LAW ADVOCACY FAMILY FINANCE A monthly newsletter providing your family with insight about the law and finance (with an occasional dose of humor) from your friends and advocates at DuPont Wealth Solutions and the Law Offices of DuPont and Blumenstiel. FINDING GRATITUDE
In my later years, I’ve found a new appreciation for old memories. And Thanksgiving is right around the corner, which always leads me to take stock of the many people and blessings I’m grateful for. I find myself looking back with newfound fondness on the Thanksgivings of my youth. The visual that first arises from the old gray matter is a white- knuckled drive through freezing sleet 30 odd years ago. I was in my early 20s, and my family drove from Ohio to Manhattan to spend the holiday there and attend the Macy’s Thanksgiving Day Parade. While that one nerve-wracking drive has seared its way into my memory, the times we made this journey were filled with too many bright points to count. So much so that the individual trips begin to blur together in my mind.
Context has made these bright memories even warmer. Having now spent the last 25 years as an entrepreneur myself, I now understand how much my father was really doing to give his children that experience. This was during a transitional time for my father’s pharmacy, when money was tight and time scarce. And yet, through sheer force of will and generosity, my parents gave my siblings and me a remarkable experience with memories that will last a lifetime. Knowing now the financial and emotional strain these trips must have caused gives me more appreciation for those Thanksgivings of old. These days, Julia and I typically host a traditional Thanksgiving for our parents and any extended family who can join us. They typically end up being 12–15-person affairs, which I think of as small coming from a family that could have 20-plus people at the dinner table. But now that my daughter is getting older, I’m beginning to think I should pay my father’s kindness forward and give her the same great New York experience. The more I write these cover letters, the more I realize that they’re a medium for me to talk to my parents, so I’m just going to come out and say it: Mom and Dad, thank you for everything. You sacrificed so much to give all of your kids an incredible upbringing. Every year, I find new appreciation for the moments, big and small, that you gave us. I’m so incredibly inspired by your example.
I was definitely appreciative of the experience in the moment. Watching the parade up close and being able to soak in all the
sights and sounds was incredible — despite being knee-deep in snow, I was mesmerized. Then the whole family
“NOW THAT MY DAUGHTER IS GETTING OLDER, I’M BEGINNING TO THINK I SHOULD PAY MY FATHER’S KINDNESS FORWARD AND GIVE HER THE SAME GREAT NEWYORK EXPERIENCE.”
would migrate over to the iconic Tavern on the Green and its hanging lamps glowing cheerfully against the gray, damp city. We’d have Thanksgiving dinner at that historic restaurant before
heading out to explore
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THE MOST UNDERRATEDTHANKSGIVING FOODS
When you think of Thanksgiving food, the first dishes that pop into your mind are probably turkey, mashed potatoes, and green bean casserole. They’re a part of nearly every Thanksgiving meal. And while these delicious foods are something you don’t want to skip, there are dishes your table is sorely missing — dishes that don’t get the respect they truly deserve. This Thanksgiving, why not take a look at a few other options? SOUP This is one dish that rarely hits the Thanksgiving table. But try a butternut squash or broccoli cheddar soup and you’ll be surprised just how “at home” it feels among the rest of your spread. It’s perfect to serve ahead of the main course, as the final touches are put on the turkey, or when the green bean casserole needs a few more minutes in the oven. BRUSSELS SPROUTS These tiny greens often get overlooked during Thanksgiving, but with the right accompaniment, they can make for an extremely tasty and nutritious dish. For example, try roasting halved Brussels sprouts with dried cranberries and bacon, drizzled with a raspberry balsamic vinaigrette. SAUSAGE Put a creative spin on your traditional Thanksgiving dishes and try using sausage in the stuffing. An Italian sausage, for instance, adds a kick of flavor to any stuffing, homemade or from the box. You can also experiment with other kinds of sausage to find the flavors that best complement your stuffing. Use a sweet sausage when you need something to pair with a stuffing that incorporates apples. 4 Dishes Your Table Needs
CRANBERRY SAUCE This Thanksgiving staple rarely gets the attention it deserves. While it’s easy to buy a can of cranberry sauce, you do your guests a culinary disservice by going this route. Instead, make your own cranberry sauce. There are many recipes online, and all you need are some fresh or frozen cranberries, orange juice, and sugar to make the best cranberry sauce of your life.
