Tag Archives: parents and their children

Postal Banking: An Idea Whose Time Has Come Again

PostOfficeMy Comments: Last month, while standing in line to buy stamps, I overhead the person behind me complaining about the apparent inability of the Post Office to adapt and have enough people behind the counter. His vitriol made me think he was probably a Trump supporter.

I kept my mouth shut but reminded myself the post office is NOT A PRIVATE, FOR-PROFIT ENTERPRISE. It’s a constitutionally defined organization designed to provide communication services to the citizenry of these united states.

Most of the locations across the country are subsidized by those of us who happen to live in towns where economies of scale permit a positive ROI. The following idea, if implemented as though there was a profit motive involved, would probably reduce the need for many locations to be subsidized.

Alex Lawson Posted: 12/20/2015

The U.S. Postal Service was established by the Constitution of the United States, which gave Congress the power “To establish Post Offices and post Roads” in Article I, Section 8. It has since become one of our country’s most popular and successful institutions. And we have the opportunity to use it to improve the lives of tens of millions of Americans, by reestablishing our country’s Postal Banking System.

Tens of millions of seniors rely on the U.S. Postal Service as one of the most trusted institutions in America. It is a perfect fit to offer no-fee ATMs and electronic funds transfer. It has over 500,000 employees working in 31,662 offices across all 50 states, making it the world’s largest retail network. Fifty-nine percent of these offices are in zip codes with either zero banks or only one bank branch. These offices could easily offer low-cost financial services in every area of the country, ranging from check cashing to bill payment to savings accounts to small-dollar loans.

This is not a novel idea. Postal banking was first adopted by Great Britain in 1861, and is now used in 139 countries around the world. In fact, the United States had a highly successful postal banking system from 1911 to 1966. At the system’s peak in 1947, four million users had $3.4 billion deposited the postal banking system.

Every American deserves low-cost, consumer-driven banking services. That’s why the Campaign for Postal Banking is supported by Senators Elizabeth Warren (D-MA) and Bernie Sanders (I-VT), along with the U.S. Conference of Mayors and Nobel Prize-winning economist Joseph Stiglitz. Over 150,000 Americans agree, and have signed petitions demanding postal banking, which we delivered earlier this week.

The time is ripe to reestablish the postal banking system. Currently, twenty-eight percent of U.S. households have either no or limited access to banking services. This leaves them vulnerable to financial predators like payday lenders and check cashers. These Americans, many of whom are among the poorest families in our country, spend an average of 10 percent of their income on these services — which make $103 billion a year at their expense. Millions more don’t want to put their money in big Wall Street run banks and are looking for an alternative. It’s time to give it to them.


Before You Send Your Child Off To College…

108679-bruegel-wedding-dance-outsideMy comments: Yes, I know this should have been posted several weeks ago. But I didn’t have it then.

The advice come from an attorney in Michigan by the name of Julius Giarmarco whose website can be found HERE. I’m unsure how rules in Michigan differ from any other state but I suspect the fundamental thoughts he offers will apply to whatever state you either live in or where your child is enrolled.

If they have already left for college, put it on your to-do list for Thanksgiving or Christmas.

Before sending your child off to college, have him/her sign a General Durable Power of Attorney and a Patient Advocate Designation. Without them, under Michigan law, parents cannot make financial or health care decisions for a child who has attained age 18 (without probate court approval) – even though the child is still a dependent and still covered under the parent’s health insurance plan.

The General Durable Power of Attorney deals with financial matters. In the event of an unexpected disability, it allows the attorney-in-fact (presumably, one or both of the parents) to handle all of the student’s business, financial and school affairs, while the student is unable to do so. The attorney-in-fact must accept the designation in writing and acknowledge his/her responsibilities.

The Patient Advocate Designation allows the patient advocate to make the student’s health care decisions. Similar to the General Durable Power of Attorney, the designated patient advocate must sign an acceptance before he/she may act.

This document permits the patient advocate to make care, custody, and medical/mental health care decisions for the student when he/she can no longer make those decisions. It also permits the patient advocate to withhold or withdraw life support and to make anatomical gifts.

Compared with other college expenditures, the nominal cost of preparing a General Durable Power of Attorney and a Patient Advocate Designation could turn out to be a good investment when compared to the cost of seeking a probate court approved conservatorship or guardianship.

Vocational Training Is No Substitute For High School

Internet 1My Comments: Some of you are aware of my continued interest in the welfare of the magnet programs across Alachua County. I’ve been a member of the advisory board to the two programs at Buchholz High School since the mid 90’s. They are, respectively, the Academy of Finance and the Academy of Entrepreneurship.

