Credit unions are overseen by the National Credit Union Administration, a U.S. government agency.  They have their own insurance fund similar to FDIC that all the credit unions pay into.  They also have their own form of the Federal Reserve system, which is a smaller group of larger corporate credit unions who serve the smaller individual credit unions.  When the smaller credit unions have excess funds, they can deposit the money with the larger corporate credit unions.  Then the corporate credit unions can loan out the money to other credit unions who have higher loan demands, etc.

A few of the larger corporate credit unions got caught up in buying mortgage backed securities issued by Wall Street in an attempt to earn higher returns.  This of course resulted in some huge losses, which are now being passed on to all the smaller credit unions.  In the credit union world, they all share in the losses of each other.  So now, huge assessments are being made to all the smaller credit unions, which are eating up their profits, and putting some on the verge of collapse.  Because of this, the number of credit unions is expected to fall sharply.  It could take decades to pay off the huge losses that have occurred.

The nations credit unions total deposits are about $729 billion.  The losses from these mortgage backed securities are estimated to be between $8.3 billion and $10.5 billion.  So far, they’ve only been assessed with about $1.3 billion in losses.  The rest will be spread out over the next decade.

The questions now that remain are:  How many credit unions will be brought down by these loss assessments?  And will credit unions be able to continue to pay higher rates and have lower fees than commercial banks?

You can look up the financial strength of any credit union in the country by going to:  http://banktracker.msnbc.msn.com/credit-unions/

Many people wonder if a hand-written will is valid.

The subject of the hand-written will comes up a lot in discussions with financial planning clients and others.  Probably because it’s one of the basic things we financial planners always ask about…”do you have a will?”  And it’s also one of the most common things missing from a person’s critical documents.  The majority of Americans don’t have one today.

I’ve written about the importance of a will and other basic estate planning documents before. Click here to read a previous post on this topic. 

So this came up again today with a client who has a friend who has never written a will.  The friend is in her 80′s and feels overwhelmed about the thought of going to an attorney to draft a legal document.  I can certainly understand why a lot of people don’t want to do something that is related to them dying.  It’s basically admitting to yourself and others that you’re going to die one day, which not many people enjoy thinking about.  (The same feeling you get when buying life insurance.)

My client asked me if her friend could just write something down on a piece of paper, and would that be valid.  I knew that all states recognize a will that is hand-written, as long as it’s witnessed, or notorized.  But what if it’s not witnessed or notorized?  I found out that this type of will is known as a HOLOGRAPHIC will.  No, that doesn’t mean it’s projected into the air so you can walk through it.

Black’s Law dictionary defines a HOLOGRAPHIC will as:  “a Will written entirely by the testator in his or her own handwriting and is not witnessed.”

Are hand-written or holographic wills recognized in your state?

Each state has it’s own rules about the type’s of wills it will recognize.  I found the list below on www.lawchek.com .  I am not an attorney, and I don’t give legal advice, and I strongly suggest that you check with your home state to verify their statutes.  But here’s what I found:

ALABAMA
A Holographic Will is not recognized as a valid Will since the state law requires that every Will be witnessed by at least two witnesses.

ALASKA
Alaska recognizes a Holographic Will as a valid Will, whether witnessed or not, if the signature and material provisions of the Will are in the testator’s handwriting.  (Code Section 13.11.160)

ARIZONA
A Holographic Will is recognized as a valid Will, whether or not it is witnessed, if the material parts of the Will are in the handwriting of the testator and it is signed by the testator. (Section 14-2503)

ARKANSAS
A Holographic Will is recognized as a valid Will where the entire Will and signature are in the handwriting of the testator. It must be established by 3 disinterested witnesses that the handwriting and signature are, in fact, that of the testator. (Section 28-25-104)

CALIFORNIA
A Holographic Will is recognized as a valid Will, whether or not witnessed, as long as the signature and material portions of the Will are in the testator’s own handwriting. A Holographic Will may be held to be invalid if it does not state the date of the execution and the date cannot be proven. A Holographic Will is also considered invalid if the testator lacked the required mental capacity to execute a Will. (Probate Code Section 6111)

COLORADO
A Holographic Will is recognized as valid, whether or not witnessed, if the signature and the material parts of the Will are in the handwriting of the testator.  (Section 15-11-502) A document that appears to have been intended to be a Will is also considered valid if it can be established by clear and convincing evidence that the decedent intended the document to be a Will. (Section 15-11-503)

CONNECTICUT
Connecticut does not recognize a Holographic Will executed in its state.  However, a Holographic Will that was properly executed in a state which allows such Wills is valid.

