Category: Wisdoms

  • What to Do Before a Loved One Passes

    We have been receiving an increased number of phone calls from our clients’ children, notifying us about the imminent death of one of their parents. The children usually call in a panic, asking if anything needs to be done before their parent passes. We do our best to assist them; however, sometimes it is just too late.

    When a client’s child, who is usually the trustee, contacts the estate planner right after their parent passes, the trustee is usually advised to call back sometime after the funeral.

    When the trustee is ready to proceed, he or she is asked to identify and collect financial information and important documents (i.e. wills, trusts, partnership documents, etc.), and bring several certified copies of the death certificate and an inventory of the assets. How the decedent’s assets are to be distributed and handled is determined in the initial estate administration meeting.

    If no issues or problems arise, the entire estate administration process generally takes about six to eight months — up to several years.

    Estate planners strongly suggest conducting an estate plan review at least every three to five years so that important decisions don’t have to be made during the very stressful time of a loved one’s waning days.

    STEPHEN B. YIM, ATTORNEY AT LAW
    2054 S. Beretania St., Honolulu, HI 96826
    808-524-0251 | www.stephenyimestateplanning.com

    We have been receiving an increased number of phone calls from our clients’ children, notifying us about the imminent death of one of their parents. The children usually call in a panic, asking if anything needs to be done before their parent passes. We do our best to assist them; however, sometimes it is just…

  • Smart Charitable Giving

    The people of Hawai‘i are generous with public charities. On the other hand, most of us do not have money to burn. Here are some good ideas about choosing where and how to give.

    ♦ DO YOUR HOMEWORK. The good works that charities do often overlap and some charities are more effective than others. Websites like charitynavigator.org and charitywatch.org can help you compare established charities to find out, for example, how much of your gift will go to charitable work versus administrative and fundraising overhead. While it costs money to run a charity and it also costs money to raise money, if expenses exceed 25 percent of a charity’s revenue, you should ask why. If the charity cannot give you a good answer, you should consider giving elsewhere.

    ♦ DON’T SELL AN APPRECIATED ASSET TO MAKE A CASH GIFT. If you own Apple stock that you bought in 2000 for $2 per share, don’t sell it now at $200 per share to raise the cash to make a charitable gift. Although you will get a deduction for your cash gift, you will also be liable for capital gains tax on the difference between the $200 sale price of the stock and the $2 purchase price. You will have less after-tax cash to give the charity and your deduction will be limited to the amount of your gift. Instead, make a bigger gift and get a bigger deduction by giving the stock to the charity. The charity can then sell the stock without having to pay capital gains tax, and you will get a deduction for the full fair market value of the stock at the time of the gift.

    ♦ MAKE GIFTS FROM YOUR IRAS. If you make your loved ones the beneficiaries of your traditional IRAs after you die, they may have to pay income tax on most of what they receive. However, if you make charities your beneficiaries, there will be no income tax. So to the extent you can, name charities as beneficiaries of your retirement plans and use your non-taxable assets for making gifts to loved ones.
    If you have begun taking required minimum distributions (RMDs) from your traditional IRA, you can give up to $100,000 of your annual RMD to charity. These gifts are not deductible, but you will end up paying less tax because the gifted portion of your RMD is not taxable.

    As always, talk with your trusted advisors to find out how to make charitable giving a win-win for you and the charities you support.

    SCOTT MAKUAKANE, Counselor at Law
    Focusing exclusively on estate planning and trust law.
    www.est8planning.com
    808-587-8227 | maku@est8planning.com

    The people of Hawai‘i are generous with public charities. On the other hand, most of us do not have money to burn. Here are some good ideas about choosing where and how to give…

  • Better Pay Attention to ‘the Fed’

    We hear frequent references to the Federal Reserve (“the Fed”) in the news, but the way it affects our lives seems a bit cloudy. So, let’s clear the air.

