A generation-skipping trust (GST) allows people to leave assets to grandchildren or other people at least 37.5 years younger. Passing assets from Generation 1 to Generation 3 avoids paying federal estate taxes twice on assets — once when passing to Generation 2 and again when passing to Generation 3.
Although GSTs may avoid estate tax, they aren’t totally tax-free. Assets passing through a generation-skipping trust may be subject to the generation-skipping transfer tax. This tax rate happens to equal the estate tax rate, which ranges from 18% to 40%
. However, the generation-skipping tax generally only applies to estates over $12.92 million in 2023 or $13.61 million in 2024. That number is set to fall to $5 million after 2025.
Price (one-time)
None
Price (one-time)
One-time fee of $159 per individual or $259 for couples.
Price (one-time)
$89 for Basic will plan, $99 for Comprehensive will plan, $249 for Estate Plan Bundle.
Price (annual)
$99 to $209 per year.
Price (annual)
$19 annual membership fee.
Price (annual)
None
Access to attorney support
No
Access to attorney support
No
Access to attorney support
Yes
Who are GSTs good for?
Generation-skipping trusts are best for higher net worth families that want to minimize taxes on their estate, says Diedre Braverman, managing attorney with Braverman Law Group in Boulder, Colorado. People who don’t have a will or estate plan may end up leaving their heirs with taxes that they could have avoided, she adds.
Pros and cons of GSTs
When considering if a GST works best for you, think of the following.
Advantages
When set up properly, a GST may save money in taxes that Generation 2 may have had to pay had they received the assets first. This allows people to leave assets to grandchildren, nieces, nephews, grandnieces, grandnephews, or a younger spouse without having a lot of it swallowed up by taxes, Braverman says.
Trusts may be able to shield assets from lawsuits, bankruptcy and divorce settlements.
Setting up a GST gets you thinking about your legacy. “It may get you into estate planning in general,” Braverman says, “which is a good thing for everybody.”
Disadvantages
Attorney fees associated with setting up a GST vary greatly across the country and can be hefty.
Money in the trust can only be withdrawn for living expenses. While those amounts can be generous, it still has to have some relationship correlated to the beneficiaries’ standard of living, Braverman says.
Trusts require a trustee, which is an ongoing expense.
The generation that gets skipped may have objections. “Generation 2 can typically get income from the trust, but they don’t have ownership in the trust,” says Brian Hill, a partner at Ball Morse Lowe in Norman, Oklahoma. “They can’t sell the asset and go buy a bigger personal home. Because of that, there could be tension.”
How to set up a GST
Work with an estate planning attorney to set up your GST. Some things to keep in mind:
Go slow. Setting up a GST involves at least three generations of people, so it’s essential to think through the process. “This is in place for a long time,” Hill says.
Talk to various advisors. Speaking with different people helps you think through all the different what-ifs, Hill says. Consider including tax professionals, financial planners and even other family members in your conversations.
Keep your appointment. People tend to cancel their appointments when they don’t have all the answers to questions that a lawyer may have sent them before their first meeting, Braverman says. This is a mistake. Working with a good attorney will help you get the answers you need.
Think about what you want your trust to encourage or discourage. Lawyers can put all kinds of provisions in trusts, Braverman says. Stipulations on substance abuse or GPAs or beneficiaries being self-supporting, for example, can help express the client’s overall intent.
GST mistakes to avoid
People often make two common mistakes, according to Braverman.
Naming family members as trustees. Money creates suspicions, and the trustee has a lot of power, she says. This can build resentment and cause problems.
Not considering who will be trustee if your original trustee passes. Consult with your attorney about who will take over if your original trustee can no longer handle the role. Braverman suggests three options for these successor trustees: Trust departments in large financial institutions, trust companies or professional, private fiduciaries.
Frequently asked questions
Can I only leave money to family members in a GST?
No. Money in a GST can go to grandchildren, grandnieces, grandnephews, or anyone who is at least 37.5 years younger than the grantor.
What is the beneficiary of a GST called?
A “skip” person is the beneficiary of a GST who is two or more generations below the settlor’s generation.
Is there a way to avoid paying the generation-skipping tax?
The IRS exclusion allows grandparents to give away $12.92 million in 2023 without paying this tax. This number is set to drop drastically after 2025 — to $5 million.
Chase offers consumers several travel rewards credit cards, most of which help you earn points for a trip and offer travel protections should your journey go differently than expected. These benefits can help give you peace of mind and reduce stress, especially if your trip gets canceled.
Many Chase cards offer travel coverage that includes trip cancellation insurance, among other protections. Let’s take a look at Chase trip cancellation insurance, which cards provide it and what this benefit covers.
What is trip cancellation insurance?
Trip cancellation insurance can reimburse your prepaid, nonrefundable expenses — such as flights, hotel reservations or a cruise — should your trip be canceled due to unforeseen circumstances, such as extreme weather, an accident or a death in the family.
Coverage begins on the date you make your initial trip deposit and ends when you depart for your trip.
Chase cards that come with trip cancellation insurance
The following cards include Chase trip cancellation insurance:
Chase credit card
Trip cancellation insurance benefits
$1,500 per covered person, $6,000 per trip.
$1,500 per covered person, $6,000 per trip.
$1,500 per covered person, $6,000 per trip.
$1,500 per covered person, $6,000 per trip.
$10,000 per covered person, $20,000 per trip.
$10,000 per covered person, $20,000 per trip.
$1,500 per covered person, $6,000 per trip.
$5,000 per covered person, $10,000 per trip.
$5,000 per covered person, $10,000 per trip.
$1,500 per covered person, $6,000 per trip.
$10,000 per covered person, $20,000 per trip.
$1,500 per covered person, $6,000 per trip.
$1,500 per covered person, $6,000 per trip.
$5,000 per covered person, $10,000 per trip.
What does Chase trip cancellation insurance cover?
Chase travel insurance covers nonrefundable prepaid travel expenses such as flights, hotels, cruises, train tickets and tours — whether you book with a travel agency or directly with the travel provider.
The benefits kick in when one of the following reasons occurs:
Accidental bodily injury, sickness or loss of life experienced by you or an immediate family member.
Severe weather.
Named storm warning.
Change in military orders for you or your spouse.
A call to jury duty or a court subpoena.
Fire, flood or a burglary to your or your traveling companion’s residence.
The death or hospitalization of your or your travel companion’s host at the destination.
Doctor-imposed quarantine.
Organized strikes affecting public transportation.
Terrorist incidents or travel warnings related to terrorism.
What isn’t covered by Chase trip cancellation insurance?
Event tickets, amusement park tickets, museum entry fees and golf course expenses aren’t eligible for reimbursement unless they’re included in a prepaid travel package.
Trip cancellation benefits don’t apply to losses caused by:
A change in plans or financial circumstances.
A pre-existing medical condition.
Loss due to voluntary surrender of unused tickets, vouchers or credits.
Travel arrangements scheduled after the 26th week of pregnancy.
Being on a waitlist for a medical treatment.
Trips taken for the purpose of obtaining medical treatment.
Unwillingness to travel due to civil unrest.
Failure to obtain required visas, passports or other paperwork necessary for travel.
Commission of illegal acts.
Attempted suicide or self-inflicted injuries.
Being under the influence of drugs.
Disinclination to travel or border closures resulting from a pandemic.
Financial insolvency of the common carrier, travel agency or tour operator.
War, insurrection, rebellion or revolution (except terrorism).
Who is covered by Chase trip cancellation insurance?
As the primary cardholder, you’re covered. The trip cancellation insurance also extends to your immediate family members, including:
Parents, step-parents and/or legal guardians.
Spouses or domestic partners and their parents.
Children, including adopted children and step-children.
Grandparents and grandchildren.
Aunts and uncles.
Nieces and nephews.
Your immediate family members don’t have to be traveling with you for the benefits to apply to them as well. However, you must have used the Chase credit card that includes trip cancellation insurance to pay for their trip.
Which trips are eligible for Chase trip cancellation insurance?
