Kansas and Missouri Estate Planning

Why Would an "Older Millennial" Need Life Insurance?

Life insurance provides protection for loved ones.

Death is a fact of life.

People get old, but that is not guaranteed.

Their bodies wear out.

They eventually die.

Some people even die young, leaving families and careers behind.

Unfortunately, the young often believe themselves invincible.

Death is a problem for others.

According to a recent Forbes article “Why Older Millennials Need To Start Taking Life Insurance Seriously,” denying the reality of death can be harmful.

Those who refuse to see their own mortality can put their loved ones at risk.

How so?

They can live too much for the moment and refuse to prepare for the future.

The truth is your action or inaction will affect others.

The failure to have adequate life insurance may put the future of your family at risk.

Why is life insurance important?

If you die and are supporting a family, your loved ones will lose their source of income.

How will they pay for groceries, clothing, the mortgage, and other bills?

Even if you and your spouse both work, the strain of working and being a single parent can cause a serious financial blow.

Life insurance helps protect your family from financial insecurity.

The benefits far outweigh the costs.

In fact, life insurance can be cost effective and a simple policy may suffice.

Many millennials choose term life insurance.

For some it is possible to get a $1 million policy for as little as $40 each month.

Is getting life insurance complicated?

It does not have to be.

Many companies are user friendly and tech-savvy, leveraging both technology and personal interaction.

Getting a policy now is important.

No one is guaranteed a tomorrow.

Reference: Forbes (January 26, 2019) “Why Older Millennials Need To Start Taking Life Insurance Seriously”

When Should I Have an "Inheritance" Conversation with My Folks?

Talking to your parents about their estate plan can be awkward.

Do your parents have an estate plan?

Can you answer this question definitively?

According to a recent The Guardian article titled “Discussing inheritance is too important to be left until someone has died”, you should talk to your parents if the answer is “yes” and if the answer is “no”.

Why?

Having clarity on what your parents want to do with their assets and the family heirlooms will give you all a sense of peace.

Yes, it will be a tough conversation.

No one wants to think about the reality of their loved ones dying.

Even if your parents make you a beneficiary to their estate, should you bank on these assets to help you with your own financial demands?

No.

About one-third of millennials will inherit nothing.

For those who do inherit, it will likely occur later.

On average, millennials will be 61 when they come into an inheritance.

This means any assets you receive will come after most of the largest financial milestones in life like paying for college for your children or purchasing a home.

The purpose of this conversation with your parents is not to plan for what you will receive.

The purpose is to encourage them to create a plan, if they do not currently have one.

If they do have an estate plan, then they should be encouraged to meet with their estate planning attorney to review it.

The "conversation" can also help deter divisive arguments and battles between family members after your parents have passed away.

You will be grieving and will need each other.

You do not want to be divided.

Gretchen and I sat down over the recent holidays with our three adult daughters and reviewed our estate plan and assets.

We do "eat our own cooking" here.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: The Guardian (January 13, 2018) “Discussing inheritance is too important to be left until someone has died”

How should Millennials Save for Retirement?

The best way to save for retirement is to start now.

Follow the money.

Sage advice when determining what is important to a person.

Unfortunately, when following the money trail of many Millennials, retirement saving does not seem important to them.

According to a recent CNBC article titled “Nearly half of millennials haven't starting saving for retirement,” 41 percent of Millennials ages 17 to 35 have not begun saving for retirement.

The reason?

Many claim they cannot afford to put money aside from living expenses into retirement savings.

It does seem there is a downward trend on wages.

The median household income for Millennials is $48,000.

Baby Boomers made almost 20 percent more at this age.

What does this mean?

Millennials may have to delay when they retire.

Many believe they will have to work until age 70 to have enough money saved.

Some good news, from the Bureau of Labor and Statistics?

Wages are starting to rise.

As they rise, how do Millennials tend to spend this increased income?

Many work to pay back student debt and others travel.

When investing, many Millennials are investing internationally.

As the economy changes, Millennials are not the only ones affected.

Baby Boomers also remain vigilent over their retirement savings and investments.

Unlike Millennials, 73 percent are investing for retirement.

Even so, even Baby Boomers believe they will need to work a few extra years and possibly maintain a higher allocation in equities closer to retirement ... if they want to retire comfortably.

Why?

Rising health care costs seem to be a major factor.

The conclusion?

Whatever your age, you should be saving for retirement.

