Category: Wisdoms

  • Healthcare Costs In Retirement

    With all the uncertainties of the future, it’s difficult for people to know exactly how much to save for retirement. While it may be relatively easy to gauge just how much you’ll need for everyday living expenses like food and housing, other expenses, such as the costs for healthcare can be a lot more difficult to estimate.

    According to projections from the Employee Benefit Research Institute*, a baby boomer couple retiring in 2020 will need an average of $227,000 to cover medical expenses. You can hope costs will be lower than that, but there’s really no way to predict the amount of medical care you’ll need as you age — or the price tag that will go with it.

    To help people better understand how their future health status, healthcare costs and finances are all intertwined, Ameriprise Financial recently released the Health, Wealth and RetirementSM study. Here are five key findings from the study, and tips to help you manage future medical costs:

    1) Most baby boomers have yet to take financial action to prepare for healthcare and potential long-term care costs in retirement. You can take some comfort in knowing you’re not alone if you haven’t put a plan in place to manage your future healthcare costs. But, because these costs can be so significant, the sooner you take action, the better off you’ll likely be.

    2) The majority of boomers see the connection between health and potentially reduced healthcare costs in retirement. While many health events are unpredictable, you can control some aspects of your future state of health. One way to offset your need for medicines or surgeries is to take care of yourself now — by eating right and getting sufficient exercise and rest.

    3) One in four baby boomers experienced a serious health condition; 54 percent say it had a financial impact. This data reinforces the vital importance of an emergency healthcare fund and a comprehensive medical plan. Your task is to research retirement health coverage options, including supplemental plans to offset large, unexpected expenses in exchange for monthly premiums.

    4) Those who have taken action to prepare for healthcare coverage in retirement experience positive emotions, while those who have not experience worry, anxiety and insecurity. Do your best to reduce the amount of worry and stress in your life by taking steps to plan and save for your healthcare expenses in retirement.

    5) A majority (62 percent) of those preparing for retirement plan to consult their financial advisors about how to afford future healthcare costs. This fact reveals that this task requires a second opinion. With a qualified financial advisor, you can explore strategies for managing future healthcare costs in the context of a larger plan that considers all of your wants and needs in retirement.

    Michael W. K. Yee, CFP
    1585 Kapiolani Blvd., Suite 1100, Honolulu
    808-952-1222 ext. 1240 | michael.w.yee@ampf.com

    Michael W K Yee, CFP®, CFS®, CRPC®, is a Financial 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 26 years.
    * Employee Benefit Research Institute, “Savings Needed for Health Expenses for People Eligible for Medicare: Some Rare Good News,” October 2012.
    The Health, Wealth and Retirement SM study was created by Ameriprise Financial utilizing survey responses from 1,075 Americans ages 50 to 64 employed full time with investable assets of at least $100,000. The online survey was commissioned by Ameriprise Financial, Inc., and conducted by Artemis Strategy Group from June 26 – July 11, 2014. For further information and detail about the Health, Wealth and Retirement SM study including verification of data that may not be published as part of this report, please contact Ameriprise Financial.
    Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
    Ameriprise Financial Services, Inc. Member FINRA and SIPC.
    ©2014 Ameriprise Financial, Inc. All rights reserved. File # 1047371

    With all the uncertainties of the future, it’s difficult for people to know exactly how much to save for retirement. While it may be relatively easy to gauge just how much you’ll need for everyday living expenses like food and housing, other expenses, such as the costs for healthcare can be a lot more difficult…

  • The Accidental Caregiver

    You love your family and you are good at your job. This does not mean, however, you will make a good caregiver for a loved one. Being an accomplished professional, expert or an akamai homemaker does not prepare you for the sudden responsibility of a full time caregiver.

    For instance, I love my father-in-law and I am a very good lawyer, but when he had a stroke, I and my family were overwhelmed and ill-prepared for the task suddenly upon us: being a caregiver for a disabled person. When my wife was pregnant, on the other hand, we had nine months to prepare for handling another human being who was going to be dependent on us for everything. My father-in-law’s stroke happened in a moment.

