ABOUT THE GUESTS

Elaine Martyn
ABOUT Elaine

Elaine Martyn is vice president, relationship management for the Private Donor Group at Fidelity Charitable®, an independent public charity that has helped donors support more than 193,000 nonprofit organizations with nearly $18.7 billion in grants since inception in 1991. The mission of Fidelity Charitable is to further the American tradition of philanthropy by providing programs [...]

ABOUT HOSTS

Joe Anderson
ABOUT Joseph

As President of Pure Financial Advisors, Joe Anderson has led the company to achieve over $2 billion in assets under management and has grown their client base to over 2,160 in just ten years of the firm opening. When Joe began working with Pure Financial in 2008, they had almost no clients, negative revenue and no [...]

Alan Clopine
ABOUT Alan

Alan Clopine is the CEO & CFO of Pure Financial Advisors. He currently leads Pure Financial Advisors along with Michael Fenison and Joe Anderson. Alan joined the firm about one year after it was established. At that time the company had less than 100 clients and approximately $50 million of assets under management. As of [...]

Published On
September 25, 2017
The Truth About Reducing Your Taxes Through Charitable Giving

The Truth About Reducing Your Taxes Through Charitable Giving

In the aftermath of natural disasters at home and abroad, Elaine Martyn from Fidelity Charitable explains how donor-advised funds can make for tax efficient, high-impact giving. Plus, how to protect yourself from identity theft following the Equifax security breach, financial tips for the five stages of your relationship, soap opera estate planning, Joe and Big Al’s beer tastes, and biker fashion.

Show Notes

 

Ask Joe and Al

Transcription

I think in a disaster situation, there is a strong emotional response, which can spur giving. And we empower our donors to take action, and the donor-advised fund means you have a ready reserve available to react and to give immediately. – Elaine Martyn, Vice President of Relationship Management, Private Donor Group, Fidelity Charitable

In the aftermath of natural disasters happening at home and abroad, today on Your Money, Your Wealth, Elaine Martyn from Fidelity Charitable explains all the ways a donor-advised fund is a tax-efficient strategy for high-impact giving, where and when it’s needed the most. Also, Joe and Big Al have the info you need to protect yourself from identity theft in light of the Equifax security breach. And on a lighter note, we’ve got financial tips for the five stages of your relationship, the best cities to celebrate Oktoberfest outside of Munich, soap opera estate planning, Joe and Al’s beer tastes, and biker fashion. Now, here are Joe Anderson, CFP® and Big Al Clopine, CPA.

:55 – Equifax Security Breach

JA: Hey Alan, Equifax reported a major breach.

AC: Well, they did. 143 million consumers potentially have their personal information…

JA: Names, Social Security, birth dates, home addresses, driver’s license numbers.

AC: I checked. They have a site where you can check to see are you potentially one of the ones. I checked that and it said, “you may have been compromised.”

JA: Really. Have you ever been compromised?

AC: Yes, but not in the ways that you have. I’ve had people that get your credit card and try to charge stuff,  and then they close the credit card and the bank refunds that charge. The Western Union one time, I had a $3,000 charge on that, because I used to pay my landlord on Western Union in Las Vegas. But they reversed that. So that’s been the extent of my identity theft. You’ve had some doozies. (laughs)

JA: Awful. Yeah, right out of college, I was live in Atlanta, Georgia. I went to the bank, opened up an account, and I lived in low-income housing because I couldn’t afford anything else.

AC: Yeah. First place, and now you’re a palace.

JA: Oh yeah. I was on Peachtree Avenue, the Darlington was the name of the building. It was right across the street from the Piedmont Hospital.

AC: OK. So if you got shot you could go right across the street.

JA: Exactly. So yeah. Got checkbooks, debit card, ready to go to. They sent my checks to the wrong address. In the same building.

AC: OK. So someone else got your checks.

JA: Yeah, and back in the day, remember – I feel really old, but you would put your driver’s license number on your checks, your telephone number on your checks. And so they sent it to the wrong address, and this person called me and was like, “hey, we got your checks!” And the message I was like, “what a very nice person, they have my checks, they’re probably just forward it to me.” No, they ended up writing checks all over Georgia, Tennessee, and I had no idea that that was really going on, until like maybe two months later, because I was broke. I didn’t have any money. And all of a sudden I started getting all these letters from the bank. And then I would go in, and I had to deal with that for like probably 10 years. So I closed the account. But Joe Anderson, my parents were so very original name. So they were able to forge a driver’s license with my name on it. They would go to Kroger and Albertsons and all sorts of grocery stores. They would always be grocery stores. $200, $300.

AC: Did you get reimbursed for that?

JA: No, I closed the account, they were just bouncing checks.

AC: But the original checks, did you get reimbursed for that or did you lose money?

JA: I think I only had probably $50 in the checking account anyway. So I probably spent it at a bar. (laughs)

AC: (laughs) They were thinking, “Oh, Joe Anderson checks.”

JA: (laughs) Right? Oh, my goodness, gracious. So then I have to go to, I think it was called credit clean. I spent probably $5,000 just trying to clean it up off all my different reports and everything else.

AC: Because of all these bounced checks and all the terrible things you supposedly did.

JA: Exactly.

AC: Wow, so you have empathy. Sympathy.

JA: Yeah. And then my childhood friend stole my identity with his fifth DUI.

AC: Yes. I remember hearing about that one.

JA: That was a good time too. But here, a couple of quick notes for people to do here. Here are some tips: If you’re worried about this, order a free credit report. So there is AnnualCreditReport.com. You can get them all at one place. That’s AnnualCreditReport.com. And you should do this annually anyway. That would go with Equifax, TransUnion, Experian. So they will just get all of those different credit reports. You could freeze your credit. Have you ever done that?

AC: No I haven’t. But I’m thinking about doing it right now.

JA: So this may be the most effective way. I’ve never frozen my credit. I’m purchasing a home for my mother, so I can’t really freeze my credit. But then you’re done, it’s frozen.

AC: Yeah, then people cannot use your name and identity to open a credit card or anything like that.

JA: Have you ever used LifeLock, anything like that?

AC: Yes, I have LifeLock.