It would be wise to work with an experienced financial planner and estate planning attorney regarding your goals and how to best meet them.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: CNBC (September 5, 2017) “Nearly half of millennials haven't starting saving for retirement”

What "Demographic" is Worst at Estate Planning?

No generation is perfect at estate planning, but some are better than others.

Age does not matter.

You need an estate plan.

Naturally, as we age, we begin to see the need for getting our affairs in order.

Young people tend to feel invincible.

They are unaware of their own mortality.

According to a recent Financial Buzz article titled “Millennials: Start thinking about estate planning now!,” a caring.com study found only 22 percent of Americans ages 18 to 36 have a will or trust.

Yikes!

This is a significant difference from Americans who are 72 or older.

Nearly 81 percent of this older demographic have a will or trust.

What about those who are 53 to 71 years of age?

Sixty percent have an estate plan.

Unfortunately, the next lowest age bracket of 37 to 52-year-olds does little planning.

Really?

Yes.

Only 36 percent have a will or trust.

These numbers are certainly not ideal.

But people make excuses.

Like what?

The two most popular are lack of assets and an abundance of time.

Neither is good.

You never know when you could die or become incapacitated.

As my maternal grandfather used to say, "The old must die ... and the young may die."

Create an estate plan now so your affairs will be in order for your loved ones later.

Be sure it is done right with the help of an experienced estate planning attorney.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Financial Buzz (March 3, 2017) “Millennials: Start thinking about estate planning now!”

What Should Women Know When Planning for Retirement?

Although retirement planning takes work for anyone, it may require more foresight for women.

Are you a millennial?

Are you a woman?

If yes, then the recent Business Wire article “Millennial Women Face Significant Gender Gap in Financial Wellness” applies to you and is worthy of your consideration.

Why?

The article recounts the findings in the "2016 Gender Gap in Financial Wellness Study."

The goal of this study was to gather numbers addressing how women leaving the workforce at various times will impact their retirement savings.

The purpose?

Helping women plan for the future and troubleshoot accordingly.

What were the findings?

The article addresses how men are typically more financially prepared for retirement than women, especially when you consider how women usually have a longer life expectancy.

How can women address this disparity?

Experts recommend women save nearly 12 percent of their income to prepare for their retirement.

If you take a break from your career, you will need to save even more.

Why?

On average, women who take a break early in their careers will find a retirement shortfall of about $1.3 million.

If you rear children, serve in charities or care for elderly parents, this likely applies to you.

Millennial women are particularly vulnerable; however, advanced planning and proactive savings will help.

So start now.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Business Wire (October 18, 2016) “Millennial Women Face Significant Gender Gap in Financial Wellness”

Why are My Millennial Children so Disinterested in My Money?

That is a good question. However, I certainly do not want to paint with a broad brush.

I am sure there are a lot of factors, to include unique family dynamics.

Maybe your children just look at "money" differently.

Reuters recently looked into this general issue in an article titled "Equating inheritance with love can cause discord."

According to the article and a survey cited therein, Millennials hold very different views about receiving gifts.

It appears some 33% of Millennials equate a monetary gift with control. They see money as a way for the older generation to exert influence over them.

On the flipside, about 70% of Baby Boomers see a gift of money as an expression of love.

In the words of Cool Hand Luke, it appears what we have here is "failure to communicate"?

And, this failure can really complicate estate planning.

When generations hold different opinions about the motivations of an inheritance, they may well fight over how assets should be distributed.

While most of those over 50 think it is fair to divide estates equally among heirs, only a third of Millennials felt the same way.

Really?

Apparently, the younger generation is more open to weighing financial needs and other factors to determine a recipient's worthiness.

Getting family members to talk to one another about estate planning can be tough.

Nevertheless, endeavor to get everyone involved early in the process.

By doing so, the giver can help avoid any disappointments or misunderstandings.

Whatever you do, however, do not leave any big surprises for loved ones to sort out after you are gone.

Better yet, take steps now to help ensure that all of the stakeholders know what to expect later ... and why.

Open family communication can make an "unequal shares" inheritance distribution easier to handle.

Sometimes a trade-off is helpful—as the giver can pass along something meaningful to each heir—when the gifts do not necessarily have the same financial value.

With the help of an experienced estate planning attorney, even people with very little are able to give in an extremely meaningful way.

So, how do you find an "experienced" estate planning attorney?

First, ask around. Friends, family and other professional advisors are trustworthy sources.

Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").

Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.

How?

Two helpful online resources are just a mouse click away to assist with your due diligence:  Avvo.com and Lawyers.com.

