Category: Wisdoms

  • Internet-Drafted Estate Plans Don’t Save Money

    If you want to, you can devise your own estate plan without the benefit of lawyers or other trained advisors. All you need is a credit card, a computer, a printer, and access to the Internet. With those tools, you can come up with a set of documents that may or may not accomplish your goal. The problem is that you will never know. The ultimate success or the failure of an estate plan is rarely revealed during the lifetime of the “planmaker.” (No, planmaker is not a real word, but you know what I mean.)

    You have seen the commercials. You have heard the radio ads. But before you go to a website to have your estate plan constructed by a computer program, be sure to ask yourself this: Do I really believe that a brilliant lawyer, or a highly-paid radio personality who hawks these kinds of programs, would trust a website to come up with an estate plan for himself and his family? If it’s not good enough for them, why would it be good enough for you?

    You may not have as large of an estate as Mr. Fancy Shmancy lawyer or Mr. Radiobucks, but everything you own is everything you own, and it makes a difference to you whether it goes where you want it to go after you are gone. It also makes a difference to you who will make decisions on your behalf if there is ever a time when you can’t make them yourself. Do you want your hand-picked decision-maker talking with your doctor when you’re unable to speak, or are you willing to leave it to chance as to who steps up to the plate?

    The problem with computer-driven estate plans is that in the real world, more often than not, they don’t work. An effective estate plan involves far more than a set of documents, even very well drawn documents, that would stand up in any court in the land. For one thing, wouldn’t it be better to have an estate plan that will help you and your family stay out of court altogether? Going to court is not the end of the world, but it can be a royal pain. It would be better for you and your loved ones if you get your plan right the first time. It should also continue to work according to your wishes in light of changes in your health, your “stuff,” the law, and the list of people you like and trust.

    Bottom line: There is a lot of really good information on the Internet. There is also a lot of misinformation. Do you have the training and background to tell one from the other when it comes to putting your estate plan in order? If so, knock yourself out, Professor. If not, there is something to be said for working with live professionals instead of an impersonal website that cares more about your credit card authorization than about what happens to you and your family. For more information about creating an estate plan that works, check out www.est8planning.com.

    SCOTT MAKUAKANE is a lawyer whose practice has emphasized estate planning and trust law since 1983. He hosts Est8Planning Essentials, a weekly TV talk show which airs on KWHE (Oceanic channel 11) at 8:30 p.m. on Sunday evenings. For more information about Scott and his law firm, Est8Planning Counsel LLLC, visit www.est8planning.com.

    If you want to, you can devise your own estate plan without the benefit of lawyers or other trained advisors. All you need is a credit card, a computer, a printer, and access to the Internet. With those tools, you can come up with a set of documents that may or may not accomplish your…

  • Crisis Communication

    If a parent suddenly fell unconscious or required emergency medical attention, would you know what do? Would you know what paperwork, insurance cards and medical records to bring with you to the hospital?

    Once a medical crisis occurs, it’s too late to prepare for the large amount of information that is needed by doctors, hospital staff, family and relatives. The solution? A medical organizer.

    With a medical organizer, you can log prescriptions, appointment times, treatment instructions and important contacts, plus track medical records, medical histories and vital stats.

    There are many different types of organizers on the market. Many of them feature tabbed dividers, storage pockets and useful medical charts. It is a great communication tool. And, it can help you make important medical decisions.

    Top 5 Reasons Why You Need A Medical Organizer

    1. More control: If a parent suddenly becomes unconscious or incapacitated, a medical organizer speaks on his/her behalf. It provides the hospital and emergency staff with the most recent health information.
    2. Peace of mind: One parent usually manages the finances, health records or housekeeping duties. Ask this parent to establish a medical organizer for both parents to avoid the burden of starting one from scratch when he or she is gone.
    3. Lessen the guilt: Eliminate the guilt adult children experience with end-of-life decisions because a parent did not establish the proper legal documents related to health issues. Studies found that siblings do not always agree with end-of-life decisions for a parent and this can break up the best of families or instill longstanding resentment.
    4. Minimize delays: Reduce delays with medical attention because important information was unavailable. You will also save time from having to search for information in safe deposit boxes, file cabinets or computer files.
    5. Proactive approach to care: Preparing now can save time and grief for family members who will make important decisions on behalf of a sick parent. Doctors appreciate when adult children take a proactive approach to their parent’s health, especially as geriatric progression worsens over time. Your parents will appreciate you too!

