We are very excited to announce that our website, CASMoneyMatters.com, will have a new look and feel soon!  We have added new colors and graphics and laid things out a bit differently for easier viewing.  All of the content that you’ve come to rely on will be available including our upcoming events, our blog, our newsletter, and other topics of interest.  In addition, we have also made our website more user-friendly for your cell phone or tablet.

Once you are on the homepage of our website you can continue to access your account information from the account access area in the upper right-hand corner of the homepage – it’s still that simple!

We hope you will enjoy the new look and feel of our website.  As always, if you have any questions please feel free to contact our offices.

Chasing performance can be like running in reverse.  Remember: it’s not a race, it’s a marathon.

Caring for your aging parents is something you hope you can handle when the time comes, but something you probably hope you never have to do. Caring for your aging parents means helping them plan for the future, and this can be overwhelming, both physically and emotionally. When the time comes for you to take care of your parents, you may be certain of only two things: Your parents need you, and you need help.

(Download the Caring for Aging Parents Checklist.)

Start planning

Talk to your parents about the future

Start caring for your aging parents by talking with them about their needs and wishes if they are able. In some cases, however, they may not be willing to talk to you about their future, either because they are afraid to face it or because they resent your interference. If this is the case, you may need to do as much planning as you can without them, or, if their safety or health is in danger, step in as caregiver anyway.

Prepare a personal data record

The first step you should take is to ask your parents to help you prepare a personal data record (if they are unable to help you, you’ll have to search for the information yourself). A personal data record is a document that lists information that you might need in case your parents become incapacitated or die. Information that should be included is financial information, legal information, medical information, insurance information, and information regarding professional advisors and the location of important records. Example(s): When Marcia and her mother prepared a personal data record, Marcia realized that her mother did not have a durable power of attorney or health care proxy in case she became incapacitated and could not make decisions about her medical care. The next day, Marcia made an appointment with her mother’s lawyer to discuss this issue.

Get advice

You can’t know everything, and you probably don’t have enough time to learn everything you need to know to care for your parents. That’s why you should seek advice from professionals. Some advice will be free, and some you will have to pay for. If you live far from your parents or are too overwhelmed to handle all your parents’ affairs, you can hire a geriatric care manager who will evaluate your parents’ situation, suggest options, and coordinate professionals who can help. In addition, talk to your employer. Some employers have set up employee assistance programs that offer advice and assistance to people who are dealing with personal challenges, including caring for aging parents.

Get support

Don’t try to care for your parents alone. Many local and national caregiver support groups and community services are available to help you cope with caring for your aging parents. If you don’t know where to start finding help, call the Eldercare Locator, an information and referral service sponsored by the federal government that can direct you to resources available nationally or in your area. Call the Eldercare Locator at (800) 677-1116.

What kind of advice will you need?

Housing and health care advice

If your parents are like many older individuals, where they live will depend upon how healthy they are. As your parents grow older, their health may deteriorate so much that they can no longer live on their own. At this point, you may need to find them in-home health care or health care within a retirement community or nursing home. On the other hand, you may want them to move in with you. In addition, you will need information on managing the cost of health care, long-term care insurance, major medical insurance, Medicare, and Medicaid.

Contact:

• National Association for Home Care
• Visiting Nurse Associations of America
• Centers for Medicare & Medicaid Services (formerly known as the Health Care Financing Administration)
• American Association of Homes and Services for the Aging
• American Association of Retired Persons (AARP)
• Health Insurance Association of America

Financial advice

If your parents need help managing their finances, you may need to contact professionals whose advice both you and your parents can trust, including one or more of the following individuals or organizations.

Contact:

• Your financial planner
• Your banker
• Your investment counselor
• Your tax attorney
• The Social Security Administration

Legal advice

Legal advisors can help you plan for your parents’ incapacity (including preparing documents such as power of attorneys, medical directives, and living wills), contact nursing home ombudsmen, set up and monitor guardianship, prepare wills, give tax advice, and provide bill payment and representative payee assistance. Many states provide funds for the delivery of free legal services to the elderly and many attorneys specialize in elder law, so finding legal advice shouldn’t be difficult.

