Good News: Advice industry raising funds to deliver financial planning to families

June 4, 2020 @ 11:50 am

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Ron Hahs looks back at more than five and a half decades in the insurance, financial planning field

Ron Hahs thought it was just a summer job, something to occupy his time before starting his teaching career.

Now, more than a half-century later, Hahs is the senior financial adviser at The Hahs Group in Cape Girardeau, a multigenerational insurance and financial planning agency affiliated with Northwestern Mutual.

Hahs marked his 56th anniversary with Northwestern Mutual and The Hahs Group earlier this month and, with a degree of reluctance, admits he probably has more seniority in the financial planning field than anyone else in the area.

“I guess you could say that,” he said. “I don’t seek that kind of notoriety, but I guess you could say there isn’t anyone else in financial services here who has done it for that many years.”

A career detour

“To be blunt, I kind of got into this by accident,” Hahs said with a laugh when asked what led him to a career in financial services and insurance. He said his career path dates back to his years at Southeast Missouri State College, as it was then known.

“When I graduated from SEMO, which was in May of 1964, I had signed a contract to teach that fall at Jackson High School, where I was going to teach math and speech, and coach debate,” he said.

“For several summers before that, I worked for what was then Missouri Utilities (now known as Ameren Missouri) on a tree-trimming, brush-cutting crew. It was a good paying summer job and I just assumed I would do that again that summer before teaching in the fall, but then I found out they weren’t going to let anybody in the (tree-trimming) program if you already finished your degree.”

Rather than spend the summer between college graduation and his first teaching position without a job, Hahs accepted a summer job offer from his uncle.

“My uncle, Luther Hahs, was the district manager for Northwestern Mutual and said, ‘You come work for me this summer and I’ll guarantee you at least as much as you’d earn at the utility company,’ and I said, ‘Good deal!'” Hahs said. At the time, he was 21 years old.

“I just assumed I’d do a lot of filing and running errands, but the second day I was there, he had me applying for an insurance license, then he had me going to training in St. Louis and then to the big national company meeting in Milwaukee that July,” he remembers. “Let’s face it, I was smitten!”

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Robots Resuscitate Financial Planning in Australia

The reality is that 80% of Australian’s have never seen a financial planner and have no interest in buying the products they sell. But technology is filling this tremendous market gap and helping the industry engage with more clients.

Robo advice has been around for a few years now, and its original promise was to deliver investment advice without leaving your computer. 

You would put in your profile and tick a box saying your strategy was “aggressive” or “defensive” and then wait for the answer.

The result would be instructions on how to allocate your assets between shares, fixed income products and some newer synthetic Exchange Traded Funds (ETFs) which give an investor exposure to everything from other market indices to exotic commodities.

In this early incarnation, in Australia at least, there was very little interaction. A client would click and wait, and if they wanted the advice, they’d reach for their credit card.

It led to predictions of the demise of the financial planning industry, and it couldn’t have come at a worse moment. 

Scandal fallout

The industry was under immense pressure from revelations of misconduct at a Royal Commission appointed by the Government. 

So, converting the 80% of Australians without financial advice seemed more of a pipe dream than ever given the massive trust deficit.

A few years on, and the model is changing and for several reasons. One is that the business model for the advice industry is evolving, and robo and human advice are co-existing within the same service offering. 

So, instead of threatening the financial advice industry with extinction, robots are now helping save and transform it.

Scaling advice

One issue for the financial advice industry in reaching more clients has been the cost of servicing at scale. 

Robo advice works as an initial contact point as potential clients do their research. But once they reach a point in their engagement — and they are serious rather than being ‘tyre kickers’ — this is when the human adviser steps in and takes up the customer journey. 

This both cuts down the cost of delivering advice and puts clients in charge of the initial contact. 

Everyone knows there’s nothing worse than making a casual enquiry and then having a salesperson swarm all over you, so putting the robo piece first puts the control in the hands of the client who can then decide to proceed if the initial contact and information is compelling enough.

Overcoming AUM hurdle

Another evolution is the nature of the advice itself.  

