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estate planning ultimate guide to retirement

Estate Planning for Retirees

In our last blog post, we talked about why someone that is retired or nearing retired would want to write their wills. This time we are going to talk about what makes up a true, full estate plan. A complete estate plan includes more than just a will. It also may include a trust and it does include a health care directive, a financial power of attorney, and also requires you to update your beneficiary designations. So, what does that mean?

Will

Let’s start with what a will does. A will determines who gets your stuff when you pass away. It also appoints the person that is going to be in charge of distributing your property according to your wishes. For those that still have minor children, it also appoints a guardian for them. If you don’t have a will, the state does have one for you, but you and your heirs are at the mercy of a judge at that point. Not having a will is a good way to put undue stress on your loved ones after you’re gone.

Trust

A trust is often known as a living trust as well. The main purpose of a trust is to continue to control your assets while you are living, but also provide a vehicle to pass on your assets to your heirs without having to go through the probate process. A trust can potentially help avoid negative estate tax consequences. It avoids probate if structured properly and it provides a way of keeping your and your family’s finances private. It is likely less time consuming when administering the trust is potentially a less expensive way to distribute your assets.

Health Care Directive

A health care directive is simply a way to make sure that your medical needs are taken care of in the manner that you want them to be. You determine who will make medical decisions for you. You can lay out the exact methods of medical care that you want to be done or not done if necessary. Copies of these should be given to all of your doctors so they know what to do or who to turn to if something should happen to you.

Financial Power of Attorney

A Power of Attorney provides the ability for someone of your choice to make financial decisions for you when you are not able to make those decisions yourself. It allows your representative to pay your bills for you when you can’t so that you can get back to life as you knew it when you’re able to resume.

Beneficiary Designations

This isn’t a document that an attorney can write for you, but an appropriate estate plan will include a discussion about your designations. It is simply an activity that you must do. Each of your life insurance policies, financial accounts and retirement accounts have these. If titled correctly, you are able to protect them from the probate process and make sure that they will go to the right people or organizations.

Obviously, there is more to it than these simple explanations. We will be holding a seminar in Belle Plaine at the KingsPath Senior Living facility at 125 Commerce Dr W at 4:00 on October 24th. You can click below to get registered for them.

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estate planning ultimate guide to retirement

Retirees and the Need for Planning

In a recent survey completed by caring.com, 76% of the respondents said that having a will is important. That means of the 1,003 people that took the survey, roughly 750 of them found it important. That same survey told us that only 40%, or 400, of all the people surveyed actually have a will. Those that are either in retirement or are approaching retirement (those that are 55 years and older) are a bit better as approximately 60% of that age group have a will. While that is better, that’s still 40% of people aged 55 or older that don’t have a will and that is the group we will focus on for now.

The question is, if it’s so important to people, why aren’t they actually doing it. Knowing you need to do something and actually doing it are completely different things. First of all, it’s not easy to admit your mortality. We all know we are going to die some day, but how many of us think that would be tomorrow? But that can’t be the only reason. We all do scary things when we need to…that’s what millennials kids call “adulting”. No, there are other reasons and the survey also addressed this question. Some common answers were “I don’t know how” and “It’s too expensive” (each received 6% of the responses). Well, we wouldn’t expect you to know how and, yes, it can be expensive. Again, we pay for expensive things when it’s necessary. How many of us would not fix the roof on our house if it were leaking? That’s expensive, but it’s necessary. Another common response was that “I don’t have enough assets”. While it may be true that you don’t have “a lot” of assets, many times it’s not how much that matters to your heirs (likely your kids) but what you have. And trust us when we tell you we have seen people fight over things that are worthless in terms of monetary value, but mean a lot to them.

The MOST common answer with half of the respondents answering this way was “I just haven’t gotten around to it.” Frankly, this answer can be devastating to families.

Devastating to families? Is that maybe a little strong? We would argue that it’s not. First, there is a financial component. If you die without a will and/or trust, Fidelity Investments did a study that estimated that 2%-5% of your assets will be eaten up by the probate process. So, just using a simple and realistic example, we can see what that means.

  • $250,000 House
  • $300,000 Retirement Accounts
  • $40,000 Personal Property
  • $590,000 Total Estate

That means that the total cost of the probate process on a relatively small estate for someone that has worked and saved for 30+ years is between $11,000 and $29,000. That is not a small bill for your estate and it’s likely not why you spent all those years saving your money. So, financially, is it devastating? Maybe not devastating, but it certainly is a tough pill for your kids to swallow.

