Category Archives: Organizing Your Finances

End of Life Decisions- Advance Directives

June 7, 2017

End of Life Decisions- Advance Directives

No matter how much control we exert over our day-to-day lives, there may come a time in each of our futures when we are no longer able to make decisions for ourselves. When and if that happens, we need to have procedures in place that establish our preferences for certain treatment measures and appoint a trusted individual as a healthcare advocate.

Healthcare Proxy and Advance Directives

Generally, healthcare proxy appointments are taken care of through a legal document called a Durable Power of Attorney (POA) for healthcare. The POA document designates a representative to make healthcare decisions when the patient is either permanently or temporarily unable to make these decisions him- or herself. The decisions the proxy can make include withholding treatment, ending treatment or prolonging treatment of any medical condition that leaves the signor unable to make decisions. Some advance directives may include precise instructions to be followed in the event of specified medical incidents, with decisions for unspecified incidents left up to the healthcare proxy.

Advance Directives, often called a “Living Will”, on the other hand, sets out the patient’s declarations for medical treatment while he or she is in a terminal condition. That is, medical doctors have determined that there is no chance for survival and any measures taken would only prolong life and not ultimately save it. This can include the wish to be kept alive on life support or to not be resuscitated. Often, the living will is incorporated into the Healthcare POA but it can also be a separate document.

Both the POA for healthcare and the Advance Directives are legal documents but are not medical orders.

POLST/MOLST Forms

While the Health Care POA and Advance Directives are legal documents executed through an attorney, you can also fill out medical forms with your doctors called a POLST or MOLST form, depending on in which state you live. These stand for Physician Order for Life Sustaining Treatment (POLST) or Medical Orders for Life Sustaining Treatment (MOLST) form. This form is written by a physician and spells out instructions to medical personnel about the patient’s direct intentions for his or her treatment of a specific condition. It can include orders for end-of-life treatment, medical intervention, and orders to forgo treatment in certain circumstances. Like the living will, POLST/MOLST forms offer instructions for very specified situations and can be used by the whole medical community—including first responders, police and nursing home staff.

It’s important to have both advance directives and a POLST/MOLST form because while advance directives deal with hypothetical situations, POLST/MOLST forms give instructions for actual conditions that the patient has. Covering both ends of the spectrum is vital to ensuring the right treatment is offered.

Keep in mind that emergency medical staff will not wait to conduct CPR while your family member locates your legal or medical documents. If you already have an end-stage condition and know that you don’t want to be resuscitated in the event of an emergency, you may also want to consider a DNR bracelet.

At Kramer Wealth Managers, we can help you work with an attorney to help develop a plan for both financial and healthcare management decisions in the event you are incapacitated. To get started, contact us today.

This material is intended for informational purposes only and should only be relied upon when coordinated with individual professional advice. Neither FSC Securities Corporation, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.

Digital Assets and Your Estate

July 28, 2016

Defining Digital Assets

Digital assets can be loosely defined as any online or electronic records, art, images, emails, creations, files, accounts or subscriptions that are owned by an individual. These assets may be stored on a computer or other electronic device such as a smart phone, a thumb drive or in a cloud.

Considering Your Digital Estate

If you have any kind of online footprint or own any offline digital content, you have a digital estate. It’s just as important to create a legacy and/or estate plan for these digital assets as it is for your tangible assets. It is important that your estate planning documents, such as your Will and Power of Attorney document, specifically include digital assets to determine:

• What happens to your social media accounts upon death. Will they be maintained by a specific person, or would you prefer them to be deleted and closed? We’ve heard stories of parents wanting to access the photos stored on their deceased child’s Facebook or Instagram accounts but not being allowed to retrieve them. Or of spouses wanting to leave up the page of their deceased spouse as a memorial to that person.

• Who can access and manage your online accounts and subscriptions. Many people are now doing more and more banking online, including paperless statements. Imagine if your spouse passes away and you don’t have access to the login information for your bank and online bills. A digital estate plan will allow you to give an executor or heir access to online accounts that make estate management easier.

• Who will gain access to your purchased digital assets. Many people spend thousands of dollars a year on movies, programs and games that they download. While not all of these assets come with licenses that permit transfer, some do.

