An important part of financial planning includes creating a Living Trust. It means that your family will inherit your assets as you have planned.

Another kind of financial planning: Investing that aligns with your values
To assess sustainability based on Environmental, Social and Governance (ESG) factors, investors look at a broad range of behaviors:

• Environmental criteria include a company’s energy use, waste, pollution, natural resource conservation and treatment of animals.For example, are there issues related to its ownership of contaminated land, disposal of hazardous waste, management of toxic emissions, or its compliance with environmental regulations?

• Social criteria may look at the company’s business relationships. Does it work with suppliers that support the same values? Does the company donate a percentage of its profits to the local community or encourage employees to perform volunteer work. Is there salary equity between men and women?

• Governance may examine whether or not a company uses accurate and transparent accounting methods and that stockholders are given an opportunity to vote on important issues. They may also want assurances that companies avoidconflicts of interest.

What’s next for SRI?

• Climate change is a big focus for President Joe Biden, which could further boost ESG funds, experts say.

• There has been a rise in assets in SRI, to $12 trillion at the beginning of 2018, up from $8.72 trillion at the beginning of 2016, according to a US/SIF Foundation report on investing trends.

• According to Morningstar, ESG funds captured $51.1B of net new money from investors in 2020, a record that more than doubled from 2019.

Financial planning and your Living Trusts
We service the entire East Bay and North Bay areas

Another kind of financial planning that has grown dramatically over the last few years is socially responsible investing (SRI). Also called impact-, sustainable- and values-based investing, SRI is a investing that helps people and/or organizations align their investments with their personal values.

A Morgan Stanley survey found that 75% of individual investors and 86% of millennials are interested in sustainable investing. But it’s not just a millennial thing, and it’s not just about politics. Things like climate change and equality transcend politics. Last year tied for the warmest on record, and Black Lives Matter protests sprang up across the U.S. following George Floyd’s death.

There are good reasons for SRI. It ensures that you’re not putting your money toward something you oppose for moral or religious reasons. SRI is a mature field with decades of history, but until recently it’s been relatively small and stable. The last few years have brought a significant increase in visibility, demand and a proliferation of new, sustainable investment products.

People are asking questions about corporations’ social impact. Many companies and fund managers are now publishing a Corporate Responsibility Report. This means that companies are self-reporting on their efforts to have a positive impact on the environment, social causes and culture.

Our Living Trust package includes a Power of Attorney and Advance Healthcare Directive. Having these legal documents in place now can help avoid confusion later on. We learned an important lesson from Covid: Once patients were infected with the virus, they were in no condition to be signing legal documents. We guide you through the process, and we prepare the legal documents. Schedule an appointment with Guideway today.

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

In Pursuit of Gracious Aging: Rethinking Aging in Place

A year of Covid has left us all feeling more vulnerable. We can do everything right, yet sometimes it’s not enough. At Guideway, many of our clients took action by creating or updating their Living Trusts. Couples approaching retirement are making important life decisions. Will they age in place, move to be closer to their kids or is a retirement community the right solution?

In a The New York Times article, a “throuple” was making plans for aging in place

A “throuple” is a new term–three people in a romantic relationship—in this case for 15 years. The pandemic forced the retirement issue for this group. They felt some urgency to find a retirement solution now so it will be ready when they need it. While they live in Florida, their desired location is New England, where they have friends and family.

They ended up buying an unimproved 1.7-acre lot of restored tidal marsh that featured changing scenery, natural light and an array of wildlife. When it came to design, there were a few nonnegotiables: Enough privacy to allow for plenty of windows, tidal marsh views, an easily maintained home and an eco-friendly yard.

Gracious aging: Being able to comfortably and safely age was the primary concern

“This is the first time we have worked for a three-person couple for whom gracious aging was part of the discussion from the outset,” said Rustam Mehta, a founding partner of GRT Architects, the Brooklyn firm that designed the 3,300-square-foot house.

The home embodies universal design principles

The one-story house follows universal design principles that are also senior-friendly–open spaces, minimal stairs, wider doorways and hallways. The three-bedroom home is wheelchair accessible and barrier free. There are no steps or thresholds across the entire principle floor. No tubs–all three bathrooms feature zero-threshold showers. For the country’s swiftly aging boomer population, this attention to safety is essential to healthy home life.