At the outset, a client would get an asset allocation list and not much else, but that wasn’t  convincing many people, and some of them wanted something more holistic.

“Many people don’t go to financial advice because they don’t have the assets to be managed, and the whole advice industry is based on assets under management,” says Vince Scully, the founder of Australian advice website Life Sherpa.

Scully sold his original financial planning business around 10 years ago and spent much of the time since then pondering a business model which would engage Australian’s who were not using financial advice.

His response has been Life Sherpa, which takes a wider look at a person’s financial profile and looks at life needs, rather than immediate investment choices.

“Life Sherpa was designed to deliver advice affordably and [make it accessible] to that group of people, in their late 20s to early 40s, who are going through life’s big changes of coupling, nesting and parenting,” says Scully.

“We are looking for someone with a money problem, and we help them develop a journey to fix that problem which over time will involve their superannuation (or pension), insurance and a home loan.

“The Sherpa is a loyal and trusty assistant who shares their knowledge and the way ahead so you can get to your destination and leaves you to take the credit.”

Scully’s Sherpa is half robot, half human. Customers pay for levels of service and use the algorithmic machine built by Scully and his colleagues, which takes them to a certain point before the human is required for high level advice and execution. 

Eliminating bias

The initial robo advice also dispels perceptions of human bias in the product selection.

One example in the robo-human teamwork model is the purchase of life insurance. Most policies have “exclusions” for a variety of conditions, but the overwhelming evidence is that seeing an exclusion is a major red light to any consumer purchasing life insurance online.

With Life Sherpa, the human intervenes at the point that the client is getting confused about the exclusion, with their explanation and assistance helping the consumer’s confidence and smoothing the path to the final sale.

“Most people are focused on the cost of advice, and that is what led to robo advice. But it misses the problem that many people don’t want the products the industry is selling,” says Scully.

With this in mind, the ‘machine’ which drives Life Sherpa takes people through a series of questionnaires which helps them understand their attitude to money and investing, and which also informs later recommendations from the algorithm.

It is a model which is working because, as Scully says, “mathematics is easy, behavior is complicated.”

It would also seem that financial advice is becoming less complicated as the delivery model evolves, and as humans learn to work with their robot colleagues.

Advising Clients Interested in FIRE

Part of the job of a financial adviser is focused on helping clients achieve financial independence and to accumulate a sufficient amount of resources to fund the retirement lifestyle they desire. Arising out of the 2008 financial crisis, the FIRE movement – which stands for financial independence, retire early, has caught the attention of many, from Gen Xers to millennials.

Here are some thoughts on how to advise clients who might be embracing the goals of the FIRE movement.

The FIRE movement embraces the goals of achieving financial independence at a relatively early age and then retiring early. Both the “FI” and “RE” parts mean different things to those trying to “achieve FIRE” as the saying goes.

I’m a financial adviser, and my richest clients all have the same 4 habits

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

  • My job as a financial adviser is to turn my clients’ desires into an actionable plan — the more you plan, the better equipped you’ll be to build wealth.
  • It can be overwhelming to think about how best to manage your money, but my wealthiest clients have four habits that make this process easier.
  • They love to strategize and think about how to save and invest, they’re patient and know that wealth comes with time, they trust professionals to give them sound advice, and they’re always learning.
  • Try commission-free trading with TD Ameritrade »

As a financial adviser, my job is to turn my clients’ needs and goals into a plan to achieve what they want. I help them create strategies for eliminating financial risk, building long-term wealth, and give them a game plan that puts them on track to achieve their financial goals. 

The more you plan, the higher the likelihood you will save, invest, and attain financial freedom. So many people are overwhelmed with what it takes to build good financial habits, but taking a step-by-step approach can make this easier.

Here are the four most common habits my richest clients have and how you can build the same habits.

Habit #1: They love to strategize

My richest clients love to strategize because they realize there’s more than one way to achieve a goal. Usually, during their financial planning meeting, we talk about strategy. We have all of their assets and goals written down in front of us so that we have the mental bandwidth to begin thinking tactically about what is coming up next. When everything is agreed on and put in place, everyone knows what they need to do to help the team execute on the plan. 