    My father-in-law was lucky, however, in that his care could be shared among our entire ohana. This was not the case for Dwayne Smith (not his real name). After suffering a massive heart attack, Dwayne’s adult son Peter assumed the role of caregiver. For three years, Peter took good care of his father. One day, however, Dwayne soiled his bedding; Peter began yelling at his dad and punching him. When the assault stopped, Dwayne was covered with bruises and blinded in his right eye. He was taken to the hospital and died a month later.

    An estimated 65 million people nationwide serve as “informal caregivers”— usually relatives who become caregivers because of financial necessity. Unfortunately, because of caregiver stress, some of these well-meaning volunteers will make decisions or take actions they not only will regret, but also will result in harming a loved one.

    If you suddenly find yourself in the position of a caregiver, you can take steps to reduce the stress of caring for a dependant loved one:

    • Don’t try and do it alone: a team approach will prevent the feeling of being overwhelmed with all the tasks that need to be done. Will you pick up the pills from Longs? How about dropping off a lunch or dinner on Tuesday? Can we please add our Costco list to yours? A simple question shares responsibilities, no matter how small, and makes the job much more manageable.
    • Organize Information: knowing where the identification card, insurance card and list of medication are located will greatly help at the next doctor’s visit.
    • Take Care of Yourself:
    •  Eat regular and nutritious meals
    • Take a Break and do something for yourself
    • Sleep
    • Express yourself: call your buddy or join a caregiver’s support group — talk about the conflicting emotions of being a caregiver for a family member. You are not alone.Work with the person you are caring for: doing everything for your “patient” may be quicker, but in the long run, the dependency you are creating will wear you down.

     

    To report suspected elder abuse, contact the Elder Abuse Unit at: 808-768-7536 | ElderAbuse@honolulu.gov www.ElderJusticeHonolulu.com

    You love your family and you are good at your job. This does not mean, however, you will make a good caregiver for a loved one. Being an accomplished professional, expert or an akamai homemaker does not prepare you for the sudden responsibility of a full time caregiver. For instance, I love my father-in-law and…

  • Selling Your Collectibles Is A Business Decision

    My hobby started in 1958 with heart and a willingness to gather and share as much information as possible. As a professional coin dealer, I still have deep excitement for numismatics, (Greek for ‘a love of the study of coins’.)

    Coins and other collectibles, such as paper money and vintage jewelry are a form of investment, and often people expect to make money trading or liquidating their assets at a future time.

    Liquidating is business, not philanthropy, so “sellers beware;” local companies rely on repeat customers and tend to be fairer than those with no base in Hawaii. A good idea is to do your homework and consult an expert to appraise the value of your collectibles, outline your options and explain any problems to avoid.

    We all spend a lot of time examining our collectibles and researching their value, which is based on the condition of the coin, how many were minted, and market demand. A coin dealer’s selling price is higher than the buying price. Well-worn coins usually fetch a lot less than “mint condition” coins. Because precious metal prices are so high, some silver or gold coins are valuable just for their metal content.

    The price of precious metals fluctuates daily, and traders who come to town offering “cash for gold and silver” pass on six figure travel and advertising costs to you. What sounds like a lot of money may actually be less than established dealers would offer.

    Have your old jewelry appraised. Some antiques are very valuable. Metal buyers are not interested in vintage value, workmanship or precious stones. In fact, stones are severely damaged or destroyed in the refining process. If melting your jewelry is your best option, remove precious stones professionally and sell them to a jeweler, to improve your return.

    I advise seniors to list all your questions first and get more than one opinion or appraisal of your collectibles. Keep asking until you get satisfactory answers. Take your time to gather as much information as you need in order to make a good business decision.