The bigger threat, though, is what it can do to families. People fight over silly things. We often tell people that writing their will is for their kids, it isn’t for them. Yes, the financial aspect can be a driver, but even more so, preventing fighting between siblings is even more important. We all have seen siblings that were the best of friends for their entire life that never talk to each other again after their parents die. It’s heart wrenching. Plainly stated, it can be prevented by writing a will in most cases. Again, you didn’t save that money just so your kids could fight over it when you’re gone and it’s certainly not what you would have wanted.

At  our seminar this month we will talk about strategies to avoid these possibilities. It will be held in Belle Plaine at Kingspath Retirement Living at 125 Commerce Dr. West at 4:00pm on October 24th. You are welcome to register here.

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Special Needs Trust Planning Seminar

Earlier this month, we posted a blog about some situations that your child may need to have a special needs or supplemental needs trust (we will refer to it as a special needs trust for this post). What we would like to do now is explain some of the consequences for not having one when it is necessary. There are two times that a trust would typically come into play. The first is one we hope doesn’t happen, but feel very strongly that everyone should plan for. That situation is if disaster hits and you as the parents of your child pass away. The second is when the inevitable happens and your child turns 18, or for some of you has already turned 18.

Special Needs Trust Introduction

We will tackle each of these scenarios separately. If something would happen to both parents of your child, presumably, your child would receive an inheritance. That could be anything from life insurance to your retirement accounts to other physical assets like your house. As soon as that happens, your child has “income”. The state would then be able to count that as income when determining whether your child is eligible for aid or not. It’s entirely possible that this would put them over the threshold and force them off of state aid, even if only for a year. If that happens, we all know how difficult it can be to get those same services back. The other part of the special needs trust that’s extremely important for your minor children is to appoint someone to be the guardian for your child that has the ability to care for them as well as to appoint someone to handle the finances. This could be the same person, but it may not be. You may have someone that you trust to take care of your kids, but doesn’t know how to balance their bank account. Or someone that is really good with money (and cares about your child), but wouldn’t know the first thing about how to keep a hectic schedule of shuttling kids from therapy to school to any other event. That’s OK, a special needs trust can help you define who does what.

The other scenario is when your child turns 18 and is no longer considered a minor. At this point, your child may be able to earn a living and income. They may also still need medical aid through the state. They may still be susceptible to people trying to take advantage of their generosity in a financial sense. No matter the scenario, if your child is considered special needs as an adult, a special needs trust may come into play. The same reasons apply though. Your child may still need medical assistance. You may need to watch over their finances. You will know what is best for your child, but the rules change when your child turns 18 and, often times, a special needs trust is the vehicle to help you care for them.

Register For The Seminar Now

Whether it be for purposes of making sure your child has an appropriate guardian or to make sure your child’s finances are protected, a special needs trust can help you and your child. Later this month, Omni Kiecker, Esq. will be giving a talk on supplemental and special needs trusts. She has written the book (Financially Caring for Your Disabled Child: A Guide to Understanding the Minnesota Supplemental Needs Trust) to help Minnesota parents in their fight to help their children. The talk will be on Wednesday, September, 25th at 4:30 pm in the Sakatah Room of the Greater Mankato Business Development Building. If you would like to join us, please register for the event and let us know you’d like to attend.

Estate Planning: Supplemental For Parents With Special Needs Children

FREE Admission Registration Open Now
Date and Time:
Wed, September 25, 2019
4:30PM CDT

Location:
1961 Premier Dr
Sakatah Trail Room
Mankato, MN, 56001

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Estate Planning for Parents With Special Needs Children Seminar

Later this month, we are going to be holding a seminar on a subject that is very close to our family’s heart. Our son was diagnosed as autistic and has ADHD. He is a very bright young man, but he sometimes has an amazingly kind heart and can get taken advantage of by other people that aren’t as innocent as he is. He shows amazing care for others and would give someone his very last cent if they asked for it. That’s why we, as parents, leverage a supplemental needs trust for him now and in the future.

So, you may ask, what exactly does a supplemental needs trust mean? A supplemental needs trust is a financial vehicle that has the ability to financially protect your child when parents aren’t able to do it any longer. It has the ability to protect state aid that your child may receive. It also grants the ability for you or someone you trust to keep watch over your child’s finances so that they don’t get taken advantage of. Essentially, a supplemental needs trust adds a separate level of protection for disabled people.

