Jeremy Fulton, Financial Wellness Coach

Category: Estate Planning

5 Reasons Why Creating a Will Demonstrates Love
The reading of the will, as seen on TV: family and friends gather in the lawyer’s office. The family attorney opens the envelope and clears his throat. The room goes silent in a instant with anticipation of what’s to come. As the reading progresses, a mix of emotions and expressions fill the room: elation, joy, anguish, anger, sadness, crying, and the breaking of relationships.

Hollywood does it’s best to build drama for the audience, but that is NOT what you want to leave behind, is it?

I remember talking with a client as she was navigating the complex and convoluted process of settling her mother’s estate after she passed without leaving a will. The time, the difficulties, and heartache of trying to divide up her possessions without severing the fragile family ties was how my client was forced to remember her mother initially, instead of reflecting on all the good memories.

Writing a will isn’t always easy; to do so acknowledges that you are mortal, that you may loose your loved ones, and that you are not guaranteed tomorrow. But to do so, to do the hard thing now, is a huge act of love to those who may be left behind.

Here are 5 ways that creating a will is an act of love towards your family:
1. YOU decide who gets what. You are not putting the burden of divvying up your possessions on your executor (legal name for the one who settles your estate). It is likely that you will have family heirlooms, some wealth, and items that hold sentimental value to your family. I’m sure you know someone or have heard of someone who experienced a family fall out because someone didn’t get dad’s tie collection. Communicate your desires ahead of time, so everyone knows where they stand, and why, long before you pass on. Don’t put that burden on your survivors.
2. More of your estate stays out of probate. Probate is the court that settles wills, but probate is VERY expensive and going through it can be very time intensive. Don’t make your loved ones have to deal with grieving for you AND dealing with the legal system at the same time. You will also allow more of your hard earned assets to pass to your kin vice the state.
3. You get to choose who becomes guardians for your minor children. Before you write your will, talk with your spouse (warning, it can be a VERY emotional discussion) and come to an agreement on who you want to raise your kids should you both pass on. Then ask the proposed guardians (in person!!! not over text or Facebook!!!!); explain why you chose them. Then talk to anyone else who might think they would be the guardians and explain why you chose someone else. It’s a VERY hard discussion, but it must be done to ensure there is peace in your remaining family. And do you really want the state to decide who gets your kids? Me either!
4. It can allow all your possessions to pass to your spouse seamlessly should you predecease him/her. You don’t want your spouse to have to deal with the courts when she should be grieving. Don’t add stress to an already difficult situation.
5. If you have a blended family, it sets up the expectations ahead of time. Deciding how to divide assets between a spouse and child won’t be easy, but don’t make them duke it out after you are gone; be an adult and allow them to challenge you while you are still around to explain and/or make changes.
Now, once you have your will (or wills, if married) complete, discuss the contents with all who are affected. Don’t allow the drama of TV to take place, deal with your decisions now!

If you have a relatively small and simple estate, you can do your own will, but if you have some wealth, seek out the advice of a quality estate planning attorney.

There are other ways that a will demonstrates love, how would you feel loved by your spouse/parent/grandparent having a will?
May 5, 2015
5 Ways to make your future self happy
Have you ever wished you could write a letter to your younger self? I know I have!

What would you tell yourself?
- Don’t date that girl
- Jump on that opportunity
- Eat more veggies and exercise more
- Call your mom more often
Turns out I’ve been talking to your future self and have been sent with some things that you should know now!

5. Forget about the Joneses. By trying to keep up with them, you will waste so much time and money; learn to be content with what you already have.

4. Don’t take investment, tax, spending, or other advice from your friends (or strangers on the internet). Invest in working with a professional with the heart of a teacher. Professionals have spent years becoming an expert in their area; what makes you think your broke friends know as good or better? Money spent in this category will pay dividends in increased wealth, avoided tax penalties, and better money control.

3. Stay away from debt. Sure its nice to get things now instead of waiting, but if you play with snakes, you will get bit! Debt is the enemy of wealth; do you want to have some money at retirement or lots of nice stuff with payments? Get out of debt now so you can build your retirement and enjoy the income you have!

2. Grandma was right; it will rain! Build up an emergency fund as soon as possible. A rainy day fund will take the stress and crisis out of anything that comes up: car broke down? Fix it without worrying how you will pay for it. Sick relative you need to visit? Buy the plane ticket without worrying how you will pay for it. Broken furnace in February? Call the repair tech and not worry about how to pay him. Get the point? Bonus: when you have a 6-month emergency fund, you tend to make different decisions when an ’emergency’ happens, which can save you money.

