What You Need to Know!

Market volatility can be quite stressful, especially for those who are near retirement or have recently retired.  By the same token, market declines can create favorable tax planning opportunities, which include the ability to maximize Roth conversions at a discount.  Before deciding to convert a traditional IRA to a Roth IRA, it is important to understand the differences.  Both types of IRAs are designed to help you save for retirement while providing a tax advantage, but they do so in different ways.  With a traditional IRA since contributions are pre-tax, you pay the tax upon withdrawal.  For a Roth IRA, contributions are post-tax, thus future withdrawals are tax-free.  Notably, a key benefit of a Roth IRA is that they do not require taking minimum distributions, unlike a traditional IRA in which required minimum distributions are enforced upon obtaining age 72.    While individuals at any income can complete Roth IRA conversions,...

Planning for Success: What kind of legacy do you want to leave?   Aside from direct, out-of-pocket gifts, or gifts made through your IRA, there are three primary vehicles that can be utilized to achieve your charitable giving goals.  We are here to educate and guide you in selecting an appropriate solution. Before reviewing charitable giving vehicles, it is important to review the IRA Qualified Charitable Distribution. A Qualified Charitable Distribution (QCD) can be made from an Individual Retirement Account (Traditional, Rollover, Inherited, SEP and SIMPLE) to a charity or charities and be excluded from income up to $100,000 annually for those 70 ½ or older.  These qualified distributions can count as all or part of your required minimum distribution, but they are not taxable to you and are not added to your adjusted gross income; qualified distributions are not deductible on your personal income tax return.  Keeping your taxable income...

Divorces in general can be quite complicated and messy.  When celebrities are involved, divorces can quickly become viral sensations as celebrities deepest and darkest secrets are broadcasted across the globe.  Not to mention the aftermath to their career as these public grievances can forever curtail their career and public perception.  As Benjamin Franklin famously stated, “If you fail to plan, you are planning to fail.” Exhibits like these can easily be avoided with a Prenuptial and Confidentiality Agreement.        As most of us have heard, Johnny Depp and Amber Heard are back in the court room for a multimillion-dollar defamation trial.  The front page $50 million defamation lawsuit Johnny Depp brought against his ex-wife, oddly resembles their divorce proceedings.  It is hard to believe that the couple has spent more time together battling in court over the last 6 years compared to their brief marriage of just 16 months. ...

There’s a myriad of updates coming out of Washington.  Here’s what you need to know to stay up to date so we can plan accordingly.  The U.S. House of Representatives approved House Resolution 2954- commonly referred to as Secure Act 2.0.  The next step for the legislation is for the House and Senate to work together to reconcile the bill, which has strong bipartisan support.  A final passage is expected in the fourth quarter of 2022.  It is important to note that there are items in the bill that could potentially impact taxpayers as early as this year.   Here are the key planning provisions: ·         Expansion of the IRA Qualified Charitable Distributions o   Qualified Charitable Distributions (QCD) can be made from an Individual Retirement Account to a charity and be excluded from income up to $100,000 annually for those over 70 ½.  o   These Qualified Charitable Distributions can count as...

Planning for Success: 2021 IRA Contribution ✓ Tax Day is swiftly approaching with this year’s deadline of April 18 th .  While this time of year can be daunting, we are here to make it a little bit easier.   There is still time to contribute to your Individual Retirement Account (IRA) for the 2021 tax year.  You have until April 18 th to contribute the maximum amount to either a traditional IRA or Roth IRA for it to be eligible as a 2021 tax year contribution.  It is important that your custodian appropriately marks the tax year of contribution.  For instance, if you have not contributed or reached the maximum contribution amount for 2021, you can identify your contribution for either the 2021 or 2022 tax year.  It would be wise to mark the contribution as 2021, so you will still be able to contribute for the 2022 tax year. ...

Planning for Success: Have you Considered a Donor Advised Fund to Achieve your Philanthropic Goals? As you contemplate your estate planning and leaving a legacy, you may want to recognize and give to charitable organizations or philanthropic causes that have made an impact on you.  Perhaps, you may want to encourage the beneficiaries of your estate to continue the legacy of charitable giving that you have maintained during your lifetime.  There are several options available to accomplish your charitable giving goals in your estate plan, and a simple and effective solution is with a donor advised fund.     Over the past decade, nonprofit fundraising has been rapidly transformed by new ways to give.  Donor advised funds are a popular way for donors to support nonprofits of all sizes.  Most people believe donor advised funds to be vehicles that streamline charitable giving during their lifetimes.  While this is certainly true, a donor...

It is never too early to learn and develop a strong work ethic.  Simply put, the best way to learn is through firsthand experience.  Family businesses give parents the ability to bestow core business values and acumen to their children.  Whether they are young adults or teens, giving them the experience at a young age on how to properly manage money and invest, will not only jumpstart their desire and ability to be financially sound, but will keep them ahead of the curve.  It also provides them with a way to start saving for future goals like college or a down payment on a house.  In return, you get employees who have a natural sense of commitment, teamwork, and loyalty.  Starting them at a young age will give them a deeper understanding of the business and a greater appreciation for your hard work and dedication to continuing its success.  They may...

