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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Understanding The Federal Reserve Mandate To End Inflation
The Federal Reserve System, the nation’s central bank, has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but that was not always the case. In fact, the Fed’s bias toward maximizing employment was a critical driver of the stagflation that plagued the U.S. in the late 1960s and 1970s. Recognizing the need to balance price stability and maximum employment, in 1977, Congress revised the Federal Reserve Act.
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Fed Governor Kugler Details Inflation And Economic Outlook
The 12-month inflation rate, as measured by the personal consumption expenditures (PCE) index, was 2.6% in December, down from its peak of 7.1% in June 2022, and the six-month rate for PCE inflation was even lower, at 2%, which is the target rate set by the Federal Reserve.
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Why Rates May Not Be Cut Until June
The cost of a loan to buy a home, car, college education, and achieve the American Dream is staying the same for now. As expected, Federal Reserve Chairman Jerome Powell said the central bank did not lower loan rates following the Fed’s Wednesday, Jan. 31, 2024, policy meeting.
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
What Happens With Your Assets When You Die?
Published Thursday, June 23, 2022 at: 10:12 AM EDT
Since a 1965 book by financial planner Norman Dacey popularized avoiding probate, the strategy has become ingrained in the American financial psyche, and the U.S. financial system has accommodated consumers by making it easy to set up IRAs and other brokerage accounts to avoid probate.
Now, with the first generation of Americans who set themselves up to avoid probate starting to die, the quiet evolution toward avoiding probate has suddenly created an urgent need for Baby Boomers to understand what will happen to their assets when they die. Once the domain of legal professionals only, consumers must be aware strategies for estate planning and avoiding probate is the domain of financial advisors, part of the financial advice process.
Probate is the term for a legal process of distributing your assets after you die. It’s historically been court-supervised, but most states now offer an independent administration option and takes months or years. Probate opens your will to objections from disgruntled family members, heirs who feel shortchanged, and makes public a record of personal information about your estate.
Since the 1980s, states changed property laws to make avoiding probate easier. Now, naming the beneficiaries of your IRA, Roth IRA, and other federally qualified retirement accounts avoids probate and that puts the financial advisor at the center of that crucially important estate planning decision.”
“Avoiding probate became standard operating procedure for the entire generation of Baby Boomers with the advent of irrevocable trusts,” said L. Paul Hood, Jr., who teaches estate tax planning to legal, accounting, and financial professionals. “And, now, as Baby Boomers are starting to die, many don’t completely understand that their financial advisor – and not their attorney – plays a pivotal in ensuring your estate passes to beneficiaries outside of probate and in conformity with your wishes.”
In addition to beneficiary-designation assets, most property that used to pass via probate can avoid it altogether now if they are properly titled. Real estate can pass by joint tenancy with rights of survivorship. Bank accounts can pass to the account beneficiary via a pay-on-death (POD) account. Marketable securities can pass to the account beneficiary via a transfer-on-death (TOD) account. In joint tenancy, POD and TOD accounts, the accountholder’s will is irrelevant, even if it conflicts.
What if the account holder wants to change the account beneficiary in a POD or TOD account? They don’t need to go to their estate planning lawyer; they need only visit (even electronically) the account sponsoring organization.
Unfortunately, with the rampant increase in elder financial abuse, it’s now incumbent on the employees and representatives at banks and brokerages to keep watch for vulnerable seniors being taken into offices to change account beneficiaries without their consent or understanding. Given that account sponsoring organizations now effectively control ultimate disposition of the accounts on death, it’s increasingly clear that organizations that don’t take adequate precautions to protect the vulnerable and elderly are going to be sued if they fail to do so.
Depending on your personal circumstances, a legal professional specializing in estate planning can be called in to assist in certain instances, including:
- family members with special needs
- transfer ownership of a business or investments
- gifting your residence to heirs
- leaving assets to charity
- estate is valued at more than $12.06 million
Estate planning is central to fulfilling our role as your trusted financial advisor. If you have questions about what happens to your assets when you die, please do not hesitate to contact us.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
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