Prosper Newsletter: January 2008 > Financial
You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.
Wills and Trusts
Estate planning is one thing you do not want to overlook this year. Having a proper estate plan is vital; and if you are lacking this essential plan, make estate planning one of your top resolutions for the new year.
People often question whether they need a will, a trust, or both. They debate which is best. Trusts can save your inheritors a great deal of money, as well as time and trouble. Trusts have become a very popular way to fulfill not only the terms of a will, but also the terms of a recurring philanthropic donation of endowment. Many estate attorneys feel that trusts have distinct advantages over wills when it comes to bestowing ones wealth, assets, and money to a specific person or organization. There are also many ways for wills and trusts to exist side by side in estate planning; however, trusts can function independently of one's will, or as a supplemental part of an existing will.
One advantage that trusts have over wills (when it comes to transferring money, assets, or wealth) is that a trust system can be arranged to bypass any type of court jurisdiction, which wills often must endure. Any property, wealth, or other type of asset bequeathed in a will automatically enters the jurisdiction of a probate court. Subsequently, all assets can become subject to appeal, trial, or redistribution. So once the terms of a will enter into probate, the distribution of any funds, wealth, or assets can be a lengthy process, which can often be different from the benefactor's wishes.
A legal trust is often a more secure way to ensure that funds, assets, property, or wealth is distributed exactly the way it was intended (and more quickly). Another distinct advantage that trusts have over wills is that through a carefully planned trust, a benefactor can avoid some of the more costly estate taxes. By bequeathing property, assets, or wealth directly to an individual or company through a traditional will, the tax burden can reach almost fifty percent of the inheritance. Assets distributed through a trust have a higher amount of tax exemption (currently set at two million dollars and scheduled to increase over the next three years).
Trusts can also help establish some measure of control of donated assets. This can be particular helpful if the recipient of one's wealth happens to be a minor or not capable of taking care of the funds without help and supervision. Placing the amount in a legal trust, with stipulations of providing for support, education, and maintenance, can help ensure that your funds are used in the manner for which they were intended. Trusts can also be set up that perpetuate charitable donations by arranging for the interest to be drawn on the donation to sustain your gift over a long period of time. Trusts can be set up with almost any attorney; although, an experienced estate planning attorney can often save inheritors time, trouble, and money.
Note: Choose an estate planner that is familiar with the local interest and tax rates, trust funds, and traditional wills. Plan your estate early in the year. You don't want to be unprepared.
Debt Free in Only 1.5 Years!!
The program helped me to be able to focus where my income has been spent plus I have been able to set reachable goals. The binders have information that I will be able to utilize for a long time. I've already been able to reduce some of my expenses on a monthly basis through research of insurances. Through an understanding of the accelerator margin I should be debt free in 1.5 years. The information regarding taxes has also been helpful in capturing more of my expenses as business expenditures.
Lynn F.
Goals and Resolutions
We have all habitually experienced the typical New Year's routine of making resolutions that we work on for a while before we fall back into our comfort zones and make many lame excuses why we just could not continue to follow through and achieve our goals. So how do we change? What are the keys to making lasting changes and establishing a new comfort zone?
The first step is to decide what your overriding purpose in life is, and state it clearly on paper. This step is crucial-make sure you write it down! Perform some brutal self-assessment: is your current behavior, in all of the major aspects of your life, consistent with your major purpose? If not, what specific changes need to be made to modify the situation for the better?
Do you take full responsibility for your life's outcomes? Or, do you find yourself regularly engaged in the blame game or the excuse game? Have you accepted the reality that your present situation is the sum total of all your decisions? In other words, based upon both your conscious choices and subconscious decisions, you are where you are because that is where you chose to be!
For better or worse, our goals, our actions, and our words are preceded by thoughts. As Earl Nightingale discovered, the real secret of success (or lack thereof) is simply that "We become what we think about." Or more especially, what we think about the most. The quality of our lives lies in the quality of our thoughts and the degree to which we focus those thoughts on worthy objectives.
The next step is to list those areas of your life that are most critical to your present happiness and your future well-being. Brainstorm and write down everything you can think of-do not hold anything back or eliminate anything. Then, prioritize your list.
At this stage, you may find yourself eliminating a few things or placing them quite low on the list. Now pick your top four or five life areas and formulate the goals, steps, and tasks appropriate to making some meaningful changes in your life. Decide how you will measure the fulfillment of these goals. Keep in mind the essential elements of a goal, such as it being specific, measureable, and attainable.
If you are married, share your goals with your spouse-this will bring you closer together, increase your commitment, and grant you some good support to continue when things get rough. Write your action plans and keep them where you can read them aloud every day. As positive changes occur, your confidence will increase and your new habits will begin to become permanent-you have taken the first steps to a new, more fulfilling and satisfying life. Good luck with your New Year's goals and resolutions!
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