Category: Wisdoms

  • Home Equity Into Retirement Income

    The long-struggling housing market is finally showing signs of recovery, giving many homeowners more equity in their properties. This is prompting more pre-retirees to consider if, and how, home equity can be turned into a source of cash to help fund their retirement.

    Home equity represents one of the biggest assets for many Americans. However, there are risks in assuming that your home’s equity will be a guaranteed source of income in retirement. For starters, home equity, like any investment, is subject to the fluctuations of the market and may have tax consequences. Also, you will always need a place to live, so you can’t assume that the full value of a home is at your disposal. Remember that the primary function of your home is to provide a roof over your head, and using equity to fund retirement requires careful planning. Here are three primary options:

    • Home Equity Lines of Credit (HELOC): A HELOCS (second mortgage) is a reasonable option for an employed individual, but it may be less practical for someone in retirement. HELOCs need to be repaid, and using the proceeds from a home equity loan to help fund retirement often means taking on interest costs in order to generate that income. It’s important to note that an individual puts a lien on their home by taking a HELOC, and risks losing it should he or she fail to repay under the terms of the loan.
    • Reverse Mortgage: A popular alternative is a reverse mortgage. This allows a homeowner to tap into the home equity while still occupying it. A reverse mortgage provides payment to homeowners for the bulk of the value of their homes via a lump sum, a line of credit or periodic payments. In essence, this is a loan to the homeowner paid back when the house is sold at some future date. However, interest accrues throughout the duration of the loan and upfront fees apply, so it can be expensive.

    A standard reverse mortgage, also called a Home Equity Conversion Mortgage, charges a 2 percent mortgage insurance premium on the full value of the home. The government now offers a lower cost “Saver” loan with a mortgage insurance premium of just 0.01 percent of the home’s value, but applying a higher interest rate. Over time, the combination of fees and interest charges can significantly deplete the value of the home’s equity.

    Reverse mortgage applicants must be at least 62 years old. The older a retiree is, the more he or she can receive from the home’s equity. Understanding the complicated terms of a reverse mortgage before signing on the dotted line is crucial.

    Selling & Downsizing: The other way to tap a home’s equity is to sell it. Many retirees are ready to “downsize” or to buy or rent a smaller residence. If the market is right, they can sell their existing home, buy a new place and have equity leftover to add to their retirement nest egg.

     

    Michael W. K. Yee at (808) 952-1222 ext. 1240

    Michael W K Yee, CFP®, CFS®, CRPC®, is a Financial Advisor and 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 25 years. To contact him, michael.w.yee@ampf.com, 808.952.1222 ext 1240, 1585 Kapiolani Blvd., Suite 1100 Honolulu, Hawai‘i 96814.
    Advisor is licensed/registered to do business with U.S. residents only in the states of Honolulu, Hawai‘i.
    1 The Money Across Generations IISM study was commissioned by Ameriprise Financial, Inc. and conducted by telephone by GfK in December 2011 among 1,006 affluent baby boomers (those with $100,000 or more in investable assets); 300 parents of baby boomers; and 300 children of baby boomers at least 18 years old. The margin of error is +/- three percentage points for the affluent boomers segment and +/- six percentage points for the parents and children of boomers segments.
    2 United States Department of Labor, Wage and Hour Division, Family and Medical Leave Act http://www.dol.gov/whd/fmla/
    Ameriprise Financial and its representatives do not provide tax or legal advice. Consult with your tax advisor or attorney regarding specific tax issues.
    Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
    ©2012 Ameriprise Financial, Inc. All rights reserved.

    The long-struggling housing market is finally showing signs of recovery, giving many homeowners more equity in their properties. This is prompting more pre-retirees to consider if, and how, home equity can be turned into a source of cash to help fund their retirement. Home equity represents one of the biggest assets for many Americans. However,…

  • Is Physician-Assisted Suicide Legal in Hawaii?

    A large, well-funded national organization has been taking out print ads and airing TV commercials that claim that doctors in Hawai‘i are providing lethal doses of medication to individuals who desire “aid in dying.” According to the ads and commercials, this is perfectly legal because of a newly discovered loophole inHawai‘i law.