For example, my clients who decide to start new businesses know this requires more than picking an industry and setting up shop. We have to develop a strategic plan that allows them to continue with their other goals, which might range from saving for college to paying life insurance premiums to paying down debt and updating their estate planning.

Strategizing helps the client feel confident about achieving their financial plan because they have a sense of direction and an outline of measurable goals. Once all the strategizing is complete, they have a physical plan guiding day-to-day decisions that allows them to evaluate their progress and change approaches if necessary.

Habit #2: They trust professionals with their money

My clients have the courage to trust someone with their secrets and their money. Many Americans keep money a secret. We experience shame and guilt, and we don’t want anyone to judge us based on how much we make or don’t make and how we spend our money. So we keep it a secret and suffer in silence. 

I’ve found that my richest clients are open about how they live, how they spend, and what they would like to accomplish. They may have started deep in debt, but placing their trust in me to guide them has led to a healthier relationship with their money.

Let’s face it: You have to trust someone to allow them to help you, even if it’s just to bounce ideas off of them. Even the greatest athletes in the world have a coach to keep them accountable. 

My most financially savvy clients value trust so much they have a team of trusted advisers. These trusted advisers are subject-matter experts; they include a financial planner, business manager, attorney, investment adviser, and CPA. Having this additional help and personalized expertise allows the client to be more proactive with their money instead of making decisions on defense and having to focus on putting out fires. 

Take time to think about who you take advice from. If you can’t afford a team of specialists right now, recruit those you know who already have a healthy relationship with money — and trust them. 

Habit #3: They have relentless patience 

Since my financial planning expertise is generational wealth, most of my clients are concerned about their future. Meaning they have to have the patience to forgo things that may bring instant gratification. For example, they may decide to buy a duplex instead of a single-family home to ensure they have help with their mortgage and investment income in the future. 

They know their goals and understand that if they want to retire with over $1 million then now is the time to invest at least 15% of their income. Of course, they have short-term plans (savings goals for annual vacations, home and/or car repairs) but they are always more excited about the long-term goals. This allows them to focus and be grateful for what they have and live a comfortable life because they know they are in the process of making their dreams a reality.

Habit #4: They’re always learning

 This is the most important habit of them all.

Having a financial plan instills confidence. Therefore, my clients understand enough about their money that they’re not just taking advice blindly. They ask questions when they don’t understand. They challenge ideas. They read and bring ideas to the table and they make sure they remain a part of the conversation. Most of all they realize that they are the ultimate decision-makers since they are the only one at the table with the authority to proceed with the plan.

If you haven’t already, you should interview qualified financial professionals — and look for someone who will educate and empower you and look at your money with your future in mind. Most of all, make sure you find someone who speaks in a language you can actually understand about all things financial.  

Believe me, repetition leads to results. Just reading this article puts you one step closer to gaining the financial habits of my richest clients.

Jala Eaton, Esq., CTFA, is an optimist, estate planning attorney, and certified financial adviser with a mission to help black women build and protect their assets through learning to invest and creating an estate plan.

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I’m a financial planner, and there are 3 ways my advice to clients has changed during COVID-19

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

  • As COVID-19 spread through the northeast, my financial planning clients called with many questions about how to spend, save, and manage their money.
  • Many wanted to know if they should pull their money out of the market, or if they should make their rent/mortgage and bill payments.
  • Given the current climate, I’ve focused on doing three things with my clients: building cash reserves fast, shoring up insurance coverage, and ensuring estate planning is in order.
  • SmartAsset’s free tool can help find a financial planner near you »

As the COVID-19 virus raged through the northeast US in March, I received numerous calls from concerned clients pleading for information and guidance. Questions like, “Should I get out of the market?”, “Which bills should I prioritize?”, and “Should I pay the rent/mortgage?” 

As we discussed these and other issues, I realized that we were dealing with times unseen by many of my clients. Sure, we have seen market crashes and we have experienced our share of crises, including 9/11, Hurricane Sandy, etc., but a health pandemic, coupled with social distancing and a shutdown of the economy, was new territory.

