Here's what you saw on Good Day Alabama:
MONEY TUESDAY - Stewart Welch with the Welch Group joined us to discuss your will - have you reviewed it lately? Take one moment and think about what your will says. Who does your will leave your assets to if you were to die today? If you are married and both of you died today, who would your estate go to? Would it go outright to those beneficiaries or would it go into a trust? And if it goes into a trust, when does the trust terminate?
Including any life insurance, what is the total size of your estate? Are your heirs well equipped to handle the money or assets they will inherit? This week is Estate Planning Week all across the nation and we want everyone to know how important it is to have a properly drawn will and accompanying estate planning documents. If you have not reviewed your will within the past 24 months, then right now is the perfect time to get with your attorney or professional advisor. A few issues you'll want to consider are:
- The Death Tax. The American Taxpayer Relief Act of 2012 -ATRA- significantly raised the value of an estate that is not subject to the death tax called the estate tax exemption amount. You can leave an unlimited amount of assets to a spouse plus up to $5,430,000 of assets to a non-spouse such as a trust or directly to children. If you are married, you can each leave up to this amount to a non-spouse for a total of $10,860,000. This exemption amount is indexed for inflation so we expect it to rise in future years. If your will was written before 2012, it is particularly important that you have it reviewed by a professional since many of the estate tax reduction strategies used prior to that time are less appropriate based on the new laws.
- Double check beneficiary designations and account ownership. Have you had any significant life changes in the past few years-- the death of a family member, divorce, significant inheritance, the birth of a child or grandchild? Take a moment and make a list of all of your retirement accounts - 401k, IRAs, Roth's, life insurance policies, and annuities. Next, list the beneficiaries for each account. Finally, the hard part, list the 'contingent' beneficiaries for each account. Lots of folks don't remember who their contingent beneficiaries are and the results can be disastrous. For example, one person had his wife as the primary beneficiary of his IRA but left the contingent beneficiary blank. The wife predeceased him and he didn't remember to change his beneficiary. He died and the IRA went to his estate instead of directly to his son. As a result, instead of being able to spread out the income taxes over his life expectancy, the son had to pay the income taxes within five years. We've seen a number of similar disasters related to divorcees. Remember, minor children -under age 19 in Alabama- should not be named direct beneficiaries of any assets.
- Power of Attorney. Effective January of 2012, the State of Alabama adopted a new model Power of Attorney agreement which compels financial institutions to accept and follow its terms. POAs drawn prior to this change may or may not be accepted by various institutions. You'll want a new one that complies with current law.
- Is a trust needed? If you have minor children, your will should make provisions for holding your assets in a trust at least until the age of majority - age 19. In many cases, we find that young adults are not prepared to handle even relatively small amounts of money and are better served using a trust and trustee to help manage money until they have had time to experience 'the real world' for several years.
- Elder Care issues. As our population ages, many of our elder citizens and their family face complex issues related to healthcare, aging and personal finances. With careful planning, you can improve the quality of life while preserving financial assets.
- Income Taxes. Liz Hutchins, Birmingham-based lawyer and president of the Estate Planning Council of Birmingham added, "Income tax planning can be more important than estate tax considerations in many estates, especially when the total assets are less than the $5.43 million estate tax exemption. Plans may need to be revised to allow heirs to take full advantage of income tax savings after your death. If you have a closely held business and your business succession plan includes trusts, special attention needs to be given to the appointment of the trustees due to the 3.8 percent net investment tax that went into effect in 2013."
Often, estate planning involves the teamwork of a number of professionals including attorneys, Certified Financial Planner™ professionals, CPA's, trust officers and Chartered Life Underwriters. That's because there needs to be a coordination of estate taxes, income taxes, multigenerational financial planning, life insurance planning and trust planning. It's these combined efforts that typically create the most effective estate plans. The Estate Planning Council of Birmingham includes professionals across each of these disciplines. For more information, visit www.birminghamepc.org.
BETH K - How safe are your supplements? UAB Nutritionist Dr. Beth Kitchin joined us with some answers! She says dietary supplements are a $14 billion-plus industry. Yet, supplements are largely unregulated when it comes to safety and effectiveness. Researchers have now estimated how many consumers end up in the emergency room after taking unsafe supplements. Their findings were published in last week's New England Journal of Medicine.
What the Researchers Did: The researchers used admissions information from 63 emergency departments in the United States from 2004 to 2013. During that time, 3667 people who were admitted to the emergency room because of side effects from nutrition supplements. The researchers used those numbers to estimate that 23,000 people in the U.S. are likely admitted to hospital each year due to supplement side effects. Young adults -20 34 years- were the most likely to end up in the ER due to nutritional supplements at 28 percent of admissions. Twenty-one percent were unsupervised children.
What Kind of Supplements? While the researchers were not able to gather data on exact supplement names, they were able to get general information about the types of supplements that were most likely to pose problems and what kinds of symptoms motivated the ER visits. Supplements that were used for weight loss and increasing energy were two of the biggest suspects. These types of supplements were implicated in the majority of cases that involved the most serious symptoms: rapid heart rate, chest pains and irregular heartbeat. These types of supplements often contain excessive amounts of caffeine (often under other names like cola nut or guarana) or other ingredients that can increase the heart rate.
Tips for Consumers:
- Talk to your doctor before starting a supplement – especially if it is marketed for weight loss or for energy
- Start with a lower dose to see how you feel
- Stop taking the supplement if you notice any side effects and call your doctor
- Report any side effects to the supplement company