Financial Planning and Advice Blog for Syracuse

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What You Need to Know about Your Will

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By wpadmin February 4, 2015

A will provides the peace of mind that comes from planning to pass on the fruits of your life's labor to your loved ones. Without a will, the probate court will decide how your assets are to be distributed and, if minor children are involved, with whom they will live.

What Is a Will? A will is a legal declaration that enables you to direct the disposition of your assets upon your death. Assets covered by a will include tangible assets, such as your home and your car, and intangible assets, such as bank accounts and mutual fund shares in your name. Other rights and benefits, such as insurance proceeds and pension rights, typically are paid directly to your designated beneficiaries and are handled outside of your will.

Generally speaking, a will includes the following items:

  • Your full name
  • Statement that the document is a will
  • The date
  • A statement revoking all previous wills
  • Specific bequests to transfer particular pieces of property to a named beneficiary
  • A general bequest, which does not specify from which part of the estate the property is taken, including provisions for the death of the named beneficiaries
  • Name of a trust beneficiary, if applicable
  • Names of guardians and alternates for minor children, if necessary
  • Names of the executor and substitute executor
  • Your signature, certified by two witnesses who do not have a connection to the will

Drafting a Will Ideally, your will should be drawn up by a lawyer and your heirs, if possible, should be familiar with its general form and contents. Many legal professionals recommend separate wills for husbands and wives since it is difficult to establish who owns which property in a joint will. If you have young children, an important provision is the selection of a guardian who would raise your children in the event of your death and the death of your spouse.

Choosing an Executor When you create a will, you must also choose an executor who ensures that the settlement of your estate is properly administered upon your death. This can either be a trusted friend or an institution, such as a bank or a law firm, with the necessary expertise.

Don't Leave Things to Chance Much is made in life of the things we can't live without. Little is made of the things you can't die without. While it's unpleasant to contemplate the thought of your own demise, it's very satisfying to know that you've put your financial house in order.

Because of the possibility of human or mechanical error by S&P Capital IQ Financial Communications or its sources, neither S&P Capital IQ Financial Communications nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall S&P Capital IQ Financial Communications be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.

 This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

© 2013 S&P Capital IQ Financial Communications. All rights reserved.

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Start Your New Year with a Financial Review

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By wpadmin December 30, 2014

As you plan for the year ahead, is an investment checkup leading your list of resolutions? Taking time for a detailed financial review -- including retirement planning, college savings, and your tax situation -- may help you progress toward your long-term goals. Consider the following items as part of your checkup:

Capitalize on tax reductions. If you plan to adjust your investment allocations, make sure you understand the tax consequences of your actions. Taxes on both long-term capital gains -- profits earned on investments held for more than one year -- and equity dividends are generally lower than rates on ordinary income (15% for many taxpayers, 20% for those in the highest tax bracket). Because of these tax reductions, you may now have greater incentive to hold your mutual funds for the long term and include equity funds that pay dividends within your portfolio.

School yourself in education incentives. Consider opening a 529 college savings plan account if education is part of your family's future. Contributions to a 529 plan compound tax-deferred, and withdrawals are tax free1 when the money is used for qualified higher-education expenses.

Remember three important letters -- IRA. You can boost your retirement planning efforts by making the maximum annual contribution of up to $5,500 to either a traditional or Roth IRA. Investors aged 50 and older get an added bonus: A $1,000 "catch up" contribution that can be made in addition to the annual maximum for a total investment of $6,500. Your money compounds tax-deferred until you begin withdrawals.

At that point, earnings withdrawn from a traditional IRA may be taxable, while those withdrawn from a Roth IRA may be tax free, subject to certain restrictions.2

There are other factors to consider -- such as your investment mix -- as you evaluate your progress toward your long-term goals. But this list can help you get started as you chart your financial course for the year ahead.

1. Withdrawals used for expenses other than qualified education expenses may be subject to a 10% additional tax on earnings, as well as federal and state income taxes. Prior to investing in a 529 plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

2. Withdrawals before age 59½ may be subject to ordinary income taxes and 10% additional tax.

Because of the possibility of human or mechanical error by S&P Capital IQ Financial Communications or its sources, neither S&P Capital IQ Financial Communications nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall S&P Capital IQ Financial Communications be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

© 2013 S&P Capital IQ Financial Communications. All rights reserved.

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