Category: Wisdoms

  • Legal: Review Your Estate Plan Often

    As we turn the page from 2012 to 2013, it is not a bad time to focus on your Rule Book (the set of documents in which you lay out your estate plan) and make sure that the rules you have in place are still consistent with your wishes and your needs. How often you review your Rule Book is up to you, but it is important to appreciate that things change. As they do, your Rule Book can gradually become obsolete, and if you fail to update it, it may do more harm than good.

    What kinds of changes impact your estate plan?

    Changes in your health. Like it or not, your health will change over time, and the general trend will not be for the better. Your doctors can do a lot to keep you going, but they have not discovered the Fountain of Youth yet. If you ever lose the capacity to update your estate plan, your family may be stuck with a Rule Book that does not meet your needs, and there may be little that can be done about it, short of taking an expensive foray through the court system.

    Changes in your assets. Values go up, values go down. Those fluctuations can affect how your estate plan works. More importantly, it is important to take periodic stock of your assets and make sure they are all properly titled. If you have a revocable living trust, you probably should have all or most of your assets in the name of your trust. If you sell an asset that belongs to your trust, make sure the proceeds go into an account owned by your trust, and when the proceeds are reinvested, make sure the new assets are properly titled.

    Changes in your family situation. Any time your family experiences a marriage, a divorce, a birth, or a death, you should have a look at your Rule Book. Other changes might impact what you want to say in your Rule Book as well. Those changes might be good, such as a child heading off to college, or not so good, such as the discovery that a family member has a drug problem or a debt problem.

    Changes in the law. There have been some dramatic changes in the Federal and Hawai‘i estate tax laws over the past several years, and you can expect those kinds of changes to continue for the foreseeable future. Though the changes have caused uncertainty, they have also given rise to opportunities. Over the past two years, Hawai‘i laws relating to trusts and tenancy by the entirety have changed in some very positive ways that open the door to enhanced asset protection. Don’t miss out on what those new laws have to offer.

    If you review your Rule Book at least once per year, you will probably be able to stay on top of all of these changes and be able to make appro-priate updates to your estate plan.

    You should also sign a new durable power of attorney and advance health-care directive each year, even if there are no changes. The reason to update your power of attorney is that once it is more than a year old, many financial institutions will not honor it, and once it is five years old, nobody will honor it. The reason to update your advance directive is to force you to focus on it and make sure that it accurately reflects your wishes. It will not be called upon until you are unable to speak for yourself, so you need to get it right while you still have the capacity to do so.

     

    Scott Makuakane, Attorney at Law
    Specializing in estate planning and trust law.
    www.est8planning.com
    O‘ahu: 808-587-8227, Maui: 808-891-8881
    Email: maku@est8planning.com

    As we turn the page from 2012 to 2013, it is not a bad time to focus on your Rule Book (the set of documents in which you lay out your estate plan) and make sure that the rules you have in place are still consistent with your wishes and your needs. How often you…

  • Tax Planning & Preparation

    Our tax system for the most part remains firmly based upon the calendar year. At year-end, it’s time to take a snapshot of your income, deductions and credits. Based on that data, your tax liability for the year can be computed. If year-end strategies are implemented before your tax liability is “set in stone” it can make a significant difference in what you owe for the tax year. Tax planning for year-end 2011 should use traditional year-end strategies as well as those that react to situations unique to this year.

    Income/Deduction Shifting

    The traditional year-end strategy of income shifting applies to 2011, but with an extra twist. Under traditional strategy, you time your income and deductions so that your taxable income is about even for 2011 and 2012 so your tax bracket does not spike in either year. If you anticipate a higher tax bracket for 2012, you may want to accelerate income into 2011 and defer deductions into 2012. If you anticipate a leaner 2012, income might be delayed through deferred compensation arrangements, postponing year-end bonuses, maximizing deductible retirement contributions and delaying year-end billings.

