Worrying over lack of parents’ will

Dear Liz: I’m 25, work full time at a job that pays about $25,000 a year and attend school at night. I have about $27,000 in student loans and other debt, but I’m already trying to save for retirement by each month putting $50 into a Roth IRA and $75 into a universal life insurance policy.

My problem is my parents. They are in their 60s, retired and live off Social Security and my dad’s military disability. Neither has a will.

I have made it my goal that by the end of the year, I will have consulted an attorney to draw up wills for not only my parents but also myself. I know that as an only child it is going to be up to me to handle anything that comes up upon their deaths. Considering my circumstances, do you think I need to consult a financial planner? Even though I have no assets, I worry about what will happen to my financial situation upon the death of my parents.

Answer: If you’re concerned about inheriting whatever debt they have, you don’t need to worry unless you’ve co-signed a loan or have become a joint account holder on one of their credit cards.

Any debts they have will be paid out of their estate (the value of their assets). If there’s anything left, you’d probably inherit it if they both died at once. If one parent outlives the other, remarries and then dies without a will, the surviving spouse would inherit most if not all of the estate.

But really, you’re getting ahead of yourself.

Before you start meddling in your parents’ finances, get your own in order. For one thing: What are you doing invested in a cash-value life insurance policy? It’s unlikely you need life insurance if you don’t have people who financially depend on your limited income. Universal life policies are often sold based on their tax advantages, but those would be extremely limited for someone in your low tax bracket. If you do need insurance, a term policy is probably a better solution.

You might well benefit from a visit to a fee-only financial planner. You can get referrals from the National Assn. of Personal Financial Advisors at www.napfa.org or from the Garrett Planning Network at www.garrettplanningnetwork.com, which represents fee-only planners who charge on an hourly basis.

As for wills, by all means, have one drawn up for yourself, but don’t expect to bully your parents into joining you. The best approach here is a gentler one.

After you get your own finances and estate in order, let your parents know the peace of mind these actions have given you. Tell them you’re concerned that you won’t know what to do when they die, and that it would be a huge relief to you if they would formalize their wishes with a will. They (and you) also need durable powers of attorney for finances and for healthcare. These documents allow someone they choose to make money and medical decisions if they’re incapacitated.

You can offer to hook them up with your financial planner and estate planning attorney. But you can’t force them to do anything, and being pushy is unlikely to win them over.

Before job search, try spending less

Dear Liz: I need to make more income because my wife stays home with our children and my day job does not cover our current levels of spending. My lifetime of experience as a mortgage broker and Realtor is not too valuable in today’s economy. Do you know of legitimate work-from-home opportunities for my wife and me to do at night after the kids have gone to bed?

Answer: Plenty of businesses have been founded by working at night and on weekends. Precious few of those started thanks to the help of the work-at-home solicitations you see all over the Internet.

Rather than worsen your situation by falling for scams, start from the bottom line. Your family needs to reduce its spending below its current income.

If you believe that you’ve cut expenses as far as you can, you may need to look for a better job, or a second job, or your wife may need to work.

If you want to start your own business on the side, start researching the possibilities rather than expect them to be handed to you. There are plenty of books in your local library to help you get started.

Number stays on Do Not Call list

Dear Liz: Do I need to re-register my phone number on the national Do Not Call list?

Answer: Fortunately, no. Congress made the register at www.donotcall.gov permanent, so you need to enter your number only once.

Liz Pulliam Weston is the author of the new book “Easy Money: How to Simplify Your Finances and Get What You Want Out of Life.” Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604, or via the “Contact Liz” form at www.asklizweston.com. Distributed by No More Red Inc.