DELAWARE
A Holographic Will is not recognized as a valid Will by this state because it does not meet the requirements the state has set forth for executing a Will. (Section 12-202)

FLORIDA
Florida does not recognize a Holographic Will as a valid Will. (Section 732.502)

GEORGIA
A Holographic Will is not recognized as a valid Will in the state of Georgia.

HAWAII
Holographic Wills are not recognized as valid Wills in this state. If a holographic Will was properly executed in a state recognizing their validity, then such a Will may be admitted to probate in Hawaii. (Section 560:3-409)

IDAHO
Idaho does recognize a Holographic Will, whether witnessed or not, as long as the signature and material provisions are in the handwriting of the testator. (Section 15-2-503)

ILLINOIS
A Holographic Will is not recognized as a valid Will in this state.

INDIANA
Indiana does not have any state statutes which provide for Holographic Wills.

IOWA
Iowa does not recognize a Holographic Will because they are not executed in accordance with the laws on executing Wills.

KANSAS
Kansas does not recognize a Holographic Will as a valid Will.

KENTUCKY
Kentucky does recognize a Holographic Will as a valid Will. (Section 394.040)

LOUISIANA
Louisiana does recognize a Holographic Will if it is written by the testator and dated and signed by the testator. No other formalities are required. (Section 1588)

MAINE
Maine does recognize a Holographic Will, whether witnessed or not, as long as the signature and material provisions are in the handwriting of the testator. (Section 2-503)

MARYLAND
The Holographic Will recognized as a valid Will must be made by a person serving in the U.S. Armed Forces and made outside of the United States. However, this Will is considered void one year after discharge from the Armed Forces. (Section 4-103)

MASSACHUSETTS
Massachusetts does not recognize a Holographic Will as a valid Will.

MICHIGAN
Michigan will recognize a Holographic Will as valid if it is dated and the testator signed at the end of the Will. Material provisions of the Will must be in the testator’s handwriting. (Section 700.123)

MINNESOTA
Minnesota does not recognize a Holographic Will.

MISSISSIPPI
Mississippi does recognize a Holographic Will as a valid Will. No witnesses are required. (Section 91-5-1)

MISSOURI
Missouri state law makes no reference to Holographic Wills.

MONTANA
Montana does recognize a Holographic Will as a valid Will, whether or not witnessed, if the signature and material provisions are in the handwriting of the testator.

NEBRASKA
Nebraska does recognize a Holographic Will as a valid Will, however, it must have some indication of the date, either written or by some external evidence. If the holographic Will is the only writing found, it will be considered valid. (Section 30-2328)

NEVADA
Nevada does recognize a Holographic Will as a valid Will if the document is entirely written, dated and signed in the testator’s handwriting. There is no particular form required other than it be entirely written in the hand of the testator. It can be made either within or outside of Nevada and there is no requirement that it be witnessed. (Section 133.030,090,190)

NEW HAMPSHIRE
New Hampshire does not recognize a Holographic Will as a valid Will.

NEW JERSEY
New Jersey recognizes a Holographic Will as a valid Will, whether or not it is witnessed, if the signature and material provisions are in the handwriting of the testator.  (Title 3B Chapter 3 Section 3)

NEW MEXICO
New Mexico does not recognize a Holographic Will as a valid Will.

NEW YORK
A Holographic Will is considered a valid Will only in the limited circumstance where it is made by certain members of the U.S. armed forces while serving in a conflict or by another person who serves with or accompanies the member of the armed forces.  Such a Will must be entirely in the handwriting of the testator to be valid. Such a Will becomes invalid after 1 year after he or she ceases serving with the armed forces. (NY Law EPTA Section 3-2.2)

NORTH CAROLINA
North Carolina does recognize a Holographic Will as a valid Will as long as it is written entirely in the handwriting of the testator. Some immaterial printed matter will not invalidate the Will. This Will must be signed by the testator in his or her own handwriting and no witnesses are necessary. The Will must also have been found after the testator’s death, among the valuables, in a safe deposit box, or with a person, where it appears it was intended to be kept for safe keeping. (Section 31-3.4) Testimony is required to admit the Will into probate to prove the above requirements.

NORTH DAKOTA
A Will which does not comply with the formal Will execution provisions will be considered a valid Will, whether or not witnessed, if the signature and material provisions are in the handwriting of the testator. (Uniform probate code section 2-503)

OHIO
Ohio does not recognize a Holographic Will as a valid Will. A Will must be executed and witnessed in conformity with Section 2107.03.

