Drinking may be a “rite of passage” for teens, but when it occurs in your home you may be held responsible for their actions.

Despite the overwhelming research documenting the health and behavioral consequences of underage drinking, some parents believe that allowing minors to drink under their supervision may lead to more responsible drinking in their adult years. Other parents believe that allowing minors to drink in the home is a better alternative to drinking outside the home.

Regardless of your parental approach to your teen children and drinking, when teens drink at home, you may be exposed to substantial civil liability. Even if it occurred while you were away or without your consent.1

Social Host Laws

At least 43 states have laws that make social hosts civilly liable for injuries or damages caused by underage drinkers, and many states have criminal penalties for adults who host or permit parties with underage drinking in their homes or in premises under their control.2

State laws vary, so the precise circumstances under which you may be held liable will depend upon the state in which you live.

The liability to which you may be subject may include medical bills, property damage, and pain and suffering.

The most effective way to avoid this risk is not to allow any alcohol at teen parties that may be hosted in your home. Since you may be liable for teen drinking in your home even when it occurs without your consent (e.g., while you’re on a well-deserved weekend getaway), make sure you have adequate personal liability coverage.

1. The information in this material is not intended as legal advice. Please consult a legal professional for specific information regarding your individual situation.
2. III.org, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Tips for setting up children for financial success

It’s the time of year when many parents are sending kids off to college to start newly independent lives full of exciting opportunities – new classes, new friends and many new opportunities. It may also be one of the first times some parents realize their children will face real-world decisions that may affect their future financial standings.

The truth is, parents should be preparing their children for financial success long before college. The time to teach kids about financial responsibility and decision making should start when they are young and be cultivated all the way through their childhood.

Here are four important tips for raising children to be financially successful:

 

  1. Help your child connect with trusted resources to learn from professionals. Rather than telling your child what they should do, help them learn important financial skills from the experts. Find a trusted banker, lender or financial advisor and introduce them. Encourage your child to ask questions or, if they’re young, ask questions for them. When your child enters high school, student loan advisors are an excellent resource for learning about options for financial aid.
  2. The internet can be helpful for research, but make sure any online research is done through trusted sources. Financial professionals can help you find good resources. Online calculators are helpful to show how student loans, or any loans, are not “free.” Understanding the total interest paid over the term of the loan can empower your student to make more informed decisions. We recommend www.finaid.org for resources on student financial aid.
  3. Be an example of what financial health looks like. Our thoughts and attitude toward finances are often reflected in our personal financial health. How we manage our money depends on how we prioritize it. The number one indication of financial health that leads to financial wealth is the ability to spend less than what is earned. Talk to your child about the choices he/she makes and how those decisions affect spending and saving. Show them your own budget or help them create a spending plan as they start their first job as a teenager. Take them with you to your own financial planning session and allow them to ask questions of your trusted advisor.
  4. Discuss the power of choices with your child. Tap into what they want for their future and what drives them. Talk about how life circumstances can change, and how planning and choices made now can affect how they weather certain life storms. Help them to ask themselves about the “what ifs” of life and be financially armored to stop changes from becoming crises. My youngest daughter (how old?) loves to have fun. If it isn’t fun or leading to fun, it isn’t worth her effort. So, I like to talk to her about spending her money for fun – but also how NOT fun it can be when bad choices lead to negative consequences.
  5. Practice makes perfect – and this includes the practice of finance! If you have a credit card, talk with your child about how it is used and paid off each month. Discuss also when it’s appropriate to use debit cards as opposed to credit cards. When they reach the age of 21, they are authorized to apply for credit cards. Instead, let your child be an authorized user on one of your credit cards – consider using it as a “practice” or emergency card. If they charge anything, they are expected to pay it off within the next billing period.

When my first child was born, one of my clients wisely told me, “You are raising an adult not a child.” Most of us dream that our children will always come to us for our wisdom and sage advice. The reality is, they may not. We have limited years to emulate our knowledge, set them up with mentors, and introduce them to professionals who will foster their independence and responsibility. Start now. Set your child up to be healthy with financial abundance to contribute to a better world.