    As it turns out, however, the ads and commercials ignore what Hawai‘i’s chief law enforcement officer, attorney general David Louie, has said about this topic. In an opinion letter dated December 8, 2011, Louie addresses:

    • whether section 453-1 of the Hawai‘i Revised Statutes (the supposed newly discovered loophole) authorizes a physician to assist a terminally ill patient with dying
    • whether any criminal laws prohibit “aid in dying”

    Louie opines that the loophole being touted in favor of physician-assisted suicide simply allows doctors to prescribe unconventional “remedial agents or measures” (i.e. medication or treatment intended to make the patient better — or at least to provide pain relief and comfort), not cause the patient’s death. In the attorney general’s view, the law clearly does not allow doctors to prescribe lethal doses of medication.

    As to the second question, Louie opines that physician-assisted suicide would constitute the crime of manslaughter. However, proving that the crime had been committed would involve convincing a jury that the physician intended for the patient to commit suicide, and that the lethal medication prescribed by the physician accomplished its intended task. As we all know, proving that a crime has been committed is not necessarily an easy task. But the fact that a crime is difficult to prove does not mean that no crime was committed. Obviously, any physician who follows interpretation of Hawai‘i law urged in the current advertising blitz could be in for serious trouble.

    So don’t be fooled by the commercials and ads. Our existing hospice and palliative care (alleviating pain) physicians and services do a wonderful job of assisting the terminally ill and their families face death. There are legitimate and compassionate ways of dealing with end of life issues that do not involve suicide or raise the prospect of euthanasia.

    For more information, or if you would like a copy of the Attorney General’s opinion, email info@est8planning.com.

     

    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
    Email: maku@est8planning.com

    A large, well-funded national organization has been taking out print ads and airing TV commercials that claim that doctors in Hawai‘i are providing lethal doses of medication to individuals who desire “aid in dying.” According to the ads and commercials, this is perfectly legal because of a newly discovered loophole inHawai‘i law. As it turns…

  • Are You ‘Good to Go?’

    We all know death is a natural part of life and something we will all experience. But have you thought about how you want to be treated during your final days? How you would like to die?

    Though it’s not an easy topic, and most of us avoid thinking about it, consider giving your death some thought this holiday season. What better way to start the New Year than with a resolution to complete your advance healthcare directive and talk to your family about what you want at the end of life?

    In fact, there is a growing movement in Hawai‘I and the nation toward considering how we want to die and sharing those wishes with doctors, caregivers and loved ones. Increasingly, people feel everyone deserves to make their own personal decisions for dying with comfort, dignity and control.

    Compassion & Choices Hawai‘i is part of this movement. They help people receive state-of-the-art care and the full range of options at the end of life, including disease-specific treatment, palliative care, hospice, avoidance of unwanted medical treatment and access to aid in dying, which is the option to advance the time of death if suffering becomes unbearable.

    How do you get the conversation started?

    After many attempts to engage family members, one Compassion & Choices client set her holiday table with advance directive forms at every place setting and announced, “Nobody gets dinner until these are filled out.” Now that’s some tough turkey!

    And while the paperwork is important, the essential thing is to get the conversation going. Try starting with, “If one of us ever had to make decisions about your treatment because you couldn’t, it would be much easier if we knew what you really want.” Then ask the following:

    • Would you want life support if you have a terminal illness? What if you’re in a permanent coma? What if you have a chronic illness such as Alzheimer’s disease?
    • Do you always want to know the truth about your condition? About treatment options and their odds of success? And what does “success” mean to you and quality of life?
    • What will be important to you when you are dying? No pain? Hold on as long as possible? Family members present? What are your priorities?
    • Would you want to be in a nursing home if your condition warranted?

    Compassion & Choices has a free Good-to-Go Toolkit to guide your conversation and document the results at www.CompassionAndChoices.org/advance-directive.

    Compassion & Choices’ End-of-Life Consultation is a free service. Professional consultants listen to each unique situation and provide information, emotional support and patient advocacy as people navigate complex choices about terminal illness or the dying process.

    For more information, free consultation, access to the Good-to-Go Toolkit and much more, call 1-800-247-7421 or visit www.CompassionAndChoices.org/hawaii.