    The twist for year-end 2011 is the uncertain future for the tax rates after 2012. Many political observers forecast that higher-income taxpayers will be asked to pay more, either through higher tax rates or more limited deductions. That may suggest a strategy in which income is not defer-red but is recognized now at lower tax rates still available in 2011 and 2012.

    Roth Conversions

    If you converted an Individual Retirement Account (IRA) to a Roth IRA in 2010, you were given an option - recognize all income in 2010 or defer that income, half into 2011 and half into 2012. If you elected to defer that income into 2011 and 2012, do not forget to figure that income into your year-end planning.

    Life Changes

    Marriage, divorce, the birth of a child, death, a change in job or loss of a job, and retirement are just some of the life events that trigger a special urgency for year-end tax planning. After December 31, 2011, it will be too late to alter most of your bottom-line tax liability for 2011.

    Tax Extenders

    A number of tax extenders are scheduled to expire after December 31, 2011. They include:

    • the state and local sales tax deduction
    • the higher education tuition
    • the teacher’s classroom expense deduction

    Seniors age 70 ½ and older should also consider making a charitable contribution directly from their IRAs up to $100,000 and paying no tax on the distribution. This tax break, especially advantageous to those who do not itemize deductions, is scheduled to end for distributions made in tax years beginning after December 31, 2011.

    For more information, call Tamilyn Masuda at 847-4422 or visit www.masudacpa.com.

    Our tax system for the most part remains firmly based upon the calendar year. At year-end, it’s time to take a snapshot of your income, deductions and credits. Based on that data, your tax liability for the year can be computed. If year-end strategies are implemented before your tax liability is “set in stone” it…

  • Review Your Estate Plan Often

    As we turn the page from 2012 to 2013, it is not a bad time to focus on your Rule Book (the set of documents in which you lay out your estate plan) and make sure that the rules you have in place are still consistent with your wishes and your needs. How often you review your Rule Book is up to you, but it is important to appreciate that things change. As they do, your Rule Book can gradually become obsolete, and if you fail to update it, it may do more harm than good.

    WHAT KINDS OF CHANGES IMPACT YOUR ESTATE PLAN?

    Changes in your health. Like it or not, your health will change over time, and the general trend will not be for the better. Your doctors can do a lot to keep you going, but they have not discovered the Fountain of Youth yet. If you ever lose the capacity to update your estate plan, your family may be stuck with a Rule Book that does not meet your needs, and there may be little that can be done about it, short of taking an expensive foray through the court system.

    Changes in your assets. Values go up, values go down. Those fluctuations can affect how your estate plan works. More importantly, it is important to take periodic stock of your assets and make sure they are all properly titled. If you have a revocable living trust, you probably should have all or most of your assets in the name of your trust. If you sell an asset that belongs to your trust, make sure the proceeds go into an account owned by your trust, and when the proceeds are reinvested, make sure the new assets are properly titled.

    Changes in your family situation. Any time your family experiences a marriage, a divorce, a birth, or a death, you should have a look at your Rule Book. Other changes might impact what you want to say in your Rule Book as well. Those changes might be good, such as a child heading off to college, or not so good, such as the discovery that a family member has a drug problem or a debt problem.

    Changes in the law. There have been some dramatic changes in the Federal and Hawai‘i estate tax laws over the past several years, and you can expect those kinds of changes to continue for the foreseeable future. Though the changes have caused uncertainty, they have also given rise to opportunities. Over the past two years, Hawai‘i laws relating to trusts and tenancy by the entirety have changed in some very positive ways that open the door to enhanced asset protection. Don’t miss out on what those new laws have to offer.

    If you review your Rule Book at least once per year, you will probably be able to stay on top of all of these changes and be able to make appropriate updates to your estate plan. You should also sign a new durable power of attorney and advance health-care directive each year, even if there are no changes. The reason to update your power of attorney is that once it is more than a year old, many financial institutions will not honor it, and once it is five years old, nobody will honor it. The reason to update your advance directive is to force you to focus on it and make sure that it accurately reflects your wishes. It will not be called upon until you are unable to speak for yourself, so you need to get it right while you still have the capacity to do so.