This article deals with how one might deal with a burdensome inheritance.

Have you ever had to deal with a “white elephant”? Not the actual pachyderm, but what Merriam-Webster calls “a property requiring much care and expense yielding little profit” or, more simply, “something of little or no value.” Of course, we’re not talking about the sort of “white elephants” you might get in a humorous gift exchange over the holidays, like a tacky t-shirt that isn’t even your size or an inexplicable kitchen gadget.

Not everyone has a rich uncle who will present them with a simple cash gift in his will. A “white elephant” is a gift that may cause more issues than it resolves, much as an elephant might eat an unwitting recipient out of house and home. It’s an asset that comes to you via gift or inheritance and needs to be quickly sold, liquidated, or transferred to avoid further expenses of time or money. In such cases, it is crucial to understand how to disclaim an inheritance properly and avoid holding the burden. The average American household stands to inherit $46,200. Not all those bequeathments are straight cash, and some might prove inconvenient or troublesome.1

There are several reasons why someone might not want to accept an inheritance:

  • Income: If the inheritance generates income, such as a business or rental property, it may push you into a higher income tax bracket. This might be good in many cases, but there are situations where this might prove inconvenient, such as—
  • Litigation or Bankruptcy: If you face a lawsuit or anticipate bankruptcy, disclaiming the inheritance may be wise. However, it’s important to note that if you are currently undergoing bankruptcy proceedings, you may be unable to deny the inheritance.2
  • Inability to Maintain: If the inheritance includes property or assets that require ongoing maintenance and you cannot fulfill those obligations, disclaiming may be the best choice. This could be real estate, a business, or perhaps even a literal white elephant.
  • Honoring the Decedent’s Wishes: Circumstances may have changed since drafting the will, and accepting the inheritance may no longer align with the decedent’s original intentions.

Remember, this article is for informational purposes only and does not replace real-life advice, so consult a legal professional before deciding on an inheritance. The article provides high-level considerations, but a legal professional who is familiar with your situation may be able to provide more insights and guidance.

To officially disclaim an inheritance, you must meet the following requirements set forth by the Internal Revenue Service:

  • Provide written notice to the executor or administrator of the estate, clearly stating that you are disclaiming the assets and that the decision is irrevocable.
  • Submit the statement within nine months of the decedent’s death (minors have until they reach the age of majority).
  • Ensure that you do not benefit from the disclaimed property, either directly or indirectly. Example: What if you were to live with the new recipient in a house you declaimed? The IRS might perceive this as you benefiting indirectly.

Notably, once you disclaim an inheritance, you have no say in who receives it. The estate will be treated as if you died before accepting it and will go to the contingent beneficiary named in the will. If there is no will, the distribution will resume according to the next person, in line with state law.3

However, disclaiming an inheritance may not be the best choice for individuals receiving Medicaid benefits. If you reject an inheritance while on Medicaid, it could be considered a transfer of assets, potentially making you ineligible for Medicaid for a certain period. It is crucial to seek guidance from a professional with information specific to your situation if you receive Medicaid benefits.

Again, you may not have the choice or inclination to refuse this inheritance. Let’s look at a few options open to you.

Donating Assets: Several tax strategies exist for charitable contributions. One method is to donate assets to charity. By doing this, you may be able to manage capital gains taxes and receive an income tax deduction for the full fair market value of the assets.

This is an overview and is not intended as tax or legal advice. Please consult legal or tax professionals for specific information if you want to donate the assets you received as part of an inheritance.

Real Estate: Unwanted land can become a financial burden. Selling land can be difficult if it has been on the market for months or years without any offers. The most common reason for this is that the price is too high. Determining the value of land can be challenging, so setting a realistic price is essential. Another reason for a property’s failure to sell is poor marketing. Undesirable features or location can also contribute to a property’s inability to sell, as can title issues such as liens or property boundary problems.