    We all know death is a natural part of life and something we will all experience. But have you thought about how you want to be treated during your final days? How you would like to die? Though it’s not an easy topic, and most of us avoid thinking about it, consider giving your death…

  • Legal: Siblingship

    siblingship [sib-ling-ship]
    noun (November 9, 2013):
    1. The state of being related or interrelated
    2. A state of affairs existing between one of two or more individuals having one common parent.

    You will not find this word in the dictionary — it is a new word as of November 9, 2013. It describes the unique, textured, dynamic relationship existing between siblings. Think about the uniqueness of this relationship. Siblings begin their relationship at a very young age. My twins, for example, literally started their lives together. And, if they are fortunate, they will experience their lives to old age together. They experience joys and setbacks together, laugh and cry together, and fight together. And through the fighting, they can learn conflict resolution together. No other relationship is quite like a “siblingship.” Parents are there at the beginning, but all too often they leave too early. Spouse’s join us in our adult lives. Friends often come and go.

    When parents die, siblings are called home to “divide up the pie.” And what I experience all too often with the families that I work with, is that the siblings fight over the same things that they fought over when they were kids — property and fairness. However, the parents are no longer there to referee and help divide up the pie fairly.

    The estate planning process, if done properly, can do much to minimize the risk of fighting when parents die. However, many plans do not speak clearly enough in this respect. Leaving a family home or a heirloom “equally to the children” does not go far enough to help avoid the family fight. To leave it up to grieving adult children to decide what is “equal” when it comes their inheritance, puts too much pressure on their relationship.

    If the parents and the estate planning attorney do not spend enough time minimizing the risk of fighting between the siblings, we risk fracturing, or worse destroying this unique, wonderful relationship — the siblingship.

    The estate plan ultimately is supposed to mirror and reflect our lives, and the relationships we built. If your plan does not mirror and reflect your most important values, or does not speak clearly enough to ensure that it helps to preserve the relationships between your children — their siblingship — I encourage you to review your plan with your estate planning attorney.

     

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

    siblingship [sib-ling-ship] noun (November 9, 2013): 1. The state of being related or interrelated 2. A state of affairs existing between one of two or more individuals having one common parent. You will not find this word in the dictionary — it is a new word as of November 9, 2013. It describes the unique,…

  • Abuse of Trust: When Caregivers Become Criminals

    When May Lee (victim’s name changed) hired Susan Chin to be her caregiver, it seemed like the perfect solution to her long-term care needs. Over time, however, when Chin gained Lee’s trust, she slowly gained access to Lee’s finances and convinced her to sign a “power of attorney” (sometimes referred to in our office as a “license to steal”). It was not long after getting this legal document, that Chin violated the trust given to her and sold Lee’s house for more than $600,000, of which Chin kept the money for herself.

    Although Susan Chin’s actions were found out and she was prosecuted for her crimes, May Lee still endured financial hardship, emotional stress and, ultimately, the loss of her dream of spending the rest of her life in the home that she had once owned.

    When Yumi Smith (victim’s name changed) hired an agency to assist her in caring for her husband who was in poor health, she trusted that the company would provide her with caregivers who were not only responsible and professional, but who also wanted to sincerely help her in caring for her husband. Unfortunately, this business sent Kathlyn Lepena, a caregiver who ended up helping herself to Smith’s jewelry.

    The Honolulu Police Department investigated this crime and was able to recover most of the jewelry Lepena stole. Eventually, Lepena pled guilty to the felony offense of Theft in the Second Degree and is presently under court supervision for her crime.

    Unfortunately, the above two cases are only a couple of the many crimes the Elder Abuse Justice Unit at the Office of the Prosecuting Attorney has handled in the past several years. It is cases like these that highlight the risks involved when hiring a stranger to care for yourself or a loved one in your own home.

    So, how should you hire a caregiver to come into your home? How can you prevent abuses?

    When looking for an agency or service that will provide a skilled worker to come into the home and provide assistance, it is important to do your homework first.

