Wednesday, September 30, 2009
Post by David Held
As everyone knows, the King of Pop passed away this summer. Now, the number one question that arises is who gets what part of Michael’s estate? Michael Jackson’s estate is worth billions, from the Neverland Ranch to the rights of the Beatle’s records, not to mention his children. What many people did not know was that Jackson was in debt when he passed away. It is reported that he owed Back of America over $270 million because of ridiculous spending sprees, but in the end his estate is in the green. Because of all the debt Jackson owed, “Jackson's estate is also subject to federal inheritance taxes of up to 45%, depending on what was placed in tax-limiting personal or family trusts. A trust arrangement also would keep much of the estate disbursement private and out of probate court but wouldn't prevent public scrutiny from legal challenges by creditors and other claimants.”
Since Michael had a will and planned out his estate correctly, most of the estate money will go to Katherine Jackson and his three children. Also, a portion of the money went to covering funeral costs. A Wall Street Journal article states, “In court documents released today, it's revealed that Katherine Jackson is paid $26,804 per month and the 3 kids $60,000 per month.”
Source #1, #2, #3
Tuesday, September 29, 2009
Post by Shawn Chandok
Article by Paul Sullivan
Now Even Millionaires Can See the Benefits of Budgeting
SOMEONE with $100 million has nothing to fear, not even fear itself. But not long ago, a client with such assets called and asked Bruce Bickel, her wealth adviser at PNC Wealth Management, to put her on a budget.
“She said we’ve never done this before, and we think we should,” said Mr. Bickel, managing director of private foundation management services at PNC. “It’s all relative. Their loss has put them in a fear response.”
That mindset is a direct result of the financial panic that turned one year old this week. At this time last year, Richard Fuld was center stage in the financial crisis; Ken Lewis, chief executive of Bank of America, was being hailed as Merrill Lynch’s savior; and Bernard L. Madoff was little known beyond the financial world.
None of that is true today. And even though a year has passed, wealthy investors remain cautious.
The Boston Consulting Group predicted this week that worldwide wealth would not return to 2007 precrisis levels until 2013. It also said it found that the number of millionaires was down 18 percent and that, across the board, clients of wealth management firms had lost trust in their advisers.
Click here to read more!!
Monday, September 28, 2009
Post by David Held
Sophisticated Estate Planning Strategies
by Rande Spiegelman, CPA, CFP®, Vice President of Financial Planning, Schwab Center for Financial Research
So far we've covered the basics of estate planning as well as estate tax repeal and the role of lifetime gifting in reducing your taxable estate. Here, we highlight some advanced strategies people can use to accomplish their gift and estate planning goals in a tax-efficient way. Of course, these are but a few of the many estate planning strategies available.
A few things to keep in mind:
Don't be seduced by intriguing strategies or what someone else did with their estate plan. Your estate plan should begin and end with your personal goals and desires, both tax and non-tax—after all, it’s your estate.
Sit down with a qualified estate planner who’s up to date on the latest statutory, regulatory and judicial developments. You may even want to combine the strengths of a qualified CPA (to map the most tax-efficient strategy) and an experienced estate planning attorney (to draft the legal documents and provide additional insights).
Beware of strategies that seem too good to be true, such as excessive valuation discounts, promises of tax-free offshore deals, and the like.
Click HERE to read on..
By: Jessie Bruyn
Every person is different and carries different values during their life, so therefore there is no set formula for a will per say. However, there are certain topics that should be included and touched upon in the creation of every will.
The first, and arguably the most important, are the funeral expenses and payments of any pre-death debts. Money should be allocated for both of these things by the creator of the will. If debts exceed assets, state law will prescribe the order in which debts are paid. You also have the opportunity to forgive debts owed to you in your will. The biggest advice given by lawyers in creating wills is to think of all the "what ifs".
The next category in creating a will is the gifts of personal property. This is where you can give assets to specified individuals (family, friends, or charitable donations). If you have several children or want to distribute certain assets evenly you give the property to "the class" this would include all the people (for example all children) and the assets would be divided evenly.
If you have custody or rights over individuals, for example your children. Detailed instructions of who the care goes to in the event of each possible circumstance are provided. You must also include special instructions for the gift and inheritance of minors (for example to wait until a certain age and how much is allocated to the specified caregiver and what for). Most importantly, make sure the will is signed and dated and kept in a safe place.