JA: I go to CreditKarma.com.com. It’s free. I check that out once a month.

AC: Mine’s $9.99 a month. Both Ann and I have that. So we both think that’s important enough to do.

JA: Didn’t the CEO of LifeLock put his Social Security number on billboards? And then someone hacked him? (laughs)

AC: That I don’t know. Nothing surprises me anymore.

JA: Was that just a myth. Few different things that you can do. Cyber attacks are on the rise. We get all these crazy emails when it comes to transferring money, and senior fraud about, “Oh hey, you won the lottery. All you’ve got to do is send me a check for whatever and I will send you your winnings.”

AC: Right. And we need all your personal information and your bank account so we can forward the money to you.

JA: Exactly.

AC: I got a couple more. You can you can get a credit report. One free one each year from Equifax, Experian, and TransUnion. So you should take advantage of that. And then Equifax actually has an offer for credit monitoring, I think for a year. It’s called TrustedID. You can actually go to their website, and first of all, you see if you’re potentially compromised. And then if you are, they let you sign up for this. And that’s what I found out. I found out that I’m part of the 143 million. And then there’s a button, “Would you like this free credit monitoring” which I actually already have credit monitoring, but anyway, why not. And that was I think on Tuesday, maybe Wednesday. But I think Tuesday, and as of Friday close of business, I still haven’t got the e-mail back from them with instructions. And they did say there’s quite a huge demand. It may take a while. TrustedID, that’s their service that you can go to. You actually go to EquifaxSecurity2017.com, and then you hit the button that says Potential Impact. EquifaxSecurity2017.com.

JA: That will tell you if you’re one of the 143 million.

AC: Yeah. You hit the potential impact – the problem with that though is you have to give me your name and Social Security number, (laughs), which probably compounds the problem. I took a chance, I went ahead and did it, and it said you may be one of the ones. So I guess I’m on that list.

JA: The world we live in, Clopine.

AC: It’s getting more complicated, right?

JA: It is getting a little bit more complicated. And they talk about the computers are going to run the world someday.

AC: Yeah. Artificial intelligence. Get ready.

JA: But I think with stuff like this, people are so afraid to put their stuff on the Internet, because of things like these breaches happen,  versus just going down to the local bank and seeing the banker face to face.

AC: Yeah. Another thing Joe is these credit freezes, they’re not free. It depends on the agency. But there are fees to put the freeze on, and there are fees to undo the freeze. And that could be, in some cases, up to $10 per incident, so just realize that. You can do those online, but they’re recommending that you call it in, so your Social Security is not going over online. Although, like I said, I already did that, because that’s what was required on the Equifax thing to see if I was compromised. I (laughs)  guess once you give ’em your Social Security number, you are compromised.

Identity theft is one of America’s fastest-growing crimes, creating a victim every two seconds according to Javelin Strategy & Research’s 2014 Identity Fraud Study. Your Money, Your Wealth teamed up with the Identity Theft Resource Center to teach you how you can protect yourself from becoming another statistic. Visit the webinars section of the Learning Center at YourMoneyYourWealth.com to watch the Identity Theft webinar. You’ll learn how identity theft happens, where criminals can get information about you, what you can do to protect yourself, and steps to take If you become a victim. The identity theft webinar is available for you to watch for free, on demand – just visit the webinars section of the Learning Center at YourMoneyYourWealth.com.

1:26 – Elaine Martyn: What are Donor-Advised Funds?

JA: Alan, it’s that time of the show.

AC: It is, we’ve got a guest.

JA: We do. It’s a very timely guest with all the craziness that we’ve experienced here in the last couple of weeks with the weather in Houston, a couple hurricanes, Irma, and so we have Elaine Martyn. She’s a Vice President, Relationship Management of the Private Donor Group at Fidelity Charitable. Want to welcome Elaine to the show. Elaine, are you there?

EM: I am. Thanks so much for having me.

JA: Yes. Well, thank you so much for joining us. We’re excited to talk charitable giving, planning, donor-advised funds, and disasters.

EM: Well, I think donor-advised funds are becoming a hot topic down in southern California and across the nation, and so I’m really looking forward to sharing what we’re doing with you.

JA: Well let’s talk first. Tell our audience a little bit more about Fidelity Charitable. What’s your role there, what do you do, and what are some of the functions that you work with?

EM: Yeah absolutely. So we are the oldest national donor-advised fund in America, and that means that we are working with donors across the U.S. to help them do more tax efficient, high-impact grant-making. And what a donor-advised fund is, it’s a really simple and effective platform to both give, grow and grant. And by that, I mean you can give charitable assets, any asset, into your charitable giving account, and then your account then grows its income through a variety of pooled funds that we offer. Or you can work with a financial planner to grow that income, and then we help you actually execute the grants to over 200,000 nonprofits here in the U.S. and abroad. And so, I actually work with donor families around the country, who are really interested in doing highly effective grant-making. And last year alone, we gave out about $3.5 billion in grants to non-profit charitable organizations in the US.

JA: So in real simple terms, because we use donor-advised funds with our clients quite a bit as a tax strategy if they’re already giving to certain charities. And a donor-advised fund is that instead of giving directly to the charity – let’s say if I’m giving $10,000 a year to a certain organization. What a donor-advised fund could do is maybe accelerate that tax deduction, if you will, and maybe they say, “Well, I’ll put $100,000 in the donor-advised fund, because I know I’m going to be giving $10,000 a year, but maybe I need a big tax deduction this year. So I put $100,000 in the donor-advised fund, I get that tax deduction in the year that I contribute to the fund, and then from there, I can distribute those dollars as I see fit, to whatever charitable organization that I have some passion about.” Is that a fair explanation?

EM: That’s exactly right. It’s about leverage. You get to give a single gift and get a tax deduction at that time, and then give at the pace you want, to the organizations that you most care about, and you don’t have to give it all in one lump sum to one organization. You can really think thoughtfully and work with your non-profit partners to figure out how you want to do your grant-making for the year and beyond.

AC: It’s a little like a private foundation, except you don’t have to set up a non-profit entity to do that. It’s much simpler, you’re just setting up an account, right?

