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Our first article in 2008 is a guest post by Alex T. Roshuk. Want to be a guest writer on Financial Dominance ? Contact Marcel

Probate is the process of having your will accepted by a Probate or Surrogate Court so that the estate will be administered and all the claims and distributions on the estate will be settled. Without a Will this process is called the administration of an estate. In the first case the Will names the Executor or Executors who administer the property, in the second case the Administrator is set by statute, agreement of the heirs and the approval of the Court. This article deals with some of the problems with probate and, to a lesser extent, administration of estates and some suggestions on how to remove your assets from your estate to avoid these problems in certain cases.

The process of probate can be complex, long, and protracted. Needless to say, it can consume a sizeable percentage of the estate assets. While it’s important to consider drafting and executing a “Last Will and Testament“, before undertaking such an important step in one’s life, one should be made aware of other options that may conserve at least some of one’s assets in a more efficient manner.

Drafting and executing a Will is generally a fairly straightforward process but you need to make sure that the formalities in your jurisdiction are adhered to in the strictest manner possible. Why? Because protracted probate proceedings may occur whenever there is a deviation from these procedures or when individuals who have something to gain if a particular Will is not accepted for probate (i.e. the intestate heirs or distributees who may be receiving substantially less when a Will is written). Such errors may be used to drag the probate procedure on causing a lot of grief to your intended heirs and may result in your assets going to people you did not intend to give them to. Also remember that a Will is a valuable document like a check, you should never have old Wills circulating that have not been destroyed and make sure that they are properly tied (with a ribbon and seal). Never allow your lawyer to keep a “copy” of the Will unless this is mentioned in the Will itself and never sign more than one copy of any signature page when executing a Will (this may later lead to fraudulent Wills being created that are basically impossible to detect).

Problems with Probate
Probate lawyers may attempt to exacerbate animosity between distributees and testate heirs and sometimes the court may appoint “law guardians” to protect the interests of minors or parties under a disability (such as someone who has been institutionalized or in a coma). Such legal representatives are usually entitled to compensation from the estate corpus, i.e. your hard earned money going to pay lawyers you have never even met. Someone who feels slighted after your death because you have not given them their “due share” of your property may feel it necessary to fight for it in probate. They may accuse your heirs of over reaching, undue influence, duress or they may suggest that you were incapacitated when you planned or executed your Will or that your lawyer took advantage of you and convinced you to sign a Will that would benefit beneficiaries who were friendly with the lawyer. The originality of jilted heirs is boundless and some unscrupulous probate lawyers may take advantage of the situation as a means to secure their sizable fees.

What you can do
It may be possible to take some or even all of your assets out of your estate. The main vehicles for such an estate plan including holding property in “joint tenancy with right of survivorship” (JTRS) or making bonds, stocks or bank accounts POD (payable on death) to a beneficiary. JTRS means that the property is automatically transferred at the time of death of one of the “joint tenants” to the other remaining owners of the real property. Naming a beneficiary is also the common procedure with life insurance proceeds, retirement accounts and annuities. One only needs to make sure that the financial institution has listed a beneficiary or beneficiaries (it is also possible to name contingent beneficiaries this way). These funds will then be available to the beneficiaries as soon as a certified death certificate can be produced and delivered to the financial institution along with whatever other proof the institution needs in order to release the funds; such accounts do not enter into the estate of the decedent but pass directly at the time of death.

Unfortunately this is the way our legal system has been created and the rationale for Surrogate or Probate Court is that the court “system” is there to protect the interests of the departed. However unscrupulous individuals may attempt to use your death as an opportunity to benefit thereby and thus deprive you of your true intention to past your assets onto those whom have designated in a Last Will and Testament. Before deciding to put all your assets into a Will make sure you have considered all the options and spoken to an estate planner who has your – and your chosen heirs – best interests at heart. Remember there may be valid tax or liability reasons to place some of your property in an estate, but using the vehicles mentioned here may make it easier for your intended heirs to get some of your hard earned assets quickly and with a minimum of legal costs at a time when they will certainly need help.

By Alex T. Roshuk, Esq. (Remember, legal information is not legal advice, please seek legal representation before making any important decisions about your estate needs).

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Being perpetually in debt seems to be a way of life these days, as I am sure many of you are aware. Credit cards are usually the main source of debt because they are so convenient to use and difficult to keep track of, but did you know that there are ways of using credit cards to reduce your debt and save money? Take a look at the tips below for an idea of how you can do just that!

