Bear Market Anniversary Reflections

March 9th marked the 9 year anniversary of the most recent bear market bottom. It passed quietly with no bands playing and no flags flying. For those who endured the decline, it was a stressful experience that tested the mettle of all of us as investors. The market peaked in October 2007, and then the S & P 500 index of large-company US stocks fell 37% in 2008. Stocks continued to fall in early 2009, until the market finally bottomed on March 9th.  Overall, there was about a 57% decline in the S & P 500 from peak to trough, the magnitude of which no one had seen since the Great Depression. Although the length of the decline was in line with the post-World War II average for a bear market at 17 months, it seemed like it would never end. After hitting the bottom on March 9, 2009, the market recovered sharply and closed up 26.5% for the year. It is interesting to note that despite these declines, the calendar years 2007 and 2009 were both positive for stocks. All declines, while distressing at the time, have proven temporary.

2017 marked the 9th positive year in a row for stocks. While we remain optimistic about the economy, we recognize that eventually there will be another negative year or years. There’s just no way to predict exactly when these will occur. Fortunately, all the major declines in modern history have been short-lived, typically lasting 2-3 years. In the past 92 years, 1929-32 was the only consecutive 4 year down period for stocks. 1973-74 was a 2 year decline, and 2000-02 was a 3 year decline.

If you don’t know when the declines are going to come, what can an investor do to maximize their chances of success?

Make sure you have an appropriate asset allocation (mix of stocks, bonds and cash) that suits your individual risk tolerance and spending needs. You should keep enough cash to provide for emergencies (we typically recommend 3-12 months of after-tax living expenses) and enough fixed income to serve a source of spending when stock prices are lower. While bonds are not particularly attractive right now with interest rates likely to rise from here, you will be glad you have them to help weather the periodic declines that historically are short-lived.

-Avoid making dramatic changes to your portfolio based on news headlines or the mood of the day.  The sudden “I’ve got a feeling” moves in to or out of the market, with a large portion of your portfolio are what can really hurt investors.

Focus on portfolio income. Dividend income from the stocks in your portfolio should be higher each year since more companies will increase their dividends than cut them. Many S & P 500 companies have histories of consecutive dividend increases of 25 years or more, with some over 60 years.

Understand how much you are spending, including what is discretionary and what is not.  The household spending level is the hardest question for most people to answer as we are updating their financial plans. If you are a Parsec client, take advantage of our eMoney portal to get a better idea of your spending by linking your credit cards and bank accounts. Access to the eMoney portal is included at no additional cost to Parsec clients.

Once you have a good grasp of your expenses, periodically monitor your spending level in relation to your portfolio income and investment assets, and adjust if needed.

Historically, the stock market has many more up years than down years. The key is having an appropriate asset allocation, not making dramatic changes to your portfolio based on the mood of the day, and periodically rebalancing to your target mix (which forces the discipline to buy low and sell high).

 

Bill Hansen, CFA

President and Chief Investment Officer

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2017 IRA Contribution Rules

The deadline to make IRA contributions for tax year 2017 is Tuesday, April 17. The maximum contribution is $5,500 per individual ($6,500 if age 50 or over) or 100 percent of earned income, whichever is less.

There are income limits which determine whether you can deduct your Traditional IRA contribution or if you qualify to make a Roth contribution. The following table gives the phase-out range for the most common circumstances. Keep in mind that if neither you nor your spouse participates in a work-sponsored plan, you can deduct IRA contributions regardless of your income.

Do you qualify to deduct your Traditional IRA contribution?
If your income is less than the beginning of the phase-out range, you qualify. If your income is over the phase-out range, you do not. If your income falls inside the range, you partially qualify.

Modified Adjusted Gross Income Phase-Out Range
Tax Filing Status For 2017 Contributions For 2018 Contributions
Single, participates in an employer-sponsored retirement plan: $62,000 – $72,000 $63,000 – $73,000
Married filing jointly, participates in an employer-sponsored retirement plan: $99,000 – $119,000 $101,000 – $121,000
Married filing jointly, your spouse participates in an employer-sponsored retirement plan, but you do not: $186,000 – $196,000 $189,000 – $199,000

Do you qualify to contribute to a Roth IRA?