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

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

    As we turn the page from 2012 to 2013, it is not a bad time to focus on your Rule Book (the set of documents in which you lay out your estate plan) and make sure that the rules you have in place are still consistent with your wishes and your needs. How often you…

  • Who’s to Get My Personal Assets?

    QUESTION: Should I write instructions for my jewelry and other personal assets in my Will?

    ANSWER: Yes. The best method to use is a “Personal Property Memorandum.”

    State of Hawai‘i law allows you to legally make your own list of beneficiaries of tangible personal property. It is as simple as making the list in your own handwriting, signing and dating it.

    Why make a Personal Property Memorandum?

    Passing on keepsakes to those we care about and who we know will keep them can be a meaningful experience for each of us. And we hope that the recipient of these items will continue to find value and meaning in the personal keepsakes long after we are gone.

    What other benefits in preparing this Personal Property Memorandum provide?

    Helps reduce conflict. It reduces any conflict that might occur between siblings after parents die. A parent’s death can be a very stressful time as people are asked to deal with assets while they are grieving, causing strain in relationships. A parent making the decision can greatly reduce any conflict that might arise.

    Reduces legal fees. A Personal Property Memorandum does not require the assistance of an attorney, thus eliminating attorney costs.

    Enriches relationships. By fostering communication now, it can bring relationships closer when the giver engages in a conversation with each beneficiary, in person, to tell the story and the value of the item intended for them.

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

    QUESTION: Should I write instructions for my jewelry and other personal assets in my Will? ANSWER: Yes. The best method to use is a “Personal Property Memorandum.” State of Hawai‘i law allows you to legally make your own list of beneficiaries of tangible personal property. It is as simple as making the list in your…

  • Better Business Bureau: Deciding Charities

    The holidays are a tough time to be in need, and unfortunately there’s way too much of that going around these days. Last year the U.S. Census Bureau said that 16% of people in the States live below the poverty line and that children in 3.9 million households across America went hungry.

    These are heart breaking statistics, and many of us seek out charities to donate to during the holidays. Of course, doing so is a great idea, but donors should be wary before making that commitment. Unfortunately there is no shortage of con artists running bogus charities whose only purpose is to pad their own pockets.

    How do you separate trustworthy charities from the scams? Here are a few tips to follow:

    • Check with Hawai‘i’s Better Business Bureau to see if a charity has met our twenty standards for accountability. Among other things BBB reviews a charities financial health and their accountability and transparency.
    • Check with our state attorney general’s office if a charity is registered to solicit here in Hawai‘i.
      Ask for an IRS Form 990—any real charity should be happy to provide you with it. It is  the IRS form that provides detailed financial information for potential givers.
    • Don’t click on any emails asking you to send money. Con-artists use the holidays to appeal to your philanthropic side — and they like to use email to reach out to you. Don’t fall for it. If you want to donate online, go to a charity’s homepage and follow the directions on their donations page.
    • When considering supporting a cause — find the answers to these questions: What portion of the donation will benefit the charity? What location will the charity use the funds in? How do they help those in need?

    Giving to those less fortunate is really what the holidays are about. Make it easier for yourself to leave your mark by doing your homework and researching the charities you want to help.

    Better Business Bureau - Generations Magazine - April-May 2013

    The holidays are a tough time to be in need, and unfortunately there’s way too much of that going around these days. Last year the U.S. Census Bureau said that 16% of people in the States live below the poverty line and that children in 3.9 million households across America went hungry. These are heart…

  • Uplifting Choices: Playing a Significant Role

    An Uplifting Story

    If you live long enough, you are likely to have an experience that is life-altering. Right now, there are two families living on the Big Island living out just such an experience; and it started out with a casual conversation between two mothers who are involved with their sons’ softball team.

