Friday, May 25, 2018

6 Crucial Estate Planning Tips

Estate planning isn't just for the wealthy. It is to make sure your family is taken care of if something happens to you.

The basic pieces of estate planning are a Will, a Living Will or Durable Power of Attorney, a Revocable Trust, Life insurance, and 

Long Term Care.

1. The Will
The most important part of your estate plan is your will. It names your heirs -- the people you want to receive your money and possessions after you die. If you have children or dependents, a Will also names the person you want to take care of them.

In most states, you need a lawyer to create a will, but it needn't be very expensive. If you die without a will, the state will decide who will get your assets, your money and who will take care of your children.

2. The Living Will or Durable Power of Attorney
A Living Will or Durable Power of Attorney (POA) says what types of medical treatment you want (or don't want) if you get sick and cannot talk to the doctor. This document also states that you give someone permission to make decisions about your money and property if you are not able to make them yourself.

3. Health Care Directive
This document is also frequently referred to as a Living Will. With this document, you name a person who will make decisions about your health care if you are personally unable to make those decisions. Be sure your doctor has a copy of your health care directive.

Although you may have both documents, keep in mind that they may conflict since the Health Care Directive allows another to make decisions while the Living Will already states what is to be done. Absent statutory or document direction, healthcare providers may experience a conflict as to what to do.

4. The Revocable Trust
In incorporating a Revocable Trust into your estate plan, don't forget to update all the account titling into the name of the trust. Not changing titles creates problems.

Moreover, never name a financial institution as successor executive/trustee after surviving spouse or instead of a surviving spouse.  In some cases, this is to the detriment of the spouse and other beneficiaries because large institutions usually follow their fiduciary responsibilities with a less personable approach that another trustee could provide.

Finally, just having a will just about guarantees probate which can cost approximately 3% of your estate. A properly drafted and funded trust-based plan (seriously consider a land trust if your state laws allow for it) can avoid probate and protect your beneficiaries from predators and creditors. It can also incorporate sophisticated tax planning so that you can avoid or reduce estate tax liability.

5. Life Insurance
Do not name minor children outright as primary or contingent beneficiaries of life insurance or retirement plans. When children are named as primary or contingent beneficiaries a court must appoint a guardian who then must be bonded and file a laborious annual accounting with the local court.

Also, with regards to beneficiaries, it is important to remember to change the beneficiary in the event of a divorce or death. And never name a special needs child or a grandchild directly as beneficiary. Instead, use a trust for the benefit of the child. If you list a child as a direct beneficiary, you affect the child's eligibility for Social Security disability benefits.

6. Long-term Care Insurance (LTCi)
Long-term care can be a wise investment. If you become unable to perform routine daily functions such as dressing yourself then long-term care will pay the expense for someone to help you whether in your home or elsewhere. LTCi will also protect your assets, so that you have something left in your Will to direct to your heirs.

Now its your turn. How much importance do you put on estate planning. Do you think that any one of these steps are more important than another?

Leave your comments below. 
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Tuesday, May 22, 2018

7 Key Health Insurance Terms You Always Need to Know

Forget Obamacare. It is falling apart fast and in the process of being replaced by Congress and the President. 

Affordable health insurance is coming soon and knowing the meaning of key health insurance terms is essential whether you are comparing policies, or need to know what to ask an agent.

Below is a list of key health insurance terms to help you understand more about what your health insurance plan has to offer.

1. Deductible

The deductible refers to the amount of money that you need to pay before any benefits from the health insurance policy is paid. This is usually a yearly amount. Consequently, when the policy starts again, usually after a year, the deductible would be in effect again. Some services, like doctor visits, may be available without first meeting the deductible. Usually there are separate individual deductible amounts and total family deductible amounts.
2. Co-insurance
This is usually a percentage amount that is  your responsibility to pay. A common co-insurance split is 80/20. This means that the insurance company will pay 80% of the procedure and you are required to pay the other 20%.
3. Co-payments
Co-payment is a fixed amount that you are required to pay at the time of service. It is usually required for basic doctor visits and when buying prescription medications.
4. Out-of-Pocket
This is the cost you would pay out of your own pocket which can refer to how much the co-payment, coinsurance, or deductible is. Also, when the term annual out-of-pocket maximum is used, it is referring to how much the insured would have to pay of their pocket, excluding premiums, for the whole year.
5. Lifetime Maximum
This is the most amount of money the health insurance policy will pay for your entire life. Pay attention to individual lifetime maximums and family lifetime maximums as they can be different.
6. Exclusions
The exclusions are the procedures that the insurance policy will not cover. 