Modified Adjusted Gross Income Phase-Out Range – Roth
Tax Filing Status For 2017 Contributions For 2018 Contributions
Single: $118,000-$133,000 $120,000-$135,000
Married, filing jointly: $186,000-$196,000 $189,000-$199,000

If your filing status differs from those listed above, please contact your advisor and he or she can help you determine whether you qualify.

Harli Palme, CFA, CFP®

 

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What Do You Need to Know About the Tax Cut and Jobs Act?

Major tax legislation generally only happens around once a decade. The last time we had a major re-write of the tax code was in 2003. Just like that round of legislation, most of the individual provisions in the Tax Cut and Jobs Act of 2017 (TCJA) are not permanent and will roll back in 2025. Legislators have indicated that they want to revisit the permanency of those provisions if fiscal indicators show that the bill is not adding to the deficit. Focusing on individual tax laws, we will look at the most common and impactful changes.

Beginning with income deductions, TCJA will remove personal exemptions from the tax code. In 2017, the value of this deduction was $4,050 per individual claimed on the tax return. This deduction was effectively collapsed into the standard deduction, which is currently $6,350 for a single person and $12,700 for a couple filing jointly. The new standard deduction will be $12,000 for a single person and $24,000 for a couple filing jointly. This creates a higher threshold for those seeking to utilize an itemized deduction. To make matters worse, many of the allowable itemized deductions have been either limited or fully eliminated. One sore spot for those taxpayers living in high tax states is a deduction cap of $10,000 on property taxes and state income Taxes. This limitation is an aggregated cap of these deductions. Miscellaneous itemized deductions have also been eliminated. The most common of which include tax preparation fees, investment management fees, and various unreimbursed employee expenses.

The mortgage interest deduction is also another itemized deduction that has come under scrutiny. The deductible limit of a new mortgage after December 15th, 2017 is $750,000 – a reduction from the current limit of $1 million. In addition to this, home equity interest will no longer be an allowable deduction on the Schedule A and there is no grandfathering of this rule. Charitable giving deductions were maintained, as well as medical expense deductions, with a lower threshold for two years. However, with the reduction of taxes paid deductions, removal of miscellaneous deductions, limitation of mortgage interest, and raising of the standard deduction; it will become more difficult to meet the threshold of itemized deductions going forward. This is especially true for retirees with paid off homes.

Now for some good news – tax rates are headed down. There will still be 7 tax brackets, but the rates are going down by 2-3% in each of the brackets. There are some adjustments to the income limits of each bracket, but the top bracket is reduced by 2% to 37%. Another sigh of relief for many taxpayers is that the Alternative Minimum Tax (AMT) will no longer affect taxpayers with under $500,000 of income for a single person, and $1,000,000 of income for a couple. In addition to raising the income limit, the exemption was also expanded. Additionally, those with minimum tax credits will be eligible to carry them forward and utilize them in future tax years. The relief on the tax rate and AMT front should help soften the blow of the lost deductions for many.

For those with children or grandchildren, the next two sections are important. With the loss of personal exemptions for dependents, this could have created a tax burden for families with more than two children. However, there was an expansion of the child tax credit, including an increase in the credit from $1,000 to $2,000, and an increase in the income phase out to $200,000 for a single person and $400,000 for a couple. As a result, a family with 4 children and income under $400,000 would receive an $8,000 tax credit. It is also important to note that there is a new tax credit for dependents who are not qualifying children, which could include college age students or even dependent parents or siblings.

The new law makes an important-to-note change to how kiddie taxes are calculated. Currently, unearned income is taxed at either the child’s tax rate, or the parent’s if it is above $2,100. Under TCJA, instead of the additional tax being calculated at the parent’s rate, it will now be calculated at the Estate/Trust tax rate. This is problematic, especially for inherited IRAs with minor beneficiaries because the tax rate hits the top tax bracket of 37% at just $12,500 of income. Fortunately, much of the income being earned by custodial accounts is tax-advantaged qualified dividends and capital gains, which will be taxed at the long-term capital gain rates of 15%, 20%, or 23.8% (where the Medicare Surtax applies). One strategy to reduce future tax rates in custodial accounts is to consider incurring capital gains in 2017 where the capital gain tax rate will be at or below 15% on the parent’s return. This is preferable because the tax brackets for individuals are much larger than the tax brackets for Estates and Trusts. A relatively small amount of income for minors will cause them to be taxed at the highest capital gain rate in 2018 and beyond. 529 plans also received some attention in the new law. The qualified usage of 529 dollars was expanded to include a $10,000 per student per year tax-free distribution for private elementary and secondary schools.