    Angie Toma, a scorekeeper for her son’s team, and Leanne Hirata, the coach’s wife, were in the press box one day when Angie happened to mention to Leanne that she has had three kidneys from birth. As it turned out, Leanne’s husband, Gregg, has experienced a deteriorating kidney for 20 years. Although he looks healthy, Gregg is gravely ill with kidneys that are only functioning at 11%. He is in need of a kidney transplant.

    Angie thought it over and decided to donate one of her kidneys to Gregg (Leanne and Gregg’s father were ineligible to donate for a variety of reasons). Since following through on her initial decision, Angie learned that two of her kidneys had grown together, so she only has two kidneys, rather than three. Undeterred, Angie continued with the medical process and expects to donate her kidney when medical procedures are complete. For Gregg, Angie’s generosity means he will be there for his wife and three young boys, with a healthy kidney and a new lease on life.

    BEHIND THE STORY

    Not everyone is so fortunate. In Hawai‘i, approximately 400 people are on the waiting list for a new kidney. The supply of healthy kidneys is not sufficient to fill the need. And many patients pass away before a matching donor can be located. In the past decade, the number of patients waiting for a transplant has doubled, while the number of transplants has remained level. The need tends to increase because people are generally living longer, putting additional stress on their organs. Younger people, like Gregg, and children are also on the list. There have been approximately 1,200 transplants performed in Hawai‘i since 1988, most of them performed by the medical team currently residing at The Queens Medical Center.

    Organ transplantation in Hawai‘i has been a reality since 1969, when Dr. Livingston Wong performed Hawai‘i’s first kidney transplant. He put together a team of doctors who pioneered the procedure at St. Francis Transplant Center, and later Hawai‘i Medical Center. When the latter closed its doors about a year ago, Hawai‘i was left with no facility for transplantation until The Queen’s Medical Center came forward to fill the gap. The new center is home to physicians and staff with over 20 years of experience in transplantation, including Drs. Whitney Limm and Linda Wong (daughter of Livingston Wong).

    HELPING TO CREATE NEW STORIES

    The National Kidney Foundation of Hawai‘i’s mission includes improving the health and well-being of individuals and families affected by kidney and urinary tract diseases, and to increase the availability of all organs and tissue for transplantation in Hawai‘i. Among their programs is a mentoring program of one-on-one help for dialysis and transplant patients. Recently, we have assisted in the creation of a new Council of NKFH known as the Hawai‘i Organ Transplant (H.O.T.) Support Group, whose mission is to improve the support for, and education of, people who’ve had or who are in the process of organ transplantation procedure through educational events and mentorship programs. The support group consist of people who are organ donors, recipients and others who are interested in transplantation.

    Our hope is that organizations like NKFH and H.O.T. will help grow awareness of the need for healthy donors and encourage kidney patients who experience this life-giving process. Our hope is for even more stories like Gregg and Angie’s.

    If you are interested or have questions relating to organ transplantation, you can reach NKFH at 808-593-1515, H.O.T. at 808-589-5965, or The Queen’s Transplant Center at 808-691-8897.

    National Kidney Foundation of Hawaii
    1314 South King St., #304, Honolulu, Hawai‘i 96814
    808.589.5976 info@kidneyhi.org www.kidneyhi.org

    An Uplifting Story If you live long enough, you are likely to have an experience that is life-altering. Right now, there are two families living on the Big Island living out just such an experience; and it started out with a casual conversation between two mothers who are involved with their sons’ softball team. Angie…

  • Financial: Retirement Confidence Boost

    Dos and Don’ts on Preparing for Retirement

    As baby boomers near retirement, many are discovering that they aren’t yet financially prepared to leave their careers. Moving from a full-time job to a life of travel, volunteer work and time spent with family and friends may seem like a natural next step. For those who are still determining how they’ll fund their retirement, however, cutting the strings of employment may not look so appealing.