The original intent in the early 90’s, from the perspective of the business community, was to encourage work related skills in these two generic disciplines, such that upon graduation, students who were unlikely to continue on to college, would graduate from high school with a skill set that would help them be more employable by members of the business community.

It didn’t work out that way. For one thing, the idea of “vocational education” went out of favor as “demeaning” to those less blessed with raw intelligence. Never mind that those students would likely benefit in later life had they had a high school education more suited to their intellectual capacity. Some of us are fast and athletic; some of us are slow and uncoordinated, which describes me. Same with our brains.

The other thing that happened, in large part thanks to the respective program directors, was due to something else that surfaced. Namely, that if a middle school student already had a reasonable idea which academic track they wanted to follow, there was now a high school program somewhere in the district that allowed that person to get a leg up on competition when it came to leaving high school and entering college. As a result, over time, the profile of the students in the respective academies became more and more advanced, to where today, virtually 100% of the participating students are going on to college as they are academically advanced. But they are not necessarily “employable” in the context of our original intent.

The dilemma for the business community, and Buchholz High School, is that we have identified the best and brightest with an interest in economics and marketing and finance, but we still don’t have a pool of students with high school diplomas and job related skills that we can add to our list of employees. They are moving on to college and will be overqualified for what we need today.

By Matthew Yglesias

A growing chorus of progressives, ranging from Rick Pearlstein to Dana Goldstein to Kevin Drum are suggesting that maybe Rick Santorum was right and instead of trying to give everyone a college prep education, we need a return to vocational schooling. After all, as Drum says “American high schools ought to be as good at turning out plumbers as they are at turning out future English majors.”

It’s true that we need plumbers, but I don’t think this has the implication that Drum thinks it has. For starters, as Kevin Carey notes it turns out that “most plumbers, pipefitters, and steamfitters get their training in jointly administered apprenticeships or in technical schools and community colleges.” This is similar to his point from a little while back that a large and growing fraction of auto mechanics have post-secondary training. In other words, while it’s true that we don’t necessarily need a large increase in people with traditional liberal arts degrees a large share of the career-focused education we need still has to occur at the post-secondary level. That’s for two reasons, the most fundamental of which is simply that as we grow more technologically sophisticated as a society all kinds of work becomes more complicated, technical, and specialized. The kinds of colleges that offer good training to be policy-focused journalists probably don’t offer great training to fix the automobiles of tomorrow, but that doesn’t mean car mechanics don’t need additional training.

The other issue is that if you look at countries that have successful high school level vocational training (Germany always seems to come up) you’ll note that kids go into the training with a solid grounding in the basics. Dana and I both visited a vocational training high school together in Finland, focused on teaching people hairstyle and makeup skills. What struck me is that the girls (and they were basically all girls) to the best I could tell were competent in algebra, literate in Finnish, and had an okay grasp of a foreign language.

The kind of low-achieving American 15 year-olds who’d be put on a “vocational track” generally don’t have those kind of skills. What they’re getting out of high school (ideally) isn’t so much college preparatory work as it is remedial work designed to put them on track to receive career training. That’s not an ideal function for high schools to be serving, and oftentimes they don’t do a good job of it, and arguably remediation could be better-integrated with vocational training but as is often the case in education it’s a problem with earlier roots. If the outputs of America’s K-8 education keep improving (which they do in fact seem to be doing) and we invest more in quality preschool, then we’ll have more latitude to talk about moving kids into job training sooner.

10 Common Estate Planning Mistakes (and how to avoid them)

My Comments: As you can imagine, estate planning is not for the faint of heart. But it matters for some of us, who have spent years and years accumulating assets. While this happens, people get married, they get divorced, they have children, some of whom are considered responsible.

I had a recent conversation with someone whose father-in-law died recently. He was not a young person but had accumulated a reasonable estate, though less than $1M. Whenever his daughter-in-law, a CPA,  asked about his circumstances, she was told in no uncertain terms that it “was none of her damn business.”

Only now that he has passed, it is their business. She and her husband have to sort out all the details in order to make sure Mom is properly taken care of. Were there any insurance policies? No idea. Was the pension set up to continue after his death? No idea. Which banks did he place money in CD’s? No idea. And this is critical since there may have been as many as ten in different banks, none of which would generate enough interest to trigger a 1099 which would at least tell the family where the money was.

If you are reading this and have money in different places, and income from various places, for God’s sake, tell your children about it before you die.

By Stephan R. Leimberg | November 7, 2013

Estate planning is the process of planning the accumulation, conservation, and distribution of an estate in the manner that most efficiently and effectively accomplishes your personal tax and nontax objectives. Every estate is planned – either by the individual or by the state and federal governments. By your action now, you can strongly influence, if not determine, what will happen in your clients’ futures.