For those looking for additional estate planning options, TCJA has resulted in an expanded estate tax exemption of $11.2 million per person. This results in a maximum exemption of $22.4 million for a married couple utilizing both exemptions. The law continues to have a tandem gift tax exemption, tied to the amount of the estate tax. This means an individual is able to give away up to $11,200,000 without incurring any gift taxes.

There were a few notable new provisions, including a 20% deduction to “pass through” business income (excluding service based businesses like attorneys, medical professionals, and accountants, unless their total income is less than certain income limits), future alimony treatment, the repeal of the moving expense deduction, and changes to the Roth re-characterization rules. Additionally, corporate tax rates have been reduced to 21%, the new inflation measure for tax purposes will be Chained CPI, and the individual insurance purchase mandate has been repealed. These three provisions are permanent and will not rollback after 2025.

There were also a number of provisions floated in either the House or Senate bills along the way that never made it into the final bill. A few of these items are the removal of the student loan deductions, removal of the medical expense deduction, changing to “FIFO” or First in, First Out accounting method for selling stock, and changes to the capital gains exclusion for selling your primary residence.

It may be beneficial to defer income into 2018 as much as possible, and incur deductions in 2017 where possible.   If you have questions about increasing charitable giving prior to the end of the year to take advantage of 2017’s lower standard deduction, reach out to your advisor as soon as possible. Our custodians work on a best effort basis as we near the end of the year. Those utilizing a Qualified Charitable Distribution from IRAs as their sole charitable giving mechanism are not affected by the changes to the standard deduction. With all of these changes, we continue to stay on top of optimal tax planning strategies both for end of year purposes, as well as looking forward into 2018.

Tax Cut and Jobs Act “Cliff Notes” Version

  • Tax Rates:
    • Overall, they are down, with 7 brackets continuing and rates of: 10%, 12%, 22%, 24%, 32%, 35%, 37%
  • Exemptions/Deductions
    • Personal exemptions are going away
    • Standard deduction rising to $12,000 for a single person and $24,000 for a couple
    • State, property, and sales tax deductions are aggregated and capped at $10,000
    • Medical deductions remain, and AGI limitation reduces for next two years
    • 2% miscellaneous itemized deductions are eliminated
    • Mortgage interest deduction is limited to mortgages up to $750,000 and home equity debt is no longer eligible for deduction
  • AMT
    • AMT remains, but with much higher exemptions and income phase-in limits of $500,000 for a single person and $1,000,000 for a couple
  • Child Tax Credit
    • Has been increased from $1,000 to $2,000 per qualifying child and income phase-outs are raised to $200,000 for a single person and $400,000 for couples
  • Kiddie Tax
    • Will now be subject to fiduciary (Trust/Estate) tax rates
    • Includes inherited IRA income
  • 529 Plans
    • Now allow for up to $10,000 per child, per year tax-free distribution for private elementary and secondary education expenses
    • Also now includes up to $10,000 per year tax-free distribution for home school expenses
  • Estate Tax and Gift Tax Exemption
    • Has been increased to $11,200,000 per person with portability of exemption between spouses
  • Business pass-through rules
    • Preferential tax deduction for pass through entities, not in the service industry. However, Engineers and Architects are able to take advantage of this deduction.
    • Of pass through income, 20% is eligible to be taken as a deduction from income
    • For those in service based fields, namely physicians, accountants, attorneys, etc, deduction is still eligible for MFJ taxpayers with less than $315,000 income
  • Proposed Changes that did not make the final bill
    • First in, First out recognition of capital gains for appreciated securities
    • Removal of the student loan deduction
    • Removal of medical expense deduction

 

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Get Ready for Tax Season

Regardless of whether you prepare your own tax return or hire a professional to do it for you, you are still responsible for collecting the information necessary to complete it.  Well-organized records can make the process significantly easier and potentially save money with your CPA who typically charges by the hour.

One way to tackle this chore is to create a checklist of the documents and information needed to complete your return.  As you gather the documents, start to organize them in a file by the following categories and check them off the list.

Prior Year’s Tax Return

Use last year’s tax return as a starting point to create your checklist.  Although you may have new sources of income or different deductible expenses for the current year, this is usually a fairly comprehensive list of needed documents such as Form 1099 or 1098.  It will also serve as a reminder of information you may need to determine from bank statements or receipts such as medical expenses.