Eligible trips can’t exceed 60 consecutive travel days. If your trip is longer, the coverage is still available, but the eligible prepaid nonrefundable expenses would be reimbursed as a pro-rated sum up to the first 60 days.
You must pay for all or a portion of the trip using an eligible Chase credit card or Chase Ultimate Rewards® for it to be eligible for the trip cancellation benefits. If your canceled trip results in a future credit or voucher, it won’t be covered.
How to file a trip cancellation insurance claim with Chase
To file a Chase trip cancellation insurance claim, you must contact the benefits administrator within 20 days of the cancellation. You can do this by calling the phone number listed in your credit card’s guide to benefits. If you wish to file a claim online, you can visit www.eclaimsline.com.
You’ll have to provide the following documentation within 90 days to support your claim:
Completed and signed claim form.
Travel itinerary.
Documentation confirming the reason for trip cancellation, such as medical records or a death certificate.
Credit card account statement listing the transaction related to the trip.
Copies of the cancellation and refund policies from the travel provider.
Any unused credits or vouchers.
Chase trip cancellation insurance recapped
Holding a credit card that provides travel insurance can help put your mind at ease when unexpected problems arise.
Chase’s insurance benefits cover you and your family members against expenses incurred due to trip cancellation, among other things.
However, it’s important to know what’s covered by the policy and what isn’t. Additionally, you’ll want to keep track of all documentation related to the cancellation and submit it before the deadline to receive reimbursement.
The information related to the Chase Freedom®credit card has been collected by NerdWallet and has not been reviewed or provided by the issuer of this card.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Architect Louis Naidorf had a disastrous 80th birthday cake. In 2008, Naidorf, who designed the Capitol Records building in Hollywood, was presented with a celebration cake that had been custom-baked in the shape of his iconic cylindrical building. But the pastry soon reflected the rather substantial difference between concrete and flour.
“When the cake was brought out, it gently collapsed, and everyone applauded,” Naidorf says, laughing over the phone from his home in Santa Rosa. “It was like in one of the movies where the Capitol Records building was destroyed.” Thankfully the cake for his 95th birthday, which he celebrated last month, was more structurally sound.
Designated a historic-cultural monument in 2006, the building has long been a favorite Los Angeles landmark to demolish on film — especially for filmmaker Roland Emmerich, who blew it up with an alien spaceship in “Independence Day” and slammed it with twisters in “The Day After Tomorrow.” Yet no movie can ever write the building out of a central place in popular music history. The tower is synonymous with the illustrious Capitol Records, home of Nat King Coleand Frank Sinatra, and the American record label of Pink Floyd and the Beatles, with the latter’s stars lining the Hollywood Walk of Fame right in front of the building.
Over the last several years, the building has been illuminated in support of various sociopolitical causes. In 2020, it was lighted red to support independent music venues. Last year, during their performance in Hollywood, Duran Duran lighted the Capitol Records building blue and yellow in solidarity with Ukraine. “I think that’s excellent,” Naidorf says. “Anything that vigorously engages the public on the right side of good causes transcends other issues. I’m flattered they use the Capitol Records building. It means it has enough cachet to merit being chosen to do that.”
Like the famous landmark he designed, Louis Naidorf has of late been experiencing his own brush with stardom, with postcards from autograph seekers arriving at his door. He is flattered but doesn’t take the attention too seriously.
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“It’s obvious that if someone asks me for four signatures I’m part of trading baseball cards or something,” he says. “They are going to trade four Lou Naidorfs for one Joe Smith.”
Still, he’s surprised and somewhat baffled by the sudden burst of recognition after all these years. “I guess my name ended up on a list or something,” he shrugs.
Naidorf was just 24 years old when he designed the Capitol Records building, in 1953. It was the world’s first circular office building.
Though it was 70 years ago, he vividly recalls how he felt when he received the assignment for his first solo project. “At one level, I felt enormous anxiety that if I didn’t get a solution, very, very quickly, something terrible would happen,” he says. “On the other hand, I felt a total confidence that I could do it. So it was a crazy contradiction.”
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Naidorf notes the building’s porcelain enamel sunshades with carefully spaced gaps to play with light and shadow. These cause spiral lines to appear on the building, drawing the eye into a rhythm rather than straight up and down. “You can see Capitol Records from quite a distance and you get a first impression of its basic form and character. You have a reading of it as complete,” he says. “But the building is designed so that the closer you get to the building, you discover more details.”
What about the long-standing myth that its round shape was designed to look like a stack of records with a rooftop antenna resembling a phonograph needle? As hard as it might be to believe, the legendary story about the building is just a coincidence — an urban legend that Naidorf has tried to debunk for decades.
In fact, when his boss, Welton Becket, tasked him with the assignment, the building was simply referred to as Project X. Shrouded in secrecy, Naidorf was given little guidance for the project other than being asked to design a 13-story building on a sloped side street in Hollywood that had to be kept as cool as possible and had smaller than usual floor space. He also didn’t know for whom he was designing it. Naidorf says it was common for clients’ identities to be kept confidential during the initial planning stages of a project.
However, Naidorf relished the creative latitude. The absence of information left him unburdened by preconceived ideas. “I knew the door was open for something special. It urged me so strongly,” he says earnestly. “I felt, and I think all architects feel this way … there’s a drive to translate the mundane bare requirements that clients come in with into something that has some poetic qualities about it.”
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Naidorf then had an epiphany: The project’s requirements were “eerily resonant” with a series of circular buildings he had designed for his master’s thesis in college. “The round shape is a very efficient enclosure of space,” he says. “You get more bang for your buck.”
Not everyone agreed with his approach. Naidorf says that Capitol Records co-founder and President Glenn Wallichs became irate when Naidorf presented him with a model and drawings of a round building, and “violently rejected” the design. “He thought it was a cheap stunt designed by a young guy to make the building look like a stack of records,” Naidorf says, laughing.
Wallichs insisted that Naidorf replace the round design with plans for a rectangular building. But when both rectangular and circular designs were presented to the insurance company financing the land, Naidorf says that Wallichs was urged to proceed with the round design.
Soon after, when talk of the building housing a radio station (that never came to fruition) was raised, Naidorf fretted when he was asked to design an antenna. He was worried that it would look like a phonograph needle and cement the idea that the building was designed to look like a stack of records.
Owing to his nagging concern, Naidorf positioned the rooftop spire asymmetrically, poised to appear as if it touches the roof delicately, like “a ballerina en pointe.” He calls it the building’s “grace note.” Still, the stack-of-vinyl myth persists. Laughing, Naidorf says, “It’s the most enduring myth of all.”
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Despite his good humor, it leaves him conflicted. “The building was not designed as a cartoon or a giggle. To have it trivialized with the stack-of-records myth is annoying and dismaying,” he says. “There’s not a thing on the building that doesn’t have a solid purpose to it.”
Naidorf’s ingenuity has been especially impressive to Los Angeles-based architect Lorcan O’Herlihy, who says he has “often responded strongly to the fact and admired that here was this interesting architect [Naidorf] who was combining science and art, or artistry and technology. Welton Becket [& Associates], very much to their credit, were at a period where modernism was at its heyday and they had to come up with ideas that were new and fresh and they did it, and Lou was certainly instrumental in that. His work is extraordinary.”
Naidorf was born in Los Angeles in 1928. His father owned a shop where he made and sold women’s clothing, with Naidorf’s mother lining the garments. Owing to his father’s lack of accounting skills and business acumen, however, the business often collapsed, forcing his parents to work at a garment factory until debts could be paid off to reopen the store.
Throughout his childhood, Naidorf’s family struggled financially as they moved around, living mostly in Silver Lake and Los Feliz. With only enough money to rent studio apartments, Naidorf’s parents slept on a Murphy bed while Naidorf spent his nights on a mattress on the floor.