    Here are several sobering facts from the New Retirement Mindscape® 2012 City Pulse index1, an annual survey that examines retirement readiness among individuals in 30 of the largest U.S. cities: Just 63 percent of respondents say they’re saving for retirement. What’s worse, only 37 percent of respondents nationwide say they feel “on track” to retire, and just 11 percent say they were able to retire earlier than planned because they were financially able to do so.

    Here are some important do’s and don’ts designed to help you move toward punching the clock for the last time and living a happy, healthy retirement.

    Do strive to be debt free upon retirement.

    This involves making well-planned, wise choices — and sometimes making trade-offs — during your last 10 to 15 years of your career. If possible, maximize funding into your 401(k) plan before refinancing or adjusting your 30-year mortgage to a 15-year term in order to retain the tax advantages available to you that come with saving for retirement. That might mean focusing on savings vs. paying off a mortgage or other long-term debt.

    Don’t assume your retirement will be “traditional.”

    In recent years, baby boomers have redefined what “retirement” really means. Some choose to work part time or start a career in which they’re really passionate about. If you aspire to have a part-time career, start laying the foundation now. Identify what you hope to do as well as the companies or organizations that might benefit most from your experience.

    Don’t disregard your health.

    As we age it becomes more important to carefully monitor our physical and mental well being. Obesity, high blood pressure and high cholesterol are the most common health issues in America. So get an annual physical and health screening and talk to your doctor about any health concerns you may have and what the future costs may be so you can accurately plan for them in your retirement savings.

    Don’t underestimate.

    When determining your retirement expenses think about the rising costs of health care, gasoline and travel (just to name a few) that you’ll continue to consume in retirement. Remember to create some contingency plans to cover unforeseen expenses. You likely won’t regret saving a little extra now for your retirement years rather than not having what you will need once you leave the workforce.

    It may be a bumpy ride to retirement, but the surest way to feel confident about your future is to plan for it right now.

    For info, contact Michael W.K. Yee at (808) 952-1240.

    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.

    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. Some products and services may not be available in all jurisdictions or to all clients. ©2012 Ameriprise Financial,Inc. All rights reserved. File # 143286

    Dos and Don’ts on Preparing for Retirement As baby boomers near retirement, many are discovering that they aren’t yet financially prepared to leave their careers. Moving from a full-time job to a life of travel, volunteer work and time spent with family and friends may seem like a natural next step. For those who are…

  • Queen’s Medical Center vs. Koga

    The Honolulu Star-Advertiser has featured several stories by reporter Dan Nakaso about the plight of Karen Okada. Karen is a 95-year-old woman who signed a “Death with Dignity Declaration” and a “Durable Power of Attorney for Health Care Instructions” back in 1998. Both documents purport to control “in all circumstances.”

    The Queen’s Medical Center has determined that Karen is essentially brain dead, or, in any event, has “permanently” lost the ability to participate in medical treatment decisions, and that the provisions of her Death with Dignity Declaration now require that her feeding tube be withdrawn.

    On the other hand, Karen’s healthcare agent, in consultation with doctors who are not associated with Queen’s, disagrees with the hospital’s physicians. What the agent knows, and the Queen’s physicians discount, is that just before she was hospitalized, Karen was conscious and able to interact meaningfully with her family and caregivers. During the time she has been at Queen’s with pneumonia, Karen has been unresponsive during examinations, but she has smiled at least twice at her adult grandchildren and nodded to her grandson in response to his question of whether she was able to breathe freely.

    The policy of Queen’s is to give precedence to an advance healthcare directive over a durable power of attorney in all events, and without inquiring into why a person may have signed contradictory documents. Accordingly, Queen’s sued Karen’s healthcare agent in order to get a court order forcing him to order that Karen’s feeding tube be removed.

    Since no one would want to be part of this kind of drama, what can you do to make your wishes clearly known so there will be no questions?

    1. If you do not have an advance health care directive, get one. Make sure your loved ones, including your children over the age of 18 have one too.

    2. Learn all you can about the options that can be written into your advance health care directive. These are not “one size fits all” documents. Your wishes may differ greatly from those of your friends and family members, and the document you sign should express your particular desires.