    The Federal Reserve, our nation’s central bank, has a fair degree of independence, but it is directly accountable to Congress. Among its primary duties, is to oversee U.S. banking and financial services industries and establish U.S. monetary policy. Here are five ways the Fed impacts us.

    #1 – Sets interest rates for mortgages & loans
    One of the key monetary policy functions of the Federal Reserve’s Open Market Committee is to set the Federal Funds interest rate. This is a rate charged when banks borrow and lend funds from one another. That does not directly determine what banks and other institutions will charge for consumer loans like mortgages or auto financing, but it does have an indirect impact. If the Fed is lowering or raising interest rates, a similar trend is likely to follow for other types of borrowing.

    #2 – Changes in your cost of living
    One of the mandates of the Federal Reserve is to try to manage the inflation rate. The level of change in the cost of living from year to year can have a major impact on your bottom line. The Fed seeks to keep the annual inflation rate at 2 percent or less. It has generally succeeded in maintaining that level in recent years. But it structures monetary policy to respond to current economic conditions in order to keep the inflation rate in check.

    #3 – The employment environment
    Another of the Fed’s mandates is to maintain what is referred to as “full employment,” an environment where most who are seeking work can find it. The Fed tries to accomplish this by managing monetary policy to create favorable conditions so employers can hire more workers. This mandate has to be balanced with the desire to maintain a modest rate of inflation.

    #4 – Short-term investment performance
    Again, the Fed does not have any direct impact on investment markets, but its monetary policy stances, including interest rate policies, are closely watched, particularly by investment professionals. Stock and bond markets can fluctuate depending on expectations of Fed actions or specific policies it implements.

    #5 – Earnings on bank savings
    Banks will often adjust the rates they pay for Certificates of Deposit (CDs) or interest-bearing accounts based on the Fed’s interest rate policy. Yields will improve when the Fed is raising short-term interest rates, but decline if the Fed decides to cut rates.

    To determine your financial position in light of the current state of the Fed’s policies, it may make sense to sit down with a financial advisor and review your portfolio.

    MICHAEL W. K. YEE, CFP
    1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
    808-952-1222, ext. 1240 | michael.w.yee@ampf.com
    Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC ®, is a Private Wealth Advisor, Certified Financial Planner ™ practitioner with Ameriprise Financial Services, Inc. in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 32 years. Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser. Ameriprise Financial Services, Inc. Member FINRA and SIPC. ©2019 Ameriprise Financial, Inc. All rights reserved.

    The Federal Reserve, our nation’s central bank, has a fair degree of independence, but it is directly accountable to Congress. Among its primary duties, is to oversee U.S. banking and financial services industries and establish U.S. monetary policy. Here are five ways the Fed impacts us…

  • Safe Ways to Use Credit/Debit Cards

    When purchasing items with a credit or debit card online – or over the counter – there are precautions you need to take.

    ● Use a credit card rather than a debit card. Under federal law, your personal liability for fraudulent charges on a credit card can’t exceed $50. But if a fraudster uses your debit card, you could be liable for $500 or more.

    ● Use a prepaid gift card if you don’t have a credit card. But be extra vigilant of emails requesting payment be made in gift cards. It’s ok if you are the one initiating the purchase. ● Keep the line of credit low for all cards.

    ● Do not use cards that are linked to an autopay billing account or accounts that receive scheduled payments or benefits, such as your retirement pension, investment dividends and social security benefits.

    ● Keep records of all your online transactions, including emails and delivery notifications.

    ● Check your financial statements weekly for unauthorized transactions; report them to your financial institution and law enforcement.

    ● Do not use your mobile phone to conduct financial transactions, such as checking your financial statements. Use your home computer and check to make sure your Wi-Fi is secured.

    ● Use the card’s chip technology instead of swiping. The chip makes it harder for the scammer to access account information compared to the data on the card’s magnetic strip.