As a little boy, Naidorf felt drawn to buildings. When his third-grade teacher decorated the classroom with a Hawaiian vacation theme, his fascination morphed into a calling. “I asked my teacher who made the drawings and she said, ‘Naval architects.’ And then I asked her who draws the plans for houses and she said, ‘Architects.’ She told me to ask my mother to show me the floor plans that were published in the real estate section of the Sunday edition of the newspaper.
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“When I saw them, I was a goner,” he swoons. “I now knew what I wanted to do. I wanted to be an architect.”
Naidorf remembers, at age 8, designing a three-bedroom house, using a card table as a makeshift drafting table. Soon after, he began designing small towns. “It wasn’t anything brilliant, but I was learning to draw, learning to scale and learning to think in spatial terms,” he says. When he was 12 years old, Naidorf got a part-time job at a bookstore, where he spent his first two paychecks on architecture books, absorbing them until they were threadbare.
Beyond literature, Naidorf amassed a growing collection of architectural materials (T-square, rectangles, instruments for ink drawings), thanks to his bar mitzvah presents, and decided he was ready to get to work. Sanford Kent, a young architect who had just graduated from USC, hired a tenacious 13-year-old Naidorf, paying him out of his own pocket.
Naidorf says tackling the abstract problems Kent gave him at once stimulated his mind and were instrumental in forming his long-standing ethos. “It got me thinking about architecture in terms of its effect on human emotions. The key issue is, ‘How do people respond to your work, whether from a distance or by living it?’” he says.
He continued to soak up whatever he could about architecture, gearing his junior and high school classes toward studying architecture in university. He attended UC Berkeley instead of the privately funded USC, not only to leave home and expand his horizons but also because of its affordability.
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Even still, Naidorf couldn’t afford all of the program’s required materials. He borrowed airbrushes from his fellow students, who would also give him their pencil stubs instead of tossing them out. Naidorf submitted his assignments on pebble board, which was not only cheaper than illustration board but allowed him to draw on one side, flip it over and draw on the other.
In 1950, Naidorf graduated at the top of his class and got his master of architecture degree a year early. He skipped his graduation ceremony because he had a job interview the next day at Welton Becket & Associates, where he was promptly hired. Among his earliest design assignments: a tray slide for a hospital cafeteria, a clothes closet and a “Please Wait to Be Seated” sign for a restaurant.
Three years into his employment, he began working on the Capitol Records building. Naidorf says he would design it the exact same way if he were given the assignment today.
Andrew Slater, former Capitol Records president and chief executive (2001-07), attests to the building’s distinctive charm. “When you go to work every day in that building it’s like you’re going into a piece of art, and it informs your attitude … to do something with that mindset, which is great,” he says. “Even though working in the music industry is, in a sense, an industrial endeavor, you never felt like you were doing anything industrial when you walked into that building.”
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Still, Naidorf fears being perceived as a “Johnny One Note,” as he puts it. Noting the plaque bearing his name outside the building’s main entrance, he expresses gratitude but wariness “that this one modest project has to carry my whole reputation on it.”
It’s a fair point, given the magnitude of Naidorf’s notable oeuvre. It’s earned him 17 regional honor and merit awards and AIA California’s Lifetime Achievement Award (2009). His work also has been featured at the J. Paul Getty Museum in Los Angeles.
“I know Capitol Records is always the first one people talk about and it’s a splendid, iconic building that fuses artistry and functionalism, but he’s also produced other projects over the years,” says fellow architect O’Herlihy. “The Santa Monica Civic Auditorium is brilliant.”
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Naidorf designed the 3,000-seat capacity Santa Monica Civic Auditorium on the heels of the Capitol Records building, in the late 1950s. Essentially two buildings in one, it was a challenge to design a locale that functioned at once as a performance space with a sloped floor and an exhibit hall with a flat floor for sports events, banquets and trade shows.
He transformed the floor from flat to tilted using a hydraulic system that was hailed for its innovation. “I don’t think you’ll find any place that has a symphony on a Friday night and a gem show, or some kind of hobby show, on Saturday,” he says.
Formerly home to the Santa Monica Symphony Orchestrabut currently sitting vacant, the Civic Auditorium opened its doors to the public in 1958. From 1961 to 1968, it hosted the Academy Awards. It also was the site of live recordings including George Carlin’s comedy record “Class Clown” and the Eagles’ “Eagles Live,” a double LP recorded during their three-night run at the venue. It also hosted “The T.A.M.I. Show” in 1964.
In the meantime, while the Civic was still under construction, Naidorf designed the 15,000-seat capacity Los Angeles Memorial Sports Arena, the biggest arena in Los Angeles when it opened in 1959. (The arena was demolished in 2016 to make way for the Banc of California Stadium, now called BMO Stadium.)
Naidorf says the Sports Arena, home to various Los Angeles sports teams including the NBA’s Lakers (1960-67) and Clippers (1984-1999) and the NHL’s Kings (1967-68), was built to attract sports teams to Los Angeles, but uncertainty about whether they’d catch on meant the facility had to be viable for other purposes.
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In 1960, a year after it opened its doors, the Sports Arena hosted the first Democratic National Convention in Los Angeles, where John F. Kennedy became the presidential nominee. Muhammad Ali (then known as Cassius Clay) won a boxing match there in 1962. It also hosted rallies by Martin Luther King Jr. and the Dalai Lama, and saw concerts by legendary rock acts including the Grateful Dead.
Bruce Springsteen played the venue’s final concerts before the building was demolished, a three-night stint during which he dedicated his song “Wrecking Ball” to the building lovingly nicknamed “The Dump That Still Jumps.” “Well, it was pretty dumpy by the end,” Naidorf says, laughing. “Not all architecture is permanent,” he continues. “I’d rather it was demolished and some useful purpose made of the site than having it sit there old, shabby and neglected as it was.”
Naidorf’s credits also include the Beverly Hilton Hotel, the Beverly Center and the Reagan State Office Building downtown. Outside of Los Angeles, Naidorf helmed the restoration of the California State Capitol Building in Sacramento, a six-year undertaking and then the largest-ever restoration undertaken in the U.S., and he designed President Gerald Ford’s house in Rancho Mirage.
The tallest building in Arizona, the Valley National Bank building (now Chase Tower) in Phoenix, also was designed by Naidorf, as well as the Hyatt Regency Dallas and adjacent Reunion Tower, the most recognizable landmark of the city’s skyline.
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He details these and his other high-profile projects in his 2018 book “More Humane: An Architectural Memoir”, filled with photos, backstories and personal anecdotes. Flipping through its pages, one learns that Naidorf not only took risks designing his projects but even risked his job on occasion.
He writes in his memoir that in 1958, when he was designing the Humble Oil (now Exxon) headquarters in Houston, he refused to design separate locker rooms and drinking fountains for Black and white people, as the company asked him to. When he went home on that Friday night, he describes not knowing if he’d have a job the following Monday. Not only did Naidorf not lose his job, he says, but the company ceased segregating its locker rooms and drinking fountains after that.
“I realized architects have access to some of the most powerful people in the world and it is our job to bring up issues that represent social issues rather than just architectural design,” he says. “The only thing for evil to triumph is for good people to remain silent. Architects should not remain silent.”
Naidorf also understood that sometimes he was designing projects where people don’t want to be, like the Naval Medical Center in San Diego, which opened in 1988. “I felt that there were two emotions we had to contend with,” he says. “One was to lay the sense that this would be welcoming and have a more personal quality. But if you go to a hospital you want a quite contradictory thing. You want to have a sense that it’s state-of-the-art, that whatever powerful forces can cure you, they’re there.”
Instead of one medical building, which he felt would seem ominous, he designed several structures and a series of outdoor walkways to make the facility feel warm and comforting. The treatment and diagnostic part of the facility was bold, with an abundance of steel and glass. Walkways were lined with floor-to-ceiling glass to allow patients to see the outdoor courtyard, grass, trees, sky and distant views of a golf course “based on the primitive feeling you have in the hospital, which is to get out of the damn place,” he says.
