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March 2024
603-894-4141 | 978-969-0331 | LegacyCareLaw.com
The True Meaning of Legacy in Estate Planning PRESERVING PRECIOUS MEMORIES AND LOVING TIES
reason to plan is to leave a true legacy uncomplicated by the snapshot of financial snafus that happened at the end of life.” No two families are identical. Countless unique memories, quirky sayings, and loving ties make up a single family, all of which deserve to be preserved as best as possible. Estate mishaps are one of the strongest ways to lose sight of a legacy, and that’s where we come in. I want to thank David for writing these stunning words, being part of the Legacy Care family, and holding to such incredibly high standards even after his time at our firm.
As you may know, my staff isn’t just my team. They’re my family. And I am always grateful to witness their growth, whether here at our firm or in another career path. Attorney David Haughton first joined our firm in 2010, and I was able to mentor him as he had just been sworn in as an attorney. Honestly, our bond is more like father and son than mentor and student. David would later go on to become a Team Lead in Advanced Planning for Commonwealth Financial Network, but this didn’t mean our friendship ended there. We still stay in contact, and I couldn’t be prouder of all he’s accomplished. He recently wrote a short piece about the importance of estate planning, and it proved to me that I, indeed, was able to pass down my passion for the field to him. I wanted him to learn that estate planning wasn’t just about finances. It’s about family legacies, memories, and bonds that are never broken. Well, what he wrote shows that he certainly holds this meaning to heart: “When I think of legacy, I think of ‘home again, home again’; joggity- jiggity Yuck Yucks; and Ocean State Bob-a-lop … Huh? “The first is what my dad said anytime he started the car as we headed home from a trip — something I now say. The second (through very odd circumstances) is what my dad came to call Dunkin Donuts — which we all also came to adopt internally. The last (as a Cape family) is what my family,
to this day, calls ‘Ocean State Job Lot’ because I couldn’t say it right when I was a toddler. “I routinely discuss monetary estate planning issues related to mitigating taxes and costs, and I should — because that’s my job — but rarely does someone buy something and think, ‘That reminded me of Mom and Dad because they left me that money.’ “No — legacy is not the monetary wealth you leave. A true legacy makes up the impressions you leave that affect how a person goes through life. It’s the lessons, values, and imprints left in the trail of a person’s life. “Here’s why estate planning matters in this equation: Messing up an estate plan in a way that causes stress, costs, or (god forbid) litigation can complicate these reverential feelings someone may have about the legacy of a loved one. So, one
David Haughton
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DON’T MISS OUT ON THIS 401(K) GROWTH OPPORTUNITY
expense ratio, while the tax-cost ratio is whatever capital gains taxes are triggered if the fund is outside of a tax-advantaged account like a 401(k). In this case, as we’re exploring how to grow your 401(k), you would only have to worry about the expense ratio. You should research which index funds have the lowest expense ratios and their investment strategies — what type of industries (energy, technology, etc.) they invest in. Small-, mid-, and large- cap indexes track small, medium, and large companies. Figuring out which sector you want to invest in within these categories is also crucial. Also, consider foreign, domestic, or a combination within emerging markets. You’ll find many choices, but ultimately, you just need to choose one that best suits your needs. Okay, I’m convinced. What’s next? Once you decide, you can invest in the fund that suits your needs. Consider convenience, costs, commission-free options, and whether you want your investment to reflect your ethics. After investing, review the fund regularly to ensure it still measures up by looking at your mutual fund’s quote page. If fees start climbing or your fund isn’t doing its job (rate of return), you can always switch to another. Also, consider diversifying your portfolio by investing in multiple index funds. We know this is a lot of information, but we hope this 101 on low- cost index funds has given you a new option to consider. It’s one of the safest, low-cost ways to boost your 401(k). Your options are broad, and we welcome your questions. We’re here to help; reach out to our office to schedule an appointment.
Planning for retirement can be exciting — deciding where you’ll travel, what hobbies to pick up, or how to otherwise fill your time in your golden years. The hardest part is planning with the optimal financial tools. The goal is for your investments (combined with Social Security) to take care of you in retirement, not to wonder why the investments you put your hard-earned money into didn’t pan out. And as with all financial decisions, you must carefully weigh your options for growing your 401(k). This article will explore one tool specifically, the low-cost index fund, which can effectively grow your 401(k) with minimal expense.
“The goal is for your investments (combined with Social Security) to take care of you in retirement, not to wonder why the investments you put your hard-earned money into didn’t pan out.”
