Staying Married:

Dont be a Silent Partner or the

Loan Survivor..
Leaving a Legacy
Chapter 4

The Basics
Merging of your assets and managing your
credit with the right attitude should get your
marriage off to a good start to being a Money
Smart Couple.
Assuming that your marriage thrives, you will for
sure be faced with more complex financial
challenges and decisions such as how to
acquire assets, meet your financial goals, pass
an inheritance onto your heirs, and how to leave
a legacy of support to your chosen philanthropic
interest.

Being Silent
As part of their gender, women, especially those
who are in a position of earning less than their
husbands or even depending on them
financially at some point a big concern is getting
their fair share of the property and not being left
alone to rear children with less than adequate
assets.
Despite this concern, women often by choice or
default find themselves out of the loop-in terms
of participating in decision-making or knowledge
of those decisions.

Being Silent
The moral of this scenario: Much as you
love your husband, and he loves you,
being a Money Smart Woman and a
Money Smart Couple means never
depending on him/her alone to plan for
your future, or your familys - especially
when you consider that women are
statistically more likely to be the survivor in
the relationship.

How You Hold Your Property

If you have assets on your own prior to marrying,
it is probably a good idea to keep them in your
own name. As you acquire property and assets
throughout your marriage, you will probably hold
much of it jointly with your spouse.
Ironically, the longer you are married, however,
and the more you are financially successful you
are, the more it will make sense to split up your
assets again. (We will explore this thought
later.)

How You Hold Your Property

Pay attention to the way in which you and
your husband own property.
Whats generally known as Joint
Ownership is actually shorthand for two
different ways of owning property
Joint tenancy with the right of survivorship
Tenancy by the entirety

Joint Ownership
Although joint tenancy is more common, tenancy by the
entirety can give you a bit more protection because
neither of you can divide the property without the others
consent. Also, the property is protected against your
husbands creditors, as long as you didnt also sign the
debt.
Tenancy by the entirety is not recognized in all states.
Both forms of joint ownership provide a survivorship
feature that is especially attractive to married couples. If
you or your husband dies, you automatically become the
sole owner of the property. In short, the property
bypasses probate.

Joint Ownership
A couple of quick points about joint
ownership:
Control of jointly held property is sometimes
muddled.For example, and depending on
what is involved, you or your husband may be
able to dispose of property without the other
persons knowledge like in the case of a joint
banking account. For those things like stock
or a home, that will require both signatures
and therefore be more difficult to sell without
the other persons knowledge.

Joint Ownership
Despite what you might think, joint ownership is
not substitute for a will.
Note: It is possible to co-own property without
being joint owners. If you take title as tenants in
common, you and your husband will have the
same ownership rights during your lifetime but
neither of you will have the right of survivorship
and your will that will dictate what happens to
your share of the property if you die say to
someone other than your husband.

Joint Ownership The Bottom Line

As you migrate into marriage and then
through marriage, you need to be aware of
how you own property.
Whom would you ask if you have
questions about these issues?

Whats His and Whats Hers

You may end up deciding that the best course
for you and your husband is a careful mix of joint
and individual ownership depending on the
property involved.
Savings and Checking Accounts
You may want to keep an account of your own if you
want to make independent spending decisions

Your Home
Own your home jointly, especially if you live in a state
that recognizes tenancy by the entirety

Whats His and Whats Hers

Your Car
Consider keeping your car and other vehicles
in individual names.

Stocks and Bonds

Can be registered in both names, requiring
both signatures or they can be held in street
name which can be dealt with by either of the
joint owners

Keep It All In The Family and

Estate Planning
Estate Planning is a fancy term that means
distributing your property and planning for your
children and other heirs after your death
Estate planning isnt just about financial assets.
If you have children, your wealth is incalculable.
Its critical that you specify how the children
should be taken care of in your absence, and
how your familys finances should be handled on
their behalf.

Estate Planning
Is about the who, what, when, and how
Whom do I love?
What people and organizations do I want to help?
What do I want to have happen if I die, retire, or
become disabled?
When do I want to transfer property?
How do I want to accomplish all of that?

All of these questions are important, especially if

you have children.

Be on Top of Your Game!

Do not assume anything. Talk to your
spouse/partner about what arrangements
both of you should make in the event of
his death, or yours.
BE INFORMED, NOT IGNORED.