    3. If you have an advance health care directive that is more than 5 years old, there is a good chance that it will not accomplish what you think it will. Review it right away with your legal counsel. Make any appropriate changes and updates.

    4. If you want to give a trusted family member or friend the power to make health care decisions for you, make sure the power of attorney meshes well with any other instructions.

    5. Be sure to give your health care providers your permission to give your medical information to your family members or other trusted decision makers. Federal and state privacy laws restrict your doctor from talking with your health care agent unless you grant that permission.

    6. Review your advance health care directive periodically to make sure it accurately states your current wishes. Once per year is not too often.

    7. Make sure you have a mechanism in place for giving you access to your advance health care directive, no matter when or where an emergency might occur. Not all health problems happen at home, and if you have a crisis while you are traveling, you will need a way to make your health care documents accessible to your caregivers.

    8. Talk with your family about your wishes before a crisis arises. Make sure everybody is on the same page. If your decision makers indicate hesitation about carrying out your wishes, think about naming someone who will. Your assurance to your loved ones of how seriously you intend your instructions to be taken will give them the courage to carry them out.

    Knowledge is power. The more you know about advance health care directives, the more likely it will be that your wishes will be carried out.

    Scott Makuakane, Attorney at Law
    Specializing in estate planning and trust law.
    www.est8planning.com
    O‘ahu: 808-587-8227, Maui: 808-891-8881
    Email: maku@est8planning.com

    The Honolulu Star-Advertiser has featured several stories by reporter Dan Nakaso about the plight of Karen Okada. Karen is a 95-year-old woman who signed a “Death with Dignity Declaration” and a “Durable Power of Attorney for Health Care Instructions” back in 1998. Both documents purport to control “in all circumstances.” The Queen’s Medical Center has…

  • The Perfect Match

    A living donor offers a two-for-one gift of life

    Nearly 15 years ago Andrea Lee’s youngest daughter Jenevieve was diagnosed with systemic lupus erythematosus (SLE), a long-term autoimmune disorder that may affect the skin, joints, kidneys, brain and other organs. Jenevieve was 15, an age where her main concern should have been friends and fun. Instead, she focused on staying out of the sun, away from those who were sick and eating bananas for potassium. By the time she was 25, her ravaged body needed drugs, surgeries and dialysis. Her kidneys were functioning at a dismal 7 percent.

    Jenevieve made many friends at the three-times-a-week dialysis treatments. She knew the nurses by first name, befriended the regulars, and made craft gifts for everyone. Outside of dialysis, except for a limp from osteoporosis of a hip joint, one would never guess that she was so sick with Chronic Kidney Disease (CKD). A life of dialysis seemed the answer until Jenevieve and Andrea were sent to a class about kidney transplantation.

    The transplant coordinator helped them navigate the world of organ donation. She scheduled tests and put Andrea in touch with organ donors and recipients. They had experience, tips and connections, plus they understood what Jenevieve and Andrea were going through.

    Jenevieve put her name onto a national list of patients who needed a kidney and then waited. While waiting, Andrea learned that one of the best organ donor candidates is a family member. She decided to undergo prescribed lab tests and passed every single test. After a few months, Andrea was cleared as a good donor match for Jenevieve.

    In August 2008, Jenevieve and Andrea spent a week in the hospital and the kidney transplant was a success.

    Once at home, Andrea allowed her body to heal. Soon she was back to normal— playing with grandkids, working, traveling, and other life activities that she enjoys. At the follow-up visit, her doctor told her that her lab results were so good that it looked like she still had two kidneys!

    Today, Jenevieve, who turned 30 this year, thrives. She is a full-time student studying radiology at Kapi‘olani Community College. She wants to give back to the medical community that helped her through her journey. She continues her jewelry craft and makes herself available to those who want to learn about kidney dialysis, transplant or SLE.