The writing of a will is very complicated and should be done with assistance of a lawyer and in conjoint with your spouse if assets are shared. It should not be taken lightly and should be updated frequently in the best interest of you and your loved ones.
Tuesday, September 22, 2009
By Nicholas Vanikiotis
The biggest mistake anyone can make in regards to estate planning is putting it off. It is one of the most important things you can do with your money and needs to be given the proper amount of attention and consideration. The cost of hiring an attorney or a financial advisor is a small cost to pay, a few thousand dollars depending on how large your estate is, to properly allocate your finances in case you die. People put off estate planning because no one wants to plan for their death. It’s a dark subject and people simply do not want to think about it or even talk about it.
Another Mistake people make when planning their estate is not asking enough questions. When you walk out of the attorney’s office you should be entirely clear on where your money will after you die, after all it is your money. Also, a discussion should occur with your heirs so it is made clear where to your family and friends as to how all of the assets will be allocated.
A third mistake is only putting a will or trust in your plan. An estate plan is a package where all of your assets are grouped together so they can be dispersed to the appropriate people in a timely manner upon death.
By Jessie Bruyn
A trust is an agreement between two people in which one person manages the property and assets of another person - the beneficiary. There can also exist a living trust in which the specified person manages the assets of the other person in the event that they are disabled and cannot manage their property by themselves. When the person dies, the trustee becomes responsible for the assets and allocates them to desired individuals.
A will, on the other hand, is a legal tool used only after the individual is deceased. The only say in the division of assets with a will is the creator, whereas with a trust the trustees have access and rights as well. When creating a will, the person appoints an Executor to handle the business and distribute the assets. Wills usually require Probate, or court involvement. However, having a responsible Executor helps eliminate the court's involvement in distribution after the death of a loved one.
Initially, a will is less expensive but can require more expenses after the death. On the otherhand, a trust is more expensive at first, but requires less expenses after death.
By: Jessica Bruyn
Now that our youngsters are back in school, we can turn our attention to some of our other goals. When was the last time you reviewed your estate planning strategy? Did you know education savings can be a part of your estate plan?
First, let's review how estate laws affect your assets. After that, we'll show you how the special rules that apply to 529 education savings plans can help you deal with the general estate tax laws.
To simplify and summarize the estate tax, most assets you own when you die constitute your estate. If the value of your estate exceeds a specific amount ($3.5 million in 2009), then you'll be subject to federal estate tax. If you reduce the size of your estate, you can reduce the amount of estate tax owed.
Monday, September 21, 2009
Probate is how an estate is distributed in court or the legal process of administering a deceased persons estate as per their will. This process is usually only gone through when there are significant assets to be transferred. This does not include life insurance or retirement benefits which have a set beneficiary. A living trust is not subject to probate.
The court appoints an executor who will be in charge of managing the estate. When there is no will then the court names an administrator. Either of these hold a fiduciary duty to the family and the court to act on another's (the deceased) behalf. AS an executor you do get paid for your service, depending on the size of the estate.The will can be contested and this begins another process to resolve it.
Posted by Chris Keeler
Saturday, September 19, 2009
Posted By: Laura Reginelli
If you happened to die tomorrow, how would your family take care of themselves financially? It is not a pleasant thought to think of, but not thinking about it can cause detrimental consequences. September is Life Insurance Awareness Month. Now is the time to make sure your family is protected from the worst case scenario.
Click here to read more.
By: Laura Reginelli
Losing a loved one is emotionally devastating. On top of that, families then have to endure the financial burden of losing someone as well. According to State Farm, life insurance “is protection against financial loss resulting from death. It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.”
Although the subject of death is a touchy one, it is important to make sure that your family will be covered if you are to pass away. On top of losing someone that you deeply care about you could also possibly lose a substantial source of income on top it that. With that being said, it makes sense to purchase life insurance before any medical problems occur and when you are healthy. Generally the older one becomes, the more expensive his or her policy will be due to the increased chances of death or medical problems. There are two specific types of life insurance offered, term and permanent. With term insurance you gain coverage for a set amount of time, pay a lower rate in the short run and find it easier to comprehend. However, with permanent life insurance the protection spans a lifetime, has higher premiums but in turn can help you build up equity. Whichever you decide is best, it is important to make sure that both you and your family are insured for the uncertainty of the future.
