Isn’t estate planning only for the rich?

In a word, no. Estate planning allows you or anyone to implement certain tools now to ensure that your concerns and goals are fulfilled after you die. Your objective may be to simply make sure that your loved ones are provided for. Or you may have more complex goals, such as avoiding probate or reducing estate taxes.

Estate planning can be as simple as implementing a will (the cornerstone of any estate plan) and purchasing life insurance, or as complicated as executing trusts and exploring other sophisticated tax and estate planning techniques. Therefore, estate planning is important whether you are wealthy or whether you have only a small estate. In fact, estate planning may be more important if you have a smaller estate because final expenses will have a greater impact on your estate. Wasting even a single asset may cause your loved ones to suffer from lack of financial resources.

You may also want to plan your estate if you have special circumstances such as any of the following:

You have minor children or children with special needs
Your spouse is uncomfortable with or incapable of handling financial matters
You have property in more than one state
You have special property, such as artwork or collectibles

While trusts offer numerous advantages, they incur up-front costs and often have ongoing administrative fees. The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional and your legal and tax advisers before implementing such strategies.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased.

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Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CUSO Financial”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CUSO Financial: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CUSO Financial. The Credit Union has contracted with CUSO Financial to make non-deposit investment products and services available to credit union members. Atria Wealth Solutions, Inc. (“Atria”) is a modern wealth management solutions company and is not a Registered Investment Advisor or broker-dealer. Investment products, services and advice are only provided through CUSO Financial, a subsidiary of Atria.

How often do I need to review my Estate Plan?

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How often do I need to review my estate plan?

Although there’s no hard-and-fast rule about when you should review your estate plan, the following suggestions may be of some help:

You should review your estate plan immediately after a major life event.
You’ll probably want to do a quick review each year because changes in the economy and in the tax code often occur on a yearly basis.
You’ll want to a more thorough review every five years.

Reviewing your estate plan will not only give you peace of mind, but will also alert you to any other changes that need to be addressed.
There will be times when you’ll need to make changes to your plan to ensure that it still meets all of your goals. For example, an executor, trustee, or guardian may change his or her mind about serving in that capacity, and you’ll need to name someone else.

Other reasons you should do a periodic review include:

There has been a change in your marital status (many states have laws that revoke part or all of your will if you marry or get divorced) or that of your children or grandchildren
There has been an addition to your family through birth, adoption, or marriage (stepchildren).
Your spouse or a family member has died, has become ill, or is incapacitated.
Your spouse, your parents, or other family member has become dependent on you.
There has been a substantial change in the value of your assets or in your plans for their use.
You have received a sizable inheritance or gift.
Your income level or requirements have changed.
You are retiring.
You have made a change in your estate plan (e.g., you created a trust or executed a codicil to your will).

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Hurricane: Emergency Preparedness

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Hurricane Emergency Preparedness

Texas Hurricane season is coming quick! June 1st starts the official return of hurricane season for Texas. Every year, we experience weather that could potentially put you at risk. Here a few tips that could prepare you for this season:

Emergency Supplies:

To be prepared for these potential catastrophic occurrences, the state of Texas advocates for your wellbeing, by designating a Tax-Free weekend for Emergency supplies. April 23-25, 2022, you will be able to purchase emergency preparation supplies without sales tax. You can find a list of items that qualify Here.

Evacuation Preparedness:

It’s always best to be prepared for the possibility of evacuating your area in case of a Hurricane. You can be prepared for this by having a “go bag” with clothes, medication, emergency supplies and food/water. It’s also wise to prepare mapped routes that you can take to evacuate.

Prepare your Home:

Secure and reinforce your windows, roof, and walls. Tie down any outdoor objects that may fly due to wind. If you can, take any items indoors. Consider the pros and cons for flood insurance. Also, make sure what your homeowners and wind insurance covers.

Alerts and Warnings:

It’s always a good idea to be signed up for your city’s local alerts and warnings. There are also NOAA weather radios that will keep you updated on all surrounding alerts. You can purchase these radios online and instore.

Important Document:

Always carry important documents with you when you evacuate. If you do not evacuate, be sure to put all important documents into a waterproof container. These documents include/not limited to, birth certificates, social security cards, insurance cards, financial documents and all other documents that may be important to you.

Emergency Contacts:

It’s recommended that you have an out of city or out of state contacts in case you must evacuate. It’s always good to have updated contact information for your work, school, doctors, and non-emergency personnel. This will help you in case you have to contact these people with ease during the emergency.

Remember to consider all recommendations of your local authorities.

Post author: Kayce Barajas

The opinions expressed on this page are for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of the article and may not reflect the views of the credit union.

Children Money Wise Topics for Parents

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Children Money Wise Topics for Parents

It’s never too early to start your children, on practicing good money habits. It’s important to start young so by the time they are teenagers, they will have a good grasp on being financially savvy. Here are a few topics that you can touch base on with your children.

What is Income?

