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Four Options For Your 401(k) When Changing Jobs

Changing jobs is one of the biggest life decisions you can make and doing so presents an important financial decision: What should you do with your former employer’s 401(k) plan? There are four options you have and understanding the pros and cons of each will be crucial to find the best fit for your situation.

Keep the funds in the old employer’s plan

While this option certainly requires the least amount of effort, not all investors are eligible to leave funds in their former employer’s plan. If your vested 401(k) funds amount to less than $5,000, your former employer has the right to require you to remove the money in some fashion. That $5,000 balance can include all of your contributions, all vested employer contributions, and all investment earnings on those funds. Additionally, your former employer may require that you withdraw your funds once you reach the plan’s average retirement age.

Outside of being low-effort, keeping funds in your former employer’s plan can be beneficial if you need more time to research alternative options, if your new employer’s plan requires employees to reach a certain length of employment to enroll, or if you had access to exceptionally good investment options.

Before deciding to let the funds stay put, make sure there are no additional fees associated with the plan for non-current employees and that your investment options remain the same.

Roll the funds into your new employer’s plan

It has become far more commonplace for 401(k) plans to accept rollovers from past employers without penalty but there are considerations to make before doing so. First, be sure that you are satisfied with your new job and that you will be there for a reasonable amount of time. Should you decide the new position is not for you, it can be a headache transferring funds around. Second, compare the investment options in your new employer’s plan to your old one. Once you have transferred the funds out of the old plan, there is no going back to your previous options.

If you decide to roll over into your new employer’s plan, ensure that the transfer is made directly into the new plan – also known as a trustee-to-trustee transfer. This allows your funds to remain tax deferred and avoids the temporary 20 percent penalty that would be applied if you were to cash-out your retirement savings and then deposit them manually into your new employer’s plan. Now, you would get that 20 percent back once filing your tax return at the end of the year however, there is no need or benefit to putting up the money in this scenario. To avoid that penalty, make sure that rollover checks are written out directly to the new plan or plan administrator, not yourself. It would be wise to contact your company’s plan administrator for details on this process.

The biggest perk of rolling your retirement funds into your new employer’s plan is for simplicity’s sake. Often, investors can lose focus on the performance of their investments with a former employer. As long as your investment options are comparable at your new position, rolling over into one main account is a good practice.

Transfer the funds into an Individual Retirement Account (IRA)

Coming from a former employer’s plan can lead many investors to overlook the option of transferring their funds into an Individual Retirement Account (IRA). An IRA can be set up through nearly any bank or other financial institution and allows a greater range of investment options than the ones chosen by most employer 401(k) plans. While the differences between a 401(k) and an IRA are numerous, the main advantage to your employer’s 401(k) is the matching of contributions up to a certain percentage.

It is important to note that you will not receive a match on the funds you transfer from a previous employer, only on the funds you contribute once enrolled in the new plan. Because of this, there is no real reward on choosing to transfer into your employer’s plan over an IRA unless the plan’s 

investment options are more attractive. With an IRA, you are in the driver’s seat to choose which funds, stocks, or bonds you invest in and there will be more effort required as a result. On the other hand, you may encounter some savings depending on what plan fees are associated with your employer’s plan.

Just like rolling over into your new employer’s 401(k), you will want to execute a trustee-to-trustee transfer if choose the IRA option. The same fees will apply if you withdraw funds before transferring to your IRA.

Cash out the funds

Lastly, cashing out your funds from your former employer’s plan is the option that nearly every financial professional would advise against. The same penalties discussed above that apply to an early withdrawal cannot be made up in your tax return as they can with a 401(k) or IRA transfer and will be a pure loss. Despite the losses, 2013 research from Boston Research Technologies found that just over 30 percent of workers changing jobs will elect to cash-out their retirement funds.

The only two instances where cashing out should become an option is if you are over the age of 55 or need the money for an immediate purpose. If you terminate your employment in or after the calendar year in which you turn 55, you will no longer be subject to an early-withdrawal penalty for that employer’s plan. In the case of a former employer’s plan that you left before age 55, those funds will still be subject to this penalty. The potential workaround is if these funds were transferred into a post-55 employer’s plan.

For any 401(k) questions, please don't hesitate to contact your GuideStream Financial Advisor. 

  • October 29, 2019
  • By admin
  • Comments Off on Close Out Your 2019 Year-End Financial Checklist
  • in financial management

Close Out Your 2019 Year-End Financial Checklist

With the end of the year just around the corner, now is great time to look back at what has happened over the past 12 months and ensure everything is in order for the new year. Here are some important items from your GuideStream Team, to review before moving into 2020.
 