    THE DEPARTMENT OF THE PROSECUTING ATTORNEY
    1060 Richards St., Honolulu, HI 96813
    808-768-7400 | Office hrs: Mon – Fri, 7:45 am – 4:30 pm
    www.honoluluprosecutor.org/contact-us/

    When purchasing items with a credit or debit card online or over the counter, there are precautions you need to take.

  • Robocalls: An Overview

    In the last year, Americans received about 5 billion robocalls per month, up from the 2 billion a month just two years ago. Robocalls are automated calls made by a computer program, enabling the telemarketer or scammer on the other end to call multitudes of phone numbers in a short span of time.

    It took me under five minutes of “Googling” to find a website and fill out a form to order robocalling software that I could use to dial hundreds of telephone numbers an hour.

    These calls are often from unfamiliar phone numbers. Answering the phone will let robocallers know that there is a person associated with this number as opposed to an automated system.

    Ignoring unfamiliar phone numbers, however, might not be enough to counter this problem, as robocallers have begun using technology that enables them to “spoof” or fake an incoming phone number that may appear to be more familiar. In other words, your caller ID device will indicate that the call is coming from an 808 area code when in actuality it could be from anywhere.

    Robocalls are very prevalent today. Nearly 50% of all mobile phone calls are spam. Many of these calls are telemarketers hoping to sell a product, but some of these calls intend to scam money or personal information from the call recipient.

    There are ways to reduce robocalls.

    Android and iPhone users might find success with applications and services such as Robokiller or Nomorobo. Additionally, Google and Apple have been working on implementing anti-robocall features into their software.

    Asking one’s cell phone carrier to block particular numbers is also a good strategy (a monthly fee may be charged).

    Major carriers such as Sprint, T-Mobile, Verizon and AT&T all have features that might block or reduce robocalls.

    Joining the National Do Not Call registry (DoNotCall.gov) may also reduce robocalls and also lets you file a formal complaint with the Federal Trade Commission.

    But the most effective way to reduce robocalls is to never answer the phone. Let all phone calls go to voicemail, then assess them before returning the call, if appropriate.

    This may not give you the satisfaction of yelling at the robocaller, but the number of unwanted calls you receive will decline.

    If you have questions about elder abuse, call or email:
    808-768-7536 | ElderAbuse@honolulu.gov

    In the last year, Americans received about 5 billion robocalls per month, up from the 2 billion a month just two years ago. Robocalls are automated calls made by a computer program, enabling the telemarketer or scammer on the other end to call multitudes of phone numbers in a short span of time. It took…

  • Once a Child Becomes an Adult…

    A frantic mother once called me after her daughter was injured in a ski accident. When she called the hospital to find out the status of her daughter, hospital personnel would’t release any information and didn’t allow her make decisions on her child’s behalf. Just imagine the stress this caused!

    This situation is all too common. When a child leave for college, for example, in the eyes of the law, he or she is now an adult and parental rights cease. This fact is often overlooked.

    Once individuals reach the age of majority — 18 in most states — parents are no longer entitled to see their child’s medical and financial records, or make decisions on their behalf. The law classifies them as adults with a legal right to privacy and to govern their own lives. As a result, it is important to help your children or grandchildren set up an estate plan. Few 18-year-olds consider the
    need for an estate plan because most have little in the way of property.

    But if a child were to lose the ability to make or communicate decisions, medical professionals and financial institutions may refuse to consult with or release information to the parents. An estate plan appoints trusted individuals to make decisions in the event the child becomes unable to do so.

    STEPHEN B. YIM, ATTORNEY AT LAW
    2054 S. Beretania St., Honolulu, HI 96826
    808-524-0251 | www.stephenyimestateplanning.com

    A frantic mother once called me after her daughter was injured in a ski accident. When she called the hospital to find out the status of her daughter, hospital personnel would’t release any information and didn’t allow her make decisions on her child’s behalf. Just imagine the stress this caused! This situation is all too…

  • Smart Charitable Giving

    The people of Hawai‘i are generous with public charities. On the other hand, most of us do not have money to burn. The following are some good ideas about choosing where and how to give.