Proper Business Protection and Succession Planning  A succession plan is much more than just an idea of who will run the company when you are not able or no longer want to.  A Plethora of factors come into play: Will you sell? To whom? Will your family take over? How will the business continue to operate? What happens to your family, employees, and the company after you pass away or incapacity?   While there is myriad of insurance solutions to protect your business from lawsuits and other liabilities, one liability that simply cannot be avoided is incapacity or death.  This is especially true if you are the sole business owner; without proper planning it will be incredibly difficult to make certain your business and the income it generates to your family will continue to run smoothly.  A comprehensive estate plan will allow you to avoid unnecessary court processes, which could easily cause...

When was the last time you reviewed your Estate Plan?   Even if you have a sound estate plan in place, it canbe worthless for the people you love ifnot regularly reviewed nor kept up to date.  Most people believe their estate plan is done when they sign a will, trust, power of attorney or a living will, but estate planning is a lifelong process.  Your life will inevitably evolve as changes to laws, assets, family, and goals happen.  In absence of any major life events, we recommend reviewing your estate plan annually to ensure it is current and still reflects your desires. These are the four questions that you should ask yourself during an Estate Checkup. Has your family or household changed?   Marriage: Marriage instantly changes your legal status.  Regardless of whether it is your first marriage or fifth, you must take the proper steps to ensure your estate plan...

Planning for Success: “Overprotected” - Britney Spears    When Britney Spears burst onto the Billboard Charts at the age of sixteen, she instantly became one the world’s most beloved pop stars.  Despite Britney’s massive fame and fortune, she has never had full control over her own life.  Imagine becoming a worldwide sensation, amassing riches and fortune, but with the caveat of having to ask for permission on how and when it can be used.   As most of us remember, Britney suffered a mental breakdown in 2008, which led to the formation of a conservatorship.  Essentially, a conservatorship is an adult guardianship in which the court appoints representatives to control the individuals legal, financial, and personal decisions.  Initially when established, the conservatorship was meant to be only temporary; yet, in October 2008, it was changed to remain in effect for the foreseeable future.  For the past thirteen years, Britney’s father, Jamie, has...

Planning for Success: Steve McNair’s Colossal Fumble Estate Planning is commonly believed to only benefit wealthy and older individuals, when in fact all stages of life can utilize certain aspects and strategies of estate planning.  One could infer that estate planning is of greater significance for younger adults than it is for older ones.  This is due to younger adults often having dependent children that will require care for the foreseeable future.  If you are a parent of a minor child, how would the unexpected disappearance of you or your spouse impact your family?  Are your assets appropriately titled to avoid freezing your estate and probate?  While estate planning is often thought to be a scary process, it is not something to fear.  By acting today, our team of seasoned professionals can develop an effective strategy to seamlessly transfer your property; thus, allowing you to continue to provide for the individuals...

An individual’s residence and domicile are often narrowly perceived as the same; therefore, potentially missing out on tremendous tax benefits.  A significant aspect of the estate administration process is your domicile at the time of your demise, not where you were residing.  While you can have multiple residences in various states, you can only have one domicile.  Essentially, a domicile is a combination of two factors, the first is residency, and the second, an intent to remain for the foreseeable future.  Clients often look to establish residency in a jurisdiction with an attractive legislation for estate planning purposes.  Suffice it to say, Florida is considered a tax sanctuary fueled by its superior asset protection climate.  Currently, there are seventeen states that will impose either an estate or inheritance tax for estates that exceed a certain threshold.  Individuals located in these states with a considerable taxable estate could be required to pay...

Is Your Estate Plan for the Average Joe?   While no one likes to think of their own demise or what needs to be done to efficiently transfer assets and protect the interest of each beneficiary, it is imperative as a business owner .  Efficacious estate and succession planning will provide a lifeline for not only the survival of your business, but your employees and their families.  An effective estate plan clearly outlines how your assets are to be distributed when the time comes.  Ultimately, this will ensure your business can continue to run smoothly as the appropriate steps towards a successful succession have been thoroughly planned. With the Dolphin’s season opener right around the corner, the estate of Joe Robbie distinctly comes to mind.  In the mid-1960’s, Joe Robbie co-founded the Miami Dolphins, which at the time played in the old American Football League, shortly before the merger with the National...

Having a will or a trust is essential, but it is only effective if upon your demise, the documents can be located in a timely manner.  The family of Florence Griffith Joyner found themselves in this predicament.    Florence Griffith Joyner was a famous American track and field star, whom most notably, won three gold medals and a silver in the 1988 Olympic Games in Seoul, South Korea.   Florence broke records in both 100 and 200 meters, earning her the nickname Flo Jo, for being the fastest woman of all time.  She was only 38 years old when she passed away in her sleep from an epileptic seizure.  Florence had taken the basic steps to ensure that her wishes would be fulfilled by a will.  Unfortunately, her husband could not locate the will and was therefore unable to file it within the required 30 days of her death per California...

