Wednesday, 16 April 2014 10:17
You may have heard and read about the benefits of a living trust as an estate planning tool. You may think it is the right thing to do -- but you're stopped cold by the price tag. Let's look at the range of offers.
The lowest price I've seen for a living trust is for a "Do it Yourself" kit offered over the Internet. A woman I know sent for one but couldn't make "heads nor tails" of it. She eventually hired me to do her living trust.
Self-help legal service clinics frequently advertise trusts and many other legal services. Look closely at their ads. They disclose, as required by law, that they are not lawyers. What they offer is also a form of do-it-yourself kit.
A cut above the providers of do-it-yourself kits are the mass marketing firms. You have probably seen their ads in the newspaper offering free lunch or dinner at a local restaurant if you attend one of their estate planning seminars. The ads generally recite that if you sign up at the sales presentation, you will receive a discounted price. In most cases, once you sign up you will receive a questionnaire concerning your personal circumstances. Based on your responses, a cookie-cutter trust will be created for you and, as most ads disclose, the trust will be presented to you by an insurance company representative. Usually, the only time you see an attorney is at the initial sales presentation. Unfortunately, the information learned about you from the questionnaire might be used to sell you investment and insurance products. The estate planning seminar is just a marketing tool.
Monday, 14 April 2014 07:53
About 10,000 baby boomers will turn 65 every day until around 2030. If you're part of that group, or if you're planning ahead for a comfortable retirement, the California Society of CPAs (calcpa.org) offers this advice for securing your financial future.
Fund Your 401(k)
Sign up for your company-sponsored retirement plan and watch as automatic payments deducted from your paycheck add up to a hefty nest egg over the months or years. Try to donate at least as much as required to qualify for the matching donation from your employer, if one exists. That employer match is like an added bonus, and along with your own contributions it will grow over time as it earns dividends and interest.
Remember, too, that your contribution is excluded from your taxable income, which helps lower your tax bite.
Create Your Own Account
If your company doesn't have a 401(k), consider setting up your own tax-advantaged retirement account, such as a traditional or Roth IRA. You can contribute up to $5,500 a year (up to $6,500 if you're age 50 or older).
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