April is Financial Literacy Month

April is Financial Literacy Month

by | Apr 13, 2023 | 401k, Advisors, Alan Hensley, Caring for Dependents, Family Talk, Investing 101, Tech Focus, Wealth Transfer

 

Financial education is in the DNA of Merriman Wealth Management. Paul Merriman recognized the importance of financial literacy when he founded the firm back in 1983. Now, 40 years later, it’s more important than ever to have access to trustworthy resources when it comes to financial planning. Since April is Financial Literacy Month, I thought I’d share some personal and professional stories highlighting how Merriman empowers our clients to live fully by providing peace of mind in their financial lives. 

 

For myself, the path toward financial literacy started at a young age. I remember overhearing my parents discussing a 401(k). At the time, it was obvious this “complicated” investment account was a source of frustration, and getting answers proved to be overly complex. I knew then that I had to educate myself if I wanted to avoid those same frustrations later in life. I bought books on the stock market, studied modern portfolio theory as a teenager, and eventually earned a degree in economics. All these events led me on a path to becoming a financial planner, and I discovered that not only did I genuinely enjoy learning about these topics, but more importantly, I sincerely loved teaching others about how to take control of their financial future.  

 

Fast forward to today, and I now have a family of my own. My wife and I have two beautiful daughters, and I constantly find ways to impart financial wisdom every chance I get. One such example I’m very proud of happened when my younger daughter, Emma, was born in 2019. At the time, my older daughter, Natalia, was interested in learning what I do for a living. I knew Natalia was a visual learner, so I did what any great teacher does: I broke open a new box of crayons and drafted a story with Natalia that teaches the basics of long-term investing! Natalia was so excited about our book that she asked if she could read it to her younger sister. This turned out to be a spark of inspiration because, after some careful searching, I realized there weren’t a lot of financial literacy books for young children. I then asked Natalia if we should publish the book so Emma could read our work over and over again. After a few more drafts and updates to our crayon illustrations, we published our first children’s book, Eddie and Hoppers Explain Investing in the Stock Market! This was the first time I could wear both my financial planner hat and my dad hat, and I couldn’t have been prouder.  

 

Professionally speaking, I love what I do because I get to share my knowledge with my clients every day. The old saying, “You don’t know what you don’t know,” is why people reach out to a financial planner in the first place. The cash-flow blind spots for a soon-to-be retiree can be costly and might delay retirement for years. Or the knowledge gap in how to be tax-efficient might trip up a mid-career professional, which could cause them to pay more taxes than necessary. Quite often, these financial landmines are completely avoidable, and you just need a trusted financial professional to help map out the course. 

 

Financial literacy is important for every stage of life. Whether you’re a mid-career professional trying to figure out what to do with an old 401(k) or are already retired and perplexed by how required minimum distributions (RMDs) work, it’s crucial to understand the financial implications of your choices. Just like compound interest, the earlier you start, the better the outcome. Here at Merriman, we have resources available through our blog, webinars, and eBooks that can help people make wise financial decisions at every stage of life.

 

When I think of financial educators, at the top of my list is Paul Merriman. Paul’s retirement from wealth management did not stop his drive and passion for financial education. In the past, Paul was a familiar voice on the radio and PBS. Paul still creates valuable content through his blogs, podcasts, and books. Case in point: I personally believe Paul’s latest book, We’re Talking Millions!, should be required reading for every young adult. In addition to all the previously mentioned resources, Paul has created a curriculum at Western Washington University to teach the principles of financial literacy and investing to undergrads as an elective course, empowering the next generation to have financial wisdom. His drive and genuine love for teaching are inspiring to say the least.

 

There have been many changes in the world of wealth management over the past four decades, so I reached out to Paul to have a conversation about what has changed and what has stayed the same over the years. If you haven’t met Paul or heard him speak, it’s hard to convey in words his passion for financial literacy and education. He has a gift for teaching seemingly complex investing topics and finding a way for anyone to understand. One piece of wisdom that Paul shared with me is how crucial it is not to over-complicate retirement planning.  He told me that a friend of his recently explained how to define retirement: “In retirement, we should not be doing anything we don’t like doing. That is a good definition of retirement.” In other words, retirement isn’t simply defined by the end of work. Retirement is better defined as reaching a point in life where work becomes optional.

 

The path to financial freedom is not a straight line; more often than not, it’s a journey filled with ups and downs. Through my experience as a wealth advisor and after my conversation with Paul, it’s clear to me that wealth management is more than just making wise investment decisions. Managing wealth involves ensuring all the puzzle pieces that make up a financial plan work together. Investing wisely is one piece of that puzzle, but it’s just as essential to make sure there is a plan to be efficient with taxes, put together a well-thought-out estate plan, and not forget to protect one’s wealth with the proper insurance. Here at Merriman, that’s precisely what we set out to do with all our clients. It starts with financial literacy, and through collaboration and education, our goal is to help the people we work with achieve their financial goals. 