1. Start saving NOW! The longer you wait to start saving for retirement, the less you will have. Money invested now is much more valuable than money invested in 5 years. Once you are debt free and the emergency fund is built, start taking advantage of employer matched 401k’s and ROTH IRAs. You won’t regret saving that money instead of buying that new car in 20 years, but you just might regret buying that car!

Now, will you listen to your future self? Or if you are the “future self”, what do you think? Anything different you would tell the younger generation? Post below:
February 11, 2015
10 things you need to know about money right now!
There are many things you can learn about money. Some are cool facts and trivia that you can use for small talk at parties. Some things will make you feel better about yourself. And others have the potential to change your life!

So, without further ado, here they are:
1. The amount of money is not fixed.
  There is no “pie” that you have a slice of. If I increase my wealth, it does not mean that I prevented someone else from increasing theirs by that much.
2. Money is created by work.
  As we work and create and build we create value which is how we get paid. That is why the GDP of the world is always increasing!
3. Giving 10% of your income to a cause you care about helps you succeed financially.
  Giving causes us to become more outward focused and generous. People who are not self-focused are more likely to get the promotion, raise, and be presented opportunities.
4. If you have money problems, your children will most likely have money problems.
  You know that your kids are impressionable. They will see how you handle money and mimic your habits, good or bad. If you don’t teach them proper money management, Visa will gladly do it for you!
5. There is no such thing as “good debt.”
  How excited do you get about making payments? This includes Student Loans. Can you be 100% sure that you (or your child) will land a job you love that pays enough to cover the payments and your desired lifestyle as soon as you graduate from school? If the student is a woman, what happens if she gets married, has a child, and wants to stay at home? Can her family support the loss of income with the debt payment? There isn’t anything that can’t be saved up for!
6. Rich people avoid debt; they didn’t get rich using debt.
  80% of America’s millionaires are self-made millionaires, and they say the number one key to building wealth is avoiding debt! When you don’t have debt, you can invest in the market or your own business much more!
7. Money ≠ evil
  Money is amoral. It’s like a brick. A brick is not good or bad. I can throw it through a window or build an orphanage. Money is the same way; in the hands of good people, a lot of good can be done. Bad people will just do more bad.
8. Your retirement fund is more important than your kids’ college fund.
  You will retire one day, either by choice or necessity. Not everyone goes to college. Also, do you want to rely on your children to take care of you when you are older and be a burden to them?
9. Budgeting gives you freedom!
  I know that the word ‘budget’ is used to imply cheap, low-rent, inferior, etc. But that doesn’t mean that living on a budget means you can’t spend money on things you want. All a budget is a plan on how you WANT to spend YOUR money. You plan out your spending for the next month, deciding what you want to spend the money you worked so hard for one, and then actually following through with the plan! You are allowed to budget money for eating out, buying ‘toys’, and hitting the local Starbucks! The biggest result to budgeting? You will feel like you got a raise!
10. Investing in a financial coach will pay off bigger than any stock!
Yes, I know it seems self-serving to tell you to hire me, but to be honest, had I hired a financial coach way back when, I would have ended up with thousands more in my retirement fund, way more in my savings, and have not wasted so much money over those years! A coach can help you pick the proper types/amounts of insurance (saving you on payments and loss), set and reach financial goals, find areas where you can save money in day-to-day expenses, help you beat debt (how much of your income goes to payments each month?), and even help you and your spouse agree on money issues (how expensive is a divorce?)!

Maybe you have all the answers already and are doing pretty good; good for you! If not, what are you waiting for? Give me a call and set up a no-cost, no-obligation consultation to see if what I’m saying is true. What do you have to lose?

I can be reached at 860-469-2274 and jeremy.fulton@me.com
January 15, 2015
No one gets out alive, or the case for Life Insurance

“…but in this world nothing can be said to be certain, except death and taxes.” Benjamin Franklin wrote this in 1789 after the US Constitution was written.

Most people would agree that this is true. We lament paying property, auto, sales, income, and every other tax that our elected officials exact from us. We hire CPAs, buy TurboTax software, and read about how to minimize out tax burden. But how many of us prepare for the other eventuality?

You are going to die.

There, I said it. If you didn’t know, you know now; sorry to be the one to pop your bubble.

Now that that’s over with, lets move on with preparing. By preparing I mean setting up your loved ones that you will leave behind to handle your parting financially. We all know of a family that lost it’s primary bread-winner and instead of having the ability to grieve for a while, had to put that aside and deal with a foreclosure, figuring out how to feed the kids, or watch as their cars were repossessed.

You don’t want to be that guy or gal who leaves their family that way.

