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    Joshua and Laura Meier Newport Beach Trust and Estate Planning Attorneys Focused on Helping Families with Young Kids
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    Monthly Archives: April 2014

    Striking a Balance Between Funding Your Retirement and Your Child’s Education

    Many parents perceive a conflict between funding a child’s college education and building their own retirement nest egg. The conflict usually arises from the lack of financial resources to do both while funding daily living expenses, so parents become stuck between priorities and usually wind up doing nothing at all.

    One of the things Meier Law Firm can help you do is sort out your priorities in a way that supports your family for the long-term. With that in mind, here are some guidelines on striking a balance between saving for your retirement and your child’s education:

    Build an emergency fund first. This should be 3-6 months of living expenses that you have saved to fall back on in an emergency. If you don’t have it, you will likely be forced to raid your 401(k) or other retirement account, spending more for penalties and taxes to cover the cost of the emergency.

    Saving for college or retirement?Save for your retirement or build a business to fund your retirement second. It is difficult for many parents to accept that they may not be able to fully fund a child’s college education, but consider the alternative. You aren’t being “selfless” if you spend what you should have saved for retirement or to create a business to fund your retirement on a child’s education, and then run out of money right when your kids are having their own families and trying to save for their own retirement. Then you will be financially dependent on them – just what you (and they) don’t want. There’s a reason there are loans for education but not for retirement.

    Save for your kids’ college education last. Only after you have funded your emergency stash and your own retirement accounts (or built a business to fund your retirement) should you funnel cash to a child’s education fund. If you invest in a 529 college savings plan, the earnings grow tax-free. Also, other people in your child’s life — like grandparents and generous aunts and uncles — can contribute as much as $14,000 per year (annual gift tax exclusion) to a child’s 529 plan.

    If you would like to learn more about strategies for getting your financial future in balance, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for an Achieve Your Dreams Planning Session, but because this planning is so important, we’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call your Newport Beach trust and estate planning attorneys at Meier Law Firm today at 949.718.0420 and mention this article.

    Vacations Are the Perfect Time for Families to Talk About Estate Planning

    If you are like most Americans, you will probably be spending at least some of your vacation time this summer with older family members. While there are few perfect times to talk with parents about their estate plan, the relaxed times you spend together on vacation can be one of them.

    Family on VacationHere are some tips on how to conduct this critical conversation:

    Find a good place to start. One of the best ways to ease your parents into a financial discussion is to bring up your own. Tell your parents that you were looking into your own estate plan and wondering if they had already executed their own. Sometimes you can use scare tactics to good effect – there are lots of stories about celebrities or others who have neglected to plan and paid the price with dire consequences.

    Take it easy. If you feel that parents may need some help with organizing their financial lives, be reassuring rather than applying pressure. Let them know that you want to make sure their financial independence is kept intact for as long as possible. Take things one step at a time, such as extending an offer to help them use online bill pay or assist them with organizing their information at tax time.

    Respect boundaries. Many parents feel uncomfortable discussing their finances with their children. If you face this obstacle, let your parents know that you at least need to know where to find their important documents when it becomes necessary, but that you aren’t attempting to control them in anyway. You simply want to help and make things as easy as possible for you and your siblings when something does happen.

    Sometimes initiating a conversation with parents about estate planning can be easier with the help of a Newport Beach Trust and Estate Planning Attorney at Meier Law Firm. We can help with an Achieve Your Dreams Planning Session. Call our office today at 949.718.0420 to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family.

    Does Your Day Start On a Positive Note?

    Weekly Quick-Step For the Prosperous Family

    Quick-Step: Start each day with a prayer or declaration of thanksgiving.

    What it is: A prayer or verbal declaration where we verbalize our gratitude for our blessings, and our hope for favor throughout the day.

    Why you need this: Inspirational author and preacher Joel Osteen says that how we start the day often times determines how our day will go. By being intentional about having a positive mindset from the get-go, we are more likely to attract good things throughout the day.

    Estimated time: 60 seconds

    How to do it: Say a simple prayer or declaration, or read something positive or encouraging, the moment you wake up. For more guidance, click here.

    What’s Changed In Your Life?

    Estate planning is not a “set it and forget it” kind of thing. Your life changes, your assets change, the laws change — and if your plan doesn’t change, your family gets caught holding the bag. The people you love most end up bearing the brunt of your failure to act.

    Conducting a proper review of your estate plan will help identify the potential need to update your plan because of:

    Life transitions:  Have any babies been born, loved ones died, people gotten divorced or married?   If so, you need to revisit your plan.

