Financial Planning for Everyone

This month, Heart to Heart with Michael sits down with Laura Redfern, Certified Financial Planner, and will be looking at some of the things that each of us can do in order to better plan for our family’s future. Oftentimes families are faced with confusion when trying to understand the wishes of their loved ones. Proper planning can avoid confusion after our death, and can make our intentions known to those who follow us and are tasked with carrying out our wishes.

This podcast is provided for informational purposes only. The topics discussed are not suitable for everyone and should not be construed as personalized investment, legal, accounting, or tax advice. Please consult your own investment, legal, accounting, or tax advisors regarding your specific situation. There is no guarantee that the views and opinions expressed in this podcast will come to pass.

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Transcript

Laura Redfern: 0:00

I've had some clients who will sit down and write a love note. In thinking about, alright, I'm gone. What do I want to say to my loved ones. And this sometimes helps people to unload their heart to think about not just the possessions and who gets what, but to think about what other people mean in their lives and give a little bit more meaning behind this whole topic.

Michael Liben: 0:32

Welcome to the fourth season of Heart to Heart with Michael a program for the grief community. Our purpose is to empower members of our community with information and support. This season, we're looking at grief in its various forms. Oftentimes, while we are grieving, we suddenly come face to face with a lack of financial planning on the part of a loved one. Today's program is financial planning for everyone. And we're going to take a look at some of the things that we can do to prepare us and our loved ones for the future. Our guest today is Laurel Redfern CFP. Laura earned her Certified Financial Planner designation in 2011. After working for over 10 years in the financial services industry. Having a background in investment management and retirement planning, Laura was attracted to comprehensive financial planning, and the opportunity to serve clients in a more significant way. Laura has a passion for educating individuals on financial topics, and speaking in real world terms to inspire individuals to become confident in making financial decisions. And experienced speaker and trainer, Laura has presented financial seminars to the American Business Women's Association, Temple College and McLennan Community College. Laura has almost two decades of experience working with teachers, baby boomers and women to align financial goals with live values. Laura's mission is to reduce client stress, make money more meaningful, and to take fear out of the finance. Laura, thank you for joining us today in heart heart.

Laura Redfern: 1:48

Thank you so much, Michael. I am so excited to be here. And I love that you say that you empower people because that's exactly what we do too. So this is great synergy.

Michael Liben: 1:57

One of the things we didn't mention above in the intro is that you and I know each other because you're a board member of Hearts Unite the Globe, which is the nonprofit organization that funds this podcast. So I want to thank you for that. And I'd like to pick your brain about how we can make end of life plans for ourselves, our parents and our children. Let's start with me. I'm 60 years old, what at a minimum, should I or anybody for that matter? What can we do to make sure we have in place as responsible, mature adults?

Laura Redfern: 2:24

Thank you, Michael, that is such a great question. And I think is an important one. Because so often, we don't like to think about this question. Whether it's for ourselves, our parents or other loved ones. Usually this doesn't come to the forefront of our mind until we have an event. And as you said earlier, when you're grieving, you can also be facing these financial planning questions and that's not the time you probably at your best decision making capability. So thinking about things beforehand is one of the most loving things that you can do for those that you might leave behind. So glad, we're talking about that today, What would you have as a minimum, as a 60 year old, responsible adult, there are a few things. First is to consider having a will. Now a lot of people will think I don't have very much as far as possessions or assets. So why would I need a will? Well,not everyone needs a will. I will tell you first off, many financial planners will say you absolutely have to have one. I don't quite agree with that.

Michael Liben: 3:26

Let me let me just break in from a lot of reasons why people think they don't need one. It may be I only have one or two children. It's very simple. If my spouse outlives me my spouse is going to get everything and then after that, it's going to go to my one or my two children. There's nothing real, no high mathematics here. If you can divide by two, it's pretty much a done deal. So why would I really need one?

Laura Redfern: 3:46

Great question. So we'll does more than just divide assets because you're right, most states have laws that will designate where those assets go, whether that be to a spouse or to children. So yes, that you may not need a will, if that's pretty simple, but a will also designates the executor, who is the person who basically is in charge for making financial decisions after you are gone. So if it's if it's pretty clear, maybe again, you don't need a will, but that's a really important responsibility.