    Sandra J. Yorong is a financial advisor and author of the ‘Lifetime Medical Organizer’ and sold at retai bookstores and online at Amazon.com and www.lifemedorganizer.com

    If a parent suddenly fell unconscious or required emergency medical attention, would you know what do? Would you know what paperwork, insurance cards and medical records to bring with you to the hospital? Once a medical crisis occurs, it’s too late to prepare for the large amount of information that is needed by doctors, hospital…

  • Let the IRS Take a Bath for Change

    Nobody likes to pay taxes, but most of us like to take baths. Unless the bath is the kind where money flows out of your pocket and down the drain. If you feel like paying taxes is a lot like seeing your money go down the drain, you will be glad to know about an exciting estate planning opportunity that can help make the IRS take a bath after your death instead of your loved ones.

    When you die, the IRS will want your loved ones to pay a tax on the value of everything you owned. The estate tax reaches all of your assets, unless some exclusion or deduction applies. The law gives each of us an exclusion (I like to call it the “coupon”) from the estate tax. You can pass the coupon amount to whomever you want, tax-free. In addition to the coupon, the law gives married couples an unlimited marital deduction so estate tax can be postponed until both Mom and Pop are gone. The marital deduction doesn’t get rid of the tax—it just postpones it. The coupon does get rid of the estate tax to some extent, but it is not enough to eliminate all of the estate tax for many families.

    The law also allows an unlimited estate tax charitable deduction. So if you would rather have your money go to charity than to the IRS, you can bequeath all of the assets that would have been taxed at your death (everything over the coupon amount) to charity. But what if you want to give your descendants more than the coupon amount? Imagine sitting in a leaky bathtub. If you do nothing, eventually you and your rubber ducky will be the only things left in the tub. In order to maintain the water level, you will need to add water as fast as it is leaking out. If you add water faster than it is leaking out, the water level will rise, and eventually the tub will overflow.

    Imagine the flood that would result if you took a nice long bath (say 25 years) with hot water filling the tub faster than it is leaking out. Now imagine that instead of an overflow of water, you had an overflow of money. This is exactly how CLTs work.

    You put assets (hot water) into a CLT (bathtub). The trust agreement says that each year, 5% of the value of the assets will be paid to charity (5% of the water in the tub will leak out). Meanwhile, let’s say that the trust assets are earning income (the faucet is turned on and the tub is being filled) at the rate of 7%. The law allows us to pretend that the trust is earning only the applicable federal rate (AFR), which is set by the U. S. Treasury each month. If the AFR is 2% at the time we created the CLT, then we get to say that the trust will grow at a rate of only 2%. Net result? If payments are made to the charity monthly, the IRS will make believe that the trust will be completely exhausted in about 26 years, even though it will have far more in it at that time than when the trust was created. The best part is that all of the trust assets will go to charity and your loved ones, and not a cent will go to the IRS.

    SCOTT MAKUAKANE is a lawyer whose practice has emphasized estate planning and trust law since 1983. He hosts Est8Planning Essentials, a weekly TV talk show which airs on KWHE (Oceanic channel 11) at 8:30 p.m. on Sunday evenings. For more information about Scott and his law firm, Est8Planning Counsel LLLC, check out www.est8planning.com.

    By using a charitable lead trust (CLT), you can give assets to charity and your loved ones, without having to give anything to the IRS.

