Bank of Montana

Your Will and Estate Planning

• Prepare a will for yourself!  An estimated 70% of Americans die without a will. That means a judge will distribute their estate and choose who will care for any minor children. Chances are the judge will not know you told your best friend they could have your coin collection.
• Take inventory of your assets. Your assets do not only include tangible items, but also your investments, insurance policies, and business interests.
• Be as clear and precise as you can when writing your will.  You do not want there to be any ambiguities after you are gone.
• Know the federal estate tax exemption threshold.  This is the amount you can leave to beneficiaries that is free of federal tax. In 2013, estates under $5,250,000 are exempt from the tax. Once the estate is above that threshold, beneficiaries are taxed up to 40%. Your accountant will know all the details behind this.
• Have at least two witnesses sign your will.
• Should you assign a power of attorney? Why not! There are two important types of powers of attorney in estate planning:
  • Springing Power of Attorney – this only comes into effect under the certain circumstances that you precisely lay out in your will. The most common circumstance is in the event that you become incapacitated.
  • Durable Power of Attorney – this is effective immediately and your assigned agent will not need to prove you are incapacitated to sign your name.

When in doubt, hire an attorney. They will make sure you fill out the correct forms and everything is taken care of before you are gone. Make sure at least a few people know where your will is filed: is it with the attorney; is it in a secure place; is it in your safe deposit box; who has access?

Your Parent’s Will (and other family members)

• Ask where they keep their wills. This is important because if the will cannot be located.  Even though you are positive one exists a judge will distribute the estate.
• If you inherit money from a deceased relative and you don’t claim it, the state does.  Each state has a website to help you find an inheritance in which you may be entitled. You can go to http://www.unclaimed.org/ to find your state’s site.

“Given that laws may vary significantly between jurisdictions, the legal advice given on this site should not be considered all-encompassing and applicable to all readers. Please consult an attorney in your own jurisdiction if you need legal advice. This blog is for informational purposes only.  We are not attorneys or accountants and strongly suggest you contact a lawyer or accountant prior to taking any action related to the information provided herein.”

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Although healthcare providers obtain your blood type when needed, it is helpful for all people to know their own blood type.  This could be helpful in the event you are a match and can donate blood for a friend or family member, and it can also be important if you have a rare blood type to donate for others.

Put simply, blood is classified by the antigens present in one’s red blood cells.  While there are many different factors that go into determining a blood type, there are four general classifications: type A, type AB, type B, and type O.  The second most important thing to know about your blood type following your ABO classification is the presence or lack of the D antigen.  This is the difference between an individual with O positive blood and O negative blood.

So why do we care about blood type at all?  Blood type plays a major role in the acceptance of donated blood.  An individual can generally always receive blood from another individual with the same blood type.  In many cases, other blood types are also compatible.  The following chart shows the compatibility of each blood type:

Individuals with type O negative blood are often called universal donors, as type O blood can generally be received by individuals with all blood types.  Those with blood type AB positive are often called universal recipients, as these individuals can generally receive any type of blood.  Type O negative blood is always needed because emergency situations often require blood before a patient’s blood type is known.  Everyone is encouraged to donate blood, but the roughly 7 percent of people with type O negative blood are always strongly encouraged, as type O negative blood is often in short supply.

Knowing your blood type may save your life.  More importantly, you may help save the lives of countless others by donating blood.

Disclaimer

“The authors of this site are not physicians and the posts here should not be taken as medical advice.”

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The fiscal cliff discussions will likely impact the economy for the next few months unless a compromise comes quickly. Thus, with the next few months causing a roller coaster effect on the economy and interest rates it is hard to decide what to do with your money. 

In order to help our clients and community look for the best rates on CDs and interest accruing accounts we recommend looking through depositaccounts.com or bankrate.com There are many useful tools on these websites for finding the best rates nationwide and locally.

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It’s the time of year where the holiday spirit arrives and we pause for a moment to give thanks for what we have.  Then as we turn on the TV or listen to the radio, we hear about the many great deals and ways for us to spend our money.  While the incentives are great for us to rush to our local malls, downtowns, and small businesses to buy the gifts that our loved ones want and possibly need, it’s also a great time to think about the future and how to plan holiday spending wisely.

 Shopping for gifts doesn’t have to lead to financial stress. Learn how to budget your holiday gift spending, and make this the year that you finally come in on (or under) budget!

