Blog Layout
I am not Married/ We Do Not Have Any Children: Who Should We Leave Our Estate to?
Sara Faitelson • November 22, 2022
I am not Married / We Do Not Have Any Children: Who Should We Leave Our Estate to?
Hello Blog Readers,
I have some clients who are not married, and I have some that do not have any children. When we discuss who the beneficiaries should be on their financial accounts, it becomes a big deal. Why? Well sometimes they have a good relationship with just one of their siblings and the others they do not. Or they may have a good relationship with just one niece or nephew and not the rest. Who should they choose without hurting any family member’s feelings?
Another option I put on the table is their favorite charity. There are so many charities that could use the money to help others. Why else is choosing a charity a viable option? The answer in one word is: taxes. If you leave money to your favorite charity, then the charity will receive the money tax-free. Also, during your lifetime, you can start making contributions to your favorite charity and receive a tax write off. Before making a contribution, or leaving a charity funds as a beneficiary, it is important to talk to a tax specialist. This way you will not have to have that awkward conversation at the dinner table during family get togethers.
Your family may not love your idea to leave money to your favorite charity, but at the end of the day it is your money, and it is your decision. There are so many people right now without a job and they do not have enough money to buy food, wouldn’t it not be nice to give back to the community. If you would like to make a charity your beneficiary, please reach out to them for further assistance. There really is more happiness in giving than there is in receiving.
7336564RG_Nov26
Can I Use Life Insurance for Only Death Benefit Purposes? Are there Any Other Benefits?
What Kind of Relationship Do you Have with Money? Can it be Improved?
Why am I Always in the Red Zone at the End of Every Month?
Are You Bad at Saving Money?
Should I Worry About Probate?
Hello blog readers. I hope everyone is safe and healthy. It has been quite a year. Who would have thought we would still be in a pandemic a year and a half later, but here we are. Lately, we have been laughing about what people are calling Covid 15 – gaining 15lbs during this pandemic. I do not know about you, but I am a big fan of pizza, which is why it is easy to become a victim of Covid 15. Most of us cut the pizza pie into 8 -10 slices. Would you ever buy a whole pizza, cut off one slice, and then throw away the rest of the pizza? I doubt it, but that is what many people do when assessing their financial goals. Last week, my business partner and I were sitting with a couple who is in this situation. They have one piece of their financial business with one person and then other pieces with other people. When I asked how their pension works with their retirement plan, they looked at me like I was speaking a different language. No one has ever looked at this piece of the pie and tried to fit it in the rest of the retirement plan. I asked about reviewing the pension booklet and creating a game plan where they can start planning for their retirement date. They said “oh, that’s how you figure out when to retire.” This is a situation that happens more than I can count. Clients have different people doing different things for them, but no one has an end game. Retirement because reactionary rather than proactively assessed. What is the point of this story? The lesson is: “don’t eat one piece of the pizza and throw the rest of the pie in the trash.” If you want to have success, all pieces of the pie must be analyzed, and they must work together to compliment each other. Registered Representative of, and Securities and Investment Advisory services are offered through Hornor, Townsend & Kent, LLC, (HTK), Registered Investment Advisor, Member FINRA/SIPC. (215) 957-7300. Stiletto Financial and other listed entities are unaffiliated with HTK does not provide legal and tax advice. 7585271RG_Jan28
Hello blog readers. I know it has been a few weeks since I have been able to post. It is tax season and it gets crazy here. This time of the year I am usually on the phone or clients reach out every day non-stop. One week we had a waiting list because we received so many calls in a week. Things are finally calming down and I wanted to write about two types of clients I have. Let me start by saying it is not great to go extremes. I want clients to open their statements and ask questions when we do our quarterly reviews. However, I do not want to receive a call if a client looses 17 cents. Having balance will help you be realistic, and you will not make knee jerk reactions. Balance is the key. It is good for people to want to know how their account is doing, what kind of trends advisors, and the tax consequences associated with their decisions. However, a financial advisor is not focused on day trading. We look at money from a long-term perspective and take the emotion out of investing. What do I mean by that? Have you ever gone food shopping on an empty stomach? It is the biggest mistake I have ever made in my life. I ended up buying way too much food that I could never eat by myself. I was hungry and everything looked appetizing and I started to fill up that shopping cart. We can make the same mistake when it comes to investing in the market: buying investments because everyone tells you to and you are always looking for a good tip. What is the moral of the story? Keep track of your accounts, maintain a balanced view, and don’t go food shopping on an empty stomach when it comes to investing. 3473555RH_MAR23