What usually happens: Changes are made in response to a fall or accident

More often than not, when homes are upgraded to accommodate seniors, changes are hurriedly made in response to a fall, accident or medical diagnosis. For the aging baby-boomer population that intends to age in place, now is a great time to start turning homes into comfortable, safe places to grow old.

Upgrades can start with easy changes:

• Installing task lighting in kitchens to accommodate fading eyesight.
• Building multi-height countertops to allow people of all abilities to both stand and sit while working in the kitchen.
• Investing in nonslip tiles and grab bars in bathrooms.
• Relocating select electrical outlets to be 18-inches to 24-inches high, making them accessible from wheelchairs.

Bigger changes can include enlarged doorways

Allowing for wheelchair access or a walker and adding ramps to eliminate stairs are essential changes. Many small modifications can be made that are inexpensive or have no associated cost. Evaluate your home for trip hazards. Unstable area rugs, cracked and loose tiles and flooring, both indoor and out.

According to Dr. Rodney Harrell, the vice president for Family, Home and Community at AARP, “The vast majority of people want to stay in their homes as they age, and most homes in this country aren’t designed to allow that to happen.” Start with the simple things that are easy and inexpensive to make your home safe.

Is it time to update your Living Trust?

Many of our senior clients created their Living Trust eight or more years ago. There’s a good chance a lot has happened since then—births, deaths, divorce, investments and new jobs. Our Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Will. We guide you through the process and we prepare the legal documents. Schedule an appointment with Guideway today. We guide you through it and we prepare the legal documents.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

In-Person Meeting to Restate Living Trust

According to the CDC, those who have been vaccinated no longer need to wear masks in indoor settings. We’re still playing it safe, masking up and social distancing. And while we’ve gotten used to our Zoom meetings, the results of our recent survey indicated that many still prefer one-to-one communications. We’re delighted to be able to provide in-person appointments once again. 

Joan wanted a one/one appointment to restate her Trust

Joan scheduled an appointment in our Walnut Creek office last week to restate her Living Trust. She and her husband had created a Trust in 2005, and her husband died in 2019. At 83, Joan is active, grateful to be in good health. She knew the Trust process was going to be challenging for her, so she didn’t want to do it over the phone or Zoom.

Among Joan’s concerns was naming a Power of Attorney and an Agent for her Advance Healthcare Directive. She has three children who are now in their 60s, and five grandchildren. She is very close to two of her grandchildren. Allison is a banker who lives in Berkeley; Oliver, a vet, is in Boston. Both are in their 30s and likely to outlive her. They are smart, trustworthy and caring. She planned to name Allison her Power of Attorney and Oliver her Agent for her Healthcare Directive. They would be backups for each other’s roles.

 

When naming a POA, consider financial acumen and commitment of time

It might seem more logical to name her children for her Power of Attorney and Healthcare Directive—they’re older, retired. But one of Joan’s daughters lives in Spain, and the logistics make this unsuitable. Another daughter is in poor health, and Joan knows that these roles can require a significant amount of attention and some financial acumen. Her son has trouble managing money, so he was not a good choice. 

Joan is realistic about this decision. She knows that if she becomes incapacitated, the role of Power of Attorney could become a significant responsibility—managing expenses, paying taxes, getting her to doctors’ appointments, moving her to an assisted care facility if it became necessary, etc.

The role of Agent for your Advance Healthcare Directive

The role of Agent for a Health Directive is someone who is legally of age, responsible for making medical decisions on your behalf if you’re incapable of doing so. It’s often a spouse or an adult child.

It’s important that you talk to your agent before appointing him/her—not after a catastrophic event. Make sure this person is willing to take on the responsibility of making crucial medical decisions on your behalf—just as you have detailed. If a situation arises that’s not covered in the Directive, your agent will be responsible for making decisions based on what he or she believes is in your best interest.

Schedule an appointment to create your Living Trust: Zoom or in-person!

You now have a choice--via Zoom or an in-person meeting. Our Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Pour Over Will. Best of all, we guide you through it and we prepare the legal documents.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

Executor Anxiety: What if the Estate Doesn’t Sell?