Sources of Income

This category generally includes wages, dividends, interest, partnership distributions, retirement and rental income.  You may receive a Form W-2, 1099, or K1 that indicates the amount of income reported to the IRS.  For other types of income, such as alimony received, you may need to determine the amount to report from bank statements.

Adjustments to Income

These are direct reductions to taxable income that commonly include deductible IRA contributions, alimony paid, Health Savings Account (HSA) contributions, SEP, SIMPLE or other self-employed pension plan contributions,  and self-employed health insurance payment records.

Deductible Expenses

If you itemize deductions rather than taking the standard deduction, you may need to collect source documents indicating the amount of mortgage interest paid (Form 1098), real estate and personal property taxes paid, medical expenses, and charitable contributions to be reported on Schedule A.

Tax Credits

Tax credits are a direct reduction of your tax bill so take a few minutes to research available 2017 credits.  You may be able to claim the American Opportunity Credit if you have a child in college or a Residential Energy Credit if you have made any “green” home improvements.

Basis of Property

This is also a good time to review and update the basis of property if necessary.  Home improvements made during the year may have increased the basis so collect and file those valuable receipts.

Taxes Paid

Federal and state taxes you have already paid may be found on your W-2 but if you pay quarterly estimated taxes you may need to collect records of payment.

While this is not a comprehensive list of every possible tax document needed to complete a tax return, it is a starting point from which you can develop your own, one that reflects your unique life circumstances.  Start organizing now and maybe tax season won’t be your least favorite season of the year.

Nancy Blackman - Parsec Financial Corporate Headshots
Nancy Blackman – Portfolio Manager
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Happy Donating!

As we approach the end of the year and the holiday season, we seem to be bombarded with opportunities for charitable giving. Happily, many of us answer this call and donate generously to our favorite charitable organizations. Your generosity may also be beneficial at tax time if you remember a few IRS guidelines for charitable contributions.

  • You must itemize deductions on Schedule A to deduct a charitable contribution.
  • Donate before year end to claim a deduction for 2017. Please remember if you are making a stock donation, to submit the request a few weeks before the end of the year. This will allow your custodian enough time to fulfil the request in time for the deadline.
  • Verify that the charity is tax-exempt (sometimes called 501 (c) (3) organizations) or qualified. The IRS considers the following types of organizations qualified for charitable donation purposes.
    1. A state or possession of the United States, or the United States for public purposes
    2. A community chest, corporation, trust, fund or foundation of the United States organized for charitable, religious, educational, scientific, or literary purposes or for the prevention of cruelty to children or animals
    3. A church, synagogue or other religious organization
    4. A war veterans organization
    5. A nonprofit volunteer fire company
    6. A civil defense organization
    7. A domestic fraternal society if the contribution is used for charitable purposes
    8. A nonprofit cemetery company if the funds are used for the perpetual care of the entire cemetery

More information about qualified organizations can be found in IRS Publication 526, Charitable Contributions. You can also verify the tax-exempt status of an organization on the IRS.gov website.

  • When making your donation of cash or goods, be sure to get a receipt. The IRS requires a receipt for donations greater than $250.
  • Large donations may be limited in the current year to 50% of AGI for public charities or 20-30% for private charities. Any excess donations can be carried forward for five tax years. When planning a large gift, talk to your tax professional to develop the most beneficial giving strategy.
  • Lastly, many employers will match gifts made by their employees, so remember to check your company policy and do twice as much good!

Nancy Blackman - Parsec Financial Corporate HeadshotsNancy Blackman, Portfolio Manager

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How Parsec Monitors Investment Securities

Parsec invests in a variety of securities for its clients.  These may include mutual funds, exchange traded funds or ETFs, and individual stocks, among others.  All of these investments can and do experience significant price pullbacks from time to time.  While Parsec’s Investment Policy Committee (IPC) focuses on investments it can hold for the long-term and performs significant research before adding any new positions, price declines still happen.  In this email we’ll discuss how the IPC monitors investment securities and we’ll share with you our process for when a stock or fund doesn’t perform as expected.

Investment security returns are driven by a number of factors.  For individual stocks, earnings growth, competitive environment, and exogenous events can significantly affect price performance.  For mutual funds and ETFs, the general capital market environment as well as portfolio management departures or changes at the parent company can influence both fund flows and price changes.  At Parsec, in addition to reviewing all covered securities at regularly-scheduled meetings, the Investment Policy Committee continually monitors client investments for these types of factors in between our ongoing investment reviews.