Hello blog readers. I hope everyone has been as busy as me. I thought it was time to write about a call I received a few weeks. A couple I have been working with has decided they want to get a divorce. The wife calls me and tells me what is going on and her husband knows we are speaking because they both want to speak to me. The wife handles the finances mainly for the family and they each had some questions. We first went over the children. They have a blended family, and I needed to know if any of the children are legally adopted by the other party. They had one child together and the other children were not legally adopted by either of them. That helped me explain if any child support could come into play during negotiations. Next, we went over the house: how much they owe, who wants to stay in house, or will they sell it. We also went over how much it is worth and if they were both contributing toward paying the mortgage and taxes. Third, we went over the investment accounts and pension plans. I specialize in separating assets and in particular pensions. Some people make the mistake of giving up their assets in exchange for keeping all of their pension. I explained what would happen in that situation, particularly if the other party passed away. In the end the client was happy to get a financial picture before calling her attorney. She was able to pinpoint topics that need to be discussed and negotiated. What is the lesson? Before calling your attorney, it is imperative to reach out to a certified divorce financial analyst to give you a fuller picture. It will save you time, energy, and aggravation when starting the divorce process. 7585248RG_Jan28
Hello blog readers. I hope everyone is safe and sound. We are living in some unprecedented times that is for sure. I thought I would touch on topic that comes up a lot in meetings with newly acquired clients. I will start with a case study a remember very well. This gentlemen had $1 Million sitting in his 401k. He was telling me about when he retires all the things he going to do like travel and play more golf. We discussed how much income he would need in retirement after doing a cash flow analysis of their expenses. Then I realized something he needed to take into consideration. The word we all hate: taxes. He never took taxes into consideration. Is it a good idea to put all of your money in one basket? As many of you know. I am a shoe enthusiast. Imagine if I owned 100 pairs of brown shoes. My life would be very boring. If I like to have different shoe colors and styles, would you not agree that my financial future is more important than shoes? Why do people buy 100 pairs of brown shoes financially? Most likely it is because they think they are doing the right thing. Are they? Would you like to own 100 pairs of the same colored shoe? Of course not! And that is why it is important to have a few buckets working for you. How many buckets should you have? Well it depends on your financial circumstances and goals. If anyone has ever read “The Power of Zero” by David McKnight, they know that it is a good idea to have at least three buckets of money. I agree with his ideology because it makes sense from a tactical and tax perspective. He speaks about tax-deferred, tax-free, and taxable buckets. In my next blog, I will explain the difference between each bucket of money. 7285982RG_Nov26
I thought I would write about something that happened last week. A client calls a few weeks ago frantic to move everything to cash. We of course did what the client asked us to do. Then the next day he tells me how happy he is in cash. A week later he calls me frantic telling me to move a portion back into the market today. He asked what I thought. I said “you should do whatever makes you happy.” At the end of the day I know my client and all he wants to do is whatever he wants to do. There is no way of moving that mountain. Why is he doing this? Of course, he is trying to time the market. Does he usually get it right? No, but it makes him feel better, so I do what he asks me to do. Should you run to cash? The answer is as always: it depends. This client will not retire for at least another 10 years so timing the market makes no sense. He can get in and out of the dance all he wants, but it will not matter until he is ready to retire. If he retires in a downward market then not only will he be losing money, but he will be taking money out to live on. He will bleed his accounts if he retires in multiple two back to back downward market years. For example, 1973 and 1974’s rates of return for large cap growth funds were negative back to back years. If want to find out how downward the market was in those years, can look up historical rates of return on yahoo’s website. So that is why it is good to have a sound defensive and offensive retirement strategy. Many people know how to get up the mountain, but crash and burn when trying to get down the mountain I like to call “retirement.” If he called me and was on the cusp on retiring this year or next year, then I would likely tell him that preservation of capital is imperative because he cannot afford to take a lot risk so close to retirement. However, he has a long way to go and all he is doing is driving himself crazy. The moral of the story is: do not make knee jerk decisions until you talk to your financial advisor and try to keep an open mind. All investing involves risk, including loss of value, and past performance is not a reliable indicator of future results. 7182883DH_OCT26