Blog

­

Common Estate Planning Pitfalls

Typical goals in creating an estate plan are to establish a legacy and create a straightforward guide for your heirs. Depending on how long ago you created your estate plan, it’s possible your wishes or priorities may have shifted. Your vision of your legacy and your directives may no longer be clear. That ambiguity can create additional stress and expenses for your loved ones and beneficiaries during an already difficult time. It’s wise to review your plan every three to five years. That way you can address and avoid common estate planning pitfalls in the transfer of your assets. In a recent article, Rande Spiegelman, vice president of financial planning at the Schwab Center for Financial Research, shared some potential obstacles.

Outdated Information

Review your accounts and beneficiary designations anytime there is a major change in your life, such as a birth, death or marriage in the family. Your heirs may not get the assets you intended when this information is incorrect. It may even override the wording of your will or trust in some cases.

Costly Probate

“A revocable living trust is one way to avoid the unwieldy and costly probate process, because your assets technically belong to the trust—even while you’re still alive,” Spiegelman noted. You should create what he calls a “pour-over will” after creating and funding the trust (by changing the title of your accounts and other assets into the name of the trust), he suggested. This states that assets not otherwise devised by your will should be transferred to the trust upon your death. Finally, be sure to name a successor trustee (in case you or another original trustee cannot fulfill the duties).

Misunderstandings

Dscussing your estate plan can be uncomfortable. Still, it’s wise to communicate as much as you can to your spouse, children or other heirs while you’re still living. Your openness about your intentions can help them manage their expectations and may reduce any confusion, conflicts or legal battles down the road.

By |September 25th, 2017|Estate Planning|

Protecting Your Business From Liability

protecting your business from liabilityProtecting your business from liability is critical. If you or your business provides professional services or advice, professional liability insurance can help protect your assets if you are ever sued. It covers financial losses suffered by third parties as a result of errors and omissions in your services (it is also sometimes called E&O insurance).

Attorneys and physicians consider this type of protection a necessity; in fact, legal and medical malpractice insurance is required by law in many states. Other professionals who should explore and consider professional liability insurance include accountants, software developers, real estate agents and consultants.

According to the Insurance Information Institute, there are two types of professional liability policies: claims-made and occurrence. Most policies are claims-made, meaning that the policy must be in effect both when the event took place and when a lawsuit is filed for a claim to be paid. An occurrence policy is less common, but will cover any claim for an event that took place during the period of coverage, even if the suit is filed after the policy has lapsed (such as after you’ve retired or changed careers).

Policies will generally have a deductible ranging from $1,000 to $25,000. The amount of professional liability insurance you will need and how much it will cost depends upon the size of your business and the level of risk it poses. Coverage does not extend to losses caused by intentional or dishonest acts. Professional liability insurance also does not cover bodily injury or property damage claims (these are typically covered by commercial general liability policies).

Consult with your financial planner or inquire with your profession’s trade association about protecting your business from liability and to determine if you might need professional liability coverage.

By |September 6th, 2017|Insurance, Small Business|

Managing Expectations

This month, the U.S. stock market hit an all-time record-high of over 22,000 in the Dow Jones Industrial Average. This rise represents a 20 percent return since November 2016 and a more than 300 percent return since a low of about 6,600 in March 2009. Managing expectations, as an investor during such a strong bull market can be difficult.

Stock market investors have enjoyed a string of steady positive returns for the better part of two years now without any meaningful correction. A meaningful correction would be a pullback in the 8 percent to 10 percent range, which from the current levels would constitute a fall of about 2,000 Dow points. As shocking as that sounds, a correction or pull back of any level would be a natural occurrence in the financial markets.

The reality is financial markets do not usually march straight upward without some type of bump or hiccup that would cause it to drop and pull back for a rest. It’s normal to experience some kind of volatility or downward movement in the course of investing. Likewise, the recent stretch of market appreciation, while welcome, is not typical.

When the inevitable and natural occurrence of a market decline takes place, remember the following things to help you manage expectations through the downturn:

  • Stay diversified. Even if it doesn’t feel right, history shows that this strategy works.
  • Avoid jumping in and out of the market. It is virtually impossible to time the market.
  • Invest regularly. The potential to buy investments at discount prices can only happen if you are involved when things look bleak.
  • Market corrections, no matter how painful, are a natural part of an economic cycle.

Finally, stay in communication with your advisor as changes take place in your life or even if you just want some perspective on market movement. An important role we play in our clients’ lives is managing expectations, or being an “emotional surge protector,” when these unavoidable declines take place.

By |August 28th, 2017|Advisors, Current Affairs, Investing|

Seasons of Investing

In many ways, tending a portfolio is like tending a tree, according to Jim Mailliard. One must know how much to water it, when to prune and when to harvest. There are seasons of investing, and a well-balanced portfolio can grow and blossom through those seasons.

In this brief video, we explain the analogy in more depth.

By |August 14th, 2017|Advisors, Video Blog|