Axiom | Vol 280

A Good Earnings Season, Inflation And Consumer Sentiment, And Moves By The Fed

Meet The Axiom®’s Guest Editor: Jeff Stanich, CFP®

I am Jeff Stanich, CFP®, Wealth Manager for Annex Wealth Management at our Libertyville, Illinois office. 

I enjoy meeting new people each week and learning about their life story. I also enjoy helping them build their unique financial plan, all the while doing it in a fiduciary capacity. 

My wife Lana and I live in Pleasant Prairie, WI and we have three grown children: one son and two daughters. We enjoy traveling and spending time with family and friends. 


A Good Earnings Season, Inflation And Consumer Sentiment, And Moves By The Fed

Consumer confidence is low as inflation continues to show itself to consumers in everyday goods and pent-up demand, though investors aren’t as quick to react to the signs of inflation with the S&P still remaining high. Hear from Annex Wealth Management’s President and CEO Dave Spano and Chief Investment Officer Derek Felske about what numbers they are watching and their thoughts on how consumer spending is interacting with the COVID inspired shortage and what it means for the economy as it continues to press on.


A recent study shows that due to the pandemic our attitudes about saving and being wealthy have changed. Over the course of the next several weeks, we’re going to ask our readers some questions about what that means.

Poll | Are You A Saver Or A Spender?


“I enjoy reading the Axiom every week for the Week in Review and the other interesting topics including the MoneyDo section. Our Annex team works hard to deliver relevant information each week in an engaging format.”

– Guest Editor: Jeff Stanich, CFP® | Wealth Manager

Review Account Titles & Beneficiary Designations 

Reviewing how your accounts are titled and who you have named as beneficiaries is an important step in making sure your finances are organized and up to date. It becomes even more important if you’ve recently completed or updated your estate plan, because account titles and beneficiaries could undo, counteract, or override your estate plan. 

This week’s MoneyDo: review the ownership structure of your accounts and make sure it works in conjunction (not contrary) to your estate planning goals. 

If you’ve experienced a significant life change like divorce, remarriage, or a tragedy like death of a spouse or child, your account titling and beneficiaries need to be updated. Unfortunately, we’ve seen too many instances where nothing was updated, which can result in calamity. We’ve seen an ex-spouse still named the beneficiary of an exes’ retirement plan; or after the death of the primary beneficiary, the disheartening discovery that there are no contingent beneficiaries, forcing the account through probate before being distributed. 

As mentioned before, titling refers to who is listed as an owner of an asset. There are a variety of ways to own an asset. 

  • Individual Account: one person owns the account. Assuming there is no beneficiary appointed, the account will be subject to probate without additional estate planning. 
  • Joint Account with Right of Survivorship (JTWROS): ownership between two or more individuals that automatically transfers or continues ownership of the asset in the surviving owners name after one of them dies. Each joint owner has access to 100% of the account. Ownership will override the provisions of an owner’s Will or Trust. The last surviving owner will have 100% ownership and control, at which time it becomes an individual account of the last owner. 

Beware of adding a child to an account as a joint owner, as you are giving that joint owner control and access to the account, so your child could use the funds as their own, to your detriment.  If your child has creditor problems, those creditors may go after your account. 

  • Tenants in Common (TIC): unlike a joint account with right of survivorship, TIC is based on the proportional amount contributed by each owner. Ownership does not automatically pass to the other owners upon death and would be subject to probate and pass according to an individual’s Will. 
  • Trust: a trust account is governed by the trust document during life and at death. The trust eliminates the need for probate when funded properly, but there are many types of trust that can have varying tax consequences that the owner should be aware of. 

Make sure to note which types of account titling pass according to title or by Will, via Probate. If you have a Trust, it is important to properly title accounts to utilize the trust. 

Another alternative to be used in conjunction with account titles is the proper handling of beneficiary designations. 

Beneficiary Designations, also known as a Payable on Death or Transfer on Death, can be listed on a variety of accounts and direct who will receive the accounts upon your death.  When used correctly as part of a comprehensive estate plan, beneficiary designations can help avoid probate. In addition to naming primary beneficiaries, it’s often important to name contingent beneficiaries. 

Consult with your estate planning attorney or financial advisor to ensure your estate plan is properly developed in a tax-efficient manner prior to naming Trusts as beneficiaries on retirement plans and IRAs. Naming a trust as a beneficiary without a proper estate plan can have detrimental income tax consequences to your beneficiaries. 

It’s important to review accounts and beneficiaries every few years. The more accounts you have, the more cumbersome reviewing and updating account titles and beneficiaries can be. Consolidation and simplification remain important components of financial and estate planning, making updates easier as your estate plan evolves. Doing so also ensures that all your financial accounts are properly aligned with your estate plan to make the transition to your heirs a smooth process. 


This week’s Ask Annex comes from Steve, who asks:


1. “Is there a limit to how much money can be put into an HSA each year?”

2. “Can HSA funds be used to pay long-term care insurance premiums? If not, do you know of any tax-free funds that could be used to pay long-term care insurance premiums?” 


We asked Annex Wealth Management’s Tom Berkholtz, CFP®:

  1. For those covered by a high-deductible health insurance plan, an HSA can be a great tax advantaged saving vehicle. There are separate contribution limits for HSA’s depending on self-only coverage or family coverage. In 2021, maximum amount allowed for self-only  coverage is $3,600 and $7,200 for family coverage. There is also a $1,000 catch-up  contribution—per spouse if you have family coverage—for HSA participants older than 55.  Additionally, to contribute the max amount you must be HSA eligible for the full year –  otherwise the limit is reduced by a prorated amount. 
  2. Typically, you can use HSA funds to pay for long-term care insurance premiums.However, there is a maximum annual tax-free withdrawal limit based on age to pay for long-term care  premiums. There is also another caveat according to the IRC guidelines that the policy must meet the definition of qualified long-term care insurance. Essentially, the policy must be  guaranteed renewable with inflation protection, no cash value, and may only pay for long-t erm care expenses.  

All in all, HSA contributions and distributions can be complex. It’s always best to consult with a financial professional and talk through the specifics of your situation. 

Tom Berkholtz, CFP®

Financial Planning Specialist 


Does Your Advisor Offer Resources For Military Families?

People who choose military careers retire differently than those in the civilian world. Brandon Lehman, CFP®, AIF®, a Wealth Manager at Annex Wealth Management and an Engineer Officer in the Army National Guard, covers some of the important factors military families need to know in this three-part series.


General Electric Plans To Split Into 3 Companies


Inflation News: US Consumer Prices Up 6.2% In October


Part 2 | Financial Planning For Military Families: Post-Military Careers


Annex Wealth Management provides free workshops, open to the public, on key wealth management topics.

Each week, we provide links to register for upcoming events.