A Reverse Mortgage Might Not Be the Best Idea

An article in The Washingon Post this week highlighted many of the reasons that I have cautioned clients against reverse mortgages over the years. The Comptroller of the Currency, John C. Dugan, warned in a speech to bankers this week that more federal oversight may be needed for reverse mortgage programs. Here’s a link: http://bit.ly/15cS6r.

An Online Legacy?

We’re estate planners. We sit down with each of our clients and discuss their worldly assets and how they want them distributed to their families if they die. Until last week, I had never thought about what happens to your email account if you die. I don’t know about you, but I have accumulated thousands of emails over the sixteen years I have been using the internet. Much like our ancestors’ letters are part of their legacy to us (think John Adams and Thomas Jefferson), our emails and online communications whether through Twitter, Facebook or email, are part of our legacy. I learned through a couple of stories I’ve heard recently that when someone dies, the family can have a very difficult time getting control of online accounts. Last week, I learned about a solution.

Legacy Locker is essentially an online safety deposit box, serving as a secure repository for your digital property. It lets you grant access to online assets for friends and loved ones in the event of death or disability by naming them as beneficiaries. The service came out of an experience of one of the founders, Jeremy Toeman. When his grandmother passed away at the age of 94, the family could not access her email accounts and respond to the continuing emails that she was receiving. Jeremy also had the experience of having a new child born and went through the process of doing some estate planning. While the attorney covered all of the physical assets of the family and how they should be distributed, the online assets were not covered. These two experiences led Jeremy to come up with the idea for legacylocker.com.

I think that protecting these online assets are almost as important as the rest of what we do as estate planners. Our society is moving increasingly online, and during our lifetimes, we will accumulate quite a trail of digital “life”. In order to protect that legacy and to pass it on to our families, it will be important to have a service like legacylocker.com. Oddly enough, the idea seems to be gaining some legs. I talked about legacylocker.com on our radio show on Saturday (neversettleforless.net) and on Monday, CNN had a story about Legacy Locker. I guess I scooped CNN. Anyway, we are going to be rolling out this service to our clients in the near future and I suggest you check it out at legacylocker.com.

Media Blitz!

Lots going on here at Smith Barid, LLC this month!

First, Mike and Richard were interviewed by Lyndy Brannen on the Good Morning show (WJCL ABC-22) last Tuesday. If you missed all the fun at 6:30 that morning, catch up on what you missed by clicking here. You’ll find the video clip on the far, right column of the page. Just click play and it’ll be like you were there!

Next on the agenda, Richard and Mike will be teaming with local attorneys Howard Spiva and George Lewis to bring back the popular local radio talk show “Never Settle for Less”. The show has a broad format and will NOT be a “law talk” show.

We’ll be covering a wide range of subjects and welcoming many local and national guests. The idea behind the show is to bring you information and entertainment that helps make you (even more) healthy, wealthy, and wise. Tune in to WTKS AM 1290 in Savannah each Saturday from 10am to 12pm EST beginning 3/14/09. If you’re outside our broadcast area (or are just a technophile) you can listen online here.

Finally, word on the street is that Mike has yet another television appearance coming up later this month. More on that to come…

If you’ve not already, check out our newsletter for regular updates from Smith Barid, LLC here and you won’t miss a beat.

The Most Important Things in Life Aren’t Things

NOTE:

There is good information in this post for everyone. In addition, however, there is A LIMITED-TIME OPPORTUNITY HERE FOR PEOPLE IN THE SAVANNAH, GA AREA FROM THE DATE OF THIS POST THROUGH FEBRUARY 21, 2009. DON’T MISS OUT!

The most important things in life aren’t things.

Most of us have heard, or even given voice to, this sentiment from time to time. How many of us prove our belief in this profound, but simple, idea by taking action?

How often have you sat with a family member around the table for a holiday dinner and heard those stories that make you laugh, cry, or lose yourself in reverie (if only for a moment)? Fleetingly you think, “I should really write this down,” or, “I should be recording this!” Sadly, we almost never do.

Well, since 2003, the good people at StoryCorps® have been making this easier to do. Some of the follow description comes pretty closely (but is not lifted directly) from a StoryCorps® flier I came across. Instead of fiddling around with flowery language, I wanted to get the word out to our reading public as quickly as possible.

You can learn more about StoryCorps® here , see their blog here, and listen to samples of their work here. The gist is that you get an opportunity to sit down with a loved-one for a 40 minute session and ask them questions about themselves, their lives, their memories – in a studio-quality environment.

