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If you are among the majority of Americans who don’t have a will, it might interest you to know that you can arrange to convey some of your most valuable assets to your heirs without a will or a probate court.

Of course, you still have to fill out the right forms, but the process is nowhere near as complicated as writing a will. In fact, your retirement assets, life insurance, and some other account types should convey to whomever you named as a beneficiary, regardless of what it says in your will or whether you even have a will.

However, be advised that failing to designate your beneficiaries correctly can create problems for your heirs that will make probate seem like a Caribbean cruise.

Don’t Default to Default Beneficiaries

Generally, when you set up a retirement account or purchase a life insurance policy, you are given an opportunity to name primary and secondary beneficiaries. Although it would be unlikely for someone to buy life insurance without designating a beneficiary, it’s not uncommon for people to leave their retirement account beneficiary forms blank.

Most people assume that their IRAs and employer-sponsored retirement plans will go to their spouses. It’s true that these types of accounts have provisions for default beneficiaries, but who exactly qualifies as a default beneficiary can vary based on the account type and custodian — and there’s no guarantee that it will be your spouse.

It can be dangerous to assume that the default beneficiary is the person whom you want to inherit your assets. If it isn’t, the person who was expecting to inherit your retirement assets may have to mount a legal challenge to attempt to change the outcome. If the default beneficiary turns out to be your estate, your intended heirs could lose valuable tax benefits.

Although it’s still important to have a current will in place, a will won’t settle all estate conservation matters. It’s a good idea to review your beneficiary designations on a regular basis to help ensure there is no debate over who will inherit your retirement assets and receive your life insurance benefits.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

KEY PROVISIONS THAT TAKE EFFECT IMMEDIATELY UNDER SENATE BILL AS AMENDED BY RECONCILIATION BILL

Below are some of the key provisions that will take effect immediately, under the legislative package the House passed this weekend (the Senate health bill as amended by the reconciliation bill). The reconciliation bill is based largely on the improvements put forward by the President’s proposal – moving towards the House bill in certain critical areas.

1.
SMALL BUSINESS TAX CREDITS—Offers tax credits to small businesses to make employee coverage more affordable. Tax credits of up to 35 percent of premiums will be immediately available to firms that choose to offer coverage. Effective beginning for calendar year 2010. (Beginning in 2014, the small business tax credits will cover 50 percent of premiums.)

2.
BEGINS TO CLOSE THE MEDICARE PART D DONUT HOLE—Provides a $250 rebate to Medicare beneficiaries who hit the donut hole in 2010. Effective for calendar year 2010. (Beginning in 2011, institutes a 50% discount on brand?name drugs in the donut hole; also completely closes the donut hole by 2020.)

3.
FREE PREVENTIVE CARE UNDER MEDICARE—Eliminates co?payments for preventive services and exempts preventive services from deductibles under the Medicare program. Effective beginning January 1, 2011.

4.
HELP FOR EARLY RETIREES—Creates a temporary re?insurance program (until the Exchanges are available) to help offset the costs of expensive health claims for employers that provide health benefits for retirees age 55?64. Effective 90 days after enactment

5.
ENDS RESCISSIONS—Bans health plans from dropping people from coverage when they get sick. Effective 6 months after enactment.

6.
NO DISCRIMINATON AGAINST CHILDREN WITH PRE?EXISTING CONDITIONS—Prohibits health plans from denying coverage to children with pre?existing conditions. Effective 6 months after enactment. (Beginning in 2014, this prohibition would apply to all persons.)

7.
BANS LIFETIME LIMITS ON COVERAGE—Prohibits health plans from placing lifetime caps on coverage. Effective 6 months after enactment.

8.
BANS RESTRICTIVE ANNUAL LIMITS ON COVERAGE—Tightly restricts new plans’ use of annual limits to ensure access to needed care. These tight restrictions will be defined by HHS. Effective 6 months after enactment. (Beginning in 2014, the use of any annual limits would be prohibited for all plans.)

9.
FREE PREVENTIVE CARE UNDER NEW PRIVATE PLANS—Requires new private plans to cover preventive services with no co?payments and with preventive services being exempt from deductibles. Effective 6 months after enactment.

10.
NEW, INDEPENDENT APPEALS PROCESS—Ensures consumers in new plans have access to an effective internal and external appeals process to appeal decisions by their health insurance plan. Effective 6 months after enactment.

11.
ENSURING VALUE FOR PREMIUM PAYMENTS—Requires plans in the individual and small group market to spend 80 percent of premium dollars on medical services, and plans in the large group market to spend 85 percent. Insurers that do not meet these thresholds must provide rebates to policyholders. Effective on January 1, 2011.

12.
IMMEDIATE HELP FOR THE UNINSURED UNTIL EXCHANGE IS AVAILABLE (INTERIM HIGH?RISK POOL)—Provides immediate access to insurance for Americans who are uninsured because of a pre?existing condition ? through a temporary high?risk pool. Effective 90 days after enactment.