    Here are two agencies that can let you know if any complaints have been made against a business:

    • Better Business Bureau
      (808) 536-6956
    • Consumer Resource Center
      State Dept. of Commerce and Consumer Affairs (808) 587-3222

    Additionally, if you type in the company’s name with the word “review” in an Internet search engine (such as Google and Bing), you might find reviews from people, either offering praises or warnings. Also, seek recommendations from friends who have already gone through the process of finding somebody.

    Perhaps the best thing that can be done, however, is to protect your financial information. Upon hiring a caregiver, never give out private financial or personal information, account numbers or blank checks. Your caregiver is there to take care of your family — not your money.

    Remember, a stranger is entering your home or the home of someone you care for. It is a lot better to know the background of these providers, than to assume they are the caregivers you envisioned them to be.

    To Report Suspected Elder Abuse, call:
    Adult Protective Services
    808.832.5115
    ElderAbuse@honolulu.gov
    All reports are confidential.

    When May Lee (victim’s name changed) hired Susan Chin to be her caregiver, it seemed like the perfect solution to her long-term care needs. Over time, however, when Chin gained Lee’s trust, she slowly gained access to Lee’s finances and convinced her to sign a “power of attorney” (sometimes referred to in our office as…

  • Retirees Have Confidence Yet Lack Finances

    Just five years after the onset of the financial crisis, Americans’ confidence about retirement is rising with the strengthening economy. According to the New Retirement Mindscape® 2013 City Pulse index, two in five (42%) Americans feel on track for retirement. This is more than last year (37%), and more than any other year since the index began in 2010.

    Yet, the lack of action people are taking to prepare financially for retirement has remained relatively unchanged over the past few years. While nearly three in four (72%) have taken some action to prepare for retirement, this number is smaller than in 2011 and 2010 when the economic recovery was still unstable.

    The annual New Retirement Mindscape City Pulse index examines the 30 U.S. Metropolitan areas. The index serves as a barometer for national and local retirement trends.

    According to the index, nearly half (45%) of Americans think that healthcare expenses during retirement will be one of the most challenging financial issues. Likewise, two-thirds (68%) of Americans express concern about the pending changes due to the Affordable Care Act, and half (51%) of those concerned say that their top worry is that they will end up paying more for healthcare.

    Of the 30 largest U.S. metro areas, San Francisco–Oakland–San Jose (#1), Detroit (#2) and Hartford-New Haven (#3) were the most confident and prepared. There are a few things that set these cities apart. If you’re preparing for retirement, take note of the following factors:

    • Contribute to retirement accounts beyond a workplace-sponsored plan. More residents than average in the top three cities contribute to IRAs or other personal investment accounts (other than or in addition to workplace-sponsored plans). Making regular financial contributions to these types of accounts and maintaining a diversified portfolio will likely make you feel more confident about life after you leave the workforce. You may also have more control over your personal accounts as you do in an employer-sponsored plan, and withdrawals typically carry fewer penalties — though it’s important to avoid withdrawing from you retirement savings accounts if possible.
    • Maintain positive feelings about retirement. Although the financial market fluctuates, you have control over how you respond to its ups and downs. Respondents in two of the top three cities were far more likely than the national average to say that thinking about retirement makes them feel empowered. Thinking positively about the future — and acting on those feelings by taking proactive steps to prepare — is key to helping build retirement confidence.
    • Consider working with a financial professional. Residents in two of the three most retirement-ready cities were more likely to work with a financial advisor. The national survey results uncovered that only one in four (23%) Americans say they have determined the amount of money they need to save for retirement and even fewer (11%) report having a written financial plan. A financial advisor can help you define and work toward your retirement goals.