What is a low-cost index fund? Low-cost index funds can diversify your investments without a huge price tag. This pre-set index of stocks is often either a mutual fund or an exchange-traded fund (ETF). These funds follow popular indexes, which frequently point to the overall economy. The Standard and Poor’s 500 index is one example. The Dow Jones Industrial Average is another. They’re staples of investing and offer security and stability for many investors. Index funds aim to mirror the performance of a specific index. So, no real management is necessary for this fund since they don’t try to outsmart the market or beat its averages. That’s what keeps costs low within the index. Because the fund is not actively managed, the costs are usually lower. Why choose a low-cost index fund? Comparatively, a low-cost index fund only requires an investment minimum (many times as low as $500–$1,000 initial investment) and an account minimum. Both of these can be as low as zero, especially for those with a Roth or Traditional IRA. The main cost is the expense and tax-cost ratios. The fees subtracted from any returns is the
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ASSET DISTRIBUTION DONE RIGHT
Know Your Options to Help Protect Beneficiaries
outright distributions, staggered, or discretionary. An outright distribution means beneficiaries
Discussions about inheritances are often delicate. However, the goal is to consider the unique circumstances of your children or other beneficiaries. You want to provide for loved ones without offending anyone in the process, yet some are more responsible with money than others, and you want to help them make the most of their inheritance. Here are a few suggestions to set your family up for success after you pass. No-Contest Clauses Employing a no-contest clause in your will can eliminate any potential in-fighting or contention to break away from your wishes. It automatically disinherits any contentious family members. If you know your kids enjoy bickering, then adding this no-contest clause puts them on notice to leave their bickering aside, especially in court. Preventing a long, drawn-out court mess is a surefire way to take care of your family. It’s an easily added clause; you just have to choose to include it. A Living Trust Establishing a living trust is one way to delineate how you want your assets to be distributed after you pass, and you can revoke or change it at any time while you’re still around. You can set up a few different ways for the successor trustee to distribute assets from the trust, depending on your family circumstances:
receive assets without any protections — but an irresponsible recipient might squander the inheritance very quickly. The
staggered distribution allows you to set the rules about how and when funds will be distributed or if any triggering events will play a role (turning 18, marriage, etc.). The last option is to give your successor trustee discretionary power to distribute assets — they will decide when and what a beneficiary will receive. Choosing the Right Trustee Whichever distribution option you choose, selecting the right person or entity to be your trustee (an individual, a private fiduciary, or a bank) is crucial. They should be trustworthy and fair, especially if you grant them discretionary power. They’ll be in charge of making sure your assets are distributed according to your wishes — and their best judgment. Being firm in your care for others won’t make you the villain. Thankfully, you can share your legacy and assets according to your best judgment and discretion. You have several options and tools — just remember, you know your children best.
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9 Red Roof Lane, Salem, NH 03079 603-894-4141 978-969-0331 LegacyCareLaw.com
INSIDE THIS ISSUE
1
David’s Inspiring Words on the Importance of Estate Planning
2
How Low-Cost Index Funds Can Maximize Your 401(k)
3
Bell Pepper Sandwich
Ensure Your Assets Are Distributed Wisely
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Embrace the Empty Nest
HOW TO ENJOY THE EMPTY NEST
and share your own. Arranging in-person visits can turn into new traditions for your family. Allow yourself to enjoy this different but equally rewarding aspect of parenthood. Now, let’s turn the spotlight on you. This is your time, a golden opportunity to focus on self-care and personal growth. Remember those hobbies you shelved when parenting took center stage? Dust them off and give them
Welcome to the new phase of life every parent faces, the empty nest. It’s that bittersweet time when the last child packs up and leaves only echoes in their once bustling rooms. Suddenly, the soundtrack of your life has shifted from a lively chorus to silence. For 18 years or more, school runs, sports practices, and the ever- present hum of family life framed most of your days. Now, your home feels a tad too spacious.
a whirl! Painting, hiking, learning a musical instrument, or even skydiving — there’s no better time to explore old or new interests.
It’s normal to miss the commotion and the constant interaction with your children. But you are entering an exciting new chapter in your life, just like your children are. Your role as a parent is simply evolving. You’ve been their guide, teacher, and protector for years, and those roles don’t just disappear — they transform. Your children will still look to you for support and guidance; this is your chance to be there for them in a new way. There’s no reason to be cut off from your children. Stay connected through texts, FaceTime calls, and good old-fashioned phone conversations. Discuss their new experiences
With fewer responsibilities at home, you can pack your bags and explore. Whether across the globe or the state, travel refreshes your spirit and broadens your horizons, offering perspectives that can only come from stepping out of your comfort zone.
Life doesn’t stop teaching, and we never stop learning. Your nest might be empty, but your life is full of opportunities waiting for you to seize.
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