When it comes to Estate Planning, a lot comes down to the titling of assets to avoid Probate. No one wants to pay the probate tax on any assets if that can be avoided.

A Lady Bird deed, also known as an enhanced life estate deed, is a legal document used in estate planning, particularly in Florida, to transfer property to beneficiaries upon the owner’s death without going through probate. It allows the property owner to retain full control and ownership of the property during their lifetime, including the ability to sell, mortgage, or even revoke the deed, while designating beneficiaries who will automatically inherit the property upon the owner’s death, provided it hasn’t been previously sold.

An additional reason to use one is an estate planning tool that enables a Medicaid beneficiary to protect their home from the Medicaid Estate Recovery Program. It allows the home to go to a loved one as an inheritance, rather than go to the state’s Medicaid agency as reimbursement of long-term care costs paid.

*https://www.medicaidplanningassistance.org/lady-bird-deeds

Disclosures:http://www.hechteffect.net/?page_id=31

I have had a number of clients changing their beneficiaries lately for a variety of reasons. Whenever they name an adult child as a primary or contingent beneficiary, I ask if they want to add Per Stirpes? I am often greeted with a questioning look on their face, what does that mean?
Technically it means: “by branch” or “by roots.” When adding this designation to your beneficiary, when they pass their share of your account will pass down their family line, or to their kids vs. to your other beneficiaries.
It is something to think about when naming beneficiaries.

Disclosures:http://www.hechteffect.net/?page_id=31

Many of my clients split their retirement investments between traditional pre-tax 401(k) or IRA contributions and the Roth option. While adding to the Roth will not do anything to reduce your current taxes, the idea is that you can withdraw tax free in retirement. Here is the rub, what if you are in a lower tax bracket in retirement? Sure, the withdrawals from the Roth are tax free, but you may end up with more spendable using the traditional route if you are in a lower tax bracket during your retirement years.

It is a hard call to make while you are still working as we have no idea what will happen with taxes, which is the biggest unknown we have to deal with in planning. My advice is to do what makes you feel most comfortable, Roth or Traditional, at least you are saving for your retirement.

Disclosures:http://www.hechteffect.net/?page_id=31

While paying attention to finances and asset accumulation is an everyday thing for me, most people do not pay that much attention to their finances. Many items are set up, then never looked at again. June is the perfect time to take a second look at some important items.

Look at your budget:
If you do not have one, put one together. Look at where you are spending money and if you are still using items you have on autopay. If you carry a balance on your credit cards, call the issuer and ask for a reduction in the interest rate. Check your streaming to make sure you are not paying for duplicate services as some of them have merged.

What are your cash reserves?
An emergency fund is important, especially during hurricane season. Checking, savings, and money market accounts are where you should keep these reserves. Figure out what is a comfortable amount for you to always have in cash and make it happen.

Check your retirement account contributions:
Have you gotten a raise and not increased what you are saving for retirement? Are you only contributing to your company match? These are two commonly overlooked circumstances that prevent most people from saving to the maximum allowed for their retirement.

These are just a few items for you to look at – but please make sure you do look at them.

Disclosures:http://www.hechteffect.net/?page_id=31

I believe that having some cash in your house, in small bills, is very important especially during hurricane season. During the hurricane season last year when we were hit, my local gas station was open but could not accept credit or debit cards. Cash allowed us to get gas and snacks. I cannot tell you what a comfortable amount of cash to have available is right for you. I can tell you the best places to have your emergency cash stashed.

A checking account, savings account, or money market account are the best places to keep emergency funds. Set a savings goal of about three to six months of living expenses.
Use windfalls like a tax refund to add more to your savings. Include savings in your monthly budget.
Make sure you look at your spending and automatic payments to be sure you are not wasting money on things you no longer use.

Hoard cash the way some people do toilet paper and water; you will feel much better this hurricane season.

Disclosures:http://www.hechteffect.net/

We have seen the stock markets all over the place with some of the biggest swings we have seen in years. On the days when everything is up, I do not hear from my clients, but on a down day, the phone and emails are wild.

What I keep repeating to my clients is this: If we have not sold anything, we have not taken a loss. S decline in the markets is just that. If you are concerned and need some reassurance, please contact your financial advisor and talk things over. I have been in business for 42 years, this happens, cycles are natural. Just take a breath, talk it out, you will feel better.

Disclosures:http://www.hechteffect.net/?page_id=31

This is a statement I make to my retiring clients. Most people have a 401(k) or 403(b) that they save while working. You may like the funds you have in those accounts, but when you retire, you should roll them over to an IRA. Here are the reasons why:

If you need to take a withdrawal the minimum tax withholding from a company account is 20%. Most people are not in a 20% tax bracket when they are retired. You will be giving money to the Government interest free until next year when you get a refund.

Your former plan may make changes that you will find out after the fact. Those changes, especially to the funds available, may not be to your liking.

The internal expenses are generally higher than investing outside of a company retirement plan.

Take your money with you when you retire.

Disclosures

Disclosures:

I have quite a few clients retiring this year, so thinking about their estate is coming front and center.
There are a few basic items everyone should have in place to make sure things move smoothly if something adverse happens.

1. Make sure all of your accounts have current primary and contingent beneficiaries listed. Even your bank accounts can have beneficiaries added to them.
2. Make sure you have a Living Will: I call this the “feed me- don’t feed me” will. A Living Will states to what extent you want medical treatment if you are incapacitated.
3. Durable Power of Attorney: Most of us are familiar with a regular Power of Attorney, the Durable Power of Attorney allows someone to act on your behalf if you cannot speak for yourself.
4. Florida Medical Surrogate: In Florida, a healthcare surrogate is a legally designated representative who can make medical decisions on behalf of an individual who is unable to do so themselves due to incapacity.

These basic items will make your life and those of your loved one easier during trying times.

Disclosures:http://www.hechteffect.net/?page_id=31

As a number of my clients approach retirement, they are asking which debt they should put extra funds towards, their mortgage or their car? I have been a fan of semi-monthly mortgage payments for a long time, it is an easy way to knock about 10 years off the life of your mortgage. Also, I believe that putting funds toward something that will appreciate in value vs. depreciate is the way to go. So accelerate payments toward the mortgage first.

Disclosures:http://www.hechteffect.net/?page_id=31

First let me explain what an emergency fund is for and how much you should have there. We have all been in the place where a major appliance breaks, or you get into a car accident, or one of your kids has an emergency, this is why you need an emergency fund. These are the dollars that sit in a checking, savings, or money market account and are liquid at a moment’s notice. How much you should have in this fund is a matter of personal preference. I think at least $5000 is good, some people feel comfortable with $10,000, some do not feel comfortable unless there is at least $100,000 in the emergency account.

Your 401(K) is for your retirement, which hopefully will last a very long time. You do not want to be dipping into your 401(k) for short term emergencies. Work to build your emergency fund, you will then have some peace of mind.

Disclosures:http://www.hechteffect.net/?page_id=31