`Don’t Die Broke’

Corrections or additions?

These articles by Teena Chandy and Barbara Fox were published in U.S. 1 Newspaper on June 23, 1999.

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Estate Planning, Cradle To . .

It is surprising how many people have not executed

living wills and power of attorneys, says Dana Rozansky of Begley,

Begley & Fendrick, based in Moorestown. "It is important that

you exercise your right to determine who gets whatever you have and

who is permitted to assist you if you are incapacitated, even if you

don’t have any assets." If you have not prepared these documents

yourself, Rozansky says, a court may make these decisions for you.

"This can be more expensive and more aggravating to family members."

Rozansky, along with Elaine J. Ruden of Ruden & Cramer, will

be speaking about "Legal Tools for Financial Management" on

Thursday, June 24, at 10 a.m. at the New Jersey State Bar Foundation,

New Jersey Law Center in New Brunswick. The event is free by reservation,

call 800-373-3529.

Rozansky will discuss the various documents essential to meet your

estate planning needs. For instance, some may confuse a living will

with a power of attorney.

A living will is a healthcare proxy documents designed

so you can dictate how your health care will be managed if you are

incapacitated.

A power of attorney is the document that will allow you

to appoint family members, friends, or other individuals to pay your

bills and manage your assets when you cannot do it yourself.

Rozansky got her BA in English from Cornell University, Class

of 1992, and graduated from George Washington University Law School

in 1995. She clerked in the civil division of the New Jersey Supreme

Court in Mercer County before joining Begley, Begley & Fendrick two

years ago, where she specializes in elder law.

"It is actually more legal planning than financial planning,"

says Rozansky. Individuals in second marriages, with disabled children,

and other such special situations should have their wills tailored

exactly to their situation, says Rozansky. "It is important that

you don’t go to a stationery store and get a generic living will or

power of attorney. These are documents that are very crucial and determine

the outcome of a person’s life."

In addition to wills, living wills, and powers of attorney, you also

have to do nursing home financial planning, says Rozansky. "Nursing

homes charge an excess of $5,000 a month for care and that can be

shattering to a family’s finances," says Rozansky. "Especially

if the person is married, it is important to support the standard

of living for the person living at home."

With proper financial planning you will not need to be impoverished

if you need nursing home care, says Rozansky. You can protect your

home, your income, your life insurance policies, and make sure your

spouse at home has something to live on. You may even be able to transfer

assets to a child and not be penalized for it. "Unfortunately,"

says Rozansky, "the federal and state governments do not make

these clauses well known because they don’t want you to do any planning.

It is important that you learn what your legal rights are. It can

be devastating to watch your assets be depleted."

Many people postpone estate planning because they are nervous that

their appointed agents may take advantage of them or try to control

their lives while they are healthy. You can prevent that by appointing

co-agents to watch over each other and by drafting the document to

say that the power to act on your behalf will not come into effect

till you are determined to be mentally incapacitated, says Rozansky.

"Anybody over the age of 18 who has any assets at all should consider

having these documents," says Rozansky. Even younger people can

come down with an illness that will require an extended stay in a

long-term care facility. If you plan for these events it does not

necessarily mean that you will need these documents, or need to use

them sooner. "If you carry your umbrella," says Rozansky,

"it doesn’t rain. But if you don’t have your umbrella with you,

you are going to get wet."

— Teena Chandy

Top Of Page
`Don’t Die Broke’

You have the opportunity, says Margaret A. Malaspina,

to control more of your retirement resources than did members of your

parents’ generation. In her new book "Don’t Die Broke: How to

Turn Your Retirement Savings into Lasting Income" (Bloomberg Press,

$21.95), she gives chapter and verse on how to do that well.

"People spend years thinking about retirement, planning for retirement,

and saving for retirement," says Peter Lynch, vice chairmen

of Fidelity Management and Research Company. "But they spend no

time thinking about what they can and should do with the money they’ve

put away in their retirement savings plans. The issues are complicated.

Mistakes are costly. And there’s no dress rehearsal. `Don’t Die Broke’

can help you crack the code. There’s not another book like it."

Malaspina debunks current myths: It’s not true that, in the past,

most Americans worked for one employer and were covered by lifetime

pensions. Neither is it true that American companies have abandoned

their retirement plans. And, contrary to some predictions, Social

Security will not fail before the next generation retires.

But today’s retirement will, indeed, be different from the way your

parents did it. People live longer, work part-time in retirement,

and don’t change their spending patterns until they get to be 85.

And, ever since 1974, employees have been able to make before-tax

contributions to an Individual Retirement Account or IRA.

Malaspina starts by helping you find your retirement resources (what

about that company you worked for 10 years ago, did you leave something

behind?) and takes you by the hand to tally up your various assets.

Then she goes step by step through all the confusing deadlines, such

as early withdrawal or too-late withdrawal penalties, and other common

bugaboos.

Like most successful "how to" books, this one is full of numbers

and is written in an anecdotal style. Perhaps that is because Malaspina

was a writer before she became a financial expert. As a vice president

in the early 1980s at Fidelity Investments, she influenced the communications

policies of one of the nation’s largest investment companies. She

also launched the book-writing career of guru/pundit Lynch and helped

start Worth magazine.

When it comes to drawing out your funds, says Malaspina, how you choose

an adviser depends on how much you have:

Less than $200,000. Consider an asset allocation or balanced

mutual fund and a systematic withdrawal from your employer’s plan.

Between $200,000 to $500,000. Choose an investment firm

that offers tailored portfolios, good service, and low fees.

At least $500,000. Consider a personal investment adviser.

Ask about credentials, track record, and fees.

"If your affairs are complicated, this is not a job for a generalist

— not even a smart, hard-working one," she says. "You

wouldn’t put your cancer in the hands of your general practitioner.

Give your retirement plan assets the same consideration."

— Barbara Fox

"Don’t Die Broke: How to Turn Your Retirement Savings

into Lasting Income" (Bloomberg Press, 1999, $21.95).


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