Articles

Transferring Wealth the Right Way

One of the most rewarding benefits of wealth is the ability to make a lasting impact long after you're gone. To this end, you could set up trusts that provide a financial cushion, pay educational costs or provide business seed capital for multiple generations of family members. Maybe you want to have your name on a library or to fund scholarships at your alma mater. Perhaps there is medical research or another cause that you strongly support.

Top College Funding Mistakes Parents Make

Paying for your children's college educations should actually be placed quite low on the totem pole of financial priorities. Why? There are several reasons for this, such as the availability of tools to pay for college, such as financial aid in the forms of student loans, grants and other programs where loans are forgiven in exchange for public service in low-income communities. But ultimately, it's also because focusing too much on college savings can jeopardize a family's overall financial planning strategy.

Think Twice About Your 401(k)

Does your 401(k) account include shares of your employer's stock that have grown a lot since you acquired them? If so, you may be able to make use of a "net unrealized appreciation" (NUA) strategy when you retire or otherwise leave your employer.

To better understand it, NUA is the difference between the market value of your company's shares on the date they are distributed to you and the date they were originally added to your plan account. To use the NUA strategy, you have to: Leave your company, receive a lump-sum distribution of your account's entire balance in a single year, and choose to take all or some of your company stock "in kind." That means you take the actual shares instead of a distribution check for their value or rolling them over into an individual retirement account (IRA). You just need to have your shares transferred to a taxable brokerage account and not have them roll over into an individual retirement account.

Annuities: A Retirement Planning Tool to Consider

When it comes to deferring taxes, people normally think of retirement accounts like 401(k)s, Keoghs, SEPs, and IRAs. But there's another way to defer taxes on your investment earnings until you reach retirement age: by purchasing an annuity.

Philanthropic Sensibilities

Like most wealthy individuals, you’d probably like to pass as much of your estate as possible to your heirs. At the same time, you may have one, or many, charitable interests to which you'd like to donate money. To find the balance, considering a structured philanthropic giving strategy for your estate is a must.

Don't Wait to Plan Your Retirement

Most of us find it easier to earn and spend money than to save it. Planning and saving for retirement too often take a back seat to other priorities. Why is procrastination the rule, rather than the exception when it comes to retirement planning? I've heard many reasons from my clients: thinking about retirement makes them uncomfortable; they're too busy to find time to plan for retirement; they're too young to worry about retirement; and retirement planning is too complicated. If you find yourself making similar excuses for avoiding some serious thinking about retirement planning, it's time to change your tune.

Getting More Out of Your Retirement Assets

For years, you've been investing in an IRA or employer-sponsored retirement plan, and, thanks to the benefits of tax-deferred growth, you now have a considerable nest egg — enough to enjoy a comfortable retirement and pass a tidy sum on to children and grandchildren. Or so you think. Unfortunately, after taxes, only a small percentage of your retirement savings may be left.

Multi-generational IRAs - A Strategy for Retirement Assets

Who should benefit from your retirement assets - you and your family or the federal tax coffers? The answer is easy: you and your family, of course. Achieving that goal is more difficult. These days, very few people stay at one job for their entire careers. So, by retirement, you and your spouse may have assets in four or five - or even more - employer-sponsored retirement plans and individual retirement accounts (IRAs). How you utilize those accounts at retirement can make a big difference in the amount of assets available to pass on to children or other heirs.

Plan Today for Retirement Tomorrow

Planning and saving for retirement, like cleaning out the attic, may be something you figure you'll get to later. But when "later" arrives at retirement age, you may not have the financial resources to enjoy your golden years.

Retirement Planning: Scared or Prepared

If you are planning on winning the lottery, don't bother reading this. For the rest of you, however, it is never too early to begin planning for a comfortable retirement. Given the new economic realities of retirement planning, building up a nest egg is a top priority. No longer can you rely on the government or employer-provided pensions to carry you through your retirement years. The long-term viability of the Social Security system is uncertain, given the crush of aging baby boomers who will begin retiring after 2010.

Using Charitable Trusts in Your Retirement Planning

Land "rich" and cash "poor." That describes Jim and Angela in a nutshell. While they actually live quite comfortably on their professional incomes, they are getting closer to retirement age and are looking for ways to supplement the income they expect from their employers' retirement plans.

1031 Exchanges, A Tax-Deferred Real Estate Strategy

When the time comes to sell your real estate, some owners of highly appreciated real estate could be staring at a substantial capital-gains tax bill. A section of the Tax Code may help you convert your appreciated property into an income stream-while deferring up to 100% of the capital-gains tax that would otherwise be due on the sale.

Are Your Assets Really Diversified

You've heard the old investment adage, "Don't put all your eggs in one basket." It's good advice. A diversified portfolio should be at the core of any well-planned investment strategy. While a worthy goal at any age, it's especially desirable as your net worth grows over the years.

Do Retirees Need a New Investment Strategy

First growth, then income. If you're like most investors, you want to achieve growth while you're working and income after you retire. But that doesn't necessarily make it smart to change your investment strategy when you retire by shifting your portfolio completely out of stocks into less volatile, "income" investments like bonds and cash equivalents.

Tax-Efficient Investing: A Wise Choice

Taxes can take a chunk out of your investment returns; yet, many investors don't give much thought to taxes when they make investment decisions. While investment decisions shouldn't be based entirely on tax considerations, tax-efficient investing may make a significant difference in your net gain. Employing some of the following strategies could help you retain more of your potential investment earnings and lessen your tax obligation.