The session is, of course, recorded. You then get a free CD to keep and share and the conversation will be preserved at the Library of Congress as part of the StoryCorps® project.

StoryCorps® advances the idea that everybody’s story matters and every life counts. Theirs is the largest oral history project of its kind – an attempt to preserve a picture of who we are as a nation.

FOR PEOPLE IN AND AROUND THE SAVANNAH AREA AT THE TIME OF THIS POST THROUGH 2/21/09:

The StoryCorps® MobileBooth (mobile, airstream-type studio) is in Savannah, next to the Telfair Museum of Art at the corner of President & Barnard Streets, just off of the square until 2/21/09. You can participate in this great project by clicking here to make your reservation.

Small Business Stimulus

There are some small business provisions in the new stimulus bill that may help to loosen credit for small businesses. CNN has a good article here http://tinyurl.com/awndty that gives some basic information about the provisions for small business. I guess no one has had a chance to read it all, so no details here, but gives a good basic idea.

Our Veterans

Along with about 86,000,000 of my closest friends (according to Neilsen numbers), I got out my chips & salsa, my wings & hot sauce, and my Prilosec & Rolaids last night. I sat down to watch the spectacular production that is the NFL’s championship football game.

In addition to the necessary players from each team and referee, there was a seeming cast of thousands (ok, maybe dozens) at center field for the coin toss. Tossing that coin, as I’m sure many of you saw, was the current Commander, U.S. Central Command, General David Petraeus. His participation and the always-breathtaking pass by the Blue Angels got me thinking about our men and women in harm’s way.

Wait! Don’t click away from this post yet! This is not a dissertation on the merits of the War on Terror. It is not a diatribe about our military action in Iraq or Afghanistan. Regardless of your politics, your thoughts on use of military force, or your politics – most of us can agree that we should do our best to stand by those serving in our armed forces. Part of the way we do that in our country is by providing certain benefits and services to our veterans through the Veteran’s Administration or VA.

Aid and Attendance is a part of those benefits of which many people have never heard. The VA Aid and Attendance program is for veterans and surviving spouses. It is in place to assure certain funding for these veterans and their spouses to get the assistance they need in basic, daily living activities (eating, dressing, bathing, etc.). Depending on circumstances, there may also be funds available to help these veterans and spouses who are in nursing care or assisted living facilities.

Not unlike Medicaid (another government benefits program), VA Aid and Attendance has its own set of regulations and hoops which much be jumped through to qualify. There are choices to be made and disclosures (regarding assets) which must occur properly. Also, like Medicaid, VA Aid and Attendance has certain maximum assets a person may have and still qualify.

If you or someone you love has a need for such benefits and is a veteran (or spouse of a veteran) it makes sense to speak with a professional who has knowledge in the area. Even if current asset levels are too high, there are often things an estate planning attorney can do to position those assets correctly and help the veteran and/or spouse to qualify for the benefits to which he or she is entitled.

From all of us at Smith Barid, LLC, we offer our sincere thanks to those who have served, and those who are serving, our country in our armed forces.

What Do You Want to Ask an Estate Planning Attorney?

If you had a free hour to sit down with an Estate Planning Attorney, what would you ask?  Tell us what your questions are and we will create blog posts around those questions.  Email me at msmith@smithbarid.com and we’ll start blogging your questions.

Thanks.

Michael H. Smith

Helping Your Children Meet Their Promise

As a parent of young children (two toddlers and a new baby on the way), one of the big concerns for me is how are we going to pay for their education.  I don’t know about you, but when I went to college (class of 93) and lawschool (class of 96), tuition did not equal the GDP of a developed nation.  It certainly wasn’t cheap, but it was attainable for your average middle class American family.  I’m not so sure that will be the case for our kids.  

If you want to see a projection of what it will cost for your kids, take a look at www.finaid.org.  This link will take you to a calculator where you can project tuition costs into the future.  My oldest son is four, and using the calculator and assuming he will go to a private college like I did, the cost would be $404,980.82 for four years of college.  That’s only one of my kids too.  The total for all three would be $1,436.649.91.  I don’t know about you, but that seems like an impossible number to me.

