Part 4: My Financial Affection for Suze Orman

                                        Suze Orman

Don't Buy It: "Only multimillionaires need a trust. You're all set with a will."


Oh, no, you're not! A will designates where your assets go after your death. But what if you become sick and incapacitated and need someone to oversee your financial affairs? Your will won't help, and court proceedings will be required to establish a guardian to act in your stead. A trust functions for your own use and benefit while you are alive—including designating someone to handle your affairs in the event of incapacitation—and when you die, the courts aren't involved in the transfer of your estate.

In my opinion: You need;

1) A Revocable Trust to allow your assets to pass to others without legal problems or long probate procedures. The transfer of assets will take effect automatically after your last breath. No probate or court cases are needed.

2) A Power of Attorney so that someone can carry on your affairs while you are still alive. It helps when you can’t carry on your everyday affairs for some medical or physical reason. This document dies when you take your last breath or when you terminate it.

3) You need a Will as a catch all, taking care of anything that might fall through your legal safety net. It comes alive when you lie.

Suze Orman’s Idea: Pay a lawyer to draw up a revocable living trust. Also arrange for a durable power of attorney—a document that enables you to appoint someone to manage all your financial and legal affairs on your behalf should you become incapacitated. Finally, you'll need a "pour-over" will as backup, covering any assets (like furniture and items of strictly sentimental value) you haven't put into your trust. The little extra time and money that go into these steps are well worth it, for your sake and that of your loved ones.

In My Option: You should discuss what Suze is telling you with your family so that family feuds and fights do not break out when you fall ill or upon your death. That is how many families loose their property when a key person in the family dies.

What did they do for the month of January 2013

The stock market measured by the Dow finished the first 31 days of the year with a 6.91% return. My High Yield Corporate bond portfolio only went up .958%, a little less than 1%. At the beginning of the year, a large share of the IRAs and 401Ks in the United States were funded. Fund managers have to do something with the cash. With most sellers out of the market, the portfolio managers of the funds buy what is hot in the market place causing stock indexes to go up.

At the same time, I fund my IRA at the beginning of January but high yield corporate bonds do not fluctuate that much. This is why I rely mostly on interest given by the bonds in my portfolio for appreciation of my portfolio. This caused my portfolio to appreciate in January. I rely mostly on interest payments and bond appreciation over the life of the bond as a secondary return on my investment.