EM: That’s exactly right. I love describing it as a private foundation for everyone. I actually manage a team of relationship managers who can serve as almost like your program officer of your foundation, who will work with you to identify what your giving goals are, what your strategy might be, and then help you figure out how to actually work with a non-profit directly, to make it as simple for you as possible.

AC: Well, let’s talk about the current hurricanes, and what’s going on in Houston and Texas, and what’s Fidelity Charitable doing and seeing at this point?

EM: These storms that we’ve seen, both hurricane Harvey and Irma have been the most powerful storms to hit the Gulf Coast in decades, and it has been extraordinary just to see the huge outpouring of response that we’ve had from our donors. We have a disaster response team that I’m a part of here at Fidelity Charitable because we know that our donors are keen to give when a disaster strikes. And the donor-advised fund, actually, 29% of our donors set aside funds for disaster relief, and they give right away, often within 24 hours of a hurricane happening. And to date, we’ve seen over $24 million go out to disaster response for hurricanes Harvey and Irma, which is extraordinary. And $7 million of that was delivered directly to the charities within the first 24 hours of Harvey hitting, making landfall. So our donors were responding right away to the guidance that we presented to them, and they were responding with their hearts full, and opening their wallets to be able to really make the impact for the families who need it most.

JA: I got a question for you. So let’s say I’ve contributed to my donor-advised fund, and the hurricane hits, and I was like, “OK, well here, I want to start giving some of that money that I have set aside in this donor-advised fund to the victims in Houston.” So can I pick my own charity, because there’s a lot of fraud out there, or do you guys help me then determine what is the best organizations for my money to go to you if I have certain passions?

EM: Yeah absolutely. So we actually make recommendations on our website, that we share with our donor community, and which are open to the public, for national organizations that are ready to respond, which have a track record of responding to disasters. Organizations like Save the Children, who are working already on the ground in both Florida and Texas and Louisiana, to make sure there are safe spaces for children. So you can give to organizations you already have an affiliation with, and we see many of our donors doing that. You can give to what you see are, even, for example, many donors already have a commitment to animal welfare, and so they want to give in alignment with that. And so we help them identify programs that are around animal welfare in times of crisis. But we also have the immediate needs, like food, water, and shelter, which are our primary needs in stage one of a crisis, and that’s where our recommendations lie. And then we update that guidance as the crisis progresses, and as long-term planning goes into effect, we make recommendations around other organizations that might be more locally-based and working at a community level to respond to longer-term needs.

JA: If I know of an organization that I want to give to, is there like an approved list that you have to vet, or could I give it to any organization that I see fit?

EM: If it’s a 501(c)(3) organization, an IRS qualified organization, you absolutely can give to it through us. We do review all the recommendations to make sure that they are doing response work if you designate it for hurricane relief, we’ll make sure that it is actually going to the program that you’re recommending. And so that’s absolutely fine, and we see many donors doing that. in the first few days after the crisis, we saw a lot of giving to the Greater Houston Community Foundation, for example, and that we hadn’t yet recommended, because we were waiting for confirmation on the fund that they were setting up. But that was an organization that many of our donors knew about, and wanted to get to right away, and we absolutely supported that.

AC: Hey thinking about disasters, Elaine, domestically versus internationally. It seems like a lot of people have a lot of causes internationally. But certainly, there are things going on the United States. Is that changing, in terms of where people are giving, or what are the current trends?

EM: Yeah, international giving has been on the rise for the last few years, and we’ve actually seen, probably a 4 or 5% increase in grants going out to international causes over the last year or two. And all our donors really do a great job in responding to international crises, like the Nepal earthquake, or the floods in India. I think what we’re seeing right now, with Hurricane Irma, is that we see a huge response around Harvey and what’s happening in Texas because that was the long-term crisis that we knew about for the last couple of weeks. But we’ve had a ton of requests coming in from the Caribbean islands, donors interested in giving to those more international causes, and we are working with organizations like UNICEF to support grant-making internationally. So I think the increasing trend around international giving – and the world is becoming smaller. So we saw the Mexican earthquake happen. We saw the monsoons in Asia, and our own hurricanes happening all simultaneously, and we saw giving to all three of those things consistently by our donors.

VisitYour Money, Your Wealth and Pure Financial Advisors on YouTube for educational video clips and full episodes of the Your Money, Your Wealth TV show, including a full show on tax-smart charitable giving. There are literally hundreds of videos to get you up to speed on just about every money topic that affects you. Watch the latest on surviving retirement without a pension, asset location, saving for college, understanding Medicare, estate planning, banking on your house as an income stream in retirement, and much more. Just search YouTube for Pure Financial Advisors and Your Money, Your Wealth and start binge-watching with purpose! Check back regularly, we’re always adding new videos.

20:58 – Elaine Martyn: How to Avoid Charity Fraud

JA: Welcome back to the show, show’s called Your Money, Your Wealth. Joe Anderson here, Certified Financial Planner, Big Al Clopine, he’s a CPA. We’re talking to Elaine Martyn. She’s over at Fidelity Charitable. The website again is www.FidelityCharitable.org.

AC: Let me ask you, you mentioned grant-making. What does that mean, or how does that relate to a donor-advised fund?

EM: When you make a recommendation of a gift to a non-profit we call that a grant. I consider that grant-making, so you don’t have to be a big foundation to make a contribution out of your giving account. This is really just a recommendation of a gift from your donor-advised fund, out to the nonprofit that you want.

AC: And so for folks that have donor-advised funds, are most of those suggested grants coming from the account holder, or are you guys, in many cases, recommending the charities yourself?

EM: We provide guidance on our website, but the donors are really doing their own due diligence as well and making their recommendations beyond that. So in the first week of the response to Hurricane Harvey, we saw grants going out to many local organizations that Texas donors knew about. And then we saw large grant-making to our guidance as well. So I think it’s both.

JA: What is your website?

EM: It’s FidelityCharitable.org. That’s where you can look for guidance around both giving to hurricane response, but we also have strategic guidance around how to think about your giving. We have a great program called Boost Your Giving IQ, which gives guidance around how to think about creating a mission statement. What are your values, and what early experiences might help inform how you think about how you want to give in response with your donor-advised fund to improve the world?

