The Shred Party

What should you get rid of and hold on to? When and why?

If a shred party happens to spring up in your area, you may want to mark your calendar. For many years, shred parties, where a business or organization hosts clients or the public to the use of giant paper shredders, have presented a fun and easy way for folks to rid themselves of paper clutter. Sometimes, it’s more than just paper, as some industrial-sized shredders even have the ability to destroy hard drives and other electronic storage devices.

Protection from identity theft. Of course, this is not just about clutter: old bills and financial documents are just the sorts of things that scammers and identity thieves want to get their hands on. The only way to be totally certain that you are safe is the total destruction of those documents and devices once their practical use has come to an end.

A shred party can also be a nice day out. It’s not unusual for the big shredding trucks to be parked outside on a pleasant spring or summer day. Depending on the hosting organization, the shred party might be attached to some other activity, like a potluck, barbecue, or community celebration.

What do you bring?The better question may be: when is it wise to let go of the documents that you’ve been storing? It’s important to be sure because they certainly aren’t something you can get back from the shredder once they’re gone!

A recent article from CBS News suggests the following guidelines:1

  • For your tax returns, hold on to those for up to seven years.
  • Purchase and sale statements for your house, for your entire ownership of the house.
  • Utility bills, at least one year.
  • Statements from your investment or brokerage account, at least one year.
  • Purchase and sales confirmations related to your investment or brokerage account, at least one year.
  • Statements from your bank account, at least one year.
  • Statements from your credit card provider, at least one year.

It’s important to remember, also, that the above represents a general guideline; different sources offer different suggestions. CBS acknowledges that, in some cases, it’s okay to shred your tax returns after three years. Your financial professional may have a different prescription for you, however, based on their close understanding of your financial life.

Information provided by Candido Palomarez, Family CFO.  He may be reached at (763) 428-1000 or at Candido@Candidoinc.com

Securities and investment advisory services offered through Woodbury Financial Services, Inc., Member FINRA/SIPC. Insurance services offered through Candido, Inc., which is not affiliated with Woodbury Financial Services. Neither Candido, Inc., nor Woodbury Financial Services renders accounting, tax, or legal advice.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – cbsnews.com/news/heres-how-long-you-should-keep-tax-records/ [4/26/2019]

Life Insurance with Long Term Care Riders

As conventional LTC policies grow costlier, alternatives have emerged.

The price of long term care insurance is really going up. If you are a baby boomer and you have kept your eye on it for a few years, chances are you have noticed much costlier premiums for LTC coverage today compared to several years ago. For example, in 2015 the American Association for Long-Term Care Insurance found that married 60-year-olds would pay $2,170 annually to get a total of $328,000 of coverage.1

As CNBC notes, about three-quarters of the insurers that sold LTC policies ten years ago have stopped doing so. Demand for LTC coverage will only grow as more baby boomers retire – and in light of that, insurance providers have introduced new options for those who want to LTC coverage.1

Hybrid LTC products have emerged. Some insurers are structuring “cash rich” whole life insurance policies so you can tap part of the death benefit while living to pay for long term care. You can use up to $330 a day of the death benefit under such policies, with no reduction to the cash value. Other insurance products are being marketed featuring similar potential benefits.2

This option often costs a few hundred dollars more per year – not bad given that level annual premiums on a whole life policy with a half-million or million-dollar payout often come to several thousand dollars. The policyholder becomes eligible for the LTC coverage when he or she is judged to require assistance with two or more of six daily living activities (dressing, bathing, eating, etc.) or is diagnosed with Alzheimer’s disease or some other kind of cognitive deficiency.2

This way, you can get what you want from one insurance policy rather than having to pay for two. Contrast that with a situation in which you buy a separate LTC policy but die without requiring any long term care, with the premiums on that policy paid for nothing.

The basics of securing LTC coverage applies to these policies. As with a standard LTC policy, the earlier you start paying premiums for one of these hybrid insurance products, the lower the premiums will likely be. You must pass medical underwriting to qualify for coverage. The encouraging news here is that some people who are not healthy enough to qualify for a standalone LTC insurance policy may qualify for a hybrid policy.3

These hybrid LTC products usually require lump sum funding. An initial premium payment of $50,000 is common. Sometimes installment payments can be arranged in smaller lump sums over the course of a few years or a decade. For a high net worth individual or couple, this is no major hurdle, especially since appreciated assets from other life insurance products can be transferred into a hybrid product through a 1035 exchange.1,3

Are these hybrid policies just mediocre compromises? They have detractors as well as fans, and the detractors cite the fact that a standalone LTC policy generally offers greater LTC coverage per premium dollar paid than a hybrid policy. They also cite their two sets of fees, per their two forms of insurance coverage. While it is possible to deduct the cost of premiums paid on a conventional LTC policy, hybrid policies allow no such opportunity.3

Paying a lump sum premium at the inauguration of the policy has both an upside and a downside. You will not contend with potential premium increases over time, as owners of stock LTC policies often do; on the other hand, the return on the insurance product may be locked into today’s (minimal) interest rates.

