Overland Park Attorney

How Hard Is Your Money Working?

Your money should always work for you, but when you're retired, it needs to work even harder. Help safeguard your retirement by placing demands on your hard-earned cash.

A recent article published in MoneyWatch, “Seven demands retirees should place on their money,”lists these important money demands:

• Growth: Make sure you still have a growth component in your portfolio. You don't want to be faced with trying to live on an income that no longer covers your costs.
• Safety: Keep your money in a safe place in the care of a reputable custodian who is not part of the investment company. Two words of warning: Bernie Madoff.
• Tax Efficiency: Remember what Mom used to always say, “It's not about how much money you make, but how much money you keep.” She was right - after-tax cash flow is a must.
• A Healthy Long-Lasting Income: Ask your financial planner to conduct a cash-flow analysis to see how your money shakes out in five, ten, twenty and thirty years. Get help creating a plan that takes taxes, healthcare costs and inflation into consideration and one that increases the probability that you’ll receive an income for the rest of your life.
• Control: Have some control over the access to your investments. What if there's an emergency?
• Access: Set some money aside for an emergency fund or rainy day fund, in case you have an unforeseen expense.
• Effective Estate Planning: Make sure that your estate plan lets your loved ones inherit your estate in the least-taxed, most cost-efficient way.

Make your money work hard! Speak with a qualified estate planning attorney.

If you want to learn more about Estate Planing in Overland Park, KS (and throughout the rest of Kansas and Missouri), please visit my Estate Planning website.

Reference: MoneyWatch (August 3, 2015) “Seven demands retirees should place on their money”

 

 

Getting Younger Heirs to Invest

As is always the case, people in their 20's today have different priorities than their parents and grandparents. Younger priorities often do not include investing in the stock market. This has caused some consternation on Wall Street because today's young adults stand to inherit a lot of money from their parents.

Much has been written about the millennial generation, those people born between 1980 and 2000. Their work ethic, tastes and even general politeness have been questioned by older adults.

One thing that some believe is different about millennials is that they do not just get financial advice from professionals. They also get advice from friends, social media and online gurus.

This is seen as a problem for Wall Street firms who are in the business of selling financial advice and getting people to use their services to invest. Since estimates speculate that millennials will inherit $30 Trillion from their parents and grandparents, it is paramount for Wall Street to attract the attention of these young heirs.

As Bloomberg reports in an article titled "Wall Street Has Its Eyes on Millennials $30 Trillion Inheritance," Wall Street has taken an unusual strategy to attract the attention of millennials, using animation and cartoon like graphics.

Click over to read the original article and see some examples of the cartoon graphics Wall Street firms are using.

One takeaway: if you are planning on leaving a millennial a large inheritance, it might be a good idea to have an estate plan that takes the choice of investing away from them and giving it to a professional.

A trust, for example, could be used instead of leaving the inheritance outright with a professional trustee to help protect the inheritance from and for your millennial loved ones.

If Wall Street is concerned that millennials will not invest their inheritance prudently, perhaps it would be wise for you to be concerned as well.

If you want to learn more about Estate Planing in Overland Park, KS (and throughout the rest of Kansas and Missouri), please visit my Estate Planning website.

 Reference: Bloomberg (March 3, 2015) "Wall Street Has Its Eyes on Millennials $30 Trillion Inheritance"

 

 

Blowing an Inheritance

Happy New YEAR!!!

 

People often fear that leaving large sums of money to their relatives will result in those relatives blowing the money on things they do not need. A recent case in the United Kingdom demonstrates that this is not an unfounded fear.

 

Euan MacAndrew, a 24-year-old, was left an inheritance by his grandfather that amounted to approximately one-hundred thousand pounds. MacAndrew then proceeded to do what was probably the last thing his grandfather would have wanted him to do with that inheritance.

MacAndrew wasted it all on cars, clothes and drugs.

Eventually, MacAndrew was arrested for selling cocaine. He might have turned to dealing drugs to continue the lifestyle that he began after receiving the inheritance and wasting it all. The full story was recently reported in The Mirrorin an article titled"Lad, 24, blew 100K inheritance on cars, clothes and drugs before being busted for dealing cocaine."

 This is something that unfortunately happens all too often.

 People who do not have a lot of wealth of their own often waste it when they come into it. When they have not earned the wealth for themselves, they do not always understand the true value of it and how difficult wealth can be to maintain.

 The good news is that this is something that can be prevented.

 You do not have to give an inheritance to a relative as a lump sum of cash. You can use trusts or other legal instruments to distribute money over time or on an as needed basis.

 If you think your relatives might waste their inheritances, talk to an experienced estate planning attorney about how you can best prevent that from happening in your family.