    Nobody likes to pay taxes, but most of us like to take baths. Unless the bath is the kind where money flows out of your pocket and down the drain. If you feel like paying taxes is a lot like seeing your money go down the drain, you will be glad to know about an…

  • Savvy Shoppers: Find a Charity You Can Trust

    The New Year is here and, because of the rough economy, it’s more important than ever to become a savvy shopper to both save money and prevent identity theft in 2011.

    Being a knowledgeable consumer is ultimately about using money wisely and learning how to squeeze as much value as possible out of every dollar.

    Charities seeking donations may tug at your heartstrings, but don’t succumb to pressure to give money on the spot. The Better Business Bureau (BBB) evaluates charities based on the use of funds, fundraising, governance, public accountability, solicitation and information materials.

    Look for the BBB seal and always check a business or charity out with BBB before you buy or donate. Nationwide, nearly 400,000 businesses bear the BBB seal of accreditation and meet its standards. You can also find the seal on Web sites and at business locations. Check with the BBB to make sure that the charity or company that you are considering does not have a history of dissatisfied customers or unanswered complaints.

    Check out a business or charity online at www.hawaii.bbb.org.

    The New Year is here and, because of the rough economy, it’s more important than ever to become a savvy shopper to both save money and prevent identity theft in 2011.

  • Smart Advice; How to Choose a Financial Advisor

    A financial advisor can offer valuable strategies and guidance to help you grow your savings and meet your financial goals and dreams. It’s important to select a qualified individual who is also a good match—personally and professionally.

    How to find the right advisor for your financial future:

    Ask for a preliminary meeting. Your first meeting should be complimentary and without any obligation on your part. Be wary if you are pressured to write a check or make any decisions at your initial consultation. During the meeting, listen carefully to what the advisor says. Does he or she ask questions to help clarify your financial circumstances and goals? Or are you listening to a canned speech? Be prepared to ask questions to determine how your advisor will work with you, including compensation (more on that later), frequency of meetings or calls and how your progress will be tracked. Look for someone who follows a process but is also flexible and responsive when your needs change.

    Understand the compensation model. Advisors may charge a flat fee for services while others charge a percentage of assets under management. Still others may be paid commission on the sale of financial products. It’s not unusual for all three methods to contribute to an advisor’s earnings. It’s important to understand how commissions and fees will affect the growth of your portfolio and to be aware of potential conflicts of interest.

    Compatibility matters. Your financial advisor should be someone who makes you feel at ease—enough so that you are comfortable sharing intimate financial details of your life. A successful advisory relationship can last for many years, so look for a person you can trust and with whom you enjoy spending time.

    Review experience and training. Look for someone with a depth of knowledge and valuable experience in the field. Your advisor should be able to distill complex financial topics for you in a way that you clearly understand and apply to your situation.

    Some advisors earn designations as part of their ongoing training. For example, a Certified Financial PlannerTM certification indicates completion of training in the financial planning process, with an understanding of insurance, investments, tax strategies and retirement and estate planning. Another designation, Chartered Financial Consultant (ChFC®), indicates the advisor has received training in personalized financial planning processes. Some financial planners also may be trained and experienced as Certified Public Accountants or attorneys.

    Consider specialization, as needed. Look for an advisor who has special expertise to meet your specific needs, such as estate planning or succession planning for your business.

    Check professional references. Take the time to call each reference. Ask specific questions to get an idea of the advisor’s strengths and weaknesses. If possible, talk to clients and professional associates. Credentials can also be verified by the organizations that award them.

    Be a proactive client. Ask for what you need. If you aren’t satisfied with the level of service you receive, take your business elsewhere.

    Michael W. Yee is a senior financial advisor with Michael W. Yee, a financial advisory practice of Ameriprise Financial Services, Inc. As a financial advisor, Yee provides customized financial advice that is anchored in a solid understanding of client needs and expectations, and provided in a one-on-one relationship with his clients. For more information, please contact Michael W.Yee at (808) 952-1240. Advisor is licensed/registered to do business with U.S. residents only in the states of Hawaii. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. © 2010 Ameriprise Financial, Inc. All rights reserved.

