Family Financial Freedom Notebook

The following article is written by America's Personal Family Lawyer, Alexis Martin Neely.

Lots of people are wondering, what do I do know that the economy appears to be melting down?

First and foremost, don’t panic. You are not going to end up standing in line for the soup kitchen. Not if you’re reading this right now.

What you are going to do is get more aware of your family finances, learn to live within your means and generally gain awareness you didn’t have before.

Then, you’re going to look back on this “financial crisis” as the best thing that ever happened to us.

One of the most important things you can do is to establish a family freedom notebook. This is a notebook that you use to keep track of everything related to the financial well-being of your family.

At a minimum, here’s what you put in it:

1. Monthly bank statements for every bank account you have, including any custodial accounts in your kids’ names (keep 12 months worth of statements in the notebook and then scan and archive older statements).

2. Monthly brokerage account statements for every brokerage account you have, including college savings accounts, like 529s (keep 12 months worth of statements in the notebook and then scan and archive older statements).

3. Monthly retirement account statements for each of your retirement accounts (keep 12 months worth of statements in the notebook and then scan and archive older statements).

4. Monthly insurance policy statements for each of your insurance policies ((keep 12 months worth of statements in the notebook and then scan and archive older statements).

5. Copies of your insurance policies (keep these forever).

6. Documents related to any other assets owned, such as the pink slip for your car or lease papers if you are leasing your car.

7. Monthly mortgage statements (keep 12 months worth of statements in the notebook and then scan and archive older statements).

8. Monthly credit card statements (keep 12 months worth of statements in the notebook and then scan and archive older statements). Also, in this section, keep a list of all of your credit card numbers, along with their security codes and the 800# on the back of the card. This list will be a lifesaver if you lose your wallet.

9. Any other loan statements or statements evidencing liabilities you may have, such as student loans, personal loans from parents or car loans.

10. Family Profit and Loss Statement: This is a monthly updated ledger of all income that comes into your family and all expenses that go out.

11. Family Balance Sheet: Updated monthly, this will list out the current values as of month’s end for each of your accounts, including liabilities.

12. Estate Planning Section: Your whole estate plan would be too big to keep in your Family Freedom notebook, but you can keep a CD or jump drive with your estate planning documents on it and any documents related to the transfer of assets into your Living Trust. Plus, keep your long-term guardian nominations and your Kids Protection Plan, medical powers of attorney for your kids, and your own health care directives and powers of attorney in this section as they will need to be accessed immediately if anything happens to you.

13. Other personal legal documents: if you own property with anyone else, have entered into any business arrangements, or have personal legal agreements, keep those in this section.

14. Pay stubs: keep a year’s worth of the part of your pay stub that shows how much you got paid, how much went to taxes and how many hours you worked. I can’t tell you how many non-breadwinner spouses have told me they don’t know how much money the breadwinner spouse makes. Bad idea. Make sure you know and have the records.

15. Social Security Statement: You know that green and white letter you get in the mail each year that says how much you’ve paid into social security and how much you can expect to get, keep it here. I can’t promise you’ll actually get this as our system may not have the money to fund it, but you can at least keep the record that shows you paid into the system.

Obviously, this notebook contains very sensitive information, so consider keeping it in a small fireproof safe in your house. Just make sure the safe is not one that can be lifted up and carried away by a thief. Make sure it’s the kind that anchors into the ground or the wall.

Please note: this is not a household notebook or a Family Emergency notebook. That’s a whole different animal and something that SHOULD be kept accessible to other family members, babysitters and household helpers.

SOURCE: Family Wealth Planning Institute

New FDIC Rules for Inter Vivos Trust Accounts

On September 26, 2008, the FDIC issued interim final regulations entitled Deposit Insurance Regulations; Living Trust Accounts. The interim rules amend 12 CFR 330 and took effective immediately, pending a sixty day comment period before finalization.