In the modern workplace, college is pretty much a requirement.  Paying for it seems like a dauting task.  I have discovered a tool reecently to help,  www.upromise.com.   UPromise is essentially a rebate program like your frequent flyer miles or cashback programs on your credit card, but instead of sending you the cashback, the rebate goes into an account for your children.  When you sign up for the site, you register your credit cards and debit cards and then as you spend money at participating businesses, money is deposited into the account.  You can also register your grocery store discount card as well as shop online through UPromise participating vendors.  UPromise also allows you to send out emails to friends and family who can then register their cards and earn money for your children as well.  The UPromise website also features information about 529 Savings Plans and Student Loans.

If your children are already in high school and nearing their matriculation, you and your family would benefit from sitting down with a college funding advisor.  There are several out there.  The only one I am personally familiar with is Fox College Funding.  If you would like to speak with one of their consultants, send an email to Seth Kovensky at info@liveoakfs.com.  Let him know that I sent you and he will discuss your options with you.

Hope, Change, and the Inauguration

Tomorrow marks an historic point in our nation’s history. Regardless of your politics, most will, in one way or another acknowledge and take part (at least in some, small way) this watershed event.

Whether you’re a news junkie, or just occasionally glance at the coverage of this event, it’s hard to miss the scope and scale of what’s happening in Washington, D.C. President Barack Obama’s inauguration tomorrow will be the most elaborate, secure, and expensive in history.

The theme of the inauguration is “A New Birth of Freedom”. We know that President Obama’s theme for his campaign and fledgling administration is “Hope and Change”. What does it take to deliver the opening of this new administration, this bridge to a place of hope and change? A massive undertaking, a show of powerful organization and funding to rival all inaugurations before.

According to news reports, “Obama will wear bullet-resistant clothing, speak behind a protective glass shield and ride in the parade in the armored Cadillac limousine, with doors and windows so thick that he probably would survive a bomb blast.” There will be 58 different agencies working on the project and the price tag to the Presidential Inaugural Committee alone will be around $45 million.

In order to create this event and set the stage for the new president to pass his legacy on to the country, it was required that his team plan not just for what’s probable, but for what’s possible.

The same is true for you as you contemplate what’s necessary to assure a smooth transition for those you love in the event you become incapacitated and when you, ultimately, pass away. It is critical that you leave as few things as possible to chance. A properly created estate plan will help you to create this kind of security for those you love.

At a bare minimum, a good basic estate plan will include a will and/or trust, a durable power of attorney, and an advance directive for health care. A carefully designed plan, set up for you by a qualified estate planning attorney, will go even further to anticipate (and smooth over) as many of life’s bumps in the road as possible.

So, whether you take time out of your day tomorrow to watch the inauguration live, or you catch the highlights on tomorrow’s evening news – let this ceremonial transition of power remind you of the responsibility you have to assure just such a seamless transition for those you love and may, someday, leave behind.

Protect Yourself and Your Family from the Costs of Long Term Care

The odds that you will end up in a nursing home before you pass away are high. Some studies show the probability of adults over the age of 65 needing a Long Term Care stay at some point during their lives nearing 50%.  Most folks, including many of the clients we meet with in our estate planning practice have no plan to minimize the burden on their estates and their families.  The truth is that people often avoid facing the reality of the Long Term Care threat, avoid taking action while they still can and avoid discussing their Long Term Care plan with their families.

The odds of falling prey to Long Term Care are staggering and the cost can be even more so.  A year in a Georgia Nursing Home averages more than $40,000.00 and promises to keep rising.  Many Americans hold the mistaken belief that Medicare and Medicare Supplemental Insurance will cover Long Term Care.  At best, Medicare covers only part or all of the first 100 days of care.  Most Long Term Care costs are paid out of your own pocket.  Once your assets have been spent down to the applicable poverty level ($2,000) you may qualify for Medicaid, a government Long Term Care program. Medicaid is a welfare program.

Against this backdrop, Long Term Care Insurance (LTCI) has become one of the fastest growing insurance products in the country. Fortunately LTCI can be designed to fit almost any budget. Most LTCI policies share some common features you should know and should be looking for:

1.  Benefit Amount: How much will the policy pay?

2.  Benefit Triggers:  When will the policy pay benefits?

3.  Inflation Protection:  Will the purchasing power increase?

4.  Level of Care: Are Custodial and Intermediate Care covered, along with Skilled Nursing Care? Is Home Health Care covered?

As with any form of insurance, the policy is only as good as the ability of the insurance company to pay your claim.  Check out the financial strength and reputation of the insurance company and seek competent legal counsel to interpret the contractual provisions of any LTCI policy before you sign on the dotted line.  As always, when considering these types of planning strategies, talking with a competent estate planning attorney before you sign any contract is a must.