    Changes in the law:  Changes in federal and state tax laws may require updates to your healthcare and financial powers of attorney. State regulations can also be revised to open up new wealth planning strategies that should be a part of your estate plan.

    Changes in assets:  Has your net worth gone up or down?  Have you invested in any new assets, such as businesses, opened new bank accounts, retirement accounts, insurance policies, real estate or anything similar?  If so, your plan needs to be revisited.  And the spreadsheet of assets you have for your family (you DO have one, right?) needs updating.

    Funding of assets and beneficiary designations:  One of the most common mistakes people make is not properly completing the transfer of assets into a trust within their estate plan.  Another common error is having beneficiary designations that are inconsistent with the distribution language in the estate plan.  We recommend a review of those matters at least annually.

    If you do not review your plan and update it regularly, then your plan will not work the way you want and your family will have to deal with the consequences.

    If you would like more information about creating or updating your estate plan, call your Newport Beach Trust and Estate Planning Attorneys at Meier Law Firm to schedule a time for us to sit down and talk. We normally charge $950 for an Estate Plan Checkup but if you are an existing client, we’ll waive that fee and if you are coming to us for the first time, we can waive all but $200 of the fee. Call 949.718.0420 today and mention this article.

    How To Write A Family Mission Statement

    Quick-step: Write a Family Mission Statement

    What it is: A Family Mission Statement is a simple written statement developed together by all members of the family that identifies your family’s core values and what you hope to become and achieve together.

    Why you need one: Writing a mission statement is a simple, yet powerful way to bring greater purpose to your family, and serve as a guide when making important decisions impacting your family.

    Estimated time: 30-60 minutes

    How to do it:

    1. Have each family member identify their three most important values (young kids should participate!)
    2. Give each family member a turn to verbally share their three most important values with the other family members without interruption or judgment.
    3. Identify the three most common values among the family members and write them down. It doesn’t mean other values aren’t important or less, it just means you are focusing on the three most SHARED values. (Example: Education, Forgiveness, Philanthropy)
    4. For each shared value, identify how you want that value to impact your family. (Example: Education- To increase our knowledge and expand our abilities in our community. Additional Example: Forgiveness- To move forward together as a family focusing on our family’s strengths instead of our mistakes and shortcomings.)
    5. Put it all together in one simple statement.  Here is an example:

    “The [Your Family Name] Mission is to continually come together to….

    • become more educated, so we can increase our knowledge and expand our abilities in our community;
    • Freely forgive, so we can move forward together as a family focusing on our family’s strengths instead of our mistakes and shortcomings; and
    • Be philanthropic, so we can share our wealth and love with others in our world.”

    For additional guidance on creating a Family Mission Statement, feel free to contact your Newport Beach Trust and Estate Planning Attorneys at Meier Law Firm. We have some great resources you can use to reach your family’s unique goals.

    How to Preserve a Family Vacation Home with a Trust

    If you are fortunate enough to have a family vacation home, you know the emotional value it holds for every member of your family.  Many cherished family memories are rooted in a special place, which makes it important for current and future generations to preserve it properly.

    A recent Wall Street Journal article explored the use of trusts to preserve a family vacation home.  A trust is often a good choice when the current owners – parents or grandparents – are concerned that joint ownership could lead to disagreements or that maintenance costs may prove too great for the next generation to manage.

    Instead of dividing ownership, you can establish a trust to hold title of the property and fund an endowment to handle maintenance expenses.  In addition, to avoid paying custodial fees to the trust, you can set up a limited liability company to hold the endowment within the trust.

    Once the LLC is registered in the state where the vacation property is located and the trust is created, the next step is to draw up a legal operating agreement that specifies when the property title and endowment would pass into the trust, usually upon the current owner’s death.

    The operating agreement would also detail how the property is to be used, and grant each member of the next generation the right to equal access to the property.  This is usually preferable to granting equal shares in a property since it prevents any one shareholder from cashing out his or her share and jeopardizing the use of the property by future generations.

    As the WSJ article noted, it is usually preferable to have succeeding generations designate a property manager from within the family to make the key administrative decisions and coordinate the use of the property so it is shared equitably.

    Using a trust can help guarantee that a beloved vacation home is preserved for generations to come, as well as preserve the family harmony that the home has played such a key role in developing.

    If you would like some guidance on establishing a trust, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for an Achieve Your Dreams Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 949.718.0420 today and mention this article.

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