Q: Where should I keep my Will?
A: The originals of your Will and any trusts should be kept in a safe place. In most cases, your family will need your original Will to begin the probate process. Therefore, your close family members should know the location. In many states you can file your Will with the court for a small charge. If you do file your Will, it is a good idea to mark a copy with the location of the original so your family will know where the original is located. For information, see Estate Planning/Wills.
Q: Can I change my Will by crossing through some language and initialing the change?
A: No, it is very important that you NEVER make any marks on your Will. Marks on a Will may cause the Will to be revoked. If you want to change your Will, see the JAG officer about a Codicil (amendment) or new Will. For information, see Estate Planning/Wills.
Q: My girlfriend and I are buying a house together. How should it be titled?
A: That depends on whether you want your share to pass to her at your death or whether you want to indicate in your Will who inherits your portion of the house. If you own the house jointly (with survivorship), your Will will have no effect over the ownership at your death. For information, see Estate Planning/Wills.
Q: Where should I indicate where I want to be buried and the type of funeral I want?
A: This information is usually best discussed with your family. One good idea is to write a personal letter to your family, describing the type of service you would like and where you wish to be buried. If you are uncomfortable discussing these details with your family now, perhaps you could write the letter and mark the envelope, "To Be Opened in the Event of My Death." Tell a trusted family member that you have written the letter and its location so that it is located immediately after your death.
Q: True or False? All life insurance should be called death insurance, because I get no benefit if I live and my beneficiary gets all the benefits, only after I die.
A: False. Whole life insurance is designed with a "savings element," known as cash value, which is available to you while you are alive to take if you terminate the plan, or borrow against without terminating the plan, or allow you to buy a reduced amount of paid-up life insurance, or to buy the full face amount of the coverage for a reduced period of time. These provisions in the policy are also known as nonforfeiture provisions. For more information, see Ordinary Life Insurance.
Q: True or False? I have no need for life insurance since no one I know is dependent on any assets I have or income I generate.
A: True. For more information, see Life Insurance.
Q: True or False? The Veterans Administration provides relatively inexpensive life insurance to veterans after they separate from the service.
A: True. For more information, see Life Insurance.
Q: True or False? I live in an area that floods every now and then. My regular homeowners policy pays no benefit if a weather-related flood damages my house.
A: True. To be eligible for federally backed loans, you must buy national flood insurance if you live in such an area, known as a special flood hazard area. For more information, see Flood Insurance.
Q: True or False? Flood damage to my car is covered by my automobile insurance policy.
A: True. For more information, see Automobile Insurance.
Q: True or False? A personal umbrella policy will cover me for damages caused by heavy rains that are not covered by my homeowners or automobile insurance policies.
A: False. A personal umbrella policy will cover you for claims in excess of what your homeowners or automobile insurance policies pay above certain minimum coverage required by the umbrella policy in the underlying policies. For more information, see Personal Umbrella Coverage.
Q: Do I have to use the net worth and cash flow charts provided on the site?
A: No, these are provided to help you develop your own personalized documents. The best thing to do is print these out and draft a new one, with your specific assets/liabilities and income/expenses on an Excel spreadsheet. For more information, see Family Budget—Cash Flow Statement.
Q: I was told that I should not cash my paycheck at one of those check-cashing places. Why not? They give me cash immediately.
A: The problem with those places is that they charge you a high fee (or interest rate) for cashing your check. When you purchase gasoline, would you like it if the station charged you an extra 10 cents per gallon for your service? You should cash your check only at your local bank or credit union. For more information, see Checking/Savings Accounts.
Q: I completed your net worth chart and I have a negative number—does that mean that I should file for bankruptcy?
A: No, you probably have a negative net worth because you do not have any tangible assets (house, property, investments). Your assets probably consist of money in your checking account and your car. Don't worry—many young people are in this situation. The key is to understand how to obtain those assets. This Web site will guide you in making the right decisions. For more information, see Building a Budget.
Q: You list two different financial planning software tools; which one is better?
A: Both are listed because they are about the same in their financial planning approach and tools. If you have more experience with Microsoft-type products, then Microsoft Money would be easier to use; if not, then Intuit Quicken may be easier. Please note that it takes time to fully understand the software, but once you get the hang of it, the tools should provide you with excellent information on your personal finances. For more information, see Financial Planning Software.
Q: Should I buy or lease my first car?
A: That depends on where you are going to use the car and how much you plan to travel. Leasing is beneficial if you like to have a new car every three years and you do not put a lot of miles on it. Leasing companies restrict the amount of "wear and tear" and the mileage (annual amount; usually fewer than 12,000 miles) on the car. If you do decide to lease, ask a lot of questions and understand all of the fees. For more information, see Buy or Lease?
Q: I don't like dealing with car salespeople, but I need a new car—are there any alternatives?
A: You can shop on the Internet with car-buying services. They will locate the car you want and negotiate the price with the dealer. The problem is that you can usually get a better deal, including financing, by doing the work yourself. Take along a friend or family member who has experience purchasing cars; this person is looking out for your best interest, and they do not have any problem walking out the door. For more information, see Negotiating the Deal.
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