Tools & Techniques of Financial Planning Leimberg, Satinsky, Doyle & Jackson Special Circumstances Nontraditional Relationships Special Needs

7-2 Special Circumstances  Not so special… Only 52% of households traditional  Impact of single family household on risk tolerance  Divorce planning Division of assets  Retirement plans QDRO Value Changing beneficiary (also life insurance) Social security: ex-spouse of 10 years

7-3 Special Circumstances  Divorce planning Division of assets  Home  Appreciated assets Child support/alimony  Child support: not taxable to payee; not deductible by payor  Alimony: taxable to payee; deductible by payor Not based on age of kids

7-4 Special Circumstances  Nontraditional relationships Living together / “same sex couples” Issues  Can’t file joint tax return: formerly advantage  Can’t make unlimited gifts  No marital deduction for estate  No intestacy rights  No joint annuity pension benefits

7-5 Special Circumstances  Nontraditional relationships Recommendations  Own property jointly with rights of survivorship  Make partner beneficiary of retirement plan, life insurance  Execute power of attorney: general/health care

7-6 Special Needs  Disability Likelihood Impact on financial status Insurance  Definition of disability Social security: can’t sell apples  Total/permanent; five month waiting period Modified own occupation: can’t do jobs trained for Own occupation: can’t do brain surgery

7-7 Special Needs  Disability Insurance  Not taxable if you paid premiums  Taxable if employer did  Coverage 60 – 70% of salary  Elimination period 3 – 6 months  Benefit period Until age 65

7-8 Special Needs  Terminal illness Viatical settlement  Not taxable  Likely will die soon Living will  Don’t want to be kept alive as a vegetable Health care power of attorney  Allows someone to act on your behalf  HIPPA