JA: I think that’s great because I think there’s a lot of people that are charitably inclined, but they really don’t know where to start. They might have a passion for something that they don’t know even where to go to give to. And they might start their own Google search, and then, next thing you know, they might find what they think is a legit organization, but you probably know this way more than Al or I, there’s a lot of fraudulent individuals that take advantage of people, especially in a time of crisis. How do people protect themselves?

EM: Yeah, we recommend partnering with organizations like GuideStar and Charity Navigator, which are both organizations that review non-profits and give them ratings around how they assess the effectiveness of those non-profits, and whether or not they are truly IRS qualified charities. So we would recommend partnering with them. There’s also the Better Business Bureau, which of course can tell you whether or not an organization is legitimate. And I never underestimate the power of community and talking to others about what their experiences have been about a non-profit that you’ve heard about or spoken to, and looking through the website of a nonprofit, and making sure that they really are doing what they’re saying they’re doing.

AC: Is it advantageous to have a donor-advised fund when it comes to giving in a disaster situation, or is it just as good just to give directly?

EM: I think in a disaster situation, there is a strong emotional response, which can spur giving. And we empower our donors to take action, and the donor-advised fund means you have a ready reserve available to react and to give immediately when the crisis hits. And oftentimes you have that gut instinct, you see something and you want to respond. The donor-advised fund means you don’t have to think about it, you just have to go on to our website, or call your relationship manager, and say, “I want to recommend a grant,” and make it happen. And I think it’s a really wonderful way because we do vet the charities, we make sure they’re accepting funds for the relief efforts, and we deliver those grants electronically daily. A lot of organizations, if you’re trying to do it yourself, you might be giving, and it might be you want to send a check – in Houston for example, the roads were closed. So a lot of these organizations couldn’t receive checks because the Post Offices were closed. We want to be able to enable them to hit the ground running so that the non-profits doing the great work can respond right away.

JA: A couple of thoughts that I have is that if I’m going to be giving to a certain organization that I may not be familiar with, how do I know how that capital is being utilized? What are they actually doing with the money?

EM: We recommend working with those charities directly, asking one, how are you planning on responding to the relief efforts? What are their prophecies around accounting and asking them what fiduciary oversight do you have for larger than normal contributions? And I think working closely with those non-profits is one way. Another way is actually working through us, as I said, through organizations like GuideStar, to see what their ratios of spending are around, and how experienced they are in these kinds of situations. And that goes not just for disaster, but for any kind of response that you might be looking to do. If you want to give around health issues, or if you want to give around the arts, you can do the same thing.

JA: We’re talking to Elaine Martyn. She’s Vice President Relationship Management for the Private Donor Group at Fidelity Charitable. A couple last questions here for you, Elaine. I don’t have a ton of money but I want to help. Is there like a minimum if I’d like to give to several different charities, maybe $200 here, $500 here, $100 here, or is this really geared towards someone that is giving thousands to certain organizations?

EM: I think that’s the power, the beauty of Fidelity Charitable. To open a donor-advised fund, you can start that account with $5,000. So you can make a $5000 gift, and then distribute that in increments of $50, $100, to the organizations you care about most. And of course, you can give larger gifts, but I think it’s a really wonderful entry point for starting to give and testing out what you might care about, and seeing what the impact can be.

JA: So all I have to do is open up an account Fidelity Charitable, and put in my $5,000, $10,000, and then I want to give a couple hundred bucks to these certain charities. Is that a website that I go to, or do I call and talk to a representative to send that money, or how do I distribute the cash to those certain organizations where I want it to go?

EM: Yes so to open an account, it’s three simple steps, it takes about 8 minutes. I did it last week for a new donor of ours. And you could do it online through FidelityCharitable.org. But equally, you can do it through your financial advisor, your CPA or lawyer can work with you, or you can call us, we have an 800 number, we’d be happy to share, and you can do it over the phone. And when you want to make the grant, the same thing, you can just go on to our website, and there’s a simple drop-down process, and you can make multiple donations, recommendations at the same time. Or you can call us, and we will process those over the phone for you.

JA: That’s great stuff, Elaine, I really appreciate your time. Big plans for the weekend?

EM: Well, I’m actually going out to San Francisco to support a funders’ collaborative at Stanford University, which will be looking at how we continue to support our donors in high-impact philanthropy, in collaboration with other funders who are looking at the same issues. So we’re looking forward to that.

JA: Really. Well, I’m going to sit on my couch and drink beer and watch the Florida Gator Bowl. (laughs) Man, you all are just all over the place, Elaine!

AC: She’s way more useful than us! (laughs)

JA: Totally! I’m just trying to lighten the thing up here!

EM: (laughs) Well, I am a massive Patriots fan, so I don’t know how that plays out in Southern Cal, but I’m looking forward to watching the team play as well.

JA: Yes, as you’re feeding the homeless.

AC: Coming up with new ideas to help everyday folks.

JA: Yes, exactly. That’s Elaine Martyn, folks, probably one of the nicest, most wonderful person in the world. We’ve gotta take a break. Show’s called Your Money, Your Wealth. We’ll be back in a second.

To learn how you can make tax-efficient charitable donations that go further, faster through a donor-advised fund, call Your Money, Your Wealth at 888-99-GOALS. That’s 888-994-6257, or email info@purefinancial.com. Get the tools for intelligent giving: support any charity, grow your gifts tax-free, support all your favorite charities with a single donation and get one tax receipt. Learn more about donor-advised funds. Call Your Money, Your Wealth at 888-994-6257, or email info@purefinancial.com

Time now for Big Al’s List: Every week, Big Al Clopine scours the media to find the best tips, do’s and don’ts, mistakes, myths and advice to improve your overall financial picture – in handy bullet-point format. This week, financial tips for the five stages of your relationship

30:37 – Big Al’s List: Financial Tips for the 5 Stages of Your Relationship (TD Ameritrade)

AC: This is a little different list, Joe, but this will be maybe helpful for you. Because TD Ameritrade – so we’re just talking to Fidelity. It’s an equal opportunity custodian. (laughs)

JA: Gotta keep it going.  (laughs)

AC: TD Bank did a survey, and which is harder to do, achieve financial success or find true love?