     

    Captain Cook Coins – Craig & Sandy Watanabe
    Consultation services are available.
    808-531-2702 | captaincookcoin@aol.com

    My hobby started in 1958 with heart and a willingness to gather and share as much information as possible. As a professional coin dealer, I still have deep excitement for numismatics, (Greek for ‘a love of the study of coins’.) Coins and other collectibles, such as paper money and vintage jewelry are a form of…

  • Bummers For Boomers

    As we all waited in long lines for gas and supplies in the face of oncoming Hurricane Iselle, we were reminded of the importance of planning ahead for inevitable catastrophic events. Here are some things NOT to do with your estate plan, according to Casey Dowd in his article, “Estate Planning Mistakes Every Boomer Should Avoid,” published on foxbusiness.com:

    • Fail to plan for large expenses such as long-term care. This may not seem like a big deal when you are relatively young and healthy, but fully 70% of us can expect to be completely incapacitated for some period of time before we die. Many of us will need care that cannot be provided in our homes in a cost-efficient way. Our options are: (A) be fabulously wealthy, (B) plan ahead, or (C) fall upon the mercy of governmental programs. (B) works best for most of us.
    • Fail to update beneficiary designations on bank accounts, investment accounts, retirement accounts, and insurance policies. Having a will and revocable living trust agreement is not enough. Better yet, transfer your assets (or funnel them by way of updated beneficiary designations) to your trust. Don’t forget that you need to update your will and trust from time to time. A lot of things change: (health family situation, assets, laws, the list of people that you like and trust to have making decisions on your behalf.) Review your estate plan annually, but also make changes any time new things occur.
    • Fail to take steps to avoid family strife. Making your intentions clear is the first step. You may also build incentives (and disincentives) into your estate plan to head off courtroom battles.
    • Use a “do it yourself” computer program to design your estate plan. If you truly know what you are doing, these kinds of tools may work. If not, they are a crapshoot. Gamble with your family’s future if you like, but better to save your loved ones a good deal of time and money by not taking shortcuts.
    • Put your kids on the title to your stuff during your lifetime. Not only might you be setting them up for capital gains taxes, bit also you may be putting your assets at risk. Once you give something away, it is gone. Not even your kids’ good intentions will spare you from the wrath of their creditors or ex-spouses.
      Estate planning is serious business, and you are better off doing it right. Usually, that will mean working with professionals who will charge for their services. Shop around until you find advisors who will help you devise a workable plan, know what they are doing, and who are worth their fees.

     

    Scott Makuakane, Counselor at Law
    Focusing exclusively on estate planning and trust law.
    Watch Scott’s TV show, Malama Kupuna
    Sundays at 8:30 p.m. on KWHE, Oceanic channel 11
    www.est8planning.com
    O‘ahu: 808-587-8227 | maku@est8planning.com

    As we all waited in long lines for gas and supplies in the face of oncoming Hurricane Iselle, we were reminded of the importance of planning ahead for inevitable catastrophic events. Here are some things NOT to do with your estate plan, according to Casey Dowd in his article, “Estate Planning Mistakes Every Boomer Should…

  • It’s Like Going To The Eye Doctor

    When we go to the eye doctor to get a new prescription, the doctor will have us look through many different lenses, constantly asking us which lens provides us with the clearest vision. Much like the eye doctor, I believe that the role of the estate planning attorney is to provide you with estate plan options that most clearly reflect your vision for your plan. You see, both estate planning lawyers and eye doctors strive to provide clarity.

    Estate planners must focus on three points for their clients: speaking clearly must accurately communicate your wishes and intentions to your fiduciaries and beneficiaries so what you intend is honored and respected; and making sure your written plan precisely mirrors your wishes.

    When you seek counsel to pass on your estate, I believe you are asking for more than written legal documents like a Will and Trust. When you go for new glasses, you need more than frames. Proper lenses bring everything into focus.

    Peace of mind comes from a sense that your written estate plan documents safely pass on your legacy, minimize tax, avoid probate, and prevent family fights. Perhaps you are concerned about also protecting the assets from creditors, predator or ex-spouses. Your plan has to be specific enough to speak clearly for you when you no longer can.

    Your attorney must first look and listen attentively to understand your hopes and goals; then offer you options that create an estate plan that your heirs can read and understand without questions or doubt. When the prescription is perfect, and the glasses fit, it’s easy to see your way.