    Michael W. K. Yee at (808) 952-1222 ext. 1240

    Michael W K Yee, CFP®, CFS®, CRPC®, is a Financial Advisor and 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 25 years. To contact him, michael.w.yee@ampf.com, 808.952.1222 ext 1240, 1585 Kapiolani Blvd., Suite 1100 Honolulu, Hawai‘i 96814.
    Advisor is licensed/registered to do business with U.S. residents only in the states of Honolulu, Hawai‘i.
    1 The Money Across Generations IISM study was commissioned by Ameriprise Financial, Inc. and conducted by telephone by GfK in December 2011 among 1,006 affluent baby boomers (those with $100,000 or more in investable assets); 300 parents of baby boomers; and 300 children of baby boomers at least 18 years old. The margin of error is +/- three percentage points for the affluent boomers segment and +/- six percentage points for the parents and children of boomers segments.
    2 United States Department of Labor, Wage and Hour Division, Family and Medical Leave Act http://www.dol.gov/whd/fmla/
    Ameriprise Financial and its representatives do not provide tax or legal advice. Consult with your tax advisor or attorney regarding specific tax issues.
    Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
    ©2012 Ameriprise Financial, Inc. All rights reserved.

    Just five years after the onset of the financial crisis, Americans’ confidence about retirement is rising with the strengthening economy. According to the New Retirement Mindscape® 2013 City Pulse index, two in five (42%) Americans feel on track for retirement. This is more than last year (37%), and more than any other year since the…

  • Secret Money for Senior Veterans

    Many Veterans believe that they have to have suffered an in-service disability to qualify for monetary benefits from the Veterans Administration. This is a common misconception. Depending on health, income and assets, many senior Veterans (and their dependent or surviving spouses) can qualify for not only basic “Improved Pensions” based on low income, but also supplemental benefits of up to $2,053 per month as of 2013. The supplemental benefits are called “Housebound Benefits” and “Aid & Attendance Benefits.”

    In order to qualify for any of these pension benefits, the Veteran (or surviving spouse, based on the Veteran’s military service record), must satisfy the following general criteria:

    • The Veteran must have served at least 90 days of active duty.
    • At least one day out of the 90 days of active duty must have been during war time (there are defined dates for the beginning and end of World War II, the Korean War and the Vietnam Conflict; and the Gulf War, which began on August 2, 1990, is not concluded yet, and its ending date will be set by Presidential Proclamation at the appropriate time).
    • The Veteran must have received a discharge other than dishonorable.
    • The claimant and household must have limited income and assets.
    • The claimant must have a permanent and total disability at the time of application (note that a surviving spouse can qualify for a basic low income pension without being disabled, but the Veteran must be disabled—although the disability does not have to be related to war time or military service).
    • The disability must have been caused without the willful misconduct of the claimant and must not have been due to the abuse of alcohol or drugs.

    As the name implies, Housebound Benefits are payable where the claimant is substantially confined to his or her home because of permanent disability. In order to qualify for Aid & Attendance benefits, the claimant must:

    • Require the aid of another person in order to perform personal functions required for everyday living (such as bathing, feeding, dressing, toileting, transferring from bed to a wheelchair, or dealing with incontinence) OR
    • Be bedridden, in that he or she must remain in bed apart from any prescribed course of convalescence or treatment OR
    • Be a patient in a nursing home due to mental or physical capacity OR
    • Be blind or have very poor vision.

    Applying for these supplemental benefits is not a quick or simple process, and if you decide to apply, you may want to enlist the help of a Veterans’ assistance organization or a specially-trained individual. Note that whoever assists with the application cannot charge a fee for that service. However, other services by the individual or organization may be chargeable.

    Scott Makuakane, Attorney at Law
    Specializing in estate planning and trust law.

    Watch Scott’s TV show, Malama Kupuna
    Sundays at 8:30pm on KWHE, Oceanic channel 11

    www.est8planning.com
    O‘ahu: 808-587-8227, Maui: 808-891-8881
    Email: maku@est8planning.com

    Many Veterans believe that they have to have suffered an in-service disability to qualify for monetary benefits from the Veterans Administration. This is a common misconception. Depending on health, income and assets, many senior Veterans (and their dependent or surviving spouses) can qualify for not only basic “Improved Pensions” based on low income, but also…

  • Estate Planning: Preventing the Fight

    You kids, don’t fight when I’m gone. These were always my Mom’s words as she left to go grocery shopping, and left my brothers and me home alone. I remember, as soon as we’d heard the car leave the garage, we would start fighting over something.

    Now as an adult, I notice that the same experience happens among adult children when their parents leave for the last time. While parents are with us, we tend to behave and get along. And once our parents die, many of us begin to argue and fight.

