Tag Archives: Life Plan

4 TIPS TO GET FINANCIALLY FIT

The New Year is an ideal time to set new goals, as many vow to become more physically fit or get organized.  The New Year is also a great time to assess your finances, gain control and stick to a new budget or saving plan. Taking control of your personal finances will allow you to save and prepare for unexpected expenses.

Get financially fit this January.  Follow the tips below to get started.

Get Organized Consider treating yourself to a post-holiday gift of a financial organization system.  Alphabetized file folders, or filing systems specifically for financial organization are available in January as people begin to prepare for tax season.  Take advantage and start the New Year with an organizational system.  While you’re getting organized, consider buying a shredder to keep your personal information safe from identity theft.

Create a Budget Track your income and expenses to see how much money you have coming in and how much you spend.  If you have debt, establishing a budget will help you to pay down your debt while saving. Use computer software programs or basic budgeting worksheets to help create your budget.  Include as much information as you can and review your budget regularly.  Print several copies of this budgeting worksheet to help you get started.

  • Identify how you spend your money.
  • Set realistic goals, especially if you plan to cut some of your expenses.
  • Track your spending and review your budget often.
  • Points to consider when cutting debt:

Lower Your Debt Debt from student loans, mortgages and credit cards is nearly unavoidable.  Most families carry about $10,000 in credit card debt.  Spending more money than you bring in can lead to financial stress.  Establish a budget to pay down debts while you save.

  • Pay more than the minimum due and pay on time.
  • Pay off debt with higher interest rates first.
  • Transfer high rate debt to credit cards with a lower interest rate.
  • Use credit cards and loans for purchases that will appreciate in value like a home.

Save for the Unexpected and Beyond Pay yourself first.  Saving is important; it ensures a comfortable future that can endure financial surprises.  No matter how old you are, it’s never too late to begin saving.

  • Save at least 10 percent of your income for retirement.  Enroll in a retirement plan or consider optimizing an established retirement plan.  Contribute at least the maximum amount that your employer will match.  Contributions made to these types of plans are tax deductible.  If your employer does not offer a retirement savings plan, many banks offer Individual Retirement Accounts.  IRAs offer tax-deferred growth, meaning you pay taxes on your investment gains when you make withdrawals.
  • Financial advisors often recommend keeping about three months’ salary in a savings account in case of financial emergencies like hospital bills or loss of job.
  • Increase your contribution as your income increases.
  • If you receive direct deposit at work, ask your employer to send a specific amount to your savings account.  Because the money is put into an account before you have a chance to spend it, automatic savings plans are an easy and convenient way to save.  If your employer doesn’t offer direct deposit, many banks allow for automatic transfers from checking to savings accounts.

Resource information provided by the American Bankers Association

Advertisements

INVESTMENT INSIGHTS

by Joan Schade

Stock Yards Bank Wealth Management & Trust


We all like to plan and dream about how we’ll spend our retirement years. What does your plan look like? Will you travel, play golf, garden, or visit with friends and family? Maybe you’re planning to move, or perhaps you’d simply like to spend some time relaxing and enjoying some well-earned rest. Sometimes, however, unplanned events arise that leave us stunned and thinking, “What just happened?” Fortunately, if we have the right type of insurance in place it can make dealing with the unexpected a whole lot easier.

When you start to plan for your retirement years it is always a good idea to review the insurance you already have in place. Consider if your needs or objectives have changed since you made the original purchase. For example, was your term policy to insure that your children’s education would be covered or that your house would be paid off should something happen to the main bread winner? If your children are grown and there are only a few payments left on the mortgage, your current policy may not be the right type of protection needed at this stage in your life.

Purchasing insurance to provide some income for a surviving spouse is common, but you may also want to look at a long-term care policy. Without the right kind of insurance, you could be forced to use all of your hard-earned savings, including your retirement savings to pay for care. The cost of such needs continues to grow by leaps and bounds. Long Term Care Insurance policy options have grown as well in the last decade. As opposed to the “use it or lose it” options in years past, many policies now offer a wide array of hybrid products that will allow you and/or your spouse to use what you need and pass any remaining dollars on to your beneficiaries tax-free.

Insuring for the right purpose today could protect the quality of your retirement years. Wouldn’t we all like our retirement dreams to come true?

For more information about Investment Plans, please contact our Wealth Management and Trust Department.

 

The Basics of Creating a Life Plan

by Claudette W. Patton, J.D.