Not all households may give a weekly or monthly allowance and that’s just fine. If you are someone that let’s your children to earn an allowance, sit down with them and explain the importance of income. The whole concept is to show your child that earning money is a necessity. Out of the payment, you can also start teaching them about taxes. Set aside a portion of the earned allowance and put it into a college savings account. Not only will it teach your children about taxes, but it will also be saving for their future without knowing it.

Creating a Budget

Even children can learn to budget for things that they want. Every child has wants, such as toys that they can learn to budget for. Want the new video game or a new Lego set? No problem! That’s where you teach them how much they need to save and can spend to get to their goals. Take your kids shopping with you and show them what your wants and needs are.

Delayed Gratification

Teaching Children at an early age that they cannot get what they what immediately when they want it, will teach them a very valuable lesson as they are older. By prioritizing the needs of your children first will show them that we can’t always purchase what we want before our needs are met. This can be from purchasing school supplies over the newest toy.

Savings Goals

The best way to show children how to save is to start small. Saving small amounts over time will not prohibit them from getting other necessities but will allow them to do both. This ties in with their budget learning. Setting aside a small amount of their earned allowance will teach them in the long run that they can save for anything if they just set a little at a time, aside.

Let us help you! We have 3 options for Minor accounts. Sandy Savers/Savings, Checking and College Saver accounts are available. Click Here to Learn More: Youth Accounts

Post author: Kayce Barajas

403(b) Plans: The Basics

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403(b) Plans: The Basics

Retirement plans established under Section 403(b) of the Internal Revenue Code, commonly referred to as 403(b) plans or “tax-sheltered annuities,” have become a popular type of employer-sponsored retirement plan.

What is a 403(b) plan?

A 403(b) plan is a retirement savings plan, sponsored by a tax-exempt organization or public school, that offers significant tax benefits while helping you plan for the future. You contribute to the plan via payroll deduction, which can make it easier for you to save for retirement. One important feature of a 403(b) plan is your ability to make pre-tax contributions to the plan. Pre-tax means that your contributions are deducted from your pay and transferred to the 403(b) plan before federal (and most state) income taxes are calculated. This reduces your current taxable income — you don’t pay income taxes on the amount you contribute, or any investment gains on your contributions, until you receive payments from the plan.

You may also be able to make Roth contributions to your 403(b) plan. Roth 403(b) contributions are made on an after-tax basis, just like Roth IRA contributions. Unlike pre-tax contributions to a 403(b) plan, there’s no up-front tax benefit — your contributions are deducted from your pay and transferred to the plan after taxes are calculated. But a distribution from your Roth 403(b) account is entirely free from federal income tax if the distribution is qualified. In general, a distribution is qualified only if it satisfies both of the following requirements:

It’s made after the end of a five-year waiting period
The payment is made after you turn 59½, become disabled, or die

Generally, you can contribute up to $20,500 ($27,000 if you’re age 50 or older) to a 403(b) plan in 2022 (unless your plan imposes lower limits). If your plan permits, and you have 15 or more years of service, you may also be able to make special catch-up contributions to the plan, in addition to the age 50 catch-up contribution.

If your plan allows Roth 403(b) contributions, you can split your contribution between pre-tax and Roth contributions any way you wish.

When can I contribute?

While a 403(b) plan can make you wait up to a year to participate, many plans let you to begin contributing with your first paycheck. Some plans also provide for automatic enrollment. If you’ve been automatically enrolled, make sure to check that your default contribution rate and investments are appropriate for your circumstances.

What about employer contributions?

Employers don’t have to contribute to 403(b) plans, but many will match all or part of your contributions. Try to contribute as much as necessary to get the maximum matching contribution from your employer. This is essentially free money that can help you pursue your retirement goals. Note that your plan may require up to six years of service before your employer matching contributions are fully vested (that is, owned by you), although most plans have a faster vesting schedule.

Should I make pre-tax or Roth contributions (if allowed)?

If you think you’ll be in a higher tax bracket when you retire, Roth 403(b) contributions may be more appealing, since you’ll effectively lock in today’s lower tax rates (and future withdrawals will generally be tax free). However, if you think you’ll be in a lower tax bracket when you retire, pre-tax 403(b) contributions may be more appropriate because your contributions reduce your taxable income now. Your investment horizon and projected investment results are also important factors.

What else do I need to know?

Your contributions, pre-tax and Roth, are always 100% vested (i.e., owned by you).
If your plan allows loans, you may be eligible to borrow up to one half of your vested 403(b) account (to a maximum of $50,000) if you need the money.
You may also be able to make a hardship withdrawal if you have an immediate and heavy financial need. But this should be a last resort — hardship distributions are generally taxable to you.
Distributions from your plan before you turn 59½ (55 in some cases), may be subject to a 10% early distribution penalty unless an exception applies.
You may be eligible for an income tax credit of up to $1,000 for amounts you contribute, depending on your income.
Your assets are generally fully protected in the event of your, or your employer’s, bankruptcy.
While your participation in a 403(b) plan has no impact on your ability to contribute to an IRA (Roth or traditional), it could impact your ability to make deductible contributions to a traditional IRA.
Many 403(b) plans let you direct the investment of your account. Your employer provides a choice of funding arrangements (typically, mutual funds or annuity contracts issued by an insurance company). But it’s your responsibility to choose the investments most suitable for your retirement objectives.