There is often confusion about the role of the Executor/Successor Trustee who manages the family’s estate after the death of a parent. An article in The New York Times underscores the uncertainty and anxiety that an Executor may be experiencing. An “Executor” carries out a person’s Will (common in New York because Probate is more workable there), whereas most California people will have a Trust, so the person doing all these tasks is the “Successor Trustee”. Anxiety is not uncommon—none of us has trained for this role, and we don’t normally bring any experience to the job.

 

In the article, one person is the Executor of her mother’s estate. The sale of her house and its belongings will be divided equally among the surviving children. The Executor had the home’s furnishings appraised and is preparing them for sale. She’s concerned that if the furnishings don’t sell, as Executor, she will be responsible for the shortfalls.

Fiduciary duties: Acting in the best interest of the beneficiaries

An Executor is legally responsible for sorting out the finances of the person who died, generally making sure debts and taxes are paid. What’s left is distributed among the heirs. As an Executor, you can’t act against the interests of any of the beneficiaries—these are your fiduciary commitments.

According to these fiduciary duties, you can’t sell assets for less than fair market value without agreement of the beneficiaries. Your job is to settle the financial affairs and divide the assets in accordance with the Will. It’s not your job to pay your siblings if the estate is ultimately not as valuable as everyone seems to think. You are expected to make prudent decisions about how you liquidate it.

 

What’s “prudent” can be a matter of supply and demand

“What’s prudent is going to depend on the nature of the assets,” said Douglas F. Allen, Jr., a trusts and estates attorney in the Manhattan office of the law firm Seyfarth Shaw. If the estate has a valuable 19th-century armoire and you sell it at a yard sale, your siblings could hold you responsible for being careless with their inheritance. Your job is to figure out how to appraise it and find the best venue to sell it, whether that’s at an auction or through an antiques dealer. If the piece appraises for a modest sum, you may decide to sell it at an estate sale. If it sells for far less than the appraised value, then it was only worth that much—it’s a matter of supply and demand. If it’s perceived as just a hulking piece of furniture in the marketplace, then the estate is responsible for the cost of disposing of it. 

A reality check: No one seems to want old bulky furniture

I recently helped a friend downsize. They sold the estate where they had lived for 30 years. They had a home full of beautiful things, including dishes, silver and antique furniture. All of these items were expensive and in excellent condition. We tried all of the online sales sites and didn’t get as much as a nibble. No one wants this stuff, including her own children. So while they may have paid a lot of money for these items, they were virtually worthless in today’s marketplace. They only have value when someone wants them.

When it comes to real estate, partner with a broker you can trust

Decide whether to list property as-is or spend money from the estate on upgrades, repairs and staging. If the broker suggests listing it for $750,000, but it sells for $700,000, then that’s all the money you have to split up, minus whatever expenses you incurred for staging, repairs and broker fees, according to Robert D. Steele, a partner at the Manhattan law firm Schwartz Sladkus Reich Greenberg Atlas, where he is head of the firm’s trusts and estates department.

Have these conversations now

To avoid a conflict among your siblings, start the conversation now, before any heirlooms are sold or divided up. Do some research to understand the local market value. Explain the process and whatever guidelines have been laid out in the Will. For heirlooms that have sentimental but limited monetary value, split these up now to avoid turmoil at what will undoubtedly be a difficult time.

Schedule an appointment to create your Living Trust: Zoom or in-person!

You now have a choice–via Zoom or an in-person meeting. Our Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Pour Over Will. Best of all, we guide you through it and we prepare the legal documents.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

This article is based on an article in The New York Times by Ronda Kaysen.

 

 

Medicare’s New Chip Card Spawns New Scams

Many of Guideway’s clients are seniors who are either creating or updating their Living Trusts. A recent conversation about scams is a window into just how hard crooks are working to steal money from vulnerable people—especially the elderly. The latest scam? Medicare is rolling out a new plastic card that will replace the old paper card. It has a microchip that encrypts transactions for greater data security. 