Stock Yards Bank Wealth Management & Trust


Preparing a Life Plan is all about living and making good choices about your legacy. Most people avoid planning because they think it’s morbid to think about death, but a Life Plan – estate planning – isn’t about dying at all. It’s simply providing direction for your legacy and determining how you want to be remembered by your community, family, charities, and personal causes. It is a chronicle of your life’s work with a plan to continue the fruits of your work for the benefit of others.

The most important question remains: “Do you want to control your personal life legacy?” A well written and thought out Life Plan keeps you in control of your life even after you’re gone. The list of those who do not plan is replete with examples of unintended ex- spouses, estranged siblings, children with addictions, and others being granted inheritances by state intestacy law (lawyer lingo for “without a will”). A recent example of a man who did not control his legacy is the music legend, Prince. According to court documents filed in a Minnesota probate court, Prince Roger Nelson left no instructions to divide his belongings. As a result, state law could divide his vast estate equally among 8 siblings. It is reported Prince has one surviving full sister, five surviving half siblings, and two deceased half siblings (with surviving children). Some of these heirs had not spoken with Prince in over twenty years. However, Minnesota state law does not distinguish between full and half siblings, plus any personal relationship to Prince is irrelevant. Would Prince have approved of this distribution? Would you?

The following is a Life Plan “Control Checklist” to assist in protecting and directing your legacy:

Control Who Inherits Your Legacy and Designate The Amount For Each Heir

Many people assume everything in an estate automatically goes to the spouse. Please be aware not every state law automatically passes the entire estate to a spouse! I repeat. A spouse may not automatically inherit everything without a Will. Some states only allow a spouse 1/3 of an estate due to parental inheritance distribution laws. According to Kentucky intestacy law, a spouse may be fourth in the line of distribution. Also, state laws typically divide assets equally to the state designated heirs without consideration of a spendthrift relative, or someone with special medical needs. Children born out of wedlock may not be recognized in some states. Charitable giving may not occur. Additionally, if no living descendants are located the estate may “escheat” (go to) to the state coffers.

Control Who Will Take Care Of Your Minor Children

Preparing a Will and naming a guardian for your children places you in control of the person(s) you desire to meet the needs of your children and reflect your values. Without a Will the court may select a guardian from any family member, regardless if you were estranged during your life. If no family member agrees to guardianship or is deemed appropriate, the court may choose a state appointed guardian such as foster care.

Control Estate Taxes

Controlling taxes is a continuous event during our lifetime. An estate plan continues the control in minimizing estate taxes. A spouse may not take an inheritance tax free. Now is the time to put a plan in place to ensure the maximum of your legacy goes to your heirs rather than for taxes. Let’s revisit the example of music legend Prince. Without a Will or other estate planning, roughly one half of Prince’s estate could go to Federal and state taxes.

Control Probate

Having an estate plan helps speed the probate process, reduces probate costs, or in some circumstances, avoids probate completely.

Control Who Does Not Inherit

Earlier we discussed a plan to choose the exact people who receive your legacy. Now, we draw attention to controlling who will not inherit from your estate. An estate plan is your personal outline and direction of exactly how you want your personal legacy to be distributed. The estate plan allows you to be as detailed as possible and gives you the opportunity to exclude heirs making your intention of distribution clear. For example, perhaps some family members are financially established and you want to distribute assets based upon need, perhaps a family member may be incapable or irresponsible with money management needing small distributions of money over time using a trust, or perhaps a family member participates in lifestyle choices you may not wish to support.

Control Family Feuding

Estate planning may reduce the fighting and conflict among family members. Executing a well drafted estate plan places you in control of potential conflicts. Family members may not view your clear directions of dividing assets in a favorable manner, but your intentions will be clear to the court. Further, some states allow forfeiture/no contest clauses, indicating if an heir contests your estate plan then the heir may forfeit any gift made under the Will.

Control Charitable Legacy

An estate plan allows your legacy to live on by personally choosing charitable giving reflective of your values, interests, and social concerns.

Control Financial and Medical Care

Through estate planning with a Durable Power of Attorney, you control your financial and medical care in the event of a disability.

You can take control of your Life Plan now by engaging an experienced estate planning attorney to assist with the personal legacy you want to create. An estate plan expresses your values and outlines how you desire your assets to be preserved and protected. Who is in control of your legacy?

For more information about Life Plans, please contact our Wealth Management and Trust department.