Your Financial Weekly Reader—September 2, 2019

Welcome to this week’s edition of Your Financial Weekly Reader. As I write this, it is Labor Day weekend. Typically, this is a weekend when families gather for a celebration of the unofficial end of summer. It’s usually a time for going to the beach or lake, taking the boat out, or having a family cookout. But this is not a usual Labor Day weekend, at least for those of us who live on the east coast of Florida. For us, this has been a weekend of watching the news for updates on Hurricane Dorian.

For more than a week now, we have been watching this monster of a storm growing in strength and continuing its painfully slow movement right at us. We have spent the holiday weekend storm-proofing our homes as best we can. As it inches its way closer and we watch every Weather Channel update on its projected path, we take steps to prepare, and we hope that our preparation will keep our family and property safe.

Since the hurricane is the big story of the weekend, I felt it would be appropriate to lead off with an article on hurricanes and home insurance. It’s important that you know what your homeowners’ insurance does, and does not, cover in the event you are a victim of a storm’s fury.

The second article in this week’s Reader gives some guidance on naming a minor as beneficiary of your IRA. And we wrap up this week’s edition with a very important article about a discussion that we should all have with our parents, if we are lucky enough to still have them with us. It’s a conversation we should all have before it’s too late. I hope you enjoy the articles and find them helpful.


HURRICANES AND HOME INSURANCE: 5 KEY QUESTIONS ANSWERED

This article from Insure.com is a couple of months old but is timely this week. When a dangerous storm is heading your way, it’s a terrible time to find out that your property is not adequately protected. It’s a good idea to review and understand your coverages before a big storm is making its way toward you. This article addresses five important questions:

  • Does homeowners’ insurance cover damage from a hurricane? Generally, the answer is yes, although it won’t cover you for a resulting flood, and if you live near the coast, you may have to have a separate windstorm policy.  

  • Do I need flood insurance? There are a lot of misconceptions about flooding and flood insurance. This discussion can help clear it up for you.

  • Are there special hurricane deductibles you must pay? As I mentioned before, if you live on the coast, the answer is probably yes.

  • Is my home covered if I leave it during the hurricane? My wife and I live on a barrier island that is almost always subject to mandatory evacuation orders when a big storm is heading our way. Now, whether we actually evacuate is a separate issue, but for those who do play it safe and leave for the storm, this question is an important one to know the answer to. This article can help.

  • What should I do after the storm hits? The answer to this question is a bit lengthy, but if your home is damaged in the storm, it’s important to understand the steps to make sure your claim is handled properly. The article provides some good tips on things you should consider.


DESIGNATING A MINOR AS AN IRA BENEFICIARY

Should you name a minor as a beneficiary to your IRA? I get this question often in my work with clients. There are very good reasons to name a minor as a beneficiary. Giving them the ability to spread your IRA over the rest of their lives is one of them. There are also some very good reasons not to, like turning a large sum of money over to them when they reach 18. This article from Investopedia discusses the question from both sides and provides some good information on alternatives you might consider.


10 WAYS TO TALK TO YOUR AGING PARENTS ABOUT THEIR FINANCES

This article from Kiplinger is very important. I always suggest that my clients have a conversation about money with their parents. There’s a good chance that you will eventually become involved in your parents’ finances. It’s not an easy conversation to have, but it’s important.

As the author suggests, you are going to have the conversation, so you have to choose whether you do it as part of a plan or as part of a crisis. It’s better for everyone if the plan for their care and the distribution of their assets is known before it’s needed. This article offers up some great tips and suggestions on how to make the conversation good for everyone.


I hope these articles are helpful. If you have any questions about any of the issues discussed, don’t hesitate to reach out to us. We’re here to help. Also, maybe you know someone who could benefit from some of the information. Feel free to share with them.

Finally, to our friends along the East Coast, please stay safe during the coming storm. Property can be replaced. You can’t be. Let’s make sure that we can get together to share storm stories in the not-too-distant future.

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