This list is devoted to the types of problems that can cost your clients dearly in terms of dollars and unbelievable heartache. And so, without further ado, here are ten areas of common (and serious) mistakes that can be easily solved by periodically reviewing your clients’ plans.

Mistake 1: Improper Use of Jointly-Held Property
If used excessively or used by the wrong parties (especially by unmarried individuals, or where one spouse is not a United States citizen) the otherwise “poor man’s will” becomes a poor will for an otherwise good man or woman. In short, jointly held property can become a nightmare of unexpected tax and nontax problems including:

A. When property is titled jointly, there is the potential for both federal and state gift tax, particularly with non-spouses and non-citizen spouses.

B. There is the possibility of double federal estate taxation; if the joint ownership is between individuals other than spouses, the entire property will be taxed in the estate of the first joint owner to die – except to the extent the survivor can prove contribution to the property. Then, whatever the survivor receives and does not consume or give away will be included (and taxed a second time) in the survivor’s gross estate. With non-citizen spouses, the typical rules associated with the marital deduction do not apply, and the client may need to utilize a Qualified Domestic Trust (QDOT) to avoid the immediate imposition of the federal estate tax.

C. Once jointly owned property with right of survivorship has passed to the survivor, the provisions of the decedent’s will are ineffective. This means the property is left outright to the survivor who is then without the benefit of management protection or investment advice or the property could be left to a person not intended to be benefited.

D. Even when property is jointly owned by spouses, the surviving spouse can give away or at death leave the formerly jointly owned property to anyone the surviving spouse wants; regardless of the desires of the deceased spouse. In other words, holding property jointly results in a total loss of control at the first death since the surviving spouse can completely ignore (and in fact may not know) the decedent’s wishes as to the ultimate disposition of the property. Whether this is an issue depends upon the specific facts of the situation. However, this loss of control can be especially horrendous when the joint owners are not related or are clearly not in agreement as to the ultimate recipient of the property.

E. Since the jointly held property passes directly to the survivor (who then could possibly squander, gamble, give away, or lose the property to creditors), the decedent’s executor could be faced with a lack of adequate cash to pay estate taxes and other settlement expenses. By the same token, since joint assets pass directly to the survivor, it is important to keep in mind how the taxes associated with these assets are to be allocated among the other beneficiaries of the estate. It is entirely possible that the joint assets can pass to one person, and the taxes associated with these assets be charged to another.

F. A well-drawn estate plan is designed to avoid double taxation – often by passing at least a portion of the estate into a CEBT (Credit Equivalent Bypass Trust). In this manner, up to $5,250,000 in 2013, can be sheltered from federal estate tax at both the first decedent’s death and then again (since the surviving spouse has only an income interest) escape estate tax at the death of the surviving spouse. But holding property in joint tenancy thwarts that objective. Instead of going to a bypass trust to avoid a second tax, the property goes directly to the survivor and will be taxed at the survivor’s death. So the unified credit of the first spouse to die is wasted.

G Some clients title assets in joint names in order to increase the FDIC insurance limitations. This occurs because FDIC insurance provides for $250,000 of protection for each owner on an account at that particular financial institution. Therefore, by titling assets in joint names, the amount of the protection is increased. However, by titling assets in joint names, these assets are bypassing the provisions of the estate documents, which can create other problems.


My Comments: I’ve been a licensed insurance agent since sometime in 1976, or was it 1975? I have helped place hundreds, if not thousands, of insurance contracts over these many years, some of which I know are still in force.

This article is directed toward those who are dealing with elderly parents, some of whom are not as mentally alert or as strong as they once were. Time has a way of getting away from us and for those of you in middle age, this part of your future has a lot of challenges.

So I encourage you to approach your time with your parents, aunts and uncles, with the following circumstances in mind. You’ll be doing yourself a favor, not to mention minimizing stress for those afflicted.

By Kevin Sypniewski | March 20, 2013

When we hear something once, we might pay attention but when we hear the same thing from totally unrelated people, we begin to suspect there is a trend.

Some of the most enlightening and interesting professional conversations I’ve had recently have been with long-term care (LTC) claim departments. Okay, perhaps I should get out more!

Two different claim departments from two different leading LTC carriers tell me that they regularly get LTC claims submitted 12 or even 24 months after the claim event.

Why on earth would someone wait that long to receive the money for which they are entitled? Because the family just found the LTC policy!

The insured was ADL dependent but not communicative, and the family just “happened” to find the policy in a shoebox or file cabinet in the basement.

Have you ever been into the basement of the house that someone has lived in for 30 years and tried to find a specific file? It is wonderful that this policy got found and even more wonderful that the carriers are paying “late” claims, some of which they are no longer contractually obligated to pay.