Through this experience came changes to general principles of financial planning, with one clear exception — I will continue, always, to make recommendations and assist in actions that are in the best interests of my clients. Here are some of the ways my planning advice has changed through the course of COVID-19 pandemic.

Survive and advance by stocking up on cash

I know that the typical principles of financial planning call for a family to save at least three to six months of necessary living expenses (housing, food, medical, childcare, transportation, etc.). The reality, sadly, is that the average American family has a tough time coming up with $400 in a pinch. 

So, when planning with a diverse spectrum of households, the path to establishing an emergency fund can take different forms. Some may be able to get it done, others may be a work in progress, and lastly, you have those who struggle to establish a fund and are literally “hoping and praying for the best, but not prepared for the worst.”

In the context of COVID-19, however, keeping cash and staying liquid is the name of the game. If you have an emergency plan, great. If not, make draconian decisions regarding your spending and only spend funds on the most basic of necessities, such as food and health-related supplies, including face masks, hand sanitizer, and antiviral cleaning products. 

My advice also included proactively contacting landlords, mortgage companies, student loan servicers, automobile financing companies, credit card companies, and other service providers to request deferments on payments and/or waivers of late payment fees/penalties in the wake of COVID-19. 

Also, I recommended immediately suspending payments on non-essential services, such as web services, auto-delivery services of luxury items, and signing up for delivery of essential items like water and food.  

Lastly, and slightly more controversially, I told my clients on the lower-income spectrum to utilize liquidity on credit lines to stock up on cash. Credit companies can lower credit limits without notice, so proactively pulling the credit (and paying it back if not needed) is a self-preserving act of “getting through today in order to deal with tomorrow.”

Shore up your defenses with the right insurance

As I worked with clients to get their cash flow fortified, I then asked to look at their insurance coverage. Specifically, health insurance (including health-related tax-qualified accounts like Flexible Spending Accounts or Health Savings Accounts), short-term and long-term disability, and ancillary coverages such as hospitalization indemnity and critical care policies.

Health insurance: We made sure that clients clearly understood what was covered and what wasn’t (or required precertification). We also identified the applicable deductibles, co-pay percentage amounts, and max out-of-pocket amounts required in the event the client or loved one were hospitalized due to COVID-19.

FSAs and HSAs: Flexible Spending Accounts for healthcare (FSAs) are tax-qualified employee benefit plans that allow employees to make pre-tax contributions to an account that is used for qualified health expenditures, including office visit co-pays and out-of-pocket costs for prescription drugs.

Health Savings Accounts (HSAs) function just like FSAs, with the exception that they are only made available to individuals and families enrolled in a High-Deductible Health Plan; the funds in such a account are allowed to rollover and grow from year to year (FSAs have a “use it or lose it” provision, where the enrollee must spend most of the funds on an annual basis). Knowing what’s in these accounts is important in planning for potential medical expenditures or funds needed to plug health insurance coverage gaps.

Short- and long-term disability insurance: Evaluating short-term disability is key under a COVID scenario, as we want to be sure that we understand what is considered a trigger event for a claim (when the doctor diagnoses you with COVID-19), your waiting period for short-term disability to kick in, the amount of the disability coverage, and for how long it lasts.

Ancillary coverages: Certain employees who are affiliated with unions or similar organizations are oftentimes offered “ancillary insurance” to supplement their existing benefits. These coverages may include hospital indemnity plans, which pay a benefit (per night, lump sum, etc.) to the insured in the event they are ever hospitalized. 

In addition, critical care coverage pays a lump-sum amount if a certain condition, such as a stroke, blood clot, or other complication, were to occur. Having these coverages in place can be very helpful with paying out-of-pocket costs in the event of an unexpectedly long hospital stay associated with COVID-19.

Get your affairs in order

Lastly, we discussed whether, in the event of the client or spouse/partner becoming infected with COVID-19, were all estate and non-probate contracts (for example, life insurance) in good order. 

Namely, were the applicable advanced directives, durable power of attorney forms, living wills, and medical proxies identified via documentation? Is there a will? Are there “Payable Upon Death” or “Transfer Upon Death” instructions in place for the bank and brokerage accounts, respectively? Do all life, disability, and retirement accounts have the right beneficiaries named and is the information on such forms accurate and current? 

