YOUR MONEY THE DOWNLOAD MONEY MATTERS


Trusts and estates is a highly technical area of the law and it’s easy to make a mistake if you don’t know what you’re doing.” — Mary L. Barrow, Attorney and Book Author


you have a child or grandchild who is in a profession with a higher risk of being sued, like certain medical professions, you might want to leave them their inheritance in trusts,” Barrow says. For a revocable living trust, there


are usually two main motivators: You want someone designated to take over managing your assets in case you become incapacitated. The alternative is having a power of attorney for finances, but Barrow says financial institutions may be more comfortable dealing with a trustee than an agent under a power of attorney. You want to avoid probate, the process of settling a person’s legal and financial matters after their death.


HOW TO SET UP A TRUST Barrow recommends working with an attorney — specifically, one specializing in estate planning — to draft your trust. “Trusts and estates is a highly technical area of the law and it’s easy to make a mistake if you don’t know what you’re doing,” she says. There are other reasons to work


with an attorney. Trust laws vary by state, so you need someone who knows the state law inside and out. Most importantly, the trust should be personalized. “These trusts really have to


be tailored to the client’s specific situation and specific goals,” Barrow says.


What about involving your financial advisor? “Some financial 66 NEWSMAX MAXLIFE | JANUARY 2019


advisors do give estate planning advice, and that’s fine,” she says, “but the person who’s actually going to draw up the legal documents is going to be an attorney.”


WHAT KIND OF TRUST? You’ll also set the terms of trust, including how the assets will be managed and when they will be distributed to your beneficiaries. Remember, the rules are totally up to you, so in addition to setting the amount and timing of distributions, you can reward beneficiaries for specific behaviors (for example, completing a college degree).


CHOOSE YOUR TRUSTEE Since the trustee may be dealing with your beneficiaries for some time, it’s important to pick someone with whom they feel comfortable. Your trustee can be: A family member or friend A trusted professional, such as an attorney or accountant A corporate entity, such as a bank or trust company Multiple people acting as co-trustees Your trust will specify whether the


trustee is to receive compensation or serve without compensation. Professionals and banks usually have a set fee schedule for this, and may require a minimum trust balance. For a revocable living trust, you’ll


likely name yourself as trustee so you can continue managing your assets in the near term. However, you’ll also need to specify a successor trustee who will take over when you pass away or become incapacitated.


BEWARE CHEAP HEALTH PLANS Short-term health insurance plans, as


alternatives to the Affordable Care Act (ACA), are coming soon. But do your homework before taking the plunge. For one, these plans don’t cover pre- existing conditions. And if you develop one while covered by a short-term plan, you are likely to lose coverage at the next renewal. Secondly, drugs are not covered, and deductibles are very high. And just as with employer health insurance, if you join a short-term plan and don’t like it, you can’t change back until the next renewal period.


HIGHER CREDIT SCORES Your credit score could be going up.


In mid-2019, FICO, the credit-scoring company, will introduce a new system called “UltraFICO” for calculating credit scores that would boost the scores of Americans who fall below the “good” rating of around 700. Improved information about consumer spending is making it easier for lenders to assess the risk of potential borrowers. Most people won’t notice much of a change; the average national credit score is already above 700.


NURSING HOME COSTS UP The annual cost of staying in a


private room in a nursing home is now into six figures, reports Genworth Financial, a national seller of long-term care policies. Blame the boomers, who are retiring at a rate of 10,000 per day. Experts suggest you buy long-term care insurance while you’re still young (in your mid-50s). Some policies offer a shared-benefit rider that creates a pool of benefits either spouse can use.


CHECK YOUR CREDIT CARD RATE As interest rates rise, it might be time


to review both your savings strategy and your credit card usage. For savers, the good news is that you can now earn more than double what you could in 2015, up to 2.25 percent, according to Bankrate.com. But the average credit card interest rate is now 17.32 percent, a record.


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