OKLAHOMA
Oklahoma does recognize a Holographic Will as a valid Will. (Section 84-54)

OREGON
Oregon does not recognize a Holographic Will as a valid Will.

PENNSYLVANIA
Pennsylvania does recognize a Holographic Will as a valid Will.

RHODE ISLAND
Rhode Island does not recognize a Holographic Will as a valid Will.

SOUTH CAROLINA
South Carolina does not recognize a Holographic Will as a valid Will. However, certain exceptions are made for Holographic Wills which are validly executed in a state which allows such Wills, or when an out-of-state probate proceeding is involved.  (Section 62-2-303, 408, 502, 505)

SOUTH DAKOTA
South Dakota does recognize a Holographic Will as a valid Will, whether it is made within or out of the state and whether or not it is witnessed, if the signature and material portions are in the testator’s handwriting. Intent that the document is the testator’s Will can be established by extrinsic evidence. (Section 29A-2-502)

TENNESSEE
Tennessee recognizes a Holographic Will as a valid Will. The Will is valid if it is in the testator’s handwriting, whether witnessed or not, but the testator’s handwriting must be proven by two witnesses. (Section 32-1-105)

TEXAS
Texas recognizes a Holographic Will as a valid Will. The Will must be entirely written by the testator, but is not required to be witnessed. It may be proven in one of two ways: The testator may attach an affidavit stating that this written instrument is his or her last Will and that he or she was competent to make the Will and that the Will has not been revoked. (Probate Code Section 60) If the testator does not self-prove the Will, then at the time of death it must be proved by the testimony of two witnesses as to the handwriting of the testator. (Probate Code Section 84)

UTAH
Utah recognizes a Holographic Will as a valid Will, whether or not it is witnessed, as long as the signature and material provisions of the Will are in the handwriting of the testator. (Section 75-2-503)

VERMONT
Vermont does not recognize a Holographic Will as a valid Will since it does not meet the execution requirements set forth by state law. (Section 14-5)

VIRGINIA
Virginia recognizes a Holographic Will as a valid Will as long as the Will is written entirely in the handwriting of the testator. It is not necessary that it be acknowledged or witnessed. At time of death, the proof of handwriting must be established by at least two disinterested witnesses. (Section 64.1-49)

WASHINGTON
Washington does not recognize a Holographic Will as a valid Will since it is not executed according to the formalities set forth by state law. However, the state may recognize a Holographic Will that was executed in states where it was deemed legally executed at the time. (Section 11.12.020)

WEST VIRGINIA
West Virginia does recognize a Holographic Will as a valid Will. The Will must be entirely in the writing of the testator and be signed by the testator. The Will must evidence an intent that the document is to act as a Will, and the signature must be intended as a signature to a Will. No acknowledgment or witnesses are necessary.  (Ch. 41, Art. 1, Section 3)

WISCONSIN
Wisconsin does not recognize a Holographic Will because it is not executed according to state law. However, a Holographic Will executed in a state where it was considered valid at the time will be recognized. (Section 853.05)

WYOMING
Wyoming does recognize a Holographic Will as a valid Will and there is no requirement that it be witnessed. (Section 2-6-113)

If a state does recognize a holographic will, they will probably require that at least two people can verify that the handwriting is that of the deceased person.

Fear of inflation

Many investors have been moving their assets into gold for some time now based on a fear of looming inflation.  Historically, when inflation rises and your dollar buys you less and less, gold will become more valuable.  Many people have been expecting infation to rear its ugly head for some time, but it hasn’t happened yet.  For inflation to occur, you normally need to have housing prices on the rise, household income on the rise, and commodity prices on the rise.  Currently we only have commodity prices rising.  If these three factors hold true, it could be another year or two before we get some real inflation.  Fear of inflation is one reason why the price of gold is so high.

Currency devaluation

If paper money is being devalued (it’s not worth as much as it used to be), then gold prices would be forced higher.  This is happening all over the world right now.  Many countries are devaluing their own currencies, not just the United States.  Here in the U.S., our dollar has been declining in value for some time (although right now it is on the rise).  Some experts believe that this has made it cheaper for people in other countries to invest their money into gold.  People seem to have lost faith in dollar based assets, and that’s another reason why the price of gold is so high.  Buying gold is similar to buying insurance on your house.  You own your house because you believe that it’s a good investment in the long run.  But you buy insurance on it just in case something bad happens to it.  Owning gold does the same thing for your U.S. dollar based portfolio.

Overall instability

Most people are pretty uneasy right now about the instability of our political situation, our economy, and our interest rates.  This nervousness is causing a lot of investors to place part of their assets into gold-based investments.  If things ever do settle down and become more stable, you would expect investors to start to back away from gold.  When that happens, people will no longer be asking, “Why is the price of gold so high?”