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Teen Money Wise Topics for Parents

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Teen Money Wise Topics for Parents

When most teens are in high school, they do not learn effective ways to handle their finances for years to come. As many teens throughout the state of Texas gear up to take on college in the coming months and years, these are few things they should understand.

Wants VS Needs

Do they understand the difference between the two? Once they are on their own, spending money may get out of hand if they don’t. Do they need cable, dinning out, the new Jordan’s or Apple phone? We know the quick answer is no. Deciphering the needs between the wants is a learned trait. Sit down with your teen and create a list of appropriate needs and wants. This will help balance their budget accordingly.

Banking Basics

Parents need to distinguish the differences between what a checking and savings are. Discuss interest rates, minimum balances, overdraft fees and ATM fees. Writing a check may also come in handy if they do not have time to get a money order or cashier’s check. Teach your teens how to understand their mobile banking app and all it’s features.

How to Use Credit Cards

Teaching teens the difference between a debit card and credit card is high on the list of need-to-know lessons. Whether they have their first credit card or are using yours, teens need to understand money doesn’t grow on trees. Swiping a card means it comes from an account. Let them know the balance needs to be paid monthly, to not be charged the interest rate for the credit card.

How to Make a Budget

Your teen will need to know how to make a budget, even if they are staying in dorms. Showing them a outline of a budget and what it entails is necessary for them to manage their funds optimally. If you are comfortable with them knowing your household budget, start with showing them yours. There are many websites that can be used to help with budgets that can be good resources for your teens.

Post author: Kayce Barajas

Do you need a Home Warranty?

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Do you need a Home Warranty?

Buying your first home can be a headache for many. Once you purchase your home, it doesn’t get easier. All of a sudden, you’re being asked if you want a home warranty, to remember to apply for homestead and to sign up for a A/C and heating program. Talk about a lot for someone, that just hurdled through closing on a house after a month-long headache. This is my opinion on what to consider before purchasing a home warranty.

What year is your home?

If you purchased your house new, your house could still potentially be under a warranty through your builder and probably do not need it. If you have an older home, as I do, you might consider a warranty due to things around your home that may need to be replaced in the near future.

How much do you estimate you’ll need to replace and the cost?

If you have a house that has small things to fix, I personally wouldn’t even consider it, if it’s below $70 to fix because a service call is usually around $70 for a home warranty. If you have bigger items you expect to replace, like a hot water heater or refrigerator, then you may want to consider having one for those instances due to the cost.

What happens if you don’t have a home warranty?

You may be used to apartments fixing everything that breaks but being a new homeowner, that is something you need to get used to and quick. When you purchase a house that isn’t under warranty and something breaks, you need a home warranty, or your own savings set aside for repairs. Whether you choose one or the other, it is up to you. Home Warranties may not cover depending on their conditions.

You may even decide to have a home warranty one year and the next, just have a savings. The circumstances depend on your ability to afford issues your house may have in the future. You can always decide at any point in time to get a home warranty or get rid of it. Do what’s best for your circumstances.

Post author: Kayce Barajas

Webinar: Retirement – Building a Comfortable Lifestyle for Tomorrow

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Webinar: Retirement – Building a Comfortable Lifestyle for Tomorrow

Microsoft 365 Users Targeted with Fake Voicemails

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Microsoft 365 Users Targeted with Fake Voicemails

Cybercriminals continue to find new ways to trick users and steal their credentials. Sometimes, they even recycle decades-old tools that were never intended to be malicious.

For example, in a new scam, cybercriminals attack Microsoft 365 users with malicious files disguised as voicemails. The scam works by sending an email with a voicemail file attached. The filename ends in “mth.mp3”, appearing to be a legitimate MP3 file. However, the file is actually a malicious HTML file that has been disguised using right-to-left override (RLO) functionality.

RLO was created 20 years ago for languages that read from left-to-right instead of right-to-left. Unfortunately, cybercriminals now use this functionality to make malicious files look safe. For example, in this scam, cybercriminals use RLO to display “mp3.htm” as “mth.mp3”. If you open the file, you will be taken to a fake Microsoft 365 login page instead of a voicemail. Then, any credentials that you enter on the fake login page will go straight to the cybercriminals.

Follow these tips to stay safe from similar scams:

Never click links or download attachments in an email that you were not expecting.
Before you share any sensitive information online, make sure that the website is legitimate. For example, an MP3 file should never take you to a login page. If you’re uncertain, navigate to the website directly.
Before you share any sensitive information online, make sure that the website is legitimate. If you’re uncertain, navigate to the website directly before sharing any information.
Remember that cybercriminals can use more than just links within emails to phish for your information. Always think before you click!

If you have any questions or feel like you may be a victim of fraud, please do not hesitate to contact your credit union’s fraud department by calling 281-487-9333.

Post Author: The KnowBe4 Security Team – KnowBe4.com
The opinions expressed on this page are for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of the article and may not reflect the views of the credit union.