Check any Avvo ratings, client ratings/testimonials and attorney endorsements on Avvo.com and any "peer ratings" by judges/other attorneys and any client ratings/testimonials on Lawyers.com.

In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Reuters (April 15, 2016) "Equating inheritance with love can cause discord"

Am I Too Young for Estate Planning?

No, not even Millennials (the youngest adults among us) are beyond the need for proper estate planning.

While mortality is not likely in the cards for them, morbidity is a real reality.

They drive (fast), ski (hard) and still have energy to take life at 100 mph, 24/7/365.

As for me and my fellow Baby Boomers - we are often just plain too tired to tango.

If you are a Millennial (or the parent of one or more), then a recent Benzinga article provides a good foundation for an estate planning discussion and follow through.

The article is titled "Millennials and Estate Planning: How to Get Started," and here is their list of legal documents you need to know about:

Last Will and Testament.

This legal document is given legal effect after you die through the probate court. In short, your will describes who will be in charge of your estate after you are gone and to whom you want your assets given. If you are a Kansas or Missouri resident with minor children, then you may appoint the guardian (i.e., backup parent) for them in your will.

Living Trust.

This is basically a contract to help you transfer assets upon your death, but without probate. Typically, you will title your assets in your trust while you are alive and/or upon your death by beneficiary designations (think life insurance). This is how they escape the necessity of probate.

General Durable Power Of Attorney.

This fundamental legal document allows you to appoint the decision-maker of your own choosing to conduct financial and legal business for you while you are incapacitated.

Advanced Health Care Directive.

The health care counterpart to the General Durable Power of Attorney, this document consists of the Health Care Treatment Directive and the Durable Power of Attorney for Health Care Decisions. Through it you give guidance regarding end-of-life treatment (or non-treatment wishes) and appoint the decision-maker to go-to-bat for you with the doctors and medical establishment. In our approach we also cover the HIPAA matters, so your decision-maker will have full access to your doctors, nurses and medical records. 

Tax Documents.

Nope. Tax liabilities do not end with death. Although most taxpayers do not need to worry about federal estate taxes, the tax rates do kick in at 40% for individuals with estates exceeding $5.45 million (married couples can protect $5.9 million). Fortunately, Kansas and Missouri do not have their own estate or inheritance taxes ... but other states do.

There, now you have an introduction to the most common legal documents you need to consider.

Bonus: Once you get your estate plan inked, then you have the moral authority to ask your Baby Boomer folks what they have done in that regard.

Be sure to work with an experienced estate planning attorney.

Leave the DIY projects to weekend home improvements. Too much is at stake.

Why take the risk of getting it all wrong? 

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Benzinga (February 08, 2016) "Millennials and Estate Planning: How to Get Started"

How can a Millennial become a Millionaire?

Start early.

If you want to retire a millionaire, then time is one of your biggest allies.

But time, without financial discipline, is for naught.

A study by Fidelity Investments last year considered the financial habits of 1,000 clients who earned less that $150,000 annually and each had more than $1 million in their Fidelity-managed 401(k)s.

The findings of that study are recounted in a recent article in Forbes titled  “Nine Ways To Be A Millionaire In Retirement.”

While you will want to read the original article and the "nine ways" identified, here are some takeaways:

• Save more. Not surprisingly, one common characteristic share by all 401(k) millionaires in the study is their savings discipline. Start early and spend less than you make.

• Pay off your debt. If you are a millennial, then likely you have some healthy student loans. The longer you have debt, the longer it will take to financial security.

• Live like a college student. No, I don't mean what some of you are thinking. I am referring to that frugal what-do-I-need-to-do-just-to-make-ends-meet-and-stay-in-school-this-semester attitude. Consequently, this approach will help you spend less than you make on your first salary as you pay off that student debt.

• Budget. No not the rental car company. Track and evaluate. If saving seems like a task that is impossible to fathom, just look where your money is going. Try this: Take a three-month period and track all of your spending. Tools like Quickbooks, Quicken, Mint, or, just use a debit card for all expenditures during that time so your finances are automatically tracked. Keep track of where you spend your money, with that data, categorize things. As they say, mind the dimes and the dollars will take care of themselves.

• Take the "free" money. Does your employer offer a "match" to your retirement plan contributions? According to the original article, by the age of 25 you should be contributing at least of 10-15% (including your employer match) to your retirement plan. While you are living below your means (like a college student) and paying off student debt, you can start out with a more modest percentage. Even so, consider increasing that modest percentage every six months.

