Why?

Fans of the television show Blue Bloods enjoy watching the multi-generational family dinners. The fictional Reagans also hold family meetings when important issues pop up. We believe family meetings should be scheduled before there are issues and while all generations are still active. HFA recently held a Lunch & Learn seminar on this subject, which was a big success. Some of our guests have already scheduled family meetings.

A family meeting should be designed to map out what you want to happen in the future. Possible reasons for a family meeting include:

• Promote Stewardship, which is the responsible oversight and protection of something worth caring for and preserving.
• Share values as well as estate and financial plans.
• Embrace the challenge to discuss thoughtful planning and its impact on family members.
• Perpetuate a family legacy.
• Discuss multi-generational planning.
• Judiciously communicate details when all generations are still living.
• Prepare heirs for future roles and responsibilities.
• Establish a forum for collaborative decisions.
• Educate heirs on financial literacy or estate planning.
• Create an atmosphere of trust.
• Open lines of communication that may have closed.
• Establish family leadership roles and responsibilities.

Many investors seek help in managing investments, but the quality and type of help they seek can vary dramatically depending on one small little detail — who’s paying your adviser? In turn, that begs the question… is your adviser on your side of the table?

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It’s important to understand the nature of the relationship between you, your adviser, and the investments he/she recommends.

Advisers come in three blanket varieties.

1. Fiduciary Advisers: These are advisers that work solely on behalf of the client. This means simply that they accept no payment from any investment or investment company. Their only loyalty is to the client.
2. Brokers: Brokers are simply paid to “broker” a transaction between two parties. They are often paid by both parties to do this. Since they essentially represent both parties in a transaction they actually don’t have any loyalty to one or the other.
3. Agents: Agents are just the opposite from fiduciary advisers. They work solely on behalf of the institution, such as a bank or insurance company. Their loyalty by definition is to their employer, whose products they must represent. If this person sounds like a salesman, it’s because they are.

Recent statistics show ownership of life insurance policies is at the lowest level in decades: One in four consumers have no life insurance at all. One of the biggest problems is many consumers simply have no idea how much life insurance they need or the best place to get it.

So, who needs insurance?

Simply put: If you have anyone in your life who depends on you financially, you need life insurance. While many Americans get life insurance policies through their job, the coverage is usually lower than individual policies and is only in place while they’re employed. Fewer than half of Americans between the ages of 25 and 64 with annual household incomes between $35,000 and $100,000 have their own life insurance policies, according to new data released by the insurance industry group LIMRA. In its survey, most consumers said they were not financially prepared for the death of a family member and would need to make a drastic or significant financial change if that occurred.

So how much insurance is enough?

Some experts say you should have enough life insurance to cover five to 10 times your annual income (especially if you have a young family), but often that’s just a guess. The answer really depends on how much money your family and/or dependents will need after you’re gone.

There are three key steps to take to determine the amount of life insurance that is right for you:

Evaluate your family’s needs. How much money does it take to run your household? Do you have unpaid medical bills, a mortgage balance and/or outstanding debts? Don’t forget to add funeral expenses and possible estate taxes to the mix. Life insurance policies can pay immediate expenses, including medical costs, as well as funeral bills, taxes, mortgage payments and other debts. The equivalent of all of that will get you close to the amount of life insurance you may need.

Consider future financial obligations. You should also have enough coverage to pay for future financial obligations. If you intend to help pay for college for your kids, say, factor in pending tuition bill and fees as well. Outline your family’s cash-flow needs as well as financial goals. Add it all up to figure out the estimated amount of money that your survivors would need.

Tally up the resources. Now look at the money that would be available. What is your spouse’s income? Do you have long- and/or short-term savings? Add up the balances in your 401(k)s, IRAs, 529 college savings plan, emergency reserves and estimated Social Security survivor benefits, as well as any existing life insurance policies (perhaps through your employer).