    This is sad for me to see time and again … As children not only lose a parent, but also their relationships with their siblings. None of my clients want their children to fight — especially after they’re gone. In fact, this is one of the main reasons why people set up estate plans. And estate planning attorneys can advise parents how to minimize the risk of jealousy, rivalry and infighting between their children. Sometimes we must continue to parent beyond the grave.

    Here are five estate planning suggestions to minimize fighting:

    • Don’t give your children the same asset, give them different things
    • Make it as equal as possible
    • Don’t leave decision-making up to them — you are the parent and these are your assets … you make the call
    • Meet with the family and explain the estate plan
    • Clearly explain your reasoning behind your decisions and share the “why” behind each gift

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

    You kids, don’t fight when I’m gone. These were always my Mom’s words as she left to go grocery shopping, and left my brothers and me home alone. I remember, as soon as we’d heard the car leave the garage, we would start fighting over something. Now as an adult, I notice that the same…

  • Sweetheart Swindles

    An elderly man was in the gym working out with his trainer when they saw an attractive young woman enter the workout area and begin to exercise. The older man asked his trainer what machine he should use to impress the young woman. The trainer replied he should use the ATM machine in the lobby.

    This joke highlights two reasons why scams are often targeted against the elderly. First, seniors have more money and assets than any other segment in our community. And second, seniors are (or perceived to be) lonely, oftentimes surviving their spouse of many years. It is for these two reasons that the Elder Abuse Unit, as well as the Honolulu Police Department, has seen an increase in the crimes known as Sweetheart Swindles.

    Although this scam takes on several distinct forms, the scam artist finds a lonely senior, makes promises of companionship, and convinces him/her to give/loan the scam artist large sums of money or property.

    How do scam artists find lonely seniors? Very easily. If you Google “senior dating,” you will find 160 million websites in less than a second. As seniors become more comfortable with using the computer, they get exposed to websites that promise that companionship is at the tip of their fingers.

    Sally (alias), thought lightning struck twice in her life when she met “Sam,” a man who had the same values and beliefs she shared with her deceased husband. She “met” Sam on a well known dating site when he replied to her profile and sent her pictures he claimed to be of himself. The emails quickly became telephone calls filled with words of romance and security. However, they could not begin their fairytale romance until he completed some business he was conducting in London. Sam shared that his financial trouble relating to his business was the only thing preventing him from flying to Hawai‘i and sweeping her off her feet. Once Sally offered to help, she began a journey that would result in her losing $160,000, by wiring money overseas as a loan to help Sam. With her money gone, so was Sam.

    Unfortunately, the police were not able to retrieve the money lost by Sally, but they have been able to recover moneys taken in other Sweetheart Swindles that have occurred in Hawai‘i. This only happens, however, when the crime is reported, which, given the humiliation and betrayal felt by victims of this scam, is not very often. If you suspect you are being targeted in this type of scam or have any questions relating to elder abuse in general, please contact us.

     

    To Report Suspected Elder Abuse, call:

    Adult Protective Services
    808.832.5115
    ElderAbuse@honolulu.gov
    or visit www.ElderJusticeHonolulu.com.

    All reports are confidential.

    An elderly man was in the gym working out with his trainer when they saw an attractive young woman enter the workout area and begin to exercise. The older man asked his trainer what machine he should use to impress the young woman. The trainer replied he should use the ATM machine in the lobby.…

  • They Are Out to Get You!

    There are several scams targeting our kupuna that you need to know about.

    Scam 1: The first is a nationwide scheme where new real estate owners and individuals who have recently transferred their homes into their revocable living trusts receive letters from a company calling itself “Property Transfer Services.” The letters warn the recipients of the importance of having copies of deeds to their real estate, and they give the recipients a deadline to send in $83 for a copy of their deeds. The letters are official-looking enough to fool people into spending money on documents that they can get for free or for far less than $83.

    If you receive one of these letters, you can safely ignore it. Nothing bad will happen to you or your home if you do not send in the $83. What Property Transfer Services is doing is not necessarily illegal, but it has deceived some people thinking they had to get a check in the mail right away.