    A financial advisor can offer valuable strategies and guidance to help you grow your savings and meet your financial goals and dreams. It’s important to select a qualified individual who is also a good match—personally and professionally.

  • Beware: It’s the Return of the Estate Tax

    The good news is that the federal estate tax took a vacation in 2010. The bad news is that it spent the whole year lifting weights and taking steroids. The estate tax is coming back in 2011, as big and bad as it has been in a long time. Now is the time to review your estate plan and make changes that could drastically affect how much of your estate goes to your loved ones, and how much goes to the IRS.

    Between 2001 and 2009, Congress gradually reduced the maximum rate of the federal estate tax from 55% to 45%. It also gradually increased the “coupon” (the amount of property that you could pass tax-free) from $675,000 per person in 2001 to $3.5 million per person in 2009. That means that with basic estate planning, a married couple could pass up to $7 million free of federal estate tax, if they both died in 2009.

    Then, in 2010 only, the estate tax was repealed. But like a horror film character who just won’t die, the estate tax returns again on January 1, 2011—only with a $1 million coupon and a 55% tax rate!

    To pay for the 2010 estate tax vacation, Congress replaced the estate tax with an increased capital gain tax. Before 2010, any assets that passed to someone when you died would be valued at fair market value at the date of death. If your surviving spouse or heirs sold any assets that had increased in value during your lifetime, they would not have to pay capital gain tax on any of that growth. This is called a “step-up in basis.”

    But in 2010, property that passes at death does not automatically receive this step-up in basis. Instead, each individual has a limited amount of property that can be “stepped-up” in value at the time of death. Property that does not receive this step-up value will be subject to tax on the increase in value from the date you first acquired the property. This means that the property could be exposed to huge capital gain tax liability if it is sold by your heirs!

    Now is the time to look into how your estate will be affected by the return of the estate tax. Contact your trusted advisors to find out what changes should be made to your “rule book” —the set of documents that will say what happens to your stuff after you are gone. You may have some prime opportunities to make a huge difference in the amount of your estate that goes to your loved ones. You may even be able to “disinherit” the IRS entirely.

    SCOTT MAKUAKANE is a lawyer whose practice has emphasized estate planning and trust law since 1983. He hosts Est8Planning Essentials, a weekly TV talk show which airs on KWHE (Oceanic channel 11) at 8:30 p.m. on Sunday evenings. For more information about Scott and his law firm, Est8Planning Counsel LLLC, check out www.est8planning.com.

    The good news is that the federal estate tax took a vacation in 2010. The bad news is that it spent the whole year lifting weights and taking steroids. The estate tax is coming back in 2011, as big and bad as it has been in a long time. Now is the time to review…

  • Tis the Season for Holiday Scams

    The holiday season is a happy time celebrated with food, family and friends. Unfortunately, it’s also a time for fraud at the hands of identity thieves, computer hackers and deceptive sellers. Hawai‘i’s Better Business Bureau (BBB) offers advice on how to recognize and avoid common holiday scams.

    Online Shopping Scams

    Some Web sites use tantalizingly low prices to lure in victims. If the price seems too good to be true, it probably is. Also, scammers often request wire payment through Western Union or MoneyGram because the money cannot be easily tracked or retrieved. Never wire money to strangers and always use a credit card to pay for items online. If the site or seller is fraudulent, you can dispute the charge with your credit card company.

    Identity Theft at the Mall

    Don’t let yourself be bogged down with packages or so rushed that you lose track of your wallet. Know where your credit and debit cards are at all times, and only carry the ones you’re going to use. Also, cover the keypad when entering your personal identification number while purchasing items or when getting money from the automated teller machine (ATM).

