LifeLine Solutions News

What Are My Options?

Long Term Care or assistance has many more options and affordable plans than ever before.

Long Term Care or assistance has many more options and affordable plans than ever before. There are so many choices available now. Because the future is so unpredictable, it’s time to look at Long Term Care options and figure out what affordable option is best for you and your families needs.

If you have health insurance, it’s time to ask the right questions. It’s time to figure out what your plan offers, before it’s too late and you realize that you do not have enough coverage.

If you are counting on Medicaid to come to the rescue, think again. Our advisors can help you figure out if this option will be open to you and what having Medicaid really means when it comes to meeting your financial obligations once the need for Long Term Care is established.

Our advisers are ready to help you. It’s time to make sure that you are covered and that we help you find an affordable option that will fit into your budget now, before it’s too late to do something affordable about it.

Buy/Sell Agreements

A chief concern of the owners of a closely held business is what would happen to the business if one of the owners could no longer continue. Surviving owners generally want to ensure a continuity of ownership and management without having the departing owner’s successor thrust upon them. Nor do they want to unduly compromise the liquidity needs of the business by funding a significant buyout. Disabled or deceased owners would want their families compensated fairly for their share of the business. A properly drafted buy-sell agreement can achieve all of these goals by:

  • Providing that upon the occurrence of a specified “triggering event,” owners are guaranteed that their interest in the business will be purchased;
  • Providing that the owner’s interest must be sold to the company, the remaining owners, or a combination of the two;
  • Providing a mechanism whereby the purchase price may be determined by market conditions in existence upon the occurrence of the event;
  • Providing a funding source, primarily through insurance policies, so that the liquidity needs of the business or its owners will not be onerous; and
  • Establishing a valuation of a deceased owner’s interest in the business for estate tax purposes.

Triggering Events

An integral part of any buy-sell agreement is to specify what type of situations will cause a mandatory or optional buyout of an owner’s interest by the other owners or the entity itself.

An integral part of any buy-sell agreement is to specify what type of situations will cause a mandatory or optional buyout of an owner’s interest by the other owners or the entity itself. The most common of these triggering events are described below.

Death or disability. This event is almost universally provided for in the buy-sell agreement. Terms of this buyout will include the determination of disability, the time for payment to the owner or the owner’s estate, whether the entity or the surviving shareholders have the obligation to purchase the interest, and whether a funding mechanism, such as life or disability insurance, should be maintained by the entity or the owners personally.

Desire to sell the interest to a third party.

The agreement should provide that the terms of the potential sale be presented to the other owners, and that they be given the option of:

  • matching the offer made by the outsider;
  • purchasing the shares in accordance with the valuation method and payment terms provided for within the agreement;
  • having the entity repurchase the shares issued in accordance with the valuation method provided for within the agreement; or
  • allowing the sale to be effectuated to the third party.

Retirement of an owner.

While a sale to a third party would provide the other owners an optional right to purchase the selling owner’s interest, an owner’s retirement will generally trigger a mandatory buyout. Of course, the conditions under which an owner may have the right to retire so that the remaining owners, or the entity, would be compelled to buy that owner out are often a point of negotiation. Once again, valuation methods and payment terms will be important issues, because there are no outside funding mechanisms, such as life or disability insurance, available to bear the cost.

Owner’s divorce or bankruptcy.

Either of these events can subject the business to interference from outsiders. To prevent this, the other owners should have the option to compel the affected owner to sell his shares to the remaining owners or the entity itself, in accordance with the payment terms and valuation methods (to be discussed later.)

The CPA Journal April 2006, Understanding Buy Sell Agreements, By Howard Davidoff

Business Solutions

You also Know the importance of keeping the books balanced, hiring qualified employees , beating the competition and meeting ever-increasing customer service expectations.

You also Know the importance of keeping the books balanced, hiring qualified employees , beating the competition and meeting ever-increasing customer service expectations.

But until you address the issues of retirement planning, business continuation and rewarding and retaining key employees, everything else could be in jeopardy.

What would happen to your Business, in the event of you death, retirement or even if you were to become disabled? Your Dream, your time and energy that you have spent to create this business would be jeopardized. In-turn with the appropriate business continuation planning, you can ease your worries and safeguard your business. You will have created a foundation to were you business will continue in succession after you are gone.

What is business continuation planning?

Simply put, business continuation planning is the process of defining and implementing a plan of succession. We define and assist in creating a Buy-Sell Agreement, Proper business continuation planning will establish who will run your business in the event you become disabled,retire or die prematurely.

Ensuring the continuation of your business with a properly drafted Buy-Sell Agreement will provide more than just a mechanism for transferring the business. It may save you thousands of dollars — and hours — by eliminating the costs, delays and frustration of IRS contests and litigation. When properly drafted, a Buy-Sell Agreement will establish the value of a business for the purposes of federal estate and gift taxes.

Did you Know …

  • Only about 1/3 of small of small businesses offer some kind of retirement saving program to employees. Fewer than 10 % offer non-qualified programs for the owners and executives.
  • Life insurance is not a top priority for these business. Group life is the least common employee benefit, only 1/3 have business life insurance for such things as key person coverage, and life insurance is next-to- last executive benefit the firms would bring in.
  • Seven in 10 small business owners have thought about who would run the business in their absence, but only 25% have formal retirement succession plan and only 35% have formal continuation plans in the event of their death.
  • Family -owned businesses are less prepared for future transition than non family businesses.
  • Just over half have personal IRA’S and fewer than 20% have annuities or pension plans.

Source : Small Business Owners 2009. LIMRA Int’l, 2009 James O. Mitchel

Disability Insurance

When it comes to a potential Disability happening to you, most people think, “it could never happen to me.”

