Last Day of Disability Insurance Awareness Month

Today is May 31st, the last day of “Disability Insurance Awareness Month”…Let’s end the month off with one final…PAYCHECK POP QUIZ: What are the odds that you’ll suffer a long-term disability during your career? Check out the video below for the answer—is it higher than you expected?

Upcoming NFS Events

First Time Homebuyer Seminar
HarborOne U, Mansfield MA
Thursday, June 7th, 2012
6:00 pm to 9:00 pm

Make a well-informed decision when you buy your first home. This seminar provides you the opportunity to get answers to your many questions from the professionals involved in the home buying process. Professionals include Mortgage Originator, Buyers Agent & Realtor, Real Estate Attorney, Insurance Agent, Tax Advisor and Home Inspector. A light dinner will be served.

Register today as seating is limited.

What Is a Trust?

What Is a Trust?
The word “trust” is applied to all types of relationships, both personal and business, to indicate that one person has confidence in another person.
For our purposes, a trust is a legal device for the management of property. Through a trust, one person (the “grantor” or “trustor”) transfers the legal title to property to another person (the “trustee“), who then manages the property in a specified manner for the benefit of a third person (the “trust beneficiary“). A separation of the legal and beneficial interests in the property is a common denominator of all trusts.
In other words, the legal rights of property ownership and control rest with the trustee, who then has the responsibility of managing the property as directed by the grantor in the trust document for the ultimate benefit of the trust beneficiary.
A trust can be a living trust, which takes effect during the lifetime of the grantor, or it can be a testamentary trust, which is created by the will and does not become operative until death.
In addition, a trust can be a revocable trust, meaning that the grantor retains the right to terminate the trust during lifetime and recover the trust assets, or it can be an irrevocable trust, meaning that the grantor cannot change or terminate the trust or recover assets transferred to the trust.
Trusts can be used:
  • To provide management of assets for the benefit of minor children.
  • To assure the grantor that children will benefit from trust assets, but will not have control of those assets until the child is older.
  • To manage assets for the benefit of a disabled child, without disqualifying the child from receiving government benefits.
  • To provide for the grantor’s children from a previous marriage.
  • As an alternative to a will (a “revocable living trust”).
  • To reduce estate taxes and, possibly, income taxes.
  • To provide for a surviving spouse during his/her lifetime, with the remaining trust assets passing to the grantor’s other named beneficiaries at the surviving spouse’s death.
Trusts are complex legal documents and are not appropriate in all situations. Before establishing a trust, you should seek qualified legal advice.

To view the complete NFS Retirement Readings Newsletter for May 2012, click here.

Celebrate College Savings Day – What is a 529 plan?

529 Plan History

A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1996.

State plans are OK for out of state colleges

529 Plans can be used to meet costs of qualified colleges nationwide. In most plans, your choice of school is not affected by the state your 529 savings plan is from. You can be a CA resident, invest in a VT plan and send your student to college in NC. Check to see if your institution is eligible under 529 rules.

Which states offer 529 plans?

Nearly every state now has at least one 529 plan available. It’s up to each state to decide whether it will offer a 529 plan (possibly more than one) and what it will look like, meaning 529 plans can differ from state to state. You should research the features and benefits of your plan before you invest, research state 529 plans and even compare between plans.

Tax Benefits

As long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits to you, the plan participant. See the top 7 benefits of 529 plans.

Some states (but not all) offer tax incentives to investors as well. Research your state’s tax treatment.

More on Tax Benefits

Watch’s Chris Stack in video below (airing date March 31, 2011).

Types of 529 plans

529 plans are usually categorized as either prepaid or savings plans.

Savings Plans work much like a 401K or IRA by investing your contributions in mutual funds or similar investments. The plan will offer you several investment options from which to choose. Your account will go up or down in value based on the performance of the particular option you select.

Prepaid Plans let you pre-pay all or part of the costs of an in-state public college education. They may also be converted for use at private and out-of-state colleges. The Private College 529 Plan is a separate prepaid plan for private colleges.

Educational institutions can offer a 529 prepaid plan but not a 529 savings plan (the Private College 529 Plan is the only institution-sponsored 529 plan thus far).

Enrolling in a 529 plan

If you want more information or want to set up a 529 plan today, please contact us for assistance.

What’s In Your Wallet?

So there I was, hanging out at the bar having dinner last Tuesday. Next to me was this guy with a flight of wine glasses. Out of curiosity, I had to ask, “What’s your favorite? He gave a long look at the three glasses and then said, “the pinot from Washington State. It’s light, smooth and silky.” We traded names and continued to chat for a while as we passed the night away. A while later, Monica, our server, asked if we were finished and we both said it was time to call it a night. Monica tallied up our bills and presented us our respective bills.

Both of us reached for our wallet. Right then, it dawned on me so I asked, “Hey, Tom, what’s the most important card in your wallet?” Tom looked into his wallet and pulled out a picture of his kids and smiled at me. “Tom, I get that—they’re important in your life! Which card though?”

Tom fingered through several credit cards and landed on his VISA card. He started to pull it out and then saw the one. “John, it’s my medical insurance card.”

“Yeah, that’s what I thought as well until …”

Tom quickly chimed in, “Until what?”

I paused and then said, “… until I learned that my medical insurance card paid everybody but me. You see, when I had my water skiing accident and was confined to a hospital bed, my medical card paid the hospital and doctors to put me back together, but it never, ever paid me my salary. That’s when I learned that the most important card to have in my wallet is my paycheck protection card—the card that shows I have disability insurance. That’s what paid me an income when I was unable to work.”

I’m sharing this story because I think Tom’s answer might be the same for most people, including you. So I want to challenge you to think about what would happen if you became sick or injured and unable to work? How long would you be able to make ends meet without your paycheck? In my case, the accident left me unable to earn an income for an extended period of time. I would have been in dire financial straits without the income that my disability insurance policy provided me. That’s why you need to protect your paycheck with disability insurance. Learn more at then give us a call.

-John F Nichols –