JA: Oh God, I knew that something like this was coming. (laughs)

AC: (laughs) So here’s the article. The best financial tips for the five stages of your relationship. I think you need this. This is if you’re newly dating. Which is, that’s kind of your perpetual status, right? (laughs)

JA: (laughs) That’s all it is, ever. Newly dating or breaking up. Newly dating, breaking up. Newly dating, oh, breaking up.

AC: Maybe we can get you to stage two by following these simple tips about money. So getting to know someone new and special is an exciting time. Would you agree?

JA: Oh, very exciting.

AC: Can also be nerve-wracking. (laughs)

JA: Ooh, super nerve-wracking.

AC: So here’s the tip number one: Avoid TMI, too much information. Particularly when you’re talking about money. So the first several dates are too soon to have serious conversations about money.

JA: First date, you can’t say “hey, whaddya got? How many kids do you want? Do you have any diseases that I should be aware of? What’s your FICO score?” (laughs)

AC: Yeah, you gotta be a little bit more careful. You might want to wait for a few dates before you get into that. And even after that, Joe, you don’t want to ask those questions directly. You want to just break the ice by asking about their job, where they live, what they do for fun, how they vacation because then you can get a sense of how they spend.

JA: Oh so you profile them. Got it.

AC: Carefully.

JA: “When’s the last vacation you went on?” “Santee.” Whoa, break up! (laughs)

AC: Well maybe that’s good because they don’t spend a lot.

JA: Oh I suppose.

AC: What if they went to Paris? “Where’d you stay?” “I dunno, a $1000 a night hotel.” “Oh, OK.” Check out their purses and their outfits. So you can get some info. You don’t have to ask it directly. So maybe that will help you advance.

JA: So that’s step 1 of my 5 step process here?

AC: Yep. Step two, I know you’ve been in this situation before, you’re in a long-term relationship.

JA: What’s long-term, three months? (laughs)

AC: Doesn’t say, whatever it feels like for you – a couple of days? (laughs) More than one day? Once you begin talking about money, do it regularly. Couples who discuss money on at least a weekly basis report being happy in their relationship, according to this survey.

JA: How do you talk about money? It’s like, “hey, what did you spend this week?” (Laughs) “How was your week, honey?” “Pretty good.” “All right, well how much money did you spend?”

AC: Well let me give you the tip: Talk about difficult issues because, among those surveyed, 36% reported having an argument about money at least once a month. And that’s because they weren’t talking about it.

JA: What, like, “you spent this on WHAT?” (laughs) “That golf course cost HOW MUCH?”

AC: (laughs) So observe actions as much as words. Look at non-verbal clues.

JA: But if you’re just dating…

AC: Are they wearing a new outfit?

JA: Yeah, you’re on a date! They should look good! If they’re wearing sweats and a T-shirt, they’re done!

AC: Yeah. They suggest that you look at how they tip. And here’s why. Not because they’re spending more money. Pay attention to your partner’s generosity, responsibility and respect for money, because the way your partner treats money has a lot to do with the way he or she treats people. So you want good tippers.

JA: But I’m the one that’s payin’. So I’m gonna be like, “hey, can you pay?” (laughs)

AC: “I wanna see how much you tip.” (laughs)

JA: Bill’s like $400. “That’s all you’re giving?!” Yep, break up. (laughs)

AC: (laughs) We went to the Black Angus in Santee (laughs) and I made her pay. We shouldn’t say that Santee is a great place.

JA: I love Santee, I play golf there. Carlton Oaks.

AC: Yeah. I love that course too. I played that once, but it was really good. (laughs) OK, now you’ve never been to this stage, because you’ve messed up the first two steps, but once you’re engaged. So this is for future knowledge. (laughs)

JA: Yes this is many, many trial runs, here. (laughs)

AC: (laughs) Did you know the average price for an engagement ring is $6,163?

JA: Six grand. Is it supposed to be something like six months of your paycheck or something like that? Three months?

AC: Oh, you’d have a big one then.

JA: Oh yeah, 5 grand. (laughs) Two months? Is that what Joe got you, two months of his paycheck? We’re looking at our producer’s ring right now, she’s a newlywed.

AC: She doesn’t want to admit what it cost. Maybe she doesn’t know.

JA: Looks like six grand. She’s saying a thousand. Ten grand.

AC: The ring is one of many large expenses you need to navigate with your significant other.

JA: So I would like to know, how about if you drop, like, 50 grand? That would be like too much? Would she freak out, like be, “this is great,” or like, “wow, what are you doing with the money?” You should’ve only bought me a $2,000 ring because we could’ve put the  $48,000 for future Joe-Joes…

AC: Because in your long-term relationship, before you got engaged, you’ve been talking about money each week, so you would already know that.

JA: Oh. Got it.

AC: That’s what you missed. And look for clues. (laughs) So yeah, planning for a wedding, it’s already stressful. I know that because I got married 29 years ago. I think it’s less stressful for the guy because usually, the women like to plan it. There’s a lot of details I would say, and it’s expensive. So you want to talk about the cost of the wedding, and you don’t necessarily want to have this just blow out a day, to the detriment of your whole financial future, I guess that’s the point. Have those chats, have your weekly summit. Maybe it’s Saturday morning in bed when you wake up. You have your spreadsheets. (laughs)

JA: It’s the father of the bride that’s got to pay for the wedding, right?

AC: Well that doesn’t always happen anymore.

JA: So when my sister got married yeah, my dad’s swept out the garage. Twice, he said. That was a party in the garage. We call it the Minnesota room, because every party you have in Minnesota, I guarantee it, it’s in a garage. Have you ever had a party in the garage?

AC: Uh, yes.

JA: Did you enjoy it?

AC: Well it was like the guys’ poker party.

JA: No. Every single – graduation parties, garage. Weddings, garage.

AC: I’ve only had the one, which was the guys’ poker party.

JA: Confirmations, garage. Everything is in the garage.