Contact:

• Your attorney
• National Association of State Units on Aging
• American Bar Commission on the Legal Problems of the Elderly
• Legal Counsel for the Elderly

What kinds of support and community services will you need?

Caring for your aging parents will be easier if you know what kinds of support and community services are available and where to locate them. The following is a list of the kinds of support and community services you can find locally and nationally, along with specific suggestions of who to contact for information.

Adult day care

If you need to work or run errands and you can’t leave your parents alone, consider using adult day care. These programs are located in hospitals, churches, temples, nursing homes, or community centers. Many are private nonprofit organizations. Adult day care can be expensive but is sometimes subsidized by the government, and fees may be based on a sliding scale. In addition, Medicare, Medicaid, long-term care insurance, or your health insurance may pay part of the cost.

Contact:

• Your local senior center or community center
• National Institute on Adult Day Care
• The Alzheimer’s Association

Caregiver support groups (self-help)

Many self-help groups are available to provide information and emotional support on broad topics (such as aging) or specific topics (such as heart disease). You may find these support groups helpful if you know little about caring for your aging parents. Such groups might also provide an opportunity to help others by sharing your experiences.

Contact:

• The Alzheimer’s Association
• Children of Aging Parents
• National Self-Help Clearinghouse

Caregiver training/health education

You may feel better about taking care of your parents if you are armed with knowledge. You may want to complete first-aid courses or take classes in gerontology.

Contact:

• Your local college or university
• Your local hospital
• The American Red Cross

Geriatric assessment

If you are uncertain of your parent’s mental or physical capabilities, ask his or her doctor to recommend somewhere you can take your parent to undergo an assessment. These assessments can be done at hospitals or clinics. Your parent will be evaluated to determine his or her capabilities. The evaluation determines whether the individual can take care of himself or herself on a day-to-day basis, including such things as bathing, dressing, eating, using the telephone, doing housework, and managing money. Based on this evaluation, you and your parent will receive advice regarding care options.

Contact:

• Your doctor
• Your lawyer
• The National Association of Professional Geriatric Care Managers
• Aging Network Services

Respite care

When you are caring for your aging parents, you may feel guilty or even resentful because you don’t have limitless energy. Taking care of your parents is hard work, however, and everyone needs a break once in a while. If you are caring for your aging parents, look into respite care. Medicaid may pay for some respite-care services.

Contact:

• Your doctor
• Your local hospital
• The Alzheimer’s Association
• National Association for Home Care

Financial and tax considerations for you

Caring for your aging parents is not only an emotional burden for you but may be a financial one as well, depending upon how well off your parents are and how much caring for them costs. Because many adults today are becoming first-time parents in their thirties, and others are remarrying and rearing second families, increasing numbers of adults are finding themselves in the “sandwich generation.” They face having to pay expenses of growing children (including college expenses), plan for their own retirement, and support their aging parents financially. Thus, it’s important to plan not only your parents finances, but your own as well.

Financial planning for your parents

Making sure that your parents won’t outlive their money is a critical step in ensuring that your own finances will remain sound. In particular, you’ll need to make sure that your parent is receiving all the benefits to which he or she is entitled and that his or her money is invested wisely. You’ll also need to create a financial profile for your parents, a statement that includes income, expenses, and net worth. If, after considering your parent’s financial condition, it’s clear that they won’t have enough resources to pay for their own care, you’ll need to find ways to supplement their income. You may need to look at Supplemental Security Income (SSI) , for instance, or ask other relatives for help. You’ll also have to determine how much financial support you can give your parents (see below).

Financial planning for you

Besides caring for your parents, you have a lot of other financial obligations. Before you can determine the best way to help your parents financially, you’ll have to look at your own financial picture. Not only will you need to consider your current expenses, but you’ll have to look down the road a few years, considering how much you’ll need to save for your own retirement and, perhaps, for your child’s education.