Most of us have envisioned what it would be like to be the beneficiary of a multimillion-dollar estate; however, it is rarely cherished by the beneficiary, the complexity of planning involved to not only protect their interest, but future generations as well.  Envision being the beneficiary of a $35 million estate, only for it to be reduced by roughly a third, this was exactly what occurred to Philip Seymour Hoffman’s estate.  Due to his decision to choose a simple estate planning technique, approximately $12 million will never make it into the hands of his family; instead, being consumed by unnecessary taxes and fees that could have easily been avoided. Philip Seymour Hoffman passed away leaving behind his beloved girlfriend and their three young children.  While he certainly had the means to hire a top estate planning attorney to develop a comprehensive estate plan; however, Philip took the advice from his accountant...

While it may seem like a distant memory, it has been a little over a year since the legendary Kobe Bryant and his 13-year-old daughter, Gianna, tragically passed away in a helicopter crash.  Kobe’s untimely death at the young age of 41, highlights just how critical it is for every individual to not only develop an estate plan ensuring their loved ones are properly protected, but to ensure the documents are swiftly updated to reflect recent life events.   Bryant’s earnings, between his salary and endorsements during his 20-year career with the L.A. Lakers, are estimated to be roughly $650 Million.  Kobe had a comprehensive estate plan in place.  His estate plan included a trust to not only protect his assets, but to reduce his potential estate tax liability and ensure his wealth is properly passed on to his family.  Kobe’s trust was created to allow his wife and daughters to...

When people pass away, it serves as a reminder of life's fragility.  You never know what the future holds and it only takes one event to change everything in a blink of an eye.    Tony Hsieh was a visionary who co-founded Zappos, a shoe company, which focused heavily on customer service and famously offered customers free shipping and a complete refund on all shoes within a full year after purchase, no questions asked.  At only 46 years old, Tony Hsieh passed away from smoke inhalation complications from a fire at his vacation home in Connecticut.  At the time of his death, Tony was worth an estimated $840 million, but despite his immense wealth he did not even have a simple will prepared.  Given Hsieh's altruistic nature, it is puzzling why basic estate planning documents had not been prepared.  Unfortunately, he is not the first among celebrities and high-profile individuals to...

Are You on the Fast Track to Early Retirement?  Have you dreamed about retiring in your 50s or before you receive your AARP card? Are you ready to call the shots and choose how you will spend your days? Take this opportunity to envision what “retirement” means to you, what kind of lifestyle you would like in retirement and at what age would you like to achieve this dream. Retiring ahead of your peers depends on your dedication, financial situation, lifestyle, and early implementation of our comprehensive road map. We can chart the path together and, with the stewardship of a seasoned fiduciary team, we can quickly steer clear of potential roadblocks to keep you on track to realizing your goals and dreams. According to recent U.S Census Bureau data, the average retirement age in the United States is about 63 years old. Early retirement in terms of Social Security and...

With the cost of college education skyrocketing and outpacing wage growth by nearly eight times, it is not surprising that student loans make up the largest portion of the U.S. non-housing debt. According to College Board, the average cost of tuition and fees for the 2018-2019 academic year for an in-state student at a four-year public university has increased 2.8 percent from the prior year to $21,370. A four-year private university increased 3.2 percent  from the previous year to $48,510. What techniques and strategies could be utilized to reduce the burden of potential student debt and keep it from snowballing? How can we best optimize our cash flow to fund all our goals and not become overwhelmed by the escalating cost of education? The One-Third Model is a funding strategy to help us stay on track with education planning by dividing the cost of college into three parts.     •...

Small business owners are actively involved in all aspects of the business, from day-to-day operations to continuing the sustainability and the growth of the business. At what point are you casting your net too wide?     It is not uncommon for business owners to assume they will never retire. After all, you’re doing what you love, so why not continue indefinitely? According to a Manta survey, a third of small business owners and entrepreneurs do not have a retirement strategy in place. Some entrepreneurs believe that selling their business is an effective way to fund their retirement. Attempting an exit strategy without a well-developed succession plan is not a feasible option. Small business owners must plan for themselves because if they don’t, who will? Before we begin reviewing the different retirement plan options, we need to determine the objective that we would like the retirement plan to achieve. Are we trying...

First, can we financially afford adding a pet to our family?  The simplest way is to start with a budget.  It is always best to slightly overstate the potential costs that will be incurred.  As a CERTIFIED FINANCIAL PLANNER™ Professional, I enjoy comprehensive research and running various scenarios to determine the best solution.       Let me save you time on gathering details for your pet’s budget. Initial costs vary greatly depending on if you are adopting from the Humane Society or opting for a designer pet from a breeder.  When it comes to adopting from a shelter, adoption fees range from $100 to $300, depending on age and breed.  A perk of this cost is that it typically includes spaying/neutering, microchipping, and vaccination. When purchasing a pet from a breeder, expect to pay from $1,000 to more than $2,000, depending on the breed. Additional beginning expenses will include: an initial...