• List whom you want to shop for: Print out a copy of the Holiday Gift Spending Worksheet: and use it to list everyone whom you plan to shop for (friends, relatives, teachers, pets, etc.).
• Don’t be afraid to go homemade: In many instances it really is the thought that counts and using websites like Etsy and Pinterest or shopping local vintage stores can lead to great gift ideas that people will love and won’t make your budget explode before your eyes.
• Determine how much you can afford to spend: Review your finances to determine how much you can afford to spend on gifts. Set this figure as your overall holiday gift budget.
• Divide your gift budget among the people on your gift list: Look over your gift list, and decide how much you would like to spend on each person. Then, total up the expected spending for all gifts, and make sure it does not exceed the gift budget that you established in step two. Rework your figures as necessary.
• Track your spending throughout the season: As you purchase gifts, note their cost in the “Actual Spending” column of the worksheet. Then, calculate how much over or under budget you are with each one.
• Tweak your budget to cover any instances of overspending: Don’t panic if you overspend on a gift; just scale back your spending on another gift to make up for it.
• Pause before you purchase: Think twice before you buy anything you didn’t go into the store or website to buy.  If you can, put the item on hold for for 24 hrs to give yourself time to decide if that is the correct and practical purchase.
• Hang on to a copy of your gift budget after the holidays are over: It will be helpful in planning next year’s budget.

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There are so many interesting things to discover online, but there are also times when the Internet can be a bit frightening.  Same as in the outside world, it’s important to keep yourself safe and secure. Whether you’re a new web surfer or an old hand, it’s good to stay up to date on the best practices when it comes to sharing your data online and browsing in safety. 

Don’t use idle passwords. Choosing passwords with 1234 is like locking your house with the key left in the lock.  Instead, come up with a longer password that contains both letters and numbers/characters, preferably one that references something significant only to you; and one you don’t talk about frequently. For example, if the name of your childhood imaginary friend was Mister Giggles, swap out some of the letters for numbers and you can end up with a very nice password like M1s7r6igglz that only you understand.

When using a public wireless network, make sure to turn off file sharing and network discovery. These both put your files and system at risk for being opened by anyone on the wireless network, not just hackers. In Windows, these options can be found under Control Panel > Network and Internet > Network and Sharing Center. In Mac OS X, they are under System Preferences > Sharing. If you are within range of public wireless networks but don’t need to be online, turn off your wireless capabilities altogether. On some devices, there is simply an on/off switch; on others, you will need to configure this yourself (ex. on a Mac, click the Wi-Fi icon and turn off AirPort).

Always check for secure transaction info. The best companies will have many security devices in place. You may see a gold lock at the bottom of the page to indicate a secure site. When giving any bank details or other information, make sure the connection is secure (URLs like this begin with https:// instead of http://) and the site is trustworthy. (Not every site which runs HTTPS or accepts payments is trustworthy, even if the connection is.)

Keep your eyes peeled for online scams. Beware of spoof email claiming to be from eBay, PayPal, or a bank or a company you trust asking for personal or sensitive information. This is called phishing. The e-mail may inform you that there is a problem with your account/password. There may be a link to click inside. Forward any of these e-mails to the company it claims to be sent from. They will confirm whether the e-mail you received was real or not. Also, bear in mind that e-mail programs like Yahoo!, MSN, and Gmail will never ask you for your e-mail password. Don’t fall for it.

Make sure you are using (and regularly updating) an anti-virus program, an anti-spyware program, and a firewall. You can use either the firewall that comes standard with your operating system or a third-party software program to your liking. Don’t use two firewalls at once, as they can interfere with / weaken one another.

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The weeks tip involve “Things you Need to Know about YOU”                                          

Know Your Credit Score and What it Means:

When applying for credit, lenders will check your credit score to see how good it is. But what exactly is a credit score; how is it calculated; and why is this number so important?

A credit score is a number that strongly indicates to lenders and creditors how likely you are to pay back the debt you owe, based on your past borrowing behavior. The higher your score, the more likely you are, in their eyes, that you will pay back the money you borrow.

Your credit score is used to determine whether you can obtain credit for things like: a credit card, a loan to buy a house or car, or a loan to start a new business. Not only that, it is used to determine what kind of loan you qualify for, how much credit you qualify for and what your interest rate will be.

Check Your Credit Report Regularly: 

Credit reports, which determine you credit score, can contain mistakes or outdated information.  If you know your score to begin with, you can determine if it has been negatively impacted.  Then check the credit report to see why and take steps to restore the score you deserve before applying for a loan or a credit card. 

Since the FACT Act (Fair and Accurate Credit Transactions Act) was passed, residents are entitled to view their credit report from each of the three credit bureaus (TransUnion, Experian, and Equifax) for free once every 12 months. It’s a good idea to check your credit report regularly so you can correct any errors that appear on your report or if you’ve been the victim of identity theft.

For a free annual credit report (this will not include your credit score), log in to http://www.annualcreditreport.com/.  To remedy inaccuracies, call the customer-service departments of the companies that have supplied the incorrect information. 

It’s generally recommended to request a free copy of your credit report from one bureau every four months so that you can keep an eye on your credit more often than just once a year.

To get your credit score, go to www.myfico.com.  A report from one of the three credit bureaus costs around $15; a score from all three cost around $45.  A score of 650 to 700 on the FICO (Fair Isaac Corporation) scale, the most commonly used credit-score system, is considered average. 

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Individuals (who have paid into Social Security) above the age of 25 will automatically receive a Social Security statement in the mail from the Social Security Administration (SSA) each year. At any time, you can also request to have this statement sent to you.