Tip: Due to the complexities inherent in providing adequately for several generations in the same family, consider seeking the advice of a financial professional.

Tax benefits for children supporting aging parents

Federal income tax law provides several tax benefits to you if you are supporting your parents financially. If you have a dependent care account at work, you can put pretax dollars into the account that you can use to pay for some costs associated with caring for your dependent parents. You may be able to claim an exemption for your parents as dependents, and you may be entitled to claim a dependent care credit. In addition, you may be able to file your taxes as head of household and deduct medical expenses you paid for your parents. For more information consult your tax advisor.

If you are financially supporting your parent, is he or she entitled to receive Social Security benefits based on your earnings?

If you are providing at least one-half of your parent’s support at the time of your death, and he or she is age 62 or over and is not entitled to a retirement benefit that is equal to or larger than the amount he or she would receive based on your earnings record, then he or she may be entitled to receive a parent’s Social Security benefit equal to 82.5 percent of your primary insurance amount (PIA).

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015

By Pops & Mom (Frank & Joan Ciccarelli)

To live a quality of life at an old age, you must create and stimulate a very special mindset, with considerable change to the normal process of aging.

Here are our rules:

Foremost, you must have an Unshakable Faith and practice that faith: Your prayers should be for strength to handle critical fears, changes, and tragedies, not to avoid them, because that is not possible.

Change Your Expectations:  Do not expect your children or grandchildren to call and visit, but imagine the joy when they do.  Don’t lay your aches and pains on them.  Expect to lose your bags when you travel and if you don’t – ooh la la.

Do Not Hate Anyone:  Hate destroys the hater and accomplishes nothing but personal stress.

Give Your Love With No Conditions:  Forgive, forgive, forgive.

Today is a Present:  When you wake up in the morning, look out the window; if you see the grass you are on the right side, it’s a great day!  This is called the present, because it is a present.  Our family philosopher, and sister-in-law, Marie Biehl, taught us this.

Do Not Associate With Depressed People:  It is contagious.  Have a positive attitude, it’s also contagious.

Do not ask old people how they are; instead say, “Nice to see you.”

Embrace Humor:  Laugh often and laugh at yourself.  Tell dumb jokes to your grandchildren.  In our family, we call them Poppy Jokes.  Frank has a considerable supply, thanks to Christmas and our granddaughter, Lina Anderson, who documented them for us.

Simplify Your Life:  Do not become emotionally involved with any material things; you cannot take them with you.  Give clothes you do not wear to charity.  Throw away junk!  Consider giving some of your jewelry to your children and grandchildren.

Control Your Fears:  Concern is common sense.  Fears destroy.  Live a good quality of life as long as you can.

Accept Who You Are:  Live within your means.

Fight Depression:  The world has always been in turmoil and always will be.  One of my favorite prayers, “God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

The Most Powerful Force In The World Is Love:  The more you give away, the more you receive.

Frank and Joan Ciccarelli are not affiliated with FSC Securities Corp.

Each year, thousands of students take out federal loans to help pay for college or graduate school. The interest rates on federal student loans are fixed for the life of the loan but reset each year on July 1 for new loans. This year, there’s some good news for students and parents. Rates on new loans issued during this academic year–July 1, 2015, through June 30, 2016–are slightly lower than they were for the 2014/2015 academic year.

The federal government pays the interest on subsidized Stafford Loans while the student is in school, during the six-month grace period after graduation, and during any loan deferment periods. With unsubsidized Stafford Loans, the student pays the interest during these periods. Eligibility for subsidized Stafford Loans is based on financial need, as determined by the federal government’s financial aid application, the FAFSA. Graduate students aren’t eligible for subsidized Stafford Loans.

©2015 Broadridge Investor Communication Solutions, Inc.

By Carrie Kerskie, Kerskie Group, Inc.