1. Compare credit cards to obtain the best deals. There is a variety of credit cards out there that offer interest free deals, including balance transfers. If you compare credit cards then you could find a deal of anywhere up to 15 months interest free on balance transfers and save on the interest whilst giving yourself a chance to clear the debt in that space of time.

2. If you have to make a big purchase and do not have the money for it then you could also tap into interest free purchase credit card deals. These deals are often similar to the balance transfer ones in that you get a certain period of time to pay the credit card’s balance off before interest is applied, thus saving you money and reducing your debt. Again, compare credit cards to find the best deals.

3. Finally, there is a whole host of reward credit cards out there that offer cash back offers and various reward points. This can save you money and earn you a little bit back on your purchases, but some of the reward deals are incredibly poor so, again, you have to compare credit cards to find the better ones.

I’m sure that you can see the common theme here – compare credit cards! It is a must if you want to access the best ones. So many of the credit card comparison websites are complicated to use. To solve this problem take a look at About Your Money. The credit cards section is simple to use, complete with a comparison table and a guide to plenty of information. Choose the best ones for your situation, whether you want to save money or reduce your debt.

User submitted ideas

Try to obtain a credit card with lower interest rates than your current credit card and you can then use this credit card to pay off the balances on your other credit cards. By doing this, you are avoiding heavy fees charged by the companies and you are transferring your debts to the credit card with lower interest rates and so, you save money. But some credit cards charge a higher fee for transferred balances and so, you need to make sure that you choose the right card. Also, make sure that you can transfer your balance again to another card in order to save some more money. Use this tip with caution.

Send us ideas on paragraphes how to “Save Money with a Credit Card”.

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Did you know that our Banks create money from nothing. Banks can lend more than they actually manage. In the next 20 years, our relationship with banks will change. We have options our grandparents would have only heard of in comic books. Here are some ways we can reduce our dependence on banks.

1. Create a Open Source borrowing and lending website softwre. COST: $200 - $2000

2. Create a Facebook application to facilitate lending and borrowing COST:$200 - $2000

3. Gmail, Yahoo Mail and Hotmail offer borrowing and lending among users. COST: Wishful thinking

4. Create open source borrowing and lending plugins for forum software like VB and PHPBB. COST: $200 - $2000

5. Telecoms giants build borrowing and lending into their mobile services. COST: Wishful thinking.

6. Depending on where you live, start borrowing exclusively from credit unions or online services like Lending Club, Circle Lending, Zopa or Prosper. COST: Little to nothing

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Two weeks ago, I wrote an article about Financial Documents You Should Save. This list is a little different. Some legal documents are more important than others. Some you don’t need, and some you need. Some legal documents everyone should possess at all times.

Will
A will is a legal, signed document that states your wishes regarding disbursement of your property after your death. Making a will when you are healthy and in sound mind, can save your family a lot of time, energy and money when you are dead. If you die intestate, which means without a will, a large chunk of the money from your estate will likely go towards higher legal fees as well as additional taxes. If you’re wondering where is the safest place to keep your will, you could keep a copy of the document in your bank locker. Make sure you appoint an executor to the will and keep your will in a place where this individual or entity will find it easily. The executor of your will could be either an attorney or a family member or even a trust company. In the event of your death, the court will appoint an executor if you have not named one.

Letter of Instruction
It would also be a good idea to leave a letter of instruction, which is a letter informing your family about your last wishes including the funeral or burial arrangements you’d like to have and who you’d like them to notify upon your death. This letter cannot and will not be used as a substitute for a will. It is an informal letter. You could also include details about where your will and other important documents are located, the money that you owe to various people or the money that is owed to you by various people.

Trusts
Contrary to popular notion, trusts can be used by everybody and are not only for the super rich. In fact you should talk to your financial planner or lawyer about creating a trust. Whatever assets you place in your trust will automatically be given to the beneficiaries; there are no probate costs involved. A revocable living trust states who will have control over your assets while you are living as well as when you are dead.

Durable Power of Attorney for Health Care
This legal document ensures that in case you were to become incapacitated, your affairs will be looked after as per your wishes. If you have not named one, the court will appoint someone they deem most appropriate. It is also called a living trust and the person nominated will be responsible for taking care of your health care as well as your financial arrangements.

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Some people have a hard time controlling their financial fears. There are various simple situations that often get out of hand because of unfounded fear. Let’s take a brief look at them and see how we can handle them.