Say for example, there is a family that has a child that is disabled and another child that isn’t. The child with Autism receives state aid for therapy and additional classes to help them. This family could have a number of scenarios that come into play in which the parents would want to treat both of their children the fairly, but need to treat them differently. If the parents pass away in a car accident and need the children to be cared for. Presumably, the parents had life insurance to help take care of their children. Unfortunately, that life insurance COULD qualify the disabled child out of state aid. In essence, not only did the child lose their parents, the money turns into something that works against them when it comes to getting aid. Add to that, the children are now being treated differently and, probably, unfairly.

Another less tragic example is of grandparents that may want to help their disabled grandbaby. They have done very well in their professional life and can afford to help financially support their grandchild. There are limits to that, of course, and what the grandparents don’t want to happen, is for their gift to hurt their grandchild. They don’t want their grandkids to get taken advantage of financially. They also don’t want their grandkids to lose the help that they are receiving from the state. Grandma and Grandpa just want what’s best for their family.

As previously mentioned, we are holding a seminar later this month on Wednesday, September 25th at 4:30 pm to discuss just this subject. You can get your tickets here or contact Jeff at [email protected] or call (952) 843-8546. If you’re reading this blog, many of you know that Omni has written the book on supplemental needs trusts in Minnesota. Her book held the #1 Best Selling New Release on Amazon for her book Financially Caring for Your Disabled Child: A Guide to Understanding the Minnesota Supplemental Needs Trust. This seminar will focus on the same principles and explain how this subject may affect your family.

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estate planning ultimate guide to retirement

Estate Planning For Retirees

In our last post we touched on some of the reasons that you may want to complete your estate planning in your retirement. This time we are going to dive a bit deeper. Specifically, we are going to look at the effects that it has on your heirs.

As part of an estate planning process, we naturally see the benefits of a good estate plan and the downfalls of a bad estate plan. Often times we see those effects in the probate process after a person has passed away and the heirs of an estate are left to deal with aftermath. To be clear, the time after a parent dies is NEVER easy, but how the estate is set up is key to making the legal aspect easier. First, let’s back up a bit and touch on the part of an estate plan that is used while a person is still living. The health care directive, or sometimes called a living will, is simply instructions to your family members on what to do if your health fails and you can’t make medical decisions for yourself. You can decide what decisions should be made for you when you are ill, but you can make those decisions now. You can tell your spouse, children or any other person you trust what kinds of medical measures should be taken and which ones you don’t want taken. This type of document helps your family to make the “right” decisions for you.

In conjunction with a health care directive is a financial power of attorney. A power of attorney is needed in a situation where someone is going to be unable to conduct business for an extended period of time. The power of attorney gives a trusted person the ability to conduct financial transactions for you. They can go to your bank and speak for you, they can pay bills for you and they can work with your investments on your behalf. It gives you the ability to not worry about your everyday life and focus on your health and still know that everything will be in order when your health is better.

When the eventual day comes that a person passes away, wills and trusts again provide a road map for your heirs on what you want. Wills and trusts both help with this process, trusts just provide a few extra layers of protection. We aren’t going to get into all the specific details as each person’s situation is different so it’s best to talk to your attorney before deciding what is the best option for you. For now, we’re going to focus on what we have seen to be the downfalls of not having either a will or trust.

To be clear, there is a plan for you if you don’t have one… the government has a plan for you. The government will eventually decide who gets what, but that is likely not what you want to happen. It’s also likely not what your heirs want to happen. All too often in this circumstance, brothers and sisters that go through this process end up never talking again. They end up thinking that they got the short end of the stick and their sibling “got more and didn’t deserve it”. These sorts of things end up being life long fights between siblings. Often it is said that writing a will isn’t for you, it’s for your kids (even if they are adults). It’s to make sure that what you want done with your assets and your money is what is actually done.

The arguing between siblings is an unfortunate reality with many families. We’ve seen it between families that seemed to always get along not matter the circumstances. Too often we see good families broken up because of money. Wills and trusts are very good ways to prevent that.

It’s because of these realities that Omni Kiecker Esq. of Kiecker Law is holding a pair of seminars called Estate Planning: The Ultimate Guide to Retirement on Thursday, August 22nd. In the seminar, she will be talking more in depth about these issues and give some insight into how to choose the people in your health care directive and power of attorney. She can also give you some tips on how to decide how you want your assets split up whether it is your kids or a charity. And she will also give you an idea on some other actions you can take to protect yourself in your retirement.