    Phishing E-mails

    Phishing e-mails fraudulently represent a trustworthy source. It is a way for ID thieves to get your personal information, or for hackers to install malicious software on your computer. Beware of unsolicited e-mail from unfamiliar people and companies. Don’t click on any links or open any attachments the e-mail contains. Always be sure your computer has current antivirus software and security patches installed.

    Charitable Giving Scams

    Beware of tear-jerking appeals that tell you little about what the charity or its cause. Ask questions about how your donation will be used. For example, if a charity claims to help the homeless, ask how and where this is taking place. Also, don’t succumb to pressure to give money on the spot. A charity that needs your money today will welcome it just as much tomorrow … after you’ve confirmed that it is legitimate.

    Have a happy, scam-free holiday!

    Bonnie Horibata is vice-president of Hawai‘i’s Better Business Bureau. BBB provides objective advice, business and charity reports, and information about topics affecting marketplace trust at bbb.org.

    The holiday season is a happy time celebrated with food, family and friends. Unfortunately, it’s also a time for fraud at the hands of identity thieves, computer hackers and deceptive sellers. Hawai‘i’s Better Business Bureau (BBB) offers advice on how to recognize and avoid common holiday scams.

  • The Secret of Happy Holidays: Spending with Discretion

    As we enter the third holiday season after the onset of the “Great Recession,” American consumers may be battling penny-pinching fatigue. We’ve scrimped. We’ve saved. When do we get to reward ourselves?

    Sure, it would be fun to celebrate the holidays with a big spending binge, but if there’s one lesson to be learned from the recession, it’s the importance of fiscal prudence. Don’t let the impulse to buy your way to happy holidays overrule your good judgment. Here are some tips for keeping your holiday spending within reason and the limits of your wallet.

    Step back from the hype. Retailers want you to get caught up in the holiday spirit and spend with abandon. Instead, take a more mindful approach to holiday shopping and consciously commit to responsible spending. Reinforce your conviction by imagining how good it will feel to enter January with money in the bank rather than paying off credit card bills.

    Make a firm budget. Think realistically about how much you have available to spend. If you’re tempted to spend lavishly, force yourself to imagine the painful consequences of overextending yourself. Keep track of your purchases and monitor your progress to avoid getting carried away.

    Narrow your list. If you’ve fallen into a trap of “gift-sprawl,” make this the year to pull in the reins. Prioritize your list and give according to your ability.

    Start early. Last-minute shoppers tend to spend more on impulsive purchases. Spreading your holiday shopping across 12 months is easier on your monthly budget. It’s also easier to find deals in the off season when retailers are anxious to move last year’s merchandise and make way for the new.

    Shop on a cash-only basis. When possible, pay with cash rather than checks, debit cards or credit cards. The tangible aspect of spending cash allows you to see how quickly money goes and can help you stick to your budget.

    Think outside the store. Save money by giving homemade gifts rather than store-bought items. Encourage your kids to skip the malls and give of themselves. Grandparents are likely to appreciate a child’s artwork or helping hands far more than a scented candle.

    Rethink excess. Does everyone in your family really need a dozen presents under the tree? Some large families and groups of friends choose to limit overall spending by drawing names so that each person receives one nice gift rather than buying for the entire gang.

    Put people first. Our consumer society encourages us to get carried away with material things. Yet the most meaningful part of the holidays is spending time with the people we love and sharing our abundance with those who are less fortunate. It doesn’t cost a thing to step back from the shopping rat race and savor the moments.

    Michael W. Yee is a senior financial advisor with Michael W. Yee, a financial advisory practice of Ameriprise Financial Services, Inc. As a financial advisor, Yee provides customized financial advice that is anchored in a solid understanding of client needs and expectations, and provided in a one-on-one relationship with his clients. For more information, please contact Michael W.Yee at (808) 952-1240. Advisor is licensed/registered to do business with U.S. residents only in the states of Hawaii. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. © 2010 Ameriprise Financial, Inc. All rights reserved.

