Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative, securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member of FINRA/SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning, and welcome to this week’s Financial Focus, brought to you each and every Wednesday morning right here on KROS. Well, this is Nate. James’ joining me again today. Hard to believe, last show that we’ll do together of 2020. Christmas’s right around the corner. I know a lot of the area schools are finally now on Christmas break and I think, excited to officially feel like it’s Christmas and enjoy hopefully some normal times this time of year.
James Nelson:
Yeah. And maybe a little extended time off. At least for my daughter’s school, they get about three weeks off and I don’t know about some of the other areas schools. But hopefully everybody enjoys the long break and stays healthy and has a good Christmas.
Nate Kreinbrink:
I think it’s just a time for everybody to catch their breath, per se. I mean, going into the school year not knowing exactly how it was going to do, and for the most part school has been able to get to this point and continue on. So excited to it. For some of the months, I didn’t know if this end of the year was ever going to get here.
James Nelson:
Right.
Nate Kreinbrink:
So it’s a good time of the year, and then hopefully everyone has a safe, healthy holiday season coming up. End of the year also brings about New Year’s resolutions. A lot of times people get to that New Year and all those things they’ve been putting off and know they want to do, becomes a priority. And those New Year’s resolutions, it’s always a joke. Gyms become full for the first couple of weeks of the year and then they fade out a little bit.
Nate Kreinbrink:
Another area that I think needs to take a little higher precedence on that to-do list is estate planning. I know you and I talk all the time and we see it firsthand as far as the importance of having these things in place. Obviously, for the unfortunate circumstances, nobody wants to think about those times or whatever, but it’s in times that those unfortunate circumstances do happen, that you’re really glad that you have these things in place. And again, making sure that everything is supposed to happen the way it should.
James Nelson:
Yeah. And you’re right. Nobody likes talking about it, and I think that’s probably why it gets pushed on the back burner a little bit and kicked down the road. But it is important. We see clients passing away or a divorce and just a simple stuff as far as updating beneficiary forms. If that doesn’t happen, that can create some really big headaches on the backside for whoever’s left. So, getting those beneficiary forms updated on life insurance, on retirement plans, on IRAs, all of that simple stuff that just takes a minute, but double checking and triple checking that those are accurate in the way a person wants is absolutely crucial.
James Nelson:
Then we move into the estate plan a little bit. You could go the will or the trust route. Both can serve the similar purpose and handle things, but who likes going through that process? Who likes thinking about passing away? But it is important. It is something that everybody should consider, and even if you have a plan, to look at it and make sure it’s accurate. The kids have grown up. Maybe we don’t need some of the restrictions. Things change for everyone and making sure that estate plan is accurate is absolutely crucial. So this is a good time to do it, and there’s a lot of details that tend to get overlooked when we have these discussions.
Nate Kreinbrink:
Right. And I think just that simply the beneficiary designations that you mentioned is just a simple part that I think people oftentimes forget about. Whether it’s their 401k or a retirement account, they fill out the paperwork, they set up the account, they name their beneficiaries and they forget about them. Years pass, their life changes. Are those beneficiaries really current for what your current situation is or do they need to be updated? Or is there a family member that’s maybe listed as a beneficiary, that maybe during that time since you elected them as a beneficiary, either primary or contingent, maybe became disabled or is receiving state aid or something like that?
Nate Kreinbrink:
If they receive those assets if you pass away, is that going to jeopardize some of the aid that they’re going to be possibly getting? So again, understanding all of those things and looking at it is a really, truly a reflection of what I want to happen with this money now versus when I initially filled those things out. And again, the estate planning is huge, and you hear the articles in the paper where a famous celebrity or famous actor dies with millions or whatever and their family doesn’t even get it because their will wasn’t updated or anything like that. And it’s huge instances like that that draw all the attention, but they really do have an impact in people that are listening and in their everyday lives as far as their assets, that they’ve worked so hard to accumulate and they’re passing. Where are these going to go? Is it going to go through probate?
Nate Kreinbrink:
That’s another thing we didn’t really mention a lot, and people don’t necessarily understand where if you don’t have your money directed through a trust or beneficiaries or something like that, it’s going to go through probate. And you’re going to pay to have your assets assigned to your heirs, your children, your friends, whoever the case may be. So again, if we can put things in place while you’re still alive to avoid some of those things, for one, it’s going to make it easier for any surviving family members to take care of. And two, you a better idea as far as how your assets are going to be controlled.