• Who will gain possession of your emails and other digital files. Every day a tremendous amount of personal information is shared via email and recorded on digital text files. It’s possible that you don’t want just anyone to have access to this information, which makes it vital to set up a digital estate plan spelling out who has control of its oversight.

Don’t assume that your Agent named in your Power of Attorney or the Executor of your Will automatically has access to your digital assets. Talk with an attorney about updating your documents to include digital assets or developing a digital estate plan to include a list of accounts, passwords, assets and other information.

Making a Financial First Aid Kit

April 15, 2016

Disaster preparedness is a practical step everyone should take to keep themselves and their family safe during all kinds of emergencies. And while having water, canned goods, and medical supplies on hand is one step toward disaster preparedness, it’s not the only thing you should do. You should also have a financial first aid kit ready to help make survival during and recovery from an emergency that much easier.

Three Essential Measures

There are three essential steps to take when putting together your financial first aid kit:

1. Set up all income sources as direct deposit so you don’t have to rely on the mail to get expected monies.

2. Itemize all the items in your home and all of your accounts on a smartphone or in a notebook, leaving room to later create a disaster recovery log.

3. Put all of your important documents in a safe place such as a fireproof safe.
Let’s take a look at each of these steps in detail.

Direct Deposit

Cash flow is vital after a disaster, but if you’re waiting for checks to be delivered or forwarded to a temporary address then you’re going to be at a big disadvantage. Schedule a direct deposit for any employer income, investment income, assistance and other income sources.

Property Itemization

Getting the right value for damaged property is an important part of getting your life back together after a disaster. By keeping an itemized list of all the property in your home you can better prove the value of your losses to the insurance company. Having this record of what you owned will assist you in making a detailed log of all the damages you endure during a disaster. A smartphone is ideal for both of these tasks, as you can use the phone’s camera and you can download one of many apps dedicated to property itemization and disaster logs.

In addition, having a separate list of all of your account information such as bank account numbers and insurance policy numbers will make it easier for you to access information that may have been destroyed in the event of a disaster.

Preserving Documents

Our lives are ruled by fragile paper documents that need to be kept safe from disaster. From your birth certificate to Social Security card, bank statements to insurance policies, marriage certificate, deeds and titles to various legal documents there’s an almost endless list of items you need to be able to access after a disaster. In addition to keeping the originals in a fireproof safe, you can also keep copies in a safe-deposit box (or vice versa), or keep copies scanned and uploaded to a secure storage cloud.

Your WealthPath may be littered with unexpected obstacles, but Kramer Wealth Managers is here to help you find a way to deal with all of them. Contact us today to see how we can keep the pathway clear and organized!

Preparing for Diminished Capacity

December 18, 2014

No one wants to think about a time when they may not be able to make their own financial decisions, but the truth is that we could all be facing this reality. Planning ahead for your future potential diminished capacity gives you the opportunity to ensure your financial objectives are protected and served even when you can no longer handle making financial decisions yourself.

Name a Durable Power of Attorney

If you are medically certified to be incapacitated, State government agencies can appoint a representative to handle your affairs but it is a long, cumbersome, and expensive process to have a Guardian appointed. Instead, establishing a durable power of attorney before you become incapacitated gives you the power to choose your own representative and clearly explain your goals, intentions and priorities. A Power of Attorney document should be drafted with the help of an attorney.

Points to remember about appointing a power of attorney:

• You can choose a different person to act as your financial power of attorney than the one you choose to make your healthcare decisions or you can choose the same person for both powers.

• It’s important to appoint a durable power of attorney because they will be able to continue managing your finances even if you become incapacitated.

• Your power of attorney documents outline the scope of the POA’s authority in detail, so you can limit them however you feel is necessary.

• Many states have developed statutory Power of Attorney forms for both legal/financial and medical that can be used without requiring the services of an attorney. However, keep in mind that these standard forms may not go into as much detail as one drafted by a qualified attorney.

Gather Documents and Passwords

It’s going to be difficult for your financial POA to take over for you if they have no clue what assets, policies and accounts you have or how to access them. Make sure you gather all your relevant documents and bills and keep them in a safe, secure location that the POA can access when (and if) the time comes.

If you have any digital assets or accounts, you’ll also need to include a list of user names and passwords for your POA. Make sure these are kept in a location that cannot be accessed during a theft in your home.