    Also, Andrea’s family volunteers for the newly established Hawai‘i Organ Transplant (H.O.T.) Support Group, a council of the National Kidney Foundation of Hawai‘i. Its mission is to support and educate people who have had, or are in the process of, an organ transplant. For more information, please visit www.hawaiiorgantransplant.wordpress.com.

    National Kidney Foundation of Hawaii
    1314 South King St., #304, Honolulu, Hawaii 96814
    808.589.5976
    info@kidneyhi.org
    www.kidneyhi.org

    A living donor offers a two-for-one gift of life Nearly 15 years ago Andrea Lee’s youngest daughter Jenevieve was diagnosed with systemic lupus erythematosus (SLE), a long-term autoimmune disorder that may affect the skin, joints, kidneys, brain and other organs. Jenevieve was 15, an age where her main concern should have been friends and fun.…

  • Creditor-Protection Gets a Boost

    Due to recent changes in our state law, Hawai‘i is one of a handful of states that affords creditor-protection to those who hold “Tenants by the Entirety” property. Tenants by the Entirety is a method by which married couples have equal interest in a property and hold the title together. Each owns the undivided whole of the property. In order for one spouse to modify his or her interest in the property in any way, the consent of both spouses is required. One of the benefits of Tenants by the Entirety is that it protects property from creditors. A home held as Tenants by the Entirety may only be reached by creditors of joint debts of both the husband and wife. In the event of an individual debt of (or judgment against) a husband or wife, the property may not be partitioned, sold or encumbered without the permission of both spouses — in essence, protecting the property from a forced sale.

    This type of property ownership can cause uncertainty for married couples. Prior to July of this year, couples that wanted to transfer their real estate to a revocable inter-vivos trust (or living trust) would lose the creditor-protection associated with Tenants by the Entirety. Having to choose between the two plans always had a proposed risk — there was never a perfect solution.

    Effective July of this year, Congress amended Section 509-2, Hawaii Revised Statues. This law allows couples to hold their real estate in their living trust, as well as maintain creditor-protection. To be effective, the real estate needs to be held as Tenants by the Entirety first and then transferred into the trust.

    In order to be eligible to hold real estate as Tenants by the Entirety, you must be a legally married couple, which includes civil unions (effective January of this year) or reciprocal beneficiaries. A valid reciprocal beneficiary relationship must include the following:

    • each of the parties be at least eighteen years old
    • neither of the parties be married nor a party to another reciprocal beneficiary relationship
    • the parties be legally prohibited from marrying one another under chapter 572
    • consent of either party to the reciprocal beneficiary relationship has not been obtained by force, duress, or fraud
    • each of the parties sign a declaration of reciprocal beneficiary relationship as provided in Section 572C-5

    If you do not have an estate plan or it has been a while since you last visited with your estate-planning attorney, this would be a great time to create or update your estate plan in order to fully optimize these new laws.

    Stephen B. Yim, Attorney at Law
    2054 S. Beretania Street, Honolulu, HI 96826
    (808) 524-0251 stephenyimestateplanning.com

    Due to recent changes in our state law, Hawai‘i is one of a handful of states that affords creditor-protection to those who hold “Tenants by the Entirety” property. Tenants by the Entirety is a method by which married couples have equal interest in a property and hold the title together. Each owns the undivided whole…

  • Important Tips for Giving Grandparents

    If you enjoy supporting your grandchildren financially — or if this is one of your goals — you’re not alone. Eighty-four percent of seniors say that creating a financially secure life for themselves and their family is an important goal.*

    Yet, deciding how to best help your grandchildren can be a struggle, especially if you share some of the same financial concerns as your peers. For example, you may be among the 27 percent of seniors who say changes to Social Security are most likely to jeopardize your retirement plans, or the 23 percent who identify health care costs as the biggest threat.