Sadly, scammers are all over the transition to the new Medicare card

“They’re on the move, developing ways to take advantage of any confusion that may be related to the transition,” the Federal Communications Commission (FCC) warned as the new cards were being rolled out. Be aware of these scams and make sure family members who are on Medicare understand how the new card is to be used. 

Some scammers are asking beneficiaries to pay for their new Medicare card; others are threatening to cancel people's health coverage if they don’t share their new number. The card is a free replacement—there is no charge. The FCC said that stolen data could be used to file fake claims, fill prescriptions or be sold on the dark web. 

Sometimes scammers promise free services or equipment, such as a back or neck brace, in exchange for Medicare information. They may reference new policies or updates. The best way to protect yourself: Remember that no government agency makes personal calls or makes free offers. Not Medicare, Medicaid, Social Security, the IRS, the DMV. Not ever. 

Website domain name scam

I encountered a scam that I want to share—a new one for me. I created a website for a friend a few years ago and he forwarded an email warning him to renew his domain name and pay for it immediately or he would lose the name altogether. There was contact information where he could use his credit card to pay. I logged into his GoDaddy account, and sure enough, he was all paid up. No crisis—just another scam. 

The thing to keep in mind is that no legitimate organization operates in this manner. For all of these scams, there is an immediacy—you have to do this right now—before common sense takes over and you realize that you’re being conned. The IRS never makes threatening personal phone calls. GoDaddy has fabulous customer service—they’re not in the business of making alarming announcements to their customers. 

How preposterous is this scam? Does a seven-year old car ever have a warranty?

My car is in great shape and paid for, but it’s seven years old, and I get a phone call at least once every few weeks trying to get me to engage in a scam about my car warranty--which has long since expired. They want me to log in and give them my credit card information to extend my warranty. A seven-year old vehicle does not qualify for a warranty. Ever.

Avoiding imposter scams

If you’re unsure about the legitimacy of calls you receive, contact the FTC.gov/complaint or 800-MEDICARE. Be vocal. Tell your friends and family members about these scams so they’ll be alert to potential deceit. They prey on our confusion. Don’t be conned. 

Is it time to update your Living Trust?

If you created your Living Trust eight or more years ago, there’s a good chance there’s a lot that has happened—births, deaths, divorce, investments and new jobs. Our Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Will. We guide you through the process and we prepare the legal documents. Schedule an appointment with Guideway today. We guide you through it and we prepare the legal documents.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

Reverse Mortgages: Generating Cash Flow for Seniors

Just as a Living Trust has become an important part of financial planning, a reverse mortgage can play a role in generating extra revenue for retired seniors. Reverse mortgages have been arounds since 1961, and they’ve always been somewhat controversial. Yet a reverse mortgage can be a real difference-maker for seniors who need cash flow to supplement their retirement income.

In its simplest form, a reverse mortgage is a loan
Warning signs. A broker who:

• Uses high-pressure tactics to talk you into a reverse mortgage.

• Won’t disclose the fees, conditions and risks that come with taking out a reverse mortgage, including the possible loss of the home, which serves as collateral.

Do your research if you’re considering a reverse mortgage: Look to HUD, FTC

• HUD and theFederal Trade Commission have plenty of excellent information.

• Talk to a trusted financial adviser or attorney before you sign anything.

• If the reverse mortgage is a federally insured Home Equity Conversion Mortgage (HECM), as most are, you are required by law to meet with a government-approved counselor.

• Be wary if someone selling home-improvement services suggests taking out a reverse mortgage to pay for renovations or repairs.

• Be very suspicious of claims that a reverse mortgage will get you free anything–income or a free home. You should know by now that nothing’s free.

• Do know that you usually have the right to cancel a reverse mortgage within three days after closing.

Don’t:

• Sign any loan paperwork that you don’t completely understand.

• For married couples: Don’t take out a reverse mortgage using just one spouse as the borrower. A reverse mortgage in one borrower’s name comes due when that person dies. The consequences for the surviving spouse could include collection proceedings and loss of the home.

• Listen to scammers telling you that reverse mortgages are a way to avoid foreclosure or get out of debt.

A Living Trust is an important part of financial planning  

A reverse mortgage lets you access the equity you’ve built up in your home. As a borrower, you get a tax-free advance on your own home equity. You can choose how you want to receive this advance—it can be a line of credit, fixed monthly payments or a lump sum.