Having the proper plans in place will not only help the families deal with affairs while one is incapacitated, but also ensure that no unnecessary costs or errors are made in dividing assets if death were to unfortunately occur. 

Sharif Muhammad, MBA, CPA, MST, CFP, is the founder and CEO of Unlimited Financial Services LLC, a certified public accounting firm in New Jersey.

Legal and financial planning among free July Alzheimer’s webinars

free webinar designed to help the families living with Alzheimer’s disease make
critical legal and financial decisions is among the series of programs offered
at no charge by the Alzheimer’s Association in July.

The Alzheimer’s Association provides a wide range of programs and services to the nearly 6 million people in the United States living with Alzheimer’s disease, including 76,000 in Colorado, as well as the more than 16 million loved ones across the country who serve as their unpaid caregivers.

free webinars offered during the month of July include:

  • The 10 Warning Signs of Alzheimer’s Disease (Learn about the 10 common warning signs, what to watch for in yourself and others, typical age-related changes, the benefits of a diagnosis, early detection and more.) – 4 to 5 p.m. Tuesday, July 14; 4 to 5 p.m. Thursday, July 30; and noon to 1 p.m. Friday, July 31.
  • The 10 Warning Signs of Alzheimer’s Disease (in Spanish) – 10 to 11 a.m. Tuesday, July 14.
  • Understanding Alzheimer’s and Dementia (Learn about the impact of Alzheimer’s, the differences between Alzheimer’s and other forms of dementia, risk factors, current research, treatments to address some symptoms and more.) – 4 to 5 p.m. Thursday, July 9; 1 to 2:30 p.m. Wednesday, July 22; and 10 to 11:30 a.m. Thursday, July 31.
  • Understanding and Responding to Dementia-related Behavior (Behavior is a powerful form of communication and one of the primary ways that people with dementia communicate their needs and feelings as the ability to use language declines. But these behaviors can be challenging for caregivers. Join us to learn how to decode behavioral messages and learn strategies to intervene with some of the most common behavioral challenges.) – noon to 1:30 p.m. Friday, July 17; and 10 to 11:30 a.m. Tuesday, July 28.
  • Dementia Conversations (Tips on how to have honest and caring conversations with family members about going to the doctor, when to stop driving, and making legal/financial plans.) – 1 to 2 p.m. Friday, July 15; noon to 1:30 p.m. Wednesday, July 22; and 11 a.m. to 1 p.m. Monday, July 27.
  • Effective Communication Strategies (This workshop teaches caregivers to decode verbal and behavioral communication from someone with Alzheimer’s and other dementias. Develop strategies for having meaningful connection with people in differing stages of dementia.) – 10 to 11:30 a.m. Friday, July 10; and noon to 1 p.m. Tuesday, July 21.
  • COVID-19 and Caregiving (Tips for caregivers who are caring for someone living with dementia during the COVID-19 pandemic, whether that person is in the home, in a residential facility, or care providers are coming into the home.) – noon to 1 p.m. Tuesday, July 7; and 4 to 5 p.m. Thursday, July 23.
  • Living with Alzheimer’s: for Middle-stage Care Partners (In the middle stage of Alzheimer’s, needs change and care partners become hands-on caregivers.  In this three-part series, you will hear caregivers and professionals discuss helpful strategies to provide safe, effective and comfortable care in the middle stage of Alzheimer’s.) – Part 3: 11 a.m. to 12:30 p.m. Monday, July 6.
  • Living with Alzheimer’s: for Late-stage Care Partners (In the late stage of Alzheimer’s, caregiving typically involves new ways of connecting and interacting with your loved one. In this two-part series, you’ll hear from caregivers and professionals about resources, monitoring care, and providing meaningful connection for the person living with Alzheimer’s and their family.) – Part 1: 11 a.m. to 12:30 p.m. Monday, July 13; and Part 2: 11 a.m. to 12:30 p.m. Monday, July 20.
  • Legal and Financial Planning for Alzheimer’s (An interactive program where you’ll learn about important legal and financial issues to consider, how to put plans in place, and how to access legal and financial resources near you.) – 10 a.m. to noon Wednesday, July 29.
  • Healthy Living for Your Brain and Body: Tips from the Latest Research (We’ve always known that the health of the brain and body are linked, but now science is able to provide insights into how we can optimize our physical and cognitive health as we age. Learn about research in the areas of diet and nutrition, exercise, cognitive activity and social engagement, and use hands-on tools to help you incorporate these recommendations into a plan for healthy aging.) – noon to 1:30 p.m. Wednesday, July 8; 4 to 5 p.m. Thursday, July 16; and 2 to 3: 30 p.m. Friday, July 24.
  • Advancing the Science: Alzheimer’s and Dementia Research (An overview of Alzheimer’s disease science and the latest advances in research to find a prevention, treatment and cure.) – 3 to 4 p.m. Thursday, July 16.