Michael Liben: 4:19

So let me ask you that if I if I die intestate, and there's no executive, but I have two children. What are my children now going to be faced with? How do I get that money? Or how do I get those assets? Or does it just naturally transfer? Is there a process for there with when there is no executor? And maybe executives the best reason to have a will?

Laura Redfern: 4:37

I think executor is one of the best reasons to have a will because then it just makes it easy, quite honestly that then they don't have to try to decide, oh my gosh, who takes care of what and what are we doing and so on and so forth. If you have the conversation beforehand with the person you would like to name as your executor, it also helps them to be prepared because that conversation will naturally lead questions of, oh, okay, where is all of your stuff? Is it in a safety deposit box? Is it in the closet? And that just leads to good healthy conversations that should probably happen so that everything runs more smoothly.

Michael Liben: 5:13

Okay, I've got to ask you another question here. And this is a question I've thought about my father was a lawyer and I used to, I used to, you know, when I was younger, I would, his clients would come to the house and I, I've witnessed a lot of wills over the years. But a question I never asked which always sort of interested was, okay, so I've named an executor. The executor is usually a friend of mine, so he's roughly my age. What if I outlive my executor?

Laura Redfern: 5:41

Great question. In my personal experience, when we drew up our will, our attorney actually had us name a successor executors, which is like a contingent beneficiary. So it's the second line, you name your executor and very often, that is a colleague who's probably around your same age. That's okay. Then you name who you want to be second in line, your second choice. And you can put that into your will as well. I would like to mention a few other items because we're talking about what you should have in place as a responsible adult. So we've talked about the will. Another important document is the medical power of attorney or also called a health care proxy. And our attorney helped me to get really clear on what the difference is here is that the will talks about finance, and assets and stuff, possessions. The medical power of attorney or the health care proxy, talks about your body. So it's very, it's different. You can even have two different people. For example, you could name one person as your executor for your will because you know, cousin Joe is good with finance and you trust him a lot. Great. But then perhaps you want someone else who's different to make any medical decisions. If you are not able to that would be where the healthcare proxy medical power of attorney would come into play. And perhaps you have a different person in mind there. So having those two documents separately, but they also work together that can be really important.

Michael Liben: 7:14

I've seen that my family actually I am, I am my mother's health care proxy. Great. But I am not a power of attorney. I don't have any I can't touch the money or do anything. There is no but I you know, I have nothing to do with her assets. I am the one who has to sign off for medical treatment and anything would go to her body. Yeah, I, I'm living that right now. Wow.

Laura Redfern: 7:36

Okay, so another really important item is the beneficiary forms on other financial tools that you might have. So we've talked about the will and most people think, Okay, I'm going to put everything in my will. And that's it. Everything's done. wash my hands.

Michael Liben: 7:55

Until life insurance shows up.

Laura Redfern: 7:56

Exactly. Yes. So there are two items that most people have in their lives that will not necessarily be governed by the will. That is your, as you mentioned, life insurance and your retirement plans. These two items have a designated beneficiary form that you fill out when you open these accounts. And what goes on that form overrules what is in your will. So it's very important to know. They basically are mini trusts, is how I usually explain it. So they create a little tiny trust, and whatever that says on that document is what goes. So you need to make sure that your beneficiary forms are up to date. If someone that you had named as a beneficiary has passed away, make sure you update that because if you don't leave a mess behind for your heirs, that you just don't want to leave. We'll just we'll just say that.

Michael Liben: 8:52

So let's, just before we break, I actually want to ask that question. What happens if you've updated your will, the message in your will is very clear, but you didn't really think about life insurance that you may have, you know, picked up through a job 20 years ago and you forgot about it sitting around. And , your parents are listed on it because he was so young, or your girlfriend is on it, because you were sure you were going to get married? What's gonna happen then? Once you're gone, can anything be done to fix that?

Laura Redfern: 9:24

Oh, gosh, what a good question. So if the beneficiaries have passed away, there will be a an order of operations to where it will go somewhere. May not be where you intended, but it can't go to a person who is deceased. So you know that if you've named a girlfriend that you'd forgotten about, sorry, bad news, it's going to go to the person whose name is on there.

