Estate planning

christie_dJuly 22, 2005

Hi gang!

Looks like I'm finally ready to retire, but I thought I'd just pass on some great advice my parents have been giving me for quite some time - get your estate plans in order. You're never too young! Don't let a major life event (retirement) be the reason (though its never too late - unless you're gone!).

If you live in the Chicago area, I just found a wonderful estate planning firm: Law Offices of Craig A. Janas, LLC. He's a wonderful young man from a family of estate planning attorneys (over 90 years experience). Very comfortable to work with - and get this: no billable hours - only flat fees...forever. Honestly, Craig is the type of attorney you would recommend to family and friends (how many of you can say THAT?!).

In any event, don't wait until retirement or don't wait long after that to plan for your permanent retirement - get your estate in order today!


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Suppose your neighbour/friend/whatever were to knock on your door, and when you answered, look down at a sheet of paper and say that, since it was possible that you might to die tomorrow, that if so, such and such and so and so was what was going to happen to your assets ...

... and the Lord knows what to your minor kids.

That the laws of your State/Province said so.

That you could, however, suit yourself about what should be done with your stuff and your kids ...

... but only if you made a will.

Before you die.

Too late after - though you might find some (good?) effective attornies in the Great Beyond, supposing you'd gone to your preferred situation (I was going to say, "location" but "location" is less important than other circumstances, I think, especially the folks that'd be sharing the place with you).

What would you say?

Some thoughts to ponder.

ole joyful

    Bookmark   August 2, 2005 at 7:26PM
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Those are thoughts I put into writing.

Happy holidays to everyone!


    Bookmark   December 15, 2005 at 3:33AM
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good luck to everyone this tax season! (groan...)


    Bookmark   April 1, 2006 at 5:23PM
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Hi again Christie D,

More or less preliminary estimation of income tax (our deadline isn't till Apr. 30) leads me to the provisional conclusion that it will likely be less than 10% of income, this year.

Partly the result of giving approx. double that amount to charity - part of which is more or less to make up for a period some years back when I was pretty well p!ssed off at everything, and didn't contribute much at all for several years.

Political contributions, as well, that give some substantial tax benefits.

Hope you all have a great week.

ole joyful

P.S. Probably some heavy duty taxes anticipated at death, however - am giving some thought as to how to alleviate that situation somewhat.

o j

    Bookmark   April 2, 2006 at 2:14PM
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"Probably some heavy duty taxes anticipated at death"

ah, the dreaded "death tax" or "double tax" - according to Craig, these are 100% avoidable (unless you love the IRS!)


    Bookmark   September 17, 2006 at 7:34AM
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Christie D,

You and I don't live in anything like the same jurisdiction.

In Canada, the major tax avoidance issue for most ordinary people is that they can obtain any increase in value of their owner-occupied home free of income tax. But mortgage interest isn't deductible.

I have never owned a home, partly due to the fact that for a number of years I was housed by my employer.

Also, when they had a discussion of how many places a person had lived in over at the Kitchen Table, I think I had counted that I'd lived in about 22, all told, during my 77 years (not sure whether it was after I moved, early last year - I've been here at Gardenweb for some time).

Some years ago, a number of clergy felt that they'd like to own their own homes, partly in order to benefit from the capital gain as they increased in value.

I said that they probably wouldn't gain as much as they thought ...

... for clergy tend to move every few years, and when the real estate, lawyer's, home inspection, mortgage insurance, etc. fees were taken into account ...

... their net gain at the end of their career would quite likely be somehat smaller than their rough calculation had indicated.

I differ from most financial advisors, who recommend tax-deferred retirement accounts (Registered Retirement Savings Plan - much like your 401 plans), as I saved 26% going in ... and am paying about 36 - 38% going out.

I find those apples a bit sour.

Not only that, I can achieve several of the benefits of such plans without the restrictions and the hassle - and when I cash out, half of my gain comes free of tax, while the RRSP (or the successor RRIF holders) are taxed on every dollar that they withdraw. Not only that - at age 70 and after they are required to withdraw a specified minimum amount each year, and in a year when I have a substantially increased income, I'd prefer to avoid developing other income as well, especially if it puts me into a higher tax bracket.

Enjoy your week.

ole joyful

    Bookmark   September 19, 2006 at 6:06PM
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Estate planning should (but seldom is) done at any major life event, such as marriage, children, house purchase, divorce, etc. Mea culpa -- I'm guilty too, we're just finalizing some legal details at this point.

At minimum, one should have a will and a durable healthcare power of attorney. The Healthcare PoA should also contain your wishes regarding resusitation -- if you are a believer in Do Not Resusitate (DNR) instructions, it must be specifically stated in the PoA or your family can overrule your wishes. Despite the glamor of TV enactments, resusitation only works in 15% of the cases, and often breaks bones and causes pain.