What about the other LTC policies on other insureds that never get found?

If some get found, others surely do not get found!

We’ve had employees in our caregiving education and LTC sessions tell us about finding policies and others tell us about “knowing” mom bought one, but they never could find it once mom needed it.

We were hoping these were somewhat isolated incidences; however, after talking with leading LTC carriers, we know these are not isolated. If someone lapses their policy and takes the carrier “off the hook,” I’m okay with that.

That is their decision and certainly the carriers don’t mind. But knowing that families are paying premiums for the duration and the carrier gets a bye on the payment…That just stinks!

You as an insurance professional did your job selling the policy. The claimant did a smart thing buying the policy, but in the end the family loses a lifetime of assets and now the family home has a lien and the insured is on Medicaid in a Medicaid facility.

That is just not right! Sure, the policies that get found eventually get paid, but by then the assets might be gone, mom is in a Medicaid facility, and now the family gets the $200,000 check.

Better than nothing, but not for Mom.

I can hear the family discussion now. “I sure wish Mom had bought long-term care insurance because she really wants to remain at home in her house of 30 years.” She did buy the policy but just never told anyone, which is exactly like not buying a policy… just more expensive.

The carriers and regulators require we designate a third-party in case we don’t pay our premium. What about a third party to make sure we file our claim?

I think we have an obligation to communicate this story to each and every person we help with LTC insurance.

Perhaps we create our own third party notification memo that at the time of purchase the new policyholder is able to designate several people who get notified about the policy purchase.
Sure, those people may or may not be around 25 years later at claim time, but I certainly like the odds of that effort versus the strategy of hope.

Source: http://www.lifehealthpro.com/2013/03/20/lost?eNL=514a2b29150ba0161b0002ff&utm_source=LifeHealthProDaily&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs&_LID=1044219161

To College or Not to College

I’ve spent a lot of time in the last few years trying to help parents and their college bound students realize there is a source of money to help pay for college that does not have to be paid back. Every college and university has funds they can use to support and encourage the students they want in their student body to enroll and eventually graduate. But it’s not like there is someone on the street corner with a sign saying “come on in, we have free money for you.”

What follows is an infographic that talks about how so many students graduating from high school are not prepared for college. I guess it doesn’t matter about the cost and where the money is coming from if, as this article says, “…a recent study found that one in four freshman in the U.S. do not complete their first year of school, despite giving college a try.”

The group behind this infographic is promoting the idea that you can live at home and work toward a college degree. I’m not endorsing this idea; just that having a college degree is an economically viable outcome for almost everyone. How you get it is up to you. Follow this image below to see all the statistics a college bound student is facing. It was created by: CollegeAtHome.com “>

Top 15 Best Paying College Degrees

college money 2My Comments: Over the last few years, I’ve been trying to develop the idea that there is money to be had to pay for a college education if you only know where to find it. All colleges and universities have endowment money to spend and award to those students they want enrolled. The trick is to get several schools to want you and then get them bidding, using their endowment money to pay your way.

While all this is happening you are working the system. Meanwhile, there is the expectation that a college degree will give your high school age student a significant leg up as she or he enters the world as a functioning adult. At least that’s the plan. Here’s an article that talks about which fields of interest result in the best financial outcomes.

By Dan Berman, AdvisorOne

The skyrocketing price of going to college is enough to make one wonder if it’s worth the cost. The National Bureau of Economic Research has attempted to answer that question by looking at factors that affect the pay that graduates in different disciplines can expect to earn. They used information from the Census Bureau to illustrate average wages.

First to those rising costs. According to the College Board, the average in-state tuition at a public university was $8,244 (more than double that if you include room and board and other fees) for the 2011-’12 academic year. For those who come from out of state, the figure rises to $20,770 ($29,657 total). For private, not-for-profit colleges the average was $28,500 ($38,589 total).

With those costs in mind, the Economic Research Bureau’s study, authored by Joseph G. Altonji, Erica Blom and Costas Meghir, could be seen as a guide for college students when choosing a career. Of course, there are more prosaic reasons for choosing a line of work, such as finding something you love to do. With the report, at the least, students will know what to expect once they hit the job market.

One interesting highlight of the report is the monetary benefit gained by earning an advanced degree. In some fields the benefit of extra course work is huge.

Biological science majors, for instance, earn 51% more than those with a four-year degree. On the other end of the spectrum, communications majors earn just a 4% premium for a higher degree. AdvisorOne also looked at the study for earnings of those in the top 10% in that degree’s field, which is not necessarily related to holding an advanced degree.

With that perspective, take a look at the Top 15 Best Paying College Degrees from lowest to highest.
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