    ♦ DO YOUR HOMEWORK – The good works that charities do often overlap, and some charities are more effective than others. Websites like charitynavigator.org and charitywatch.org can help you compare established charities to find out, for example, how much of your gift will go to charitable work versus administrative and fundraising overhead. While it costs money to run a charity and it also costs money to raise money, if expenses exceed 25-percent of a charity’s revenue, ask why. If the charity cannot give you a good answer, you should consider giving elsewhere.

    ♦ DON’T SELL AN APPRECIATED ASSET TO MAKE A CASH – GIFT If you own Apple stock that you bought in 2000 for $2 per share, don’t sell it now at $200 per share to raise the cash to make a charitable gift. Although you will get a deduction for your cash gift, you will also be liable for capital gains tax on the difference between the $200 sale price of the stock and the $2 purchase price. You will have less after-tax cash to give the charity and your deduction will be limited to the amount of your gift. Instead, make a bigger gift and get a bigger deduction by giving the stock to the charity. The charity can then sell the stock without having to pay capital gains tax and you will get a deduction for the full fair market value of the stock at the time of the gift.

    ♦ MAKE GIFTS FROM YOUR IRAs – If you make your loved ones the beneficiaries of your traditional IRAs after you die, they may have to pay income tax on most of what they receive. However, if you make charities your beneficiaries, there will be no income tax. So to the extent you can, name charities as beneficiaries of your retirement plans and use your non-taxable assets for making gifts to loved ones.
    If you have begun taking required minimum distributions (RMDs) from your traditional IRA, you can give up to $100,000 of your annual RMD to charity. Although these gifts are not deductible, you will end up paying less tax because the gifted portion of your RMD is not taxable.

    As always, talk with your trusted advisors to find out how to make charitable giving a win-win for you and the charities you support.

    SCOTT MAKUAKANE, Counselor at Law
    Focusing exclusively on estate planning and trust law.
    www.est8planning.com
    808-587-8227 | maku@est8planning.com

    The people of Hawai‘i are generous with public charities. On the other hand, most of us do not have money to burn. The following are some good ideas about choosing where and how to give.

  • Managing Aging Parents’ Finances

    Making financial decisions takes time, attention and energy at any age. In the case of elderly adults, it can become increasingly difficult to manage daily finances, particularly if their health is declining or they’re experiencing cognitive issues. If you’re providing support to aging parents — or plan to in the future — here is some advice on how to handle the situation and prepare for what’s to come.

    Don’t wait to start talking about finances. While it may be uncomfortable to ask your parents about their finances, it’s essential you are familiar with their plans for care. Initially, emphasize that you are only looking for an overview. This first conversation can help set the groundwork for future discussions.

    Create a contact list. If your parents have a sudden change in health that affects their ability to manage their own affairs, it’s important to have a plan. If you anticipate stepping in to handle bills, insurance claims or other financial tasks, start by asking your parents for a list of the professionals they work with and where their accounts are held. You may need to be an authorized user or power of attorney to be allowed access to certain accounts. Consult a lawyer to discuss what permissions may be necessary to enable you step in if the need arises.

    Build a support network. Talk with siblings or other trusted family members about what a care plan could look like. While this conversation can be tough to initiate, it’s often easier to bring everyone together while your parents are still healthy and mentally competent. Discuss who can realistically provide support — in what way and at what cost. Proactively deciding who can drive your parents to doctor appointments, manage financial affairs, care for their home and handle other tasks can help reduce or avoid a strain on your time and energy down the road.

    Know what choices exist. Even if they aren’t yet needed, explore the options and costs of various assisted living and memory care services. Check insurance policies to see if and how services might be covered. Determine whether their home or yours could be modified to provide amenities such as wheelchair access.

    Know your rights at work. The Federal Family and Medical Leave Act of 1993 (FMLA) allows covered employees up to 12 weeks of unpaid leave to provide care for a family member with a serious health condition.1 Consult your human resources department to learn about policies for employees who are caring for a parent and how to initiate a claim. Many employers have access to resources and support groups to help you manage your responsibilities at home and at work.