Retirement Accounts 

  • If you are retired, make sure you have taken all required minimum distributions (RMDs). 

RMDs may be one of the most important items to review when going over your finances at the end of the year. Standard IRAs require these distributions be taken annually after the year you turn 70 ½; standard 401(k)s require them annually after you retire or turn 70 ½ (whichever is earlier). Failure to take an RMD will trigger a 50 percent excise tax on the value of the RMD. 

  • Maximize contributions to an IRA and employer retirement plan for the year. 

Both IRAs and 401(k)s have annual contribution limits. If you find you have excess savings and have not reached your annual limit, it may be a good idea to make additional contributions. Similarly, you may also consider making greater monthly contributions to your accounts next year, spreading out the cost of contribution. The deadline for IRA contributions for 2019 is April 15 of 2020; 401(k) deadlines may be restricted to the calendar year, depending on your employer. 

  • Consider converting a traditional IRA to a Roth IRA. 

Did you have a good tax year? Now may be an opportune time to convert a portion (or all) of your traditional IRA to a Roth IRA and pay your taxes at a lower rate. It is important to understand, however, that Roth accounts have contribution limits placed on them, so keeping a traditional IRA may still be beneficial. Before making any changes, consider seeking the help of a professional accountant who can help you with this conversion and calculate your new tax liability.
 

Income Tax 

  • Review your tax withholdings. 

Did you have a major life change (employment change, marriage/divorce, a new child) that may impact your income tax? Check to make sure your tax withholdings have been properly adjusted. Having low withholdings can lead to tax penalties while having too high of withholdings prevents you from accessing your money until your tax return is filed. 

  • Estimate your AGI. 

Determine your adjusted gross income either on your own or with the help of your tax preparer. Your AGI will help determine your tax bracket, which you’ll need for investment and retirement planning. 
 

Family Funding 

  • Check your flexible savings account (FSA). 

The government only permits a $500 annual rollover in an FSA; any excess funds disappear if unused by the end of the year. If you have extra money in your FSA, you may want to schedule necessary medical or dental procedures before the end of the year. 

  • Check your health savings account (HSA). 

HSA funds do not disappear at the end of each year like with an FSA; however, many with few medical needs discover money accumulating in their HSAs faster than they are using it. Consider reducing your contributions to your HSA if your account has reached a comfortable amount and you know of better uses for your money. 

  • Consider contributions to a 529 plan to fund your children’s/grandchildren’s education. 

529 plans allow you to contribute to a tax-free account that may be used to pay for qualifying secondary education expenses.
 

Giving 

  • Donate to charity as a way to reduce taxes. 

You can lower taxable income by 50 percent with a gift to a public charity or by 30 percent with a gift to a private foundation. If your gift exceeds these limits, you can roll over the excess deduction for up to five years. 

  • Reduce your estate through gifts. 

You are permitted to give up to $15,000 ($30,000 for married couples) a year per recipient as an untaxed gift. Gifts above this value will consume part of your lifetime gift/estate tax exemption amount ($11,400,000 in 2019). If a gift directly funds education tuition or pays for qualified medical expenses, it will go untaxed no matter what the value is.

Purpose, Priorities & Return on Life

Purpose, Priorities and Return on Life
by our very own Mark Olson

Throughout our flawed and complex world, there is a consistent downward drift away from the elements in our lives that matter most. Slowly, over time our best intentions often become distorted by a wide range of influences that include the urgent, our culture and our own predispositions.  Most of us yearn for excellence, alignment and fulfilment but often find ourselves being complacent, confused and frustrated because we fall short of all we can be.

One dominant illusion created by our world of finance is that we will be fulfilled and content if we maximize our income, portfolio returns and net worth.  While industries spend massive amounts of time, money and energy promoting those outcomes, deep in our hearts we know those portrayals just aren’t true. 

I’m hopeful the following two recommendations will spur you on as you fight against the downward forces in your circumstances and maximize the return on your life . While both may be simple and familiar, they represent missing links in most of our lives.

Clarify your purpose

Author Rick Warren has highlighted that “personal fulfilment, satisfaction and meaning can only be found when we realize that it’s not about us and we discover our purpose by figuring out what on earth we are here for.”  

Helping people find hope after loss, loving God and loving others, or teaching and inspiring students to be more than they thought they could be, are some examples of a compelling purpose.   