Michael Liben: 9:48

That's not bad news for her.

Laura Redfern: 9:51

That's true. But that's why that's so important. You're exactly right, Michael. That's why it's so important to keep your beneficiary forms updated. Yes, it's a little bit of a pain to do that. But it's not too bad. If you have the name of the company where you have a policy, whether it's a former employer, or you've bought a policy yourself, you have certificate somewhere, you can even just start with the name of that insurance company, Google it, find a contact number and call them up and tell them what you're trying to do. They should be able to help you with that, so that you can get your beneficiary forms updated.

HomeTonightForever: 10:26

Home Tonight Forever by the Baby Blue Sound Collective. (Anna) "I think what I love so much about this CD is that some of the songs were inspired by the patients." (Dr. W) "Many listeners will understand many of the different songs and what they've been inspired by. Our new album will be available on iTunes, Amazon.com, Spotify."(Anna) "I love the fact that the proceeds from this CD are actually going to help those with congenital heart defects."(Dr. W) Enjoy the music.(Anna) Home. Tonight. Forever

HUG Store Promo: 11:07

Hi, my name is Jamie Alcroft and I just published my new book "The Tin Man Diaries." It's an amazing story of my sudden change of heart as I went through a heart liver transplant. I can think of no better way to read th"T Tin Man Diaries" than to cuddle up in your favorite Hearts Unite the Globe sweatshirt, and your favorite hot beverage of course in Hearts Unite the Globe mug, both of which are available the HUG Podcast Network online store, or visit HeartsUnitetheGlobe.org

HUG Message: 11:37

This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. The opinions expressed in the podcast are not those of Hearts Unite the Globe, but of the Hosts and Guests and are intended to spark discussion about issues pertaining to congenital heart disease or bereavement. You are listening to Heart to Heart with Michael, if you or someone you know would like to be a guest on Michael's program, please email him at Michael at heart to heart with baykal.com. Now, back to our program.

Michael Liben: 12:14

Laura, we were talking about how we can prepare for our own end of life considerations in the first part, but now I'd like to address something different. I'm in the sandwich generation, I'm still caring for my elderly mother, and I have children. So in this part, I'd like to talk about considerations for elderly parents. What documents should my mother have prepared? And what to do if we're caring for elderly parents who don't yet have documents interferes in order? How do we bring it up? And what if, what if our parents have dementia?

Laura Redfern: 12:41

Those are such good questions, Michael, I'm really glad that we're talking about this. I will say I'm proud of the financial services industry in that this has become a hot topic. And in fact, to maintain our licenses, we're required to take a course now on elder abuse and elder care. So this is very much at the forefront of people's minds. They realize that a lot of people like you in the sandwich generation, who needs to be aware of what elder concerns could be out there. So the documents that your mother would need in place would be just the same that we talked about before. At a minimum, a will would be nice to have the financial power of attorney being part of that. And a medical power of attorney would also be great, making sure that the beneficiary designations are updated on any life insurance or retirement plans that she might have also any pensions that she might be getting, especially if perhaps she inherited them from your father as a spouse. No one might have thought, okay, she's inherited. Now we need to put something if someone's going to inherit from her. So very often, when it's the second spouse, I will see that there aren't any contingent beneficiaries. So it's something worth looking into. But of course, that all hinges on how do you bring this up with mom. That is That is a difficult conversation for many people.

Michael Liben: 14:03

I found that my parents refused to talk about what I mentioned over the years. We have some interesting pieces around the house that I said, we really have to decide what to do with this and they just wouldn't talk about it.

Laura Redfern: 14:13

Yes, it's it's tough. I will tell you, there's no silver bullet solution that I can tell you. But I will say that what I found, works best is gentle, open ended questions that put it in as positive light as possible. And by that, I mean, striving to point out that it is the most loving, caring thing you can do to have these documents in place. It's not about them. It's not about them dying. It's about leaving things in order for those that they leave behind. That's, that's the important part of what they're doing here. It's not trying to be mercenary. It's trying to be smooth and have everything in order, so that while you're grieving, you don't also have to untie knots in their financial life.