Establish a Plan with Your Personal Advisors

It is often the case that others may notice your diminished capacity before you realize it yourself. Have a candid conversation with your loved ones as well as your personal advisors such as your financial advisor, tax accountant, and attorney to discuss whom you want them to contact should they notice changes in your behavior or actions that may give them concerns over your ability to continue to manage your personal affairs. Keep in mind that confidentiality rules will limit their ability to share these concerns with others unless you provide them with advance permission.

At Kramer Wealth Managers, we can help you prepare financially for the possibility of dementia, Alzheimer’s and other cognitive problems. Contact us today.

This material is intended for informational purposes only and should only be relied upon when coordinated with individual professional advice. Neither FSC Securities Corporation, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.

Eight Tips for Keeping Financial Records Safe and Organized

October 16, 2014

If you want to have good control of your finances, keeping good records is one of the first steps. If your records are disorganized, they’re not going to be as effective a resource as they could otherwise be. Here are eight tips to help you keep your records organized so when you need it, you can easily get the information you need.

1. Have a central location for all statements, tax forms, receipts and other documents. Instead of keeping your records in random places throughout your home, keep them all together, ideally in a fireproof safe or cabinet.

2. Clearly label everything. Records from each tax year should be kept together and clearly labeled so you can quickly identify and grab them when needed.

3. File everything immediately. Don’t hang on to receipts and paperwork planning on filing them “later.” Instead, file everything immediately upon receipt.

4. Keep active files accessible. Files for the current year containing documents you need to get in and out of routinely should be kept nearby in an easily accessible location.

5. Consider scanning to save space and time. Using your computer to keep electronic copies of all your records will make organization, storage and maintenance much easier. Just make sure you create regular data backups and store them somewhere safe and secure. In addition to scanning, you can also opt to receive electronic statements from your various creditors and financial institutions.

6. Organize electronic records the same way you would paper records. Keep your electronic scans and statements in a central location on your computer, organized by year and clearly labeled.

7. Always keep security in mind. File cabinets should be locked, computers should be password protected and backup copies should be kept in a separate safe place, such as a safety deposit box.

8. Know what to keep and what to shred. In July, (http://kramerwealth.wpengine.com/how-long-to-keep-financial-documents-and-statements/) we talked about how long you need to keep your various financial documents and statements. Make sure you’re following the schedule and shredding documents when it’s safe to.

If you need advice on getting your financial document storage set up, we can help. Contact us today to discover the many ways Kramer Wealth Managers can help you organize your records and get a handle on your finances.

Beneficiary mistake #6: Gifting away tax benefits


August 21, 2014

Many assets allow you to name a beneficiary, that is, whom you would like to receive the asset in the event of your death. Life insurance policies and retirement accounts are common examples but some other account types such as bank accounts and non-retirement investment brokerage accounts also may allow you to name beneficiaries through a Pay on Death (POD) or Transfer on Death (TOD) form. While these forms are generally straight forward, they often lead people to make inadvertent errors. We have identified six common mistakes people make when preparing for the distribution of their assets after death. This is PART SIX OF SIX.


Gifting vs. inheriting. Many people prefer to give assets to their children while they are still alive instead of waiting for them to inherit it. This is common for people who are aging and find they don’t need some of the assets they have or they want to remove assets from their name to reduce estate taxes or for Medicaid planning purposes. However, there are often tax consequences associated with gifting assets while you are alive.


• Gift tax. Gifts in excess of the $14,000 annual gift tax exclusion may be subject to gift tax. Even if it isn’t subject to the tax, you will still need to report it on an IRS form 709, a Gift Tax Return. While many people are aware of this as it relates to cash gifts, they do not realize that it also applies to changing the registration on assets. For example, if you change the title on the deed to your home to your children, and the house is worth $500,000, the IRS considers this a $500,000 gift. Consult with a tax advisor before making any registration or title changes.


• Loss in stepped-up cost basis. One expensive mistake is gifting (or re-titling) highly appreciated assets such as real estate or stocks to someone else’s name. When an asset is gifted to someone while the donor is alive, the recipient takes on the original cost basis of that asset as well. Conversely, when an asset is inherited by someone after the death of the original owner, the beneficiary receives a “step-up” in cost basis to the value as of the owner’s date of death. This tax benefit can be huge.