We do this by reading sell-side research reports, company government filings, and the news.  Likewise, the financial software we use alerts us to any new developments on our covered securities and helps us manage the large volume of news flow in order to focus on the most important stories of the day.  When a significant event does happen that negatively affects a security, we research the development by listening to a company’s conference call, reading industry reports, and conducting our own due diligence.  We review our thesis on the fund or stock and determine if and how the latest events could affect the security’s long-term prospects going forward.  In order to gauge an investment’s upside potential we adjust our growth assumptions to reflect the new information and evaluate the security’s risk/reward profile in light of its new price level.

Oftentimes when a major story surfaces there is minimal information on which to make a decision.  At the same time, the market has a tendency to overreact to news events.  For these reasons, Parsec’s Investment Policy Committee may intentionally wait before taking action when a stock or fund experiences a significant negative development.  Although it may appear that we are not responding to the event in question, we are in fact working diligently behind the scenes to gather as much data as possible while reviewing our thesis and assumptions.  This can be a frustrating time for clients who would, understandably, prefer us to take immediate action.  However, we have found that taking a wait-and-see approach allows us to collect more information and answer important questions before making an uninformed or premature decision.

Waiting for the dust to settle while collecting additional information also allows us to better understand how a development could affect a stock or fund’s long-term prospects.  If we determine that a company or fund can recover from an adverse event and the security has fallen significantly in price, it’s often an attractive buying opportunity.

However, on other occasions it may be clear that it’s time to sell a position.  This can happen when an investigation surrounding a security is new but affects multiple divisions or aspects of the underlying company’s or fund’s operations.  Another example may include an environmental disaster or a significant product recall that could take years to resolve.  In these instances the best action may involve taking a modest loss now in order to avoid a much larger loss in the months or years to follow.

While our bias towards higher-quality stocks and funds may mean we’re more likely to hold a security or even add to positions following a negative news event, we are closely monitoring client investments and performing in-depth due diligence as new developments arise.  Our intention is to make objective and thoughtful decisions that will benefit clients and their portfolios over the long-term.

Thank you,

The Parsec Team

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(Tax loss) Harvest Season is Almost Here!

The kids are back in school, the leaves are changing colors, and pumpkin spice lattes – the age-old harbingers of harvest season – are everywhere. At Parsec, we are preparing for the harvest…of tax losses.

Every year, beginning in late October/early November, Parsec’s portfolio managers will scour clients’ taxable accounts for meaningful losses, which we can use to offset realized gains created from trading throughout the year. These tax-efficient trading strategies provide value to clients by minimizing their tax burden while keeping the portfolio aligned with their financial planning goals.

You might see trades from one security into another one that is similar, but not exactly the same – we do this so that you can recognize a loss while maintaining exposure to the same industry or sector, yet avoid incurring a wash sale. According to IRS publication 550, “a wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale, you buy substantially identical stock or securities,” either in the same account or in another household account, including IRAs and Roth IRAs. Stocks of different companies in the same industry are not considered “substantially identical,” nor are ETFs that track the same sector but are managed by different companies (like a Vanguard Emerging Markets ETF vs. an iShares Emerging Markets ETF).

Sometimes it makes sense to place a loss-harvesting trade and leave the proceeds in cash for 31 days, then repurchase the same security. We may do this for clients who have cash needs during the holiday season, with the intention of placing rebalancing trades in January when there is no more need for liquidity. When liquidity is not an issue, however, we prefer to keep the funds fully invested in another high-quality name. We may later choose to reverse the trade, once the wash sale period has expired, or we may leave the trade in place if we think it is appropriate and suits the clients’ needs.

Sarah DerGarabedian, CFA
Director of Portfolio Management

 

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March Update – Trading

Trading is an important, albeit often underappreciated part of investment management.  In this email, we’ll share with you our investment philosophy and how it drives our trading approach.  While Parsec uses both funds and individual securities across client accounts, this blog applies more to those portfolios with individual stock holdings.  In general, we use funds for smaller-sized accounts because of the immediate diversity it provides, at a relatively low cost.  We generally use individual securities for larger client portfolios as these portfolios offer economies of scale that can overcome trading costs.  Over the years, we have fine-tuned our trading approach with an eye towards minimizing costs and maximizing efficiency.