7. Pre-existing Conditions
This is something you had before obtaining the health insurance policy. Some plans will cover pre-existing conditions while others may completely exclude them. Then again, some health insurance plans will cover pre-existing conditions after a certain time period.

Any comments or questions? Leave them below.

Saturday, May 19, 2018

How to Acquire a Home and Build Equity Even with Poor Credit

Until recent years, if you had a middle score of 520 or even as low as 500, you could qualify for mortgage. For example if your Experian score was 513, your TransUnion score was 522, and your Equifax score was 507, your middle score would be 522. 

That would be the score the mortgage company would use to set up your mortgage financing. 

Because of this low score, you may have had to accept a higher interest rate, come up with a higher down payment, or our accept a lower loan-to-value if you are refinancing, but you could still would have gotten your financing done.

Now, you must have a middle score of at least 620 to even get considered.

And along with the need for a higher score, the interest rate for a conventional loan is 4.12%. And, for a FHA loan the current interest rate is 3.75 % if you and the property meets the qualifications. Both of these rates require specific down payments and closing costs.

Nevertheless, despite these mortgage requirements, you still have a chance to acquire your home and build equity. You just need a higher level of sophistication and be willing to carry out your search either with or without a realtor. 

Here are some choices:
Rent with an Option to Buy.
Many sellers are realizing that buyers are having more difficulty qualifying for a mortgage, but have a steady job, adequate income, and some savings. This type of buyer would make a good candidate for Rent with an Option to Buy.
Contract for Deed
This is often referred to as buying on an installment contract or just buying on contract. This as another option for the similar type of buyer, but gives the buyer more rights while living in the property.
Seller Financing
On occasion a seller might have a need to move because of a death in the family, a need to relocate for employment purposes, or just tired of the property and the location. If the property has a low mortgage balance or a non-existent one, the owner may be receptive to a wraparound mortgage. 

In a situation like this, the owner may agree to an amount which will wrap around his current monthly mortgage payment as well as a give him a profit.

The details covering the owner and buyer obligations are very important and it would be wise to consult a real estate lawyer to review the agreement.

Finding these types of sellers will require persistence and follow through. These types of sellers generally advertise in the classified sections of the local newspapers. 

They are receptive to your calls and offers and although they may be tough negotiators, it is possible to have a meeting of the minds. The key is being diligent and persistent.
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Tuesday, May 15, 2018

Don't Buy Health Insurance Until You Read This

Keep Regular Dental Visits
It has been said that the best health insurance is moderation. 

However, even though you may be conscientious enough to get a regular physical examination, you may unexpectedly experience symptoms that may require you to get an urgent examination to find out what’s going on and to get treatment.

If hospitalization is necessary, then you have to get admitted. To meet these expenses without insurance can wreck havoc on your bank account.

According to the National Association of Health Underwriters, only 5 percent of Americans get their health coverage from an individual health insurance policy. Individual health insurance is a type of health care coverage that is provided to individuals rather than to employers or organizations. It can be sold to an individual or to a family.

There are 4 major advantages to choosing an individual health insurance plan rather than employer-based coverage:
  1. You can customize your coverage, where employer-based coverage may provide limited options.
  2. You have the freedom to pursue better rates with other companies.
  3. Depending on your circumstances, it may be more affordable than employer-based health insurance, particularly if you're paying for coverage via COBRA.
  4. It's not dependent on an employer. Individual health insurance plans protect you no matter where you work.
Maintaining health insurance coverage doesn't have to cost a fortune and neither does dental insurance. Here are a few ways to help keep your health insurance premiums low:
  1. Costs can vary widely depending on the insurer, sometimes by as much as 50 percent for similar plans. Make sure you shop around.
  2. The higher your deductible, the lower your monthly premium. You'll be responsible for more out-of-pocket costs should you need to file a claim, but the money you save on your premium may be well worth the risk.
  3. Keeping yourself healthy can save you money on health insurance costs. Excess weight or tobacco and alcohol usage will drive up your premium.
  4. If a member of your family isn't in perfect health or is of advanced age, it may be more affordable to purchase separate health insurance plans.

Protect yourself and your family with the health insurance coverage you deserve.

Any comments? Leave them below. For a free consultation, call (773) 614-3201 or e-mail me a  

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