Category: Wisdoms

  • 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.

  • A Heartfelt Operating Manual

    How nice would it be if your child was born with an operating manual? There are many parenting books out there, but none that are specifically made for your child. The obvious reason for this is because the only person who can write an operating manual for a child, is the person who is raising the child.

    This idea really hits home for clients who have a minor child or a child with a disability and are concerned about who is going to love and raise him or her if they are no longer here. In this case, the most important estate planning document is the will. The will allows parents to appoint a guardian for their child if they are no longer able or alive to care for them.

    However, establishing a will alone is insufficient. It does not tell the guardian about the child or about how to love and raise him or her.

    To supplement the will, our nonprofit, the Heartfelt Legacy Foundation, created a memorandum entitled A Heartfelt Operating Manual. We recommend our clients fill out this memorandum to provide guidance to the appointed guardians in respect to specific child-rearing practices, and important choices and wishes regarding their child’s care — it also serves as a tool for parents to use in discussions with their guardian. The will, the memorandum and a conversation will prepare the guardian to provide what you wish — the best care possible.

    HEARTFELT LEGACY FOUNDATION (501(c) 3 nonprofit)
    Stephen B. Yim, Attorney at Law
    2054 S. Beretania St., Honolulu HI 96826
    808-524-0251 | www.stephenyimestateplanning.com | www.heartfeltlegacyfoundation.com

    How nice would it be if your child was born with an operating manual? There are many parenting books out there, but none that are specifically made for your child. The obvious reason for this is because the only person who can write an operating manual for a child, is the person who is raising…

  • What Is a POLST & Do I Need One?

    A POLST is a special document in which you say what measures should be used to keep you alive. The acronym stands for — Provider Orders for Life Sustaining Treatment. It’s different from an Advance Directive in that it will be followed by emergency personnel before you reach the hospital, provided that they are aware of its existence.

    Emergency medical technicians (EMTs) are required to do whatever they can to restore and stabilize your heartbeat and breathing and take you to an appropriate facility for treatment. They will not read your Advance Directive and try to figure out how it might apply to your situation. But in some cases, resuscitation procedures are not appropriate or wanted.

    A POLST — a medical provider’s order — will be followed by the EMTs. Your Advance Directive will not come into play until you are in the hospital. But depending on what your Advance Directive says, the EMTs may not have followed your wishes by keeping you alive.

    Almost every state has a version of the POLST, but it is known by other names. In New York it is called a MOLST and in West Virginia it is called a MOST. Veterans Administration medical centers use the term SAPO, which stands for State Authorized Portable Order. Whatever the alphabet soup used to name the document, it generally works as described above.

    In Hawai‘i, it’s recommended that you print your POLST on lime green paper so it will be recognizable immediately. The trick is to have your POLST in a conspicuous place in case you need it. You can post a copy near your bed, or you can carry it with you when you leave the house. Just make sure your loved ones know that you have one and where to find it if an emergency occurs.

    Note that the POLST does not have to say “don’t resuscitate me.” It can say the exact opposite if that is your wish. Either way, most people do not need a POLST. However, for someone whose death is imminent and who doesn’t want to risk being kept alive artificially against his or her wishes, a POLST is essential.

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

    A POLST is a special document in which you say what measures should be used to keep you alive. The acronym stands for — Provider Orders for Life Sustaining Treatment. It’s different from an Advance Directive in that it will be followed by emergency personnel before you reach the hospital, provided that they are aware…

  • If Your Kids Plan a Later-in-Life Family…

    Many couples are choosing to start families later in life compared to their parents and grandparents. According to the National Center for Health Statistics, the mean age of first-time mothers rose from 25 in 2009 to 26.3 just five years later.* And, increasingly, mothers are waiting to have their first child at age 35 or older. This trend has financial implications. On one hand, parents may be more financially secure and have clear priorities for the future. On the other hand, these parents are closer to retirement, so balancing kids’ expenses with saving can be a juggle.

    If your kids choose to have their first child later in life, here are four key dos and don’ts to help them manage their finances with confidence:

    DO establish a solid financial foundation. Their household expenses will likely increase once they’re paying for childcare, additional checkups at the doctor or dentist and other items for their child. With this in mind, they should consider using the discretionary income they have today to shore up their financial position—prioritize paying off student loans, build an emergency fund (three to six months worth of expenses is a good benchmark) and consider paying more toward their mortgage if they own a home.

    DO boost savings. Creating a habit early of saving for major goals can help maintain savings momentum while they are focused on adapting to their new addition. They should harness the power of compound interest by contributing to their retirement accounts with each paycheck and setting aside funds for major goals, such as an annual vacation or home remodel.

    DON’T prioritize the child’s college education over retirement. Will they be making tuition payments in their final years of work or in retirement? If this is a possibility, it’s imperative that they create a plan to balance saving for both goals right away. The reality is many couples need to push back their retirement date, figure out how to earn additional income with a different job or cut back their travel plans to pay for their child’s education. While it’s understandable that they will want to provide for their child, keep in mind that health, layoffs or other circumstances outside of their control could change their retirement date. Their child has other options to pay for college — including scholarships, loans and work-study programs — that are not available to them if their retirement savings come up short.

    DON’T forget to update the estate plan. Ensuring they have adequate insurance coverage becomes a bigger priority when they have a child in the picture. If your son or daughter (or spouse) were to sustain an injury or pass away prematurely, they would need to ensure that their disability and life insurance coverage will cover their financial commitments and goals. They should also consider purchasing long-term care insurance to cover potential healthcare expenses in retirement.

    It’s exciting to dream and plan for an expanded family. But if your kids want a second opinion on how to juggle their financial priorities, they should meet with a financial advisor.

    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.

