A Painless Strategy for Long-Term Care Insurance

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I’m constantly amazed by how little planning people are willing to do. Take long-term care for example. People will spend money on a cruise or two annually, yet ignore the fact that they may live longer than they think.  They may need assistance, either at home or in a nursing facility. A medical emergency could deplete their savings very quickly. The children they don’t want to depend on will be forced to help with their medical costs.

I have a painless way for siblings to help parents who can’t or won’t purchase long-term care insurance. It’s called the Latte LTC Savings Act.

If three adult siblings give up one latte daily, at a savings of $12 collectively, they will save $84 weekly. In one month, they will save $336 collectively. In one year, they will save $4032. That will buy LTC insurance for one parent for two years.

That’s only one latte daily. What if they gave up three lattes a week and covered both parents. Run the numbers for yourself.

I don’t sell insurance. I’m not a financial adviser. I’m not an economist. But this isn’t rocket science . It’s common sense that kids may have to make a small sacrifice to make sure they and their parents are not bankrupted by long-term care costs.

If your parents won’t plan for themselves, you can do this for your parents. Everyone wins.

An Attorney Who Really ‘Gets’ It

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The following is an excerpt from the website of estate planning attorney John Parr in Olympia, Washington:

“Estate planning is generally the same for men and women in terms of the paperwork. Each needs a power of attorney for health care and financial management, a will or revocable living trust, a health care directive, and other planning documents. BUT unique considerations affect how women should approach their financial and estate planning.

Ninety percent of all American women will be making financial decisions on their own due to being widowed, divorced or unmarried. Also consider these complicating factors: (1) Women´s income is approximately 73% of men´s income; (2) Women may, on average, work fewer years than men due to family priorities such as caring for children and elderly parents; and (3) Women outlive men by an average of seven years.

These circumstances require women to have a financial intimacy with their income and assets, be actively involved in the estate planning process, work with a financial planner to create a life expectancy cash flow analysis, and be actively involved in the management and operation of the family finances.

John was one of the earliest supporters of my work with women and financial intimacy. He is an estate planning attorney who really ‘gets’ it. He’s given dozens of my book “Don’t Worry about a Thing, Dear” to his clients at no charge to them.

If you’re one of my readers in the state of Washington, I highly recommend that you contact John Parr for your estate planning or legal advice.

http://www.parrlawfirm.com

Children and Grandchildren Not Entitled to Inheritance

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In her will, Leona Helmsley, NY hotel magnate, left $12 million dollars for the care of her dog. She left nothing to two of her four grandchildren, saying ‘the reasons are known to them’.

Even though Helmsley was a philanthropist, bequeathing millions of dollars to charitable organizations, she took a stand when it came to rewarding behavior she didn’t like. Her thinking may have been simple:  “My dog loves me, is good to me, I feel appreciated and loved. Two of my grandchildren treat me badly. They don’t deserve anything. I’ll leave money for the other two.”

There is no law requiring parents to leave their children or grandchildren an inheritance. Blood lines don’t apply in the U.S. or England, the only two countries that practice the legal concept of  ‘testamentary freedom’  – the right to designate who will inherit their estate.

That means children and grandchildren are not automatically entitled to any portion of their parents’ or grandparents’ estate. They receive an inheritance because parents choose to leave it to them. Inheritance lies not in the genes, but in the heart. It’s all about the quality of relationship, not family ties.

If I Had A Year to Live…

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When I was younger, I made New Year resolutions only to have them evaporate after a few weeks. Using a matrix of goals, timetable, action plan and reward system, I would track my progress. I don’t do that anymore.

Realizing that life is too short for everything, I struggled with how to maintain a balance between what I like to do and what I felt I ought to do. I came up with a formula that works better for me.
If I had a year to live, would I spend 15 minutes doing this?

It works for me in situations where I have a choice. For example, how do I want to spend my time? Do I really want to be on that committee, attend that lecture or class, learn to play bridge? If I’m not actively enthusiastic about something or someone, I don’t do it.

I don’t have to beat myself up about the choice because for me, it’s obvious. One year, 15 minutes? Yes or no.

In situations where I don’t have a choice, there’s no conflict. I might procrastinate a little, but I do it because I know I’ll feel good afterward.

Try the formula. You can do it all year round without keeping track of anything. If it doesn’t work for you, you can always go back to resolutions.

If you knew you had only one year left to live , would you spend 15 minutes making New Year resolutions?

Happy 2012. May whatever you wish for be yours.

Bag Lady Fears: Rational and Persistent

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Men, whether successful or not, don’t seem to worry about becoming destitute in their old age, invisible, unloved, roaming the streets, scrounging in garbage cans for food. But irrational as it may seem, successful women also suffer from bag lady fears.

Katie Couric, Gloria Steinem and Lily Tomlin admit to sharing this fear of becoming a bag lady. So did 48 percent of the 1,938 high earning women polled by Allianz Life Insurance in a 2006 poll. A stunning 90 percent of these high earners admitted to feeling financially insecure.

Many married women don’t have a history of understanding or managing money. They’re not used to seeing the bigger picture. They think their husband is better at making the ‘really big’ money decisions. While they balance the household budget and decide what to buy, he handles the investments. If the marriage ends, they don’t understand what he was doing financially. Often they find themselves responsible for financial decisions he made without their knowledge or participation.

The bottom line? Wives’ financial decisions revolve around money spent and gone, not invested for growth.

Bag lady fears may be emotionally irrational for financially secure Katie, Gloria and Lily. Their fears relate to being out of control, of feeling weak and fearful that they can’t make it on their own. For them, these are childhood tapes and no longer based on reality.

But for millions of women, divorce or widowhood is the wake-up call that they have to start thinking differently about money. Four in 10 marriages end before the 30th wedding anniversary. Only 16% of married women have a financial “Plan B” in case of divorce. The average age a woman is widowed is 56. Her average longevity is 84.

Every woman who isn’t in charge of her financial life is at risk of being a bag lady if someone is planning her future. That makes the bag lady syndrome a rational fear which requires paying attention to now.