6 Insurance Policies You May Need and Not Have

6 Insurance Policies You May Need and Not Have

You probably already have homeowners and auto insurance. But there are many other types of policies that can help safeguard you and your family from unforeseen financial disasters. Speaking to a qualified insurance agent and reviewing your coverage and personal circumstances is a prudent course of action to help ensure that you and your family have adequate protection. Here are some often-overlooked common types of coverage that can make recovery easier in the event of an insured loss:

  1. Flood insuranceMany mistakenly assume that flood damage is covered under a traditional homeowners insurance policy. Sadly, it is not, and the worst way to learn this is after a flood. Speak to a qualified insurance agent to find out if your home might be vulnerable to floods and how to obtain coverage through FEMA to help protect to.

  2. Disability insurance.Sometimes this is available as a benefit through your employer. But if it isn’t, you can still purchase private coverage that will pay should you become disabled and unable to work.

  3. Personal umbrella policy. Did you know that you can purchase additional coverage that picks up where your homeowners and auto policies leave off? A personal umbrella policy might be a wise choice, especially if you have a lot of assets. You can often purchase $1 million or more of additional coverage at a relatively inexpensive rate.

  4. Unemployment insurance.While most are familiar with the government-sponsored program, you can also purchase insurance privately that could help pay the mortgage for a period of time should you unexpectedly lose your job. Coverage such as this can provide extra security, especially in an uncertain job market, and when you have dependents to support.

  5. Long-term care insurance.Many mistakenly assume that Medicare will pay for assisted living, nursing home or private care should you become incapacitated as a result of old age or a chronic medical condition. Medicare limits coverage for such care, usually restricting it to a short period of time after a hospitalization. The type of care that many Americans require as they age is typically excluded and requires coverage under long-term care policy.

  6. Riders for excluded items.You might assume that all of your belongings are covered under your homeowners insurance policy in the of event of theft, fire or some other loss. However, certain types of items are often excluded depending on your policy, such as artwork, musical instruments, jewelry, guns, cash and certain electronics. Depending on your policy, you might need to take out riders to specifically cover such items. You should speak to your insurance agent to see what is and is not covered under your policy.

The worst time to find out that you lack the coverage you need is after disaster strikes. Be proactive and take the time to review your current policies — and purchase the insurance you need to protect what matters most.

#insurance #retirement #wellcents #policies

Estate Planning Basics

Estate Planning Basics

Estate planning can be simple or complex depending on your particular circumstances. However, there are certain basic documents that everyone should consider preparing to ensure their wishes are carried out should they become incapacitated and in the event of their passing.

Will or Trust. Both of these documents specify who will receive various assets upon your death. They can include homes, savings and investment accounts, personal effects (like collectibles, jewelry and furnishings), businesses and even intellectual property. You can use either a last will and testament or a trust to accomplish this, although there are important differences in terms of privacy considerations and probate depending on which option you choose. It’s also important to specify guardians for any minor children.

Advanced Directives. Also called a living will, this outlines what medical and supportive treatments you want administered and which you want withheld in the event you’re unable to communicate your wishes. While unpleasant to think about, consider the burden you’re lifting from loved ones if they ever have to consider removing a feeding tube or ventilator.

Durable Healthcare Power of Attorney. This document assigns a healthcare proxy and can be useful for decisions not specifically enumerated in the living will. The healthcare proxy is able to speak with doctors and access your private health information to make medical decisions on your behalf.

Durable Power of Attorney. You can use this document to appoint an agent to handle your financial affairs should you become incapacitated. This person can pay your bills, deposit or withdraw money from bank accounts and sign financial documents for you. Without one, your loved ones may face a lengthy and complicated court proceeding to petition for guardianship or conservatorship.

Beneficiary Designations. It’s important to designate beneficiaries for all retirement accounts (401(k)s, IRAs, etc.) and life insurance policies. Contingent beneficiaries are named in the event that the primary beneficiary is deceased at the time of your death. If there are no named beneficiaries, the court system will decide who will receive these assets.

Letter of Instruction. While this document does not carry the legal authority of a will, it can be a useful means of communicating your wishes to loved ones after you pass away. You can include your preferences for funeral arrangements, locations of important paperwork, recipients of sentimental items with little value and even just a final message to those you love.