     

    Stephen B. Yim, Attorney at Law
    2054 S. Beretania St., Honolulu
    808-524-0251 | stephenyimestateplanning.com

    When we go to the eye doctor to get a new prescription, the doctor will have us look through many different lenses, constantly asking us which lens provides us with the clearest vision. Much like the eye doctor, I believe that the role of the estate planning attorney is to provide you with estate plan…

  • The Gift That Gives Back To You

    Did you know there is a way to support your favorite charitable cause and receive cash back? It’s called a charitable gift annuity and many, but not all, charities offer this form of giving. In Hawai‘i, there are some legal requirements that must be met by a charity before it can offer this form of charitable giving.

    When you make a gift of cash or an appreciated asset in exchange for a charitable gift annuity, the charity makes a promise to pay you for the rest of your life. Your payment rate is fixed based on your age and never changes.

    Choosing to participate in a charitable annuity program allows you to make a meaningful charitable gift, and receive regular, fixed payments no matter how long you live. The payments may provide for dependable payments for your spouse or another person if you wish. Optionally, you may receive higher payments for a deferred payment gift annuity. There may also be tax benefits such as an income tax deduction in the year of your gift, and payments that are partially free of federal income tax for a period of time.

    People who are considering a substantial charitable gift but also feel uncertain about the future like the idea of a charitable annuity with continuous payments.

    If you plan to give a portion of your assets to charity, and want more information on ways charitable gift annuities might work for you and your family, visit National Kidney Foundation of Hawaii online and just click on “Donor Stories.”

     

    National Kidney Foundation of Hawaii
    808-589-5976 | jeff@kidneyhi.org
    For Planned Giving: www.kidneyhawaii.org
    Main: www.kidneyhi.org | www.kidney.org

    Did you know there is a way to support your favorite charitable cause and receive cash back? It’s called a charitable gift annuity and many, but not all, charities offer this form of giving. In Hawai‘i, there are some legal requirements that must be met by a charity before it can offer this form of…

  • Adjusting Your Money Mindset

    Money is a powerful influence on our lifestyle, emotions and behaviors. If you’re serious about improving your financial life, examine your money mindset

    Acknowledge your personal history. If you grew up in poverty, you may have an underlying sense of scarcity–never having “enough.” If you were accustomed to abundance, you may not know how to manage money wisely. Such patterns may prevent you from earning what you’re worth, saving adequately, spending responsibly or being more philanthropic.

    Evaluate your emotional response to money. Is your mood tied to your assets? Does your bank account define you? When money occupies the driver’s seat, anxious thoughts can prevent you from making reasonable choices.

    Stop playing these money mind-games.

    • I’ll be happy when I make more money. Happiness comes from within. It is important to enjoy the successes you’re experiencing today as well as working on future goals.
    • Money is the only thing that matters. Money is an important means to an end. Worshipping money at the expense of people, nature, art and ideas may lead to loneliness and disappointment.
    • Money is meaningless. This harmful idea feeds reckless spending, de-motivate your work life, and stress those who depend on your productivity. Money should be treated with respect and not frittered away.

    Let go of the past. Stop beating yourself up for your financial mistakes. Reframe regrets as lessons and opportunities to grow. People recover from a failed business, job loss, stock tumble, or tax trouble. Keeping an open mind and focus on what you can do now.

    Curtail the time spent thinking about money. Dwelling on dollars and cents or fantasizing about winning the lottery doesn’t get you any closer to your goals. Step back; switch gears and identify\ tried and true actions to help you reach your goals. Daydream for short bursts of time; then get back to the business of living.

    Enlist a financial ally. A skilled financial advisor will be very familiar with mental, emotional and behavioral landmines you want to avoid on the road to a solid financial future. With tools to plan, save, and invest, within your timeframe and budget, you can live without financial stress, now and In the future. Look to your advisor for guidance and encouragement to sharpen your mental game and develop a new money mindset.

