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How To Discuss Finances At Family Gatherings

12/21/2018

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Andy Williams' 'It's the Most Wonderful Time of the Year' holds true for many. While the holidays can be hectic, this is also one of the few times of the year when families come together. Assuming that you like your family, this can be one of the “wonderful” aspects of the season. Along with food, games and laughter, these family get-togethers also present an opportune time to bring up important topics such as estate planning, life insurance and other financial matters that don’t normally get discussed. 
 
Sixty percent of Americans lack any type of estate plan. And, of those who have one, many have not discussed the details with their heirs. Truth be told, “end of life” plans are topics that many people do not want to deal with, which often leads to unfortunate circumstances such as having no plans at all and/or family misunderstandings. The pain from never addressing is usually much greater than the temporary discomfort of having “the talk” (and I’m talking about the birds and the bees…). 
 
As a Financial Advisor and Life Underwriter Training Council Fellow (LUTCF), I recommend that everyone consider having a plan for their finances, life insurance and estate. It doesn’t matter if you just turned 21 or 91. You’re never too young and it’s never too late; however, you’ll usually have more options when you’re younger than when you’re older.
 
Estate Planning
Two ways of settling an estate are a Will and a Living Trust. 
 
Everyone in California has an estate plan! Either, an individual has established his or her own Will or Living Trust (usually through the help of an attorney), or, the State of California has written a Will for you. In the latter case, you may or may not like the provisions stated in the California statues regarding persons who die “intestate”.  This simply means people who have not written their own wills.  Luckily, there is an alternative. An individual can create their own will or a living trust.
 
Many people mistakenly believe that a living trust is just for the wealthy. But this is not the case.  Other Living Trust misconceptions such as; “I’m too young to have a trust” and “I don’t own enough” prevent beneficiaries from receiving the full value of the assets they inherited. Click here to learn the differences of a Will and a Living Trust. 
 
 
Life Insurance
The cost of life insurance is determined by age and health. You will never be younger and may not be healthier than you are today. When it comes to finances, the cost of waiting can be detrimental. You’ll hear very few people say, “I wish I hadn’t started to save so early.” Whereas, one of the biggest and most frequent life regrets is that savings didn’t happen soon enough. This scenario holds true for any type of savings - whether it be for emergencies, retirement or life insurance. 
 
Sadly, I’ve had clients come to me either after waiting until their term life insurance has expired or they are in financial despair after their spouse has passed away. Situations such as these are consequences from having inadequate or no life insurance. 
 
Nearly everyone should have life insurance – whether you’re single, married or divorced. 
 
Finances & Retirement
Most Americans close to retirement have saved only 12% of what they need. Having too little retirement savings often impacts other family members. Regardless of your age, if you haven’t started saving for retirement, you need to start as soon as possible. And, if your parents are still living, you should discuss their retirement plans with them, as well. Don’t wait and don’t assume.

According to a 2015 Genworth study, 75% of all people over the age of 65 will end up spending time in a skilled nursing home. Many people think that Medicare will pay for long term care, and they will to a very limited extent under certain circumstances, but after Medicare is exhausted, most individuals will be required to “spend down” his or her estate (assets) to less than $2,000. Click here to learn more facts about Long-Term Living. 
 
These topics can be difficult things to talk about. They can be easy topics to want to ignore or put off for another day. However, I urge everyone to not wait. The cost of waiting can negatively impact you and your family later. If discussed in a thoughtful and sensitive manner, your family is likely to appreciate you taking the time to discuss this with them.  

For a complimentary financial or life insurance consultation, please contact me at 909-714-1830 or at russ@russmorrisfinancial.com.
   
 
 
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The Reasons Why a Living Trust Benefits Most Homeowners

2/5/2018

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Many people mistakenly believe that a living trust is just for the wealthy. But, this is not the case.  Other misconceptions such as; “I’m too young to have a trust” and “I don’t own enough” prevent beneficiaries from receiving the full value of the assets they inherited.
 
Many middleclass couples and individuals, especially those that are homeowners in California, would benefit from a Living Trust.
 
There are many benefits to a Living Trust:
 
  • The assets from a Living Trust does not go through probate, a court-supervised process of authenticating the instructions and assets in a will. The average length of time for probate in the county of San Bernardino is two years. The average cost of probrate with court fees, etc., is 10% of the total value of the assets.
  • A Revocable Living Trust allows a substitute trustee (a person that you assign) to manage your affairs if you become incapacitated; such as from a coma or Alzheimer's.
  • A Living Trust is private. On the other hand, once filed, wills become part of the public record and can be accessible to almost anyone.
  • A Living Trust can include provisions to financially protect beneficiaries that have special needs.
 