    As we enter the third holiday season after the onset of the “Great Recession,” American consumers may be battling penny-pinching fatigue. We’ve scrimped. We’ve saved. When do we get to reward ourselves? Sure, it would be fun to celebrate the holidays with a big spending binge, but if there’s one lesson to be learned from…

  • Do You Really Want to be a Trustee?

    You were named as successor Trustee of a trust created by a family member or friend, and that person just died. What now? Before you rush in, think about what awaits.

    Until you sign on the dotted line, the fact that you have been named as a trustee does not obligate you to accept that position. Decide carefully, because once you accept the job, you accept all that goes with it. It is a position of great honor, and it involves great responsibility.

    A trustee is what the law calls a fiduciary. A fiduciary is a person who is responsible for taking care of something that belongs to someone else. Under the law, fiduciaries are answerable to the beneficiaries (and possibly the Court) for the things they do—or fail to do.

    A trust is a legal relationship that results when a person (who we’ll call the trustmaker) makes a written agreement with a trustee to handle stuff for the benefit of beneficiaries. (“Stuff” is what the author calls everything a person owns. It could include real property—land and buildings— and personal property—everything else). Your primary duty as a trustee is to read, understand, and faithfully follow the terms of the trust agreement.

    When the trust agreement is made, the trustmaker transfers stuff to the trustee. The trustee actually becomes the legal owner of the stuff. However, the beneficiaries are the ones who are supposed to benefit from the stuff. Chances are, you will hear from them if they are not receiving the benefits they expect.

    The “dark side” of serving as a trustee is that you can be held personally liable in the event that you do something you shouldn’t have, or you fail to do something you should have, and the trust is harmed as a result. Even if you acted with a pure heart and noble intentions, you could have to reach into your own wallet to restore any losses to the trust.

    Before you rush into the job of trustee, be sure to determine whether you can devote adequate time and attention to the job, be armed with a clear understanding of the trust agreement and your duties, and have a team of legal, accounting, financial, and other advisors at your side to help you do your best by the beneficiaries.

    SCOTT MAKUAKANE is a lawyer whose practice has emphasized estate planning and trust law since 1983. He hosts Est8Planning Essentials, a weekly TV talk show which airs on KWHE (Oceanic channel 11) at 8:30 p.m. on Sunday evenings. For more information about Scott and his law firm, Est8Planning Counsel LLLC, check out www.est8planning.com

    You were named as successor Trustee of a trust created by a family member or friend, and that person just died. What now? Before you rush in, think about what awaits. Until you sign on the dotted line, the fact that you have been named as a trustee does not obligate you to accept that…

  • Decision Time About Benefits

    One of the rites of fall for most employees is the opportunity to review and revise their benefit options for the next year (the next benefits year could start in January or sooner). This is often referred to as the “open enrollment” period. Typically, all employees of a company or organization can make adjustments to their benefit options at this time.

    Although the opportunity is there to make changes, many employees do little more than confirm the benefits they already have in place. Failure to act during the open enrollment period may represent a missed opportunity. For today’s worker, retirement plans, health care coverage and other important benefits represent a significant piece of overall compensation. More effective management of the benefits available to you can, in effect, represent a pay raise.

    Changes in the law that impact your benefits:

    The health care reform law that passed in March includes several changes that will begin to take effect with your employer’s new benefit year (after September 23, 2010). The biggest that impact employee benefits are:

    • Dependent health insurance coverage – parents with adult children no longer in school can now include them as part of their dependent care coverage up to the child’s 26th birthday. To qualify, children must not have access to coverage through another employer (either their own or their spouse’s workplace).
    • Flexible Spending Accounts (FSAs) — FSAs allow individuals to save pre-tax dollars in an account designed to reimburse them for out-of-pocket medical expenses. Beginning in 2011, purchases of overthe-counter medications will no longer qualify for reimbursement from an FSA, except in cases where a physician prescribes them. If you defer income into an FSA, you should consider what is an appropriate amount given the new limitations for over-the-counter medications. It is also a good time to begin preparing for a future change to FSAs. Beginning in 2013, the maximum that can be set aside in an FSA will be limited to $2,500/year. You may want to accelerate spending for costly procedures (such as dental or orthodontic work) in advance of this change. Accurate planning is critical with FSAs, because any money leftover at the end of the plan year is lost.