     

    Michael W. K. Yee, CFP
    1585 Kapiolani Blvd., Suite 1100, Honolulu
    808-952-1222 ext. 1240 | michael.w.yee@ampf.com
    Michael W K Yee, CFP®, CFS®, CRPC®, is a Financial 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 26 years.
    Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
    Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
    © 2014 Ameriprise Financial, Inc. All rights reserved. File # 975765

    Money is a powerful influence on our lifestyle, emotions and behaviors. If you’re serious about improving your financial life, examine your money mindset Acknowledge your personal history. If you grew up in poverty, you may have an underlying sense of scarcity–never having “enough.” If you were accustomed to abundance, you may not know how to…

  • When Home is Anything But Sweet

    Hawaii has the largest number of Homeowner’s Associations (HOA) per capita than other state. In these structured communities, residents agree when purchasing their homes to follow certain rules to ensure a certain quality of life is maintained for residents. They pay monthly fees to maintain amenities like, common areas, landscaping and pools, also other expenses, including hiring lawyers to enforce the rules. Governing body of HOA is the Association Board made up of residents elected to their position and to act in the community’s best interest. These communities, are only as good as the members elected to the Boards. Run well and responsibly, neighborhoods become everything residents desire and more. Run poorly, abuse can occur.

    An increasing number of instances nationwide where these Boards, hiding behind the excuse of enforcing the rules, have abused their powers, often times targeted the elder members of their community, using harassment, confusion, shame and fear in order to financially bully them.

    One example, when Walter (not his real name) returned home from a trip, he discovered in his mailbox letters from his HOA Board, fining him for not maintaining his lawn — an HOA violation. Since he was comfortable speaking up at previous Board meetings, he ignored the correspondence with the intent of explaining the circumstances of his trip at the next meeting. Before the next meeting, he received a letter from an attorney the Board hired, threatening legal action if Walter didn’t pay not only the original fine, but also the legal expenses the lawyer charged to write the letter. Walter found himself not only the target of the Board that didn’t appreciate his outspokenness, but the subject of a lawsuit demanding thousands of dollars in unreasonable legal expenses.

    Actions that can be taken to minimize harm done and protect yourself and home.

    If you are being treated unfairly by a HOA:

    • Learn your HOA’s rules and the consequences.
    • Know what fee’s you’ve agreed to pay for.
    • Know how fee increases are set, how often they occur, how much is in the HOA’s reserve fund, and the operating expenses and the budget.

    If you feel abuse is occurring:

    • Keep records: document abuses and keep all your correspondences with your HOA.
    • The worst thing is refusing to pay HOA fees and not telling your reasons — the risk is foreclosure.
      Call the Department of Commerce and Consumer Affairs at 586-2643.
    • Seek out legal advice from an attorney specializing in defending homeowners from HOA; depending on your circumstances, they may take the case on contingency (pay if you win).

    To report suspected elder abuse, contact the Elder Abuse
    Unit at: 808-768-7536 | ElderAbuse@honolulu.gov

    Hawaii has the largest number of Homeowner’s Associations (HOA) per capita than other state. In these structured communities, residents agree when purchasing their homes to follow certain rules to ensure a certain quality of life is maintained for residents. They pay monthly fees to maintain amenities like, common areas, landscaping and pools, also other expenses,…

  • Signs of the Economic Times

    The state of the economy can make a big difference in our lives. It affects opportunities in the job market, drives stock market, determine prices and influences buyer behavior.

    When economy is robust, there’s optimism in the air. Companies’ hire, investors invest and consumers spend. When economy is sluggish, mood is somber, companies struggle to make a profit, investors are more cautious and consumers tighten their wallets.

    How do we know if the economy is doing well?

    Economic indicators that go hand-in-hand with economic health, provide clues. Direct economic indicators go up when economy is rosy and down when economy tanks. Other factors have an inverse relationship with the economy. These inverse factors fall and rise opposite the strength of the economy.

    Leading economic indicators are considered most important factors to watch. Unlike lagging economic indicators that appear after economic change, these indicators come first, helping economists predict the direction of the economy. Here are some of the most discussed leading economic indicators.