How can I invest in gold?

If you don’t already have a part of your portfolio in gold, it would probably be a good idea to look for an opportunity to get some.  Some experts say that “the trend is your friend”.  In other words, buying something that is on its way up will help you achieve better than average returns.  But many studies show that buying near a high can be a recipe for disaster.  Prices are very high right now, and I wouldn’t be surprised at all to see a pullback in the price of gold soon.  When the price of gold dips down, that might be a good time to get some exposure.

GLD – This is an exchange traded fund, or ETF that gives you good exposure to the price of gold.  You can buy and sell shares of this fund (symbol GLD) through any brokerage firm, and the only trading costs are the same commissions you would pay to buy any other stock.  

SPDR Gold Shares offer investors an innovative, relatively cost efficient and secure way to access the gold market. SPDR Gold Shares are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that interest through the trading of a security on a regulated stock exchange. The introduction of SPDR Gold Shares was intended to lower many of the barriers, such as access, custody, and transaction costs, that have prevented some investors from investing in gold.

 SPDR Gold Shares represent fractional, undivided beneficial ownership interests in the Trust, the sole assets of which are gold bullion, and, from time to time, cash. SPDR Gold Shares are intended to lower a large number of the barriers preventing investors from using gold as an asset allocation and trading tool. These barriers have included the logistics of buying, storing and insuring gold. In addition, certain pension funds and mutual funds do not or cannot hold physical commodities, such as gold, or the derivatives.

GDX – Market Vectors Gold Miners ETF.  This is another ETF that will give you exposure to the price of gold, without actually owning gold bullion.  The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners index. The fund generally normally invests at least 80% of its total assets in common stocks and American depositary receipts of companies involved in the gold mining industry. The fund is nondiversified.

Hopefully this article has helped answer the question, “why is the price of gold so high?”  Additionally, I’ve tried to give you a few ideas about how to invest in gold.  The question I have not addressed is, “How much gold should I own?”  This question can only be answered after evaluating an investors overall situation because every person is unique.  Talk to your financial advisor or give us a call at 1-866-983-4222 for a complimentary review of your portfolio.  Financial planning is about diversification, and looking at the big picture.  Only after looking at a client’s total situation could a financial planner make a recommendation like that.

Will

A will is probably the most important document that you’ll ever sign.  Among other things, it determines who gets your possessions when you die, things like your cars, house and personal property.  If you don’t have one, the probate court will decide who gets your things, and also who will take care of your children.  There may be someone in your family who you would prefer to take care of your children, and there may be someone else who you really DON’T want to have your kids.  These are decisions not to be left to a judge.  A will does NOT determine who gets your IRA’s, annuities, or life insurance death benefits.  Those types of accounts have beneficiaries named on them, and are NOT directed by a will.  In fact, you need to make sure your beneficiary designations are correct.  Even if your will is more current than your beneficiary designations, the beneficiaries named on IRAs and life insurance is who will get that money.

Living Will

A living will is a document in which you state your wishes regarding medical treatment, especially treatment that sustains or prolongs life by extraordinary means (life support).  This document is used when the signer becomes mentally incompetent or unable to communicate (such as a coma).  If you don’t have this document, the doctors are going to keep you alive as long as possible.  It will then turn into a court battle if your family feels that it is better to take you off of life support.  If you are married, your spouse may feel differently than your parents do about it, so then you have a family feud/court battle going (remember the Terri Shaivo case?).  Having this document written up in advance will save everyone a lot of guessing and heartache.

Power of Attorney (POA)

This is a document that is also very important to have.  It gives someone else permission to make financial and legal transactions in your behalf.  So obviously, your POA needs to be someone that you trust very much.  It can either be a Durable POA, which means that person can sign things for you at any time, or a Springing POA, which means that it only comes into effect if you become incapacitated.

These are a few of the most important legal documents that are important for everyone to have.  For these simple documents you can use a website like www.legalzoom.com or even an off-the-shelf software like Quicken Willmaker Plus 2010  for under $50.  However you get them done, the most important thing is just GETTING THEM DONE!

The biggest fear that we all face with regard to long-term care insurance is, if you end up not needing it (which you hope that you won’t) then all your insurance premiums have gone down the drain.  So when you buy long-term care insurance, you’re betting that something bad is going to happen to you, but at the same time hoping that it doesn’t.  But that’s the reality of buying any kind of insurance.  It’s protection against a risk that could potentially damage your financial well-being.

