Sunday, March 31, 2013

59) The Third Estate

The Third Estate

assover, (with two Seders in the Diaspora), Holy Thursday, Good Friday and Easter, all arrived this week.  Students, teachers & parents took vacations, family members prepared gatherings & feasts, the S&P 500 hit a high, and tax preparers kept crunching numbers except for family functions and religious holidays.

            I remember a Sunday television show from my childhood that methinks was called 'The Third Estate'.  I believe it  was about religion; I believe it had relatively broad appeal.

            But I couldn't understand the title!

            I concluded that the Third Estate was humankind, and the First Estate was G-d's (or Heaven, if it’s real estate?).  However, I could never figure out who might be the Second Estate.

            As it turns out, in the Middle Ages, 'estates of the realm' were the ‘broad social orders of the hierarchically conceived societies as ordained by G-d’.  It was big in France.

            The Clergy occupied the First Estate in order to ordain Royalty and Nobility (the second estate), who, in turn, ‘settled privileges on the more prestigious commoners, or burghers (bourgeoisie)’ - the Third Estate.  Peasants made up the Fourth Estate.

            Although I believe that humankind has not evolved as much as we might have thought as children growing up in America, I believe that, to some degree, that society shows evidence of evolution.  I think most (although I fear maybe not an overwhelming majority) of the world’s people, now, supposedly, have rights: Human Rights, Civil Rights, and other legal rights; rights, such as to property - an estate.

            Everyone has an estate.

Basically, it’s everything you own, and to which you have rights.

            You would be wise to learn about, and plan your estate.  Everything from additional estate creation and protection (e.g. life insurance, investing, a business), to maximization (tax minimization, investing, protection from lawsuits, creditors, divorce), and settlement (legal devices & distributions, accounting & administration, and taxation).

Estate planning has two parts: the part while you're alive, and the part after you're dead.

Each part requires planning, usually documents, and is coordinated (it’ usually a basic estate plan from an attorney that may save cost.  And even if you pay aalot, how much more are you protecting?  100 times?  More?.

            While you're alive, it's prudent to have at least two documents:

1.    a Living Will/Health Care Proxy
2.    a Durable Power of Attorney

            Your Living Will (your will/wishes while you’re alive but can’t speak for yourself) states your wishes such as whether or not to be kept alive by artificial means.

            Your Proxy (i.e. agent, representative nominee) for your healthcare, names someone to make medical decisions for you, such as whether or not to have an operation, or pull a plug.

            You need to choose someone who understands your wishes and can make tough decisions.  In addition, you may need a substitute person in case the primary person can't/won't serve.

            A Durable Power-of-Attorney names someone as your Attorney-in-Fact to act on their behalf after the point of incapacitation; it’s durable.

            This can power can go into effect at its signing, or it can ‘spring’ into power by some event such as a doctor certifying incompetence.  Such are known as ‘Springing Powers-of-Attorney’.

Different powers can be granted to different people.

            Depending on what powers are appointed to whom, your Attorney-in-Fact can pay bills, collect income, file taxes, buy/sell property, and, maybe make gifts - a special power.

            These documents vary from state-to-state and probably should be coordinated with certain other documents such as Driver's Licenses, where you can donate body organs.

After you've departed, this world, your Will comes into play.  A Will is a final clean-up (vehicle) document for everything left over from, what are considered, ‘Will Substitutes’.

A Will Substitute is anything that takes precedence over & above (& prior to) your will.  Examples include certain joint ownership assets where the deceased's share automatically transfers to the other owner(s)(e.g. Joint Tenants with Rights of Survivorship vs. Tenants in Common), or naming beneficiaries on insurance, retirement accounts, and trust assets.

Your Will states who gets your stuff (e.g. home, money, art, intellectual property, royalties), and who takes care of the children, dependents, and pets.

Your Will may also, need to be specific to the state in which you are domiciled.

Divorce can void a will, and federal law (e.g. pension, bankruptcy), and state statutes usually trump a Will (e.g. a surviving spouse may be entitled to a third of their deceased spouse's estate - unless there's something like a pre/post-nuptial agreement).

Before death, a Will can be rewritten or modified with Codicils.

Estate plans need to be reviewed when tax laws change and personal circumstances change (e.g. marriage/divorce, death/births, disability/windfalls, change of state residence or states in which you own property.

            After death, a Will may allow you to 'speak from the grave' by doing things such as creating and/or having established trusts with personal guidelines for family members.

Wills can be challenged, and if not absolutely clear, can cause confusion.

            An estate goes through an administrative settlement process with each state in which property is located.  This makes sure that everything is accounted for, all monies are collected, all claims are paid, any taxes (e.g. income, gift & estate, etc.) are filed and paid, all beneficiaries are identified, and finally, all assets are distributed.  The Will states how and who does these things.  Things can go wrong.

            The person in charge of executing your last will, is named in your Will as your Executor/Executrix.  In New York the administrative process, called Probate (probating a will), is done by the Surrogates Court, usually with a Clerk.  Both, the Executor and Court are allowed to collect small fees for service, according to a state schedule.  (These fees should be tax-deductible to the Estate - and income to the recipient.)  Family members often waive their fee.  A Successor Executor/Executrix should be considered and listed.

            Should someone die without a Will (i.e. Intestate), then there's a state schedule of who is entitled to the property (e.g. spouse, children, parents, etc., ultimately, the State) that didn’t pass by Will Substitute.