    *Mathews, T.J. and Hamilton, Brady E., “Mean Age of Mothers is on the Rise: United States, 2000-2014,” National Center for Health Statistics Data Brief No. 232, January 2016. https://www.cdc.gov/nchs/data/databriefs/db232.pdf.

    Many couples are choosing to start families later in life compared to their parents and grandparents. And, increasingly, mothers are waiting to have their first child at age 35 or older. This trend has financial implications. On one hand, parents may be more financially secure and have clear priorities for the future. On the other…

  • Don’t Be Duped By a Text Message

    There’s been a marked increase in text messages with a spoofed Caller ID that ask the recipient to click on a hyperlink — that’s always the objective of this type of scam. It is their methodology to hijack your device.

    Graphic showing examples of spoofed text messagesTwo Major Risks

    1. The recipient does not know who really sent the message.
    2. The hyperlink may redirect the message recipient to a website where malicious software may compromise the recipient’s cellphone.

    These programs may allow “spying” on your calls and text messages, and stealing personal and financial information and passwords. The program may even take control of the cell phone’s functions, such as the camera and/or microphone.

    Signs of Caller ID Spoofing

    • If the message is written using bad grammar and/or misspelling.
    • The message creates a sense of urgency and demands an immediate response.
    • The Caller ID is not in your address book — a big red flag!

    You should never respond to a text message from an unknown sender.

    Prevention Tips

    • Keep your address book current to include financial services you use regularly.
    • If you receive a text message with a hyperlink, do not click on it until you can determine it is legitimate. Use Google to determine the validity of the web address in the text message. Do the same with the Caller ID of the sender.
    • If neither is legit, do not reply to the sender and/or click on the hyperlink.
    • If it is legit, contact the sender of the message through other means; do not reply to the text message. If it is a company, find its contact phone number and call them to verify that they sent the message.

    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/

    There’s been a marked increase in text messages with a spoofed Caller ID that ask the recipient to click on a hyperlink — that’s always the objective of this type of scam. It is their methodology to hijack your device. Two Major Risks include: The recipient does not know who really sent the message; and…

  • Stealing Home: An Ultimate Betrayal

    The term “stealing home” is associated with baseball. It occurs when a runner is on third base and uses guile, speed and luck to make a dash for home plate to score a run. This usually happens when the runner takes advantage of the pitcher being distracted.

    In the Elder Abuse Unit, however, my team has come to know the term in a different context. We have seen situations when a homeowner literally has had their residence stolen.

    The first time I saw this happen was when I got a call from Mark (story real; names changed) about what his brother, Tony, had done to their mother, Alice. Tony asked if she could co-sign on a loan for him. Given that Tony seemed responsible and had a job, she agreed. The two of them went to an office downtown and Alice was presented with many papers to sign. She didn’t think any more about it, assuming that she would have heard if he defaulted on the loan.

    Years later, when Mark and his mother began to plan her estate, they discovered that Alice was no longer the owner of her house. She had signed it over to Tony without realizing it. Tony even let his mother continue paying the mortgage as to not tip her off to what he had done. Tony committed the felony crime of Theft in the First Degree by Deception. Alice was in such shock over this betrayal of trust that she did not know what to do — and that is when Mark made the call to our office for help.

    I wish I could say that Alice’s story is an anomaly, but I have seen houses being stolen by caregivers using powers of attorney and con men using illegal contracts that promise help with foreclosures and debt, only to instead transfer ownership to these charlatans.

    I have seen families misuse monies from reverse mortgages and adult children draining bank accounts of home equity loans, leaving the parents to face financial uncertainty and foreclosure.

    Your house is the single largest investment you’re likely to make. And the equity in your home (or your actual house itself) is very attractive to others who see it as “free money.” It’s like an amber light at night, attracting mosquitoes, but this time, the bloodsuckers could be family members, or “helpful” friends or even strangers.

    When presented with any legal papers to sign, read them carefully or have someone else look them over. You may feel embarrassed asking to do this, but you will feel even more embarrassed if you lose your house. Also, tell your trusted family members and friends, and bring them along. Swindlers hate questions from protective loved ones. If these papers are so good for you, why keep this deal a secret?

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

    The term “stealing home” is associated with baseball. It occurs when a runner is on third base and uses guile, speed and luck to make a dash for home plate to score a run. This usually happens when the runner takes advantage of the pitcher being distracted. In the Elder Abuse Unit, however, my team…

  • Spam, Eggs and Rice

    A few years ago, I created the Heartfelt Advance Care Plan booklet to provide my clients with a tool to improve their end-of-life care, to honor their choices and to reduce conflict and guilt among surviving family members. Those who do fill it out usually comment about how difficult yet rewarding it was to complete.

    Asking and answering detailed questions about end-of-life wishes, regardless of how difficult it may be, is tremendously helpful to both the dying and their survivors.

    Photo of eggs, spam and riceFor example, a wife and husband discussed in detail his wishes during his last days, as well as what he would like to see happen after he passed. The husband, who was usually not a humorous man, answered the uncomfortable questions with a sense of playfulness and humor. In response to one of the questions about his last meal, he said he would like spam, eggs and rice — and so she prepared this last meal to enjoy with her family. To onlookers, this may appear to be a rather minor thing. To his family, it was profoundly meaningful.

    After he passed, she followed his instructions and planned the funeral in accordance with his wishes. She was able to carry out his expressed wishes, allowing him to take control of his life, the end of his life and thereafter, through his answers to the hard questions.

    She was able to be by his side during his waning days, fully present and at peace because she knew what he desired during this transitional period of life.

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

    A few years ago, I created the Heartfelt Advance Care Plan booklet to provide my clients with a tool to improve their end-of-life care, to honor their choices and to reduce conflict and guilt among surviving family members. Those who do fill it out usually comment about how difficult yet rewarding it was to complete.…