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Archive for the ‘Estate Planning’ Category

7 Deadly Sins That are Harmful to Your Financial Health

They’ll Kill Any Chance You Had of Ever Being Healthy, Wealthy and Wise…

borrowed from Richard Lindsay, CPA

1. Bad Debt—Taking on debt just to achieve a boost in lifestyle. Long after the initial good feeling of owning something new has worn off, you will have the monthly payment. Think of debts as receiving a monthly “decrease” in your earnings since you will have less disposable funds available to do things that are important to you in the future.

2. Borrowing to Meet Ongoing Expenses or to Pay Other Debt—If you find yourself falling deeper into debt just to make ends meet, it’s time you face facts, you need a budget.

3. Stealing from Your Retirement—If you find yourself raiding your retirement while you are still working, you need to set time aside and create a budget.

4. Not Paying Yourself First—The first payment from any paycheck or business withdrawal should be toward your personal savings or investment program. Most experts recommend saving at least 10%. While this may seem like a lot, most individuals can defer some spending in order to meet their personal objectives. Consider having a portion of your paycheck directly deposited into a separate savings or money market account that is not connected to your ATM or debit card. Automatic saving is a cornerstone to financial wealth building.

5. Not Taking Advantage of Your Employers’ Benefit Plans—This includes not taking advantage of or not maximizing the employer’s match in your 401(k) plan. No one can afford to turn down free money. It also includes not taking advantage of other employer benefits such as a Health Savings and Flexible Spending accounts which can dramatically cut the cost of insuring and caring for your family.

6. Hiding and Not Setting Goals—Not knowing if you have enough saved for your children’s education, your own retirement, or any other goal that you are looking to achieve. Act now and take control of your life.

7. Not Being Happy—Our culture is pervasive with the “I will be happy when” syndrome. Surveys show that a significant portion of the population report that they would be happy if they could increase their income by 20%. This perception seems to remain true at all income levels regardless of how much income is earned. People caught in the 20% more trap can never be happy because, even if the objective is reached, there will always be another 20% more needed to remain happy. Happiness is a choice. Look and be thankful for things that make you happy everyday. Learn to change your mind about anything—it’s easier than you think.

10 Ways to Lose Your Nest Egg—as reported on

1. Having No Diversification.

2. Putting it all in One Stock.

3. Ignoring Inflation.

4. Buying Stock After Unverified Tips- “Hot” tips have a way of not panning out.

5. Ignoring Investment Expenses- Some of these investment expenses can be excessively high and decrease your investment. This is something you will want to monitor.

6. Trying to Time Markets.

7. Taking on Too Much Risk – Portfolio overwhelmingly full of stocks. Stocks are a hedge against inflation, but only in moderation.

8. Taking too Little Risk.

9. Investing with Borrowed Money- Add leverage to a portfolio, borrowing money to invest tremendously increases risk.

10. Ignoring Tax Implications- When they are withdrawn after retirement, funds in a traditional 401(k) or IRA account are taxed at ordinary rates.

Watch out for these common mistakes when managing your investment portfolio!

Latest Estate Tax Update from the Association of Advanced Life Underwriting

Estate Tax Developments in Congress…..from the AALU Weekly Briefing

Democratic Leadership in the Senate has begun to mark its position on expiring year-end tax provisions by introducing draft legislation calling for temporary extensions of tax relief for middle-class taxpayers (taxpayers earning $250K or less). The estate and gift taxes were addressed in the initial draft, but were later eliminated as narrower strategy on year-end taxes was adopted. Nonetheless, the markers established in the initial draft are highly encouraging and reflect the consistent advocacy by the AALU in pursuit of permanent estate and gift tax reform that maintains unified lifetime exemptions. The original draft bill, introduced by Majority Leader Harry Reid (D-NV) and developed by Senate Finance Committee Chairman Max Baucus (D-MT), proposed $3.5 million lifetime exemptions and a 35% top tax rate–maintaining unified lifetime credits against the estate and gift taxes–and also included portability of unused credit, indexing for inflation, and a fix to the potential “clawback” issue that has previously caused concern amongst the estate planning community.

These provisions were stripped from the legislation as Democratic Leadership states its intent to focus solely on “middle-class tax relief.” It is likely that the political sensitivity around these issues led to their removal–particularly for several Senators in challenging campaign fights in moderate states. While this result is not ideal, the most important takeaway from this exercise is that the Democratic Leadership and the top tax-writers and senior staff of the Finance Committee have made policy judgments on the estate and gift taxes that are largely consistent with the AALU’s.

