Doing grown-up stuff
This is where a goals recap post is supposed to go, but I don't think I'll do one this month. The short story is that I'm a little more behind on savings than I was last month (the Boston Marathon trip was budgeted, but it was still expensive), and I've knocked off one marathon out of the three I had planned. The second is this weekend, and I'll be glad to see the end of the spring season. I hope this one helps make the horrible events in Boston recede a little.
The biggest progress I made towards goals this month was to do something really grown-up and completely overdue: I finally signed my revocable living trust, pourover will, advanced health directive, and power of attorney forms. The hangup on my trust was that my co-op's attorney has very specific requirements for incorporating my apartment into the trust. While the lawyers were wrangling it out, I came across an article in the New York Times Real Estate section stating that due to a change in the tax laws this year, co-ops that are owned by a trust instead of an individual are not eligible for STAR tax abatement, a plan that cuts me a small break on taxes. (My building issues a shareholder assessment in the same month to suck that money right back up, so there's no extra cash in my pocket. This is pretty common in New York City.) I checked it out with my lawyer, and he confirmed the change. As a result, I decided that because of the tax implications, it would make more sense not to put the apartment in the trust at this time. That made it easy to wrap up the paperwork.
The next part is to move assets into the trust. I can't put my 401(k) or IRA assets into the trust, so I've been making phone calls this week to find out what happens if I make the trust the beneficiary of the 401(k) and IRA's instead of my designated beneficiary. I found out a few important points:
--If my designated beneficiary is a spouse, the assets can be left in the existing accounts, or placed into an account in the beneficiary's name. The beneficiary can then take distributions at any time after age 59 1/2, or cash it out as preferred. The assets would not be subject to probate.
--If my designated beneficiary is a person but not a spouse, the assets can be rolled into an inherited IRA or cashed out within five years. The assets would not be subject to probate.
--If my designated beneficiary is a trust, the assets must be cashed out by the beneficiary of the trust within five years, or systematic withdrawls need to be initiated within a year. There is no option for an inherited IRA.
Since these assets don't go into probate and the options are more limited if a trust is the beneficiary, I'm leaving them as is. This weekend, I'm getting my checking and savings accounts moved into the trust, and then I'll do the same with my investment accounts. It's kind of a hassle, but not nearly as complicated as I expected. My co-op will not be in the trust (for now, anyway), but even though it means probate, the pourover will takes care of it.
The next big grown-up item on my list wasn't on my goals list, but it should have been: I need long-term care insurance. Out of curiosity, I recently got my genotype done through one of the companies that does DNA analysis for both medical and ancestry results. I learned quite a few surprising facts in both areas, but what made me the happiest was the fact that I actually have less risk than average of developing Parkinson's and a whole host of stomach and bowel cancers from genetic causes. Apparently, I'm also highly resistant to the most common strain of the cruise ship vomiting and diarrhea bug as well. I'm not planning to take a cruise (no interest), but for some reason, I'm weirdly proud of that.
While there was nothing horrible and scary in my results, they did have a fairly sobering element: My genetic risk factors for two medical issues with the potential to be quite serious are higher than average, significantly higher in one instance. There's still less than a 25% chance of getting one of these things from genetic causes and less than a 15% chance of getting the other from something inherent in my wiring, but it's enough for me to get the religion about long-term care insurance.
I'm sorry I'm not going into detail any further on these risks. I might come back to this topic after I get long term care insurance, but there is no legal protection against genetic discrimination for long term care insurance in the US, so I don't think it's wise to say more right now.
I should also add that I don't think genetic predisposition is predetermination. For many serious medical conditions, there are a variety of environmental factors that can raise or lower risks. As a lifelong athlete, I have a really good shot at reducing my risk factors significantly, and now I'm more motivated than ever to stay fit and active. Nevertheless, though, I guess thinking about these things is what you do when you're ambling towards middle age. It all seems so grown-up, which made me think of this one-hit wonder from my youth. Sorry about the sound quality, but enjoy the '80's hair!
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