    When evaluating how much financial support to provide, consider the following:

    • Give only what you can afford. Your financial security should be your first priority. Since there is no way to know with any certainty how long you’ll live, how the market will perform or how inflation may impact your purchasing power, make sure that you gift within your means. Doing so will help ensure your generosity today doesn’t create a financial hardship for you — or your family members — down the road.
    • Give equally. To help prevent family conflict and avoid damaging relationships, give equally to your grandchildren. If you need to give more to help one of them through a rough patch, adjust your will to even things out and clearly communicate your intentions.
    • Clarify whether you’re making a loan or giving a gift. If you’re giving a gift, familiarize yourself with federal tax rules, which are based on the calendar year. For example, in 2012 you were able to give up to $13,000 before the federal gift tax is applied. Also, be sure the recipient knows it’s a gift to alleviate any uncertainty about whether they’re required to pay you back.
      If you are loaning money, be specific about the terms and repayment. Make sure you have a written document that both parties sign and date.
    • Discuss your intentions. Only 61 percent of seniors say they regularly discuss finances with their family. If you would like to support your grandchildren and save for their college or home down payment, be sure to communicate this with their parents. This can help your adult children with their own financial planning.

    If you want to provide financial support to a family member, consider consulting a financial professional. He or she can help you evaluate your finances and goals and create a strategy. A realistic understanding of your financial picture can help you identify how much you can comfortably give, as well as the most tax-efficient and effective way to go about it.

    For info, contact Michael W. K. Yee at (808) 952-1240

    *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.
    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. Some products and services may not be available in all jurisdictions or to all clients. © 2012 Ameriprise Financial, Inc. All rights reserved. File # 143286

    If you enjoy supporting your grandchildren financially — or if this is one of your goals — you’re not alone. Eighty-four percent of seniors say that creating a financially secure life for themselves and their family is an important goal.* Yet, deciding how to best help your grandchildren can be a struggle, especially if you…

  • Wire Fraud

    How money coming in is actually going out

    Western Union, Moneygram and similar businesses allow you to send money quickly. Their services are useful for transmitting funds to friends, relatives and others you know well. But scammers frequently take advantage of victims by convincing them to wire money to a stranger, often someone in a foreign country.

    The initial hook can take many forms. In every case, the scam ends the same way … you are asked to wire money; once you do, it’s gone for good.

    Consumers lose millions of dollars each year through wire fraud. Hawai‘i’s BBB receives calls often from duped residents who believed they “won a prize” or they were going to “work” as a secret shopper. Locally, we have seen consumers lose as much as $50,000, or taking a mortgage out on their house in order to claim a winning.

    The most important thing for consumers to remember is this: Never wire money to someone you haven’t known for a long time. If you have truly won a lottery (which are illegal in Hawai‘i) or a sweepstakes, you would not need to pay a penny to receive your winnings.

    Hawai‘i’s BBB warns residents to look for the following red flags:

    • You are asked to wire transfer money.
    • You are sent a check in connection with a payment request. Scammers often win their victims’ confidence by sending a fake check for more than the so-called processing fees, shipping costs or other expenses. It may be a cashier’s check, personal check or money order. They instruct the victim to cash the check at their personal bank account and send them a portion of the money back.
    • The contact indicates a confirmation code or money transfer control number (MTCN) is needed before your money can be withdrawn. Once you wire money, it can be picked up immediately.
    • A caller or e-mail appears to originate from overseas.
    • The person communicates via TTY service. TTY is used by the hearing impaired. Cons prefer the service because it disguises thick accents and makes calls untraceable.

    If you are a victim of fraud, report it to the police and FBI. If you have any questions about someone who wants you to wire or tranfer money, contact Hawai‘i’s BBB for information.

    Complaints or Questions, contact BBB:

    808-536-6956 (O‘ahu)
    877-222-6551(Neighbor Islands)
    www.bbb.org/file-a-complaint/

    How money coming in is actually going out Western Union, Moneygram and similar businesses allow you to send money quickly. Their services are useful for transmitting funds to friends, relatives and others you know well. But scammers frequently take advantage of victims by convincing them to wire money to a stranger, often someone in a…