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estate planning ultimate guide to retirement

Estate Planning: Ultimate Guide to Retirement Seminar

Wills, Financial Power of Attorney, and Health Care Directives

Over the course of time, the reasons for completing your estate planning changes. To better understand, first we need to define what constitutes a complete estate plan. The most obvious instrument an estate plan is a will. That’s the one that everyone thinks of. It certainly is important as it lays out who gets your money and other stuff and, if you have minor children, who will take care of your children if you are no longer there. Unfortunately, many people forget the important Financial Power of Attorney and Health Care Directives. These documents are to help guide people in health care decisions as well as keep your financial affairs in order if you are in the hospital and can’t speak for yourself. These three documents are essential in any estate plan.

Trusts & Privacy Planning

The last piece of the puzzle may be a trust. Some people will need to have trust and some people won’t. It truly does depend on your situation. It depends on the level of your wealth. It also depends on your children and their financial aptitude. Some people may not want the general public to know their financial affairs when they pass away and will use a trust to keep their information private. There are a multitude of other reasons that you may want to use a trust. You will want to consult with your attorney on whether a trust is necessary for you.

Estate Planning for Retirement

Getting back to the reasons why you would complete your estate plan, when you’re young and single, your biggest need is typically going to be to make sure that you’re taken care of if you’re in the hospital and can’t make decisions for yourself. When you have kids, you obviously want to make sure your kids are taken care of if something happens to you.

The next phase in life is the part that we will be talking about in our August seminars: Retirement. You save your entire life in things like savings accounts, 401(k)s, IRAs, and any other number of financial vehicles. Presumably, you have saved enough for you to live on for 20, 30 or 40 years. Now, you want to protect that if something happens to you. Maybe you want to pass it to your kids. Maybe you want to give it all to your church or favorite charity. Or maybe you just want to make sure that it won’t all be used for a nursing home to care for you. Additionally, you want to make sure that everyone knows exactly how you want your health care to be carried out and someone to pay your bills for you if you are in that nursing home.

The Ultimate Guide to Retirement Seminar, August 22, 2019

All of those topics and more is what Omni Kiecker, Esq. of Kiecker Law is going to cover in the seminar “Estate Planning: The Ultimate Guide to Retirement” on Thursday, August 22nd. There will be two seminars, one at 3:00pm and one at 6:00pm in the Sakatah Trail Room in the Greater Mankato Business Development Building. Please see the links for the below for the registration page or you can call (952) 843-8546 to get registered as well. Space is limited so please reserve your spot. All guests in attendance will receive a copy of the “The Ultimate Retirement To-Do List” to keep as well.

You can also keep following our blog as well as our Facebook page to get more information as the month goes on. We want to keep providing more information on why this is important and help you make the best decision for you.

We look forward to seeing you at the seminars helping you prepare for or continue working through your retirement.

Estate Planning: Ultimate Guide to Retirement Seminar 1

FREE Admission Registration Open Now
Date and Time:
Thu, August 22, 2019
3:00PM – 4:00PM CDT

Location:
1961 Premier Dr
Sakatah Trail Room
Mankato, MN, 56001

Estate Planning Ultimate Guide to Retirement Seminar 2

FREE Admission Registration Open Now
Date and Time:
Thu, August 22, 2019
6:00PM – 7:00PM CDT

Location:
1961 Primeier Dr
Sakatah Trail Room
Mankato, MN 56001

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hope rooted golf tournament

Hope Rooted Golf Tournament

Hope Rooted is hosting its 2nd annual charity golf tournament, “Kendall’s Drivers for Hope” on Friday, August 16th at Deer Run Golf Club in Victoria, MN. The event shall feature and 80’s theme (get your neon and big hair ready), golf, activities, lunch, dinner and silent auction. 
Awards for:

  • 1st, 2nd and 3rd Place Teams
  • Longest Drive
  • Closest to the Pin 
  • Longest Putt
  • Best Dressed Foursome

Funds generated through your generosity will support the functional medical needs of local Minnesota children. Get ready for a totally tubular, radical and gnarly time! Can’t wait to see you!

Events

  • 11:00 am Check in begins, golf range, complementary buffet style lunch and beverages.
  • 12:45 pm Welcome from Kendall and the King Family and rules of play.
  • 1:00 pm Shotgun Start
  • 5:00 pm Complementary Happy Hour begins, silent auction.
  • 6:00 pm Silent Auction Closes, Dinner and Program begins.
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