Why Consider Variable Annuities

You may already participate in an employer-sponsored retirement plan and/or contribute to an Individual Retirement Account (IRA). If so, congratulations! You're one step ahead of many Americans when it comes to saving your money. But chances are you will still need additional retirement savings to secure your financial future and reach your retirement goals.

Charitable Trusts Can Work for You

A charitable remainder trust (CRT) may be an estate planning tool that fits well into your financial picture. A CRT is a type of trust generally used to donate appreciated assets to charity and avoid immediate capital gains taxes. Let's review the basics of a CRT and the benefits it can provide when planning your estate.

Concerned About Estate Taxes

Despite strong congressional support for repeal of the federal estate tax, the tax is still with us. While the Economic Growth and Tax Relief Act of 2001 attempted to reduce or eliminate estate taxes, the result was a tax system with three phases: relief, repeal, and reappearance. Transfer tax rates are scheduled to decrease, and the amount that may be transferred free of estate tax (the credit equivalent) is scheduled to increase, until the estate tax is repealed in 2010. However, the rates return to 55%, and the credit equivalent to $1 million in 2011, unless Congress takes action.

Don't Leave Your Estate Unprotected

Many people who plan carefully to keep income taxes at a minimum don't give any thought to estate taxes. They assume that estate taxes affect only the very wealthy. Not true. Currently, any estate worth more than $2 million may be subject to federal estate taxes — at rates ranging as high as 47%. With so many dual-income families and the high value of real estate in many areas of the country, an estate of this size isn't necessarily a large estate.

Yours, Mine, and Ours: Estate Planning for Today's Blended Family

In a "traditional" estate plan, each spouse provides for his or her assets (or most of the assets) to pass to the surviving spouse, with the understanding that those assets will go to their children at the surviving spouse's death. This planning approach may work well when the spouses have only been married once -to each other - and the only children involved are the ones they have together

Considering Your Options

To attract and keep top employees, more companies are offering them employee stock options. If you receive employee stock options as part of your compensation package, careful planning can help you make the most of them.

Buy-Sell Agreements Keep Your Business Afloat

Alex and Brad, both in their mid-forties, had just celebrated the tenth anniversary of Consulting, Inc., their market consulting business. The next morning, before going to work, Brad suffered a heart attack while jogging and died later that day. Alex suddenly lost his long-time business associate. What's more, after the estate was settled, he found himself with a new co-owner -- Brad's wife.

Buy-sell Agreements: Taking Care of the Eight D’s

Most closely held businesses, especially multi-owner corporations and partnerships need to have a buy-sell agreement in place. Individually owned businesses can also profit from the use of a buy-sell agreement. This is essential for smooth transition of ownership upon the occurrence of several events, namely the "Eight D's." We'll discuss each one individually in the corporate context, however, most would also apply to partnerships. In a single-owner business, the buyer could be key employee(s), a competitor, a supplier, or even a customer.

Considerations on Selling Your Business

Whatever your motivation for selling your business, you'll only get one chance to maximize the return on your years of hard work. Do it the right way and you could get the price you want and reduce the impact of capital gains and estate taxes. Do it the wrong way and you might end up with a hefty capital gains tax bill and estate-planning headaches.

Organizing Your Business as a Limited Liability Company

As a sole proprietor, you've enjoyed watching your business take off. Your customer base is building, orders are steady, and your overhead is under control. But with this growth, you now realize you can't handle everything yourself. You need to attract investors, take on a few associates, and protect your personal assets from your firm's liabilities.

Plan Ahead for Your Company’s Survival

As the founder, owner and manager of your family business, you probably have a hard time imagining anyone else running your company as well as you. You may be right, but that attitude spells trouble. Even though they know better, many successful entrepreneurs choose to ignore the need for planning for their business succession.

Integrate Retirement Planning With Charitable Giving

For many Americans, giving money to charity – during their lifetime or in their will – is an important financial goal. But common sense says you shouldn’t do so at the expense of other goals – for instance, educating your children or funding your own retirement. By thinking ahead it’s possible to include charitable giving in the comprehensive financial planning process.

Finance of Remarriage

Getting remarried includes merging two well-established financial and emotional lives. Both partners bring accumulated assets, debts, forged spending habits, obligations and perhaps children to the relationship. Determining how to manage your financial assets to meet the needs, goals and expectations of each partner can help solidify a harmonious union - but may not always be easy

Financially Savvy Women

Having a career that brings you personal satisfaction and financial success places many demands on your time and energy. You may find yourself putting off important tasks simply because there's no strict deadline for completing them. But, no matter how busy you are, there's one task you shouldn't put off - planning for your financial future. Married or single, with or without dependents, you need a comprehensive financial plan.

Is Retirement Hard Work?

Ah, retirement! Finally, there will be time to relax, free from financial worry. Many people think of retirement as a time to travel or pursue special interests - a welcome break from the 40-hour workweek. But without careful retirement planning, you may actually need to work harder and longer than you imagined during your so-called retirement years. In fact, it may be safe to say that, when it comes to retirement, the best-laid plans are made well before age 65.

Women and Retirement

According to a study by the National Center for Women and Retirement, nine out of 10 women will be solely responsible for their finances at some point in their lifetime. Women living in affluence may feel at ease with the resources they will have in retirement. However, this ease may lend a false sense of security if they don't realize that wealth must be strategically managed to last a lifetime.