Personal Finance Blog

Tips And Stories To Help You With Managing Money

A Living Trust Protects Assets

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Living Trust
One of the first benefits of a living trust is that it avoids probate.
If you want to keep control of your assets while you are alive and set out guidelines for their distribution after your death, a living will may be what you need. Even if you need to make amendments over time, that can be easily done.

With a living trust, you can set specifics for all types of properties and have the flexibility to make changes as needed. For instance, you can name alternate beneficiaries if the individual you initially named dies. You can’t do that with joint tenancy or a pay-on-death bank account.

Compared with a will, a living trust does have some downsides. They are more time-consuming to establish and involve more ongoing maintenance. It is harder to modify them.

The usual cost of having a living trust prepared by a lawyer is about $1,000, but you can significantly reduce this cost by making your own trust. There are self-help tools to guide you through the process. Even if you create a living trust, you will need a simple will as a backup.

Age and wealth are the two most important factors in considering a living will. Greater wealth makes it more desirable to protect your inheritors from the inconvenience and cost of probate. The nature of assets also is important. If you own a small business or other assets that you don’t want tied up during probate, you are more likely to consider a living trust at a younger age. Although your expectation of dying is not immediate, you don’t want to risk having an executor obligated to report to a judge for a year or more.

The steps you should follow if you need to amend your living trust include: Locate the documents and identify the provisions you want to change.

Draft an amendment form or purchase one from a legal publishing store or office supply. Be sure all pertinent information is included, such as the name of the trust, the trust grantors, the trustees as named in the original document and the date it was created. Specify which article in the trust allows for amendments and which article you want to change.

Bring the trust grantors and trustees before a notary public and have all parties sign and date the amendment and specify who they are in the presence of the notary, who will then notarize the signatures.

Attach any changes you make to the original trust papers. Keep them is a secure place. If you filed the trust initially with your county records department, be sure you add any amendments as they are made.

Wave-produced Energy The Wave Of The Future?

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Will energy from waves become a usable source for power?
Scientists estimate that the energy inherent in the movements of oceans, if it were harnessed, could provide power to meet a quarter of America’s energy demands.

But even with increasing pressure on other energy sources, including oil, gas and coal, research into ocean activity as a source has not been urgent. The potential for wind and solar power tends to get more attention.

The U.S. Navy has stepped up with a test site in the waters off Hawaii to see if wave energy is a feasible area for more research. If it becomes a reality, it could be a boon to coastal cities around the world. In fact, Hawaii’s island cities have the highest electricity rates in the U.S., making the prospect attractive. The cities rely on fossil fuels shipped across the ocean. State officials have issued a mandate that Hawaii will be using renewable energy fully by 2045.

Surfers already know what the waves coming in to Hawaii are like. They are powerful and roiling. One of the challenges for the experimentation is to find buoys that can capture both the side-to-side and up-and-down ocean motions.

Any device designed to capture electricity generated by the motion would have to withstand long-term thrashing as well as the powerful storms that sometimes hit the coast. Not to mention the corrosive effects of constant exposure to salt water.

Patrick Cross, specialist at the Hawaii Natural Energy Institute in Manoa, which manages the test site, recognizes the challenges but is confident buoys can be designed that will do the job.

Being able to harness the energy now going to waste in the oceans would go a long way toward achieving the U.S. goal of reducing emissions from carbon-based fuels by a third by 2030. Many states are involved in efforts to develop renewable energy sources as well.

Some European countries also are pursuing the wave energy potential. They have spent more than $ billion on the effort, while the U.S. has put about $334 million into its research. Marine Energy Council, a trade group representing Great Britain and other European countries, is heading the research effort there. China and Norway also have been building and testing devices.

At present, the U.S. effort off Hawaii consists of two buoys anchored a half mile offshore. The Azura extends 50 feet below the ocean surface and stands some 12 feet above. It converts both horizontal and vertical movements in the ocean to about 18 kilowatts of electricity, enough to power about a dozen homes.

Plans are for Northwest Energy Innovations of Portland, Ore., a company working with the Navy, to build a prototype that can generate at least 500 kilowatts of energy, enough to power hundreds of homes.

Researchers are aware that the prospect of hundreds of buoys bobbing in the ocean could trigger opposition from environmentalists – the same problem that has stifled some wind turbine research.

Health Coverage Up In The Air

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With President Trump hinting at dismantling President Obama’s Affordable Care Act health care plan, what’s the use of buying coverage now, even if you feel you need it?