all programs and services of the Alzheimer’s Association, the webinars are
offered at no charge, but registration is required. To register, click here
or call the free Alzheimer’s Association Helpline at 800-272-3900.

Coronavirus spurs talk about death, financial planning – Chicago Sun

The coronavirus pandemic that’s hit Black and Latino families especially hard has forced an uneasy conversation about death and dying. But it should also include a conversation about what happens after the worst happens. Are wills — and more importantly — trusts in place? What happens to a family home, for example?

Families who prepare for the worst can keep their homes out of probate and avoid the lengthy time, expense and bureaucracy it can entail. And there are affordable or free resources available to help everyone navigate the financial planning landscape.

Englewood resident Earline Alexander said the recent COVID-19 deaths of her father-in-law and his brother within two weeks heightened her awareness of getting her affairs in order.

“Even though they were in their 80s and had underlying health conditions, had this pandemic not come along, I believe they’d still be with us,” said Alexander, who retired from a career as a director and manager of nonprofit and government agencies.

Having a last will-and-testament will not keep your estate out of what can be a long, costly and complicated probate process. To keep the family home out of probate court, with its potential for family feuds, homeowners must set up an alternative planning tool like a trust or a Transfer on Death Instrument, or TODI.

A homeowner needs two witnesses’ signatures and a notary public’s seal to file the TODI with the county recorder of deeds, and it needs to be filed while the homeowner is still alive to be valid.

Alexander took advantage of two programs aimed at helping people hardest hit by COVID-19 and anyone looking to ease their family’s inheritance experience:

  • A nonprofit legal aid organization — the Center for Disability Elder Law at 206 W. Randolph St., Suite 1610 — that offers free estate planning for homeowners with incomes below 150 percent of federal poverty guidelines, roughly a $19,000 yearly income for a single person or $32,500 for a family of three.
  • And Cook County’s lowered fee — $48 instead of the usual $98 — effective through Sept. 30, to file the TODI.

“Now, I feel like I can pass when the time comes and know that I have things in place,” Alexander said.

An attorney at the Center for Disability Elder Law helped Alexander apply for property tax exemptions and to create a will, a TODI and advance directives including power of attorney.

“I was able to determine what would happen to me, who would help take care of my financial matters, how I wanted to be buried and all the other details,” Alexander said.

“While I’m living or when I’m no longer here or if I’m here and not capable of handling matters, I can designate whoever I want to handle things — and how I want it handled,” said Alexander, who is planning a new career aimed at reducing the African American infant-mortality rate by setting up doula childbirth services and educational programs on breastfeeding, childhood learning and yoga and meditation practices in underserved neighborhoods.

“The stress that my family would have had to go through while I am living or no longer here, has been relieved,” she said.

“While I’m living or when I’m no longer here or if I’m here and not capable of handling matters, I can designate whoever I want to handle things — and how I want it handled,” says Englewood resident Earline Alexander.

“While I’m living or when I’m no longer here or if I’m here and not capable of handling matters, I can designate whoever I want to handle things — and how I want it handled,” says Englewood resident Earline Alexander.
Anthony Vazquez/Sun-Times

Families can end up losing their homes, for example, if they fail to complete the legal paperwork to ensure their property is transferred to intended beneficiaries.