Fear of Not Knowing What You Want
Problem: You have a good job; you make a lot of money. Yet, you’re not satisfied with your life. You feel like something is missing.
Solution: Step back. Take a look at your life and what you’ve done so far and what you would like to do. Make a list of things that you’ve always wanted to do. Pick the most significant ones and work out steps to accomplish them. Use the money you make whenever needed.

Fear of Society and keeping up with the Jones
Problem: You make a good sum of money each month but your judgment and belief goes against spending too much of it. Yet, assuming that society won’t accept you the way you are, you proceed to spend large amounts on things you don’t even want or need.
Solution: Take a look at the bigger picture. Many years from now, how you lived is not going to count but how much you were able to save or invest will be vital to your well being. Make small but powerful decisions on how your lifestyle should change.

Fear That You May Go Broke
Problem: You’re scared stiff of falling ill or getting into an accident that will cause you to stop working and lose all your savings. You can’t have enough money right now.
Solution: Letting a probable situation affect your daily functioning is unhealthy. Every day living poses a little risk in some way, but it should not interfere in your life. Make sure you’re well-insured against potential situations and invest in a savings plan so that you can live a comfortable retired life.

Fear of Breaking Bad News about Money to Your Partner
Problem: You’ve been in debt for too long and it seems to be getting worse. You can’t let your partner know for fear of what they might say to you or what actions they might take.
Solution: Remember, your partner is just that, someone to stand with you and by you through every circumstance. It may come as a shock to them when you reveal the truth, but it is far better for them to know now, than later, when your financial standings get you into more trouble – like being denied a loan, mortgage, etc. Sit down together and make a long-term plan. Decide how to save and spend from now on, make detailed strategies and stick to them. It will help both of you in the long run.

Fear of Wealth
Problem: You’re entitled to a raise but you don’t know how to ask for it. Secretly, you think you don’t deserve it and that is what the bigger problem here is, probably.
Solution: Taking care of yourself is something you should be determined to do. Never be afraid to ask for something you know that you have earned. Make sure you are responsible for yourself and your future by accepting raises or inheritances passed down to you.

Fear of Taking Control
Problem: You know you have to start investing your money and save for the future. However, it all seems so intimidating that you’d rather not think about it now, although you know you’re wrong.
Solution: Start small. Read a few good books about investing and talk to a recommended financial consultant. Make a small investment and learn from it. Slowly explore and understand until you’re able to take bigger steps. Make sure you’ve got a savings plan too.
Overcoming these fears may not be the easiest task, but taking small, deliberate steps can get you through quicker than you realize!

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Many people save no financial records or papers whatsoever. If you are one of those people, allow me to tell you that this is a very bad idea. There are many cases in which you will be extremely relieved that you saved certain papers, or had the correct things on hand. However, with lots of financial transactions going on, it can be hard to know which ones you need to save, and which ones would be fine to throw away. Here are some of the records that you need to save.

Bank Records. You should keep bank records for at least a year, but if storage is not an issue then it couldn’t hurt to keep them forever. You can sort them according to their importance. If your checks represent large purchases, business expenses, or anything pertaining to taxes, then they are more important in the long term. You can shred the rest.

Savings Records. If you contribute your money towards a retirement or savings plan account, you should save the statements you receive. If you get monthly or quarterly statements, save those temporarily. Once you get the annual summary, make sure it matches up with the previous statements, then get rid of everything but that. Be sure to shred it thoroughly to make sure nobody else can retrieve your personal information. You should keep the annual statements forever, or at least until you are finished with the account.

Tax Records. It may seem paranoid, but it is probably a good idea to save everything related to your taxes. This includes returns, records, checks, and receipts. The IRS performs many audits each year, and these can be a nightmare if you haven’t got the proper records. But, if you’ve got everything sorted out and you’re as honest as possible, you can get through it with minimal stress. The IRS has a certain period of time during which they can put you under suspicion for anything they notice in your filing. This period is 3 to 6 years depending on what exactly the problem is. So, you should keep all tax-related documents for a minimum of 7 years.

Bills. You should keep your bills for about a year. Once a year, go through the ones that you have saved up. If the transaction is finished and everything went smoothly, feel free to shred it. However, if the bill is for a big purchase, you should hold on to the bill permanently. It will come in handy if you ever have to deal with warranties or insurance, in case the item gets damaged, stolen, or lost.

Filing 101 - What to do next A good way to make sure they are in order is to keep a filing system. Start by identifying convenient areas for 1. Regularly used or “current” files. 2. Hardly used or “dead” files 3. A safe deposit box that would store any document that are expensive or hard to replace

If you’ve got documents and you aren’t sure whether to keep them or not, it’s probably a good idea to keep them. You never know when it will come in handy to have proof of your financial activity.

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I’ve been enjoying No Credit Needed’s 33 Days and 33 Ways to Save Money and Reduce Debt for the last couple of weeks and wanted to write in agreement to his post about calling for discounts. Calling and negotiating with every vendor possible is the easiest and most surefire way to start saving lots of money.

Over the past couple of years, I have saved thousands from continually calling the companies I do business with and simply saying, “The price you are giving me simply isn’t good enough.” Most companies are happy to oblige if you reason with them thoughtfully and factually.

Here are some places to get started:

Credit Cards

You will hear the glories of credit card rate negotiation preached on nearly every personal finance blog on the planet. This blog is no different. With a balance transfer only a click away, most credit card companies will happily notch the rate down to keep your money. After all, 10% of $100 is better than 16% of $0.

To negotiate, use these to bolster your case:

• You are willing to transfer your balance to a competitor’s card
• You are willing to cancel their card altogether
• If you have other accounts with them, tell them you are willing to cancel those accounts as well
• Tell them you are willing to take a credit line decrease in exchange for a lower rate

After having some large, unplanned expenses last year, I racked up a large amount of debt on my credit cards. After about a half hour of calling (darn those long wait times), I had the average rate on my cards down from around 15% to 10%. Although, to be honest, one card offered me 0% for 12 months to consolidate my balances with them, and I happily obliged. The other low rates are still in effect, though.

Auto Insurance

After finally getting a second car, I was looking for ways to reduce our auto insurance premiums. I called my agent at Allstate to discuss possible alternatives. I was amazed at the huge amount of possible discounts that could be applied to my account. Discounts ranged from a “good student” discount (I had started an MBA program) to an adjustment to yearly mileage for the cars to a discount for where I parked my car at night. When all was said and done, I had saved 15% on my premiums after a ten minute conversation.

Cable/Satellite

The cable/satellite rivalry presents great opportunities for saving money. I won’t get into too much detail on this one as I’m sure most of you have threatened to cancel your service at one time or another. What typically happens when you call the cable/satellite company is remarkable - deals that you have never heard of suddenly arise. You are offered 50 more channels for $10 less per month. If you push hard enough, like I did, you may end up getting expanded digital cable free for three months, $15/month for the next three months, and at a 10% discount thereafter. You should probably negotiate at least yearly with them, though, as your price will eventually return to ridiculous levels.

My advice is to do as No Credit Needed says: gather all your bills, write down what you are currently paying, and give the companies a call. Stand firm and you could be well on your way to a boatload of savings.

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The following guest post was submitted by glblguy from Gather Little by Little - A Christian Personal Finance Blog (RSS)

My boys mowed the yard the other night, and when they finished the whole front yard looked like a dust storm had gone through. What grass I have is crabgrass, the rest is mostly dirt with a few weeds and lots of completely yellow and dead grass. In the spring, it was a lucious green and completely full and thick.

Looking at our yard, my wife commented,”Why do we care about our yard so much? I am just tired of worrying about it.”

That got me thinking about how much time and money I put into my yard each spring and fall. In the spring I aireate, thatch, re-seed, fertilize and water. By May it’s beautiful, then the summer heat and drought kicks in. Within a few weeks the yard is yellowing, within a few more there is more dirt than dead grass. In just a few more large clumps of crabgrass are beginning to dominate.

Then comes September. I aireate, thatch, re-seed, fertilize and water (hmmmm, this is sounding familiar). By December the grass is dormant. Dormant is a fancy word for grass that looks dead but isn’t really.

A quick calculation of the cost each spring and fall:

• Grass Seed: $50.00
• Fertilizer: $50.00
• Aireate: $50.00
• Watering: $80.00 (for 3 months)

Total: $230.00 or $460.00 per year

Let’s assume for a few minutes that I live in my home for 20 years. Over the course of 20 years that works out to be $9,200.00. Placed into my 401k at a conservative 10% return for 20 years, it would be $10,865.00. This doesn’t even factor my time in which would inflate the numbers even further.

With that kind of money, I think my wife is right. I am tired of worrying about it, watching it grow then die just to grow and die again. Not to mention, $10,865.00 is a lot of money and frankly money I could use.

I think I’ll just leave the yard alone this fall and see how it does in the spring. I’ll keep you posted!