As you’ve heard us say time-and-again, Parsec does not engage in market timing.  Instead of trying to determine when one asset class will underperform and another outperform, we select our securities using a bottom-up fundamental research approach.   Using individual equities as an example, this means that we first screen any new stock ideas for attractive financial characteristics and then perform additional due diligence to determine its total return potential over the next several years.  Once a stock is added to a Parsec portfolio, we monitor the company regularly for changes in its competitive environment, its growth drivers, and valuation levels.  However, we do all of this in light of our long-term thesis on the stock, as opposed to the market’s near-term noise.

Taking a long-term investment approach in which we focus on a security’s total return potential often allows us to buy and hold securities for many years.  This keeps our portfolio turnover – a measure of how frequently assets are bought and sold – low, and in turn keeps our trading costs low.  When we do trade we use block trades whenever possible.  By aggregating all of our trades into one large transaction we can better assure that clients receive the same price when a given security is bought or sold.

In addition, our focus on a security’s long-term potential largely circumvents the need for specialized trade orders.  Typically short-term traders, and not long-term investors, utilize limit orders, stop orders, or other types of non-market orders.  These specialized trades often come with additional costs, including higher transaction fees for retail investors and various opportunity costs.

One such opportunity cost can arise when setting short-term price targets.  For example, using a limit order to purchase a security requires an investor to set a price target.  However, without thoroughly researching a security using fundamental analysis, price targets are often based on “a gut feel” or are knee-jerk reactions to an investor’s past experience with an asset.  In effect, unconscious emotions can drive the trading decision and lead to even higher costs.  These can come in the form of missed opportunities, as when a stock declines but doesn’t quite reach an investor’s price target to buy.  In this case if the stock then continues higher an investor may have missed-out on significant upside potential.

Another opportunity cost is possible when a security pays a dividend, but because an investor was waiting for a slightly lower price before buying, he or she inadvertently forfeited the added income.  In some cases the dividend payout might have amounted to more than the savings associated with buying at a lower price.

While there are many types of trades, and some that do add value, in general we’ve found that specialized trade orders often come with more costs than benefits.  This is why Parsec identifies assets using fundamental research and takes the long-term view on a security’s total return potential.  Doing so inherently reduces security turnover in a portfolio and thus trading costs.  It also avoids incurring hidden opportunity costs and, we believe, increases the likelihood of reaching your longer-term financial goals.

Thank you,

The Parsec Team

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Time to Update your Estate Plan?

Now that we have started a new year, it’s a good time for many of us to stop putting off getting an estate plan created or updated.

Under current tax law, most people do not have a concern with estate tax.  The current Federal estate tax exemption is $5.49 million per person. If properly elected, any unused exemption is portable between spouses.  Therefore, a married couple with an estate of $10.98 million or below could pass their entire estate to heirs without any Federal estate tax liability.

While much attention is focused on the tax aspects, estate planning is more a matter of organizing and simplifying your affairs so that your heirs are not burdened with additional stress at the same time they are grieving for the loss of a loved one. We recommend that you engage the services of a qualified attorney to guide you and create the appropriate documents.

Your estate plan should include a will and possibly living or revocable trusts. Advanced directives and incapacity planning are other items that are typically addressed as part of your estate plan. This includes having documents prepared such as a durable power of attorney, health care power of attorney and living will.

As part of your estate plan, you should review your beneficiary designations. By filling out a beneficiary designation form, individuals can bypass the probate process and pass specific assets upon their death directly to their heirs. Many types of assets such as IRAs, qualified retirement plans, life insurance policies and commercial annuities pass via beneficiary designation rather than through your will. In addition, beneficiary designations can be added to taxable investment accounts (known as Transfer on Death or “TOD”) and bank accounts (known as Payable on Death or “POD”). Note that while the assets passing by beneficiary designation bypass the probate process, they are still included as part of the decedent’s estate for calculating any potential estate tax liability.

There is talk that the estate tax may be changed or even eliminated this year. For most people that shouldn’t be a deterrent to getting their estate plan done, since few are affected by the estate tax in the first place. Having an updated estate plan gives you peace of mind and helps prevent additional stress on your heirs. Once you have a plan in place, it can always be modified as tax laws and your personal circumstances change.

William S. Hansen, CFA
President
Chief Investment Officer

bill

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