A Step-by-Step Guide THE ESTATE-PLANNING PROCESS
Figuring out personal finances can be intimidating, especially when doing so also causes you to contemplate your own mortality. So, naturally, it makes sense that most people drag their feet when it comes to estate planning. But the truth is that ensuring your loved ones are taken care of after you are gone is one of the most important things you can do in this life, and the earlier you start, the easier it’s going to be. To help you kick-start this process and get the most out of your plan, we’ve put together this guide. Step 1: Assemble a Team. Many people struggle to form their estate plans because they don’t know where to start. This is natural; estate planning is a complex process with many moving parts. Therefore, your first step should be to build an estate-planning team of professionals you trust. If you don’t have a large or complex estate, a financial planner and your attorney will make a fine team. For more involved assets, you may want to
bring your insurance agent, bank trust officer, and accountant into the loop.
Step 2: Gather Information. After you’ve assembled professionals you trust, they can help you with the specifics of your plan. You should gather the following materials to help them find options that fit your needs: Current income from employment and all investments Any expected deferred compensation All retirement benefits from Social Security (including survivors benefits), IRAs, pensions, and profit-sharing plans • • •
Your will, if you have one
Current and expected debts and obligations, including mortgage and loan balances and real estate Liens, taxes payable, consumer debts, estimates of funeral costs, and estate settlement expenses Step 3: Set Goals. While estate-planning professionals can help you understand the options available to you based on the above information, only you can decide the route that’s best for you and your loved ones. Worried about estate taxes? Perhaps a living trust is right for you. Want to donate to charity? Read about CRT plans on Page 3 of this newsletter! •
Investment documents, certificates, passbooks, etc. Deeds to primary and vacation residences
• • •
Life insurance policies of which you are the owner, the insured, or the beneficiary
Trust agreements, if any
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CHARITABLE REMAINDER TRUSTS
Should I Start a CRT?
As our country prepares to celebrate what we are grateful for this year, it’s important to remember those who are less fortunate than ourselves. We thought it would be fitting in this season of giving to cover an estate-planning option for those looking to donate to charitable causes while also generating income. So this month, we’re delving into charitable remainder trusts (CRTs).
As with most estate planning and financial vehicles, certain factors determine whether CRTs are appreciable assets and want to set up an income stream that allows you to give to philanthropies best for you. If you have highly
What’s a CRT?
At its core, a CRT is what’s known as a “split-interest” trust, meaning a portion of the trust’s assets will go to a third party — in this case, one or more charities. You or an individual you name can receive an income stream from this trust for a period of up to 20 years or until this beneficiary passes away. Then the remainder of the assets go to the charities named in the trust.
What Are Its Benefits?
you care about, CRTs can be a very attractive option. However, there are plenty of great financial planning tools out there
There are many personal and philanthropic benefits to be had from a CRT. These trusts offer a lot of flexibility, allowing valuable assets such as publicly traded securities and real estate within the trust to be sold tax-free. Income from this trust will be protected from capital gains tax, both for your beneficiaries and your chosen charities. Furthermore, CRTs allow you the opportunity for an immediate income-tax deduction based on the estimated amount of your assets that will go to charity.
that can help you secure your future and give to those in need. If you want to include philanthropy in your plan, give us a call. We can help you find an approach that fits your assets and your desire to do good.
A SIMPLE BRINE FOR SUCCULENT TURKEY
No matter how you cook your bird for Thanksgiving, it will taste better if you brine it beforehand. Break out your biggest cooler and some ice to ensure that your guests rave about your turkey.