AC: Not too common here. And the reason you do it in the garage when it’s a guy’s poker party is some guys invariably want to smoke cigars, and the women don’t want it insane.

JA: My garage here in San Diego, I have a couch and a fridge in my garage. And a TV. I’m ready for a party. Gonna take my car out, sweep it twice, there we go, baby.

AC: Christmas party, Pure Financial.

JA: Yeah, you want to come over to my Christmas party, everyone is going to the front door. No, back here in the garage.

AC: The door is wide open. There’s the party.

JA: Yes. If anyone’s from Minnesota listening, they’ll know exactly what I’m talking about.

AC: What about if you’re newly married? Here’s the tip, is to make the rules together, no matter how you choose to blend your finances. It’s important to set financial guidelines to enhance marriage compatibility. Set a dollar limit on what can be spent without needing a discussion or justification. That’s actually a good idea. “Ann, you can spend $22. Above that, we need to have a summit. (laughs) Bring me your list of wants.” (laughs)

JA: Oh this is awful. No wonder why people get divorced over money, because no one wants to talk about this crap.

AC: Well and that’s tip number two, avoid surprises. To ease stress by having your conversations.

JA: “OK honey, I’m going out tonight with the boys. The bar tab is going to be about 400 bucks.” What is she going to say? No, you’re not going. Ask for forgiveness versus permission.

AC: That’s why people don’t stay married. Maybe you ought to get approval beforehand. You know what? I’ll just nurse a Coors Light all night long.

JA: All night long. What’s my budget, honey? $42? Got it. (laughs)

AC: I can do this. (laughs)

JA: So I got to go out drinking and try to find a dollar beer place.

AC: But that conflicts with another rule because you’re supposed to see if a person is generous. You like to be generous, but sometimes being generous means spending money, on others. So that’s why you have to have your summit, to make sure you’re in sync with each other. And then what if you’ve been married a long time? Only 12% of the survey respondents ages 55 and above said retirement planning was one of their biggest successes as a couple. So to me, that’s an odd thing. I don’t know that I would put that in the top five. The successes as a couple are your relationship, it’s the kids, it’s the things you’ve done. That’s actually what it should be. In my opinion. So 12% do the weekly summit and see if they’re on track. (laughs) But I guess they stay together. So define new goals. Keep up those weekly talks about money, even when married for decades, because you need to regroup sometimes. Kids leave, you got more money. What do you do with it? Save it, change your lifestyle, whatever? And, here’s another tip that makes sense over 55. Revisit estate planning. Because you’re going to die. (laughs)

JA:  OK. Here’s a story. An ex-girlfriend of mine. Owned a few different bar-restaurants in downtown San Diego.  So I would frequent her establishment.

AC: And that’s how you met her?

JA: Yeah right, she was a very beautiful bartender. And she would serve a couple of beers, and I would leave, and leave a giant tip. So you remember me. Next time. “Oh, hey Joe what’s going on.” Boom, another nice big fat tip. So then we start dating. So if we would go to another bar, she’s like, “what are you doing?! Don’t tip that much! Jeez! Oh my God!”

AC: So you’re supposed to change your behavior.

JA: So what do you want me to do?

AC: Right, well I have noticed I’ve been to a bar with you, and the bartender starts pouring your drink even before you walk in. It’s like a Cheers for you, every bar you go into, “Joe!” (laughs)

JA: (laughs) Yep, every single one.

If you’ve made it through the five stages of your relationship and you’re about to retire, there is a whole different set of tips for you. You may not have enough saved, you may not even have a retirement strategy, and chances are what you think you know about retirement is dead. In a stress test, do you think your portfolio and your retirement plan could stand up to record low-interest rates, skyrocketing healthcare costs, market volatility and increased longevity? Can you afford to live to be 90 or 100 years old? Visit YourMoneyYourWealth.com and sign up for free two-meeting assessment with a Certified Financial Planner. There is no cost or obligation to you, and you’ll learn highly effective strategies to transform your savings and income in retirement, minimize your risk, reduce your taxes and help your portfolio withstand today’s challenges in a stress test. Sign up for a free two-meeting assessment with a Certified Financial Planner at YourMoneyYourWealth.com

43:20 – Soap Opera Estate Planning: Contesting the Will

JA: Have you ever heard of the Moneyologist, Alan?

AC: No.

JA: it’s pretty awful, to be honest with you. But it’s almost entertaining. It’s like people will write in. And so I don’t know how this caught my eye, but it did. “My late mother disinherited me and my siblings on her deathbed. Can we sue?” So Mom’s on her deathbed. And so the siblings go to mom on her deathbed and change the will. And so, I’m not going to read this whole thing, but let me start. So it starts out with, “my father didn’t want his military and intelligence colleagues to know he married a divorcee with seven children. So they decided she should abandon her six children and start a new life. However, as they pulled out the driveway with all of her kids in tears, one of my half brothers ran after the car and they decided to take him with them.”

AC: Oh, you’re kidding. That’s how it starts? Is this a soap opera?

JA: Right? “I was told that my six half brothers and sisters were cousins, not siblings. This was to ensure that if we talked to our neighbors, we could tell them the correct story. Over the next several years I, my mother, and my brother were terrorized by my father.”

AC: Wow, OK. It’s getting better.

JA: “Fast forward to 1999, and he decided to stop talking to my parents since they were toxic people. I told my mother if I was disinherited, there was no reason to reconcile. Needless to say, we never reconciled. My father died in 2013, I think, and my mother saw me at my grandmother’s funeral in August of 2016. In November 2016. My mother went into the hospital, so I bought her flowers every week to cheer up, sent stuffed animals, and called the room to tell her I loved her. She died in the hospital in New York in January of 2017. I sent her a beautiful expensive wreath to her funeral because I really care.” I want to be part of the inheritance! I’m trying to reconcile, mom! Right on your deathbed, come on, Mom!

AC: Thinking about you the whole time.

JA: ‘I found out later that my mother signed a will in the hospital with two of my half-siblings and a lawyer. The will stated that the two half-siblings involved would split the estate, worth over $600,000, minus $10,000 for one of my half-sisters who selflessly cared for my mother in the hospital, and $5,000 a piece for my mother’s three sisters. The will also stated, ‘I also have six other children that are disinherited for reasons known to them.’ The will looked very amateur and even had typos in it, much to my surprise. So everything is gone. The will is in probate. Can I sue my half brothers or the estate? Any help will do. Thank you.” So what advice do you give this guy?