The best reason is that health care is fickle. Today you may be able to get by and wait out the changes. But tomorrow you may be facing significant health care issues. That’s the nature of insurance of any kind. But with health care now being a huge consideration in your personal finances, it doesn’t pay to treat it lightly while waiting for the chips to fall.

If you are facing decisions regarding your own health insurance arrangements, make the potential for need the major factor, not the current haziness of what happens next in Washington D.C. It may take months or even years for the change in policis to settle out and you don’t want to risk a health disaster in the meanwhile, experts advise.

No changes are expected within the coming year, at least. The Republican-controlled Congress has indicated it will provide a transition period of a year or more, even if Trump should opt to repeal ACA soon after he is inaugurated. Congress also is toying with the idea of a replacement act that would significantly alter ACA. The future is too cloudy to base health care decisions on the “what-ifs.” Cutting funding now for the national program would leave millions of Americans without health care resources, and that’s a scenario even Trump may want to avoid.

More than 10 million Americans covered through HealthCare.gov and state markets that offer subsidized private insurance will see no changes. Also safe for the moment are those low-income persons covered by Medicaid.

The 2017 premium prices, which incorporate huge increases, were set months ago and have already been approved by the relevant agencies. Some people are looking at short-term coverage outisde the ACA exchanges. They generally cost less but also cover less. Those who choose this option are exposed to the possibility of being fined for being, to all intents and purposes, uninsured. But they are covered for major health expenses.

Those who are still uninsured when 2017 rolls along face penalties of $695 per adult or more, depending on household income. But the payment isn’t due until tax time 2018, and by then major changes in the national program may have taken effect. Trump has expressed particular opposition to this aspect of ACA.

The future is not clear, but your need for health care coverage is. Make your decisions accordingly.

Millennials Falling Behind Boomers

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Millennials are 20 percent behind what their parents were doing at the same age in life.
In the normal course of things, it is expected that each generation of Americans will be better off financially than the one before it. That is not holding true for the Millennials. They are lagging behind their Boomer forebears by an average 20 percent in earnings.

The Federal Reserve’s latest figures, as interpreted by the advocacy group Young Invincibles, show that, with median household income at $40,581, the Millennials are 20 percent behind what their parents were doing at the same age in life.

The facts run counter to the wisdom that education is the answer, since the Millennials outstrip their elders in that category.

The M generation boasts less home ownership and has half the net worth of the Boomers. Their education debt is significantly higher, the data show.

The scenario is not good for the new administration, which has pledged a return to post-World War II economics. Culture and identity issues that split the country are factors. White Americans still earn much more than Latino or Black peers, but they have also seen their incomes drop the most, relative to the Boomers.

Many of the Millennials bemoan the fact that at their ages, their parents had homes and were rearing families. Too many of today’s college graduates are working at low wages in jobs that have nothing to do with the courses they took.

Education does have an effect in boosting incomes, but the median college-educated Millennial who has student debt is earning only slightly more than a Boomer without a degree did in 1989, the figures say. More young Americans have a college education, with some 35.6 percent of those 25- to 29-year olds boasting a degree, compared with 23.2 percent in 1990.

In1989, home ownership for the earlier age group was 46 percent. It has dipped now to 43 percent, and the median net worth of the average Millennial is $10,090, 56 percent less than that enjoyed by the Boomers at the same age.

Despite being born at a time when opportunities seemed at a crest, downward mobility is the trend for white Millennials if the current numbers tell it like it is.

Elderly Targets For Financial Exploitation

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Make sure you are aware of basic ways to protect yourself from fraud.
Older Americans are prime targets for financial exploitation, both by people they know and strangers. Financial experts label it “the crime of the 21st Century.” In 2010, the losses amounted to at least $2.9 billion.

With more than 57 million people over age 60 in the country (2010 census) it is a growing problem.

Mild cognitive impairment associated with aging is a factor that allows the elderly to be victimized. They may lack the ability to make sound financial decisions without help.

Though it is well recognized, the problem of financial abuse of the elderly remains “under the radar,” experts say, because cases are complex and are hard to investigate and prosecute. The situation is even more serious for old people because they are limited in their ability to recoup losses. The result may be loss of ability to live independently, decline in health, broken trust and family dissolution.

The best solution is prevention. Being aware of an elderly person’s finances and protecting them against theft is paramount. Planning ahead and managing money according to needs is essential. In the case that something appears to be amiss, early reporting helps facilitate recovery.

Some trusted individual should be granted executor of their finances to enable him or her to act in financial matters for an elderly person if he or she becomes too disabled to handle their own money.

Additional information is available through the Consumer Finance Protection Bureau or by visiting Consumer Finance.