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When he was out shopping a few months ago, Naidorf met a woman who mentioned that she had been in the Navy, forcing her to move around a lot when her son was battling childhood leukemia. Without knowing she was talking to the Naval Medical Center’s designer himself, she told Naidorf that it was the only hospital that didn’t scare her ill 6-year-old son, who has since made a full recovery.
“What kind of an architect…,” Naidorf says, overcome with emotion and his voice breaking, “do you have to be not to hold that as better than any design award?”
Though Naidorf had risen through Welton Becket & Associates’ ranks to become vice president, director of research and director of design, he grew increasingly unhappy after the firm’s merger with Ellerbe Associates (it was renamed Ellerbe Becket). He moved into academia full-time in 1990, spending just one day a week at the firm.
Naidorf became dean of the School of Architecture and Design at Woodbury University, earning numerous distinctions, including teacher, faculty member and administrator of the year. He was also a guest professor at UCLA, USC, Cal Poly Pomona and SCI-Arc. At his retirement ceremony in 2000, he was awarded an honorary doctorate, marking not only the end of his academic career but also his time in Los Angeles.
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Charmed by the beauty of Northern California, Naidorf moved up the coast to Santa Rosa. For the next 15 years, he continued working with Woodbury University as campus architect, designing and remodeling some of its buildings, and was invited to be a board member.
When he parted ways with Woodbury at 87 years old, it was not with the goal of taking it easy. Naidorf had other pursuits in mind, including his work with City Vision Santa Rosa revitalizing the city’s downtown area.
He also helped his close friend, Mike Harkins (who edited Naidorf’s memoir), design his new house free of charge after the 2017 Tubbs Fire burned Harkins’ home to the ground and he and his wife lost 99% of their belongings.
“Lou offered without solicitation: ‘I’d like to design your house,’” Harkins says. “To me or anyone else who knows him, it was a heartfelt offer that of course he would make, and yet so much more. One analogy might be if Eric Clapton said, ‘I’d like to play at your wedding.’ The knowledge and sensibility that comes along with a Naidorf design offering is huge, just like his heart.”
Most recently, Naidorf has been experimenting with plans for a project to help people who are unhoused.
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Naidorf has made the most of his architecture license over the last 71 years. His voice fills with pride when he reveals that he holds the earliest issued active architecture license in the state of California, obtained in 1952.
“It’s something I wanted to be since I was a little kid. My architecture license was so hard to come by. I don’t want to give it up,” he says with palpable emotion. “I don’t want to be retired. I want to be an architect until I fall over. I plan to be buried as a licensed architect.”
Of recently turning 95, he jokes that he feels like a bad vaudeville performer who soon will be pulled offstage by a hook. But Naidorf remains in remarkably good health after surviving both prostate and esophageal cancer in his 80s.
To keep his brain sharp, he does exercises including counting backward from 100 by sevens and taking IQ tests online.
As a nonagenarian, he says there is no key to living a long life. He suggests, though, that it helps to try to use it well. “It’s not how big the steak is but how tasty it is,” he says. “I think you have to seek a calling, listen for it and search for it. Find something in your life that is really yours. … Get engaged with something that’s going to scare you, something where the problems are hard. And take risks. There is no failure.”
He also notes the importance of adaptability. “I have had four marriages. I’d better be resilient,” he quips. Twice divorced and twice widowed, Naidorf has a daughter from his first marriage, four stepchildren (who call him “Dad”) from his fourth marriage, 11 grandchildren and six great-grandchildren. An intensely private man, he’s reticent to speak publicly about his relationships and family, preferring to focus on his work.
“I remain so fascinated with architecture,” he says. “I cannot even walk past a store where somebody is putting in an electrical outlet without stopping to look in and watch it.”
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The chatty Naidorf turns summarily succinct, saying, “I certainly have had a good run.”
You may have read a certain ABC news report that a man made his final mortgage payment with pennies he had collected over the years.
If not, the story goes like this. During the past 35 years, Milford, Massachusetts resident Thomas Daigle began saving pennies to pay off the mortgage on his first home.
The first one was supposedly found on the ground of the parking lot as he left the bank where he obtained his mortgage.
He told his wife at the time that he’d use pennies to make his final mortgage payment, and because “his word” meant everything, he stuck to it.
As time went on, any penny he encountered would be collected and put with the rest, eventually rolled and packed into boxes in his basement.
He kept a tally of the total number of pennies so he’d know when he met his goal.
And in April, on his 35th wedding anniversary, he took the pennies down to Milford Federal Savings and Loan Association and made his final payment, just as he said he would.
It is estimated that the 62,000 pennies weighed roughly 427 pounds, depending on the material they were made with.
Cool Yes, Practical No
While this story is heartwarming and certainly admirable in a very unconventional type of way, it’s clearly nowhere close to practical.
Sure, he was able to save $620 worth of pennies and make a “free” mortgage payment, but let’s analyze the amount of work he put into it.
The man picked up pennies and sifted through his coins for pennies and rolled them for decades – that is certainly a lot of work for $620, especially when inflation adjusted.
He probably also obsessed over pennies for years and drove his wife nuts.
The poor employees at the savings and loan also had to count the 400 pounds of pennies once he brought them in, probably only agreeing to it because of the nature of the story and the fact that it’s their 125th anniversary this year.
A Better Alternative
What Daigle could have done instead was make biweekly payments, or simply make an extra payment each year.
Or pay a little extra each time he made a monthly mortgage payment.
Even if he only added $10 or $20 to his mortgage payment each month, he would have saved a whole lot more than one single payment.
He probably could have refinanced his mortgage as well as mortgage rates dropped over the years and shortened his term.
And he would have paid his mortgage off early while saving thousands of dollars, not just $620.
Oh, and he wouldn’t have had to touch a single penny or waste hours rolling them.
Of course, he may have enjoyed the whole process, and clearly was happy to have met his goal.
The takeaway here is that simple things like paying a little bit extra or refinancing when rates drop substantially can lead to huge savings on your mortgage over the long term.
So take a proactive approach to your mortgage – it’s a huge financial decision and one that needs lots of care and attention over the years, not just at the outset.
For the record, Daigle said he’s no longer saving pennies, and seems to want nothing to do with them at this point.
He’s now focused on collecting grandchildren, who will likely pass down this story for generations. Hopefully none will repeat it.
Cyber-attacks are on the rise as hackers and criminals learn about and adapt to methods put in place by government agencies to prevent scams. The FBI’s Internet Crime Complaint Center (IC3) reported monetary losses totaling more than $1.4 billion in 2017. [1]
While anyone, regardless of age, can be a target of common money scams, many hackers specifically target seniors. Nearly 17% of reported cyber crimes in 2017 came from victims over the age of 60. And with losses of over $342 million, seniors are losing more money to scams than any other age group. [1] Considering the average age of retirement in the U.S. is 60, this trends is a serious threat to the financial security of many Americans as they enter retirement.
With an empty nest and retirement on the horizon, your senior years should be the time to pursue your passions—not get scammed out of your hard-earned savings.
This guide covers the basics of recognizing and preventing common online money scams, plus provides tips to help seniors navigate the online world safely.
Table of Contents:
Why Scammers Target Seniors
Pew Research shows that seniors are adopting technology, such as the Internet and smartphones, more than ever before. [2] If you’re among the technology adopters, you know how great technology is for connecting with your children and grandchildren who live far away and with friends you haven’t seen in years.
Con artists and scammers exploit seniors online believing that they aren’t Internet-savvy, despite many proving otherwise. Here are a few of the reasons seniors are a frequent target of scams online:
You generally have larger savings accounts and valuable assets.
You’re perceived as more trusting and polite.
You may not recognize and report the scam right away.
As you age, cognitive function and physical ability declines.
How to Recognize a Money Scam
As online scammers get increasingly sophisticated, certain types of fraud can be hard to spot even for the most adept Internet user. To keep from falling victim to scammers’ tactics, make yourself aware of common warning signs and stay vigilant. A gut feeling is always a good place to start. For example, if something feels too good to be true, it probably is. Also, if a request from someone you know feels out of character, trust your instincts and do your research before taking action.
