Client Axiom | Vol 266
Fear & Greed Still Leans Fear As Markets Continue Climb | August Is National Make A Will Month
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Meet The Axiom®’s Guest Editor: Bryan Fiore, CRPC®, CSRIC™
I am Bryan Fiore, Wealth Manager and Branch Director for our Naples / SW Florida office.
I’m Bryan Fiore, Wealth Manager and Branch Director for our Naples / SW Florida office.
I enjoy getting to know people and hearing about their experiences on our planet. I also build awareness and connections with Annex Wealth Management and the SW Florida community.
Like many, I enjoy the challenges and nuances of our financial markets. My job lets me partner with people to help them plan their financial future to help reach their goals.
I grew up a child of a USA Army family with a brother two years older than me. My father and brother had careers in the army. My entire family – including my wife and two children – like sports and being active.
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“I appreciate our Axiom in that it is a consistent, time-friendly source of information. Each week we get a summary of our investment team’s thoughts, a question or two from clients or readers, and a few topics of interest. Best of all, the Axiom doesn’t take a lot of time to enjoy and get informed.“
– Guest Editor:
Bryan Fiore, CRPC®, CSRIC™ | Branch Director, Naples Office
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Fear & Greed Still Leans Fear As Markets Continue Climb
The “E” in the P/E ratio keeps multiples low as a fantastic earnings season and a low fear and greed index buoy the markets. Annex Wealth Management’s Derek Felske and Deanne Phillips discuss.
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National Make A Will Month
In honor of the start of national Make a Will month, here are a few things we found that might motivate you to get creative with your will as you update or create it!
One woman left 12 million dollars to her pet dog. Apparently, the dog had to go into hiding after inheriting after continuous threats of kidnapping.[1]
A man put aside enough money to create a cat mansion. The plan was for a house large enough for bedrooms, a dining room, and extensive grounds for cats to roam around. No one knows if this mansion was built, unfortunately.[2]
Jack Benny, a US comedian left instructions in his will to have a red rose sent to his wife every single day for the rest of her life after he died, prepaying for them beforehand. She received them every day for nine years. [3]
Author Rober Louis Stevenson left his birthday to a girl from Vermont. She was born on Christmas day, and he wanted her to have a day to celebrate just for herself. He said that his birthday had carried him “in a very satisfactory manner” and was hopeful that it could be passed on to her to enjoy as well. [4]
An older man left instructions in his will for his wife to look in a desk drawer in their home for an envelope. It was filled with previous lottery tickets that were all winners. His wife was able to claim about $9,000 from the saved tickets.[5]
A wealthy aristocrat in Portugal had no family to leave his vast estate to, so he chose 70 names randomly from the Lisbon phone book and they were only notified after his death that they had inherited a part of his entire estate.[6]
[1] https://www.theguardian.com/money/2015/aug/25/10-strangest-wills-finances-death
[2] https://www.therichest.com/lifestyles/strange-wills-lifestyle/
[3] https://www.theguardian.com/money/2015/aug/25/10-strangest-wills-finances-death
[4] https://www.therichest.com/lifestyles/strange-wills-lifestyle/
[5] https://www.therichest.com/lifestyles/strange-wills-lifestyle/
[6] https://www.therichest.com/lifestyles/strange-wills-lifestyle/
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18-34 year olds are now more likely to have a will than 35-54 year olds. And only 21% of people over 55 have a will.
Poll: Do You Have A Will?
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A Few Do’s and Don’ts When Making a Will
As part of a well-rounded financial plan, we believe that estate planning and the different aspects that go into it are important. At the start of national Create a Will month, we want to remind you about the importance of either creating a will or looking at your existing will to make sure that it is up to date with your current life situation and desires.
If you don’t have a will currently, you aren’t alone. A recent study showed only 42% of adults had a will created.[1] Though many people don’t want to think about the implications of a will and what it means for them, taking the time to have a comprehensive and updated will can benefit yourself and your family greatly in the future.
