Mission Statement

There may come a time when you see that your parents are losing the ability to manage their affairs. Life crises like the death of a spouse are warning signs, as are unopened bills, old food in the kitchen and a messy house that once was spotless. Stepping in to help raises a host of issues like privacy and independence. If the adult child does not act tactfully, the parents can feel defensive and even suspicious. For those whose parents grew up during the Great Depression, open communication is particularly difficult since secrecy about money is common in this generation.

If privacy issues are paramount in your family, you may need the presence of a social worker or geriatric care manager to help with tough questions in the meetings. Financial planners may also help set up intergenerational planning.  The goal is to ensure that someone else in your family has access to your parents’ important financial information like insurance policies, bank accounts, credit cards and investment advisors or financial planners. Online banking has simplified this task considerably if the parents wish to rely on their children’s help with bill paying.

It is also wise to assess if your parents have put the mechanics in place so the children can take over if needed. This may involve joint checking accounts, powers of attorney or revocable trusts.

Consulting with your parents’ estate planning professional can help tailor the plan to the family’s wishes.

Planning for Your Children. 

By helping your parents you can learn how to plan for your children. The most obvious lesson is put your own financial affairs in order now. Create a document locator that organizes your records. Let your child or confidant know where the document is stored.

Next revise or get started on your estate plan. If you own property in more than one state, have a lot of assets, have special family issues or wish to avoid probate, consider a living trust. Otherwise a will might be sufficient. 

We all followed the Terry Schiavo case. Be sure that your Advance Medical Directive is updated for your current wishes. Also set up financial powers of attorney.

There are usually some thorny issues to be resolved: remarriage, unequal distributions to children or an irresponsible or disabled child. Although these issues can be daunting, you are doing your children a big favor by addressing them now.

When you are all done, head off unpleasant post death litigation or estrangement and open up the communication. Tell your children what you are putting in the will or trust and why.

–Jeff D. Opdyke,
Wall Street Journal
9-11-05

The Gulf Coast tragedy spotlighted the lack of flood insurance and scarcity of personal emergency plans for families to reunite after unexpected disasters.  Those of us in California are reminded to once again address the issue of earthquake and flood insurance. Clients all over the country might check over their homeowners insurance to be sure the coverages are up to date and appropriate for their location’s particular risks.

If you do not have a detailed inventory of your possessions, remind yourself of the agony the citizens of New Orleans are facing in trying to reconstruct. Having a list of your household items can help get the insurance claim settled faster.  Keep notes on major home features and improvements, such as intricate moldings. Take photos or videos of your possessions.

For help, there is a new free inventory software at www.knowyourstuff.org. You can download this and start documenting your possessions, hoping never to need the list.

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Non-Citizen Spouses

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Under current law when one spouse dies, the other spouse gets an unlimited marital deduction and will pay no tax. However, if the surviving spouse is not a US citizen, the assets are subject to taxation.

The surviving spouse can try to become a citizen before the estate tax return is filed. However, since you have only nine months to file the return and citizenship approval may take longer, this solution is high risk and not advisable. 

We strongly recommend consulting an experienced estate planning attorney for a workable solution. This may involve annual gifts to the non-citizen spouse or a Qualified Domestic Trust.

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Long-Term Care Insurance Help

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Recent nationwide figures suggest care in a private nursing home costs $70,000 per year and home health aides $18 per hour. Expect to pay much more than this in certain areas of the country; for example California skilled nursing care now averages $74,825. An interesting site to explore the issues of long term care is www.ltcq.net. You can do a needs analysis, which includes finding out the cost of care in your state. You can also get free quotes on insurance.  Insurance is not the option every client should choose, but exploring the costs of care and insurance is a good first step to deciding how to protect your assets in old age.

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Change in Financial Situation

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Please contact Wiiken & Gorman if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account. Financial planning is a process and we are here to help you transition through important life changes.

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Mutual Fund News

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Artisan Midcap Value closed August 31.  We are still able to purchase this fund for new investors.

9% of all money invested in stock mutual funds is invested in 126 funds that lag behind their category average. According to a new study from the University of Oregon, existing shareholders of poorly performing funds don’t add but also don’t sell. We suggest finding a winner to replace that loser unless capital gain consequences are punitive.

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Management

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Wiiken & Gorman manages money in pension plans, IRAs, personal accounts, and trusts. We charge a retainer fee for portfolio development, monitoring and reporting. We also help with financial life planning issues that arise. Please call us if you would like to work with us in this capacity.  The minimum portfolio size is $500,000 and we welcome your business.

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About Your Planners

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Paula’s older son Matt has been deployed and left for training in Texas. He will be posted to the Persian Gulf in October, most likely serving on a boat and docking in Kuwait and the UAE. Thanks for all your wishes for his safe return.

Mike’s younger son Andy left for UC Irvine this month where he will be completing his college studies in computer science.

Paula is now working remotely Monday and Fridays and is accessible by phone and e-mail. She will be in the Petaluma office Tuesday through Thursday.

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Fee Schedule 2005

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We feel privileged to serve our clients and try to respond to phone calls, letters and e-mails in a timely manner. Wiiken & Gorman thinks that each client deserves a carefully reasoned response to every question and we bill accordingly. If you would like a copy of our most recent fee sheet, please let us know and we will be happy to provide one.