Connecting Grandparents to their GrandKids and Why Would You Need Estate Planning?

I am so proud of my friends, Scott and Patricia. They are amazing people--creative, compassionate and innovative.

Scott and Patricia are family focused and launching a new company called GRANDCAMP ADVENTURES on November 10.  Through a mix of storybooks, backyard activities, games and music, Scott and Patricia have created a unique way for grandparents and grandchildren to form lasting memories and meaningful connections—or play their way to better relationships. 

I was surprised when Scott told me there are nearly 70 million grandparents in the United States and we all know how our families are scattered all over the country as well.  Patricia said they wanted to create interactive experiences to “create the space” to nurture and grow relationships between grandparents and their grandkids.  

Congratulations Scott and Patricia—you are proof that taking a great idea, turning it into a big goal and then figuring out how to turn the goal into reality can bring families together!

What goals have you set for yourself? How's your progress?

As long as we’re discussing families and goals, let’s talk a bit about Estate Planning. 

What is it?  Why would I need to do it?  What should I consider?

What is it?

Estate planning is essentially a process to think through and then set up legal arrangements to meet your specific wishes if "some-thing happens" to you or those you care about.  Good estate planning done with the guidance of a good estate planning attorney considers taxes, your desired health care treatment, and what happens to your stuff (business, insurance, investments, etc).  And though not fun to think about, it is best to do well before you would even think you need to do it.

Why would I need to do it? 

You should consider having an estate plan if:

·         You are the parent of minor children

·         You have property that you care about

·         You care about your health care treatment.

Think about details you handle on a regular basis.  If you weren’t around, is there someone else you would want to make decisions on your behalf.  If you have anything complex or if there are details only you handle, it would be very helpful to you family to have some directions and guidance.  I also recommend you talk with a friend who’s just handled the loss of an older family member and ask their advice.

What should I consider?

There are many aspects of your life to consider and this list includes a few.  If there is anything on this list you are not familiar with, then do some research, talk to an advisor, see what you need to take care of now while there’s no urgency.

1.      Estate tax planning - flexibility for changes in the law and value of assets

2.      Income tax planning – basis issues and retirement plans

3.      Coordination of asset ownership and beneficiary designation with estate plan

4.      Probate– Living Trusts, POD, TOD accounts

5.      Incapacity planning – Durable Powers of Attorney, Living Trusts, Health Care Powers of Attorney, HIPAA Authorizations

6.      End of life care – Advance Directives (Living Wills), DNR, MOST form

7.      Long-term care planning – insurance, Medicaid issues

8.      Insurance – life, long-term care, disability, umbrella liability

9.      Asset Protection – use of LLCs for rental property, avoid joint accounts, etc.

As you can see, an estate plan is more than just a set of forms.  It should be a comprehensive approach to dealing with certain or potential issues of death, disability, long-term care, tax liabilities, probate costs, and family disputes.  Not exactly cheery subjects, but certainly important and having a plan will let you sleep easier at night. 

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I will continue to provide investment tips and food for thought.  I am always open for topic requests and you can send your suggestions to tara@taraenolan.com.  

 Also remember…

If you have questions and would like to learn a little more about me please visit my website www.taraenolan.com.

Cheers,

6 Tips on Teaching Kids Responsibility with Money

I just got back from Hawaii where I’m serving my annual Air Force reserve time.  I was able to get into some exciting adventures during Memorial Day Weekend.  Kris came out and we went to a polo match on the North Shore, dove the Mahi wreck on the West Side, and hiked the Kuli’ou’ou Ridge overlooking both Diamond Head and Koko Crater. 

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I felt like I was on an adventure quest and it reminded me of my personal goal to organize a family vacation.  There are 6 of us plus spouses and kids so a plan is in the works to organize both the logistics and finances to make it happen.

Today’s Topic

6 Tips on Teaching Kids Responsibility with Money

The reason why I’m giving you these tips is that I’ve just gone through the exercise myself.  I am now an aunt to an 8 year old and a 2 year old.  I feel a great responsibility and see a great opportunity to start sharing my money smarts with them early on.  What a great opportunity to grow up understanding the language of finance and money.  It’s like learning a second language from the get go; instead of waiting until you’re ready to try and buy that first home!

6 Tips on Teaching Kids Responsibility with Money

Teaching kids about money is a great thing to do early on.  What an opportunity to get past the money issues we were raised with and show your kids that money is a tool to work for us.  It is way easier for your child to grasp planning and investing if they can work on a real scenario like saving up for that new bike they’ve had their eye on.  Here are 6 things you can do with your kids to help them start learning about money that they will not learn in school.

1.     

    Set Goals with Your Kid (needs, wants, wishes):  Sit down at the table with some paper and pencil and make three columns on the paper labeled Needs, Wants, Wishes.  Ask your kid to give you three examples for each column.  You can talk about the difference between dinner and a candy bar at the store.

2.     Create a Hand’s On Example: Find a toy that you kid has their eye on that costs $30.  Make change to include coins, dollar bills, 5’s and 10’s.  Have your child line up $30 using at least one of each type of money.  This will make a visual comparison of a desired toy to the money needed to buy the toy.  Then compare this dollar amount to an allowance or even a minimum wage job.  Let them tell you how long it will take to earn the money.

3.     Start a Savings Account:  Check with your local bank about setting up a savings account for your child.  When your child is old enough to understand multiplication and division— talk to them about compounding interest.                                        

Here is a simple example for comparison.

6% interest APR (annual percentage rate) beginning with $100.

(100 * 0.06) + 100 = $106.00

Versus

6% interest APR (annual percentage rate) compounded quarterly beginning with $10.

 1^st Qtr:  [($100.00 * 0.06)/4] + 100.00 = $101.50

 2^nd Qtr :[($101.50 * 0.06)/4] + 101.50 = $103.02

  3^rd Qtr:  [($103.02 *0.06)/4] +103.59 = $104.57

4^th Qtr:  [($104.57 * 0.06)/4] + 104.57 = $106.14

4.     Give an Allowance:  Make a deal to show you child how investing now will reap dividends later.  Give your child two options to pick from and help them through the decision-making process.  For the first option, offer them $3 dollars a month and they will have $3 a month to spend.  For the second option, offer them $5 a month if they put $2.50 into their savings account.  They will have $2.50 to spend each month.  Stipulate that they cannot spend the savings account money for 6 months.  After 6 months of investing they will have $15 and it will only cost them 50 cents a month.

5.     Discuss Credit Cards:  Talk about good ways to use credit cards i.e. to build a good credit history and then pay off each month versus bad ways buying such as for instant gratification.  Also discuss how different credit cards have different interest rates.  Have your child pick which card would be the best card to use for a larger purchase like a refrigerator that you may take a few months to pay off.

6.     Keep Records: Buy an organizational folder with 12 months.  Have your child put receipts of purchases into the folder each month.  When you are paying bills have your child tally up their spending.  Ask them if they are still happy with their purchases or if they would make different choices now.  This will help them further understand wants versus wishes.

Be sure to talk to your kids about money so their knowledge comes from you and not what they’ve learned from the kid down the street.  I think you’ll be surprised how much they already understand—I know I was when I talked with my niece!

Also remember…

Make sure you’ve made your appointments for your annual financial plan review.  And, if you’re not already working with me, feel free to make an appointment for an initial free consultation.

If you have questions and would like to learn a little more about me please visit my website www.taraenolan.com.

Cheers,

Tara J

www.taraenolan.com