3/4 cup plus 2 tablespoons kosher salt
2 bay leaves
1 tablespoon black peppercorns
• • •
3/4 cup sugar
1 carrot, peeled and diced
1/4 teaspoon crushed red pepper flakes 1/4 teaspoon fennel seeds (optional)
1 large onion, peeled and diced 1/4 cup celery, diced 2 large sprigs thyme
1. In a large stock pot, bring salt, sugar, and 4 cups water to a boil. Stir until all ingredients are dissolved. 2. Turn off heat and add remaining ingredients. Place brine in the fridge, uncovered, until cold. 3. Add 6 quarts cold water to brine. Add turkey and submerge completely. Brine chilled for up to 72 hours.
Inspired by Bon Appétit magazine
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Finding Gratitude PAGE 1
Thanksgiving Dishes Your Table Is Missing
How to Start Planning Your Estate PAGE 2
Put Charity in Your Estate Plan
A Simple Brine for Succulent Turkey PAGE 3
A Historic Veterans Day PAGE 4
A HISTORIC VETERANS DAY COMMEMORATING THE 100TH ANNIVERSARY OF THE END OF WORLDWAR I
This year, Veterans Day takes on particular historic significance: Nov. 11, 2018, marks the 100th anniversary of the armistice that ended the First WorldWar. Countries around the world will commemorate the signing of this peace agreement with moments of silence, centennial ceremonies, and historical exhibits. Unlike Memorial Day, Veterans Day is a celebration of life. It’s a day to honor the power of peace and the living veterans across the globe who have served their countries. This November, take a moment to remember the war that helped shape the international community’s dedication to peace and thank the individuals who served to defend it. THE GREATWAR By 1914, a world war had been years in the making, but the assassination of Archduke Franz Ferdinand of the Austro- Hungarian Empire by a Serbian nationalist provided the spark that would eventually burn down much of Europe. A chain reaction of land disputes, pre-emptive attacks, and strategic alliances brought over 30 countries into WorldWar I. The Great War that ravaged Europe resulted in a devastating loss of life, but from those ashes rose a renewed appreciation for the importance of peace and a global effort to ensure its place in the future.
THE RESTORATION OF PEACE In 1918, Germany surrendered unconditionally, and the armistice ended the fighting at the 11th hour on the 11th day of the 11th month in 1918, though the war did not officially end until the signing of theTreaty of Versailles the following July. An estimated 16 million soldiers and civilians died in just four years, making it one of the deadliest conflicts in modern history. VETERANS DAY Originally called Armistice Day, Veterans Day was first observed on Nov. 11, 1919, to honor the one-year anniversary of the armistice, and it became a U.S. holiday in 1938. Today, Veterans Day celebrates veterans who served their country honorably. The U.K., France, Australia, and Canada also commemorate their veterans in November. If you know a veteran, thank them for their service this month.
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Back to Basics #5: Planning for Health Care Expenses
Over the last few months, I’ve been sharing a series of Articles called “BACK TO BASICS.” In each article, we examined one of the basics of financial planning. This month, let’s look at:
Take a moment to think about the future. What do you see yourself doing? Traveling the world? Starting a new business? Playing with grandkids? Taking up that hobby you’ve always dreamed of doing? Getting in shape? Improving your short game? Or maybe just relaxing and reading a book? Whatever it is that you see, the future probably looks pretty exciting! Unfortunately, there’s something else the future holds that no one can avoid. Maybe it won’t happen for a few more decades. Maybe it’s already happening. But at some point in the future, your body will start to slow (and even break) down. They say age is a state of mind, but it’s also a fact of life – and this fact means inevitable changes to both your health and your pocket book. Make no mistake, your medical expenses will go up as you get older. But many people fail to plan for these costs. Those that do plan often underestimate exactly how much their medical expenses will cost. For example, a recent study by Fidelity Investments found that the average couple retiring at age 65 will need at least $280,000 to pay for their health-care costs in retirement. 1 Another study done by the Employee Benefits Research Institute found that “a 65-year-old man and woman would need $127,000 and $143,000, respectively, if they want a 90% chance of covering all their health care costs…in retirement.” 2 That’s a lot of money. There are just so many aspects to health care that you may need to pay for some day.