13.
EXTENDS COVERAGE FOR YOUNG PEOPLE UP TO 26TH BIRTHDAY THROUGH PARENTS’ INSURANCE – Requires health plans to allow young people up to their 26th birthday to remain on their parents’ insurance policy, at the parents’ choice. Effective 6 months after enactment.

14.
COMMUNITY HEALTH CENTERS—Increases funding for Community Health Centers to allow for nearly a doubling of the number of patients seen by the centers over the next 5 years. Effective beginning in fiscal year 2010.

15.
INCREASING NUMBER OF PRIMARY CARE DOCTORS—Provides new investment in training programs to increase the number of primary care doctors, nurses, and public health professionals. Effective beginning in fiscal year 2010.

16.
PROHIBITING DISCRIMINATION BASED ON SALARY—Prohibits new group health plans from establishing any eligibility rules for health care coverage that have the effect of discriminating in favor of higher wage employees. Effective 6 months after enactment.

17.
HEALTH INSURANCE CONSUMER INFORMATION—Provides aid to states in establishing offices of health insurance consumer assistance in order to help individuals with the filing of complaints and appeals. Effective beginning in FY 2010.

18.
CREATES NEW, VOLUNTARY, PUBLIC LONG?TERM CARE INSURANCE PROGRAM—Creates a long?term care insurance program to be financed by voluntary payroll deductions to provide benefits to adults who become functionally disabled. Effective on January 1, 2011.

OFFICE OF SPEAKER NANCY PELOSI
MARCH 22, 2010

More than 80% of married couples ages 45 to 72 say they don’t agree on when they should retire, what their retirement lifestyle should be like, or whether they will work in retirement, according to a new survey.¹

This may not come as a surprise to anyone who is married. The real news is that leaving such basic issues unsettled paves the way for confusion and missed opportunities. Funding a comfortable retirement is challenging enough without adding marital conflict to the mix.

Only 38% reported making decisions together about their retirement investments.² This could explain why 39% of couples disagreed about whether they owned annuities and 25% disagreed on whether they owned an IRA.³ When a couple pools their financial resources, they should also consider how the union will affect their combined risk tolerance and time horizon. Failing to do so could result in the couple having an improperly allocated portfolio without knowing it.

Forty-two percent don’t agree on the kind of lifestyle they will share in retirement.⁴ If she wants to move closer to the family and he wants to travel the open road, it will be difficult to determine whether they are saving enough to support their expected lifestyle because they still don’t have an accurate picture of their lifestyle goals.

Sixty percent could not agree on the husband’s or the wife’s expected retirement age.⁵ Obviously, choosing when to retire is a personal decision, based on health and career factors. But there are other important considerations that relate to age eligibility: Will each spouse begin taking Social Security benefits at 62, or should one or both wait until full retirement age? Will the older spouse’s retirement age affect the younger’s decision about when to tap tax-deferred retirement accounts, which carry penalties for withdrawals before age 59½?

Disagreements are natural in a healthy marriage. But allowing them to go unresolved can needlessly limit financial options and opportunities.

1–2) The Dallas Morning News, July 9, 2009
3–5) AARP, 2009

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

Edmond Haronian and staff wish you a Happy, Healthy and Safe 4th of July celebration.

Independence Day fireworks. Photo taken by Marc Averette from Wikipedia.

Celebrate Independence Day in style this year – with a plan!

Author: Jennifer Marlo

Jennifer Marlo is an Examiner from Los Angeles. You can see Jennifer’s articles on Jennifer’s Home Page.

Americans are more likely to have employer-sponsored life insurance coverage than to own their own life insurance policies.¹ Unfortunately, the major problem with employer-sponsored group insurance is that you usually lose coverage after you leave your job or retire (unless the policy is portable).

Owning your own life insurance policy is one way to help keep your family protected, regardless of whether your employment situation changes. Fortunately, owning your own policy may offer some other attractive benefits as well.

Term Policies

Individual term life insurance policies remain in effect for a specific period and pay a death benefit if the insured dies within that term. The death benefit paid to beneficiaries is generally not taxable as income. Term policies do not accumulate cash value and have no residual value if allowed to lapse.

Permanent Policies

Like term policies, the death benefit from a permanent policy is generally income tax–free. But unlike term policies, certain types of permanent life insurance policies remain in force throughout the insured’s lifetime as long as the premiums are paid.

Permanent insurance not only provides a death benefit, it also offers a living benefit. Part of each premium goes into a cash-reserve account that accumulates earnings on a tax-deferred basis. Once you have built up significant cash value, you can access it for any purpose, such as college tuition for your loved ones or retirement income. Because you have already paid income taxes on the funds used to pay the premiums, that portion of the cash value will not be taxed (any interest withdrawn, however, is taxable). Remember that access to cash value through loans or partial surrenders will reduce the policy’s cash value and death benefit, and it may result in a tax liability if the policy terminates before you pass away.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Any guarantees are contingent on the claims-paying ability of the issuing insurance company. Before you take any specific action, be sure to consult with your tax professional.