    Maintain momentum on your own financial goals. It’s prudent to look at your finances to see how much support you could provide (if it’s needed) without jeopardizing your own retirement and future healthcare needs.

    For additional support, contact your financial advisor and lawyer.

    MICHAEL W. K. YEE, CFP
    1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
    808-952-1222, ext. 1240 | michael.w.yee@ampf.com

    Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC ®, is a Private Wealth Advisor, Certified Financial Planner ™ practitioner with Ameriprise Financial Services, Inc. in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 32 years.
    Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.
    Ameriprise Financial Services, Inc. Member FINRA and SIPC. ©2019 Ameriprise Financial, Inc. All rights reserved. 1 United States Department of Labor, Wage and Hour Division, Family and Medical Leave Act http://www.dol.gov/whd/fmla

    Making financial decisions takes time, attention and energy at any age. In the case of elderly adults, it can become increasingly difficult to manage daily finances, particularly if their health is declining or they’re experiencing cognitive issues. If you’re providing support to aging parents — or plan to in the future — here is some…

  • Preventing Scammer Calls

    How often do we get and answer calls from telephone numbers of people who we think we know, only to discover it’s a telemarketer or scammer? Below are some prevention tips that may help.

    • NEVER pick up a call on the first ring until you confirm the Caller ID is legitimate.
    • IF the Caller ID is not in your address book and you don’t recognize the number, let it go to voice mail.
    • IF the Caller ID is in your address book under someone’s name but it doesn’t appear on your phone, chances are the Caller ID that’s listed has been spoofed.
    • IF you do pick up a call by mistake, hang up immediately. Even if you don’t fall for the scam, scammers can still sell your telephone number
      and whatever information they had gotten from your conversation with the scammer.
    • Use the default phone greeting rather than your own. This will mask your gender and age.
    • Routinely update your address book with the current numbers of family members, friends, services and other important contacts.
    • Use GOOGLE to determine if the Caller ID is legitimate. Also include the word “scam” to see if the Caller ID had been linked to scams.

    THE DEPARTMENT OF THE PROSECUTING ATTORNEY
    1060 Richards St., Honolulu, HI 96813
    808-768-7400 | Office hrs: Mon – Fri, 7:45 am – 4:30 pm
    www.honoluluprosecutor.org/contact-us/

    How often do we get and answer calls from telephone numbers of people who we think we know, only to discover it’s a telemarketer or scammer? Here are some prevention tips that may help…

  • Kick Out Your Freeloading Adult Kid(s)

    My office has received an increase in calls from parents, siblings or other relatives trying to kick an adult child out of their house. Often, the caller has already requested that the child leave, only to receive an adamant “no” from the unwelcome person. In one instance, a mother was selling the home that she loved to move into a small, one-bedroom apartment, hoping her son would not be allowed to live there.

    After a child’s loss of a job or a divorce, naturally, parents want to help, expecting the situation to be temporary, even though they say “stay as long as you want.” The caller may then explain how the child has made no efforts to move out. Why move out of the family home when you can stay there rent-free with meals included?

    Why I am being informed of these situations? Because there are often allegations of emotional, physical and financial abuse. The abuse occurs very subtly, frequently creeping up on the senior parent until they find themselves in a situation that seems inescapable. For instance, I have gotten multiple calls from parents who gave spending money to their child, which eventually turned into supporting them entirely. One father almost depleted his savings trying to bail his son out of repeated financial disasters.

    How do you divorce yourself from a child?

    If the abuse is physical, call 911. No exception. After the police arrest him or her, file for a restraining order. Our office’s Victim Advocate Services (808-768-7400) can help with that or there are instructions online as well. You can still call the police if the abuse is financial. But depending on the circumstances, the arrest may not be immediate. Additionally, a parent can call the Legal Aid Society of Hawai‘i (808-536-4302) and request help getting a Writ of Ejectment. This is a legal way of kicking a child out of the house.