A New Way To Protect Yourself

A few years ago, insurance companies started developing a new type of protection against the risks of long-term care that eliminate the biggest fear people have about buying insurance for it.  That is, the fear that if you end up not needing long-term care, you’ve wasted your money.  This new type of protection is called “Asset-based” long-term care benefits.  The concept is very simple, and yet very different from paying traditional long-term care insurance premiums.

Asset Based Long-Term Care Benefits

This type of protection combines a deferred fixed annuity with build in long-term care benefits.  A deferred fixed rate annuity is a financial planning tool that can help you save more money for retirement.  It earns a fixed rate of interest and grows tax-deferred until you start taking income payments from it.  And, in addition to helping you save more money, it can provide you with up to three times the annuity value in long-term care benefits if you need them.  This will help preserve your other hard-earned assets while it pays for up to 6 years of long-term care.  It will also protect your spouse and children from the emotional, physical, and financial toll of caregiving.  And with it, you have a choice of care options which include in-home care, assisted living, adult day care, homemaker services, personal care, respite care, hospice care, and nursing home care.

What If You Don’t Need The Care?

If you end up not needing any of this type of care (which is a very good thing), your money is not gone or wasted.  In fact, this is the best part of this type of long-term care protection.  If you don’t need the care, you’ve still:

1.  Earned a guaranteed rate of interest on your savings

2.  Taken advantage of tax-deferred growth (this will be more important as tax rates go up)

3.  Had access to your principal through partial withdrawals or lifetime income options

4.  Had a death benefit for your beneficiaries that is equal to the annuity value at the time of death

5.  Avoided probate on these funds

The chances of a 65 year old person needing some type of long-term care during retirement is very high, above 50%.  And the cost of this care is very costly.  The average nursing home in our country today costs about $5000 – $6000 per month, depending on where you live.  This can eat up a retirement nest egg in no time at all.  But still, many people hesitate to pay the premiums each month for traditional long-term care insurance.  You can see that the benefits of asset-based long-term care are many.  You have the protection if you need it, and if you don’t need it, you get all your money back.  I think everyone should consider puting part of their “safe money” into one of these types of vehicles.

If you would like more information on this, and other types of asset-based long-term care protection, please contact us today.

Many people don’t realize that you can, and should do the same thing for healthcare related services and low cost health insurance.   The reason most people don’t think of this is that for most services you receive, you just pay a co-pay and that’s it.   Once you pay your co-pay, you don’t really care what it costs, and neither does the doctor.   In fact, the doctor has more than one incentive to perform as many tests and scans as possible.  The more he does, the less likely he is to get sued by you, and the more money he makes.  However, depending on where you receive the service and how it’s billed, may be covered by a co-pay, or it may go towards your deductible (which means you’ll have to pay for it out-of-pocket).

Let me give you a recent PERSONAL example of this.

My wife was told by her doctor that she needed to go have a CT scan done.   The doctor scheduled the appointment for her at an imaging center owned by the same hospital network that he worked for.   Now this was after we had told him that we wanted to have to test covered by a co-pay if possible, and not have it go towards our deductible.   We also told him that she had previously had some imaging done at a certain center where we knew it was covered by a co-pay.   We thought that was the place he had scheduled the appointment. When we arrived at the imaging center for her appointment, she was not on the schedule. They made some phone calls and found out that she was scheduled at another nearby imaging center, the one owned by the same hospital network that my wife’s doctor was in.   So we went over there and spoke to them, and found out that if she had the scan done there, it would go towards her deductible and would cost us about $2,000 out-of-pocket.   But if she had the scan done at the other imaging center that was not part of that hospital network, all it would cost us is a $15 co-pay.  What a difference!

This is why I am writing a blog post about saving money on healthcare on this personal financial planning site.   Health care costs have become a huge part of a person’s finances, and it’s very important for everyone to understand how to save money on these services. The more you can save on healthcare and on low cost health insurance, the more you’ll have to pay off debt or invest for you future retirement.  Healthcare professionals and hospitals are running businesses, and are trying to make them as profitable as possible.  This recession is hurting the healthcare industry just like everyone else.   Because of this, you really should not assume that your doctor is going to always act in your financial best interest. You need to take responsibility to do your homework and shop around to make sure you’re getting the best possible price for the service you will receive.

The fact that the same service could cost your either $2,000 or $15 depending on where you get it is ridiculous and should tell you that there is a lot of work to be done to straighten out our healthcare system.  That would take a whole other web site to cover that topic.  Maybe doctors need to start being worried about getting sued for charging a patient $2,000 for a scan when it could have been done for a $15 co-pay.