When it comes to a potential Disability happening to you, most people think, “it could never happen to me.”

The reality is, is that it might not, or at least the way that you thought that it would happen. Most people that become disabled do not get that way just because of some random accident. It is often by some sort of a sickness, disease or some other catastrophe that may not necessarily be accident related. However this is not something that one would ever plan on, or ever hope for, that is why it is important to understand your options now, and what you might be able to do to prepare financially if such an event ever did happen. Most people will plan on some sort of a health issue, or perhaps even a premature death, but one of the most crucial financial pitfalls one could experience in their lifetime would be to experience some type of a long term, or even short term disability. Know your options, and what you might be able to do to protect those that financially depend on you, even if you have no dependants, protect the assets that you have worked so hard to accumulate

Do I have Enough?

Are you protecting the right Assets?

Consider that you:

  • Drive an insured car,
  • Live in an insured house, and
  • Your personal belongings are insured.

Why risk your earning power, when so much depends on it?

What if you are unable to work? What would happen to your income?

  • How would you maintain your lifestyle?
  • Where would the money come from?
  • What happens to your retirement savings and other financial goals?

You Have a lot to Lose

  • Future earnings
  • Retirement savings and other assets
  • Peace of mind
  • Current standard of living
  • Insurability
  • Credit rating

Now Is the Time to Act

  • Assess your current need
  • Tailor a disability insurance program to fit your individual needs
  • Premium will never be lower

Do You Understand Your Work Benefits?

  • Do you need to maintain a certain number of scheduled hours to remain eligible for health and disability benefits?
  • What happens to your health and disability benefits if you switch from full-time to part-time status?

Do You Understand Your Work Benefits?You may have many questions regarding employee benefits. And, these are important questions to ask. No one else will ask them for you. YOU have to proactive in finding the answers. Ask your Human Resources Manager for an Employee Benefit Handbook if you lost the one originally provided to you.

During your employment, your health plan options may change. If your health plan does change:

  • Will you and your family be affected?
  • Is your doctor still on the list of providers?
  • Has your co-pay changed?
  • Are there deductibles and limits to the coverage?

There are so many important questions to ask and far too many people find the answers to their questions after it is too late and they are in the middle of a health crisis. Don’t wait until it’s too late. Look at the fine print. We can help you ask the right questions. Our trusted advisors will help you navigate this path and you will start to really understand what your work health benefits really cover and what they do not cover. Let’s talk now, BEFORE the crisis hits and it’s too late.

Finding Whats Right For you

Are you a business owner? Don’t make the mistake of owning a business without a good financial plan at work for you and your employees. You have worked too hard and have too much at stake to not spend a few minutes with one of our trusted advisors.

As you maintain and expand your business, there are important goals to discuss and many ways to maximize your profit. Increase your likelihood of success now and spend a few minutes learning about what steps you can take now to increase your profitability and success.

Health Insurance

More and more Americans are going without Health Insurance.
And to make matters worse, those without insurance are waiting until it’s too late to even seek medical help in the early stages of a health crisis.

More and more Americans are going without Health Insurance. And to make matters worse, those without insurance are waiting until it’s too late to even seek medical help in the early stages of a health crisis.

There really are affordable plans. There really are answers and solutions to this problem for every situation. Sometimes, it’s asking the right questions. Our trusted advisors can help you with your Health Insurance needs.

Do you need a catastrophic insurance plan just covering the basics of a major emergency, or do you need frequent and ongoing medications that need to be covered?

There are so many different options now, that we can go over your choices with you and see just what fits your needs in conjunction with Health Insurance.

We can help you with figuring out just what can fit into your budget and what questions to ask before purchasing Health Insurance.

What kind of reassurance do you get from Health Insurance provider? Do you Understand your policy? Does it cover all of you needs on a day to day basis? Is it in you budget or is it your budget? So many vital options to consider when it come to you and your families Health.

How Much Should I Have?

How much should Long Term Care Insurance should you have?

How much Long Term Care Insurance should you have? There are very important answers to these types of questions. Each individual situation is so different.

Genetics, budget, and personal finances can all play a part when answering this question. This is why it is so vital to have a conversation with one of our trusted advisors. We can give you options. We can instruct you on how much Long Term Care to invest in. We can help you navigate your future and figure out a solution for your needs.

This in an important question to ask. There is no doubt about that. Our advisors are here to help you and show you what your options are. Long Term Care is now an important part of our financial future. As we head into retirement, Long Term Care Insurance becomes an important part of our financial future.

Make sure that you are covered. Most people that need it, find out much too late that they could have been more proactive in finding solutions now. Most importantly, those solutions now are much more affordable then waiting until it’s too late and your options are so minimal. Let’s talk about finding the Long Term Care solutions that can help you now.

It’s never to late to plan…until it’s too late. We look forward to exploring your options with you and finding something that will work for you when it comes to Long Term Care.

How to Maximize Social Security Benefit

Having a financial plan for the future is the only sure way to do the things you want in life. Your financial plan can help you send your children to college, start your own business, or enjoy retirement. However, we understand that it is not always easy finding the money to fund that financial plan. Here is a potential solution.

Did you know that wages above $90,000*are exempt from Social Security tax?

For example, if you are earning $150,000, $60,000 of this annual income is above the Social Security wage base. So somewhere around mid-July, the 6.2% that you are accustomed to paying will stop. By year-end, this amounts to $3,720 of “found money.” And, since the rate for self-employed individuals is 12.4%, you could have twice as much!

How some annual incomes are affected

Pre-Tax Available Funds

Annual Income

Income Above Social Security Wage Base

Individual

$125,000

$35,000

$2,170

$150,000

$60,000

$3,720

$200,000

$110,000

$6,820