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Tag: financial adviser

  • Rudy Giuliani agrees to deal to end his bankruptcy case, pay creditors’ financial adviser $400k

    Rudy Giuliani agrees to deal to end his bankruptcy case, pay creditors’ financial adviser $400k

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    Rudy Giuliani has agreed to a last-minute deal to end his personal bankruptcy case and pay about $400,000 to a financial adviser hired by his creditors, avoiding a potential deep-dive into the former New York City mayor’s finances that was threatened by a federal judge.

    The agreement was filed Wednesday in federal court in White Plains, New York. That came nearly three weeks after a judge there threw out Giuliani’s bankruptcy case after criticizing him for repeated failures to disclose his income sources and to comply with court orders.

    But after Judge Sean Lane dismissed the bankruptcy case, Giuliani’s lawyers said he didn’t have the money to pay the creditors’ forensic financial adviser as required under bankruptcy laws, according to the judge. That led Lane last week to order all parties to submit proposals on how to end the case by noon Wednesday and prepare for a possible evidentiary hearing on Giuliani’s finances if no deal was reached.

    The judge has to sign off on the agreement, which was filed less than three hours before the deadline.

    The creditors include former Georgia election workers Ruby Freeman and Wandrea “Shaye” Moss, who won a $148 million defamation judgment against Giuliani for his false ballot fraud claims against them related to the 2020 election. Freeman and Moss said Giuliani pushed Donald Trump’s lies about the election being stolen, which led to death threats that made them fear for their lives.

    In the agreement filed Wednesday, Giuliani will give his lawyers $100,000 to help pay the creditors’ financial adviser, New York-based Global Data Risk, and pay the rest of the firm’s expenses from the proceeds of selling either his New York City apartment or Florida condominium, which are worth an estimated $5.6 million and $3.5 million, respectively, according to court documents.

    Global Data Risk is also allowed to put liens on the New York City and Florida properties to make sure Giuliani pays all its fees, under the agreement.

    Rachel Strickland, a lawyer for Freeman and Moss, said in a court filing earlier this month that Global Data Risk racked up $400,000 in expenses during the bankruptcy case.

    Strickland and Giuliani’s bankruptcy lawyers did not immediately return messages seeking comment Wednesday.

    Lane had said it was “troubling” that Giuliani was saying he couldn’t pay Global Data Risk.

    “Even assuming that the Debtor does not have the funds on hand to immediately pay these bankruptcy expenses, he certainly has considerable assets upon which he can draw to pay such expenses,” Lane said in a July 25 order.

    Freeman and Moss, meanwhile, are now free to seek enforcement and payment of the $148 million verdict in federal court in Washington, D.C., where they won their case. The bankruptcy had put a hold on collection efforts.

    The bankruptcy was one of a host of legal woes consuming the 80-year-old Giuliani, the ex-federal prosecutor and 2008 Republican presidential candidate who was once heralded as “America’s Mayor” for his calm and steady leadership after the Sept. 11, 2001, terrorist attacks.

    He recently was disbarred as an attorney in New York after a court found he repeatedly made false statements about Trump’s 2020 election loss. He is also facing the possibility of losing his law license in Washington after a board in May recommended that he be disbarred.

    In Georgia and Arizona, Giuliani is facing criminal charges over his role in the effort to overturn the 2020 election. He has pleaded not guilty in both cases.

    When he filed for bankruptcy, Giuliani listed nearly $153 million in existing or potential debts, including almost $1 million in state and federal tax liabilities, money he owes lawyers, and many millions of dollars in potential judgments in lawsuits against him. He estimated he had assets worth $1 million to $10 million.

    In recent financial filings in the bankruptcy case, he said he had about $94,000 cash in hand at the end of May while his company, Giuliani Communications, had about $237,000 in the bank. A main source of income for Giuliani over the past two years has been a retirement account with a balance of just over $1 million in May, down from nearly $2.5 million in 2022 after his withdrawals, the filings say.

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  • ‘We are blessed’: My mother, 72, gets $11,000 a month, not including income from retirement savings. Should she get long-term care insurance?

    ‘We are blessed’: My mother, 72, gets $11,000 a month, not including income from retirement savings. Should she get long-term care insurance?

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    “She owns her home outright in the San Francisco Bay Area, which is valued at over $1 million.” – MarketWatch photo illustration/iStockphoto

    Dear MarketWatch, 

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    I, like many older millennials, am trying to help my mother navigate her retirement.