No matter where you live, the federal taxes will be about the same. But you'd be amazed at how much your state and local tax burden may vary. And if you itemize deductions, how much you pay -- and deduct -- in local property taxes could affect the bottom line of your federal return, too.
People planning to retire "often use the presence or absence of a state income tax as a litmus test for a retirement destination," says Tom Wetzel, president of the Retirement Living Information Center. "But higher sales and property taxes can more than offset the lack of a state income tax."
Seven states -- Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming -- have no state income tax. Two states -- New Hampshire and Tennessee -- tax only dividend and interest income that exceeds certain limits. But many of the remaining 41 states (and the District of Columbia) that impose an income tax offer generous incentives for retirees. If you qualify, moving to one of these retiree-friendly areas could be cheaper than relocating to a state with no income tax.
A lot of the estate planning process focuses on reducing or trying to eliminate taxes. The government imposes a tax known as the Unified Gift and Estate Tax which puts a tax on the transfer of your property to others both during your lifetime and when you pass away. But not everyone will have to pay federal estate taxes. According to estateplanninglinks.com, “If your estate falls under the government exemption your trustee/executor does not have to file an estate tax return (Form 706) and pay the required tax within 9 months of your death.” It’s important to know what property will be included in your estate for federal estate tax purposes. The estate includes all property owned by the decedent at the time of death: investments, cash, real estate, vehicles, personal property, life insurance proceeds from policies owned by the decedent within three years of death, life insurance paid to the estate, retirement assets and business interests.
There are some estate tax exemptions that can be helpful. The first is personal exemption, The "personal estate tax exemption" allows a certain amount (or all) of a deceased person's estate to transfer free of the estate tax. Next, there is a marital deduction. According to findlaw.com. “A deceased person's estate can pass tax free to a surviving spouse, as long as the surviving spouse is a U.S. citizen and his or her interest in the estate is not a nondeductible terminable interest. A nondeductible terminable interest is an interest in the property that is held by someone other than the surviving spouse.” And lastly there are other deductions which include; against the gross estate include certain administrative expenses, funeral expenses, claims against the estate, certain taxes and other indebtedness and charitable bequests.
With everything that has to do with estate planning, you should always consult a professional. According to Forster, “Should you realize that your assets do fall under the category of taxable, you should start looking for an estate planning tax consultant. There are a lot of ways you can protect your possessions from taxation laws. Most of these methods include different types of trusts that will give you estate-tax exemption. Living trusts also allows you the freedom to control your possessions while living, and care for your spouse and/or heirs without having to go through months of probate.” It is best to have an estate planning adviser who can regularly update your trusts and will. He can also monitor any amendments in estate-tax laws and make any necessary adjustments. This way, your beneficiaries will be protected from any new laws that may prevent them from receiving your bequests.
Tuesday, September 15, 2009
Posted by: Jessie Bruyn
The looting of estate assets, also known as Involuntary Redistribution of Assets (IRA), can occur through the use of various probate instruments - wills, trusts, guardianships, powers of attorney - and with the actual acts configured in different ways. Guardianships or powers of attorney can provide for estate looting while a person is alive, but asset diversion can be perpetrated posthumously via wills or trusts. Whether these acts are instigated by greedy lawyers, disgruntled family members or wannabe heirs (or often a combination), the sad reality is that death doesn’t necessarily bring the closure one might expect. Death, even with the most meticulous of estate plans, in no way ensures the honoring of a decedent’s wishes or heirs' avoidance of IRA.
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Life Insurance is one of the many components when planning your estate. It plays a slightly different role than the other assets in your estate. It is intended to make sure your estate has value at the time of your death. Thus, it is important to understand the different options available and to make sure it is included and given the proper attention when planning your estate.
The two main types of life insurance are whole life and term life insurance. The main difference is that whole life is permanent while term life is not. Term life insurance is a short-term option, which is usually taken by people who are younger since it is inexpensive relative to whole life insurance. Term insurance is taken out for a specific purpose and only last for five to ten years. This may be a good option for a young doctor going to work overseas in a hostile area where death is more likely than at home. Another aspect of term insurance is the premiums increase over time.