Determine what life priorities matter most to you

It’s amazing how even the most intelligent and gifted individuals often go through life without slowing down long enough to define the life priorities that matter the most to them.  They are not alone as mathematician and theologian Blaise Pascal stated, “The last thing one knows is what to put first.”

Honoring God, leading your family and caring for others are examples of meaningful life priorities.

When life priorities that matter most are defined, they provide guidance at every fork in the road, which increases the probability that what matters most is accomplished.  Without those priorities in place, critical decisions are often based upon urgent, shifting, less important factors which can lead to regrets about “what might have been.”  

Commit to clarifying your purpose and determining what life priorities matter most. If you do, it will direct your actions, counter the downward drift and maximize the return on your life.

TIPS FOR HOMEOWNERS TO SAVE THIS SUMMER

The tail end of winter in 2019 was among the coldest in recent history, bringing temperatures not seen in most locations for over 20 years and even setting some record lows. With the “polar vortex” now well in the rearview, consumers are gearing up for the summer season to kick off. This is an opportune time for many homeowners to tackle different remodeling projects around the house. Before the season officially begins on June 21, here are some tips for saving on these new additions.

Use longer light hours for landscaping needs

Graduation parties, barbecues, and holidays add up to a higher likelihood of hosting family and friends in the summer months. Early summer is a great time to get a head start on landscaping projects that will bring your yard to life. Although retail sales may be tough to find, opting to complete yard work on your own can bring sizable savings compared to hiring a landscaping company.

According to improvenet.com, the median cost for yard maintenance services in the U.S. is $226 per month but can cost up to $700 per month on the top end.

Exterior painting on a budget

With college students home for the summer, homeowners may look to student-run painting services for exterior paint jobs. While the quality might not reach the level of expensive professionals, serious savings can be had for a decent paint job.

Homeadvisor.com reports that the average homeowner spends between $1,714 and $3,682 to paint their house. Student-run services will often be in the lower price range and able to beat other professional quotes.

Rack up savings on an early-summer roof replacement

According to Angie’s List, late summer and early fall are the busiest times of the year for roofing contractors, giving homeowners an opportunity to rack up savings by scheduling their project for early summer. Unpredictable spring weather in the previous months makes June an ideal time to contact a roofing company and get the project underway.

Expect to pay between $3 and $7 per square foot, with the average total cost ranging from $4,900 to $14,100.

Save by strengthening home security

Though many summer projects can include a great deal of labor, one way to save without breaking a sweat is installing a home security system. The cost of installation can vary, with a DIY project ranging from $50 to $300, while a professional system can range $300 to $1,500.

Savings then come via reductions in your home insurance rates, with some insurance providers offering reductions of up to 25 percent for those with installed security systems. Before moving forward and counting on these savings, check with your current insurance provider on the discount offered and if only specific systems qualify.

Hot deals on cold weather needs

Products that are intended for winter use can have substantial savings in the summer months. One of the best areas for savings is in furnace inspections and replacement. By scheduling a furnace inspection in the summer, you will ensure that everything is running properly and may be able to score a discount on the inspection cost with lower seasonal demand for technicians. 

In the event that a replacement is needed, many installation companies will have unsold inventory from the previous winter available at a fraction of the price. According to Angie’s List, inspections cost as little as $60 to $85 while a new replacement gas furnace ranges from $2,250 to $3,800.

Also, look to score a deal on a snowblower in the coming months. While most consumers are shopping at the local power equipment store for lawn mowers and weedwhackers, you can often pick up last year’s models on sale. Already in recent weeks, both Home Depot and Walmart have run sales of 30 percent off or more and expect these discounts to pop up throughout the summer.

BY THE NUMBERS

Spending During Retirement
Planning for retirement can be stressful, with a number of unpredictable costs in the mix. In fact, a 2018 survey from TD Ameritrade found that 3 out of 5 Americans do not know how much they will need to save to fund their lifestyles beyond age 65.

While spending during retirement can vary widely depending on health and location factors, it is important to project what your costs may be during retirement sooner rather than later. Consider this breakdown of average monthly spending by retirement-age U.S. households from the Bureau of Labor Statistics a good place to start.

Housing: $1,322

Largely dependent on your location, housing costs can make up the largest portion of your spending during retirement. Even if your mortgage is paid off, do not underestimate costs in taxes, insurance, utilities, and repairs.

Transportation: $567

An area that has shown to be cheaper during retirement, transportation costs will remain 
a factor with car payments, gas, insurance, and travel.

