Avoid Financial & Estate Planning Mistakes

By Christina Bush, CES, CAS CMFC
Wealth Manager/Certified Estate and Trust Specialist

  • Never carry confidential information with you (social security numbers, ATM passwords, bank account numbers, credit card numbers). In the event your wallet or purse is stolen, a thief could easily and quickly charge thousands of dollars to your credit cards and take money directly out of your bank accounts.

  • Never write your pin number on the back of your ATM card.

  • Don't throw away vulnerable computers. If you give away or get rid of computers with the hard drive in tact all of your personal information is free for the taking. Before you get rid of a computer clean the hard drive, smash it, do whatever you have to so no one can use it.

  • Monitor your credit report regularly. Errors or fraud can appear and affect your score without you knowing. You are eligible for a free credit report annually from all three credit reporting agencies: Experian, Transunion and Equifax.
    * Go to www.annualcreditreport.com or call 877-322-8228
    * It typically costs around $9 to get your credit score.

  • Conduct regular financial reviews and maintain careful records of your banking and investment accounts. There may be erroneous fees charged to your account. Also economic environments and personal objectives change and need to be updated. At least annually update an inventory of your assets, liabilities, insurance policy information. Put this in a safety deposit box and give a copy to a trusted individual so it can be easily accessed if something happens to you.

  • Never give out your social security number or other personal information to callers on the phone. Many scammers will say they are calling from large financial institutions where you have accounts and claim they need to update your information. This should NEVER be done over the phone, only in person at your financial institution.

  • Protect yourself from identity theft.
    * Be aware of 'shoulder surfing' (people watching you from a nearby location as you punch in your telephone calling card number or credit card number).
    * Don't be a victim of 'dumpster diving'.
    * Lock up your personal information at home, work, in your car, etc.
    * Shred all old statements, credit cards, etc.
    * Avoid putting your driver's license number on checks. This is not necessary and just gives theives more information to use against you.
    * While traveling have your mail held at the post office or collected by a trustworthy person.

  • If you are a victim of identity theft immediately place a fraud alert on your credit call: Transunion (800) 680-7289, Equifax (800) 525-6285 and Experian (888) 397-3742
    * Close accounts that you know or believe have been tampered with.
    * When you open new accounts, use brand new pin numbers and passwords (avoid using your mother's maiden name, your birth date, the last 4 digits of your social security number, your phone number, or childrens' birthdays).
    * File a police report and a complaint with the Federal Trade Commission (877) ID-THEFT
    * Don't respond to spam and avoid Phishing (responding to emails asking you to verify your personal information)

  • Properly title your financial accounts. Individual or joint accounts will be subject to probate if death occurs.You should ultimately have large accounts and properties titled in the name of a living trust or have your bank add TOD (Transfer on Death) information to your accounts naming beneficiaries.

  • Maintain current financial records and let beneficiaries know about life insurance policies (approximately 25% of life insurance death benefits go unclaimed in the United States because beneficiaries are unaware of the policies being in force). Insurance companies will never go knocking on the beneficiaries' doors to give them money! This is one of the reasons that insurance companies are so profitable.

  • Properly name beneficiaries on retirement accounts (take advantage of Stretch IRA opportunities). Spouses and children can inherit retirement accounts as their own retirement plans without it being an income tax liability. They would simply need to open a beneficiary IRA account and roll the funds over into it.

  • Never email any confidential information because email is NOT secure! Hackers can get into your email without your passwords. Did you know that if you have a camera on your computer, people can hack in and watch what you are doing?

  • Be cautious in choosing a caretaker. A large amount of financial abuse occurs between an older individual and their personal caretaker. With the trust of the victim in hand, the caretaker and slowly steal possessions out of the person's home. They can also use coercion to get the older individual to sign away land, property or access to bank accounts. They can also manipulate powers of attorney and the last will and testament.

  • Avoid probate through the use of a living trust. If you have more than $100,000 (not including retirement accounts and annuities that allow beneficiary designations) and you die without a valid trust your assets will go into probate. They will be stuck in the court system for typically 18 months to 2 years, it will be open to public scrutiny and is very expensive. Probate costs are 5-10% of the amount of the assets involved. This will be completely avoided with a proper living trust in place.

  • Have Medical Directives, living wills and organ donor wishes in order. If you die as the result of an accident you can save the lives of up to 8 people and enhance the lives of up to 150 or more. Your status can be updated by including your wishes in your will or trust document or by contacting the DMV and having the organ donor status addes to your drivers license.

  • Name a guardian for minor children in the event a tragedy occurs. Children become wards of the state until a court decides who will be their guardian. The court may decide to place the children with someone other than who you would wish your children/grandchildren to be raised by. Many times individuals will name one guardian for the child/children and separate guardian to manage the finances left for their care.

  • Protect your pets as part of your estate plan. More than 500,000 pets are euthanized annually throughout the United States due to the death or disability of the owner. Put your wishes for your pets in writing so this doesn't happen to them.

  • Establish 529 plans instead of custodial accounts for college funding for children or grandchildren. With custodial accounts the funds automatically will go to the ownership of the child when they reach the age of majority, typically age 18 (depending on the laws of each state). Many of them will quickly blow through the money and spend it unwisely. A 529 plan allows the custodian of the assets to have complete control forever and they can even change the beneficiary to someone else if the child goes out of control or gets hooked on drugs and refuses to go to college. The custodian can even change the beneficiary to themselves and go to a cooking school, golf clinic or other school as long as it is accredited as a 'higher education' learning facility. 529 plans also grow tax deferred over the life of the account and the funds come out income tax free if used for college.

  • Don't make the mistake of giving someone an 'Immediate' Durable Power of Attorney rather than a 'Springing' one. When you give someone an immediate POA they have the power to access your bank accounts, sell your house, etc. from the moment the document is signed and notarized. With a springing POA they can only act on your behalf if a physician states in writing that you are incapacitated and incapable of acting for yourself.

  • Investigate non-profit organizations before donating to them. Go to www.guidestar.org to check the financial records, tax returns and salaries paid to board members.
    * $40 billion per year is lost to fraud in non-profits.
    * Fraud is found in nearly 20% of 501(c)3 non-profit organizations.
    * By law, the last 3 years of 990 tax returns are supposed to be available for public scrutiny as well as the past 2 years financial statements, which are supposed to list any salaries taken by board members or employees. If this information is missing it is a red flag.
    * Be very cautious who you donate your hard-earned money to!

  • Never loan money to your financial advisor, attorney, doctor or CPA! It is unethical and illegal for these people in trusted positions to take loans from clients and they can lose their licenses for doing so. Unfortunately, it happens way to often.

  • CB Wealth Advisory - Private Wealth Management



    Securities offered through Cambridge Investment Research, Inc., a Registered Broker/Dealer and Member FINRA.org and SIPC.org; Advisory services offered through Cooper McManus, an SEC Registered Investment Advisory firm; Christina Bush, Investment Advisor Representative. CB Wealth Advisory, Cambridge Investment Research, Inc. and Cooper McManus are separate entities.

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    Christina Bush, licensed insurance agent: CA Insurance license #0B48734 - FL Insurance license #W050514 - NC Insurance license #2620839 - WA Insurance license # 787335


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    All Photos By Christina Bush

    Copyright 2020 by Christina Bush/CB Wealth Advisory