    We are blessed to be in the place we are in, but could use some recommendations. My mother is 72, single and is, overall, in great health. She loves to travel, volunteer and donate to causes she loves, like her church. She owns her home outright in the San Francisco Bay Area, which is valued at over $1 million.

    She worked for 25-plus years as a county nurse and, as such, she has a healthcare plan and a great pension, both for life. She has another $500,000 between her 401(k) and IRA, which she has yet to touch. Including Social Security, her monthly income is around $11,000, not including her retirement accounts (she will need to start taking RMDs from them soon).

    That said, she is debating what to do with her retirement accounts, and is trying to decide whether long-term eldercare insurance would be worth it, given her health and income. Her financial adviser recommended she consolidate the 401(k) and IRA and use that money to buy an annuity. But I am not certain of the terms.

    They also recommended purchasing a long-term eldercare insurance package. They say the terms of the insurance would be premiums for five years at $20,000 a year. This $100,000 would be guaranteed and “refundable” after the five years. When care is required, the policy would pay out around $4,000 a month.

    The way I see it, with her income coupled with the free healthcare, she should be well covered to pay out of pocket for any long-term care or assistance she requires. Worst case, she could either rent out her home for another $5,000 a month or sell her home and have a $1 million in cushion. As for the RMDs, she doesn’t really need the money,

    I recommended she put them into a CD ladder. She is very risk-averse, but was debating putting her 401(k) and IRA into the market with an indexed fund; again, she doesn’t really need the money. I know she wants to leave something for my brother and me, but we both have well-paying jobs, and do not need her money. We would rather she use it for herself.

    Related: I own four homes and have $800,000 in liquid assets. I’d like to retire in two years. Can I do it?

    Dear Reader,

    Your mom is very fortunate — not just because of her nest egg, home and health, but for having children who have put so much thought into her financial wellbeing. Because of her current financial situation, she has a lot of options.

    Regarding long-term care: You’re right that she could probably self-fund long-term care, as many wealthy individuals do, but that could be an expensive road. A 65-year-old today has a 70% chance of needing some sort of long-term care in their lifetime, according to the Administration for Community Living. About a fifth of people who do need long-term care will require that support for more than five years. And keep in mind, women tend to need care for longer than men.

    You mentioned she could rent her home or sell it outright to use that money, but the latter would be a drain on her assets, and the former could become a headache if she needs to return home, or to have someone manage the property while she’s away. You don’t want to go from a point where she’s well-off and comfortable to a precarious, debt-riddled state. Selling the home is often considered a last resort, even for people covered under Medicaid.

    Fortunately, you don’t necessarily need insurance to pay for long-term care, but it would be a good exercise to at least try and map out those expenses in the area, should it happen. For example, the average hourly rate for a home health aide in San Francisco is $24, whereas the monthly cost for assisted living is between $1,950 and $6,200, according to the American Association for Long-Term Care. The average cost for a private room in a nursing home is $300 a day, compared to $250 a day for a semi-private room.

    Of course, insurance products are typically more expensive the older a person gets, and she may not qualify for everything, but it never hurts to shop around when you’re creating an action plan. Look at other products to compare to the adviser’s recommendation, such as a hybrid package that combines life insurance with long-term care. A hybrid plan pays for long-term care, the amount of which depends on the terms, but if that never happens, it can pay a death benefit when the insured dies.

    Also, look into a qualified longevity annuity contract, also known as a qualified longevity annuity contract (QLAC). There are so many factors that go into picking the right one with the appropriate payout and payout date, and how much is used to fund the plan. Some QLACs will also allow a return of premium, according to Northwestern Mutual. You don’t have to go with the first (or even the second or third) product recommended to you — there are always choices.

    QLACs may help your mother’s RMD issue. The money put toward these contracts doesn’t count toward RMD withdrawals, but by coming out of the retirement accounts directly, they lower the balance that affects the ultimate distribution required. Your adviser may have been suggesting something similar to this when he or she mentioned consolidating the retirement accounts.

    Your idea to ladder CDs makes sense if she’s risk-averse. Treasuries are another possibility, as they are also low-risk. But interest rates may change your mind, as they may not be as high in the future as they are right now (and you don’t want inflation to eat away at the principal).

    She’ll have to pay taxes on those withdrawals, whether she needs the money or not. Because she’s 72 and in good health, investing it in a conservative way could make sense as it gives her another layer of diversification. There’s no way to know for sure how long a person will live, but by investing for the long-term, she can have that money work for her should she eventually need it.

    But there’s a caveat. Investing in the market only works if she is comfortable with it. She should still be able to sleep at night and be confident she won’t panic at any market movement, especially in a downturn.

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