AC: My advice is to get a job. Move on. (laughs)

JA: (laughs) Oh my god. If you want to contest the will, it’s very, very difficult to do that. So you have to prove what was going on on her deathbed. So you’ve got these two half-brothers going to mom and saying, “hey, we got this lawyer, sign everything over to us.”

AC: And presumably, so three half-brothers, or half-sisters, whatever, they were already disinherited for reasons known to them. So I’m going to say this other individual had a reason that they got disinherited, for reasons that he forgot. (laughs)

JA: (laughs) It’s very difficult. I guess you could, you could sue for anything. That’s the world we live in as well. Here, I deserve this…

AC: It’d be hard. But typos that don’t invalidate the will. So I think, I’m not an attorney, but I would think you’d have to prove that the mother was not of sound mind at that time. I don’t know how you do that because she’s already deceased.

JA: Yeah, she’s deceased and who’re the witnesses? Well, it was the two brothers, of course, they’re into signing the will!

AC: She was totally of sound mind! (laughs)

JA: What are you talking about? She was great. (laughs)

AC: We chatted about old times. (laughs)

JA: I think the point of this story is that looking at your own estate, and if you have family members or something out there, that you feel that might contest your overall wishes, what will happen is that it will just lock the thing up in courts for a long time. So this guy, if he wants to sue, he can, it’s in probate. So what’s going to happen? He’s going to spend a lot of attorney fees. But then the two individuals that maybe deserve the overall inheritance, they want to get it through the probate process as soon as they can. It’s going to be just tied up in the court systems for even longer. The probate system is not necessarily lightning fast, to begin with. So it’s going to take years, potentially, who knows? And then, at the end of the day, whoever contested it is probably not necessarily going to win, because it’s pretty difficult to prove anything. So a living trust. There are clauses in the living trust that says like there’s a no contest clause.

AC: Yeah, I was just thinking the same thing.

JA: So Big Al, he’s in my trust, and I’m going to give him $10,000 at my demise. And then Big Al is going to be like, “well, what are you talking about? We were partners for over 20 years, brother!” (laughs)

AC: 50/50 with your wife. (laughs)

JA: 50/50! 10 grand, this is BS! So I will put in my trust is like if anyone contests my wishes, they’re automatically disinherited. So then you don’t have to necessarily worry. “Oh, little Johnny, I know he wants more. He’s broke. He’s on drugs. He might do a little something stupid, but I’m only going to give him $10,000. But if he contests it, well then he doesn’t get anything.” That’s why estate planning is so important because you’re not here anymore. You want to make sure that you have these documents drafted, so that your executor, or successor trustees, don’t put them through that. It’s just all there in writing. It’s a legal document. All of your assets are then funded inside the overall trust, the trust owns those assets. You are the trustee, you can do whatever you want with them, but after you pass, the successor trustee takes over, and then distributes the assets exactly in accordance with your wishes. So, just a word to the wise, it might make sense to get that estate planning done.

AC: And Joe, we’ve seen different studies. We know that more than 50% of the people don’t have a will or a trust. So I think like 60%, give or take. So that means only 40% of kind of thought this out. If you die without a will, then what happens is your assets get distributed in accordance with state law. And state law is going to designate, usually, it would go obviously to the spouse first, and then maybe the kids, and maybe in equal shares. And then at some point, it goes to brothers and sisters, parents. I’m not sure. Every state has their own ordering rules.

JA: Right. It’s dying intestate.

AC: Yeah and the thing is, the allocation if you will, may not be what you want. And that’s that. Maybe you’ve got one child you want to do some special too, or you love this brother, but not so much this one. But it doesn’t matter. It’s in accordance with state law. So at the very least, you need a will. But the problem with a will is, at estates of certain dollar amount, I want to say, what, $150,000, give or take? We’re not attorneys, but there’s a level where, if your assets are greater than that, then you can’t just distribute it, it’s got to go to court. That’s what probate is. That’s the purpose of probate. So that’s why you have a trust, because then with a trust, you don’t have to go to court.  It’s already a legal document. The trustee just distributes the assets in accordance with the trust itself.

JA: Right. A will not avoid probate. A lot of times, yeah I have an estate plan, it’s a will. Well, a will is fine, it’s going to distribute the assets to where you want to go. But it has to go through the court process to distribute the assets, and that’s the probate process as you mentioned. And that’s expensive. It’s public record, it takes a long time. So if you want to avoid all of that. But who needs a trust is someone with over $100,000, maybe you have a home. But if all of your assets are in retirement accounts, with the beneficiary designation, or a TOD, a transfer on death, well maybe you don’t necessarily need a full-blown estate plan. But probably if you have real property. If you have a brokerage account, if you have things like that, I think it makes the most sense, probably, to spend a couple of thousand bucks, sit down with a qualified estate planning attorney, and draft all this stuff up. It’ll pay off significantly, long-term with heartache, headache, and a lot of BS.

Keeping family records current and centrally located is a challenge – maybe not as challenging as the soap opera we just heard – but it’s especially important when a family member dies or becomes disabled. Make sure you’re ready before you need it. Visit the white papers section of the learning center at YourMoneyYourWealth.com and download our free Estate Plan Organizer! It’s designed to help ensure your assets and desires are carried out upon your departure. Find all the relevant information, fill out the forms completely, keep them up-to-date and store them in a safe, easily accessible place for your heirs. To get your free estate plan organizer, just visit the white papers section of the learning center at YourMoneyYourWealth.com

53:11 – Best Cities to Celebrate Oktoberfest Outside of Munich

AC: So today starts Oktoberfest. Since we were talking about bars and beer last segment. It starts in Munich today, as a matter of fact.

JA: And for how long?

AC: I have no idea. I’m going to say a couple of weeks.

JA: So Oktoberfest is in September is what you’re saying. Or does it last all the way through October?