    Why not just call the police and have the child removed for trespassing?

    The police may interpret the relationship the parent and the child have as a landlord/tenant situation. In that case, the parent will have to go through the court system to evict the child from the home. The process may take a month or longer. Whatever avenue the parent decides to pursue, it is not going to be easy. And because of that difficulty, many parents choose to remain in an unhealthy environment instead of living in a stress-free, happy home. The choice is yours.

    If you have questions about elder abuse, call or email:
    808-768-7536 | ElderAbuse@honolulu.gov

    My office has received an increase in calls from parents, siblings or other relatives trying to kick an adult child out of their house. Often, the caller has already requested that the child leave, only to receive an adamant “no” from the unwelcome person. In one instance, a mother was selling the home that she…

  • Saving for Unfunded Liabilities

    For many years, we have heard our federal and state politicians talk about “unfunded liabilities” of the government.

    An unfunded liability is any liability or expense that does not have sufficient savings or investments set aside to pay for it. The party responsible for paying the unfunded liability pays for it out of current income or savings or by borrowing the funds.

    The risk of an unfunded liability is two-fold:

    1) The payee may not receive payments which they are entitled to

    2) The payer may experience financial stress

    Although the government must address these issues in the coming years, we often overlook the fact that these issues may also extend into our personal lives.

    In our 20s, an unfunded liability might be an unexpected repair that could require using our savings or borrowing from our credit card.

    Later in life, unfunded liabilities can be more serious. For some, a health crisis could result in unexpected and unaffordable medical expenses.

    While the unfunded liabilities of the government may seem overwhelming, establishing a regular personal savings plan and investing wisely can help alleviate the burden of personal unfunded liabilities. Consulting a financial professional can assist you with evaluating and managing your portfolio to help mitigate your personal exposure.

    LEE FINANCIAL GROUP HAWAII, INC.
    808-988-8088 | info@leehawaii.com
    www.leehawaii.com

    For many years, we have heard our federal and state politicians talk about “unfunded liabilities” of the government. An unfunded liability is any liability or expense that does not have sufficient savings or investments set aside to pay for it. The party responsible for paying the unfunded liability pays for it out of current income…

  • Pay Medicare Supplements With SPIA

    With rising health care costs, many Medicare participants use Medicare supplement insurance to help cover expenses that Medicare does not.

    However, many still struggle to pay the premiums for their Medicare supplement insurance. Surprisingly, another insurance product — one that can guarantee a monthly income stream — might be the solution. A single premium immediate annuity — or a SPIA — can guarantee a source of income for life in exchange for a lump sum premium payment.

    SPIAs are the only product that can guarantee that you won’t outlive your savings and offer financial security for living a long life.

    Here’s how it works:

    1. Purchase a Medicare supplement policy with help from a licensed insurance agent.

    2. Your financial advisor can help you purchase a SPIA with a payout that will cover your Medicare supplement premium and other expenses.

    There’s no guarantee you can completely fund the premiums throughout the duration of your SPIA policy. But an SPIA can help keep your Medicare supplement policy in force by providing a guaranteed income.

    MUTUAL OF OMAHA, HAWAII DIVISION OFFICE
    1600 Kapiolani Blvd., Ste. 1200, Honolulu HI 96814
    Garrett Wheeler | 808-942-8133 ext.248
    garrett.wheeler@mutualofomaha.com
    www.mutualofomaha.com
    Investment advisory products and services are made available through Mutual of Omaha Investor Services, Inc., a Registered Investment Advisory Firm. Member FINRA/SIPC.

    With rising health care costs, many Medicare participants use Medicare supplement insurance to help cover expenses that Medicare does not. However, many still struggle to pay the premiums for their Medicare supplement insurance. Surprisingly, another insurance product — one that can guarantee a monthly income stream — might be the solution.