Health care: $499

By far the category which will vary the widest, health care costs are shown to increase as you age. When projecting your medical expenses, take into consideration Medicare and your employer’s offerings.

Food: $483

Similar to transportation, food costs decrease on average with age. Still, it remains a top expense during retirement and can fluctuate by location.

Entertainment: $197

Though a primarily controllable category, retirees can often underestimate their expenses for entertainment.

Financial & Estate Planning

By our own Scott Blakemore
for Jackson Magazine

What is your dream sports car? Corvette, Mustang, Porche, Ferrari?

Now, imagine you own it and decide to give it to your son or daughter … but they don’t know how to drive … because you never taught them. You just hand them the keys and say, “Good Luck!”  

I think we can agree this strategy is a little crazy and unwise.  However, when you and your spouse are deceased, and your heirs inherit your estate without understanding how it was managed and for what purpose – it is the equivalent of handing a sportscar to an untrained driver.    

I speak with clients daily about retirement cash flows, portfolio allocations, distribution timing, and taxes.  And while those things need to be understood and managed for a successful retirement, planning for the transition of an estate is equally crucial – especially if you’re concerned your heirs may not be ready to manage it or worse, you fear it might destroy them.

I know talking about death can be uncomfortable, and kids rarely want to discuss a future where their parents are gone.  But that day will come whether we like it or not. Talking about death with your children is like talking about sex – always a bit awkward, but the earlier the better.

So how do you prepare to talk to your children about your estate?  Here are several simple ideas to get the conversation started and a few that dig a little deeper.

First, the easier items to implement:

  • Talk about your funeral.  Write down your wishes and share them with your family.
  • Keep your bank, investment account(s) and insurance beneficiaries up to date.
  • Introduce your family to your Financial Advisor, CPA and/or Attorney.
  • Use Estate planning tools.  Let the family know if you have a Will or Trust as well as Durable and Health Care Power of Attorney (POA) documents.  Make sure your designated representative is willing to serve, understands your wishes, and knows where your documents are located.

Second, the more involved items to consider:

  • Have an annual family meeting to discuss any changes you have made to your financial or estate plan.  Be sure to allow time for questions.
  • Bring heirs into the conversation with organizations where you volunteer or provide financial support.
  • Create a family foundation or donor advised fund to give together during your lifetime. This is a great teaching tool.  

These items will obviously require some work.  However, with your heirs being part of the discussion, and doing the work alongside you, you can be confident they not only hear and see your values but participate in them as well.  They will experience the legacy you are trying to create while learning valuable lessons about managing the resources that will one day be under their stewardship.  

Remember, learning to drive isn’t accomplished through watching a YouTube video, and neither should learning how to manage an inheritance. I encourage you to work through the fear and discomfort and invite your children into the conversation to create a legacy impacting them and our world for good.  

 

 

  • February 19, 2019
  • By admin
  • Comments Off on It’s Not Too Late to Craft Your 2019 Financial Game Plan
  • in Uncategorized

It’s Not Too Late to Craft Your 2019 Financial Game Plan

Financial New Year’s resolutions are one of the most common as nearly one-third of Americans plan to make one in 2019 according to a Fidelity survey. While wishing to strengthen your financial situation in the new year is a good first step, actually following through on this can be difficult. Everyone’s situation is unique, but let’s take a look at a few of the top areas to address when crafting your 2019 financial game plan.

Reevaluate your savings strategy
The start of the new year is a great time to take a step back and reevaluate your current savings strategy. First, consider looking into your retirement savings options. If you have not already, maximize the match your employer offers for 401(k) contributions. One in five workers are not contributing enough to get the full match from their employer according to research from benefits administrator Alight Solutions. 

Additionally, consider sitting down with your GuideStream financial advisor if your goals or needs have changed recently. Perhaps you have a new child on the way and want to begin an education savings plan, or maybe you have set a resolution to make a big purchase in the new year. Whatever your new goal may be, being prepared for the financial commitment ahead of time will be a big help in achieving it.

Learn and build your credit score
Your credit score is a constantly evolving number that banks and other lenders use to decide whether to approve you for a loan or line of credit. If you do not know your current score, it can be easily checked for free on a number of sites such as annualcreditreport.com or creditkarma.com. Checking your score on these sites does not hurt your score since it is a soft inquiry. A hard inquiry, on the other hand, is done by banks or lenders when you apply for a new loan or credit card. Too many hard inquiries in a short period of time can have a negative impact on your score.