An easy way to know if something is a likely con is to use the three U’s for identifying money scams.
Unexpected: If you receive an email from someone you trust making an unexpected or unusual request for money or personal information, contact them personally to confirm.
Urgent: If the tone of the message is threatening or asks you to act immediately, take time to think it over or tell a friend before acting. If you’re still unsure, check the IC3’s Alert Archive to see if there have been other incidents of the same scam.
Unsecure: Make sure the address bar reads “https://” and not “http://” when entering personal or financial information online. If a URL begins with “https://” that tells you the site is secure and protects information that’s transmitted. If you provide sensitive information to an unsecure site, it can easily be stolen.
Top 10 Online Scams That Affect Seniors
Scammers see senior citizens as easy victims, but you can prove them wrong by educating yourself on some of their common schemes. They often use things like healthcare, retirement savings and online dating to lure unsuspecting seniors into giving over their personal information. Here are 10 of the most common online schemes that target seniors.
1. Medicare Scams
If you’re 65 or older, you might rely on Medicare for your health coverage. Scammers know this and whenever Medicare sends out new cards or makes changes to its policies, they capitalize on opportunities to steal personal information. This can be done over the phone or by email. The scammer claims to be a Medicare representative and insists there’s a fee associated with getting you a new card or that your card has been compromised—neither of which is true.
According to Medicare.gov, “Medicare, or someone representing Medicare, will never contact you for your Medicare Number or other personal information unless you’ve given them permission in advance.”
How to protect yourself: Don’t respond to the email and mark it as junk or spam. If you need to speak with Medicare, call them directly at 1-800-MEDICARE (1-800-633-4227).
2. Health Insurance Scams
In order to make a profit, criminals may try to offer you health insurance plans that have little to no real value. In some cases, they may be selling discount cards or limited-benefit plans, but rarely explain how limited the coverage really is.
How to protect yourself: Never purchase insurance on the spot. Do your research on the company and thoroughly read the details of the coverage offered.
2. Counterfeit Medications
This scam is especially dangerous because it can cost you not only your money but your health. Prescription drugs aren’t cheap, and most seniors are dependent on a medication or two to maintain their health. Scammers exploit this by offering fake prescription medications for purchase online at a low cost. The number of counterfeit medication scams under investigation by the FDA is up four times since the 1990s. [3]
How to protect yourself: Always go through licensed medical professionals to get any prescriptions and pick up your medications at a local pharmacy. If you enjoy the convenience of ordering online, many reputable pharmacies allow you to refill your prescription online or have your medications delivered.
3. Phishing
Scammers often capitalize on your trust in people and institutions by posing as them in emails, on calls or in text messages. For example, the Social Security Scam is a form of phishing where scammers pose as government officials who need your social security information. Once they’ve gained your trust, they use that to gather personal, sensitive information like your Social Security number, bank/credit card information and/or passwords.
How to protect yourself: Always check the sender’s email address or phone number before clicking any links in emails or messages that request personal information.
4. Dating and Romance Scams
Online dating can be great for people of all ages—seniors included. But it’s important to practice the same kind of cautions online as you do in real-world dating. Online dating scams are one of the biggest and most costly scams, and scammers can break your heart and bank account if you’re not careful. It’s a red flag if someone builds a rapport with you only to turn around and ask for money. Even if the request seems heartfelt, like wanting to come see you, it could still be a play solely for money.
How to protect yourself: Take things slow, do your research and never send money to someone you don’t know personally. Even if you’ve met them, run the other way if they ask for money after you’ve known them only for a little while.
5. Investment Scams
In these cons, scammers take advantage of your need to build or maintain retirement savings. A lot of seniors are concerned about making their money last, which makes them vulnerable to ads or requests that promise high-profit, no-risk investments.
How to protect yourself: Stop and think, “Is this too good to be true?” Never accept an offer on the spot. If you’re not sure, talk it over with a trusted friend or check the IC3’s Alert Archive along with other online sources, such as the Scams and Frauds page on USA.gov.
6. Homeowner Scams
Seniors are at a point in life where they’re more likely to own their homes. While some may want to stay right where they are, others have grand dreams of moving to a new location—maybe somewhere warmer. In this scenario scammers work to identify the value of your property and then offer you a reassessment—for a fee, of course.
How to protect yourself: If you want to move, only work with a reputable realtor or go the for sale by owner route.
7. Sweepstakes and Lottery Scams
These scams use a surprise factor to trick you into thinking you need to click something to “claim a prize.” It can come as an email, a web pop up or even within a web page you’re reading.
How to protect yourself: If you receive an email that claims you’re a winner, it’s almost guaranteed to be a scam. On the off chance that you actually signed up for a sweepstakes, check your email inbox to see if you have a confirmation of your signup from the same email address. Better, yet, pick up the phone and call the company before you click on a link in an email or on a website.
8. Fake Charities
Seniors may feel more compelled to donate to those in need or contribute to disaster aid, but unfortunately fake charities often try and get donations after a natural disaster.
How to protect yourself: Do your research. Call a number to speak with someone from that charity or search the charity name and a phrase like “scam” or “fraud” in Google. You can also use the organizations listed by the FTC to research reputable charities.
9. Malware Scams
Using antivirus software is a great way to protect yourself from fraud. Unfortunately, scammers often pose as antivirus providers and instead install malware on your computer. These advertisements are often pop ups or web page ads.
How to protect yourself: Make sure anything you download to your computer is from a reputable source and never give anyone you don’t trust remote access to your computer.
10. Threats and Extortion
These types of scams utilize fear to get the desired outcome. Typically the scammer tells you that something terrible is going to happen if you don’t give them money or personal information.
How to protect yourself: Never act impulsively. Consider whether the scenario seems realistic. If you’re unsure or scared, talk to a friend. If the caller acts like a relative, hang up and call them back to ensure it is, in fact, your relative and not a stranger pretending to be your relative.
How to Protect Yourself Online
It’s good to know the basics about scams and the accompanying warning signs, but there are steps you can take to further protect your computer and online identity from fraud including. settings, tools and government resources.
Keep your firewall turned on. A firewall monitors incoming and outgoing network traffic to prevent unauthorized access to and from a private network. It protects your computer from hackers attempting to crash it or gain sensitive information.
Keep your computer’s operating system up-to-date. Make sure your computer software is up-to-date. You can usually subscribe to automatic updates online. If you keep your system updated, your computer will continue running smoothly and you’re sure to have the latest fixes for any security holes.
Turn on two-factor authentication. Two-factor authentication requires both a password and an additional piece of information to access your account. The second piece of information is typically a message sent to your phone or a code generated by an app or token.
Look out for unsecure networks and websites. If you get a warning message saying “Unsecure Wi-Fi Detected,” don’t visit any banking websites or store any passwords while on that network.Also, most browsers will warn you when you visit an unsecure site. The feature should already be enabled on most computers, but if not, make sure you enable this setting.
Install or update antivirus software. Antivirus software prevents malicious software programs from installing on your computer. Malware programs allow others to see your computer activity. Be wary of any ads on the Internet for these types of software as they are often not real solutions and instead are fraudulent.
Use a password manager. A password manager, like LastPass or Dashlane, lets you have a unique, strong password for every secure website—in other words, not your grandchild’s birth date. You won’t have to remember them all, because the password manager stores and encrypts your passwords for your protection.
Check your credit often. Major changes toyour credit can indicate potential fraud. Consider signing up for a free credit score and checking it every few weeks as a way to watch for changes.
Find Information About Active Scams
What To Do If You’re the Victim of a Scam
The best thing to do if you suspect you’ve been the victim of a scam is to report it. IC3 chief Donna Gregory says, “We want to encourage everyone who suspects they have been victimized by online fraudsters to report it to us.” IC3 receives over 800 complaints a day on average, so don’t let embarrassment keep you from reporting something.1 Reporting a scam helps law enforcement investigate similar scams and take action to bring the scammers to justice.