One major way you can say “I love you” to your family is to prepare for your departure. It may not happen till you are 106, but it could happen tomorrow. It’s part of our responsibility as adults to face reality and prepare for it instead of thinking it can’t happen to us.

“Ok,” you say, “I get it, I want to love my family well; what do I need to do?” I’m glad you asked!

Life Insurance. You need it.

Why? Life insurance’s purpose is to replace you, financially, when you die. It is to be invested such that it produces enough growth (think interest) to replace your net income perpetually.

That’s it. If you have people who depend on your income you need this. If you are a stay-at-home parent, you need it to replace the economic value you provide (think child care, cook, maid, shopper, taxi driver, first aid provider, etc, etc).

Ok, so you get it, you accept that this is something you need. How do you navigate the hundreds of different policies and types of life insurance out there to properly care for your family without getting ripped off?

Lets use the K.I.S.S. principle. You need 10-12 times your income on your self (and $300-400,000 on the stay-at-home spouse) in 15-20 year Level Term Life Insurance.

Simple math: if you make $50,000 a year, you need at least $500,000 in coverage. Sounds like a lot, doesn’t it? What your survivors will do is invest this money into decent mutual funds and live off of the growth. A large amount helps to keep their income steady as the market fluctuates.

Sounds expensive, right? Most people can get enough coverage for the cost of a couple of pizzas a month! Do you love your spouse and kids enough to skip a few pizzas a month? Don’t believe me, check out this site to get an instant quote: Zander Insurance.

But what about Whole Life or Cash Value Life insurance policies? Why only 15 or 20 years of coverage?

Simply put, you don’t need coverage for your entire life. in 20 or so years, you will be debt free, the kids off to college, the house paid for, and have a healthy nest egg! [If you need some help figuring out a plan to get there, click here and I’ll help you.] With all that done, the need for insurance is gone! [Note: if that’s you, or you have no dependents, you have NO need for life insurance.]

In addition, the cost for a whole life policy can be 10 times the cost for the same benefit as term insurance. You could invest the difference and still be better off! Oh, and that cash value that the salesman told you about? They keep it when you die! I bet he didn’t tell you that!

So, what are you waiting for? Apply for a policy today!!!

Still have questions? Post them below and I’ll answer any you have!

June 12, 2014
Reverse Mortgages – Good retirement option or scam?
We’ve all seen the commercials, the 60’s Heart Throb on TV touting how safe and great a reverse mortgage is for those in their elder years. And for those who are older and were hurt in the “Great Recession” this may look like a great option to have a little extra money for travel, fixing up the house, or just to pay medical bills. After all, why not use some of the equity in your home while you are still around to enjoy it?

Sound too good to be true? Or do your Spidey senses tingle when you see those commercials, but you’re not sure why? Then read on! But I’m not eligible for one, you say, but your parents and/or grand parents are! Wouldn’t it feel good to be able to steer them in the right direction? Good answer!

In case you have not heard of a reverse mortgage, or not fully sure what it is, it’s basically a series of cash advances secured by your home, capped by the value of the home, that you don’t have to pay back until you vacate the home (either by moving out or dying). To qualify for one you must be at least 62 years old and have enough equity in the home to cover the amount to be borrowed.

You might be thinking that this is a great idea; borrow money and never have to pay it back! You could use the money to travel, boost your life style, or do some home repairs/upgrades, right? Sounds too good to be true, and you know what they say about that?

Did you know:
- That if the mortgage isn’t done correctly, a surviving spouse may have to pay back the loan or face foreclosure?
- That the closing costs can be several thousand dollars?
- That if you become delinquent on your insurance or property tax that the lender could call the loan (demand repayment immediately)? (if you couldn’t pay your taxes, you for sure can’t pay the loan and WILL loose it)
- That the housing market is not always an upward trend, and that if the value of your home falls the lender could stop payments that you started to rely on?
- That if the home value drops (while your equity is dropping faster) and you want to move, you may not be able to afford to sell your home due to being upside-down on the loan?
- The reverse mortgage industry is full of scam artists, so it’s possible your trusting grandma may fall for one.
Still sound like a good plan?

“But,” you say, “I’ll stay in this house till I die, so will my spouse, I’ve got a good pension that will more than cover taxes and insurance, and I’ll just use ‘my equity’ for fun stuff and not rely on it for meeting my needs.” That may be true and you and your spouse may never have to deal with any of the big negatives; but what about your heirs? Did you want to leave them the family home? They may be forced to sell it to pay back your debt when you paid on it for years and years hoping to leave a legacy.

They may not all be scams, but they are for sure not a good option! If you are having trouble making ends meet, please talk with me, or any other financial coach, before making what could be a very costly mistake.
May 27, 2014