In the age of technology scammers still rely on good-old-fashioned methods to steal your money or your personal information. One of these methods is the phone scam.

The greatest warning sign of a phone scam is the fact that it is an unsolicited phone call, a call that you did not initiate or were not expecting, often from someone that you do not know.  However, scammers will pretend to be calling from a well known organization for instant credibility. To help you determine the legitimacy of a call here are a few common phone scams.

Travel scam: Unsolicited calls offering you “free” or “low cost” vacations are a scam. Often these vacations end up having numerous hidden fees or you could end up paying for a vacation that does not exist.

Credit and loans: Unsolicited offers to lower your credit score, payday loans, advance fee loans or credit card protection are all scams. These types of phone scams are typical during a down economy. They will promise a service in exchange for paying them a fee.  You pay the fee but the service is never rendered. Or you provide them with your credit card and bank account information so they can “help” you but they only help themselves to using your accounts.

Business and investment opportunities: Unsolicited offers for business or investment opportunities are a scam. Scammers are relying on the fact that business and investing can be complicated and that most people do not research the investment. The caller will sound very professional and convincing, promising you a guaranteed return on your investment. The only thing that is guaranteed is that you will never see your money again.

Charitable causes: Unsolicited requests for recent disaster relief or donations to well known charities are scams. These scams are successful because they tug the heart-strings. Unfortunately it is difficult to determine if the caller is actually with the stated charity or if he is merely using it as a front to steal your money or information. You are better off contacting the charitable organizations that you know directly to make a donation as opposed to making a donation through an unsolicited call.

Lottery or prize winner: Unsolicited calls notifying you of winning a lottery in which you did not actively participate is a sure sign of a scam. Further, participation in foreign lotteries is illegal. Callers will often state that you are required to pay a fee or tax before they can send you your prize. Or they will ask you for your bank routing and account information so they can wire you the prize. ALL OF THESE ARE SCAMS.

Extended car warranties: Unsolicited calls selling you an extended car warranty are scams. Scammers can easily find out what kind of car your drive and when you bought it. Both of these are used to gain your trust so they can urge you to buy an overpriced, or worthless, extended warranty.

“Free” trial offers: Unsolicited calls regarding “free” trial offers are a scam. These companies use the free trial offer to sign you up for products which cost you lots of money. What they neglect to tell you is that when the free trial period ends you will be billed every month until you cancel. They will also make it very difficult for you to cancel the service.

Owe money or arrested: Unsolicited calls stating that you owe money and if you do not pay immediately an arrest warrant will be issued are scams. These are the worst type of call as they use fear and intimidation to coerce you in to complying with their request. Scammers will often claim to be with the IRS or some other governmental agency. This is done to instill fear. When you begin to question them they become aggressive and threaten to have you arrested.

What Can You Do

Your best defense is to simply hang up the phone. You do not owe them your time or an explanation.  You do not have to be nice to them or worry about hurting their feelings. They are professional scammers. Their only goal is to steal from you. The more you try to tell them “no” the harder they will pressure you. If you consistently hang up the phone the scammers will move on to an easier target, one that will play their game.

After receiving a scam call you should tell someone. This could be your local law enforcement, a relative, or a trusted advisor. By telling someone you help warn others about the scam so they too can be prepared. Sometimes, if law enforcement receives enough complaints about a scam call they will notify the public through the media.

Still Not Sure

If you are still not sure if the call you received was legitimate or a scam here are a few things to remember.

• An unsolicited call is often the first warning sign of a scam.
• The IRS will NEVER call you regarding owed taxes.
• Was there a sense or urgency, you must do it now or else? This is a favored tactic of scammers. Take your time, ask a trusted advisor before sending money or agreeing to an offer.
• If someone threatens you with arrest, contact local law enforcement immediately.
• Caller ID can be manipulated to display whatever the caller wants it to display.
• If the call is claiming to be from your bank or a company you do business with hang up and call the business directly. NOTE: Do not call the number shown on your caller ID.
• Scammers can build a profile on you from public records found online.
• Speak with your financial advisor about business or investment offers. That is why you have him or her.
• IF IT SOUNDS TOO GOOD TO BE TRUE, IT IS A SCAM.