Life Insurance Made Easy

The Purpose
To take care of the people who depend on
you and who would suffer financially if you
werent around to provide for them

This is particularly important for stay-athome moms who are completely

dependant on their husbands
Once you have children, life insurance
becomes a major priority!

Insurance Coverage
Insurance coverage should equal 5 to 10 times your total
household income. To make things simple, lets split the
difference and recommend buying insurance equal to
about 8 times your annual income
Term Insurance
Easiest type of insurance and the least expensive
Recalculate your life insurance needs at various points in
your life. At some points more than others, you may
need more coverage.
Remember the R and the A in the ERA!

Where theres a Will,

Theres Security
Write a will thats sets out your plan for
how your assets should be distributed and
your children provided for.
If you die without a will your states onesize-fits-all plan kicks in, and it may not be
tailored to your or your childrens needs.

Famous People and Their Wills

Famous people who have died intestate: Presidents
Abraham Lincoln, Andrew Johnson, and U.S. Grant, as
well as Howard Hughes and Pablo Picasso.
Others to note: Heath Ledger did not update his will to
reflect or provide support for his daughter, Matilda, or his
former girlfriend. Leona Helmsley's will specified that her
dog, Trouble, would receive $12 million for its care after
her death. Former Supreme Court Chief Justice Warren
Burger jotted a short will that overlooked the matter of
estate taxes, costing his heirs thousands of dollars.
Richard Nixon left behind specific instructions on how to
handle his personal papers.

Famous People and Their Wills

HENRY FORD, American Industrialist - Ford's worth
amounted to $600 million, primarily as stock in the Ford
Motor Co. Having previously provided for his wife, he
gave all the Class "A" nonvoting stock of the Ford Motor
Co. to the Ford Foundation. The Class "B" voting stock
was divided into 5 equal shares, for his son, Edsel, and
his 4 grandchildren.
FLORENCE NIGHTINGALE - British Nurse. The
founder of modern nursing left pound 36,128. She
refused burial in Westminster Abbey and gave her body
"for dissection or postmortem examination for the
purpose of Medical Science." The provision was
ignored. She was buried at East Wellow, among her
ancestors.

Famous People and Their Wills

JOHN D. ROCKEFELLER - American Oilman And Philanthropist.
After assets were transferred to the Rockefeller Foundation, the
residual estate of $25 million was left in trust primarily to Mrs.
Margaret Strong de Cuevas, his granddaughter, and her
descendants. Rockefeller did so, to the exclusion of his other
grandchildren, because they had already been provided for "when
the time came that I felt it wise to place upon my children the
responsibility of owning and administering substantial sums."
ANDREW CARNEGIE - American Industrialist & Philanthropist
After selling out to J. P. Morgan for $400 million in 1900, Carnegie
devoted the balance of his life to giving away his fortune. He felt
that, after one's family's needs were provided for, the wealth which
remained was to be held only as a public trust, "... to be
administered for the benefit of the community." Carnegie built 2,509
free libraries in following this philosophy, spending over $56 million.
Before his death, he had managed to give away over $308 million.

Protect Your Children

Dont put off writing a will. Over 50 percent of
Americans die without a will. Often times it costs
more to die without a will than it does to bite the
bullet and get one while you are alive. If you die
intestate, the state decides what to do with your
assets.
Protect your most precious assets
Your Children

Guardianship of your Children

Look to your generation
Stick close to home
Name one guardian, not two
Consult the prospective guardian
Consult the kids
Split the responsibilities
Revisit the plan The ERA

Other Pieces of the Plan

A Durable Power of Attorney
A Durable Power of Attorney for Health
Care or Health Care Proxy
A Living Will Life Sustaining Treatments
Trusts
Revocable Living Trusts transfer assets and
keep control of them
Bypass Trusts- unlimited marital deduction
Testamentary Trusts or incentive trusts

Other Pieces of the Plan

Planning for Taxes soon phase out of
estate tax so that by 2010 there will be no
estate tax but will be revisited

Leaving a Charitable Legacy

Charitable Intentions
A very meaningful way to support your charity of choice
is by making arrangements in your will to leave a gift.
These gifts are often very tax efficient ways to pursue
philanthropy. Through effective estate planning you
can leave gifts of cash, property, stock, etc. to your
favorite charity and perpetuate your legacy through
these actions.
Assigned beneficiaries for philanthropic purposes For
example through an IRA, through an assigned
beneficiary of a 401K, or life insurance.

