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Three Most Important Family Preparedness Steps

admin — Sun, 24 Jul 2011 20:01:29 +0000

Image by Getty Images via @daylife

When I think about what frightens parents, seeing their children in a vulnerable position pretty much tops the list–whether it’s at home, at the pool, or any other place in public.

What exacerbates this is knowing the fear which children themselves feel when they are surrounded by people they don’t know, and when they can’t fully understand just how much love their parents have for them.

Put these steps into place…and you’ll eliminate at least some of these dangers…

#1: Identify a Clear Plan for the Care of your Children.
Did you know that 74% of parents have not named guardians? Worse, of the 26% who have, most have made 1 of 6 common mistakes that leave their kids at risk.

When you name short AND long-term guardians for the care of your children, you must give clear guidance to your caregiver and everyone you’ve named to care for your children, in written form. Just by naming these guardians (both short and long-term), your children never have to be put in a situation in which they would be taken out of your home and into the hands of strangers if something happens to you.

An even better step, if your children are old enough for this discussion, is to tell them this plan. Don’t make a big deal of it…you don’t want to frighten your kids at the prospect of your loss. But they’ll feel better knowing that you’ve selected people they can trust and love to care for them well.

#2: Properly Document Your Decisions
Parents often have discussed and agreed upon a guardian for their children and have even made their wishes known to their families; however, not documenting these decisions can result in your wishes not being followed when it really is too late.

You see, if you don’t communicate your wishes in a legally-binding document, you are placing your children in a “free for all”. Without clear, legal guidance, every family member has equal priority of guardianship and the decision about the care of your children will be left in the hands of a broken-down court system and some judge who doesn’t know you or your kids.

This legal documentation is particularly important if you intend for a friend to care for your children as courts will almost always choose a family member over a friend.

Also, don’t forget to be sure to leave behind specific guidance about how you want your children raised. Education decisions, healthcare decisions, discipline decisions … these are all things you care a lot about and would want made consistent with your opinions for how your kids are raised.

#3: Don’t Neglect Their Financial Future
Sure; there are different schools of thought on this issue. Some parents don’t want to overwhelm their children with too much in their bank accounts at once, which is understandable.

But, regardless of how you structure this provision, providing sufficient financial resources for your children’s care is your responsibility. And, as a responsible parent, you must take steps to protect what your children will receive … whether it’s through life insurance, savings or some other means.

To do so, establish a living trust to receive any life insurance benefits your children would receive so that they don’t get access to your assets at the age of 18, and make sure your living trust holds on to the title to any assets that would go through probate in the event of your death. And, if your estate is large enough, you will want to plan to avoid estate taxes as well.

Many of these issues can be handled by an estate-planning attorney, and we’d be happy to put you in touch with somebody good. Or, there are online options as well. Either way…let us know how we can help! Visit our site www.savemoretaxes.com to obtain your free report on saving more taxes.

Who Needs Long-Term Care?

admin — Tue, 05 Jan 2010 02:23:54 +0000

Who Needs Long-Term Care?

: Image by Levy Carneiro Jr via Flickr

Here are some interesting statistics. Baby boomers start turning 65 in 2011 and the number of older people will increase dramatically during the 2010 to 2030 period. The older population in 2030 is projected to be twice as large as in 2000, growing from 35 million to 71.5 million. [Source: 2009 Long Term Care Insurance Sourcebook, American Association for Long-Term Care Insurance]

Between 2000 and 2040 the number of older adults with disabilities will more than double, increasing from about 10 million to 21 million. [Source: 2009 Long Term Care Insurance Sourcebook, American Association for Long-Term Care Insurance]

More that two-fifths (42%) of people age 65 and over reported a functional limitation. Eighteen percent had difficulty with 1-2 Activities of Daily Living. Five percent had difficulty with 304 ADLs. And three percent had difficulty with five to six ADLs. [Source: 2009 Long Term Care Insurance Sourcebook, American Association for Long-Term Care Insurance]

An estimated 10 million Americans needed long-term care in 2000. [ Rogers, S., & H. Komisar. Who needs long-term care? Fact Sheet, Long-Term Care Financing Project. Washington, DC: Georgetown University Press, 2003. ]