    Scam 2: A second scam comes in the form of an email from the IRS telling you need to contact them in order to claim a refund that you are due. What the sender of the message really wants is information about you so he or she can rip you off. First of all, the IRS never emails. They always snail mail. If you receive an email from somebody claiming to be from the IRS, you can safely ignore it.

    Scam 3: A third scam involves somebody calling you on the phone telling you it’s time to update your estate planning documents, and trying to get you to make an appointment to meet with someone from their organization. Best, is to hang up and then call your own estate planning attorney. Find out whether the call came from that office. You will probably find that it did not. Periodically updating your estate plan is a good idea, but it should be by your chosen advisors, and not by somebody who may not be looking out for your best interests. Your estate plan involves a lot of confidential and sensitive information that you don’t want it to fall into the wrong hands.

    Beware of anyone asking you questions of a personal nature unless you know exactly who they are and why they need the information. Better to be safe than sorry. If you are contacted by a stranger asking nosy questions, hang up and call your own trusted advisors. You can also contact your local office of consumer protection. In Hawaii, the URL for the State Office of Consumer Protection is http://cca.hawaii.gov/ocp/, and the phone number is 808-587-4272. Be careful out there!

     

    Scott Makuakane, Attorney at Law
    Specializing in estate planning and trust law.

    Scott’s TV’s show on KWHE, Oceanic channel 11: Malama Kupuna airs Sundays at 8:30pm

    www.est8planning.com
    O‘ahu: 808-587-8227, Maui: 808-891-8881
    Email: maku@est8planning.com

    There are several scams targeting our kupuna that you need to know about. Scam 1: The first is a nationwide scheme where new real estate owners and individuals who have recently transferred their homes into their revocable living trusts receive letters from a company calling itself “Property Transfer Services.” The letters warn the recipients of…

  • Do I Need Long-Term Care Insurance?

    If you never experience chronic illness or an accident resulting in extended care, you won’t need long-term care insurance (LTCI). But, if either were to happen to you today, a nursing home in Hawai‘I could cost you $100,000 – $120,000/year and could last up to 3 years. People age 65 and older with Alzheimer’s survive an average of 4 to 8 years after diagnosis. If you have to use money you were earmarking to retire on to pay for care in a facility or at home, where does it leave your family’s financial future? If you don’t have money or run out of money, you will be dependent on children to be your caregivers or plan on an extended stay at a Medicaid eligible care home not of your own choice. Either way, it’s not pretty picture. On the other hand, LTCI transfers the cost of paid care providers from yourself to an insurance company for a fraction of the actual cost and it offers you choices.

    What are my chances of needing some form of LTCI?

    The chances of needing LTCI are high. The Department of Health estimates 7 in 10 people will need some form of LTCI. If it happens to you, odds don’t matter.

    What is the current cost of LTCI in Hawai‘i? What is the projection in 10 – 20 years?

    The current cost of a nursing home stay in Hawai‘i is approximately $100,000 – $120,000 per year. Assuming a 5% annual rise in the cost of care, the cost in 10 years would be $162,800 – $195,500 per year. In 20 years the cost would be $265,300 – $318,400 per year.

    Why are premiums expensive? Can you compare dollar for dollar versus cents on the dollar?

    Assuming an LTCI policy offered to Federal Employees, a 50 year old may be paying an LTCI annual premium of $3,000. For this money, the insurance company promises to pay up to $328,500 towards the cost of care. The choice is simple, $3,000/year to the insurance company or $328,500 out of pocket for the cost of care. If the insured paid premiums for 25 years, the combined cost over time would be $75,000. For this money, the insurance company’s 5% inflation rider would grow the promise to pay up to $1,112,400. Like health insurance, LTCI premiums are subject to increases in the future. However, my experience with LTCI premium increases over the past 25 years is that paying for LTCI is still pennies on the dollar compared to paying for care out-of-pocket.

    Is it realistic today for my kids to take care of me?

    For many, depending on the kids to be caretakers, is not realistic. Studies show that 59% of unpaid caregivers are currently employed, 70% are married, and 62% are women. Long-term caregiving is hard work; there are consequences physically, psychologically, economically and relationally.

