Wonder if you’re worth more dead than alive?

If you are like many moderately successful Americans, chances are you are worth more dead than alive. In many cases a lot more.

That’s especially true if you are a long-time federal worker or retiree, and if you own a house, and are still married to your original spouse. Got a car? Better yet, if you have life insurance and a Thrift Savings Plan account it’s a no-brainer. From a purely economic stance the question is what are you still doing here?

And during times like this, when a pandemic is still running wild, it’s a good question. The old rules and odds don’t apply.

Regardless of where you live, your age, race, sex and what precautions you take, or ignore, we are all at risk — some a lot more than others. But still, if you have people you want to leave something to, if you leave unexpectedly, do you know where to start? Have you done something or nothing? Do you know what you don’t know?

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For instance what’s the difference between having a will and setting up an estate? Do you need one or both? Short answer: Probably yes, so how come?

What’s power-of-attorney, of a medical directive? If you become seriously ill or injured, maybe in a vegetative state, do you want the hospital to take heroic measures to keep you alive? If you don’t make that decision beforehand, somebody who loves you — a spouse, adult child — may have to do it.  And they may need the assurance, especially if other family members disagree, that they are acting as you directed. Grim stuff but these are grim times. Nobody alive has been through anything quite like this.

So we asked tax and estate attorney Tom O’Rourke to return today on our Your Turn radio show.  He’ll talk about wills, powers of attorney and the tax implications for your estate which, even if you don’t know it, you probably have. Here are some things you need to consider that we’ll talk about today:

“The basic estate plan includes powers or attorney and some mechanism for distributing your assets in the event of death.

“At the present time an advance medical directive, also known as a health care power of attorney, is essential. This document accomplishes two important goals: It names an individual of your choosing to make health care decisions for you if you are unable to make these decisions for yourself. It also includes end of life instructions (a living will) that specifies what actions you wish to have taken on your behalf if you are terminally ill, in a vegetative state, if you are unlikely to recover. Do you wish to be kept alive by artificial means (i.e. a ventilator)?

“An equally important tool in any estate plan is a durable financial power of attorney. This allows an agent of your choosing to manage your financial affairs if you are incapable of managing your own affairs.

“When most people think of estate planning they think about a will. Although a will is very important, most people have many assets that will not be affected by their wills such a jointly owned property, and assets for a beneficiary is designated, such as life insurance, TSP and annuities. The important point to emphasize is that everybody needs to specify how they wish to have their assets distributed following their death. This can be a will, a trust, or by beneficiary designation.

“I have also been getting a number of questions about changes in the tax law that are part of the CARES Act. These questions generally relate to the following:

  1. The amount of any rebate a person may get and what do you need to get this rebate?
  2. The ability to make a penalty-free withdrawal from an IRA or other tax deferred plan.
  3. The waiver of the required minimum distribution for 2020.”

Best date(s) to retire

When it comes to the best dates to retire for federal workers, Dec. 31, Jan. 1, 2 and 3 are most popular with feds depending on which plan (Federal Employees Retirement System or Civil Service Retirement System) they are under. But did you know there are dozens of dates, spread throughout the year, when you can maximum your future annuity and minimize your taxes? So how do you find out?

On Thursday, July 16, the National Active and Retired Federal Employees is holding a webinar featuring benefits expert Tammy Flanagan and NARFE’s Jessica Klement. And it’s open to members and nonmembers of NARFE. Check it out or pass it on to a friend.

Nearly Useless Factoid

By Amelia Brust

The reason decaf coffee pots in restaurants typically have an orange top is due to the original purveyors of decaf in America: The German company Sanka, which used orange labeling. When General Foods bought Sanka in 1932, to promote the brand, the company provided orange pots to coffee shops and restaurants, and the color stuck.

Source: Fortune Magazine archives