While there are many things to consider when making a will, one thing is for certain: you should. We’re here to help you start the process and guide you towards resources that can best help you get the information and assistance you need.
Consider a few of these other dos and don’ts of making a will to help you get on track as you think about what a comprehensive will looks like for you and your family.
Don’t assume that because you may not have a large amount of assets, a will is not important. Wills allow you to make your wishes known on more than just financial matters, such as care of pets, guardianship of children, and gifting of sentimental objects.[2]
Do assign someone to manage assets and make health care decisions on your behalf if you become unable to do so yourself. While no one likes to think about this, it is better to be prepared.
Don’t rely solely on a joint will with a spouse. You may have assets that are not jointly owned, and this creates difficulties in execution as many states won’t recognize joint wills.[3]
Do seek out the advice and guidance of a qualified estate planning attorney. They will be able to help you properly express what you need to, no matter how complex (or not) your wishes may be and will understand the specific requirements of the law for a valid and complete will. [4]
Don’t leave your pets out of your will. Even though we love our animals like family, the law sees pets as property, and they are therefor treated that way if there is no clear direction on care or needs.[5]
Do revisit your will every few years to make sure that it still reflects your wishes and any potential life changes that may have occurred.
Don’t forget about the various types of accounts you have, such as retirement accounts, brokerage accounts, and IRAs. It is important to be comprehensive so that there is no question as to what your family can or can’t do with them.[6]
Do make sure that the person you choose to be the executor, power of attorney, or witness is willing and able to handle the responsibilities that come with each of these roles.
[1] https://lawyers.usnews.com/legal-advice/the-do-s-and-don-ts-of-writing-a-will/15
[2] https://tickertape.tdameritrade.com/personal-finance/estate-planning-writing-a-will-16077
[3] https://lawyers.usnews.com/legal-advice/the-do-s-and-don-ts-of-writing-a-will/15
[4] https://susansandys.com/interesting-facts-about-wills/
[5] https://lawyers.usnews.com/legal-advice/the-do-s-and-don-ts-of-writing-a-will/15
[6] https://tickertape.tdameritrade.com/personal-finance/estate-planning-writing-a-will-16077
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This week’s Ask Annex comes from Rick, who asks:
“My wife and I are preparing our wills, is there a way to ensure that our beneficiaries don’t get placed into a higher tax bracket?”
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We asked Annex Wealth Management’s Tom Berkholtz, CFP®:
Great question – One of the major changes made by the 2019 SECURE Act was the elimination of the stretch IRA for many beneficiaries, such as children. The old rule allowed a tax strategy for children with inherited IRAs to withdraw only a required minimum distribution each year based on their own life expectancy thus stretching the taxable income potentially over many years. The new law mandates inherited IRAs after Dec. 31st, 2019, to be emptied within 10 years of the death of the original account owner. “Fortunate” timing could start the 10-year window during the children’s low/no income years resulting in a lesser tax impact. Or this gift could unintentionally bounce children up into higher tax brackets, especially kids who are still working and high-income earners. The good news is with proper tax planning, future generations can still potentially receive an inheritance without these taxable strings attached.
Parents who can strategically fill up lower tax brackets with Roth conversions can help shift some money to the tax-free bucket.
Roth conversions can be carefully timed during low-income years thus maximizing the amount of pre-tax dollars converted from an IRA to a Roth IRA. The idea is pay the taxes now during a historically low tax rate environment, the money grows tax free insulated from future tax rate hikes, with the remainder passing to children income tax free.
All in all, depending on age, income, and stage of life, it can be a challenge to convert a significant amount of qualified money during a parent’s lifetime. In some cases, the taxes cannot be avoided. Everyone’s situation is different, so it always best to discuss with a qualified financial professional.
Best,
Tom Berkholtz, CFP® | Financial Planning Specialist
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