Whole Life is the other option of insurance. This one is a lifetime commitment and attached by a savings component, which you have the opportunity to invest in different investment vehicles of your choosing. There are variations of whole life insurance that give you more freedom regarding the terms of the policy and how the savings component is handled.
Monday, September 14, 2009
In these economic times more and more people are worried about their money and what will happen to it. There are a few options for you to explore. One of these is to visit a financial planner or specialized estate planner. Another option is to go to a seminar to learn what you can or should be doing.
The seminars have lawyers and professional planners who speak and answer your questions. They speak on topics from your estate to long term care (and LTC Insurance). Many seminars are free, while some are at a cost. It is a smart idea to attend one to get some basic information to mvoe you on the right track, but visiting a planner is still a must to ensure your estate and needs are met in the most efficient manner.
Posted by Chris Keeler
Probate Planning To Minimize Estate Costs
Mon, Sep 14, 2009 12:00 AM EST
What is Probate?
When an individual dies intestate, the person's estate is divided among that person's relatives, and where there are no relatives, the entire estate falls to the government. Where there is a Will, all authority and property rights are governed by that Will and it takes effect upon the moment of death.
In principle, a properly drawn Will requires no further act to justify its legal existence. However, as a result of the often secretive nature of Wills, and the fact that the deceased is no longer available to verify the terms of his or her Will, third parties, such as financial institutions and land registry offices, will often require a higher level of certainty when dealing with the property of a deceased person. This certainty is provided through a process traditionally referred to as "probate", now called a "certificate of appointment of estate trustee". The process involves submitting the Will to the courts for verification. If there is no Will, the courts must appoint an individual called an "estate trustee without a will". With applications to the courts, both with or without a Will, it is necessary to pay the required court fees commonly known as "probate fees". With the exception of assets that were held jointly with a right of survivorship, court fees are calculated on the value of all personal property owned by a deceased anywhere in the world and all real property situated within the province. The basis for calculating the fees varies from province to province. In Ontario, the rate is calculated as $5 per $1000 of the first $50,000 of the estate and $15 per 1000 for the value of an estate over $50,000. It works out to approximately 1.5 percent.
Posted by Chris Keeler
Sunday, September 13, 2009
- Referrals from friends
- Check with banks
- Look for names that repeat
- Contact your state bar association
- Interview candidates
According to About.com, “When it comes to estate planning, a fiduciary is a person or institutions given the power to act on your behalf if you become disabled and on behalf of your beneficiaries after you die. This includes personal representatives, successor trustees, health care agents, attorneys in fact, and guardians.” Choosing a fiduciary is similar to choosing an estate planner because you want to pick someone that you can trust, is honest, and loyal.
Saturday, September 12, 2009
Posted By: Laura Reginelli
DYING without a will can be a nightmare for those left behind.
If you have young children, it can be much worse if you have not stated who you wish to be their guardian in the event that both you and your partner die.
A will is a must even if you are young and invincible with not many assets, otherwise your mother-in-law may become the new owner of your stuff.
Scott Whitla, partner at McCullough Robertson Lawyers in Brisbane, says even though Michael Jackson's untimely exit sparked an outpouring of grief from around the world, his estimated $US1 billion ($1.2 billion) estate is posing a real legal thriller.
Click here to read full article.
By: Laura Reginelli
Nowadays making a will seems like common sense, right? False. Only around half the population creates one prior to their death. So what does this mean for you? Although many go without them, start planning now to ensure that your estate is handled the way you intended. It’s even possible to create your own will if you choose to.
A will has several different, yet equally important parts. If you were to have small children at the time of your death, a will would designate who would be the legal guardian. Wills also specify how ones’ assets will be dispersed after passing away. By creating your own will you will be able to appoint executors who will follow out the wishes stated in your will.
An individual who passes away without making a will is known as an intestate. When one is an intestate, the reality of your estate being divided up may not exactly follow your intentions. It is possible that if you have a spouse that not all of your property will go directly to him or her. Instead, this is limited up to a certain amount.
In order to avoid becoming an intestate, make a will by either consulting a lawyer, solicitor or even yourself. From there you must include general information yourself and where you live, names of family members, spouses and beneficiaries, a list of your assets, names of guardians and executors and signatures from both yourself and witnesses.