A Revocable Living Trust can be revoked or amended during your lifetime. For example, you should consider amending your living trust if:
 
  • You get married or divorced
  • You have, or adopt, a child
  • You move to another state 
  • Your financial status changes significantly 
  • One of your trust beneficiaries dies 
  • One of your named trustees dies or is incapacitated
  • You have an AB Living Trust that written prior to 2000. Contact Russ Morris Financial if you’d like to have an existing Living Trust assessed at no charge. 
 
 Learn more about a living trust and/or to find out the options that may be best for you.
 
Click here to request more information about a Living Trust or to schedule a complimentary consultation with Russ Morris. 
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The Types of Life Insurance

3/17/2016

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There are many types of life insurance being sold today, and what is appropriate for you and your family is dependent on your specific situation. There is no right type of policy that fits everyone’s needs. The following is a brief description of some of the types currently available and their pros and cons.

Group Life Insurance
These policies are quite often offered by an employer or union for the benefit of the employee. At entry level they often provide one or two year’s annual salary as the death benefit, with an option to purchase additional coverage to a specified limit.
        
Pros: 
  • The employer may pay for the “basic” benefit with the employee paying for the optional insurance.
  • The premiums are typically low when the employee is in his/her 20s, 30s, and even into their 40s.
  • There is no underwriting. The only qualification is employment or membership with the sponsoring organization.

Cons:
  • The amount of insurance available may not be adequate for a family’s needs.
  • The policy terminates when you leave employment or membership with the sponsoring group. Or, in some cases remains in force during retirement with a drastic reduction in death benefit.
  • Since the policy is not medically underwritten, if you are a healthy, non-smoker, you may be paying higher premiums than getting your own medically underwritten policy.
  • Premiums usually increase every five years.
 
Term (or Temporary) Insurance
Term policies as their name describes, is meant to protect your life for a specific length of time. It may be for a single year, five years, ten years, 20 years, or even 30 years. Most term policies today are renewable at the end of the term, but the premiums increase significantly. With some variation by insurance carriers, most term policy’s “term” ends around age 75. And, even though the policies may be renewable, the increase in premium makes the continuation of the policy prohibitive.

Pros
  • Usually the least expensive type of life insurance available.
  • Most life insurance companies allow policy holders to “convert” their term policies to one of their permanent policies without additional underwriting.
  • May be used as a guarantee for a debt with the death benefit assigned to the creditor to the limit of the loan.

Cons
  • The “term” allowed by most insurance companies can cover you for the least likely time you may die, and become cost prohibitive  when you are most likely to die (according to current life expectancy values).
  • Insurance companies only have to pay a death benefit on less than 2% of all term policies written.
 
Permanent Life Insurance
         The final category are permanent policies. They have several variations including; Whole Life Insurance, Universal Life, Indexed Universal Life, and Variable Universal Life. These products remain in effect as long as the premiums are paid, usually with the same premium throughout the entire contract. Since they continue for one’s entire lifetime the insurance company will pay a death benefit 100% of the time. In many cases they generate a cash value that may be accessed during the policy owner’s lifetime.

Pros
  • Cash value may be used to help with various expenses during one’s lifetime, such as, house repairs, college expenses, or as a supplement to their retirement income.
  • If taken out early in one’s life, premiums are affordable and in many cases less expensive that equivalent term policies taken out later in life.
  • Premium remains constant for entire life.

Cons
  • Most expensive initially of the three categories.
  • Cash value may be taxable if policy is terminated before death.

There are also many “hybrid” policies marketed by various companies. These will combine the features of two or more types listed above.

When you are setting up a financial plan for you and your family, or specifically in the market for life insurance, the first step is to find a trusted financial advisor who can explain your options in regards to your specific needs.
​

For more information on the different types of life insurance or for help determining which option is best for you, please contact 
Russ Morris. 

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    Russ Morris, LUTCF

    In 1995, I became a licensed financial advisor and Life Underwriter Training Council Fellow (LUTCF) because I believe that next to our physical health, our financial health is the most important factor in our lives. For over twenty years, my goal has been to be a "financial doctor" that my clients can trust.  

    As a financial doctor, I take the time to listen, assess and understand each of my clients’ unique situations, goals, and concerns. I help grow assets for retirement and protect families from the financial loss that can occur after a premature death.  I truly enjoy helping my clients develop financially healthy lives.


    ​Along with my passion for helping all clients achieve strong financial health, I enjoy tennis, hanging out at Rancho Cucamonga's Bad Ass Coffee and meeting new people.

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