For most reverse mortgages, you must use the proceeds to pay off your existing mortgage; the remainder of the loan comes due when you move, sell the house or die. Reverse mortgages are somewhat complicated, and they can be risky. Because the audience is older Americans, the industry seems to be populated with more than its share of scammers who can’t wait to take advantage of older homeowners.

While a reverse mortgage can be an important source of income for many seniors, a Living Trust is a critical part of financial planning. Our Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Will. We guide you through the process and we prepare the legal documents. Schedule an appointment with Guideway today.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

Probate: A Story of Greed and Conflict

Covid-19 has left many families grieving the sudden loss of their loved ones. As Guideway assists them in probating their estates, we’re sensitive to the painful loss of family members. In a best-case scenario, the Probate is uncontested by the surviving family members, the Executor settles the estate and it’s divided evenly among the surviving family. But in families where there are resentments and conflicts, the Probate process can be contested and it becomes more complex, as in the following story.

Father divided his estate equally among his three daughters

Dr. Johnson had lived a long, happy life. After his wife died, he modified his Will to make sure that each of his three daughters received an equal share of his estate—a palatial home, a Tahoe house and several luxury cars. As Dr. Johnson became more frail, his daughter Sarah and her husband, Bob, moved in to take care of her father. Her sisters helped occasionally, but Sarah and Bob were the primary caregivers. When their father died, the estate went into Probate, with Sarah named as the Executor.

Caregiver daughter’s fight for larger share of the estate resulted in legal battle

Sarah’s husband Bob believed that she deserved a larger portion of the estate because she had cared for their father for nearly eight years. Bob wanted to inherit the massive home in which they had been living in as they cared for Sarah’s dad. He also felt entitled to the cars and the Tahoe house. Sarah became caught up in the greed and ultimately began fighting for a larger share.

Sarah and Bob contested the Will; and a long, expensive legal battle caused a major rift among Sarah and her sisters. The case was finally settled with some concessions for Sarah and her years of caring for her father. The relationship among the sisters likely will never be the same.

Probate can seem overwhelming, but it’s actually a very methodical process

As part of Probate, the Court appoints an Executor to settle the estate, and Guideway works with that Executor throughout the Probate process.

The Executor is responsible for:

• Collecting all of the decedent’s Probate property
• Paying all debts, claims and taxes owed by the estate
• Collecting all rights to income, dividends, etc.
• Settling all disputes
• Distributing or transferring the remaining property to the heirs

Access to the decedent’s accounts

The Executor will be able to gain access to all of the decedent’s records–bank statements, savings accounts and income tax returns–to fully understand the financial landscape. This may include valuing assets, taking physical custody of assets and selling assets, as necessary, to pay off debts or expenses.

During Probate, the deceased’s estate becomes a separate tax entity. The Executor must obtain a federal tax identification number and open a bank account in the name of the estate from which to pay creditors. It is also necessary to file the estate’s tax return and a final individual tax return.

Distribution of remaining assets

Once all taxes and debts have been satisfied, the Court will then distribute any remaining assets according to state law. In California, as in most states, the first priority is given to the deceased’s spouse, followed by the deceased’s children.

How could this family conflict have been avoided? 

Dr. Johnson could have:

• Informed his daughters that he was dividing his estate equally among them. At that point, Sarah might have been able to make a compelling case for extra compensation for her years of loyal caregiving.
• Added a no-contest clause stating that anyone who challenges the document will receive nothing.
• Given away most of his estate to his children before he died.

Dr. Johnson could have saved his family a lot of grief if he had created a Living Trust

In this way, his daughters could have avoided Probate altogether. Sarah and Bob, however, still could have contested this agreement.

As the uncertainty of the Covid crisis drags on, many of our clients are scheduling appointments to create or update their Living Trusts. Our Trust package includes a Pour Over Will. For those families with children under 18, this means that they can name a Guardian rather than having the court appoint one for them. A Trust, with a Power of Attorney and Advance Healthcare Directive are providing peace of mind to many. Best of all, we guide you through it and we prepare the legal documents. Schedule an appointment with Guideway today.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.