For more information about Estate Planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), please visit my Estate Planning website.

 Reference: The Mirror (December 19, 2014) "Lad, 24, blew 100K inheritance on cars, clothes and drugs before being busted for dealing cocaine"

 

 

 

Trustees Liable For Bad Investment Strategy

When a trustee chooses an unwise investment strategy that trustee can be held liable if the trust assets are unnecessarily depleted as a result of the trustee's actions. A recent case in Massachusetts illustrates this principle.

As reported by the Wills, Trusts & Estates Prof Blog in "New Case: The Woodward School for Girls v. City of Quincy," a recent case in Massachusetts held that a trustee who only invests the trust assets in bonds is liable to the trust for loss of trust principle as a result of the trustee not properly taking inflation into account.

In this case it appears the trustee sought investment advice, but ignored that advice. If the trustee had followed the advice, then the trust would have more gains than were realized by the trustee’s insistence on only investing in bonds.

A trustee is required by law to act as a reasonably prudent investor would. Accordingly, the court in this Massachusetts case determined that the trustee was not acting in a prudent matter. Consequently, the trustee will be responsible to pay damages for difference between what the trust actually earned and what it would have earned had the trustee invested as a reasonably prudent investor.

Trustees who are not “professional corporate trustees” face personal risk if they follow their own investment strategies. Non-professional trustees should consider getting advice from lawyers and financial experts about the best way to invest trust assets.

For more information about Estate Planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), please visit my Estate Planning website. 

Reference: Wills, Trusts & Estates Prof Blog (August 18, 2014) "New Case: The Woodward School for Girls v. City of Quincy"

 

 

When Trustees Work For Themselves

Trustees are required to act in the best interests of the trust and its beneficiaries. However, sometimes trustees are tempted to make decisions about a trust's finances that benefit the trustees’ financial institution more than the beneficiaries.

When Eli Lilly, Jr. passed away, he directed that 10% of his estate be left in trust to an Indianapolis church, The Christ Church Cathedral. As reported in the International Business Times in an article titled "Christ Church vs. JPMorgan: Bank Allegedly Mismanaged Millions," Lilly actually left three separate trusts for the church. Each trust was to be handled by a different bank.

The article does not say how, but at least one of the trusts eventually came under the management of JP Morgan. The church alleges that the bank invested trust assets in risky financial ventures controlled by the bank. It further alleges that the bank received more value out of these investments than the trust. The church claims a loss of $13 million.

This case highlights an inherent risk when trustees are financial firms that sell investment products. The trustees certainly have a financial interest in channeling trust assets into their own products, but that might not always be in the best interests of the trusts. Rival financial firms might have more appropriate investment products for the trust.

Trustees are supposed to act as reasonably prudent investors. Accordingly, they should be investing trust assets wisely and not just in the products they sell.

That is not to say all financial firms will make poor trustees. However, it is something to consider when designating a trustee. It is not always a good idea to choose a trustee who might have an interest in using trust assets to further his or her own firm.

For more information about Estate Planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), please visit my Estate Planning website. 

Reference: International Business Times (August 13, 2014) "Christ Church vs. JPMorgan: Bank Allegedly Mismanaged Millions"

 

 

Make Sure You Get Good Financial Advice

Many people could use help from a talented financial planner, but they don't know where to begin when looking for one, says an attorney and certified financial planner in a recent article. An estimated 300,000 people in this country call themselves financial advisers, and there's a wide variety of skill levels among them.

Almost all of us can agree that we receive a lot of free advice, to include in the financial and estate planning area.  It can get complicated quickly, and some people do not know what to do. As a result, many do nothing, or they accumulate cash - which does not earn them anything. Others will start to think about planning when they are in their late 50s and early 60s, realizing that their work life is short. Panic can set in. However, a good financial planner can help clarify and prioritize your goals, and help you make the most of your money.

A recent USA TODAY article, titled “How to find the right financial adviser,” states that no matter where you stand financially, you can benefit from the advice and guidance of a qualified financial planner. The article advises that even for those with modest savings can see a significant change in their lives with a one- or two-hour session with a planner.

Many financial planners are members of professional organizations that certify them, such as the Certified Financial Planner Board, which is an independent professional regulatory organization. To earn this certification, a financial planner must meet all the requirements, including extensive study and a comprehensive test on the financial planning process, investment planning, income tax planning, retirement planning and employee benefits and estate planning. There are several other prominent financial planning designations, and you should work with your estate planning attorney, who either will have this type of certification or know of a qualified financial planner to help you design a plan to meet your objectives.

For more information about Estate Planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), please visit my Estate Planning website. 

Reference: USA TODAY “How to find the right financial adviser” (July 9, 2014)