Thursday, 27 November 2014 00:00
I awoke a little groggy and made my way to the kitchen only to be confronted by the Gracious Mistress of the Parsonage.
"Here is your coffee and breakfast," she said rather sternly, "go to your study, eat this and stay out of the kitchen."
As I sat in my chair and started consuming my breakfast, I suddenly noticed I was surrounded with an overpowering aroma I knew was not my breakfast.
Then it hit me. It was Thanksgiving and my wife was preparing the family Thanksgiving dinner. If this Thanksgiving preparation time was like all the times before, I needed to avoid the kitchen area as much as possible.
Then she poked her head through the doorway and said, "I have to go for several hours, I do not want you to go to the kitchen."
"What if I need another cup of coffee?"
"OK, but that's it. Don't get anywhere near the turkey. Understand?"
Wednesday, 26 November 2014 23:57
In Part 1 of this series we discussed the initial duties of the successor trustee (manager) of a trust when the person who created the trust passes away. In summary, the successor trustee is to lodge the will, if any, with the court, send a formal notice of the trust administration to the trust beneficiaries and deceased person's next of kin, and file appropriate documents with the County Recorder's office if real property is involved. In Part 2 we discussed the next step of gathering trust assets and paying off all of the legitimate debts of the decedent. This installment focuses on the issues involved in winding up trust affairs and making distribution to the heirs named in the trust.
Before assets can be distributed to beneficiaries, the successor trustee must make sure any federal and/or state taxes due have been paid and appropriate releases have been received from taxing authorities. The successor trustee should also prepare an accounting which details all of the financial transactions affecting the decedent's assets. The accounting will show (1) what was in the estate on the date of the decedent's death; (2) what came in to the estate (eg. utility refunds, life insurance payments, rent receipts, bank interest), (3) all expenditures made from trust funds, and (4) what is left to be distributed. The accounting should be promptly given to all of the beneficiaries to trigger the three-year statute of limitations for challenging the financial transactions of the successor trustee. When a trust is administered over a long period of time, periodic accountings will likely be required.
After all of the preceding steps have been taken, the successor trustee is in position to distribute the trust assets to the beneficiaries as set forth in the trust. The method of distribution usually dictates that specific items be given to particular beneficiaries and that remaining assets be given to beneficiaries equally or based on a percentage of the total balance. When the distribution is made, the successor trustee should have each of the beneficiaries sign a receipt. I usually suggest that any monetary payments be made from the trust account (as opposed to a cashier's check or money order) so that a copy of the canceled check can be used as a receipt if necessary.
Wednesday, 26 November 2014 23:54
What does it take to be comfortable during retirement? Conventional wisdom calls it the 4 percent rule – withdrawing that amount from your nest egg each year to live comfortably. And, for that, millions of Americans believe they need to stick to a job they don't like during their earning years.
"Unfortunately, the kind of money retirees want to spend each year for a comfortable lifestyle tends to be about $60,000, which means someone's nest egg would have to be $1.5 million for that rate of withdrawal to sustain for 25 years," says financial advisor Dave Lopez, a mathematics and computer science major who applies his analytical mind to solving retirement challenges.
"Of course, there are additional sources of income during retirement, such as social security, but the program may not survive the coming decades. And, there are additional costs of retirement, including legacy interests and the likelihood of needing long-term medical care."
The fact is that millions of retirees simply do not have or will not have the kind of income they'd like to have during retirement. Lopez, founder of ILG Financial, LLC (www.theilg.com), discusses an alternative approach to the golden, or distribution years.
Remember, Social Security is a welfare program. Before President Roosevelt signed the Social Security Act in 1935, seniors worked. America was an Agrarian culture, and many who were in their 60s and 70s usually continued duties on the family farm, albeit handling lighter tasks. Social Security is essentially a Socialist idea. A response to the Great Depression, its purpose was to move out older workers in favor of employing younger Americans, but times have changed.
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