Michael Liben: 15:08

Well, I just want to add something that because it's not, I found that those conversations that I tried to have my parents when they were younger, it cut both ways. They didn't like talking about their eventual end. And I felt ghoulish bringing it up. I thought actually, I felt ghoulish saying, what are we gonna do? Who's gonna get this? Like, can I have that? No, but there are some things that I think we need to have organized into. So there is no discussion later, that would be superfluous, but you know

Laura Redfern: 15:34

Yes, part of what it's all about storytelling, and how you frame the questions I find are because you're right, that's completely natural, as a human being to feel like, oh, gosh, I don't want to bring that up. I want this and don't let my sister get that. That doesn't feel good. If you can reframe that, even in your own mind before you go to mom and dad, and think about the questions being more around what would be ideal? Mom, What would you like to have happen? What would you like to see? When you're looking down from heaven and you're not around anymore? What would you like to have happen? Trying to pose it in a positive light as possible, helps perhaps to take the edge off of that feeling that this is a grungy topic.

Michael Liben: 16:22

I always had trouble even bringing it up. And I shouldn't because my father, as a lawyer did this for other people. So you would think. And there you are not wanting to talk about things that are completely unpleasant. Nobody wants to plan for it. Trying to yourself to sit down and plan for me. I'm 60. I don't have a will yet and I know I should. I know I'm a bad boy but I don't want to think about it.

Laura Redfern: 16:55

Well, another thing that you can do if the conversation is just distasteful and not really moving anywhere, I've had some clients who will sit down and write a love note in thinking about, alright, I'm gone. What do I want to say, to my loved ones. And this sometimes helps people to unload their heart to think about not just the possessions and who gets what. But to think about what other people mean in their lives and give a little bit more meaning behind this whole topic. Sometimes that's just cathartic. And maybe you don't even share that and that's fine. But sometimes that's...

Michael Liben: 17:31

It sounds like they made their will already, that's actually a very good thing.

Laura Redfern: 17:33

Mm hmm. Exactly. And you can say, just what's on your heart, what would you wish what would be ideal, the picture that you leave behind. So that sometimes helps to open up that conversation a bit.

Michael Liben: 17:46

Before this program, you and I talked about some special considerations that a family might have. What if you have a parent who was a collector of antiques or something like that, or maybe they have artwork or, or even just valuable stamp collections? What do we do if our parents have certain things that have sentimental or financial value, or significance that are not listed in the will necessarily?

Laura Redfern: 18:06

The will is the best place to put those items. First off, because that makes it official and just, again, smoother for the heirs. But if they're not listed in the will at least they could write down a love note, as I mentioned before, what they would really like to have happen, maybe they have this prize stamp collection that they would love to see go to a local museum. Well, if write that down, at least it's something in writing, that's the most important thing. If they could just put it in writing, even if it isn't in an official document. That's going to help so much more than well. I remember I heard mom say once, or that's not how I remembered it. She said I

Michael Liben: 18:43

I have an example, I have an example. What if you find that there's more than one copy of the will more than one version of the will over time? Only the last one is signed. It doesn't include things that were included in the earlier ones. The plan you wanted, the ideal, what I'd like to see is written down. But it's written in an unsigned will. So can you use it. Can you refer to it? I would think not.

Laura Redfern: 19:09

Wow, that's an attorney question, Michael. That's a really good question, but it's beyond my scope of knowledge.

Michael Liben: 19:17

Okay. That was a hard one. I admit.

Laura Redfern: 19:19

That's a good one.

Michael Liben: 19:21

I mean, what if you had an earlier signed will, and then you had a later will that was unsigned, I think in any case, you have to go with the signed will?

Laura Redfern: 19:27

I think so too. That would be my understanding, but again, really an attorney question.

Michael Liben: 19:32

No, if it's unsigned, it's just a piece of paper doesn't

Laura Redfern: 19:35

Yeah, yeah, that's true.