How to Proceed

Ideally, you should engage an experienced estate planning attorney who is an expert in the laws and regulations of your state. He or she can also help you examine any particular aspects of your specific situation that might impact your plan. However, you can also use an online legal service like LegalZoom or Rocket Lawyer to prepare basic documents — but whichever manner you choose, the most important thing is that you tackle this critical task.

#estateplanning #estate #retirement #planning #wellcents




Revocable vs. Irrevocable Trusts: Which Is Right for You?

Revocable vs. Irrevocable Trusts: Which Is Right for You?

A trust is a legal instrument where one person (the trustor) grants another person (the trustee) the legal right to hold title of assets for the benefit of a third party (the beneficiary). Depending on the type of trust, they’re often set up for a number of purposes, including:

  • Creditor protection: Certain types of trusts can protect assets from creditors and lawsuits.

  • Asset safekeeping: A trust is a legal entity that holds property, and as such it can be a safer choice than simply giving assets to a relative or other individual who could lose them in a legal entanglement like a lawsuit or divorce.

  • Tax shelter benefits: Certain trusts allow assets to transfer to beneficiaries without being subject to estate taxes.

  • Privacy: The terms of a will may be public information depending on where you live, whereas the terms of a trust can remain private.

  • Estate planning: Trusts allow minor children to receive assets with the stipulation that a trustee manages those assets until the child reaches adulthood.

  • Incapacity. A trust can allow a person you designate to step in and manage your assets in the event you become incapacitated without having to petition the court for guardianship.

  • There are many different types of trusts, but one of the main differentiators that allows a trust to function for different purposes is whether that trust is revocable or irrevocable.

    One can alter the terms of a revocable trust at any time. The owner could decide to eliminate or add beneficiaries and modify the terms under which assets are managed.

    While this offers flexibility, it also greatly limits some of the benefits trusts can offer. Typically, revocable trusts do not confer tax shelter benefits or protection from creditors. In many cases, however, they can avoid the probate process and provide greater privacy than a will.

    An irrevocable trust, on the other hand, cannot be changed once it’s established except under very rare circumstances. And any changes generally require the intervention of a judge and the consent of all parties involved. You’re permanently giving up control of your assets by placing them in an irrevocable trust. This is why it’s important to be very certain that your needs or reasons for establishing an irrevocable trust are not likely to change over time.

    Irrevocable trusts require serious contemplation, but they can offer a number of advantages over revocable trusts, including protection from creditors and lawsuits, tax shelter benefits and asset protection from Medicaid. In essence, there is a direct tradeoff between control of assets and the benefits and protection a trust offers.

    An Important Decision, No Matter Which Type You Choose

    An Important Decision, No Matter Which Type You Choose

    #estateplanning #estate #retirement #planning #wellcents #trusts


    1. https://www.thebalance.com/pros-and-cons-of-revocable-living-trusts-3505384

    2. https://www.investopedia.com/ask/answers/071615/what-difference-between-revocable-trust-and-living-trust.asp

    3. https://money.usnews.com/money/personal-finance/mutual-funds/articles/2014/06/19/how-to-choose-between-a-revocable-and-irrevocable-trust

May Your Will Be Done

May Your Will Be Done

Writing a will is one of those things that you know you ought to do, but many of us try to avoid. A will is the way you authorize the transfer of your assets to your spouse, children or others after your death. If you don’t have a valid will, your home, bank accounts and other possessions will be dispersed at a court’s discretion in a probate proceeding — and the fact that you told your nephew he could inherit your classic car may make no difference to the judge.

What’s in a Will?

A will is basically a written statement detailing who should receive your property. In most states, it must be signed by a witness, while others require a notary. It must name an executor, the person who will oversee the legal process of transferring your assets. That can be your spouse, an adult child or a trusted friend, attorney or banker. Be aware that executors are often paid around 2% to 5% of the value of the estate for their work, even if they’re not professionals.

What a Will Can — and Can’t — Do

A will can transfer many types of property: real estate, intellectual property like patents and real property such as cars, furnishings, artwork and collectibles. It can also transfer shares in a partnership or corporation, though that may depend on the by-laws or partnership agreement.

However, understand that there are limits to what can be in a will, such as if you have property that’s held in joint tenancy with someone else, like a spouse — or financial assets such as retirement accounts, brokerage accounts or insurance policies for which you’ve signed a beneficiary form.