1) LIMRA International, 2008

This material was written and prepared by StoneRiver–Emerald.
© 2009 StoneRiver, Inc.

Anthem plans across the country are working to develop innovative products and programs that help address rising health care costs. Through pay for performance initiatives, consumer directed health plans and transparency initiatives; Anthem is providing access to the information needed to drive down health care costs.

While many people may believe that insurer profits are the driving force behind increasing health insurance premiums, research reveals very different reasons for the high cost of health insurance.

A May 2009 report titled “What’s Really Driving the Increase in Health Care Premiums?” addresses the issue. The report, issued by the WellPoint Institute of Health Care Knowledge, compiles research from sources such as PricewaterhouseCoopers, the Robert Wood Johnson Foundation, the Kaiser Family Foundation, the Bureau of Labor Statistics and the Congressional Budget Office.

According to the report, the “key drivers” of spiraling U.S. health care costs are:

• Advances in medical technology and subsequent increases in utilization;
• Price inflation for medical services that exceeds inflation in other sectors of the economy;
• Cost-shifting from people who are uninsured and those receiving Medicare and Medicaid to the private sector;
• High cost of regulatory compliance; and
• Patient lifestyles, such as smoking, physical inactivity and obesity.

Citing PricewaterhouseCoopers research from 2008, the report found that only three cents of every health care premium dollar is spent on health insurer profit.

According to the Institute’s report, newer medical technologies tend to increase costs because they are generally more expensive than the older technologies they replace. While the availability of more advanced, superior technologies can yield better results for some patients, these technologies and diagnostic tests may be used inappropriately in some situations where existing, older technologies are more effective and accurate.

View a copy of the full report, “What’s Really Driving the Increase in Health Care Premiums?”

Let’s face it, on all levels, change is upon us and it behooves us to embrace it to progress and grow. Sometimes when that change seems dire and consequential, it can actually be the catalyst for our growth.

As Harold Wilson (former Prime Minister of The United Kingdom) once said, “He who rejects change is the architect of decay.”

Hence, many of us while watching tightening budgets and thinning wallets, are taking advantage of these times to reassess and return oft times forgotten areas of importance into our lives.

To wit is the reemergence of creativity, as so many seek forgotten avenues of expression that have somehow been sidelined from our lives.

Now, I can’t go as far as saying a second renaissance is upon us, but it is evident that our individual and collective mindset is changing, sometimes by choice and other times by compulsion.

Such is the theme of this issue’s stories. Inside, we offer a variety of ways to ease the path through today’s financial minefield as we focus on health and wellness.

Sincerely,

Edmond Haronian, LUTCF

The $787 billion American Recovery and Reinvestment Act signed by President Obama includes a subsidy for newly unemployed workers to maintain their group healthcare coverage. The law becomes effective March 1, 2009.

The subsidy aims to help these workers by paying 65 percent of COBRA or state continuation premiums for up to nine months, with eligibility limited by income. Joint tax filers with $250,000 or more of modified adjusted gross income (AGI) and all other filers with $125,000 or more of modified AGI are not eligible for the full subsidy. The subsidy is phased out for individuals with AGI of $290,000 joint or $145,000 for other filers. The subsidy will be available to those who involuntarily lose their jobs between Sept. 1, 2008, and Dec. 31, 2009.

The Department of Labor has 30 days from when the bill was signed to provide sample documents, and then the groups and COBRA administrators have 60 days to make any required system modifications and complete the member mailings. Ceridian will be prepared by April 18 with all necessary system changes.

Employers that work with a different COBRA administrator should contact that company. Employers that administer COBRA benefits internally should contact their internal legal/compliance area.

Note on State Continuation: State Continuation, which varies by state, is expected to follow similar guidelines as COBRA. Some questions need to be clarified regarding the subsidy, notifications and taxes. We will update you as information becomes available.

Find out more about the COBRA subsidy at the American Benefits Council Website.

State Children’s Health Insurance Program (SCHIP) Reauthorization Update February 9, 2009 The expansion and reauthorization of the State Children’s Health Insurance Program (SCHIP) was signed into law by President Obama on February 4, 2009. In California, the SCHIP is known as Healthy Families. This law keeps nearly 900,000 California children in Healthy Families. It also gives thousands more children access to health care. It provides money for 4 ½ years and gives financial stability for Healthy Families. Federal funds provide 2/3 of the funding needed for states to run their SCHIPs.

Making sure Healthy Families has enough money to cover children is important to Governor Schwarzenegger. The Governor is grateful that President Obama shares the same thoughts. Children who need coverage will be able to receive it. The reauthorization will allow California children access to comprehensive health, dental and vision care that is crucial for their healthy growth and development.

Click the following link to read the official press release:

http://www.mrmib.ca.gov/MRMIB/Press_Release_President_Signing_2009.pdf