Long-Term-Care Insurance
A Womans Issue
What is long term care insurance?
Long term care insurance helps pay for long term care services
needed due to a chronic disease, serious accident, sudden illness,
or cognitive impairment such as Alzheimer's, that limits a person's
ability to think or reason.
Long term care services may be provided by a health care
professional (a nurse, for example), a home health aide, or other
personal care providers, like family members and personal care
attendants.
Long term care insurance can pay for varying levels of care in a
variety of locations, ranging from a few hours of care per week at
home to round-the-clock care in a nursing home.

Long Term Care Insurance

Why is long term care insurance a womans
issue?
Women are more than likely the caregivers. Too
often, women find themselves facing a difficult
choice between caring for a loved ones well
being and caring for their own.
But just as they are likely to be the care givers,
they are more likely to be the recipients of care
because with increased age come increased risk
for illness and diseases that require long term
care.

Long Term Care Insurance

In addition, Josefina Carbonell, US Assistant
Secretary for Aging, states that over half of
employed women who were providing care for a
relative had to make accommodations at work,
like coming in late, taking time off, etc.
Moreover, one in five of women caregivers had
to give up work temporarily or permanently,
according to the National Alliance for
Caregiving/AARP survey in 2002.
In Alabama alone, it is estimated that the annual
cost of staying in a nursing home for one year is
$55,000.

How to Evaluate a Policy

A well-chosen policy that pays for both nursinghome care and at-home care can protect the
assets youve spent a lifetime accumulating and
buy priceless peace of mind
Benefit Amount
Your policy will pay a certain benefit per day of any
nursing-home stay

Waiting Period
The amount of time between when you enter a
nursing home and when you insurance begins to pay

How to Evaluate a Policy

Benefit Period
Usually continue for a period of 2 years to an
unlimited amount of time

Shared-Care policies
Buying an amount of time as a couple
If you and your husband each purchase a 3 year
policy and he only uses 1 year you will now have
5 years of long-term-care insurance to use

How to Evaluate a Policy

Home Care
Choose a policy that pays as much for home
care as they do for nursing-home care

When to Buy
Most cost effective- start looking in your 50s
and 60s

Long term care

(continued)
Share comments on long term care
insurance in class
Your assignment:
Two sources for long term care insurance
and why you will or will not need long term
care insurance.

Second Marriages and

Special Issues
Merging of assets and how to hold property?
Is a prenup in order? A Prenup is a legally enforceable
contract between souses-to-be that spells out what will
happen to your property when one of you dies or if there
is a divorce
A postnup is a legally enforceable contract that is signed
after you are married.
You might be a candidate for these type of agreements if
you or your husband make a high salary, have children
from a previous marriage, one of you is paying for child
support, or you have agreed to pay for professional
education, etc.

Sharing Your Intentions

Tell Your Kids
However you decide to split up your
property, tell your adult children what
youre doing-- especially if you dont plan
to divide your assets equally among family
members

Dont Stop Now!

Re-title property --such as your home, vacation
home, or car--if you and your husband would
benefit from a change in the form of ownership.
Review with your husband your financial
documents, including retirement and estate
plans, credit-card statements, life-insurance and
health-insurance policies, and any business-loan
documents.

Dont Stop Now!

Update your beneficiaries and your will if you or
your husband has experienced a major life event
Draft a will and other important documents like a
power of attorney, living will, health care proxy
and name guardians for your children
Look into long-term-care insurance for your
husband and yourself if youre age 55 or older
and havent already done so

Dont Stop Now!

Consider the pros and cons of prenuptial
agreement if youre embarking on a
second marriage (or a first one if you and
your husband-to-be have high incomes
and substantial assets).
Maximize your philanthropic impact by
leaving a legacy for a charity in your will or
by designating a beneficiary for a trust, life
insurance, IRA or 401K

And Six Things you Both Need

to Know
Retirement Plans
Take time to fully acquaint each other with all your
retirement plans

Credit card documents

It pays to know how much you both owe

Power of Attorney
If you have assets that you dont own jointly, each of
you should have power of attorney for the other

And Six Things you Both Need

to Know
Wills, trusts, and life insurance
Dont put these in a Banks safe deposit box the bank
may delay access to the documents when one of you
dies

Health insurance policies

If you and your spouse are covered under different
insurance plans, familiarize yourself with each others
plans

Business loans
If one of you owns a business or is a partner in a
professional firm, you should both know about any
personally guaranteed loans.