Steps to Take After Fraud
To report a scam, file a claim online at www.ic3.gov. You’ll be asked to provide complete information about the crime as well as any additional relevant information.
Once you’ve reported the scam to authorities, you also want to take action against any other loss. IC3 recommends that victims take actions, such as contacting banks, credit card companies and/or the credit bureaus to block accounts, freeze accounts, dispute charges or attempt to recover lost funds.
Keep a close watch on your credit reports and consider using credit monitoring tools.
In February 2018, the Justice Department made a coordinated sweep of elder fraud cases that resulted in several initiatives to reduce the number of annual cases. [4] This included building local, state and federal capacity to fight elder abuse, supporting research to improve elder abuse policy and practice, and helping older victims and their families.
Each year the number of Internet crimes increases and scammers become more sophisticated, but spreading knowledge and awareness is one of the best ways to combat the issue. Arming yourself with a basic understanding of the dangers online can help you protect yoursel f from fraud.
Additional Resources
Sources:
1 Federal Trade Commission Latest Internet Crime Report Released
2 Pew Research Center Tech Adoption Climbs Among Older Adults
3 National Council on Aging Top 10 Financial Scams Targeting Seniors
4 United States Department of Justice Justice Department Coordinates Nationwide Elder Fraud Sweep of More Than 250 Defendants
Last time I was at an auction with my son Felix it was 1994, and he was in my stomach. Fast-forward the videotape, and he has an advertising job, finance pre-approval and a kerbside spot in front of the bloke auctioning a 1930s flat on Inkerman Street, St Kilda East.
Before proceedings two Sundays ago, we had lunch at the Galleon in St Kilda. Felix, his gorgeous partner Pip, his dad and me. Nervous and pumped, the 28-year-olds mulled tactics. Bid boldly early or wait and suss out what others have in their hand? Just roll with it, the parents said.
Inevitably, we went down the days of yore path about our first home. Buying a place was just what you did then, farewelling rentals along with single life. A Californian bungalow with big backyard and Axminster floral carpet, ours for $122,000 in 1991. Our firstborn Jack came home from hospital there, then we upgraded when Felix – later joined by Sadie – was on the way.
Our winning bid of $172,500 on a fixer-upper in Williamstown was just under double our combined income. Yeah, interest rates were higher and the house needed two renos, but the value still seems miraculous compared to what my kids and yours need to spend versus what they earn if they want to buy a place now.
Now that our three are adults, there’s lots of talk about next steps. Relationships, careers, babies. Like they did as kids, our boys still share mates, a footy team, sense of humour. Both have six-figure salaries. But they’re divided on how to live in one of the most expensive property markets on the planet.
Felix is all about buying. “The Australian dream, Mum, haven’t you heard? Although it’s hard to know if it’s your dream or what society says you should want. But it is what I want.”
Two years ago, Lix got real after a determined spending frenzy that included a tattoo gun and multiple motorbikes. He and Pip created a spreadsheet to map projected and actual savings for a deposit that was more than the total price of our first home.
One night they hosted us and Pip’s parents for dinner at their Footscray rental. Lasagne plates cleared, the real main event was served up: a presentation of their current finances, their goal and what a small chop out from us – to be repaid – would mean.
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It was a pretty good investment pitch. The four parents shared a look: this could bring us closer to grandchildren. We were all in. Adam and Denise went further, offering a rent-free room at theirs while the wannabe home owners saved.
Two research findings have struck me in the last weeks. The first: more than two in five first-time buyers need to tap into the bank of mum and dad. The second: renters who don’t buy by their early 30s are less likely to achieve home ownership later in life than their parents’ generation.
That scenario is one of Felix’s drivers. “I see buying as an inevitability, and you may as well just get it out of the way. The alternative is horrible. If you rent forever, what happens when you retire and are renting on the pension, with no housing security?”
Jack works in banking, has an economics degree, understands money. At 30, he’s a renter who “long ago gave up” on owning a home in a capital city.
“Enslaving myself to a bank – yes, I get the irony – is highly unattractive. And housing is completely overvalued, so I don’t see paying a million dollars in interest on an average property as a rational investment.”
Parental financial lifelines are beside the point, says Jack, who asks what relying on generational wealth says about our economic system: “Plus that’s conditional on me then entering a massive debt, which means a worse economic position.”
I love they’re both doing what makes sense to them. Not so great: Pip and Felix missing out at the Inkerman Street auction. It’s like waiting for a bus, we tell them. Another one will be along soon. The hardest bit, the saving, is done.
Kate Halfpenny is the founder of Bad Mother Media.
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When Fernanda Niven and Alexia Leuschen launched their home decor business, they were passionate about finding beautiful, timeless pieces. After two years as a pop-up in Bridgehampton’s gourmet market L’Épicuriste, they’ve hit their stride. “We wanted to sell things that we loved and thought were special and unique,” says Niven, whose fashion background includes a stint with Vera Wang, designing handbags and her own line of sun-protective clothing. “We never wanted people to buy our things just to have them. We wanted them to buy what they love because they’d have those pieces for a long time.”
Shoppers can swing by The Bouwerie after procuring global delicacies for their next dinner party at L’Épicuriste, and pick up items needed to make the soiree really pop. Niven says this summer’s must-haves include little LED lamps that have become popular for both indoor and outdoor at-home dining—The Bouwerie sells them along with fashionable shades, in green, white and neutral. “This summer we have wonderful napkins that we just cannot keep in stock,” Niven says. “They have a pretty fringe, and come in blue-and-white gingham, a bold green and white floral pattern. They make your table come to life.”
Niven and partner Leuschen, a decorator, make some of their own items, such as fireplace screens named after streets in Southampton. The women have been friends for about a decade, and enjoy perusing the internet for unique items to sell, and doing some buying on the road—they both love to travel. “That’s how this business came about,” Nevin says. “We both love finding these little special things around the world.”
When it came to choosing their company’s moniker, the businesswomen liked the Old World spelling of “Bouwerie,” the name of a once-beautiful, now long-gone house in Southampton. To bring it back full circle, they happen to know the grandchildren of the house’s owners. thebouwerie.com
When choosing a life insurance beneficiary, it is very important to be clear in the designations of who is going to receive the benefits after the death of the insured.
Due to specifications regarding the wording of beneficiaries, certain members of the family may be left out, while others may be unintentionally included.
It becomes especially complicated when there is an ex-spouse involved, or adopted children.
Should the beneficiary die before the insured, then a contingent receives the benefits instead.
However, this can become complicated if the contingent is a minor and no guardian has been designated. The process of determining insurance beneficiaries can be complicated, especially given the changing family situations that happen with divorce and death.
When deciding on your insurance beneficiaries, make sure the beneficiaries are clearly distinguished, with varying levels of contingents.
Specifying Your Beneficiaries
When writing out who will receive life insurance benefits upon your death, simply putting one-word designations like “spouse”, “children”, or “grandchildren” isn’t enough anymore. If you put “spouse,” then former spouses may be included in the event of a divorce. In the case that children are the beneficiaries, then which children will be included must be specified.
Are they only children from your marriage, or do children born out of wedlock count?
Also, it must be specified if adopted children are included, or the children of a spouse which you may have adopted as well. The same applies for any grandchildren. Also, if the children are minors, it is generally recommended that a guardian be appointed, as benefits aren’t usually paid to minors.
The beneficiaries can be specific, or a class. Specific beneficiaries are identified by name and relationship to the insured, while a class is identified mainly by relationship, such as “children.” If a class is chosen as a beneficiary, who belongs to that class needs to be clearly identified, as legal complications can arise if the class isn’t distinguished.
Also, it is advisable to have several levels of contingencies. In the case that a beneficiary dies, the benefits will go to the contingent.
However, if the contingency dies as well as the beneficiary, the benefits may be left in limbo, or to be disputed by other family members. That is why several contingencies must be clearly identified, as many complications can arise considering the possibilities of a changing family structure.
How Much Life Insurance Will Your Beneficiaries Need?
