Taxes Archives - Page 12 of 12 - Blogging Away Debt Blogging Away Debt

Last fall things got really, really tight. I had lost my dream corporate job in the summer of 2022. Then my contract job was a significant cut in pay. Then it ended versus becoming a full time position in February of 2023. And finally I had a 20 hour per week job beginning in March of 2023.

My finances were a mess and super, super tight. And it came to head last fall when I was at risk of not being able to pay our auto insurance along with Gymnast car payment and so on.

Some of you are probably familiar with this phase of my roller coaster of a life. And what I did…

The History

As with each of my kids, I had agreed to help Gymnast get on his feet post high school (or school) completion by paying some of his bills for 6 months. In his case, it was his car payment and auto insurance. He moved to Texas as soon as he turned 18 and that started the clock for the 6 months.

But I ran out of money and the ability to pay the bills about 2 months early. So I made the difficult call to let him know. I held out as long as I could. And probably waited too long. Because it did blindside him.

The Resolution

Thankfully, he had listened and was making fantastic financial decisions. And without question, he sent me the money not just to pay his car payment, but also to catch up and cover the entirety of the family auto insurance bill. He didn’t blink. He didn’t blame. He didn’t wait to be asked. He just did it.

I was beyond floored. And so proud. And I told him I would pay him back.

Fast Forward to Now

Gymnast has continued to refuse my offer to pay him back. And I know he’s been stressed over the heavy load that is his car payment and car insurance. (He has had 3 car wrecks which he’s covered as well.)

But now we’ve been able to refinance the car getting the interest rate down to a reasonable rate. And our insurance premium has dropped with this next renewal. And he has the lofty and from what I’ve seen very achievable goal of paying his car loan in full in the next 6 months. And I now have stable and solid full time income again.

So I’ve decided to HELP him in another way that will hopefully give him a bit of relief and the push to really meet his goal of paying off his car. I am going to pay his portion of the family auto insurance policy from August (yes, last month) through December. This is why the kid’s contribution was significantly less that budgeted last month.

The total of this will be just slightly more than the amount he covered last year so it’s just a different way of paying him back for something I had planned to cover. And hopefully…it will help him get that much closer to being completed debt free. With a nice and reliable car to carry him through these young adult years!

Hope

Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 3 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.

Get to Know the Costs of Probate and Estate Planning

by Semify

Planning for the future can be a complex process, but understanding the costs associated with probate and estate planning can help you make informed decisions that protect your assets and loved ones. Whether you’re updating an existing estate plan or preparing for probate, knowing what to expect financially is crucial. Let’s dive into the costs of probate and estate planning and why it’s important to keep your estate plan up to date.

The Importance of Regularly Updating Your Estate Plan

One of the key aspects of effective estate planning is ensuring that your estate plan reflects your current wishes and circumstances. Experts recommend updating your estate plan at least once every five years, or more frequently if you experience major life changes, such as getting married, moving to a new state, or acquiring significant assets. Regular updates can help avoid legal complications and ensure that your estate is distributed according to your desires. Refrain from updating your estate plan to avoid outdated provisions that might not align with your current situation, potentially causing confusion and disputes during probate.

Understanding Probate Costs

When a person passes away, their estate often goes through a legal process known as probate, during which the deceased’s assets are distributed according to their will or state law if no will exists. However, probate can be an expensive process, sometimes costing as much as 10% of the total estate value, as noted by Legal Zoom. These costs can include attorney fees, court costs, and other administrative expenses, all of which can add up quickly and reduce the amount of the estate left for the beneficiaries. Understanding these potential costs can help you plan accordingly and consider strategies, such as setting up a trust, to minimize the need for probate and protect more of your estate for your loved ones.

The Rising Number of Single-Family Homes and Its Impact on Estate Planning

The real estate market plays a significant role in estate planning, particularly with the ongoing increase in single-family homes. In 2021 alone, over 1.1 million single-family homes were constructed, a significant number that reflects the importance of real estate in modern estate planning. As homeownership continues to rise, the value of real estate assets within estates grows, making it more critical to plan for how these assets will be handled after your passing. Whether you intend to pass down property to your heirs or sell it to cover debts and expenses, incorporating real estate into your estate plan is essential. Proper planning can ensure that your property is transferred smoothly and without unnecessary financial burden on your beneficiaries.

Additional Considerations in Estate Planning

While the costs of probate and estate planning can be significant, it’s important to consider the potential financial benefits of proper planning. By investing in a well-structured estate plan, you can minimize taxes, reduce probate costs, and ensure that your assets are distributed according to your wishes. Additionally, having a clear estate plan can prevent disputes among heirs and provide peace of mind knowing that your loved ones will be taken care of.

Moreover, the importance of regular updates to your estate plan cannot be overstated. As mentioned earlier, it’s recommended that you review and update your estate plan every five years or after significant life events. This regular review process helps keep your plan aligned with your current wishes and any changes in the law that could affect your estate.

Understanding the costs of probate and estate planning is essential for protecting your assets and ensuring your loved ones are cared for after your passing. As the number of single-family homes continues to rise, the value of real estate in estate planning becomes increasingly important. By staying informed and proactive, you can create an estate plan that preserves your wealth and provides for your family’s future.

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Paying Back Gymnast