There is a reason phone scams have been around since the invention of the telephone – they work and are very profitable. In this day and age we can no longer trust then verify. We must verify, verify again, and verify again before even thinking about trusting or your too will become the next victim of a phone scam. You have the right to ask questions, or better yet, simply hang up the phone.

Carrie Kerskie and Kerskie Group, Inc. are not affiliated with FSC Securities Corporation.  Published with permission.

Keep critical documents and records safe and secure but accessible in a time of need

Certain documents and records are too important to retain in an ordinary file drawer. Fortunately, they are also the ones you tend to need least frequently. If they are stolen or destroyed by a catastrophe such as flood or fire, replacing them could be extraordinarily difficult, if not impossible. One of the best places to retain such items is a safety deposit box. These can be rented for a small monthly fee at many banks. The boxes are actually locked drawers within the bank’s vault. Various sizes are often available to meet individual needs. A home safe is another option, provided that it is adequately rated to protect contents from fire, water, explosions (gas leaks), and other calamities. Documents deserving extra protection include:

• Property deeds
• Trust documents
• Insurance policies
• Automobile titles
• Stock and bond certificates
• Wills and estate plans
• Personal property inventory
• Marriage and birth certificates
• Military discharge papers
• Passports

Keeping copies of vital records can save time, money, and headaches

There may be times when you need to know certain information contained on documents you’ve placed in safekeeping but don’t need the actual document. Avoid the inconvenience of obtaining the original documents by making copies of them for your file.

Tip: Create one file that includes copies of all documents you’ve placed in safekeeping (e.g., a “Safety Deposit Box” file). Then, you not only can turn to it for vital facts, but if you are incapacitated, whoever handles your important affairs will be able to locate key documents quickly.

Caution: The specific contents of some documents, such as wills and trusts, may be inappropriate to keep in more highly accessible home files. Instead of a photocopy, you might simply file a page containing those key facts that are less confidential in nature or obliterate very sensitive items on the copy.

Make backup copies of all computerized records

These days, many people keep important records on their personal computer. This can be an easy way to keep your records organized and updated, but it is important to keep a backup copy of these records in a safe place. If your hard drive has a meltdown, you’ll need to be able to recreate the important financial information that was lost.

Financial management software can be beneficial in tracking your finances, but it will take some time to learn how to use it properly. Don’t forget that you must still retain original documents as evidence of past transactions.

Save all essential records, receipts, and documents that your budgeting system requires

There are many reasons to save important records. If you apply for a loan (such as a mortgage, auto loan, or education loan), you will have to provide proof of your income. If you notice that money is disappearing out of your checking account, you’ll need your bank statements to back up your claim of unauthorized transactions. If you own financial securities, capital gains taxes are based on the price you paid for them on the date purchased. You’ll be required to verify this information. Potential tax audits will be far less intimidating if you have kept records to substantiate your tax return claims. An unsubstantiated claim will cost you not only the unpaid tax but interest charges and possibly, a hefty penalty.

Tip: Most of us realize it’s important to keep expense records, but for those with income sources other than employers, a cash receipts log can be invaluable. A small notebook or a few sheets in a separate file folder will do for recording income as it arrives. If you don’t recall later whether you received a particular dividend or rent payment, the log provides a quick answer.

Caution: Certain items, such as tips or business-related use of a car, require special tax treatment and records. Therefore, your record-keeping system must track these and retain any related documents.

