A Healthy Financial Picture

1. A Healthy Financial Picture Should include the following: • Monthly Spending Budget • Emergency Savings • Flexible Spending Account • Debt Elimination Plan • Disability Insurance • Retirement Savings Plan • Will and Power of Attorney

2. Wills • Important if you are concerned about who gets your money. • Probate process validates the will and determines how all the assets are distributed. If things are not determined ahead of time and the family cannot agree on how things are split up, the process can last for years. • Don’t wait. Tragedy can happen to anyone at any age. Ease the process for your surviving family members by detailing the distribution of your assets.

3. A Will…. • Identifies who will inherit your estate • Details how the property is distributed • Names Guardians if you have minor children • Creates a Trust if minors are your heirs • Chooses an Executor • This is the person who pays the deceased’s bills and taxes out of the estate, and then distributes the remaining inheritance. • If an executor is not chosen, the court will make that determination.

4. Do it on your own? In order to be a binding agreement, a will only needs to: (This varies from state to state.) • Expressly state that it's the will of the person who wrote it. • Include at least one substantive provision, such as a clause leaving some property to someone or appointing a personal guardian for a minor child, and • Appoint an executor (called a "personal representative" in some states), the person responsible for carrying out the terms of the will when the time comes. Also, for your consideration • Typed or computer printed wills must be signed by two witnesses that do not have anything to gain from the person’s death. • Handwritten, also known as holographic wills, are legal in some states, but are much more easily challengeable because the probate court must be convinced that the handwriting is that of the deceased and was intended as a will.

5. When to use a lawyer • You expect to leave a very large amount of assets. • Rather than simply naming people to inherit your property, you want to make more complex plans -- for example, leaving your house in trust to your spouse until he or she dies and then having it pass to your children from a previous marriage. • You are a small business owner and have questions as to the rights of surviving owners or your ownership share. • You must make arrangements for long-term care of an incapacitated or disadvantaged child or adult family member. • You fear someone will contest your will on grounds of fraud, or claim that you were unduly influenced, or weren't of sound mind when you signed it. • You have any questions or concernsabout your will or other options for leaving your property.

6. Living Will In Kentucky a Living Will allows you to leave instructions in four critical areas: • Designate a Health Care Surrogate (also referred to as a Durable Power of Attorney for Health care • Refuse or request life prolonging treatment • Refuse or request artificial feeding or hydration (tube feeding) • Express your wishes regarding organ donation

7. Health Care Surrogate • This person makes the decision about your medical care based on your living will, but may need to interpret your wishes if something unexpected occurs that is not specifically addressed, so consider many factors before making such a decision. • You share the same belief system including religious values and quality of life as it relates to treatment. • Should be assertive, so that they can ask the tough questions in order to get all the information needed to advocate for the best course of treatment. • Willing to take on the responsibility and the emotions associated with such a situation. • It is someone you trust. • Inform the rest of your family of the decision because once the surrogate is identified, doctors will not accept input from anyone but the surrogate.

8. Living Will You can download a copy of the living will packet from the Attorney General’s website (www.ag.ky.gov/civil/consumerprotection/livingwills.htm) or contact the office at 502-696-5300 to have one sent by mail. • Once you have completed the document, provide copies to your surrogate, doctor, family and the hospital where you prefer to be treated. • You can also enter your directives into the national living will registry for a fee (www.uslivingwillregistry.com or call 800-548-9455 for more information).

9. Financial Power of Attorney • A legal document that gives someone of your choice the power to handle financial transactions. • In the case of planning for a situation in which you are no longer able to manage your finances, a person would specify a “durable” power of attorney, because that guarantees the person retains their ability to manage your money if you become incapacitated. All powers of attorney end at your death. • You can dictate how much authority your power of attorney has by limiting what they deal with to one area, such as handling transactions with banks, or you can give them access to all financial responsibilities. • A lawyer can draft the document or you may find computer programs that provide “fill in the blank” templates and inform you of the state specific procedures needed to make the document binding (i.e. signed witnesses, use of a notary public).

10. Money Management is Nothing to Fear A healthy financial picture is within your reach by using the resources available to you as a state government employee and applying some, or all, of the ideas discussed in this presentation. The most important key to success is perseverance. The number of people who are able to approach a problem and conquer it immediately are limited. Most of us need to work at it and refine our solutions over time until we succeed. Those that are unable to reach their goals, choose to become frustrated and give up instead of turning their failures into learning experiences. Those that become proficient at something, do it through trial and error. If you have any concerns about the state of your finances then make that decision to institute change for SUCCESS.

11. Sources • Department of Employee Insurance • Membership 502-564-6534 • Flexible Spending 502-564-0350 • www.kehp.ky.gov • Kentucky Retirement Systems • 696-8800 or (800) 928-4646 • www.kyret.ky.gov • Kentucky Employee Deferred Compensation Authority • 502-573-7925 or (800) 542-2667 • www.kentuckydcp.com • Department of Justice – Approved Credit Counseling Agencies • www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm • www.assistance.ky.gov

12. Sources • www.bankrate.com • MSN Money • www. moneycentral.msn.com/personal-finance/ • Heady, R. J., & Heady, C. (1999). The complete idiots guide to managing your money (2nd ed). New York, New York: Alpha Books. • Pew Research Center • www.pewresearch.org • About.com • www.about.com/money/ • Care2 Make A Difference • www.care2.com/greenliving/ • www.annualcreditreport.com • Chatzky, J. (2004). Pay it down: from debt to wealth on $10 a day. New York: Portfolio.

13. Sources • Living Will – download from Office of the Attorney General • www.ag.ky.gov/civil/consumerprotection/livingwills.htm • 502-696-5300 • E-mail: attorney.general@ag.ky.gov • Advanced Planning Toolkit through American Bar Association • www.abanet.org/publiced/practical/estate.html • AARP – Will Resources • www.aarp.org • NOLO (Legal Website) • www.nolo.com • US Living Will Registry • www.uslivingwillregistry.com • 800-548-9455