    Consumer Price Index (CPI) — Is a consolidated measure of price of goods and services over time at the consumer level. Observed changes in CPI help determine inflation and cost of living, help shape our monetary policy. Measured by the Bureau of Labor Statistics, the CPI is calculated for food, energy and other consumer goods. Further analysis within these categories reveal what influences price fluctuations.

    Prices of some goods and services are more influential than others. For example, we are a nation of automobile owners; price of gas is closely watched. When prices get too high or too low, government may intervene with policies intended to cap consumer costs and spur economic activity.

    Producer Price Index (CPI) — Prices paid at the store, the Producer Price Index (PPI) considers what wholesalers pay for U.S. goods and services (food and energy, not factored). Wholesale prices influence consumer prices; PPI can be a useful predictor of impending inflation.

    U.S. Import and Export Price Indexes — Our nation relies on foreign trade to sustain economic activity. Price we charge foreign trading partners for goods and services, can reveal a good deal about our economic standing. Fluctuations in supply and demand, competition and stability of our global partners make these measures more vulnerable to variability.

    Productivity and Costs — Productivity statistics tell how well our economy is working. When businesses are able to do more in less time, profits rise, in turn paves the way for more investment, more jobs and prosperity.

    Real Earnings — Looks at real average hourly earnings to estimate consumer-buying power. Comparing real earnings to the CPI, shed light on how far the U.S. dollar can go.

    New Construction — Housing starts and building permits are regularly monitored by the financial industry, they reflect both business growth and consumer confidence.

    Employment Situation — Stock market tends to perk at announcement of new hires and fewer unemployment claims. Investors like a healthy economy. Job security also tends to give consumers more confidence.

    Visit the Bureau of Economic Analysis at www.bea.gov and U.S. Census Bureau at www.census.gov. Apply what you learn with your financial advisor, who can help you consider important financial decisions.

     

    Michael W. K. Yee, CFP
    1585 Kapiolani Blvd., Suite 1100, Honolulu
    808-952-1222 ext. 1240 | michael.w.yee@ampf.com
    Michael W K Yee, CFP®, CFS®, CRPC®, is a Financial 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 26 years.
    Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
    Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
    © 2014 Ameriprise Financial, Inc. All rights reserved. File # 823751.

    The state of the economy can make a big difference in our lives. It affects opportunities in the job market, drives stock market, determine prices and influences buyer behavior. When economy is robust, there’s optimism in the air. Companies’ hire, investors invest and consumers spend. When economy is sluggish, mood is somber, companies struggle to…

  • Retirement Assets for Charitable Giving

    If you are like many people; you may desire to make a charitable gift as part of your estate plan, a way to give back, when your need for assets is done. This kind of planning is done when retirement is also on our minds.

    Most of us hold retirement savings in an IRA, 401(k) or 403(b). Because of the way these funds are used, you may not exhaust all of your retirement money during your lifetime. So, the question is, “What will I do with my unspent retirement savings?”

    A Common Solution

    Most people designate family members as beneficiaries of retirement accounts. The problem with doing this is that much of your savings may never go to your loved ones. By giving your unspent retirement savings to your family (other than your surviving spouse), your retirement savings will be taxed. First, if you have a taxable estate, your estate will pay tax on the asset. Second, your family members will pay tax at their ordinary income rate resulting in very little of your remaining money actually going to your family.

    A Better Solution

    When leaving assets to family, it’s best to give your family assets that step-up in basis at death such as stock and real estate, these assets may be received and sold by your family without paying any tax. Your retirement assets actually make a better gift to charity because a charitable organization can receive the entire asset tax free and make use of it to further its mission.

     

    National Kidney Foundation of Hawaii
    808-589-5976 | jeff@kidneyhi.org
    www.kidneyhi.org | www.kidney.org

    If you are like many people; you may desire to make a charitable gift as part of your estate plan, a way to give back, when your need for assets is done. This kind of planning is done when retirement is also on our minds. Most of us hold retirement savings in an IRA, 401(k)…

  • Our Story

    I have had the great fortune to be able to go on a cruise this summer with my family and visited many different places in Europe.

    We barely heard any English spoken on this trip and while the languages are varied, I’ve noticed more commonalities than differences among the people we’ve had the privilege of meeting during our travels.