If you need help selling your inherited land, there are several strategies you can try. Listing the land for sale online on various platforms can provide maximum exposure. Contacting neighboring property owners may also be effective. Other options include donating the property to a charity. Several charities accept land donations, but they typically have a screening process and often sell land to raise funds for their organizations.

Collectibles: Perhaps the most common of these white elephant inheritances include collectibles, esoteric items that future heirs have no wish to inherit, such as stamps, baseball cards, comic books, figurines, or dishware. The inheritance may also require more thought or consideration, such as an art collection that includes several large canvases or a cache of ephemera, such as old letters that may have historical value and require special preservation.

Most metropolitan areas have resources for liquidating collectibles or helping you get in touch with collectors who might purchase these items wholesale. Holding an estate sale is another common step for quick movement. If you believe you can earn more, you might list these items for sale online. However, in most cases, you may have to decide whether this is worth the effort or whether donating the items to a charity might be simpler.

In short, don’t let the elephant gobble up your time and money! Another step, when possible, is to speak to your relative in advance if you anticipate inheriting something you can’t handle or don’t want. Conversations with your relatives might go a long way toward averting more work later and give them the satisfaction of knowing they are caring for you in the present.

1. Finance.yahoo.com, September 15, 2023
2. NasonLawFirm.com, September 27, 2023
3. GreatAOakAdvisors.com, September 27, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

As our nation ages, many Americans are turning their attention to caring for aging parents.

Thanks to healthier lifestyles and advances in modern medicine, the worldwide population over age 65 is growing. In the past decade, the population of Americans aged 65 and older has grown 38% and is expected to reach 94.7 million in 2060. As our nation ages, many Americans are turning their attention to caring for aging parents.1

For many people, one of the most difficult conversations to have involves talking with an aging parent about extended medical care. The shifting of roles can be challenging, and emotions often prevent important information from being exchanged and critical decisions from being made.

When talking to a parent about future care, it’s best to have a strategy for structuring the conversation. Here are some key concepts to consider.

Cover the Basics

Knowing ahead of time what information you need to find out may help keep the conversation on track. Here is a checklist that can be a good starting point:

  • Primary physician
  • Specialists
  • Medications and supplements
  • Allergies to medication

It is also important to know the location of medical and estate management paperwork, including:2

  • Medicare card
  • Insurance information
  • Durable power of attorney for healthcare
  • Will, living will, trusts, and other documents

Be Thorough

Remember that if you can collect all the critical information, you may be able to save your family time and avoid future emotional discussions. While checklists and scripts may help prepare you, remember that this conversation could signal a major change in your parent’s life. The transition from provider to dependent can be difficult for any parent and has the potential to unearth old issues. Be prepared for emotions and the unexpected. Be kind, but do your best to get all the information you need.

Keep the Lines of Communication Open

This conversation is probably not the only one you will have with your parent about their future healthcare needs. It may be the beginning of an ongoing dialogue. Consider involving other siblings in the discussions. Often one sibling takes a lead role when caring for parents, but all family members should be honest about their feelings, situations, and needs.

Don’t Procrastinate

The earlier you begin to communicate about important issues, the more likely you will be to have all the information you need when a crisis arises. How will you know when a parent needs your help? Look for indicators like fluctuations in weight, failure to take medication, new health concerns, and diminished social interaction. These can all be warning signs that additional care may soon become necessary. Don’t avoid the topic of care just because you are uncomfortable. Chances are that waiting will only make you more so.

Remember, whatever your relationship with your parent has been, this new phase of life will present challenges for both parties. By treating your parent with love and respect—and taking the necessary steps toward open communication—you will be able to provide the help needed during this new phase of life.

1. ACL.gov, November 2022
2. Note: Power of attorney laws can vary from state to state. An estate strategy that includes trusts may involve a complex web of tax rules and regulations. Consider working with a knowledgeable estate management professional before implementing such strategies.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Military families face unique challenges, making personal finance even more critical.

Military families face unique challenges, making personal finance even more critical.

