Jeremy Fulton, Financial Wellness Coach

Tag: love

  • 5 Reasons Why Creating a Will Demonstrates Love

    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.

    headstoneHollywood 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?

  • No one gets out alive, or the case for Life Insurance

    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!