Once you know your current score, there are many different actions you can take to improve it. The most impactful however is to improve your credit utilization ratio, which is the amount of credit you are currently using comparative to your available line of credit. For example, if you have a $1,000 line of credit and just made a $900 credit card purchase, this will likely have a negative impact on your score the longer it remains at this high ratio. Paying off current credit amounts not only helps reduce this ratio but can help you save money lost on accumulating interest charges. Consider consulting your advisor on additional tips to improve your score and pay back debt.

Identify areas to cut back
Perhaps the simplest financial goal you can make for the new year is to reduce spending on non-essential purchases. One of the most popular ways Americans are cutting monthly costs is by getting rid of traditional cable. Though streaming services like Netflix and Hulu are far from brand new offerings, the content they offer is eliminating the need for many consumers to continue spending on cable TV. This results in cord-cutters saving an average of $85 per month even including the amounts spent on internet and streaming services according to Fortune.

In 2019, do not underestimate the savings that can be had in other purchase areas like restaurants and entertainment. Forbes contributor Priceonomics found that it is almost five times more expensive to order delivery from a restaurant than to cook at home. Of course, completely ditching all restaurant and entertainment expenses is not a realistic goal, but saving money on these occasions is still possible. Before planning a night out or heading to a restaurant, scan coupons sites such as Groupon and RetailMeNot for deals.

Biggest Retirement Savings Mistakes

According to Northwestern Mutual’s 2018 Planning & Progress Study, a shocking 21 percent of Americans have nothing at all saved for the future, and 78 percent say they are extremely or somewhat concerned about not having enough set aside for retirement.

Everyone’s path to retirement is different, but there are general rules that can help guide your savings strategy over time. Here are retirement tips for each stage of your life:

Your 20s: Not taking the advantage of time
Fresh into your new job out of college in your 20s is an exciting time and can set the foundation for a successful financial future. The biggest mistake to avoid during this time is not getting started early and missing out on the most powerful retirement savings factor out there: time.

Recency bias can push young savers to dedicate more than is required to student loans lessening the ability to compound savings. It may be natural to think of retirement as a lower priority since it is decades away compared to student loans, both can be done at the same time. 

Be sure to understand how your employer’s match works and maximize this if possible. Even if you have doubts about your current job in the long-term, most retirement savings can be transferred to your next employer or an individual retirement account should you choose to switch jobs.

Your 30s: Getting housed in
Life changing events such as marriage and children will likely start coming into play during this time. As these events occur, some savers may find themselves buying a house too early. 

While you should not feel pressure to stay cramped-up in a small apartment, be sure look at your first home purchase from all angles. Buying a home too small for your growing family might not work for your needs years down the road. Spending lavishly on a big home might seem sensible now, but consider what happens in the event of a move or job transition.

Your 40s: Shifting your focus
Your early years are considered the accumulation phase but do not think that your 40s are a time to neglect retirement contributions. By this time, there are may be many different areas that need financial attention in your life. How much should you be setting aside for your child’s education? Should you use that new bonus for a home remodel?

Questions during this time can get complex and it is important to prioritize what saving areas need the most attention. Now is a good time to consult with your GuideStream financial advisor to break down these various areas and your goals for each.

Your 50s: Inaccurate assumptions
By your 50s, you likely have a clearer picture of what your savings situation looks like and can begin preparing for when you want to retire and the expenses you expect to have.

Too often, savers underestimate what they will need throughout retirement. According to a recent study featured in Wealth Professional, 15 percent of retirees globally do not have enough income to live comfortably and another 43 percent say they could have used a little more income after retiring.

Similar to your 40s, these decisions of when to retire and how much will be needed can be complex to navigate. With the help of your GuideStream financial advisor, consider all of the factors that may be in play. These can include upcoming healthcare costs, what happens in the case of an underperforming market, and other scenarios.

Retirement Planning for Small Businesses

By our own Caitllin Koppelman
for Jackson Magazine

Planning for retirement as a small business owner is important for you and your employees. Small businesses have unique needs. Thankfully, you have various options when it comes to retirement plans and a little bit of exploration can help you find a solution that best fits the needs of you and your employees. 

Some of your retirement plan options include:  

  • SEP IRAs
  • SIMPLE IRAs
  • Traditional or Safe Harbor 401(k)s
  • Profit-sharing plans

Simplified Employee Pension (SEP) IRA is funded by employer contributions. Benefits for all employees must be uniform (ie: the same percentage of compensation). Contributions are limited to the lesser of either 25% of the employee’s compensation or $55,000 per year. SEP IRAs allow you a relatively low-maintenance way to contribute to your employees’ retirement, and contributions are deductible by the employer for income tax purposes. 