    How do I keep my LTCI premiums affordable?

    Interestingly, it is possible to design a plan that is affordable to many people. Making LTCI affordable is made possible by considering plan type (traditional or hybrid), plan design and creative planning for premium funding.

    __________________________________

    Michael W. K. Yee at (808) 952-1222 ext. 1240

    Michael W K Yee, CFP®, CFS®, CRPC®, is a Financial Advisor and 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 25 years. To contact him, michael.w.yee@ampf.com, 808.952.1222 ext 1240, 1585 Kapiolani Blvd., Suite 1100 Honolulu, Hawai‘i 96814.
    Advisor is licensed/registered to do business with U.S. residents only in the states of Honolulu, Hawai‘i.
    1 The Money Across Generations IISM study was commissioned by Ameriprise Financial, Inc. and conducted by telephone by GfK in December 2011 among 1,006 affluent baby boomers (those with $100,000 or more in investable assets); 300 parents of baby boomers; and 300 children of baby boomers at least 18 years old. The margin of error is +/- three percentage points for the affluent boomers segment and +/- six percentage points for the parents and children of boomers segments.
    2 United States Department of Labor, Wage and Hour Division, Family and Medical Leave Act http://www.dol.gov/whd/fmla/
    Ameriprise Financial and its representatives do not provide tax or legal advice. Consult with your tax advisor or attorney regarding specific tax issues.
    Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.
    ©2012 Ameriprise Financial, Inc. All rights reserved.

    If you never experience chronic illness or an accident resulting in extended care, you won’t need long-term care insurance (LTCI). But, if either were to happen to you today, a nursing home in Hawai‘I could cost you $100,000 – $120,000/year and could last up to 3 years. People age 65 and older with Alzheimer’s survive…

  • Honoring End-of-Life Choices

    Our community is facing a crisis, most recently evidenced by the Karen Okada case. The local news recently exposed this crisis, reporting that Ms. Okada made a living will in 1998 where she stated that she did not want her life to be “artificially prolonged” at “end of life.” The Queen’s Medical Center clinicians diagnosed Ms. Okada as being in a persistent end-of-life vegetative state, and that the feeding tube should be removed in accordance with her wishes. Ms. Okada’s family, however, felt differently and did not want the feeding tube removed. This case ended up in court, making this very private family matter public. The crisis lies in the fact that many people, such as the Okada family, are not prepared for the end-of-life process. Unfortunately, as a result, patients’ dying wishes are often not upheld and many family members experience anxiety, depression and regret during and after the loved one’s death.

    Statistics reveal that only about 25 percent of adults ever make an end-of-life decision. Consequently, many family members suffer from post traumatic stress because they feel as though they were responsible for making the end-of-life decision for their loved one. Some experience conflict with other family members as ideas about care differ, while others suffer because they were not clear as to what their loved one’s wishes were about end of life.

    For those clients who do document their decisions, only about 30 percent of advance directives are honored by family members and medical facilities.

    While filing an Advance Health Care Directive in your medical chart is recommended, the medical community and legal community must ensure that patients and clients will receive:

    • dignity, respect and quality care
    • comfort and peace of mind that their choices will be honored
    • help though the end-of-life process, with the least amount of stress and anxiety as possible

    It is time for our community to come together and offer an Advance Care Planning system where:

    • information is shared so that clients can make informed decisions
    • choices are discussed with loved ones, care providers and legal advisors
    • decisions are documented and stored so that they are easily retrievable when necessary
    • plans are viewed as a process and revisited from time to time

    Statistics from communities that have adopted this type of planning are positive. Close to 90 percent of the patients made an Advance Health Care Directive, and 86 percent of the directives were honored by family and medical facilities.

    Encourage our community leaders — medical, legal and financial professionals, business leaders, educators, the political and spiritual leaders, and non-profit organizations—to work together to create a uniform advance care planning process for all of Hawaii.

    Our community is facing a crisis, most recently evidenced by the Karen Okada case. The local news recently exposed this crisis, reporting that Ms. Okada made a living will in 1998 where she stated that she did not want her life to be “artificially prolonged” at “end of life.” The Queen’s Medical Center clinicians diagnosed…