Ideally, you would also have a durable general power of attorney, in case you became mentally incapacitated due to an accident.

Although there is a huge push to get people to have Revocable Trusts, there are some downsides to RTs that I have seldom seen discussed. It is critical that the Trustor(s) keep the beneficiary list updated, and to indicate not only a successor Trustee or Trustees, but remainder Trustees as well if the successor Trustee(s) are unable to serve for any reason.

I mention these points because my in laws have had an RT for over 20 years. Their list of contingent beneficiaries is outdated - some cousins are included, others are left off; some of the ones listed are much more affluent than the others, etc. However, since one of the Trustors has died, the Trust is now an Irrevocable Trust -- the surviving Trustor has NO power to change the terms of the original trust. All she can do to "even out" the possible unequal distribution of assets is to deplete the half of the assets her husband owned, and change the contingent beneficiaries on her half of the Trust which remains Revocable. Also, the language of the original Trust on certain issues was not standard and a subsequent estate attorney has advised us that the wording is definitely open to interpretation, something you do not necessarily want to hear from a lawyer! So sloppy legal work does happen, and it is difficult for us consumers to judge the level of expertise we are paying for.

One thing many people fail to do is update the beneficiaries on their insurance policies and retirement accounts. One of the trickier things is that when vendors change, or even when new computer systems are put in, details can get lost. We accidentally discovered on my husband's retirement plan that my designation as his primary beneficiary had somehow disappeared from the current system, even though I had paperwork confirming me as primary on the previous account statements on the old computer systems. It had been gone for four years before we found out!

Also, if you have multiple 401k's from different employers -- for the sake of your heirs, please consolidate them into one account! It will make their lives, at a difficult time when they are grieving for you, much, much easier.

    Bookmark   November 17, 2006 at 1:52AM
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Confession time.

I hadn't checked on the designated beneficiary of my (small) life insurance policy for some time.

It is named as the person who was my wife.

We've been apart for 35 years ... she's been dead for almost 2-1/2 years.

So - I guesss it's time to change it - what do you think?

ole joyful (more or less former personal financial advisor)

    Bookmark   November 17, 2006 at 3:12PM
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Wonderful advice from everyone! The downsides to revocable trusts are the ongoing fees for updates, reviews, and law changes. Try and find an attorney that doesn't charge for those things - mine doesn't!

Love to all!

    Bookmark   November 24, 2006 at 7:00AM
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Happy Halloween everyone!

    Bookmark   October 24, 2008 at 8:37PM
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Joyful, my name is jennifer wellinton, and watch the spelling please when you get around to adding a new beneficiary.

    Bookmark   October 27, 2008 at 9:09PM
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please add my name to the list of potential beneficiaries!


    Bookmark   July 15, 2009 at 10:10PM
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Can you guys spell, "Medicins Sans Frontiers"?

Also, as one who helped a few refugees work toward getting back on their feet, having started over more than 55 years ago with just the clothes on their backs, I'm cognizant of the need of our Church's World Outreach programs.

Plus ... if I contribute assets whose value has appreciated directly to them ... there's no capital gains tax to pay ... which, if to go to my estate, or one of my kids, or a charity indirectly, I'd have to pay tax at regular rate on half of the capital gain.

Actually, I believe that it's an endowment at age 85 policy ... and, currently having achieved the grand old milestone of 80, I'm looking forward to making it to 85.

Sorry to (maybe) disappoint.

ole joyful

    Bookmark   July 16, 2009 at 2:26PM
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Hi Everyone!

I hope everyone has a wonderful holiday season. I just visited our senior center to say hello to all my friends. At the senior center Craig Janas was there giving a talk on retirement and income planning. In this economy having another guaranteed source of income is such a necessity. Craig Janas showed me every product and plan available, and I am thrilled to say that I have a new guaranteed income plan that I cannot outlive and pass on to my heirs. It was nice to see all of my options and fit my needs to the available plans.

Ole joyful, did you change that beneficiary yet?


    Bookmark   November 13, 2011 at 12:14PM
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N ...

... o.

ole joyful ... who has a red face.

P.S. Actually ... my 85th birthday is next week ...

... and I think that it endows at 85.

Time for a visit to their establishment, possibly?

Dad bought it for me when I was about 15 - about $1,000. or $1,500. face value, I think ... plus about $4,000. of accumulated additions, with a couple of hundred loan.

Haven't paid premium of about $11.00 in years - they've been set up as a loan against accumulated values in the insurance, which were credited - and on which income tax was paid - annually.

Interest being charged at 6% annual rate ... and I could have paid it off from bank accounts paying about .25% per year ... or borrow on my secured line of credit at about 4.25%.

o j

    Bookmark   January 24, 2014 at 6:44PM
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