    Given the important role that benefits play in your overall financial picture, the decisions you make should not occur in a vacuum. Your financial advisor can help assess what changes to your benefits might be advantageous for your overall financial position. An advisor can also provide perspective on how to plan for your long-term goals as they relate to your workplace compensation package.

    Michael W. K. Yee, CFP®, CFS, CRPC® Senior Financial Advisor Ameriprise Financial, Inc. 1585 Kapiolani Blvd., Suite 1100 Honolulu, HI 96814, Tel: 808-952-1222 ext 1240 “This communication is published in the United States for residents of Hawaii only; and this advisor is licensed only in the state of Hawaii.” Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.

    One of the rites of fall for most employees is the opportunity to review and revise their benefit options for the next year (the next benefits year could start in January or sooner). This is often referred to as the “open enrollment” period. Typically, all employees of a company or organization can make adjustments to…

  • Who Gets My Stuff?

    You may have heard the old joke, “where there’s a will … I want to be in it.” That may be true, but is estate planning really all about “who gets my stuff?” Who gets your stuff is important, but when you sift through the reasons for doing estate planning, you may find that identifying who gets your stuff takes a distant back seat to far more important considerations.

    The primary concern most of us have about our estates is figuring out how to stay in control. Does it really matter who gets your stuff if you don’t get to enjoy it during your lifetime? So the foundation of your estate plan should be making sure you are in control of your stuff for as long as you are alive and well, and so your hand-picked decision makers will step in if you are unable to manage your stuff yourself. Choosing your successor fiduciaries is as important as any decision you will make about your estate plan.

    Part of staying in control of your stuff involves protecting it from creditors, predators and plain old bad luck. Think of your estate plan as a castle. Imagine a large stone enclosure surrounded by a moat. In the old days, the moat would be stocked with alligators to discourage anyone from approaching the walls. With your present-day estate plan, you can stock the moat with a different kind of gator: litigators — attorneys paid for with insurance — to protect you from people who would like your stuff to be their stuff. Having adequate liability insurance is a critical element of your estate plan.

    The walls of your castle represent various legal structures you can put in place to protect your home, business, rental properties and other assets. The legal structures might include trusts, limited liability companies, corporations, limited partnerships or a combination of entities. You can also consider using a special kind of ownership with your spouse called tenancy by the entirety to protect your stuff from claims against one spouse, and to make it so that both spouses must agree to any mortgage, sale, or other transfer of the tenancy by the entirety property.

    Ultimately, you will want your estate plan to assure that your stuff goes to whom you want, when you want, the way you want, with the lowest overall cost, delay and loss of privacy. You may want to put special restrictions on a gift to one beneficiary without imposing the same restrictions on your other beneficiaries. You might have special assets or special situations (including a special needs loved one) that require careful planning. The only way to navigate the alternatives is with the help of experienced counsel who can educate you as to the available options and help you pick the ones that are right for you and your loved ones. Good counsel can help you build the castle that is just right for your situation.

    Thinking of your estate plan as your castle helps you to zero in on your true values and objectives when it comes to making arrangements with your assets that will put you and your loved ones in the best possible position when something bad happens in the future.