All in all, it pays to plan ahead for the future of your estate and your assets.
Tuesday, September 8, 2009
By: Jessie Bruyn
With today's economy in distress, it is becoming more and more important for us to think about our future and the future of our loved ones. No one wants to leave their friends and family with mountains of debt or unfinished business to take care of in addition to grieving for their loss. Many people think that estate planning is only for rich individuals. But as Heidi Brown comments in her recent Forbes article, it doesn't matter your age or how much money you h ave, creating a will cuts down on confusion and chaos after your passing.
There are currently new federal laws being under examination for change based on regulations applied to estate taxes which will be repealed in 2010. Roy Adams, professor at Northwestern University School of Law says "What happens in the next few months could cause some of the biggest changes we've seen in the trusts and estates field."
Often times people avoid creating wills and other estate planning documents (such as trusts and long-term care agreements) because of the sensitive questions and concerns that arise from related discussions. But it is especially important to get past the uncomfortable feelings to make this less stressful and run smoothly when a death does occur. Having a well planned will helps eliminate further stress caused after a death of a loved one and will be greatly appreciated by those you left behind.
By Nicholas Vanikiotis
Let’s face it, pretty much everyone and everything today is online, whether it is banking information or social networking sites. Who will control such sites and gain access to them when you pass away? This is a question people should ask themselves, especially when we are living in a digital age. Putting account IDs and passwords in either a safety deposit box or a virtual deposit box is not a bad idea.
Imagine if you did not have any of your accounts or passwords stored for your beneficiaries. This would make it very tough for them to gain access to money and any other delicate information. In most cases they will have to get a court order that will cost your beneficiaries time, money, and the hassle of going through the process.
There are many online deposit options available. For example, Wells Fargo offers an online protection service of all your financial documents, which can include your will and any other estate plan documents you may have. They are also not very expensive at all. For example, keepyousafe.com only costs $50 per year for up to 5 gigabytes of storage. Thus, placing your account information in a secure place is a valuable investment and will ensure that your beneficiaries can gain access to your accounts after you pass away.
BY: Jessie Bruyn
As many of us watch our portfolios dwindle and bills add up, it's tempting to put off planning for the future. Experts caution, though, that everyone--no matter their age or family status--needs to sit down and plan their estate.
Whether you are wealthy or debt-laden, you should tell loved ones and put into writing how you want your estate to be handled, says Debbie Whitlock, co-owner of Sound Financial Partners, a financial-services practice in Seattle.
She says women often assume that such after-death planning is something only rich people need to do. Perhaps it's the word "estate." That's wrong.
"It doesn't matter how much money is in your bank account" or what age you are, says Whitlock, who works mostly with female clients. "Everyone needs to do estate planning. Without it there's a lot of confusion and chaos."
Estate planning isn't just about distributing cash. If you don't have a will, your children could end up guardians of the state. Heirs could end up liable for your debts. Loved ones will be saddled with your funeral costs with no hope of reimbursement until after a lengthy court process that can take years.
by nicholas Vanikiotis
WITH THE MARKETS in , planning for the here and now seems daunting enough; planning for the after-I-die is even less appealing. Nobody likes talking about death, telling relatives what they’re going to inherit or wading into jargon like terminable interest property. But if you haven’t figured out where you ultimately want your investments and property to go, you won’t control what happens to your savings when you die—and your family will be forced to make hard decisions without your guidance. The stretch between Thanksgiving and New Year’s is a great time for reflection and resolution. Here’s how to get on the ball.
First, take stock of everything you own: Your estate includes not just your personal belongings and investments but also your home, life insurance and retirement savings plan assets, as well as your share of any jointly owned property. You must not only decide where you want each piece to go after you die but also inform your loved ones. If this sounds difficult, start by literally cataloging how you have piled up your most important possessions; connect the work you’ve done with the things in your life that hold the most meaning. Using your life story as a narrative, write down what you’ve accumulated and develop a list of your most significant purchases and investments. Then when you divide up your estate, you will be working from a sense of pride in your accomplishments, not anxiety about death—and your heirs may be fascinated by the details that emerge.