Here is a summary of the new regulations:

The FDIC is adopting an interim rule to simplify and modernize its deposit insurance rules for revocable trust accounts. The FDIC's main goal in implementing these revisions is to make the rules easier to understand and apply, without decreasing coverage currently available for revocable trust account owners. The FDIC believes that the interim rule will result in faster deposit insurance determinations after depository institution closings and will help improve public confidence in the banking system. The interim rule eliminates the concept of qualifying beneficiaries. Also, for account owners with revocable trust accounts totaling no more than $500,000, coverage will be determined without regard to the beneficial interest of each
beneficiary in the trust.

Under the new rules, a trust account owner with up to five different beneficiaries named in all his or her revocable trust accounts at one FDIC-insured institution will be insured up to $100,000 per beneficiary. Revocable trust account owners with more than $500,000 and more than five different beneficiaries named in the trust(s) will be insured for the greater of either: $500,000 or the aggregate amount of all the beneficiaries' interests in the trust(s), limited to $100,000 per beneficiary.

SOURCE: Wills, Trusts & Estates Prof Blog

Make sure your money is 100% protected! FOR MORE DETAILED INFORMATION get a free special report on "If Your Bank Fails, Will You Get Your Money Back? What You Need to Know About FDIC Coverage." Click Here.

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***Note: After this post was originally created, the following rules came out:

Deposit Insurance Coverage Changes to FDIC Deposit Insurance Rules for Revocable Trust Accounts

FIL-99-2008 Revised as of October 8, 2008

Summary:

The FDIC has adopted an interim regulation simplifying the rules for insuring revocable trust accounts - commonly known as payable-on-death accounts and living trust accounts. The new rules are easier to understand and apply, and provide at least as much coverage as the former rules for revocable trust accounts. The revised rules take effect today and apply to all existing and future revocable trust accounts at FDIC-insured institutions. The FDIC welcomes comments on the interim rule for 60 days after its publication in the Federal Register.

Highlights: Under the interim rule: The concept of "qualifying" beneficiaries based on certain family relationships has been eliminated. For each account owner with combined revocable trust deposit balances of $1.25 million or less at a single bank, the maximum coverage will be determined by multiplying the number of different beneficiaries by $250,000. (This will apply to the vast majority of revocable trust accounts.) For each account owner with combined revocable trust deposit balances of more than $1.25 million and more than five named beneficiaries, coverage is the greater of $1.25 million or, as before, the aggregate of all beneficiaries' proportional interests in the trust deposits, limited to $250,000 per beneficiary. In determining coverage for living trust accounts, a life estate interest is valued at $250,000. Irrevocable trusts that spring from a revocable trust upon the death of the revocable trust owner will continue to be insured under the revocable trust rules. Continuation of FIL-99-2008 Distribution: All FDIC-Insured Institutions Suggested Routing: Chief Executive Office Head of Deposit & Branch Operations Compliance Officer Training Officer Related Topics: FDIC Deposit Insurance Regulations 12 C.F.R. Part 330 Attachment: Draft Federal Register Notice Contact: FDIC Call Center at 1-877-275-3342 FIL-99-2008 - PDF (PDF Help) Printable Format: Note: FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2008/index.html. To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html. Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562- 2200).