Michael Liben: 19:36

But you were saying at least get it down on paper. And I'm concerned, wait, I mean, I've seen things on paper that aren't valid. Because there's something

Laura Redfern: 19:45

Sure it's not formalized. And if there are conflicts, just like you said, then the more formalized documents going to probably rule, but if it's not mentioned at all, and the will just says the house goes here and the car goes here or whatever. But there's no mention of the China collection, then at least if there's something in writing that says I would really like the China collection to go to Chris, then even if it isn't official that has expressed what the desire is, and it's more likely that that will be followed. Doesn't mean that it's binding. But at least the expression in writing helps the heirs to know what you would like to have happen.

Michael Liben: 20:25

I think actually, a lot of that depends on somebody else's lawyer. Okay, I'm taking a hypothetical situation if you have a cousin or you and a sibling arguing over a piece of furniture, and you say, Yeah, but she told me I should have it. Good luck and your other your other the other lawyer is gonna is gonna rip you up on that.

Laura Redfern: 20:46

And that's, that's really sad to see when wills are contested like that. And that's what we're trying to prevent actually, by suggesting that the original owner put something in writing is that that will at least express what what they wanted to happen. Doesn't again it doesn't prevent fights, but it helps.

Heart to Heart with Anna: 21:05

"I was five hours old when I had my first surgery." (Heart Warrior)"The only advice I can really give someone like that is to be there for your family." (Heart Warrior Sibling) "This is life and you have two choices. You either live it or you sit in a corner and cry." (Heart Warrior) I am Anna Jaworski, and the host of "Heart to Heart with Anna." Join us on Tuesdays at noon Eastern Time on Spreaker or BlogTalkRadio. We'll cover topics of importance for the congenital heart defect community. Remember my friends, you are not alone.

HUG Message: 21:36

If you've enjoyed listening to this program, please visit our website HeartsUniteGlobe.org and make a contribution. This program is a presentation of Hearts Unite the Globe, and is part of the HUG Podcast Network. Hearts Unite the Globe is a nonprofit organization devoted to providing resources to the congenital heart defect community to educate, empower, and enrich the lives of our community members. If you would like access to free resources pertaining to the CHD community, please visit our website at CongenitalHeartDefect.com. For more information about CHD hospitals that treat CHD survivors, summer camps for CHD families and much, much more.

Rejoiner: 22:15

You are listening to Heart to Heart with Michael. If you have a question or comment that you would like addressed on our program. Please send an email to Michael Lebin at Michael@HearttoHeartwithMichael.com Now back to Heart to Heart with Michael

Michael Liben: 22:31

Laura, I think all parents want to make sure that our children are left with some kind of legacy. What can you tell us that we can do to help create that legacy for our children?

Laura Redfern: 22:41

There are a couple of things that you can think about as a parent is what kind of legacy you'd like to leave behind. One is to consider life insurance. That's not for everybody. But it's a good thing to think about if you have younger children and what might happen to them, financially, if you were gone. So I have seen this work with families where sometimes the life insurance policy is really what saves the day that the children are able to move ahead with their lives financially, in ways that would not have been possible without that life insurance.

Michael Liben: 23:21

So let me ask you a very specific question on life insurance because I'm dealing with that right now. I'm 60. My life insurance. I have, I think at least two policies. I actually have three, I have one on my mortgage, which they required. I have two that I've acquired over the years one is still 65 and one is still 65 and a half. Okay. What if God forbid I live to be 66.

Laura Redfern: 23:44

I hope you do, Michael.

Michael Liben: 23:45

I paid all this money.

Laura Redfern: 23:46

Yes. Yes. So what you've spoken to is the difference between Term Life, right and a permanent life insurance policy and there are a couple of different types of permanent...

Michael Liben: 23:59

Not to mention the price.

Laura Redfern: 24:01

Yeah, exactly. So Term Life is the type that you are mentioning, I'm assuming that you have because it expires at a certain point 65. Or in the case of a mortgage, it's attached to a thing. So when your mortgage is paid off, that goes away, there's a time period attached to the policy, that's term life. That's usually the least expensive. And that's usually a really good idea for most people who have a specific purpose. So let's say the mortgage debt, you don't want to leave your children with the mortgage. So you attach a term policy to it. That's the most affordable way to do it. There is a different type of life insurance, a permanent insurance policy, they come in different flavors, whole universal variable. These are more expensive and they're more complicated, and they're not always what they seem to be. They can get very squirrely with the language and the price and the commission that goes to the agent, quite frankly. They're not my favorite vehicle, but they are appropriate some times.