Most but not all persons in need of long-term care are elderly. Approximately 63% are persons aged 65 and older (6.3 million); the remaining 37% are 64 years of age and younger (3.7 million). [ Rogers, S., & H. Komisar. Who needs long-term care? Fact Sheet, Long-Term Care Financing Project. Washington, DC: Georgetown University Press, 2003. ]

The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older. [ AARP. Beyond 50.2003: A Report to the Nation on Independent Living and Disability, 2003, (11 Jan 2005). ]

By 2050, the number of individuals using paid long-term care services in any setting (e.g., at home, residential care such as assisted living, or skilled nursing facilities) will likely double from the 13 million using services in 2000, to 27 million people. This estimate is influenced by growth in the population of older people in need of care. [U.S. Department of Health and Human Services, and U.S. Department of Labor. The future supply of long-term care workers in relation to the aging baby boom generation: Report to Congress. Washington, DC: ]

Of the older population with long-term care needs in the community, about 30% (1.5 million persons) have substantial long-term care needs (three or more ADL limitations). Of these, about 25% are 85 and older and 70% report they are in fair to poor health. [The Henry J. Kaiser Foundation. Long-term Care: Medicaid’s role and challenges [Publication #2172]. Washington, DC: Author, 1999 ]

40% of the older population with long-term care needs are poor or near poor (with incomes below 150% of the federal poverty level). [The Henry J. Kaiser Foundation. Long-term Care: Medicaid’s role and challenges [Publication #2172]. Washington, DC: Author, 1999 ]

I consider having Long Term Insurance as being critical for your financial protection. Do you know anyone who had to go to a nursing home? Both my parents required assistance and it was not pretty. Don’t become a burden to your family. If you want to discuss this, let me know.

Long-Term Care Insurance Is Not Expensive

admin — Fri, 11 Dec 2009 22:14:19 +0000

One of the great misconceptions about long-term care insurance is that it’s expensive.One argument goes, it’s expensive because I could pay for something I never use.

Would you say the same thing about your homeowner’s insurance?It’s a waste if my house never burns down. Or your car insurance?I’d better total that car so I get my premiums back. Of course you wouldn’t make either of these statements.That’s because you know that every day many people have bad car accidents and every day house fires happen.You count yourself quite lucky when they don’t happen to you.

The same is true for long-term care insurance.Every day many people submit a claim on their long-term care insurance policy.According to the American Association for Long-Term Care Insurance some 180,000 individuals are receiving benefits from their insurance coverage yearly.Some $8.5 billion is paid out annually.

Long-term care insurance is incredibly valuable protection to have should you need it.Consider yourself lucky if you live a long life and never need long-term care.

For those who are still not convinced, I’d like to share two real examples of individuals who purchased long-term care insurance.These are real people with the information provided to the Association by the nation’s leading insurance companies at the beginning of 2009.

COMPANY A:Largest open claim: $1.2 million.

The individual (a woman) purchased long-term care insurance at age 43, paying an annual premium of $1,800.Three years later her claim began and has continued for almost 12 years ($1.2 million in benefits already paid).

COMPANY B:Largest open claim: $1.02 million.

The individual (also a woman) purchased long-term care insurance at age 72 paying an annual premium of $12,766. Three years later her claim began and has continued for almost 9 years ($1.02 million is benefits already paid) for her nursing home care.

Individuals between the ages of 55 and 59 paid between $700 and $6,950 for long-term care insurance according to a new report from the trade organization.People are taking advantage of readily available discounts to and policy design techniques to reduce the cost of coverage.You can too.

The cost for long-term care insurance coverage is based on a variety of factors.Some you have no control over such as your age and current health when you apply.Others are choices that can significantly impact what you pay.Understanding how to take advantage of applicable discounts and saving techniques can reduce the cost by 20-to-50 percent yearly.

Spouses as well as partners residing together can take advantage of the most significant discount available today when both parties purchase coverage.The discount can be as much as 40 percent applied to both policies.A number of insurers will even offer the discount when only one individual purchases coverage or can health qualify.

If you would like more information, please call me at 847-243-3600. I can help make this important protection more affordable than you might think.