AC: (laughs) I believe it does. I believe that’s how it works. I have been to Hofbrau House in Munich. They suggest going to Munich, by the way, but if you can’t go to…

JA: Who are they?

AC: This article is on CNBC. Best cities to celebrate Oktoberfest outside of Munich. And I’m not going to go through the list, but guess what the number one city in the United States to celebrate Oktoberfest.

JA: New York City.

AC: Good guess, that’s number two. Cincinnati.

JA: Really?

AC: Who would think that.

JA: Not me. I’ve never been in Cincinnati.

AC: I have. It’s actually not bad. Midwest, good values.

JA: I don’t even know…. how far away is Cincinnati like from Cleveland? Toledo?

AC: I have no idea. If I had to guess I’d say a couple of hours but I could be way off. Maybe a 4 or 5. Do you want more?

JA: Sure.

AC: Since we already started? (laughs)

JA: How many you got?

AC: There’s 10.

JA: Oh jeez, let’s just go 5. (laughs)

AC: Cincinnati, New York. There’s one on the west coast.

JA: San Francisco.

AC: You would think. Portland Oregon. They actually have a lot of micro-breweries.

JA: Oh yeah okay. I’ve been to Bend, Oregon.

AC: Yeah Bend would be good too. Then Philadelphia, then Denver.

JA: I don’t care for craft beer. I don’t care for any of that. Give me a Coors Light Blue Mountain cold and I’m good. (laughs)

AC: (laughs) Make sure it’s blue.

JA: Yeah, the blue mountains. I went to Bend, Oregon, and it was so trendy with the craft beer here and I was like, “can I just get a Coors Light?”

AC: Well, you have to develop a taste.

JA: Then they would look at me like I’m nuts.

AC: Well yeah you have no sophistication.

JA: Yeah, I’m just a low life.

AC: I like Coors Light too, as you know. Here’s my thing, is that was basically all I drank for a long time. You have an occasional Dos Equis lager, it’s kind of similar, Corona, whatever.

JA: (laughs) Dos Equis lager, what the heck are you talking about.

AC: But then I started trying a few IPAs here and there. Now I have to say I like them. Although they are more bitter, there’s a lot more flavor. And then you drink an IPA and then you go back to the Coors Light and it’s like, “oh, where’s the flavor?”

JA: I could probably only drink two IPAs.

AC: Well that’s the point.

JA: I like to socialize. Two beers? Whoa, hey! Uber home. Stupid. No. It’s like 6:30. I’ve had two beers, and I’m drunk. That’s not a good time for me. I like to sip a couple cold Coors Lights and you can have them.

AC: I went to the brewery last weekend called the Booze Brothers in Vista. It was kind of fun, and it was all IPAs of course, and they put the international bitter unit so you can see how bitter it is, and they also put the alcohol content. And the guy that I went with said, “oh, this one’s really good.” But they serve it to you a little glass because it’s like really potent. (laughs)

JA: You get a shot of beer?

AC: I want the big boy glass. “No, we don’t do that sir.” (laughs)

JA: Give me a pint, what are you talking about? 24 ouncer. (laughs)

AC: Now they did give my friend a pint because it was his birthday. So but I didn’t get the pint.

JA: I would have said you know what, it is my birthday too. (laughs)

AC: It’s going to be at some point. (laughs)

JA: Did they check ID?

AC: No, flawed system. Because the guy sitting on the stool right next to us, he goes, “yeah. Everyday is my birthday.” (laughs) He’s got chains coming out of his pockets. I don’t get what the chain thing is.

JA: Well that’s motorcycle. That’s cool.

AC: But what’s the point of a chain?

JA: What do you mean chain, pocket? Like their wallet is hooked up to a chain to their belt, that thing?

AC: I guess…

JA: Or is he a janitor? (laughs)

AC: (laughs) Well. I don’t know.

JA: Did he have a thousand keys on it? Or was the chain connected to a wallet?

AC: Well I don’t know because we went inside his pocket. So my take is, based on his tattoos and his outfit, he was a motorcycle rider, not a janitor.

JA: Yeah see, no, that’s cool.

AC: That’s cool.

JA: Yeah, you get a wallet with the chain on it because you hang out with some rough people, they might try to pickpocket you, but you got the chain so they can’t walk away with it.

AC: Got it. And it might fly out when you’re riding.

JA: See you have, like when you carry your briefcase around with that handcuff? (laughs)

AC: (laughs) I got a fanny pack in the front with a lock to my belt.

JA: (laughs) That big lock you have on your fanny pack?   It’s the same concept!

AC: Yeah sometimes I can’t find the key and I gotta shower. (laughs)

JA: Oh my god, this show just went down the drain. (laughs)

AC: There’s not much content today is there? (laughs)

JA: Oh boy. Alright, that’s it for us today. For Big Al Clopine, I’m Joe Anderson, show’s called Your Money, Your Wealth.

____

So, to recap today’s show: Visit EquifaxSecurity2017.com to find out if you’ve been affected in the Equifax security breach, and check out the identity theft webinar in the Learning Center at YourMoneyYourWealth.com to learn how to protect yourself from identity thieves. Early in a relationship, avoid TMI, but later in a relationship, be sure to talk about money regularly – and when you’ve been together for years, remember to revisit estate planning. And Joe and Big Al are both Coors Light guys, and a wallet chain either means you are a biker or a janitor.

Special thanks to our guest, Elaine Martyn from FidelityCharitable.org for telling us about donor-advised funds. Call Your Money, Your Wealth at 888-99-GOALS to find out how you can make tax-efficient charitable donations that go further, faster. That’s 888-994-6257.

Subscribe to the podcast at YourMoneyYourWealth.com, through your favorite podcatcher or on iTunes, where you can also check out our ratings and reviews. And remember, this show is about you! If there’s something you’d like to hear on Your Money, Your Wealth, just email info@purefinancial.com. Listen next week for more Your Money, Your Wealth, presented by Pure Financial Advisors. For your free financial assessment, visit PureFinancial.com

Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.

Your Money, Your Wealth Opening song, Motown Gold by Karl James Pestka, is licensed under a  Creative Commons Attribution 3.0 Unported License.