As important as it is to find your right beneficiary, you have to make sure that person(s) is left with enough money to cover any financial obligations you will leave behind. So let’s take a look at some of the factors that help you decide how much coverage you need to buy.
You always need to calculate your current debt situation first. The main goal of your life insurance plan is to give your family the money needed to pay off all your bills and debts. The number you come up with should be the baseline for how much coverage you start looking for.
If it’s in your budget we also suggest adding a few years worth of salary to the final total as well. Your income has helped support the family for years and a sudden loss could bring on major lifestyle changes. To stave that quick change it’s best to up the value some to provide some breathing room as they cope with a drop in household income.
Another category to account for is the funeral expenses. While you may not realize it, funerals are expensive. Funerals can come in around $10,000, and is a big expense that some might not be ready to pay. Your coverage will give your family the money that they need to fulfill your family wishes.
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Getting Affordable Life Insurance
In addition to choosing the right beneficiary, and ensuring that they will have enough money, it’s also important to get the most affordable life insurance plan available. A lot of applicants are surprised to see how cheap a life insurance plan can be, regardless of how much life insurance you need.
One of the easiest ways to get lower insurance rates is by cutting out tobacco. Users pose a much greater risk to have health problems like cancer or heart problems, which equals a greater risk to the insurance company. By mitigating that risk they’ll be charging you much more for your insurance coverage, and that charge could be twice the quoted amount.
The medical exam you’ll go through is going to show the carrier a snapshot of your overall health. If you’re overweight, then your premiums are going to be around 50% higher than a person that rates healthy. So when you know the date you want to apply its best to start living a healthier life a few months before. Eat a little cleaner, exercise a little more. These actions will keep your premiums down.
Another action is to lay off the gas pedal. When the insurance company is reviewing your application, they are going to pull your driving records. With a lengthy accident or ticket history, the carrier could see you as a high-risk applicant, which is going to translate into more expensive coverage. Slowing down on your way to work in the morning can save you hundreds of dollars every year, not to mention you won’t have to pay those expensive speeding tickets.
Our last tip is the easiest step for you. Compare, compare, compare. And you can make it even easier by working with us! We have years of experience working with quality insurance companies and we’ve helped all types of applicants get the perfect plan for you. Our status as independent agents allows us to gather as many quotes as fast as possible and present them to you in a simple form.
Explore all Possibilities with Life Insurance Beneficiaries
When deciding on life insurance beneficiaries, it is best to consider all possible situations. While it may become complex and it is grim to think of the future deaths of you or family members, all of these things do happen. Save your possible beneficiaries the trouble of having to dispute the distribution of benefits, and make sure to define the beneficiaries as specifically as possible.
Don’t use vague wording that may include or leave out people you don’t wish to.
You will want to make sure your benefits go to the intended recipients after your death. Try speaking with a life insurance advisor to determine how to properly designate your beneficiaries.
Angelo Mozilo, Whose Mortgage Giant Fell in Housing Bust, Dies at 84
He built Countrywide Financial into the country’s largest mortgage lender, but its increasingly risky loans helped precipitate the 2008 financial crisis.
July 18, 2023
Angelo Mozilo, a founder of Countrywide Financial who presided over that lending giant’s rapid ascent and then its collapse during the financial crisis of 2008, died on Sunday. He was 84.
His death, in the Santa Barbara, Calif., area, was announced in a statement by the Mozilo Family Foundation, the family’s philanthropic organization. It did not specify a cause.
Countrywide was a major player in the run-up to the housing crisis, when looser financial regulations enabled lenders to aggressively sell risky mortgage products to prospective homeowners, contributing to a bubble in housing prices. That burst, in 2008, when home values came crashing down, led the U.S. economy into a prolonged recession.
Mr. Mozilo, who was the son of a Bronx butcher and worked his way through Fordham University, became one of the most recognized executives associated with the crisis. Motivated by his modest beginnings, he had built Countrywide into one of the nation’s largest mortgage lenders by the early 2000s. But he still wasn’t satisfied: He wanted the company to attain 30 to 40 percent market share, far more than any single lender had achieved.
sales culture propelled the company’s growth and profits but ultimately led to its downfall. As the housing market crashed and borrower defaults soared, Countrywide’s lending practices came under the scrutiny of legislators, regulators and consumer advocates.
Financial pressures began to mount, and the company, based in Calabasas, Calif., west of Los Angeles, was acquired by Bank of America in 2008 at the fire sale price of $4 billion. But the purchase ended up costing Bank of America billions more in legal and other costs it had inherited.
At the time, nearly 150 mortgage lenders had failed, many of which were taken over by healthier institutions.
Mr. Mozilo, recognizable by his crisp suits and deep tan, continued to defend his company throughout the ordeal. “Countrywide was one of the greatest companies in the history of this country,” he told congressional examiners in September 2010, more than two years after Bank of America bought the company.
his member profile in the Horatio Alger Association.
By the time he was 14 he had his first job in the financial industry, working as a messenger boy for a Manhattan mortgage company.
He was married to Phyllis (Ardese) Mozilo for more than 50 years. She died in 2017. He is survived by their five children, Christy Mozilo Larsen and David, Elizabeth, Eric and Mark Mozilo; and 11 grandchildren.
post on Tuesday.
“He was an excellent father and a legend in the mortgage industry,” he added during a phone call.
Mr. Mozilo and a partner, David Loeb, who died in 2003, started Countrywide in 1969 with $500,000. Within a few decades, the company had grown from a conservative home lender, originally based in New York, to the largest mortgage lender in the United States. As of 2007, it had 900 offices and $200 billion in assets and made $500 billion in loans that year.
In the early 1990s, after government data revealed that lenders were disproportionately rejecting minority borrowers for home loans, Countrywide saw an untapped market and began offering more loans in low-income and minority communities.
“When I first brought the loans into the office, they said: ‘You’re nuts, you’re crazy, don’t do this. There’s a reason why we’re rejecting these people,’” Mr. Mozilo later told the congressional commission investigating the crisis. The loan officers, he said, “had very static, inflexible guidelines.”
a 2019 CNBC report. “It affected my reputation, it affected my family, it had a profound impact on my entire life. So I cared. Then a lot of years went by, and my wife passed away, and I turned 80 years old, and now I don’t care. There’s other things more important in life.”
Ben Protess contributed reporting.
Tara Siegel Bernard covers personal finance. Before joining The Times in 2008, she was deputy managing editor at FiLife, a personal finance website, and an editor at CNBC. She also worked at Dow Jones and contributed regularly to The Wall Street Journal. More about Tara Siegel Bernard
A version of this article appears in print on , Section B, Page 11 of the New York edition with the headline: Angelo Mozilo, Leader of Lender In 2008 Housing Bust, Dies at 84. Order Reprints | Today’s Paper | Subscribe
When I learned that my late grandfather had left me his prized watch in his will, I was swept away by a confusing mix of emotions.
I felt touched, of course, that he thought of me and wanted me to inherit something he treasured so highly. Naturally, I also felt a pang of melancholy realizing that the watch came loaded with memories of his vibrant life, but also his passing.
The more surprising emotion, however, was stress. Did I really deserve this watch? What would I do with something so valuable? Would he expect me to wear it? What if I lost it? Am I allowed to sell it?
According to CNBC, around 40% of America’s young generation will inherit wealth. Much of the time, that wealth will come in the form of physical valuables like watches, jewelry, clothing, art, and collections.
If you’ve inherited something valuable or think you might in the future, you might already be facing the confusing mix of emotions that I went through. That’s why I felt inspired to write this piece. Despite the fact that millions of young people will inherit valuables, there’s not a lot of material out there to help us not only appraise and sell the items but get comfortable with the idea of selling in the first place.
What’s Ahead:
Process those complex emotions and decide if selling is right for you
When I received my grandfather’s watch, I found myself in a similar headspace as Frodo when he inherited The One Ring. Staring down at our newfound jewelry, the hairy-footed hobbit and I both realized three things:
It’s valuable.
I don’t exactly know why it was given to me.
