Page 27 - FOP Magazine March 2019

When is the best time to start planning?
Now.
Just by its very definition, the best time to plan is now, in advance and without procrastination. How- ever, we don’t do that, do we? I am guilty of putting things off, or prioritizing what I have justified as most important. Every time I analyze whatever
providing secure asset protection.
• We created an LLC and secured their investment property
from personal liability.
If any of the above issues sound familiar, you know what you
should be doing today: plan now.
If you have already raised your children, or you are mar-
it is that I put off, I arrive at the same conclu- sion. There were deeper issues at play, and I know the obvious. I am avoiding what I should be doing now.
FOP
Benefits Plan
ried or single and without children, you know the reali- ty. None of us are getting out of this thing alive. Do what you should be doing now: plan for that unknown day and
TOM TUOHY
I was with clients in my office recently, and they fit sev-
eral categories of need when it comes to requiring a solid
estate plan. One of the first is that they are young, in their mid-30s, and have two young children. No matter how obvious the need for young parents, this demographic avoids estate plan- ning more than any other. In this case, both are police officers, and they know the obvious risks they face daily. They realized, like few parents their age do, that sudden tragedy can change ev- erything, for anybody, in an instant. And so they planned.
If young parents have no estate plan and die in a common ac- cident or occurrence, they leave their children in a terribly vul- nerable and insecure position. Responsible parents would never think of doing that on any given day. Yet far too many choose to live with an unplanned future, with the real possibility that their children could face that future without them. Who will have cus- tody and raise their children? Who will handle the finances? How will education and housing be provided for them? Will their chil- dren be financially secure and, if not, can anyone in their surviv- ing family handle that burden?
Let’s look at a list of vulnerabilities this couple faced:
• No estate plan
• No guardians selected for their minor children
• Inadequate life insurance
• Inadequate auto and home insurance limits in case of a catastrophic accident
• No financial plan for retirement
• No education savings plan
• Title to marital residence vulnerable to lawsuits
• Investment property vulnerable to personal liability
We quickly remedied every one of these issues:
• The couple obtained a living trust, avoiding the need for
probate court to control their estate at death until their children reach 18 years of age. They chose 25 as the age of final distribution in the trust, so their children would not receive everything at 18 years old — and end up broke at 19.
• They chose the appropriate guardians and successor guardians for their minor children.
• They secured additional life insurance at police discount rates.
• They obtained a $1 million umbrella policy that covered each of their three vehicles and their residence for $205 a year. (If you have the standard $100,000/$300,000 liability limits on your auto policies and own more than $100,000 of assets, you are at risk. Call our office for an explanation and an easy fix.)
• They chose a financial planner to maximize their savings for retirement. The earlier you save the right way, the more financially secure you will be when you retire. There is no way around it.
• They started a 529 college savings plan and can contribute up to $15,000 a year and withdraw it tax-free for tuition.
• We created a tenants by entirety deed for their residence,
don’t leave a costly mess behind.
A revocable living trust is a written, legal document that
allows you to privately and efficiently pass your assets (real property, bank accounts, stock, saving certificates, personal property, etc.) to your family, friends or charities after your death — outside of probate court. (Remember, all wills are subject to probate.) Your life insurance policies and deferred compensation accounts can name your living trust as beneficiary, subject to es- sential tax considerations.
Call my office today to lock in your FOP 50 percent reduced rate for a living trust. Registration in the Benefits Plan for FOP members and family is free. Visit www.fopbenefitsplan.com or call 1-866-729-5454 for assistance with registering.
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Bene- fits Plan. He has been a police lawyer for 36 years. His father was a CPD detective, and his grandfather was CPD Chief of Major Inves- tigations. You can reach Tom at 312-559-8400.
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