    SCOTT MAKUAKANE is a lawyer whose practice emphasizes estate planning and trust law. He is a graduate of Ka‘u High School, Duke University, and the University of Hawaii School of Law. Scott has practiced estate planning law since 1983. He is the principal of Est8Planning Counsel LLLC, a 6-lawyer firm with offices in Honolulu, Kihei (Maui) and Kalaheo (Kauai). Scott has chaired the Elder Law and the Probate & Estate Planning Sections of the Hawaii State Bar Association, has served as President of the Financial Planning Association of Hawaii, President of the Board of Trustees of the Foundation of the Rotary Club of Honolulu, and President of the Christian Legal Society of Hawaii

    You may have heard the old joke, “where there’s a will … I want to be in it.” That may be true, but is estate planning really all about “who gets my stuff?” Who gets your stuff is important, but when you sift through the reasons for doing estate planning, you may find that identifying…

  • Retirement Planning in Stages

    If you are closing in on retirement, planning for the day you leave the workforce is probably at the top of your mind. But retirement planning is critical at any age. It’s never too early to begin putting a retirement savings strategy in place.

    Here are suggestions on how to plan for retirement based on the amount of time you have left to save and invest for your ultimate financial goal:

    Stage 1 — Retirement is 10–20 or more years away

    Don’t be fooled by the time-frame — even if retirement is 30 or 40 years away, you should think about putting a savings plan in place. If you are employed and a workplace retirement plan is available to you, it makes sense to start saving there. This is especially true if your employer makes matching contributions. Many younger people qualify, from an income standpoint, to make Roth IRA contributions as well.

    From an investment perspective, take a long-term view. You should be in a position to ride out short-term market swings and maintain at least a moderately aggressive mix of investments in your retirement portfolio, seeking the greatest long-term return. The biggest advantage you have in your favor is time. The longer you can let your money work for you, the greater the opportunity to accumulate notable wealth from the dollars you’ve saved.

    Stage 2 — The decade leading up to retirement

    For many people, the final years before retirement are the peak income earning years. This also may be the time when financial commitments for goals such as paying for a child’s education are behind you. It is important to make large contributions to your retirement savings plans — through work, into an IRA or using other vehicles such as tax-deferred annuities. The emphasis now is to do all you can to prepare for the day when you will need to depend on your retirement savings to meet your lifestyle goals.

    Note that those who are 50 or older are allowed to make what are referred to as “catch-up” contributions — additional sums above standard contribution limits that exist for workplace savings plans or IRAs. Take advantage of this special opportunity to maximize your savings.

    Make sure you are prepared for unexpected events by having appropriate levels of insurance in place. Start thinking seriously about what age you plan to retire, and how other sources of income, such as Social Security or a company pension, will be affected by the timing of your retirement.

    Stage 3 — Starting retirement

    As you enter retirement, a lot of changes may occur. You need to determine how to generate current income from your existing savings while still trying to keep your money growing to meet your needs well into the future, when the cost of living is likely to be higher. You want to protect your assets from market volatility, but still be an active investor.

    There are a number of other key issues to deal with as retirement begins, including:

    • Applying for Social Security — the longer you delay taking Social Security (up to age 70), the larger your monthly benefit will be.
    • Applying for Medicare — you need to do this when you reach age 65, whether or not you are taking Social Security. Also, to help cover expenses not paid for by Medicare, you will need a supplemental insurance policy.
    • Determining other sources of income — you need to arrange for payments from a company retirement plan, and determine how you will draw income from your own savings, if you need to.
    • Managing taxes — you want to take steps to help reduce the tax impact on any sources of income you receive.

    Looking at retirement planning at three different stages of life can make it easier for you to keep a focus on achieving your ultimate financial goal. Consult a financial advisor to make sure you’re taking the right steps at the right time.

    Michael W. K. Yee, CFP®, CFS, CRPC® Senior Financial Advisor Ameriprise Financial, Inc., 1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814, Tel: 808-952-1222 ext 1240

    This communication is published in the United States for residents of Hawaii only; and this advisor is licensed only in the state of Hawaii.” Ameriprise Financial does not provide tax or legal advice. Consult your tax advisor or attorney. Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. © 2010 Ameriprise Financial, Inc. All rights reserved

    As you enter retirement, a lot of changes may occur. You need to determine how to generate current income from your existing savings while still trying to keep your money growing to meet your needs well into the future, when the cost of living is likely to be higher. You want to protect your assets…