Keep records as long as appropriate

Different records need to be saved for different periods of time. Divide your records into categories, such as short-term, medium-term, and long-term. There are no concrete rules about how long records must be saved, so you will often have to use your own judgment. The following guidelines may help:

Short-term (1-3 years)

• Household bills, except those that support tax deductions (items such as heat, water, and electricity are generally short-term unless you deduct them for home office use or a rental)
• Expired insurance policies

Medium-term (6-7 years)

• Tax returns and supporting information
• Income and expense records (including lottery tickets and winnings)
• Bank and credit union statements
• Brokerage house statements
• Canceled checks and check registers (checks for major purchases may be kept longer)
• Paid-off loan documents
• Personal property sales receipts

Long-term (indefinitely)

• Tax dispute records
• Evidence of retirement plan contributions
• Investment records
• Medical history information
• Pension/retirement plan documents
• Social Security information

Other (as noted)

• Home ownership/sale documents: 7 years after sale or indefinitely
• Home improvement records: 7 years after sale

Caution: The IRS typically has three years after a return is filed to audit a return, or two years after you’ve paid the tax, whichever is later. However, if income was underreported by at least 25 percent, the IRS can look back six years after the return is filed, and there is no time limit for fraudulent tax returns. An audit requires that you provide documentation to substantiate the return being audited.

Tip: Canceled checks do not necessarily prove why a given payment was made, only that the payment was made. Having dated receipts, invoices, sales slips, credit card statements, and bank statements can provide valuable proof if needed, whether for an IRS auditor or an insurance claims adjuster.

Save space: Annually review retained records and discard those no longer needed

Some records and documents can be discarded after all potential usefulness has passed. Depending on circumstances, records can accumulate quickly and require extensive storage space. Discarding records that are no longer necessary saves space and makes finding a record you need easier.

Tip: Expired product warranties and insurance policies are excellent candidates for the trash can.

Tip: For easier future access, retain records for each year in separate files.

Caution: Keep your important records and financial files separate from information you might want to retain for other purposes. If you clip articles, jot notes, and save information you receive on items of potential interest, create a separate set of information files for them. These might contain vacation ideas, recipes, home improvement items, personal letters, or the kids’ school papers. Keeping them apart from vital records and financial files makes both easier to find and manage.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015.

You will find here some key numbers associated with estate planning, as well as the federal gift tax and estate tax rate schedules for 2014 and 2015.

1 The basic exclusion amount
2 Deceased spousal unused exclusion amount (for 2011 and later years)
3 The GST tax exemption is not portable

2014 and 2015 Gift Tax and Estate Tax Rate Schedule

There are five estate planning documents you may need, regardless of your age, health, or wealth:

1. Durable power of attorney
2. Advanced medical directives
3. Will
4. Letter of instruction
5. Living trust

The last document, a living trust, isn’t always necessary, but it’s included here because it’s a vital component of many estate plans.

Durable power of attorney

A durable power of attorney (DPOA) can help protect your property in the event you become physically unable or mentally incompetent to handle financial matters. If no one is ready to look after your financial affairs when you can’t, your property may be wasted, abused, or lost.

A DPOA allows you to authorize someone else to act on your behalf, so he or she can do things like pay everyday expenses, collect benefits, watch over your investments, and file taxes.

There are two types of DPOAs: (1) an immediate DPOA, which is effective immediately (this may be appropriate, for example, if you face a serious operation or illness), and (2) a springing DPOA, which is not effective unless you have become incapacitated.

Caution: A springing DPOA is not permitted in some states, so you’ll want to check with an attorney.

Advanced medical directives

Advanced medical directives let others know what medical treatment you would want, or allows someone to make medical decisions for you, in the event you can’t express your wishes yourself. If you don’t have an advanced medical directive, medical care providers must prolong your life using artificial means, if necessary. With today’s technology, physicians can sustain you for days and weeks (if not months or even years).

There are three types of advanced medical directives. Each state allows only a certain type (or types). You may find that one, two, or all three types are necessary to carry out all of your wishes for medical treatment. (Just make sure all documents are consistent.)