Read your statement carefully to make sure that your earnings information is correct; your future benefits will be based on the recorded earnings from SSA.

This statement can also be used as a financial planning tool to help you to estimate your income in retirement, and determine how much money you will need to supplement your Social Security benefits. The statement will also give you details about your spouse’s and dependents’ possible benefits if you die, as well as your disability benefits if you were to become disabled.

Log on to https://secure.ssa.gov/RIL/SiView.do and create a personal profile to view your Social Security Statement.

It provides:

• Estimates of the retirement and disability benefits you may receive;
• Estimates of benefits your family may get when you receive Social Security or die;
• A list of your lifetime earnings according to Social Security’s records;
• The estimated Social Security and Medicare taxes you’ve paid;
• Information about qualifying and signing up for Medicare;
• Things to consider for those age 55 and older who are thinking of retiring;
• General information about Social Security for everyone;
• The opportunity to apply online for retirement and disability benefits; and
• A printable version of your Social Security Statement.

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Let’s talk about getting a home appraisal on your house.

Most home appraisals are done before refinancing or purchasing a home. Some are done for equity splits or insurance reasons as well.

The first question that most people ask us is “why do we have to have an appraisal done before I get a mortgage?” The simple answer is that lenders want to make sure that your home is worth the money they loan on it. If you were buying a $100,000 car from us wouldn’t you look at the Kelly blue book value before forking out the money?

We found a recent article in CNN Money Magazine from August 2012 and thought we would share the advice.

Appraisers say that homeowners often misjudge the worth of their home. Below is a list of some of the items an appraiser sees when they are summing up your property value and things you can do to increase the assessment.

1. Beautify the outside of your house. The Appraisal Institute states that adding curb appeal is the first step to winning over appraisers and buyers.  Overgrown plants/lawn and chipped paint on the outside of house will take as much as 3% off the value of your home.  It raises the question of; if this is what the outside is like what is the inside like?

2. Brand new roof.  This adds nothing to property value; however, a roof in disrepair or visible leaks will severely depreciate the value of your home.

3. Finished basement with half bath adds about 2% to the value.  But don’t expect it to count like a first floor remodel.

4. The market – two homes nearby went into contract above listing price. That adds nothing to the value of your home.  Appraisers go off of actual sales, so closed purchases.

5. Custom expensive built-in entertainment center is actually a negative adjustment. Why?  Cost doesn’t equal value.  Stay away from trendy remodels.  Renovations that are at all trendy — or not in keeping with the historical period of the home — will be assessed at the cost of ripping them out.

So how do you maximize your appraisal? Here are a few small projects that usually return dollar for dollar.

1.  Spruce up the landscaping;  add mulch, a few plants, put away tools, paint the outdoor areas, and fix any obvious problems such as torn screens, broken steps or a burned-out entrance light.

2.  Refinish existing wood floors

3.  Clean up your home interior, eliminate mold, mildew, stains and peeling paint, and put away clutter and junk.

4.  Rake or mow your lawn.

5.  If you have exposed sheet rock or studs, finish and paint this area.

6.  If you have water stains from an old roof leak paint this. Appraisers have to mention this in their report as a possible roof leak.

7.  Finish any construction or repair projects you have prior to the inspection.

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Getting a home loan is much trickier than it used to be.  Bank of Montana offers several smart moves to make sure the process goes smoothly.  Here are some tips from Kim Shappee related to shopping for your home loan.

1. Ask how long the rate lasts:

“Lenders typically offer a rate that’s good for 30 to 60 days, but closing can take a lot longer these days.  You want to know up-front if your lender will let you pay to extend it and if and when you locked in a rate.”

2. Think local:

“Sticking with a lender that has a branch and loan officer nearby gives more peace of mind to a seller and listing agent.  They’ll know the lender understands any issues unique to their market.”

3. Get it in writing:

“To head off any he said/she said arguments later, ask for a Good Faith Estimate and written verification of anything the lender tells you.  Make sure you always know and understand all of the costs included in your loan”

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Today’s calendar includes important reports on July home prices from CaseShiller and September consumer confidence from the Conference Board.

From Vining Sparks:
Home prices are expected to rise 0.75% MoM and confidence is expected to jump 2.5 points after the U of M survey showed a surprising jump.  We will also get the Richmond Fed Manufacturing Index (September) and the FHFA Home Price Index (July).  Fed Bank President Plosser and Treasury Secretary Geithner are scheduled to speak today.  Treasury will be auctioning $35 billion in 2-year notes which will be a good indicator of demand following last week’s disappointing TIPs auction.

 The yield curve continues to flatten.  The long Bond is now trading back at 2.89% while the 10-year yield has dropped back to 1.70%.  Stocks have remained fairly flat after spiking 1.5% immediately after the QE3 announcement.  The interesting thing to figure out has been the drop in commodity and oil prices following the QE3 announcement.  While they jumped higher originally, they have since fallen back to lower levels than before QE3.  Thus far, the markets have responded with disbelief that QE3 is the solution. ”

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