• Check your “vest.” As you take advantage of the 401k match by your employer, review your company’s vesting schedule. Although all of the money you put into your retirement account is yours, but you have to be fully vested to keep all of your employer’s contributions.

• Get expert help. It is never too soon to establish a relationship with a financial advisor you can trust. An estate planning attorney can refer you to one.

Speaking of estate planning, be sure to get the fundamentals inked for yourself.

This means, at a minimum, getting your advance health care directive and general durable power of attorney in place.

That way people you know and trust can take care of your personal, health care and financial matters, if an injury or illness ever leaves you incapacitated. Otherwise, you will be creating unnecessary expenses and hassles for them ... just to take care of you.

Remember to share copies of these critical legal documents with your parents and physicians, too. 

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there. 

Reference: Forbes (October 9, 2015) “Nine Ways To Be A Millionaire In Retirement”

I am a "Millennial" ... do I Need an Estate Plan?

So, should you have an estate plan at this stage of life?

Short answer? Yes. Long answer? Yes.

As my grandfather used to say: the old must die and the young must die.

If you have a present pulse, then you need an estate plan for when it stops.

This includes you, even if you are a millennial (also known as "Generation Y" born in the early 1980s to the early 2000s).

This timely topic was take up in a recent article in the St. Louis Dispatch, titled “Why Everyone Needs a Will (I'm Talking to You, Millennials).”

Here are a few of the key actions recommended in that article: 

Designate Your Beneficiaries.

You can list your beneficiaries on your retirement accounts (401(k) 403(b), IRA etc.) when you complete the application.

While you are at it, be sure to designate your beneficiaries on bank and investment accounts by setting up a TOD (Transfer on Death) designations.

Why?

First, it is easy and free (two things stereotypically essential to millennials).

Second, probate is avoided if your beneficiaries have legal capacity, let alone are alive, at your passing.

Accordingly, beneficiary designations supersede any instructions you make in your last will and testament.

As you can see, it is very important to make sure your beneficiary designations are consistent with your other estate planning arrangements. 

Draft your will.

Well, after just telling you how to avoid using a will and thereby skirting probate, you really should create (and sign) your will.

After all a will is more than a legal document - it is the final written statement of your intentions, to include where you want your earthly possessions to go and how you want them to get there.

Note to self: this is not a DIY project. There are a lot of things you can do, even on the internet.

This is not one of them.

Period.

Contact an experienced estate planning attorney in your state, because each state has different laws. 

State Your Health Care Wishes.

Use an Advance Health Care Directive to make your health care wishes known now for a potential time when you cannot make them later. Oh, be sure to appoint your health care decision-makers to carry out those wishes when relevant. 

Sign a Durable Power of Attorney.  

This fundamental legal instrument enables someone you trust to make financial decisions in the event you are unable to do so.

As the article notes, you have options regarding the amount of authority you give and when it is given.

By establishing a relationship with an experienced estate planning attorney now, you will have a valuable personal and legal advisor through the coming years who is required to maintain your confidences and secrets.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there. 

Reference:  St. Louis Dispatch (September 11, 2015) “Why Everyone Needs a Will (I'm Talking to You, Millennials)”

Millennials + Money = Freedom

What do Millennials want out of money? Freedom, baby, freedom. 

So, what does that mean?

For some insights we turn to a recent USA Today article titled “For Millennials goal is financial freedom.” According to the article, the key to working with those in that generation is to understand their generation and its unique characteristics and challenges.

Millennials, as opposed to Baby Boomers, are accustomed to getting quick answers to their questions with a mouse click or two. In addition, they are more likely to have multiple jobs in multiple locations during their working years.

Oh, and they tend to have a lot a lot of student debt against the backdrop of a tight job market.

Consequently, financial strategies that may have been appropriate for Baby Boomers may not work for Millennials.

In fact, one financial planning firm that targets Millennials approaches them as "personal trainers" who are guiding Millennials to financial health.

For young professionals of this generation financial freedom to chart their own course is a higher priority than saving money for retirement. 

They want (and need) to be financially nimble.

Not surprisingly, purchasing a home is not always a top priority to younger adults who may prefer urban living, or may need to relocate to pursue their professional goals. 

Even with these less concrete plans, having a strategy for the future to finance the aspirations of Millennial is critical.

If you are a Millennial, then you should consider working with an experienced estate planning attorney who also can help coordinate other professional “coaches” to help you find that financial freedom you are seeking.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website. 

Reference: USA Today (April 11, 2015) “For Millennials goal is financial freedom”