            None of these documents should be kept in safe deposit box (you can leave photocopies, there for back-up).  They should be handy so that if the safe deposit box gets ‘sealed’, when the bank learns of the death of one of the key holders, you have access to them.  They’re important.

            More sophisticated planning, for privacy (court records are public, trusts and beneficiaries are not), tax issues, family issues (like divorce, providing for a minor or children of a prior marriage, or caring for a handicapped person), liability, business continuation, investing, or charitable donations can also be accomplished.  Some of it is not as difficult as it seems if you have a good financial planner, insurance agent,  and ultimately, estate attorney for the document preparation.

            in addition, prudent estate planning should coordinate with all kinds of insurances, elder law, and, possibly Planned Giving, whether it's for gifting (to a charity, and/or in order to qualify for Medicaid) or, possibly Long-term Care Insurance.

            Ideally, estate plans could be discussed with and explained to family members or loved ones.  This way, they know what you want.  And those who will be asked to serve understand what’s expected of them.

            Proper estate planning is a must.  Too many family, business, financial, and tax issues can arise causing immense strife, conflict, time, and cost.  All of this on top of the hurt and healing.

            You can save money, protect loved ones, assets and businesses, remove insult from injury, feel organized and confident, and instead of being a Bull, a Bear - or a Hog, be a SWAN (sleep well at night).

            Live for the good times, plan for the bad.

Is your estate plan up to date?

            Who's your Trusted Family Advisor©?


Tuesday, March 19, 2013

Conscious, Deliberate Decisions.

58)  Conscious, Deliberate Decisions. 

ecision-making is a process.  It's a rewarding one whether it's for goal attainment, smart decisions, your American Dream, quality of life, fame & fortune, simplicity, or a mental exercise - and exercise feels good.

            You assess a situation, you consider your alternatives and their repurcussions, and then make a conscious, deliberate decision.  Maybe you temper your mind with your heart, your gut, your moral compass, but you make a prudent choice using a smart process.

            Where will you live?  By the sea?  (I hate being land-locked but wouldn't want to lose my home or my life to a  hurricane.)  A city?  (More than half the world's population now does.)

            What will you do for food clothing and shelter?  Will you hunt?  Farm?  Sew hides?  Weave?  Live in a cave?  Build a log cabin?  Do you need money for these things?  If so, how much?  How will you get money?  Steal, work, public assistance, beg?

            Will you have children?  With whom?  How will you raise them?  Alone?  How about their clothing, a home, healthcare, and education?

            What about your health?  How might you pay doctors or buy medicine?  What if you can't work?

            How about old age?  Will you work til you die?  Who will take care of you if you're sickly?  Where will you get money?  Who will bury you?

            How will you get and manage money?  How much do you need?

            In life, you can choose your own path, otherwise it will be chosen for you.  You can live life on purpose or by accident.  You can be captain of your ship or a victim.  No decision, is a decision.

            It's up to you.

How do you make conscious, deliberate decisions?

            Who helps you make smart money decisions?

Who's your Trusted Family Advisor?

Friday, March 8, 2013

'Congress: SHAME ON YOU!'

57)  Congress: SHAME ON YOU!

f they were children they would have been given a ‘time out’ or a spanking.  If they were high school or college students, they would have been suspended or expelled.  If they were professional athletes or investment professionals, they would have been evicted and, maybe, banned for life; they, themselves, would have been having hearings.   If they were Employees at Will, they would have been fired.  If they were military personnel, they'd be demoted or even thrown in the brig.  In another country, they may have been overthrown or assassinated.

            Indeed, according to a New York Times columnist, a record number of politicians went to jail in 2012.

            They managed to destroy our credit rating, which made the US Government the safest investment on Earth.  It was thought so due to its power of taxation, never having paid interest late, never having defaulted on a debt, and, loosely, its supposed ability to ‘print money’.  Now there are for-profit corporations rated safer, and their responsibility is to their stockholders!  There's no transparency, and our civil liberties are smothered.  There was the Fiscal Cliff, tax change (the type I expected and to our benefit, but after such bickering) and now the Sequester.   Voters and residents are confused, upset, depressed, disillusioned, and demoralized, and Americans are forming militias and becoming Doomsday preppers.

            It seems as if we’ve switched from one step forward, three steps back, to one slow step at a time.  At least, the stock markets think so.  Employment’s slightly up, we’re most of the way through the winter, some holidays are approaching, and American morale may be a little better.

            But, it's still the other Golden Rule: 'The One with the Gold Makes the Rules'.  Money is so strangely intoxicating.

Many continue to suffer, whether it's not knowing how much tax to have taken out of their paycheck, or about unemployment, or having lost their home due to business & financial collapse or weather.

            Congress has become a childish power struggle, dividing the Union like the Civil War for which our entire society shall pay and suffer.  One of my friends also thinks it's racist.  It’s something we must overcome immediately before it escalates and something horrible happens; they are supposed to be working for us.

            How long are we going to trust them?  How far are we willing to trust them?  We can kick the out at election times.

            Should it return to being a volunteer position like when we were founded?

            When you look at the lists of the cities on Earth to live (based on factors such as happiness, healthcare, infrastructure), it's becoming more plausible to leave the US.  There's a whole community of older brothers and sisters out there from whom we can learn and with whom we can enjoy life.  So many speak English, balance work & play better than we, have excellent technology & infrastructure, are less crowded, and have daily flights to the US.  Some are much less expensive - further bettering your quality of life.

            Do you have a financial plan?

            Who's your Trusted Family Advisor®?