Financial Institution Letters FIL-99-2008 Revised as of October 8, 2008

Deposit Insurance Coverage Changes to FDIC Deposit Insurance Rules for Revocable Trust Accounts The FDIC Board of Directors has issued an interim rule to simplify the coverage rules on revocable trust accounts without decreasing coverage. The FDIC believes the interim rule will make the regulation easier for depositors and bankers to understand and apply. It will also result in more rapid deposit insurance determinations following bank closings and will help strengthen public confidence in the nation's banking system. Background Two types of revocable trust accounts are insured under the FDIC's coverage rules: informal trust accounts and formal trust accounts. Informal trust accounts consist of a signature card on which the owner designates the names of beneficiaries to whom the funds in the account will pass upon the owner's death. These are the most common type of revocable trust accounts and generally are referred to as "payable-on-death" (POD) accounts. The other type of revocable trust accounts are accounts established in connection with formal revocable trusts. Formal revocable trusts are created for estate planning purposes and are referred to as living or family trusts. The FDIC's former rules stated that all revocable trust accounts (both POD accounts and living trust accounts) were insured up to $250,000 for the interest of each "qualifying beneficiary" designated by the owner of the account. Qualifying beneficiaries were defined as the owner's spouse, children, grandchildren, parents, and siblings. Summary of the Interim Rule The interim rule eliminates the concept of qualifying beneficiaries. The relationship between the trust owner and the beneficiaries no longer affects deposit insurance coverage. Under the interim rule, coverage is based on the existence of any beneficiary named in the revocable trust, as long as the beneficiary is an individual, a charity, or another nonprofit organization. For revocable trust account owners with balances of $1.25 million or less in one FDIC- insured institution, the interim rule eliminates the former requirement that based coverage on the proportional interest of each beneficiary in the trust deposit. For each trust owner with combined revocable trust account deposits of $1.25 million or less at a single bank, the maximum coverage will be determined by multiplying the number of different beneficiaries by $250,000. (This will apply to the vast majority of revocable trust account owners.) Note that for revocable trust deposits that are jointly owned, the $1.25 million threshold would apply to each co-owner's share of all revocable trust deposits at one FDIC-insured bank. For revocable trust accounts where the owner has more than $1.25 million in one FDIC- insured institution and has named more than five different beneficiaries in the revocable trust(s), the maximum coverage is the greater of either $1.25 million or the aggregate amount of all the beneficiaries' proportional interests in the revocable trust(s), limited to $250,000 per beneficiary. (The impact of the interim rule results in no depositor being insured for an amount less than he or she would have been entitled to under the former revocable trust account rules). In addition, the FDIC reminds insured institutions that the rules for coverage of informal revocable trust (payable on death) accounts require that the names of all trust beneficiaries be disclosed in the institution's account records. The FDIC also encourages bank customers to make certain that the names of living trust beneficiaries are included in the bank's account records. The attached draft Federal Register notice provides details on the rule changes. Once the interim rule is published in the Federal Register, the FDIC will distribute a copy of that document in a follow-up FIL and highlight the due date for comments. Sandra L. Thompson Director Division of Supervision and Consumer Protection

Your Parents, FDIC and Keeping Your Money Safe

Timely discussion on how to protect your money held within financial institutions. Can you shield more than $100,000 via FDIC protection? Absolutely!

Don't fail to take advantage of these valuable planning techniques!

Squidoo Lens - Elder Law

Check out my Squidoo Lens on Elder Law. It has many links and is generally a portal I've created for you to access information related to issues you may be facing. Please sign the guestbook and leave a suggestion so that I may make it better!

Thank you!

Where Can I Check Out My Financial Adviser?

Visit the Securities and Exchange Commission website to make sure that your financial adviser (or a potential advisor that you're interviewing) is on the "straight and narrow".

You can download the adviser's "form ADV" to find out if he or she has ever been disciplined by the SEC or another ageny, what type of misconduct was found, and the resolution. There is also information on the adviser's education and business. For Ohio-specific information, visit the Ohio Department of Commerce - Securities Division.

Be aware, however, that I am told only advisers that manage more than $25 million in assets must register with the S.E.C. This means that many advisers may not show up on this webpage, which does not necessarily mean that adviser is "good" or "bad".

I've had the good fortune of creating some good working relationships with advisers with many varied backgrounds. I find that they are often a valuable, even indispensable, part of creating the best plans for my clients. For more information about retirement planning with your IRA or 401(k), feel free to contact me today.

How Can I Save On My Energy Bill?

Visit the Department of Energy for money saving tips to learn how to keep dollar bills from slipping away (under the door, through the windows, and down the drain).

This site features an "energy audit" and other tools which show you how to do things such as check insulation, plumbing, or even to compare gas mileage in different models of cars.

Another section of this site educates on which tax credits are available for energy-conscious consumers. For example, installing a central air conditioning system can give you a $300 tax credit!