Even with the removal of the estate and gift taxes from the Democratic draft, It is possible that the Senate could vote on a clean, one-year extension of all Bush-era tax cuts—which would include the estate and gift taxes—in the form of an alternative bill offered by the Minority Leader Mitch McConnell (R-KY) and the top Republican on the Finance Committee, Sen. Orinn Hatch (R-UT). Nonetheless, we continue to expect meaningful action to occur on the estate and gift taxes in the post-election lame duck session. However, these recent developments are a positive indication of where Senate negotiations may begin when that time comes.

Lastly, as we have previously reported, the House Republican leadership is still scheduled to push a vote next week on legislation to address expiring taxes for one year that will include current estate and gift tax policy enacted in 2010 ($5million exemption/35% rate with unified estate and gift tax credits). That legislation is not expected to be taken up by the Senate if it clears the House.

For further information, or to learn more about the Association for Advanced Life Underwriting go to

MEG Financial Stresses the Importance of Life Insurance in Estate Planning: You May Not Be As Lucky As George Steinbrenner

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MEG Financial, a nationwide specialty life, disability and estate planning insurance agency comments on the death of George Steinbrenner and how he escaped paying federal estate taxes.

Pensacola, FL (Vocus) July 29, 2010 –

MEG Financial, a leading online provider of life insurance and estate planning emphasizes the need for high net worth individuals to plan for future estate taxes.

The recent death of New York Yankee owner and icon George Steinbrenner should be a wake up call to anyone with a significant estate value with future federal estate tax exposure. Fortunately for Mr. Steinbrenner, his death on July 13th came six months after the federal estate tax expired. Forbes magazine had previously estimated Mr. Steinbrenner’s net worth at over $1 billion. With the expiration of the federal estate tax in 2010, the timing of his death will likely save his heirs in excess of $500 million in federal estate taxes. Yes, he was ultimately successful in business and you could say from a financial point of view that he picked the right time to die.

How Will the Federal Estate Tax Affect You?

Well, if you die in 2010, you will be like Mr. Steinbrenner and avoid the punitive federal estate tax. However, the federal estate tax is coming back in January 2011 and will affect all estates over $1 million. In fact, the maximum federal estate tax rates could be 55% of your entire net worth that exceeds $1 million. Don’t get caught off guard with no plan!

MEG Financial President and CEO Michael Gray, Jr states “these days, it is not that hard to amass an estate that exceeds the $1 million exemption and at the scheduled rates for 2011 many families will be dramatically affected.”

No One Knows Where the Federal Estate Tax Rates and Exemptions Are Heading

The inactivity of Congress with respect to the federal estate tax is cause for alarm. It was widely felt among tax planners and estate planning attorneys that the federal estate tax exemption for 2011 would be set at a much higher level, say $3.5 million or even up to $5 million. But the state of the economy and the shortfall of federal revenues may mean that the exemption remains unrealistically low. According to Gray, “the key is to evaluate your net worth and estate planning concerns carefully and to plan accordingly. With the low federal estate tax exemption, you really do not have to be in the same financial league of the Steinbrenner’s of the world to be impacted by the pending federal estate tax. Be smart and plan now.”

Life Insurance: The Perfect Tool for Effective Estate Planning

It has long been know by most wealthy families that one of the best ways to pay federal estate taxes is with life insurance. In fact, it is the perfect vehicle because the timing of the payout of the life insurance proceeds corresponds directly with the federal estate tax bill.

The concept of using life insurance to pay estate taxes is relatively simple. You can set up an irrevocable life insurance trust and have the trust purchase a life insurance policy to be owned by the trust with the trust as the beneficiary. When proceeds become payable, the life insurance funds go into the trust which can then write a check to the federal government to pay the estate tax due. This allows for your estate to be passed to your heirs in whole and the life insurance proceeds cover the estate tax.

This explanation is obviously a simplification and you should always consult your tax and legal professionals. But the concept is clean and works great for estates with large real estate holdings or other non liquid assets.

For additional information on using life insurance in your estate planning or to receive a custom life insurance quote, contact MEG Financial now or visit our website

MEG Financial:
For the past 16 years, MEG Financial of Pensacola, Florida, a nationally known life insurance and estate planning brokerage firm, has worked with high net worth individuals to secure life insurance to pay estate taxes. MEG’s specialty is finding the right policy at the right price and delivering the best results every time.

MEG Financial, a nationwide specialty life, disability and estate planning insurance agency comments on the death of George Steinbrenner and how he escaped paying federal estate taxes.