There’s regular visits to your doctor, medicine, surgeries, hospital stays, long-term care, and more. Hopefully this gives you a little glimpse of how important it is to plan for your health care expenses. But how do you pay for them? The obvious answer is “work longer and retire later,” but let’s delve a little deeper. Here are a few things you can do: 1. Learn your various Medicare options. If you are one of the lucky few who will have employer- provided health care coverage even after retirement, congratulations. But if not, start familiarizing yourself with the intricacies of Medicare now. The Federal government’s health insurance program for seniors is often referred to as a single plan, but in reality, it’s many types of plans rolled into one. From the basic level of coverage (Part A) to “Medicare medical insurance” (Part B) which covers outpatient hospital care, physical therapy, and home health care, to the more elaborate “Medicare Advantage” plans, most retirees are confronted with too many options, some of which are more appropriate than others. Choosing the best type of coverage for you will be crucial when it comes to paying for your medical expenses. One of the smartest financial decisions you’ll ever make is to set up a rainy-day fund. This is where you regularly set aside a portion of your income for dealing with the unexpected. Whether that’s losing your job, dealing with a natural disaster – or yes, paying for unexpected medical expenses – a rainy day fund can make all the difference. 2. Start saving and investing – now.
Back to Basics #5: Planning for Health Care Expenses
Similarly, if you invest wisely and consistently, you have the potential to grow your money for the future . That means you’ll have a better chance of being able to afford any health care costs that pop up in the future.
and cancer can extract a high toll on your finances as well as your health. Most people don’t realize this, but one of the best ways to ensure a financially secure future is to take care of your body in the present. Over the last few months, I’ve tried to share a few basic tips on how to plan for and secure a bright financial future. They may seem overly simple, but they’re fundamental to your financial health. Remember: “Winners don’t just learn the fundamentals, they master them. You have to monitor your fundamentals constantly, because the only thing that changes will be your attention to them.”
3. Consider long-term care insurance.
Important disclaimer: not everyone will need long-term care or assisted living in their lives. That said, many people do, and long-term care (LTC) insurance is one of the best ways to pay for it. It can be beneficial to purchase LTC insurance sooner rather than later, as premiums can get higher as you grow older. However, LTC is expensive in and of itself, so give the subject a lot of careful consideration before making a decision. I’m a financial advisor, not a doctor or trainer, so I’m not in the business of providing tips on healthy living. But this tip is just common sense, and it’s amazing how often it gets overlooked. Keeping yourself healthy now can save you a lot of money in the future. By getting regular exercise, eating a healthy diet, sleeping enough, and quitting smoking (among other things) you can give yourself a better chance of avoiding future medical problems. Conditions like high blood pressure, diabetes, 4. Keep your body healthy.
– Michael Jordan
By mastering the fundamentals of financial planning, you will get yourself much closer to achieving the future you’ve always dreamed of.
That’s it for my Back to Basics letters. I hope you’ve enjoyed reading them. Here’s to the future!
1 Elizabeth O’Brien, “Here’s How Much the Average Couple Will Spend on Health Care Costs in Retirement,” Time Magazine , April 19, 2018. http://time.com/money/5246882/heres-how-much-the-average-couple-will-spend-on-health-care-costs-in-retirement/
2 Sudipto Banerjee, “Cumulative Out-of-Pocket Health Care Expenses After the Age of 70,” Employee Benefits Research Institute , April 3, 2018. https://www.ebri.org/pdf/briefspdf/EBRI_IB_446.pdfPage 1 Page 2 Page 3 Page 4 Page 5 Page 6
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