Making Financial Decisions After the Loss of a Spouse

Man's Hand Resting On HeadstoneDear Mr. Market:

Our letters to you typically center around the stock market, the economy, and related investment topics. At the end of the day, however, what is wealth (the accumulation, growth, and preservation of it) all really for? That answer is different for everyone but from our experience in meeting with thousands of investors ….it means nothing without family. Losing a loved one is always painful but when it’s your spouse there are also several financial issues that arise and knowing how to navigate is critical.

The following article is written by a guest contributor, Lucille Rosetti (see credits at the end):  Continue reading

What matters beyond wealth…

Dear Mr. Market:Steve-Jobs-Quotes-on-Life

Almost every letter we write to you has to do with educating people about building or protecting wealth. At the end of the day, however, what does it all mean? Real wealth is more than a number, a status, or some level of material achievement.

To date the best articulation of this (in our opinion) comes from the alleged letter that Apple co-founder Steve Jobs wrote from his death bed. We note “alleged” in that sources closest to him recount it differently but none the less, this is an incredibly powerful message. Continue reading

WILL VS. TRUST – WHAT’S THE DIFFERENCE?

Catching

Dear Mr. Market:

The stock market has been rather nasty as of late so let us switch gears and touch on a topic that most investors avoid yet need to pay more attention to. After all, what exactly happens to your investments when you’re gone? Do you actually need a living trust or would a will suffice? We reached out to Mindy Baldwin, an estate planner in Rancho Santa Margarita for expertise on this topic:

The terms “will” and “trust” come up often when doing estate planning. Many people assume that these terms mean the same thing and use them interchangeably. However, wills and trusts are different documents that are used in different circumstances.   Continue reading

More than a Client …

photo[287]Dear Mr. Market:

Like most Mondays you begin the week with your gyrations of going up and down. All the companies that make up your identity are digesting the news from over the weekend as well as what’s on tap for the week ahead. As of this writing investors are scared and don’t completely trust you but conversely they’re also almost bored since you have yet to provide any meaningful direction or hint as to what your real plans are.

You could continue to break out and go higher or you could do what you’re supposed to do which is sell-off by at least -10% to -20% within the next few months. Guess what? We don’t care…at least not today. After some sunsets, both literal and figurative ones, there is so much more to them than what happened with the market. Yesterday, June 22, 2014 was such a day.

Driving over to the Long Beach Yacht club was pleasant and relaxing. On this first day of summer I looked out over the bridge leading into Naples and Belmont Shore and I could see tons of people splashing in the water, kids building sand castles, and nearby boats sailing in and out of the marina. As I parked my car however, the reality of why I was going to the yacht club struck me harder than expected. I was going to see a client, or at least one of them. For the third time this month our firm lost another client to cancer. Today was to be a celebration of her life and although that’s what she and her family wanted, it sure was difficult to “celebrate”. After all these years a client becomes a friend and a part of your extended family. Continue reading

Building Your Financial Team – The Road to Success

Teamwork arrowDear Mr. Market:

How ‘fit’ is your financial team? Putting together a financial team to help you meet your financial goals is like building a winning sports team. Each member of your financial team needs to know what their responsibility is and what they are contributing to your financial success.   With tax-season behind us and the equity and fixed income markets experiencing volatility, now is a great time to assess your team and see if it is truly making the grade!

There is no single approach to building your team or a guide on how to assemble one. The key is the team needs to work for you, they need to give you a sense of comfort and they need to work together. Whether you work with individuals or utilize software solutions it is important that an assessment takes place so that you don’t suddenly find yourself in a hole that you need to dig out of.

In this article we will discuss how to build your “Team of Trust”. We will look at three key areas that every investor should consider: Estate Planning, Tax Planning and Financial Advice. We will discuss some key elements with each member of the team: Why? Who? What? How Much? Continue reading

Splitting Headaches: New Laws May Adversely Affect Your Living Trust

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Dear Mr. Market:

On occasion you must certainly get writer’s cramp with all of your musings about the stock market. Allow us to not only give you a break this week but to also open your eyes to something outside of investments. All the attention you give your portfolio may be hampered if you neglect a few other issues. We’ve asked a guest and expert in estate planning to contribute some important information that you should be aware of:

Your living trust might be out-of-date.

Good financial planning isn’t just about stocks, bonds and other investments, it also involves looking at a client’s entire situation, encompassing family goals, tax planning and estate planning.  When My Portfolio Guide, LLC invited me to contribute an article, I jumped at the opportunity to collaborate with them because of their commitment to understanding all aspects of their clients’ lives when implementing strategies and solutions.

For those of you who have prepared a living trust, it is important to have your estate plan reviewed from time to time as things change.  As you are probably aware, new Federal and State laws are constantly being implemented, not to mention any changes that may be occurring in your personal life.  Because of the constant evolution of your personal situation and the legal landscape in general, I encourage my clients to occasionally review their living trusts and associated documents to make sure that everything is still going according to plan.

In particular, there has been one major change which I want to make you aware of.  Many people have created AB Trusts over the past two decades.  AB Trusts are designed to protect more of a married couple’s assets from being taxed by the government upon their passing.  However, one drawback of an AB Trust is that it is relatively expensive to implement after one spouse passes away.  The AB Trust requires that the trust be divided or “split” into two separate trusts after the first spouse passes away.  This split requires the help of an attorney or a CPA to divide and administer the trust and can also give legal rights to children or other beneficiaries over a portion of the trust during the lifetime of the surviving spouse, increasing the potential for conflict.  Furthermore, the split requires the filing of additional tax returns after the passing of the first spouse.  The costs associated with an AB split are often several thousands of dollars.

The AB Trust was very popular because it Continue reading