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How to Build a Financial Legacy

By U.S. News & World Report

If you ask someone about their long-term life goals, chances are, reaching retirement is close to the top of the list. Through careful planning, attaining a financially secure and carefree retirement is something that almost everyone hopes to attain.

However, and as many retirees would add, once the so-called “finish line” is reached, the race is actually far from over. Proper budgeting and planning continues well into the “golden years” to ensure that the nest egg lasts for the duration.

Beyond that, the topic of leaving a legacy also comes into play. And while it is not necessarily the easiest subject to tackle, determining how to leave a legacy and moving forward with a plan on how to do it is important.

While there are many approaches, one way to look at legacy planning is through the “Four Pillars” approach. This approach offers a simple framework to begin the planning process and can also serve as a great conversation starter when discussing legacy matters with family or friends.

[See: 9 Stocks to Buy for the Aging Baby Boomer Market.]

Here are the four pillars:

Values and life lessons. Having years of life experience equates to many lessons learned and much knowledge to pass on to the next generation. Take time to document these lessons and knowledge in some manner so that they can be preserved. It might be as simple as a notebook or video, or maybe even a memoir or diary.

In addition, take note of any family history, folklore and traditions. This is an area that is easy to overlook, but often one of the most cherished and meaningful for families. Having the stories and traditions and not simply just the names of long-deceased family members brings memories to life for years to come.

Instructions and wishes to be fulfilled. This is an area where it is often best to bring in an attorney to ensure the proper legal documents are in place to fulfill any instructions and wishes.

First, consider health and well-being directives. Is the proper insurance in place? Has a health care advocate been named? What are the wishes and directives for medical care and life support measures?

Also, living arrangements should be thought out. Will living unassisted be a viable option or should assisted living facilities be considered? Is there family nearby to help if needed rather than being several thousand miles away? Is a nursing home a possibility?

Last, instructions for the executor or personal representative of a will and any trustees of any trusts should be clear. Any final wishes regarding funeral arrangements, burial, cremation, etc., should also be in place.

Personal possessions of emotional value. While it appears simple on paper, this task has the potential to create friction among family members.

Think about which items are of importance and/or have special meaning. Discuss these items with family members and also ask them about which items have a special meaning for them. Based on these discussions, decide who will receive what items.

[See: 7 ETFs for a Solid Portfolio Defense.]

Being clear and candid during this process will help during what can be a surprisingly emotionally-charged task.

Financial assets and real estate. This is an area, again, where it is best to seek the counsel of an attorney. Breaking this category into three areas is an ideal approach.

1. Consider items of financial value. Inventory high-value items such as art, antiques, and jewelry, and determine what will happen to them. Will they be designated through your will to pass to a specific person? Left to a museum? Sold and the profits distributed to your estate? Getting these items appraised, if they have not been recently, may also help provide additional clarity as some items could be higher — or lower — in value than anticipated.

2. Take into account residences and other real estate. Will the proceeds from the sale of a current residence go into the overall estate? What about any vacation properties such as cabins, condos, and/or timeshares? Keep in mind that owned vacation properties often hold special value and meaning to families as a gathering spot.

3. Evaluate all financial assets such as savings, investments and retirement accounts. Also consider any trusts as well as insurance policies. Determine where the proceeds from these assets will be disbursed. Will they go to family members? Will they be specified as a bequest to a charitable or other organization?

Business owners also need to have clear and explicit instructions in place regarding any sale of the business and/or property. Co-owned businesses need special consideration and agreements as to any transfer or sale of ownership shares.

As true with financial assets, do not leave any surprises in regards to financial liabilities. Share information on mortgages, loans, automatic bill payments, etc., with family and/or legal representatives. No one wants to be left cleaning up a financial mess and providing clear instructions and contact information regarding all liabilities will make it that much easier for those in charge of the estate.

[See: The Fastest Ways to Lose All Your Money in the Stock Market.]

Having a comprehensive legacy plan in place is the first and most important step to leaving a lasting and positive legacy. The earlier the process begins in speaking with family and working with a team of professionals, the more comfortable all parties involved will be in ensuring a legacy lives on.

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How to Build a Financial Legacy originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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