James Nelson:
Right. Right. And I think the numbers are what they are that’s 60% of Americans don’t have any estate plan. So, that’s concerning. That’s the majority, and we got to do our best to get that turned around a little bit. The other thing that tends to get overlooked in the course of the estate plan and discussion is some of the other ancillary documents like powers of attorney, the HIPAA release, those may be even more important. And those numbers are what they are. Those documents are used at least two times more likely than actually the distribution, the estate plan.
James Nelson:
So those powers of attorney for healthcare, naming somebody, naming multiple people that are able to step in and speak with doctors and help make decisions is really important. So you’re not having to go get a guardianship through the courts. Powers of attorney for property is also very important. Nominating somebody or individuals to handle your financial matters if you were incapacitated. Sign the tax return, whatever the case may be, those documents are very important, and again, they’re used a lot more than the actual trust or the will. So those documents are crucial. The HIPAA release is a fairly new document in the last, I don’t know, 5, 10 years.
James Nelson:
Some of the older state plans don’t even have this language, but that again allows for family members to understand what’s going on and understanding the medical condition that a person may be in. And again, this year really highlights that with all the health problems and dealing with a pandemic. That really highlights the importance of some of these at least medical type documents that are absolutely crucial for family members to be able to act on your behalf and at least get information.
Nate Kreinbrink:
I think it’s important too, to share that information with those that it involves. If you name a sibling, as far as a medical power of attorney or something, have a conversation with them and express to them your wishes as far as how you want to carry it out or whatever. Not just naming them, and then all of a sudden they find out when they have to enact as far as how that’s going to do. Again, communicating. In usually normal years, holidays are a great time to do that because you have family members all together and you can take a little bit of time and do that. Now, obviously this year is probably going to be a little bit different with that.
Nate Kreinbrink:
But again, whether it’s just setting up a phone call or sometime communicate with these things. And we mentioned, no one wants to talk about the unfortunate and their passing or unfortunate circumstances happening. But again, we never know how long we have. And I think that when those things come up and they arise, it’s important that the people that involves who you named, durable power of attorney, medical power of attorney and all those things, they’re aware of what it is and understand what your wishes are and why you named them as far as in those specific roles.
James Nelson:
Yeah. And I think it’s also important from the emotional side of things. If the kids or a spouse are dealing with a loss, a parent passes away or their parent passes away, or a family member passes away, they’re going to be overwhelmed with emotions and dealing with just that fact. Then, if there’s not the proper documents or an estate plan is not really in place, then you burden them with all of these other moving parts. The timeline gets dragged out and they’re having to run around and find where beneficiary forms are at and all that type of stuff.
James Nelson:
So, just from the sheer fact of trying to get things in place and trying to help, whether that’s a surviving spouse or children or friends, or whoever’s going to be handling things on the backside. Try to make their life a little bit easier because they’re going to be overwhelmed, just dealing with that loss. You’d hate to burden them with additional paperwork and a much longer timeline if things aren’t in place.
Nate Kreinbrink:
So again, and just challenge everybody that if you already have something in place, maybe it’s time to pull it out, dust it off a little bit and make sure that everything’s still current. Review it to make sure that it’s accurate. If you don’t have anything in place, I would challenge you that maybe put that up on that to-do list as we enter a new year, to definitely look at things and at least get the basic things in place to take care of it, again, when those situations arise.
Nate Kreinbrink:
So again, appreciate everybody joining us for our shows all week. It’s always been a pleasure to come up here and share some information with you guys on a weekly basis, headlines, topics, planning, and all that. Did want to mention though, real quick, that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of December will be donated to The Share Our Sandwiches Program, sponsored by the Sisters of Saint Francis. James, as always, appreciate you joining me today.
James Nelson:
Absolutely. Merry Christmas to everybody.
Nate Kreinbrink:
Absolutely. Merry Christmas. Have a safe, happy holidays. Again, Nate and James, with NelsonCorp Wealth Management, bringing you this week’s financial focus. Thanks again for tuning in, and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management and Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly registered representatives, securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member of FINRA/SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.NelsonCorp.com.