First, a living will allows you to approve or decline certain types of medical care, even if you will die as a result of that choice. In most states, living wills take effect only under certain circumstances, such as terminal injury or illness. Generally, one can be used only to decline medical treatment that “serves only to postpone the moment of death.” In those states that do not allow living wills, you may still want to have one to serve as evidence of your wishes.

Second, a durable power of attorney for health care (known as a health-care proxy in some states) allows you to appoint a representative to make medical decisions for you. You decide how much power your representative will or won’t have.

Finally, a Do Not Resuscitate order (DNR) is a doctor’s order that tells medical personnel not to perform CPR if you go into cardiac arrest. There are two types of DNRs. One is effective only while you are hospitalized. The other is used while you are outside the hospital.

Benefits of a will:
•Distributes property according to your wishes
•Names an executor to settle your estate
•Names a guardian for minor children

Will

A will is often said to be the cornerstone of any estate plan. The main purpose of a will is to disburse property to heirs after your death. If you don’t leave a will, disbursements will be made according to state law, which might not be what you would want.

There are two other equally important aspects of a will:

1. You can name the person (executor) who will manage and settle your estate. If you do not name someone, the court will appoint an administrator, who might not be someone you would choose.
2. You can name a legal guardian for minor children or dependents with special needs. If you don’t appoint a guardian, the state will appoint one for you.

Keep in mind that a will is a legal document, and the courts are very reluctant to overturn any provisions within it. Therefore, it’s crucial that your will be well written and articulated, and properly executed under your state’s laws. It’s also important to keep your will up-to-date.

Letter of instruction

A letter of instruction (also called a testamentary letter or side letter) is an informal, nonlegal document that generally accompanies your will and is used to express your personal thoughts and directions regarding what is in the will (or about other things, such as your burial wishes or where to locate other documents). This can be the most helpful document you leave for your family members and your executor.

Unlike your will, a letter of instruction remains private. Therefore, it is an opportunity to say the things you would rather not make public.

A letter of instruction is not a substitute for a will. Any directions you include in the letter are only suggestions and are not binding. The people to whom you address the letter may follow or disregard any instructions.

Other benefits of a living trust: •Gives someone the power to manage your property if you should become incapacitated •Lets a professional manage your property for you •May circumvent state laws that limit your ability to give to charity, or force you to leave a certain percentage of your property to your spouse

Living trust

A living trust (also known as a revocable or inter vivos trust) is a separate legal entity you create to own property, such as your home or investments. The trust is called a living trust because it’s meant to function while you’re alive. You control the property in the trust, and, whenever you wish, you can change the trust terms, transfer property in and out of the trust, or end the trust altogether.

Not everyone needs a living trust, but it can be used to accomplish various purposes. The primary function is typically to avoid probate. This is possible because property in a living trust is not included in the probate estate.

Depending on your situation and your state’s laws, the probate process can be simple, easy, and inexpensive, or it can be relatively complex, resulting in delay and expense. This may be the case, for instance, if you own property in more than one state or in a foreign country, or have heirs that live overseas.

Further, probate takes time, and your property generally won’t be distributed until the process is completed. A small family allowance is sometimes paid, but it may be insufficient to provide for a family’s ongoing needs. Transferring property through a living trust provides for a quicker, almost immediate transfer of property to those who need it.

Probate can also interfere with the management of property like a closely held business or stock portfolio. Although your executor is responsible for managing the property until probate is completed, he or she may not have the expertise or authority to make significant management decisions, and the property may lose value. Transferring the property with a living trust can result in a smoother transition in management.

Finally, avoiding probate may be desirable if you’re concerned about privacy. Probated documents (e.g., will, inventory) become a matter of public record. Generally, a trust document does not.

Caution: Although a living trust transfers property like a will, you should still also have a will because the trust will be unable to accomplish certain things that only a will can, such as naming an executor or a guardian for minor children.

Tip: There are other ways to avoid the probate process besides creating a living trust, such as titling property jointly.

Caution: Living trusts do not generally minimize estate taxes or protect property from future creditors or ex-spouses.