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Estate Planning Basics

The Biggest mistakes People Make:

  1. Doing nothing at all.
  2. Trying to do it on your own without paying a professional for guidance.
  3. Failing to coordinate your entire situation with your Advisor / Quarterback.*
  4. Thinking that estate planning is just for the rich.
  5. Estate Planning is only for when you die.
  6. Thinking Estate Planning is only about taxes.
  7. Failing to review and update your plan regularly.

The 5 Documents you need: (If you don’t think you have time to do this, please consider talking to us and letting us help you prioritize the following documents. We can also direct you to the best way of at least getting executable drafts in place to protect you right now. In some cases you may be able to do this online as a fill-gap and then we can all work from there.)

  1. Last will and Testament (Living Trust Preferable-avoid probate)
  2. Durable Power of Attorney-Incapacity, disability-financial
  3. Medical Durable Power of Attorney-Incapacity/disability-medical
  4. Living Will (Advance Directive to Physicians) – Do you want life support, heroic actions?
  5. Authorization for Release of Protected Health Information (HIPPA)-Access to info for family.
    Doctors may not even release to a wife if this form is not handy.

Download your state forms from this site: www.caringinfo.org

Estate Planning Check List:
(Link to PDF Document) Estate Planning Document Checklist (Must Haves!) Call Marty for this list and additional info. (Retired, Married, with Children, Divorced, or Getting Started.)


Early Retirement .

Retirement doesn’t necessarily mean sixty-five anymore. Retirement now can mean fifty to fifty-five years of age, when you could be offered early retirement!

If you are fifty-five years of age or older in the year of your retirement, you can withdraw any or all of the money, whenever you wish, from your qualified retirement plan without any penalties whatsoever. This rule of “fifty-five and over” pertains only to money in employee qualified plans, not for any other retirement account, such as an IRA, an IRA rollover, or SEP/IRA.


If you are 55 or older and transfer your funds from your qualified plan into an IRA rollover, you will also transfer away the right to access these funds at convenience without penalty until you turn 59 1/2 unless you take substantially equal periodic payments (a 72t can be set up to avoid any penalties, but distributions will be taxed as ordinary income and you will be required to take distributions until you turn 59 ½ or for five consecutive years whichever is longest period).

If you are not or will not be fifty-five in the year of your retirement, the best way to avoid penalties, if you need to access those funds, is by rolling over your funds into an IRA rollover and taking substantially equal periodic payments (72t, see above).

If you are presented with an early retirement offer, the following guidelines will help you in deciding.

Tip 1: If you are taking early retirement because your spouse or partner’s earnings cover your financial needs and you are dependent on those earnings, you should consider purchasing a “level term” life insurance policy on him or her to protect you in case anything happens to your spouse or partner if he or she is not already adequately insured. (You will need the policy only for the number of years your spouse or partner plans to work. If he or she will retire in ten years, take out a ten-year policy.)

Tip 2: Most early retirement health benefit offers will not include dental or optical care. If your company now covers these two and if early retirement is in the air, get all your dental and optical work completed

Tip 3: At age 70 1/2 you are required to start withdrawing funds if you have not already done so.

Tip 4: If you and your spouse have set up a living trust (hold your assets in trust), make sure the primary beneficiary named on all your retirement accounts is the individual name of your spouse and not the trust. If you name the trust as the primary beneficiary, it will be subjected to the same rules as a non-spouse and the account will have to be wiped clean within five years. The trust should be named the contingent beneficiary only.

Private Sector Retirees (Rollovers and 401K Planning): Use link at top of this page to contact us for specific information regarding your retirement accounts.

Public Service Retirees: Use the link at the top of this page to contact us so we may review your retirement plan details with you.

Social Security Planning

Deciding to take your social security benefits before full retirement will decrease your monthly payout, but everyone’s situation is different, and knowing the facts can help you make the right decision for you and your spouse. Here is a brief commentary from a recent article from Michael Lecours in West Hartford, Conn.

Social Security: When to Claim at 62

Clients can receive Social Security benefits as early as age 62, but starting then triggers one or two drawbacks. For one, starting at 62 causes a permanent 25% decrease in monthly benefits. A client who would receive, say, $2,400 a month at age 66 (now full retirement age) would receive only $1,800 a month, before any cost-of-living adjustments.