I probably shouldn’t tell anyone that I have it.
Naturally, Frodo and I both reached the same, misguided conclusion – that we should hide it and never speak of it again. This, of course, was the wrong choice; basically, a form of procrastination until we figured out what to do with it.
Whereas Frodo eventually threw his inheritance into a volcano, that isn’t really an option for you and me. We know that whoever left us the item wouldn’t have wanted us to just bury it in our linen closet, so that leaves us with two choices: use it or sell it.
Most people assume that if their late relative left them something valuable, it’s because they wanted them to use it and enjoy it as they did in life. Therefore, if you immediately turn around and sell it, it’s like returning their thoughtful Christmas gift to the store. It’s awkward and uncomfortable, and the fact that it’s your inheritance makes it feel even worse.
However, while it’s possible that your late relative wanted you to enjoy whatever they left you, it’s important to distinguish the difference between inheritances and gifts.
Inheritances are not gifts
A gift is something that someone gives you with the full intent that you’ll use it and benefit from it. Therefore, if you return a gift to the store, it signals to the gift-giver that they missed the mark. That’s why we do it in secret.
An inheritance, however, is a form of wealth transfer. Your late relative may have intended for you to use and enjoy the item, or they may have fully intended for you to just sell it and benefit financially.
The difference between an inheritance and a gift, therefore, is the intent of the giver. A gift is always meant to be kept, while an inheritance is meant to be kept or sold.
If an inheritance is meant to be sold, why not just sell it and leave the money in the will? Well, most people don’t sell their valuables in their twilight years; they enjoy them in life and let the next generation decide what to do with them.
How do I know whether my late relative intended for me to keep or sell my inheritance? It’s impossible to say. There’s no statistic that says “XX% of baby boomers intend for their grandchildren to sell their inherited valuables,” and even if there was, everyone’s situation is different.
There are signs, however – if your late relative left you an extensive art collection for your 500 sq. ft. apartment, they probably intended for you to just sell it. If they left you their wedding ring and they know you’re about to get engaged, it’s a safe bet that they want you to use it.
But even if you conclude your late relative probably wanted you to keep your inherited valuables, it’s still OK to sell them.
Here’s why you shouldn’t feel guilty selling your inherited valuables
Inheritances can come in countless forms, from real estate to trust funds to diamond earrings. They can be intended for the recipient to keep or to sell, or anything in-between.
But regardless of their form or surface-level intent, the underlying intent of all inheritances is exactly the same: whoever left it to you wants you to prosper and be happy.
Your goal, then, is to handle your inheritance in a way that honors your late relative’s underlying wish: to make you happy. Keeping it and enjoying it might honor that wish, but so could selling the item and investing the money so you can achieve financial independence faster.
For instance, you could consider a robo-advisor with a lower buy-in like Betterment. Betterment stands out with an easy-to-use platform, a generous selection of Socially Responsible Investing (SRI) opportunities, and the ability to access a human advisor once your balance exceeds $100,000.
Putting your money into an investment opportunity can do a lot more for you than keeping the gift in a box at the bottom of your dresser for years.
Protect the item from theft, damage, and depreciation
Before you get your inherited valuable appraised and sold, you need to educate yourself on how to store it, protect it, and overall preserve its value.
For example, I inherited a rare Japanese teapot from a grandparent a few years ago valued at around $100. Because I love tea so much, I decided to classify this inheritance as a “keep.” However, because I never taught myself how to properly maintain such a fancy teapot, I let water sit in it for too long and rust it. Totaled and worthless, the teapot now sits in my kitchen as an ignominious reminder to not be a lazy knucklehead with my valuables.
The first step to inheriting something valuable, then, is to teach yourself how to use it, maintain it, and store it. Teapots may need special cleaning; art may need to be stored in a cool, dark location; leather goods need routine conditioning; watches may need winding, etc.
In tandem with proper care and maintenance, you’ll want to keep your valuables someplace safe. Even if your renters insurance has adequate theft protection to cover the value of your goods, you still run the risk of the claim being rejected or getting paid less than the item’s market value.
For small items like watches, jewelry, or card/coin collections, consider renting a safety deposit box at a local bank. $60 per year is a small price to pay for peace of mind!
For medium-sized items like artwork or furniture, your first inclination might be to borrow space in a friend or family member’s basement or attic. After all, a giant painting is probably too big to steal!
Storing valuable art/furniture in a basement or attic is a common mistake, however, because these areas are subject to moisture and variable temperatures, which can damage and devalue your stuff. Consider renting a climate-controlled storage unit instead, and look for one outside the city limits where it’s cheaper.
Lastly, if you inherit something really big like a car, you’ll want to protect it from the elements by parking it in a covered space or at least investing ~$250 in a fitted car cover. Since you’ll inevitably have to drive it, you’ll want to get some cheap collision and comprehensive coverage, too, which will also protect it against damage and theft. That may all sound expensive, but keep in mind that you’ll get it back when you sell it.
Big or small, once you have your inherited valuables safely stored and protected, it’s time to see what they’re worth.
Appraise the item
Before getting a professional appraisal, you can get a rough idea of how much your inherited valuable is worth by heading to eBay.
Don’t pay too much attention to asking prices in active listings. Sellers can ask for whatever they want; doesn’t mean it’ll sell.
For a better idea of your item’s true market value, filter by SOLD listings only. You can do this by searching for your item, then clicking “Advanced”
Then check the box for “Sold listings”
In this example, you can see that in general, vintage Gucci bags are selling for anywhere from $300 to $500.
eBay is an excellent self-appraisal tool, but you can also get a more accurate appraisal from a site dedicated to reselling your specific goods.
For example, I got my grandfather’s watch appraised at Precision Watches & Jewelry and Crown & Caliber – both were entirely online, requiring only a description and serial number.
For cars, I recommend using Edmunds’ True Market Value (TMV) Tool. It’s entirely free and can give you a realistic valuation of your inherited car in seconds. If you’re thinking of keeping the car your late relative left you, you can research its True Cost to Own (TCO) to know how much it’ll cost you in depreciation, gas, maintenance, repairs, insurance, etc. If you decide to sell the car, well, you can do that on Edmunds, too!
For art, furniture, and other assets that might prove difficult to appraise online, you can connect with a live appraiser. The American Society of Appraisers has an online directory where you can search for and connect with an appraiser of your goods in your area. Most appraisals cost ~$150 or less, and it’s worth it so you don’t end up underselling your stuff!
Sell the item
Your penultimate step, of course, is to make the sale.
Whoever appraised your item will also have tips for how and where to sell it. They’ll likely make an offer themselves; if so, just be sure to get multiple appraisals online to ensure you’re getting a good deal.
At the risk of sounding lecture-y, just be sure you follow the essentials of selling a high-value item; ship the item well-packed and well-insured, and if you meet anyone in-person, bring a friend and meet somewhere safe. Lastly, be sure the buyer brings cash or cash equivalents, such as Venmo or PayPal, so you receive your full asking price onsite.
I got some cold feet before selling my grandpa’s watch and you might, too. It helped to remind myself that my grandpa didn’t necessarily want me to wear his fancy watch; just to do something with it that made me happy. My grandpa was smart with money and achieved financial independence early in life, and would surely want the same for me. Therefore, I knew that if he saw me sell his watch and invest the money wisely, he’d be proud.
If you use the money from your inherited valuable to inch closer to freedom, happiness, and financial independence, your late relative will likely be proud of you, too.
So make sure you park your money somewhere safe. A Chime® Savings Account is a good example, with no monthly fees2 and a slick UI.
2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
Summary
Inheriting a high-value item like a watch, jewelry, car, or even a rare piece of art can elicit a mixed bag of emotions. You may feel glad that your late relative thought of you, sad that they’re gone, and guilty that you aren’t sure what to do with the precious asset that they left you.
Selling an inherited valuable may initially feel uncomfortable, but it’s important to remember that whoever left it to us probably just wants us to be happy. Selling the item and investing the money to accelerate our financial independence is a great way to honor that wish.