Savings Incentive Match Plan for Employees (SIMPLE) IRA allows for both employer and employee contributions. Employee contributions are limited to $12,500 per year, and employers have to either match up to 3% of employee contributions or contribute 2% of the employee’s salary. 

Like a SIMPLE IRA, 401(k) Plans allow employees to save money in a tax-deferred account for retirement. Traditional 401k plans hold “pre-tax” money, so the money will be taxed when it’s withdrawn from the account for retirement expenses. 401k plans can be set up to allow Roth (or “after-tax”) contributions as well. Employees can contribute a regular amount into the account, straight out of their paycheck. 401k contribution limits are significantly higher than Traditional IRA limits. An employee could defer $18,500 for 2018, plus an additional $6000 if he/she is age 50 or over. Employers can choose to match funds contributed by employees. Keep in mind that 401k plans require a bit more administrative work and legal documentation. A Safe Harbor 401k plan mandates employer contributions. 

Profit-sharing Plan gives employees a portion of company profits. Employers have a great deal of latitude when it comes to contributions: employers can give as much as they want (up to the annual contribution limit, which is the lesser of $55,000 per year or 100% of the employee’s compensation) or none at all, depending on the year’s profits. Contributions do have to be distributed proportionately to the employees. The administration of a profit-sharing plan can be burdensome for some employers, depending on the number of participants in the plan. 

There are two major things to consider when selecting a plan: contributions and administration. If you’re considering starting a plan for yourself and your employees, you should discuss your options in detail with your GuideStream financial advisor and your CPA.  

 

*information adapted from an article written by Advicent Solutions, an entity unrelated to GuideStream Financial. 

Planning Your Estate

by Scott Blakemore
for Jackson Magazine

What is your dream sportscar? Corvette, Mustang, Porsche, Ferrari, Lamborghini, Bugatti, McLaren? Now, imagine you own it and decide to give it to your son or daughter … but they don’t know how to drive … because you never taught them. You just hand them the keys and say, “Good Luck!”  

I think we can agree this strategy is a little crazy and unwise.  However, when you and your spouse are deceased, and your heirs inherit your estate without understanding how it was managed and for what purpose – it is the equivalent of handing a sportscar to an untrained driver.    

I speak with clients daily about retirement cash flows, portfolio allocations, distribution timing, and taxes.  And while those things need to be understood and managed for a successful retirement, planning for the transition of an estate is equally crucial – especially if you’re concerned your heirs may not be ready to manage it or worse, you fear it might destroy them.

I know talking about death can be uncomfortable, and kids rarely want to discuss a future where their parents are gone.  But that day will come whether we like it or not. Talking about death with your children is like talking about sex – always a bit awkward, but the earlier the better.

So how do you prepare to talk to your children about your estate?  Here are several simple ideas to get the conversation started and a few that dig a little deeper.

First, the easier items to implement:

  • Talk about your funeral.  Write down your wishes and share them with your family.
  • Keep your bank, investment account(s) and insurance beneficiaries up to date.
  • Introduce your family to your Financial Advisor, CPA and/or Attorney.
  • Use Estate planning tools.  Let the family know if you have a Will or Trust as well as Durable and Health Care Power of Attorney (POA) documents.  Make sure your designated representative is willing to serve, understands your wishes, and knows where your documents are located.

Second, the more involved items to consider:

  • Have an annual family meeting to discuss any changes you have made to your financial or estate plan.  Be sure to allow time for questions.
  • Bring heirs into the conversation with organizations where you volunteer or provide financial support.
  • Create a family foundation or donor advised fund to give together during your lifetime. This is a great teaching tool.  

These items will obviously require some work.  However, with your heirs being part of the discussion, and doing the work alongside you, you can be confident they not only hear and see your values but participate in them as well.  They will experience the legacy you are trying to create while learning valuable lessons about managing the resources that will one day be under their stewardship.  

Remember, learning to drive isn’t accomplished through watching a YouTube video, and neither should learning how to manage an inheritance. I encourage you to work through the fear and discomfort and invite your children into the conversation to create a legacy impacting them and our world for good.  

 

 

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Name: GuideStream Financial, Inc.
Phone: 800-325-8975
Fax: 517-750-2752
Address: 8050 Spring Arbor Rd., PO Box 580, Spring Arbor, Michigan 49283