Monday, September 7, 2009
By Chris Keeler
There are several elements in the estate plan. A few of the core pieces include you will, power of attorney, health care proxy and a trust. These elements help to protect you and your family in the event of sickness or death. You will have a handle on your assets and how they are to be distributed or maintained. When planning you must keep in mind tax laws, both state and federal. There are many ways to find tax favorable options in planning. Having a well thought out plan makes it easier on family and friends in the event of death and can avoid long legal issues to settle a non planned estate through probate. When going into plan your estate have your goals and objectives in mind as this makes it easier for an attorney to help you plan and draw up your estate plan.
IT is important for your plan to be in place to help both your children and their children. In the event of sickness it can put a strain on family who may have to take care of you. A plan in place can avoid this. If you are taking care of an elderly parent make sure to keep your finances in check first before worrying about the parent. Most times it takes a death or illness for people to realize the importance of planning. The earlier the better.
By Chris Keeler
Wealthy people who spend their careers building complex portfolios, with investments and assets all over the world, often overlook one key area of financial planning: how their estate will be passed on when they die.
Advisers say that no matter how closely engaged some investors are in their financial affairs during their lifetime, many are woefully unprepared when it comes to structuring their estate for their death. This partly reflects a reluctance to face the reality of death, but also time-pressed entrepreneurs and business owners often find the process of making a will a burden they can do without.
According to PriceWaterhouseCoopers there are several elements when it comes to estate and gift tax planning—“including gifting policies, the amount of property involved, resident or domicile status, the availability of deductions, and exclusions and credits. It’s important to understand US federal rules in this area; proper planning should also include a review of the rules in the state of residence, as those rules may also influence planning.” With estate planning you can determine:
- How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
- When and under what circumstances it makes sense to distribute your assets during your lifetime.
- How and to whom your assets will be distributed after your death.
- How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
It is extremely important to plan ahead so that there is no question or doubt as to the future of your assets and estate. It doesn’t matter how much money you have or how old you are, everyone needs to plan their estate. If you’re married you need to sit down with your spouse and discuss your wills together and how you want distribute your assets. Although planning for your future can be somewhat scary and depressing you must take matters into your own hands, not only for yourself but for your loved ones.
It is estimated that as much as 10 percent of the elderly population live on wages at or less than the national poverty line -- in 2009, $10,830 for a single person; $14,570 for two people for 2009. Even those who are living above the poverty line may not have the financial resources to pay for much needed care, especially if they need long-term care in an assisted living community or nursing home. This leaves the financial burden falling to their families, who also may not have the means to cover all of the costs.
One of the ways families can help ease any future financial stress is by sitting down with their loved ones and creating a comprehensive estate plan. This plan can include setting aside resources to pay for not only any possible long-term care needs, but also the day-to-day expenses loved ones may need in their golden years.
Click here to read more
Friday, September 4, 2009
Economists are famed for the phrase “on the other hand,” and the sobriquet fits in looking at the most recent report on the Consumer Price Index.
While Friday’s report on the CPI was benign -- no change in the overall price index and a modest change in the “core” index -- it nonetheless could be a downer to millions of people collecting Social Security payments
Under provisions of a 1975 law, Social Security benefits are adjusted each year based on the year-to-year change of the Consumer Price Index for Urban Wage Earners (known as CPI-W). For every year since the law was enacted, benefits have been adjusted upward each January, with a 5.8% boost at the beginning of this year, the largest since 1982.
Click here for full article.
Posted By: Laura Reginelli
No one obviously likes to think about their death; however, sometimes it is necessary to plan ahead for the day that you will no longer be around. According to www.bloomberg.com , estate planning is “the preparation of a plan to carry out an individual's wishes as to the administration and disposition of his/her property before or after his/her death.” With proper planning, your wishes about how your assets should be divided up will be followed properly when the time comes.
Some helpful tips to tackle estate planning include:
· Go through and create a list of all your assets. Then estimate a monetary value associated with each of the assets.
· Plan accordingly for how any sort of debt you may have had in your life will be taken care of in the case of an event where you would die.
· Create a will and determine how your assets will be divided up. This will include naming a guardian for your possible children as well as an executor who will be given the duty to carry out the will.
· Purchase life insurance as a safety blanket for the future.
· Make sure to update this information if need be.