Another reality is that many middle-class seniors have little or no need to go out and buy a life insurance policy. Their heirs will not face inheritance taxes, because their estates aren’t large enough to exceed the federal estate tax exemption. Moreover, their children may be adults and financially stable themselves; a large death benefit for these heirs is nice, but the opportunity cost of paying the life insurance premiums may be significant.4

Cash value life insurance can be a crucial element in estate planning for those with large or complex estates, however – and if some of its death benefit can be directed toward long term care for the policyholder, it may prove even more useful than commonly assumed.

Provided by Candido Palomarez of Candido, Inc.

Phone: 763-428-1000

Website:  www.CandidoInc.com

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – cnbc.com/2015/08/07/fer-more-products-that-cover-long-term-care-costs.html [8/7/15]

2 – consumerreports.org/cro/news/2015/04/get-long-term-care-from-whole-life-insurance/index.htm [4/16/15]
3 – tinyurl.com/o3ty2j3 [5/4/14]
4 – marketwatch.com/story/hedging-your-bets-on-long-term-care-2013-11-06 [11/6/13]

Who Needs Estate Planning?

Why estate planning is so important, and not just for the rich.

You have an estate.
It doesn’t matter how limited (or unlimited) your means may be, and it doesn’t matter if you own a mansion or a motor home.

 

Rich or poor, when you die, you leave behind an estate.
For some, this can mean real property, cash, an investment portfolio and more. For others, it could be as straightforward as the $10 bill in their wallet and the clothes on their back. Either way, what you leave behind when you die is considered to be your “estate”.

 

“But, I don’t need estate planning … do I?”
Let’s think about that. If the estate is small, should you still plan? Well, even if you’re just leaving behind the $10 bill in your wallet, who will inherit it? Do you have a spouse? Children? Is it theirs? Should it go to just one of them, or be split between them? If you don’t decide, you could potentially be leaving behind a legacy of legal headaches to your survivors. This, quite simply, is what estate planning is all about – deciding how what you have now (money and assets) will be distributed after your lifetime.

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Care Management: What it is and how we help

Geriatric Care Managers, also known as Care Consultants, Care Coordinators or Elder Care Managers are professionals who specialize in working with seniors and their families to coordinate their care needs. A Geriatric Care Manager may be a nurse, social worker, counselor, psychologist or gerontologist who has training and experience specifically in working with older people.  Geriatric Care Managers help with short-term projects or can be involved in a more on-going relationship. Geriatric Care Managers offer a large variety of services to assist older people and their families in meeting their care needs.

Geriatric Care Managers can:

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Partnership Plans for Long Term Care

Many states are assisting their residents to buy LTC insurance.

A helping hand for a pressing need – With the baby boom generation maturing, numerous studies and articles have pointed out the rising need for long term care. Some state governments have directly responded to it.

Now, many states have created partnership programs to encourage their residents to purchase LTC insurance coverage. It only makes sense: if more people opt to privately insure themselves, a state will face less of a burden and less liability when it comes to its own eldercare programs and eldercare costs.

How the partnership plans work – Essentially, these plans provide dollar-for-dollar asset protection when you buy an LTC policy. So for every dollar the policy pays out in benefits, you get an equal dollar amount in asset protection under a state’s Medicaid spend-down regulations.

What does this mean for you? It means that you are able to retain assets you would otherwise have to spend down before you could qualify for state Medicaid benefits. These partnership plans let you protect an amount of funds equal to the amount the policy pays out in benefits and still qualify for state Medicaid assistance (as long as you have used up all policy benefits and still require long term care).

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A “New” Power of Attorney on the Way

(Will it Save the Day?)

Financial exploitation stories appear all over the news. Money is swindled from an elderly or disabled person by a family member or professional they should have been able to trust. Often, the power to take the money was given freely to the offender by the victim in a Power of Attorney. The theft is still theft, but the Power of Attorney (sometimes dubbed a “license to steal”) made it easy.

A new Minnesota Law will make it a little harder for Attorneys-in-Fact (that’s what we call the person given the power on the Power of Attorney) to inadvertently or on purpose abuse their duties.

What is a Power of Attorney? | A Power of Attorney is a document where one person (called the “Principal”) gives another person the authority to manage some or all of the Principal’s financial affairs. It’s a way to have someone ready to pay bills, cancel cell phone service, adjust investments or sell the house when the Principal becomes mentally incapable of doing these things himself or herself.

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