How much do you spend on your yard annually? Do you bother with it? Any suggestions for accomplishing the same thing more frugally? I’d love to hear your thoughts on the subject.

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I recently read a great post at Debt Free Revolution called Dave Ramsey: Con Man, Cult Leader, or Other? In the post, Ana ponders whether Dave Ramsey should be considered a con man since he charges money for his books, seminars, and other products. This got me to thinking about various other gurus and why some are regarded as heroes and others are regarded as villains.

Right off the bat I began thinking about the often controversial Robert Kiyosaki, author of the Rich Dad series of books. In many circles, especially in multilevel marketing organizations, he is very highly regarded as his message is that anybody can be rich if only they have the right mindset. However, for many others, he is regarded as a con artist that preys on the naiveness of people just looking to get ahead. So what causes this extreme divide between people who love Robert Kiyosaki and those that despise him? And why does Dave Ramsey seem to have nearly universal acceptance? (I don’t mean that everyone agrees with him, but it seems that even those that don’t agree with him still respect him)

I’ve narrowed it down to a few things:

The devil is in the details…

One of my biggest complaints about Robert Kiyosaki is that his books are typically very vague and provide a cursory overview of how to get rich. There is rarely enough value in the books to justify the price tag. When asked questions about his philosophies, his answers are very trite and simplistic. That being said, there is one underlying philosophy he and I share: instead of overloading on depreciating assets such as expensive TVs, stereos, etc, throw that money into appreciating assets such as stocks, real estate, or other investment vehicles.

Dave Ramsey, on the other hand, often provides a step-by-step guide to implementing his methodology. If you call into his radio show, he will dissect your situation in detail and give you a game plan going forward. Although I don’t always agree with his opinions on debt, his teachings are by no means dangerous and often err on the side of conservatism.

Man those audiobooks are expensive!

Robert Kiyosaki is the king of “upselling”. If you read his books, you will find lists of not only his other books but also his line of money games. If you buy his money games, you will see advertisements for his “beginner” seminars. If you go to his “beginner” seminars, you will hear advertisements for his “advanced” seminars. The cycle just doesn’t end. I recently received two free tickets to a Rich Dad event near where I live. I shuddered at the thought of the hardcore selling that would be present at the event and threw the tickets in the trash.

Dave Ramsey, though, is nearly the opposite. As mentioned in Ana’s post at Debt Free Revolution:

Dave often gives away his books, FPU memberships, and tickets to his live events to callers who need them. Others he tells to check his books out from their local library

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So, your little girl or boy has finally grown up and is about to graduate. They are about to face the scary “real world” without the constant guidance from mom and dad. You wonder, “What can I do for them before they leave for college that will have a lasting impact on the rest of their life?” Money Magazine has a great idea: give them a session or two with a financial planner.

What better to preempt those inevitable credit card offers and student loans? The financial planner can explain, probably much better than you or I can, the downward spiral that can occur when a person spends more than they earn. And, in college, what you earn isn’t much, so you have to be even more conservative in your spending. The planner can explain the long lasting financial effects of just one extra night of partying a week.

Aside from explaining what the student shouldn’t do with their money, they can also explain what they should do with their money. Right away the student can begin putting 10%+ of their income into a savings vehicle to jumpstart their road to financial independence. They can tell them about such wonderful things as compound interest and give them examples on why it pays to start early. Take for instance someone who starts investing $1,000 per year their first year of college versus someone who starts five years later. Assuming 40 years of investing at 8% interest, the one who started saving earlier will have nearly $94,000 more than the one who started later. Only five years earlier!

The glue that will hold the financial plan together will be the fact that the advice is coming from a 3rd party expert in the field of personal finance. (i.e. not mom and dad) This freedom from mom and dad allows the soon-to-be adult a chance to be independent and develop a confidence in their ability to handle their finances on their own. It will also allow them to be more forthcoming and honest about their concerns, fears, and hopes.

My recommendation is to find a fee-only planner as you don’t want someone trying to sell your child something when they are just supposed to be teaching them. The $500-$1000 you will spend will be a bargain compared to the alternative of a financially inept child calling you every few months for “just another loan until I get back on my feet.”

If you haven’t already, take a look at my article on 6 ways to increase your kids’ financial intelligence. It has a few tips on what to do BEFORE graduation, so your child will hopefully be interested in their finances when you give them perhaps the greatest graduation gift ever.

Photo: PublicRadio.org

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