One study found that military personnel have more credit problems and are more likely to make late house payments than their civilian counterparts.¹
While the financial situation of military personnel and their families mirrors the general population in many respects, heavy indebtedness and mismanagement of credit cards may be especially acute issues for service members.

Of course, military families face unique challenges, such as deployment to conflict zones, overseas assignments, and the constancy of change, making personal finance even more critical.

Money Tips to Consider

  • Some Programs Available
    • The Savings Deposit Program allows eligible personnel serving in designated combat zones to invest up to $10,000 and receive a return of up to 10%.²
    • Saving in a Roth IRA may be a good idea if you receive tax-free combat-zone pay. This allows you to deposit tax-free income and take tax-free qualified withdrawals in retirement.³
    • The Post-9/11 GI Bill covers the full cost of in-state tuition, up to between 36 and 48 months, depending on your circumstances.4
    • Servicemembers’ Group Life Insurance protects your family with low-cost life insurance.5
  • Set Goals—Like any mission, success begins with articulating goals you want to pursue.
  • Establish a Budget—A budget provides the financial discipline that may help you control spending impulses that can lead to greater debt levels.
  • Pay Yourself First—Determine how much money you need to set aside to reach your savings goal, deduct this amount from your paycheck, and attempt to live within the limits of what remains.
  • Establish an Emergency Fund—Uncertainty marks the life of military families, so be sure you have an emergency fund that allows you to be as prepared as possible for these changes.
  • Control Your Debt—Indebtedness is one of the enemies of financial independence.

As you think through your financial goals, remember, taking action today is your first and most important step.

1. Debt.org, April 24, 2022
2. Defense.gov. The Savings Deposit Program is a benefit offered to eligible personnel serving in designated combat zones. The guaranteed rate of return is subject to change.
3. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals also can be taken under certain other circumstances, such as a result of the owner’s death. The original Roth IRA owner is not required to take minimum annual withdrawals.
4. VA.gov, 2023
5. VA.gov, 2023. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Planning for a child with special needs can be complicated, confusing, and even overwhelming.

Raising a child is expensive and can cost about a quarter of a million dollars, excluding college. For a child with special needs, that cost can more than double. If you’re the parent of a child with special needs, it’s vital to ensure your child will continue to be provided for after you’re gone. It can be difficult to contemplate, but with patience, love, and perseverance, a long-term strategy may be attainable.1,2

Envisioning a Life After You

Just as every child with special needs is unique, so too are the challenges families face when preparing for the long term. Think about the potential needs of your child. Will they require daily custodial care? Ongoing medical treatments? Will your child live alone or in a group home? Can family members assume some of the care? Answers to these and other questions can help form the vision of what may need to be done to plan for your child’s care.

Preparing Your Estate

Without proper preparation, your child’s lifetime needs can quickly outstrip your funds. One resource is government benefits, such as Supplemental Security Income (SSI) and Medicaid, which your child may qualify for depending on their situation. Because such government programs have low-asset thresholds for qualification, you may want to consider whether to make property transfers to your child with special needs.

You should also make sure you have an up-to-date will that reflects your wishes. Consider creating a special needs trust, the assets of which can be structured to fund your child’s care without disqualifying them from government assistance. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

Involve the Family

All affected family members should be involved in the decision-making process. If at all possible, it’s best to have a unified front of surviving family members to care for your child after you’ve passed on.

Identify a Caregiver

In order for a caregiver to make financial and health care decisions after your child reaches adulthood, the caregiver must be appointed as a guardian. This can take time, so start setting this in motion as soon as you are able.

To do this, you can write a “Letter of Intent” to the caregiver and family to express your wishes along with information about your child’s care. This isn’t a legal document, but it may help communicate your desires. Store this letter in a safe place, alongside your will.

Outlining an approach for a child with special needs can be complicated, but you don’t have to do it alone. Working with loved ones and qualified professionals can help you navigate the various facets of this challenge. If we can help, please don’t hesitate to reach out.

1. Investopedia.com, January 9, 2022
2. AmericanAdvocacyGroup.com, May 3, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
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