Example: John Doe purchased his home in 1950 for $25,000. Today, the home is worth $400,000. If John changes the title on the home to his daughter, Jill, and then Jill sells it, she will have to pay tax on the capital gain of $375,000 ($400,000 sale – $25,000 cost basis= $375,000 capital gain). She would owe $56,250 in Federal taxes alone, not to mention State taxes, where applicable. However, if John were to leave it to Jill after his death as part of his estate, Jill would receive a step up in cost basis to $400,000. If she then sold it immediately for $400,000, she would not owe any taxes at all ($400,000 sale – $400,000 cost basis= $0 capital gain).


The stepped-up cost basis also applies to other capital assets such as stocks, bonds, and many other investment vehicles.


Before adding your child’s name to any of your assets, be sure to consult with a tax advisor or estate planning attorney.


Being aware of this type of common mistake can help you better prepare to ensure your wishes are followed in the event of your death. At Kramer Wealth Managers, we can help you coordinate with an estate planning attorney to make sure your estate goals and financial planning goals are in line with your personal WealthPath.

While the tax or legal guidance provided is based on our understanding of current laws, the information is not intended as tax or legal advice and should not be relied upon as tax or legal advice. Neither FSC Securities Corporation, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.

Beneficiary mistake #5: The empty estate

August 14, 2014


Many assets allow you to name a beneficiary, that is, whom you would like to receive the asset in the event of your death. Life insurance policies and retirement accounts are common examples but some other account types such as bank accounts and non-retirement investment brokerage accounts also may allow you to name beneficiaries through a Pay on Death (POD) or Transfer on Death (TOD) form. While these forms are generally straight forward, they often lead people to make inadvertent errors. We have identified six common mistakes people make when preparing for the distribution of their assets after death. This is PART FIVE OF SIX.


Leaving nothing in the estate to cover expenses. In an effort to avoid probate, many people fail to consider expenses that may need to be paid after their death. For example, if you own a home, there are expenses needed to maintain the home until it can be sold, which can often take a few months. By leaving all of the funds directly to beneficiaries and leaving nothing in the estate, the beneficiaries will have to use their own money to pay for utilities, repairs, and maintenance on the home until it is sold. They may also have to pay for final expenses such as burial or cremation. Sure, they will have the assets you have left to them to cover the cost but it could cause arguments between multiple beneficiaries over who will be responsible for paying for what. When some funds are left in the estate, the estate will pay for all expenses until everything is paid and then the remaining funds will be divided among the beneficiaries.


When determining whether or not you should leave some assets in the estate and as part of probate, you will want to consider the amount of assets, the type of expenses anticipated after death, who will be handling these expenses, and the cost of probate, among other factors. An estate planning attorney can help walk you through this.


Being aware of this type of common mistake can help you better prepare to ensure your wishes are followed in the event of your death. At Kramer Wealth Managers, we can help you coordinate with an estate planning attorney to make sure your estate goals and financial planning goals are in line with your personal WealthPath.

While the tax or legal guidance provided is based on our understanding of current laws, the information is not intended as tax or legal advice and should not be relied upon as tax or legal advice. Neither FSC Securities Corporation, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.

How Long to Keep Financial Documents and Statements?

July 2, 2014

If you’re like many of us, you’ve got a few boxes of financial records that you’d probably like to get rid of. From old bank, credit card and loan statements to tax records, keeping these boxes isn’t fun and takes up room you could use for storing precious mementoes. It’s possible that you may be able to get rid of some of these papers, assuming you’ve held onto them long enough.

Tax Forms and Supporting Documents

The IRS recommends keeping a copy of your filed returns along with supporting documents (such as W2s, receipts for deductions and 1099s) for at least three years. However, if you’ve claimed a loss for a worthless security or bad debt, they recommend keeping your records for that tax year as long as 7 years after filing. If you own rental property or a business and claim depreciation, some tax advisors recommend keeping tax returns as long as you own the asset you are depreciating. Before you shred any tax returns, be sure you match up the numbers against your social security earnings report to make sure the income figures match.

Bank, Loan and Credit Card Statements

Unless you need them for tax purposes, you can shred bank, loan and credit card statements after a year. If you do need them for tax purposes, attach them to your tax return instead of keeping them in a separate file.

Investment Statements

Most investment statements provide an annual statement December 31st of each year which shows the transaction history for the year. For any investments purchased prior to January 1, 2011, you will want to keep these annual statements for as long as the account is open to track cost basis. Once the account is closed and the gain or loss is reported on your tax return, you should hold on to it for seven years and file it with your tax papers for the year you reported the sale. For purchases made after January 1, 2011, the investment companies are required to track the cost basis and it is no longer necessary for you to hold on to your investment statements.

Better Safe than Sorry

While you can technically get rid of loan and credit card statements after a year, if you’ve paid off the debt you may want to hold onto the last zero-balance statement indefinitely. That way, should your full repayment ever come into question, you have proof that if was repaid.

Receipts for big-ticket purchases should also be kept, even if you didn’t take a tax deduction for them. The reason you want to hold onto these is so that you have documentation to provide your insurance company should you suffer a loss.

Other documents you may want to hold onto forever include original loan documents, divorce decrees, insurance policies and custody agreements, deeds and titles.

Keeping Digital Copies

If you’re ever concerned about shredding a document once you’ve held it to the recommended date, but you still want to free up some space in your attic or storage facility, consider having the document scanned so that you can keep an electronic copy in your computer. Just make sure to create a backup so that you have another copy of the files should something happen to your hard drive. You may want to consider placing the backup files in a safe deposit box or fireproof safe.

At Kramer Wealth Managers, we believe that having organized finances can help you stay on your WealthPath. We can help you decide when to shred documents and when to make an electronic copy. Contact us today.

Prepping for 2013 Tax Filing

The IRS recently announced that they’d begin processing tax returns on January 30th, 2014. If you’re not ready to meet that aggressive timeline, you can always wait until the April 15th deadline. Whichever date you choose to send your paperwork in and close out the 2013 tax year, you need to be organized and have all your data together. Here are a few tips to make the process easier.

• Compile your documents. If you’re taking deductions for charitable contributions, energy-efficient home improvements, child care, tuition and other expenses, now’s a good time to start gathering those receipts together. If you can’t find a receipt, call the retailer or organization you gave the money to and see if they can provide a copy.

• Gather your statements. In January, you’ll start receiving end-of-year statements from your mortgage lender, retirement account custodians and banks. These statements will show important information that may need to be used on your tax forms, including gains, interest payments, distributions, contributions, and more. Get these documents together and match them with the various 1099 statements you will receive in February so that you can verify accuracy. Most 1099-DIV and 1099-R documents are mailed by January 31st, 2014 but the deadline for 1099-B forms is not until February 18th so you may not receive your tax documents for non-retirement brokerage and investment accounts until the end of February.

• Max out your Traditional and Roth IRA contributions by April 15th, 2014. You have until April 15th to make a 2013 contribution to your Roth* or Traditional IRA. The maximum IRA contributions for 2013 are $5,500 with an added catch-up contribution of $1,000 for people over 50. Don’t forget to tell your IRA custodian the tax year you want the contribution credited to.

• Make health savings account (HSA) contributions by April 15th, 2014. The balance in your HSA rolls over from year to year and funds withdrawn for non-medical purposes are exempt from the ten percent penalty once you reach age 65, making this an important account to max out annually. Just as with an IRA, you can make a 2013 contribution between now and April 15th, 2014. You must still follow 2013 limits, which are $3,250 for single individuals, $6,450 for families and a catch-up contribution of $1,000 for those over 55 who are not enrolled in Medicare.

• Schedule your appointment with your tax preparer. Many tax preparers are happy to start booking appointments now, even for March and April, so they can better plan out their busy tax season. Having an appointment on the books also gives you a hard deadline for preparing all of your documents so you aren’t tempted to procrastinate. Just bear in mind that if you have non-retirement brokerage accounts, you may not want to schedule an appointment before the end of February since the deadline for mailing 1099-B forms is not until February 18th.

It’s easy to get overwhelmed by the amount of preparation that goes into an annual tax filing but getting a head start can ease the stress.

*Generally, Roth IRA contributions are not tax deductible, however, you could qualify for the savers credit, which may entitle you to a partial tax credit if you fall within certain income limits. Ask your tax advisor for more information.