Amanda Insalaco, the attorney leading the Center for Disability Elder Law’s Housing Preservation Project, said that if a person living in the deceased person’s house is not listed on the title, he or she cannot take advantage of property tax exemptions, refinance the mortgage to avoid foreclosure, draw from the equity to make repairs or create an estate plan for the property.

“Fortunately, a Transfer on Death Instrument is a powerful and extremely cost-effective tool that homeowners can use to prevent these complications,” she said.

It’s also important that the homeowner and the beneficiary make sure no one else’s name is listed on the house deed, that no liens are outstanding on the property, and that the beneficiary listed in the TODI has no legal actions pending, said Tiffany Smith, the Chatham neighborhood strategy coordinator for the nonprofit Neighborhood Housing Services, which works with the Center for Disability Elder Law.

An example would be a trust set up specifically to cover property taxes for five years. That’s because a beneficiary younger than 65 would lose the senior homeowner’s exemption.

“We’ve seen houses go into delinquency on unpaid property taxes and then punitive interest rates start to pile up for the overdue taxes,” Smith said.

Smith said it’s a tough conversation for many families.

“Your house is probably your biggest investment,” said Smith, who is one of seven second-generation homeowners who live on the same block in Chatham. “We tell homeowners, ‘Be realistic in your conversation with your children.’ Our children are not equal in how they can maintain a house. It’s not a reflection that you didn’t raise your children well. One might be a traveler. Don’t leave the house to that kid.”

For homes that end up in probate, the process often takes at least a year.

That’s because a family who fails to keep their home out of probate by setting up a trust and other tools, like a TODI, must pay a $475 court fee just to get the probate process started, then hire a lawyer, pay $250 to publish a public notice covering a six-month period for anyone to file a claim against the estate, and, during that time, maintain the property and pay any outstanding mortgage, utility bills and property taxes.

If a family cannot continue to pay the bills or maintain the property, the situation can spiral into the property being abandoned and eventually sold off at a Cook County tax sale.

“It’s important for the homeowner who has invested an entire lifetime of payments into the property to make sure it goes to the person or people the homeowner chooses,” said Caroline Manley, executive director of Center for Disability Elder Law.

It’s especially key because experts predict foreclosures will soar once coronavirus pandemic relief expires.

Sandra Guy is a freelance writer.


  • Chicago Volunteer Legal Services, or (312) 332-1624, provides free legal services to low-income people and the working poor, including estate planning. For anyone who has inherited a home that’s in foreclosure, there’s also a hotline at (312) 332-8785 or online at
  • The Center for Disability Elder Law,, (312) 376-1800 from 9 a.m. until noon Monday through Friday, is a not-for-profit organization that provides free legal services to low-income Cook County residents over age 60 or of any age with a permanent disability.
  • The center’s Housing Preservation Project provides free legal assistance to senior homeowners with issues such as title correction, property tax matters, foreclosure and building code violation defense, and succession planning, helping to ensure seniors’ ability to age in place and transfer their homes.
  • Legal Aid Chicago,, (312) 341-1070, helps low-income people for free with legal needs, including advanced directives and property transfers such as health care and property powers of attorney, Living Wills and Transfer on Death Instruments.
  • Justice Entrepreneurs Project,, (312) 546-3282, a Chicago Bar Foundation-sponsored incubator for attorneys who offer cost-conscious full-representation or limited-scope legal help to Chicago-area residents.

Within JEP’s network

  • Jessica Bell, principal attorney at Bell Advocate LLC, offers estate-planning help at her office at 9987 S Throop St. or (773) 234-2052.
  • Shunté Goss at Shunte S. Goss,, focuses on estate planning and family law. She can be reached at (708) 794-8559 or
  • Anthony M. Abu-Ezzi, practicing as Ezzi Law, handles estate planning (wills, trusts, powers of attorney, special needs trusts), probate, adult guardianship, small business and corporate formation, and disability law. He can be reached at (929)-322-3994 or
  • Illinois Legal Aid Online,, a non-profit that provides online resources to people to handle legal issues and paperwork. Sub-link for estate planning: