Sarah Stewart Legal Group, PLLC

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Month: October 2018

3 Steps to Add a Charity to Your Estate Plan

By: Sarah Stewart Legal Group, PLLC

As you consider the legacy you want to leave behind through estate planning, charitable giving may blip on your radar.  Many of us have causes and organizations we want to support and impact.  If you are one of those people, the good news is incorporating charitable giving into your estate plan can be an easy process.

(1) Pick Your Charity

Think of the causes and organizations that are important to you.  Where have you donated time, money, or materials?  Are there causes that have impacted the people you love personally? What do you want your gift to contribute to the community?

Charitable giving is immensely personal.  There are a myriad of questions to consider for yourself before making a decision.  But, rest assured, you can plan for any and all organizations you want in your estate plan.

(2) Pick Your Gift

After you’ve decided where you want to donate and the goals you wish to accomplish, you can move on to deciding what you need to donate to meet those goals. If you wish to donate anything other than cash, be sure to reach out to the organization to be sure they accept that kind of donation.

Though many large charities have the means to accept property, stocks, bonds, and other personal assets for donations, many small or medium-sized charities may not have the ability to manage and/or sell those assets.  A simple phone call can help you determine the best assets for you to donate that will best benefit the organization.

(3) Pick How to Give Your Gift

Now that we’ve decided who and what, we have to decide how. Most estate planning documents allow you to designate a charity as a recipient of any or all of your assets.  But, your goals will help you determine the best vehicle to leave your assets to charity.

If you are looking for tax benefits, there are ways to accomplish that.  If you want more say over how your donation is used, there are ways to structure your planning to ensure your goals are met. Professionals can help you meet your goals.

Do you have a charity you want to support after your death?  Reach out to trusted estate and tax planning professionals to help you organize and achieve your goals for your cause.

Planning for 4 Important Life Stages

By Sarah Stewart Legal Group, PLLC

Generally, people will experience 4 different stages through their lives. Estate and financial planning are important for every stage of our lives.  But, certain aspects of planning are more crucial during different stages. Learning what to focus on and when can help you make the best plans possible for your life.

(1) Starter Stage

Budgeting is the most important skill to learn when we are just starting out. A well-planned budget allows individuals to live within their means and avoid getting trapped by credit cards and other debts.

Once the budget is mastered, plan for savings.  Start with emergency savings.  Inevitably, something important will break. Your car will need new brakes.  The hot water heater will go out.  The washing machine will flood.

Having an emergency savings of at least $1,000 can stop an emergency from derailing your budget and financial plan.

It is also wise to start putting away some money for retirement.  Compounding interest helps early investors get the most bang for their buck.  The more you can save the earlier, the better your outcome when you want to retire.

Unless you already have a family, life insurance is not as important at this stage of your life.  Put that money to better use elsewhere, like a good health insurance policy. Figure out a basic estate plan in case something were to happen to you.

(2) Family Stage

Once you have a family, in addition to budgeting, saving, and investing, you’ll want to ensure you have a good life insurance policy to cover them if something happens to you. Term life insurance gives you the most coverage for the lowest rates. Add you family to your health coverage.

Start to revise your budget as income and expenses increase.  Plan for short-term, mid-range, and long-term financial and personal goals. Find a financial advisor to help you focus on greater retirement investments.  If you don’t have an estate plan in place, get one.  Your family will be grateful if they need it.

(3) Growth Stage

During this stage of life, your income will increase and your costs will stabilize. Plan to maximize saving and investing during this stage of life. Restructure your retirement plan based on the extra money you can devote to your investments.

Update your insurance policies based on your current needs. Update your estate plan, taking into account marriages, divorces, deaths, births, and other life changes.  Consider new estate planning vehicles based on the amount of wealth you have accumulated.

As with all other stages, try to keep your debts as low as possible.

(4) Retirement Stage

The focus of your retirement years will be budgeting. You know how much is available to you and you will have to stay within that range to retire successfully.

Healthcare costs will increase, so invest in a good health insurance option.  Debt should be minimal and life insurance will only be critical to protect a spouse or live-in child.

Update your estate planning and financial documents and simplify your finances.  Consolidate accounts and organize your financial portfolio.

The best way to plan for each stage of life is to focus on the most crucial financial components during each stage of life.  Having a thorough financial and estate plan can help minimize costs and risks for you and your family.

Reach out to professionals today to start your financial and estate plans!

 

How Famous Rapper Mac Miller Planned for His Death

Picture by Clarke Tolton for RollingStone.com

By Sarah Stewart Legal Group, PLLC

Malcolm James McCormick, the rapper and music producer known as Mac Miller, died on September 7 in California.  He was only 26 years old.

The rapper began his career at 14 under the name EZ Mac. In 2010, he signed with Rostrum Records and released his first album, Blue Slide Park in 2011. He went on to create several more albums over the span of his short career and became a highly-sought-after collaborator.  By the time of his death, he amassed more than $9 million in net worth.

Mac Miller was single and had no children, yet despite his youth, he learned from the errors other famous musicians made in their estate planning.  Mac Miller helped his family by pre-planning. He planned for his family after his death with a Will that left everything to a Trust.

Other famous musicians, including Prince and Aretha Franklin, did not properly plan for their assets after their deaths.  Prince died in 2016.  His family is still going through the court process of probate to try to distribute his assets. The process has been stressful, and no doubt, costly.  Aretha Franklin died in August 2018.  Her estate is currently going through the probate process as well.

When estates go through probate, it can take a long time.  Also, the public nature of the proceedings allow family members and sometimes even strangers, to make claims on the estate and delay the process even more.

Mac Miller’s estate will not have to go through the probate process, thanks to his advanced planning.  That means a Court will not have to oversee the division of the assets and notices will not be sent out that allow people to try to stake their claim to his estate.

Another benefit of Mac Miller using a Trust is that his wishes will remain private.  His family will not have to file documents that inventory his assets and who receives them in the court-which makes matters of the estate a public record.

Of course, a Trust is only as good as what you put in it.  When creating a trust, the person making the Trust must change the title of assets into the Trust’s name. Should an asset be missed, most Trust plans will include a Pour-Over Will.  The Will would be probated, but the assets would go straight into a Trust, keeping the assets and distributions private from the public eye.

If you haven’t created a plan for your family after your death, there is no better time than now!  Reach out to an estate planning professional today to get started!

 

 

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