund, contact United Way at 360-457-3011 or info@unitedwayclallam.org

United Way

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The Clallam Community Foundation is a collection of separate funds established by individuals, families and charitable organizations – a community of donors. TheThe Clallam Community Foundation ofseparate separatefunds funds Clallam Community Foundationisisaa collection collection of established by individuals, families and charitable organizations –a What will by your legacy be? established individuals, families and charitable organizations The Clallam Community Foundation is a collection of separate funds – a community of donors. We can help youfamilies exploreand howcharitable to create your own lasting community of donors. established by individuals, organizations – a investment in the future of Clallam County and its citizens. community of donors. It’s easier thanbe? you What your legacy be?might think to create a fund to support the causes you What willwill your legacy care about. We can help you explore howtotocreate createyour your own lasting help yoube? explore how lastinginvestment investmentinin WhatWe willcan your legacy The Clallam Community Foundation also accepts donations the future of Clallam County and its citizens. the future Clallam County its your citizens. We can helpofyou explore how toand create own lasting investment in to any of our Named Funds existing funds. It’s easier than you might think to create fund to the future of Clallam and its citizens. It’s easier thanCounty you might think to create aa fund to support supportthe thecauses causesyou you Created by individuals or families to honor a loved one, representatives care about. It’s easier than you might think to create a fund to support the causes you of the donor may recommend grants to charitable organizations and/or care about. United WayCommunity of ClallamFoundation County Funds The Clallam also accepts donations to any of our care about. award scholarships to Clallam County students. Named Funds The Clallam Community Foundation also accepts donations to any of our Named Funds Distributions from United Way Funds are determined byofthe United Way existing funds. The Clallam Community Foundation also accepts donations to any our In 2013, seven grants and 23 scholarships were one, distributed totaling Created by individuals or families to honor a loved representatives existing Board funds.of Directors. Named Funds Created byrecommend individualsgrants or families to honor a loved one, representatives existing funds. $49,095. of the donor may to charitable organizations and/or Createdof bythe individuals or families to honor a loved one, representatives included: United 2013 Way distributions of Clallam County Funds donor may recommend grants to charitable organizations and/or Bright Haygood Copsey Scholarship Fund awardmay scholarships to Clallam students. recommend grants toCounty charitable organizations and/or UnitedDistributions Way of County Funds  Clallam $12,000 from the Undesignated Fund to United annual from United Way Funds are determined by theWay’s United Way fundof the donor award scholarships to Clallam County students. United Way of Clallam County Funds Karen Memorial Scholarship Fund In 2013, seven grants and 23 scholarships were distributed totaling toByrd Clallam County students. Distributions from United Way Funds are determined by the United Way award scholarships Board of from Directors. drive InFish 2013, seven grants and 23 were scholarships were distributed totaling Distributions United Way Funds are determined by the United Way Family Fund $49,095. In 2013, seven grants and 23 scholarships distributed totaling Board of Directors. 2013 distributions  $10,000included: from the Undesignated Fund to help agencies increase Board of Directors. $49,095. Hull Family Fund Bright Haygood Copsey Scholarship Fund  $12,000 from the Undesignated Fund to United Way’s annual fund $49,095. Karen 2013 distributions included: funding resources through grantwriting 2013 distributions included: Carol Munro Memorial Fund Byrd Memorial Scholarship Fund Fund Bright Haygood Copsey Scholarship Copsey Scholarship Fund from $57,000 from the McCool Fund totoEarly Learning grants drive  $12,000 from the Undesignated Fund United Way’sfund annual fund Bright Haygood  $12,000 the Undesignated Fund to United Way’s annual Mac & Phyllis Munro Memorial Scholarship Fish Family Fund Karen Byrd Memorial Scholarship Fund Fund Karen Byrd Memorial Scholarship Fund  $10,000 from thethe Undesignated Fund to help agencies increase  $8,000 from Orville Ninke Fund to assist Clallam County drive drive Michael Sindars Scholarship Fund HullFish Family Fund Family Fund Fish Family Fund funding resources through grantwriting seniors withUndesignated urgent needs  $10,000 from the Fund help agencies  $10,000 from the Undesignated Fund to helpto agencies increase increase Mac Ruddell Community Carol Munro Memorial Fund Fund Hull Family Fund Hull Family Fund  $57,000 from the McCool Fund to Early Learning grants funding resources through grantwriting Whatton Family Fund Mac & Phyllis Munro Memorial Scholarship Fund funding resources through grantwriting Carol Munro Memorial Carol MunroFund Memorial Fund  $8,000 from theMcCool Orville Fund to assist Clallam County  $57,000 fromfrom the McCool FundNinke to Early grants Michael Sindars Scholarship Fund  $57,000 the Fund to Learning Early Learning grants Mac & Phyllis Memorial MacMunro & Phyllis MunroScholarship MemorialFund Scholarship Fund seniors urgent needs Ruddell Community  $8,000 fromfrom thewith Orville Ninke Fund to assisttoClallam County County  $8,000 the Orville Ninke Fund assist Clallam MichaelMac Sindars Scholarship FundFund Michael Sindars Scholarship Fund Whatton Family Fund seniors withwith urgent needsneeds Mac Ruddell Community Fund seniors urgent

Mac Ruddell Community Fund

Whatton Family Fund For more information on the Clallam Community Foundation, contact UnitedFund Way of Clallam County Whatton Family PO Box 937, Port Angeles WA 98362 360-457-3011 info@unitedwayclallam.org www.unitedwayclallam.org/clallam-community-foundation

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Estate Planning October 2014

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Peninsula Daily News and Sequim Gazette

Tips to help you reduce the stress in planning your retirement Today, planning for retirement is more important than ever. With fewer than 21 percent of employees in the private sector covered by traditional pension plans, according to the Bureau of Labor Statistics, Americans need to take a more proactive approach to ensure their retirement. They will need to rely heavily on their own savings for income in retirement and plan carefully to avoid outliving those savings. Fortunately, retirees can create a “personal pension plan” that guarantees a steady stream of income for life using an insurance product called an immediate annuity. The following tips describe how a “personal pension” from an immediate annuity might fit into an overall retirement plan. Diversify. As part of your overall retirement strategy, consider using a portion of your savings to fund an immediate annuity. Leave investments that move with the market to other parts of your retirement portfolio, depending upon your tolerance for risk. Fund the plan. An immediate annuity can be funded with part of your 401(k) or IRA savings or from other savings you have accumulated. You can also use money from an inheritance, from downsizing your home or from money available once you’ve finished paying off a child’s college tuition.

Access to funds. Over the course of retirement, your needs and circumstances are likely to change. Many personal pension products don’t allow you to touch your money once your income begins. If you are concerned about having access to your funds in the future, choose an immediate annuity that offers this feature. Fight inflation. Inflation can take a big bite out of your retirement income. Some personal pension products allow for annual payment increases that will help you keep up with inflation’s impact.

Leave a legacy. If leaving an inheritance is important to you, look for products guaranteed to pay back your premium to your spouse or another family member, or that provide ongoing payments to them, even if you received payments well beyond your life expectancy. Guarantee it for life. You may need your retirement income to last 20, 30 or even 40 years. Choose an immediate annuity from a company with a long, steady track record of financial strength and stability. — Content and photo from NewsUSA

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