June 2013 eNews

Catch up on the latest Starion news in our June 2013 Starion Financial eNewsletter.

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Supporting the Middleton Outreach Ministry

Starion Financial supports the communities it serves, and is dedicated to helping them grow and flourish. To support the Madison, Wis., community, Starion Financial pledged $100,000 to the Middleton Outreach Ministry’s (MOM) Building Hope Strengthening Communities capital campaign. This was the first contribution made toward the campaign.

MOM is a non-profit organization that is leading a community-wide effort to prevent homelessness and end hunger for people throughout Middleton, West Madison and Cross Plains (suburbs of Madison). The organization provides food, clothing, housing assistance, emergency financial assistance and special services for seniors, free of charge.

"Starion chose to support MOM because of its mission to prevent homelessness and end hunger, and the positive impact it has had on the Middleton community,” said Bill McDonough, Madison market president. “Our hope is that the financial support will allow MOM to reach more people in need, and in turn may encourage others to join Starion in supporting the Building Hope Strengthening Communities capital campaign.”

MOM’s $1.8 million capital campaign will help fund the purchase and renovations of the office and food pantry where the organization moved to in March 2013. MOM’s new home gives clients access to all of the organization’s essential services and enables MOM to better help those in need.

“We are proud to assist an organization such as MOM,” said Craig Larson, Starion Financial president and CEO. “Their dedication to the Madison community is admirable, and we are more than happy to help support their cause.”

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What is umbrella insurance and could it benefit you?

People buy insurance policies to protect themselves and their families from unexpected events that could end up costing them a large sum of money. However, many people don’t realize that most homeowner and automobile insurance policies do not cover their entire financial risk. This creates a coverage gap.

Umbrella insurance coverage can close this gap by offering you protection from financial liabilities that are incurred after your other insurance policies are exhausted. Most insurance policies only provide coverage up to a fixed dollar amount after which the policyholder is responsible for any and all additional costs. Umbrella policies protect you by covering any costs that you incur after your other insurance policies cap out.

You may be asking yourself, “Why would I need an umbrella insurance policy?” Imagine that you get into a car accident with another driver who is significantly injured after the crash. A judge rules that you are responsible for the accident and that you must pay for the other driver’s hospital bills. Additionally, since the other driver will never be able to go back to work, the judge determines that you must pay her a multi-million dollar settlement to compensate her for the lost income she would have otherwise received had she not been injured.

Since your auto insurance policy caps out at five hundred thousand dollars, you are now personally responsible for paying the rest of the multi-million dollar settlement. The judge can force you to empty out your bank accounts, sell your house and even garnish your wages in order to pay the settlement.

But what if you have an umbrella policy? Your umbrella policy will step in after your auto insurance caps out. It will cover your legal fees and pay out the rest of the settlement. Your bank accounts and assets are safe. Financial doom is no longer a looming possibility.

In addition to providing protection from auto injury claims, an umbrella policy can also help to protect you if you get sued because of an accident that happens on your property or on your recreational vehicles. It also covers you for slander and libel suits.

"People used to think that only those with a lot of assets or money needed umbrella insurance policies," said Martina Isaacson, insurance agent at Starion Financial. "These days with the tight budgets, we need to protect all of our assets and our income. The personal liability umbrella policy could do just that.”

The best thing about umbrella policies is that they are surprisingly inexpensive when compared to the costs of homeowner and auto insurance. A $1 million umbrella policy typically only costs between $150 and $500 dollars a year. Talk with one of our insurance agents today to learn more about umbrella insurance and find out if purchasing a policy is a good option for you. 

These insurance products are: Not a deposit • Not FDIC insured • Not insured by any Federal Government Agency • Not guaranteed by the bank

Sources: New York Times; CNN; Smart Money

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Estate planning essentials

Many people hear the term “estate planning” and think that it is only for wealthy or older individuals. However, you should have some form of estate plan regardless of your level of wealth.

Estate planning means providing for your family after you are gone. It allows you, not the court, to make important decisions about caring for your loved ones and the distribution of your belongings.

With a proper estate plan you can address these major issues:

  • Who do you want as the executor to settle your estate?
    That person should be someone who is qualified, trustworthy and understands your wishes.
  • How will any minor children be protected?
    This includes naming a guardian on the death of both parents and making decisions about the future financial security of the children.
  • How will your assets be distributed?
    Wills are used to designate who will receive your assets. Trusts may be useful for the ongoing management and distribution of your assets.
  • Do you have your beneficiaries listed correctly?
    Has an ex-spouse been removed or have your children been added?
  • How can the costs of administrating your estate be minimized?
    Proper planning can reduce probate fees and any estate taxes.
  • How should assets be titled?
    Individually? Jointly?

Federal Estate Taxes
The tax treatment of estates has been changing almost yearly for several years. The American Taxpayer Relief Act of 2012 clarified many of the rules and has made many provisions permanent. These changes should prompt everyone to have their estate plan reviewed.

How does an estate get taxed?
The federal government levies a tax, payable by your estate, with rates up to 40% on the largest estates. The tax is charged against the value of the estate after allowable deductions are taken. Deductions include burial expenses, existing debts, charitable contributions and accrued taxes.

In addition, any assets left to a surviving spouse are not included in the taxable estate. After the estate tax is calculated, there is a credit against that tax. The result is that many estates pay no tax. The amount of the credit is increasing and below is a chart indicating the size of taxable estates that will be subject to tax after the credit.

Year Estate Size Where Taxation Starts Top estate tax rate
2013 $5,250,000 40%
Future years Indexed for inflation 40%

You should note that the tax is levied on the fair market value of your assets and not the cost basis. For many individuals, the values of their stock portfolios, land or small business interests have grown significantly over the past few years.

Use an expert to create and update your estate plan
An estate plan should be reviewed periodically (generally every 3 or 4 years) as your situation or the rules change. Births of children, changes in marital status, increases in income or wealth or moving to another state should also trigger a review of your estate plan.

Estate planning is not a task to be taken lightly. Rules are complex and may differ by state. A qualified attorney can ensure that your estate plan accomplishes your objectives. You can also contact one of our financial advisors to help answer your questions and get you on the right track toward establishing your estate plan.

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Earn money when you refer-a-friend

From now through July, you can earn money simply by referring a friend to Starion. For every one of your friends who opens a Starion checking account, you get $25! Here’s all you need to do:

  • First, let your friends know how much you like banking with Starion, and that they can earn $100 for opening a checking account with us
  • When they open their new account, have them fill out a Refer-a-Friend coupon and give it to their personal banker
  • We’ll credit you $25 for every friend you refer who stays with us at least 6 months

This is a great deal for both you and your friends, so spread the word before this offer is gone! For details, visit the Free Checking reward page or talk with a personal banker today.

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Trivia

When did we start having school summer vacations?

School summer vacations were invented by educator Horace Mann in 1840. Until the early 19th century there was no summer vacation. Depending on the location of schools breaks came either quarterly (town schools) or to coincide with planting and harvest seasons (rural schools).

Courtesy of parkrideflyusa.com