In addition, clients with substantial earned income will see their Social Security checks reduced. This year, early starters will lose $1 of benefits for every $2 of earned income over $15,720. A client with $50,000 of earnings, for example, would lose $17,140 of benefits in 2015 while one earning $64,000 wouldn’t get anything from Social Security, even if he or she would qualify for the maximum age-62 benefit. (Withheld benefits will be restored gradually in subsequent years.)

Pulling Ahead

Assuming no earnings-based reduction, clients who start at 62 will pocket thousands of dollars from Social Security each year, giving them a head start on clients who wait. Nevertheless, “We’ve found the present value of the numerous options are all very similar around a client’s life expectancy,” says Brandon Jones, a senior wealth manager at Accredited Investors, a fee-only planning firm in Edina, Minn. “You will see a large difference if you assume an early death or live very long.”

According to Jones, some clients choose to take benefits at age 62 after reviewing those numbers. “We are often comfortable with this choice,” he says, “knowing the client will likely not be significantly worse off for choosing to begin benefits early. Plus, this may give clients the comfort to do the things they want to do while still relatively young and active.”

You can get the facts regarding your specific social security benefits by going to www.ssa.gov and providing your current income information. Please feel free to call or email us and we will review your situation and provide feedback and ideas based on your needs.

Social Security Administration
(800) 772-1213

www.medicareInsurance.com We provide expert-level assistance in navigating Medicare and Medicare-related insurance products.

Who Qualifies for Medicare in California?


College Planning

There is a lot of general information provided by financial institutions that may be biased by what they offer. The government sponsored sites provide access to specific forms and a plethora of information that is overwhelming and can be outdated.

I recommend that you take a look at: www.savingforcollege.com and then call or email us to help you drill down on what makes the most sense for your situation. Here at NICH Capital Partners our staff currently has kids that have already graduated college, currently attending college, and several children attending Grammar School. Let our experience help you with the planning.

Quickie on 529 Plans – www.savingforcollege.com

A 529 Plan is an education savings plan operated by a state of educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1996.

State plans are OK for out of state colleges. 529 Plans can be used to meet costs of qualified colleges nationwide. In most plans, your choice of school is not affected by the state your 529 savings plan is from. You can be a CA resident, invest in a VT plan and send your student to a college in NC.

Insurance Planning

Explanation of Kinds of Insurance

Three liability terms related to insurance:

Personal Liability: Insurance coverage that offers protection in the event you are personally sued for accidentally hurting another person (s) or damaging their property. Personal liability helps to cover the associated legal costs and related damages.

General Liability: Coverage for an insured when negligent acts and/or omissions result in bodily injury and/or property damage on the premises of a business, when someone is injured as the result of using the product manufactured or distributed by a business, or when someone is injured in the general operation of a business.


Professional Liability: Legal obligations arising out of a professional’s errors, negligent acts, or omissions during the course of the practice of his or her craft.

If you are planning to open your own business and this business is at home, you will need to obtain proper insurance. Many people think that their homeowner insurance policies will provide coverage for their business automatically, but this is not true. Most homeowner policies provide only $2,500 in coverage for the business related property (i.e. computers and office related equipment, materials, etc.) located at the home and no business-related liability coverage. Yet, often for just a few hundred dollars a year, an endorsement can usually be added to the homeowner’s policy to protect the interests of a small home based business. If you find that your homeowners company will not add your business via endorsement, you will need to ask your agent about a commercial insurance policy called a BOP (Business Owners Policy).

Healthcare.gov Insurance Finder

This tool will help you find the health insurance best suited to your needs, whether it’s private insurance for individuals, families, and small businesses, or public programs that may work for you. It was created to help consumers under the health insurance reform law, the Affordable Care Act. http://finder.healthcare.gov

Insurance Quotes – There are several companies that can help you (we do not sell insurance, but are happy to advise you on amounts and types that best suit your needs). We do not receive any compensation from Select Quote, but have found them very competitive in quality insurance offerings.

Select Quote
(800) 343-1985