Michael Liben: 25:04

So can I get one at my age? I don't have it. Can I get one of those now?

Laura Redfern: 25:08

Good question. Possibly, it will probably be so expensive that you would balk at the price. Most likely, it is possible. Usually will you want to attach it to a specific cause. And most of the time, I can only see thinking about a permanent policy. If you have young children that will need a income stream should you be gone. But let's look outside of life insurance. We talked earlier about the beneficiary forms. So keep in mind that if you have retirement plans or pension plans, here's where you also have the opportunity to leave a legacy because you're naming a spouse or a beneficiary child on those forms as well. Those can pass along to heirs as well and it can be very advantageous or it can also get squirrely.So it's having the right beneficiaries on those accounts is again, just really important.

Michael Liben: 26:02

My retirement plan was to work until I drop. And I don't think I'm alone with that. I think a lot of people have that, for whatever reason, you know, these retirement plans sometimes are expensive, and we can't always afford, depending on our situations, I can't really afford a decent retirement plan

Laura Redfern: 26:20

Very often with pension plans, that is true. And that's something to know when you are selecting your options. Many workplace plans might have an annuity option, and you need to make sure you know what those are when you're selecting that. So let's say you retire, and you want to leave half of your benefit to your spouse, well, you need to make sure that you're selecting the 5050 option, so that your spouse gets that that's an election that you make usually when you retire. So knowing those options, when you go through that.

Michael Liben: 26:52

What do we need to tell our kids about our end of life care?

Laura Redfern: 26:56

Yes. So a big part of your legacy is the education, the conversations that you have with your children. And I think that's so important for parents to be open and teach the children from the lessons they've learned the reasons perhaps their own financial decisions. Obviously, you need a child who is old enough to understand these concepts. But once they get into their teenage years and start thinking about things like an adult, it's important to have a money conversation. Again, these are not easy conversations, but they're so important. They really lay a foundation for making good financial decisions.

Michael Liben: 27:37

I understand that you and your husband have a company called Shadow Ridge Asset Management. Tell us a bit about how that works and how people can get in touch with you if they have any questions because I'm sure people listening today have been their interest has been piqued in this.

Laura Redfern: 27:49

We have a website is ShadowRidgeInvest.com. And I realized that's a lot of words that you could just google Shadow Ridge Asset Management. We are financial planning firm. My husband does the money management investments. So he would talk to you about stocks and investments. I'm the financial planner, obviously. And I talk to clients about how to manage their financial lives. If they go over to the website, there is a Contact Us page, they can send me an email with any questions. I'm always welcoming that. I have the heart of an educator as you might be able to tell. So I love the questions. I always say there are no stupid questions. I'm happy to answer them. And you can reach me on the contact page on that website, ShadowRidgeInvest.co.

Michael Liben: 28:34

Well, thank you for that. It's been an enlightening half hour. This is something we really all need to think about and to think about again, and again. And to make sure we get it done. I have seen some terrible, terrible times where people meant to get to it, but didn't. Yes, that's really very unfortunate.

Laura Redfern: 28:51

There's another website you can go to, and that is letsmakeaplan.com. That's sponsored by the CFP Board. So that would lead you to a certified financial planner in your area you can put in your zip code, and it will bring up profiles of certified financial planners near you.

Michael Liben: 29:09

Thank you for that. Well, that concludes this episode of Heart to Heart with Michael. I want to thank you, Laura, for sharing your expertise and your advice with us. And thank you for joining us on the program.

Laura Redfern: 29:17

My pleasure, Michael, thank you for having me.

Michael Liben: 29:20

Please join us again at the beginning of next month for brand new podcast. I'll talk with you soon, but until then, please remember moving forward is not moving away.

Closing: 29:33

Thank you again for joining us. We hope you have gained strength from listening to our program. Heart to Heart with Michael can be heard every Thursday at noon, Eastern time. We'll talk again next time when we'll share more stories.