In addition, you can’t put overly onerous conditions on bequests, such as requiring someone to get married, divorced or change their religion. Some conditions, such as leaving money that someone is to receive if they go to college, for example, might be ok. And you can’t leave your money to your cat; animals can’t own property, but you can leave money to someone else to take care of your cat after you’re gone.

To Hire or Not to Hire

There’s no legal requirement that you hire an attorney to create your will. However, if you have complicated finances, family members or business partners who could fight over inheritance, or just a desire for peace of mind, you may want to hire a specialized estate planning attorney who is up to date on the latest regulations in your state and can help ensure your interests are represented faithfully.

You can also use a do-it-yourself will kit or an online service such as LegalZoom, Rocket Lawyer or Quicken Willmaker & Trust. If your financial life and your wishes are simple, one of those may suffice. However, be aware that any mistakes you make can be costly for your heirs to undo.

Don’t Hide It

You have a will. Now, where to keep it? If you use a bank safe deposit box, make sure two other people — your spouse and either a child or your attorney — have a key and access to the box. Otherwise, your heirs will have to get a court order to drill the lock. A secure, fireproof safe at home is another option. You can also give a copy to an attorney you trust and let your heirs know who that is. However, some jurisdictions may require an original signed document — not a copy.

Facing Hard Facts

Writing a will means you have to envision a future you’re not a part of. It can also mean making difficult decisions about how to treat children and other relatives. But it’s important not to bury your head in the sand about preparing a will. Postponing those decisions will not make them any easier, and finalizing your wishes can take one more nagging “to do” item off your list and safeguard your final wishes.

#estateplanning #estate #retirement #planning #wellcents

Long-Term Care Basics - Residential Care

Long-Term Care Basics - Residential Care

Sometimes as we get older, we require assistance to perform basic activities of daily living. This can result from normal aging or a progressive disease or condition. And while many seniors prefer to stay in their own home, many will require more help than can be offered in that setting and must be cared for in a residential facility. You can learn about home-based options for long-term care in part one of this article, but here we will discuss options for when care at home will no longer suffice.

Assisted Living Facilities

An Assisted Living Facility (ALF) is a residential facility where clients live full time. ALFs typically provide some health care services along with socialization, meals and activities. They can be a stepping stone between living at home and a nursing home or an alternative to nursing home care for someone who’s relatively healthy: ALFs often require clients to meet minimum standards of mobility and self-care, such as being able to get in and out of bed unassisted and feed themselves. State regulations vary widely, so ALF policies do too.

Some ALFs have dormitory-style housing or full apartments. Others provide transitional care with a residential wing for clients who are healthy and mobile and a medical wing for more advanced care. Nationally, the median monthly cost of an ALF is $4,051.

Nursing Homes

A nursing home is a residential facility that can offer the highest level of medical care outside of a hospital setting with skilled nursing available 24/7 and doctors that see residents on site. Other amenities can include meal preparation, laundry and housekeeping services, social activities and planned outings. Not everyone will end up in a nursing home, but for many seniors, this is a part of their long-term care journey. Nationally, the median cost is $280 a day, which works out to $8,516 per month or $102,200 annually.

Memory Care

Some facilities offer specialized care for patients with dementia or Alzheimer’s. The services offered in Memory Care Centers can run the gamut depending on the level of health and functioning of the patient. They can be a separate wing of a nursing home or ALF as well as independent residences — and their costs vary accordingly. Such facilities often incorporate physical safeguards to prevent wandering and safety protocols such as locking up potentially poisonous items, removing individual kitchens from residents’ rooms, and ensuring patients are eating a healthy diet.

Help Now, and Help When You Need it

More information is available from the federal government at https://acl.gov/about-acl/administration-aging. In addition, your state should have one or more departments that assist with legal, financial and medical advice for seniors. Check your state’s health website as a starting point. Many counties and towns offer community programs and other services for the elderly. A phone call to city hall or the county administration office can put you in touch. And if you’re a veteran, there are programs — including nursing home assistance — available through the Veterans Administration.

No one expects you to be an expert on an industry — and make no mistake, eldercare is a big industry. Sit down with your doctor and a qualified financial planner to come up with a strategy to fit your budget and needs. Whether you’re planning for yourself or your parents, it’s important to have an open and frank discussion about everyone’s wishes and means so that you can make the best plans possible.

#estateplanning #estate #retirement #planning #wellcents


1. https://pro.genworth.com/riiproweb/productinfo/pdf/131168.pdf

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