    These commonalities include (1) the love of family as I hear universal laughter coming from parents and children, (2) enjoying freedom other countries may not yet enjoy, including the freedom of speech, to vote, to drive and (3) a desire to tell one’s story.

    Fittingly, the person’s name assigned to help us during our cruise in the Mediterranean is Story. We visited museums in Paris, the incredible ruins in Pompeii, and the young democracy in Tunisia. In each place, I noticed that the people have a desire to tell one’s story, through pictures, writing,\ and oral history.

    Estate planning, to me, is much more than leaving cash to someone. Cash is so quickly gone. It is one’s legacy that continues on.

    I believe that this legacy, your story, is just as important as the legal estate plan leaving assets by way of will or trust and have created what I’ve coined “My Heartfelt Will.” Please consider taking the time and giving yourself permission to write your story.

    I encourage you to consider writing your legacy down, the memories and experiences that continue to shape your lives. Are you considering making your estate plan this summer?

     

    Stephen B. Yim, Attorney at Law | 2054 S. Beretania St., Hon. | (808) 524-0251 | stephenyimestateplanning.com

    I have had the great fortune to be able to go on a cruise this summer with my family and visited many different places in Europe. We barely heard any English spoken on this trip and while the languages are varied, I’ve noticed more commonalities than differences among the people we’ve had the privilege of…

  • Clarke v. Rameker and Your IRA

    In Clark v. Rameker, decided on June 12, 2014, the U.S. Supreme Court boldly went where it has seldom gone before. It waded into the estate planning world and decided that the creditor protection rules that generally apply to IRAs do not apply to inherited IRAs.

    The Federal law that governs retirement plans, known as ERISA, provides protections against creditors trying to raid your IRA in order satisfy their claims against you. The Clark case answered the question of whether those same protections apply to the unspent balance of your IRA that you leave to your spouse or children after your death. The answer is a resounding “no.”

    This case is important for those of us who want to include protective measures in our estate plans to prevent a beneficiary’s ex-spouse or creditor from enjoying what was intended for the beneficiary. The good news is that there is a tried and true means of providing these kinds of protections despite the outcome in Clark.

    Stand Alone Retirement Plan Trusts (SARPTs) are particularly attractive to those who have substantial (more than $250,000) in qualified retirement plan assets. Instead of naming your loved ones as beneficiaries of your IRAs, you name an irrevocable trust that divides into separate trusts for each of your beneficiaries upon your death. Each trust receives the annual distribution that the beneficiary otherwise would have received. The trustee then has the discretion to either distribute the money to each beneficiary, or to withhold the distribution of any beneficiary or beneficiaries who are in legal hot water.

    The upsides of this strategy are that they provide creditor protection for retirement plan assets, and they also enable beneficiaries to “stretch out” distributions, so they pay income tax on those distributions in small increments, keeping the remaining assets growing for them on an income tax-deferred basis.

    The downside is that if an IRA distribution is not distributed to the beneficiary in the year of receipt by the trustee, the trust (instead of the beneficiary) will pay the income tax on the distribution, and the tax rates for trusts are almost always higher than the tax rates for individuals. However, this is the one time that the beneficiary may appreciate seeing 40% of the distribution go to the IRS, because the alternative might be for 100% of it to go to a creditor or ex-spouse.

    SARPTs can be helpful for the families of many IRA owners, and they are worth discussing with your trusted advisors.

     

    Scott Makuakane, Counselor at Law
    Focusing exclusively on estate planning and trust law.
    Watch Scott’s TV show, Malama Kupuna
    Sundays at 8:30 p.m. on KWHE, Oceanic channel 11
    www.est8planning.com
    O‘ahu: 808-587-8227 | maku@est8planning.com

    In Clark v. Rameker, decided on June 12, 2014, the U.S. Supreme Court boldly went where it has seldom gone before. It waded into the estate planning world and decided that the creditor protection rules that generally apply to IRAs do not apply to inherited IRAs. The Federal law that governs retirement plans, known as…