 

If you would like to learn more, click here to set up a time to meet with one of our wealth advisors.

 

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

8 Helpful Tips for Deciding Which Animal Rescues to Support This Year

8 Helpful Tips for Deciding Which Animal Rescues to Support This Year

by | Oct 18, 2022 | Charitable Giving, Tech Focus, Wealth Transfer

 

There are so many animal welfare charities out there, all doing great work saving, helping, and re-homing pets, and all asking for your support. But how do you decide which ones will really value and make good use of your money? Learn useful tips for selecting the best animal welfare groups for you.

More than 23 million American households—that’s practically 1 in 5 families—adopted a pet during the pandemic, according to the American Society for the Prevention of Cruelty to Animals (ASPCA). Even the White House got a new pup when the Bidens adopted Commander!

 

Perhaps You Got a Pandemic Puppy as Well

Little Benny was huddled in a kennel, frightened. A pointer/lab/beagle mix, he was cute as a button and in desperate need of loving companionship and a caring home. His floppy ears loved being scratched, and he adored kids. Hounds2Home, the rescue organization caring for him, was accepting applications. He was adorable! You applied, and after being granted a “Meet & Greet,” your application was approved, and you took Benny home. And now you want to support Hounds2Home Rescue because they did such a great job bringing you and your new best friend together!

Choosing how to support animal welfare organizations is not always so straightforward. Maybe you are an animal lover, but due to a variety of circumstances, you cannot actually house a pet. Instead, you choose to find an organization worthy of your support. BUT THERE ARE SO MANY! There are national groups such as the ASPCA, but then there are also thousands of smaller regional and local groups who do great work.

What Should I Look for in a Nonprofit?

If you are looking to support animal welfare, here is a list of the top eight expert tips for deciding which charities to support this year.

 

1. Conduct Research

Before you offer money to any charitable organization, take some time to do your research. Figure out which organizations align with your values and make the most impact.

There are many great charities out there, but that does not mean they are the right fit for you. So, how can you decide?

  • Make a list of the organizations you are aware of and decide if you prefer to make an impact locally or more broadly.
  • Be realistic about how much you can donate.
  • Do your homework and read up on different animal welfare groups, rescues, and shelters.
  • Examine the overhead costs of various organizations.
  • Ask friends and family for recommendations.
  • See if there is a way to volunteer with the nonprofit of your choice.
  • Consider how well they communicate goals and results.
  • Think about the long-term impact of your donation.
  • Ask questions! The more you know, the better decisions you will make.

 

2. Consider Your Budget

There are many organizations out there that are doing amazing work, and you do not need to spread your money thin by supporting them all. Instead, take some time to find a few animal welfare organizations that are the best fit for you and your family.

Don’t be afraid to get creative with how you give back, either. There are many ways to offer support, from donating money and goods to volunteering your time and skills.

 

3. Consider the Size of the Organization

When you are looking at different nonprofits to support, it is important to consider the size of the group, rescue, or shelter. Are they a small grassroots organization or a national charity with a big budget?

There are pros and cons to both. Smaller organizations may be more personal and have a direct impact on the community they serve, but they may also be limited in their capabilities. Larger groups may have more resources, but they can also be less accountable and harder to track how your money is being spent.

 

4. Consider Effectiveness

While deciding which groups to support, you should consider how effective they are. After all, no one wants his hard-earned money to go to waste. So, how do you determine effectiveness? There are a few things to look for:

  • Wellness: Are they efficient with their money? Do they have good governance structures in place?
  • Effectiveness: Are they making a difference in the world or community? Do they have a solid plan for how they are going to achieve their goals?
  • Use of Donations: Some charities have high administrative costs, and that means that your donation may not be directly affecting an animal’s day-to-day quality of life.

 

5. Consider Transparency

Consider how much information you can find about the organization, rescue, or shelter online. Learn how much of their budget is allocated to administrative expenses versus specifics like medical care, food, and housing.

Charity Navigator is a great resource for evaluating nonprofits. It has a rating system that ranges from one to four stars, and it breaks down how each charity scores in seven different areas. It is a great way to look at overall performance.

 

6. Consider the Mission

The organization’s mission is the goal it is attempting to achieve. It is something you both care deeply about.

For example, some animal rescues focus on re-homing cats and dogs in general while others focus on caring for older dogs or difficult-to-place dogs. Most shelters house animals hoping to reunite them with owners, but some also perform euthanasia when they become full.

 

7. Consider Track Record

Of course, you should also make sure that the organization you’re choosing is reputable and has a good track record to ensure your money will be used wisely. Has it made a positive difference in the lives of the animals it has helped? Are there obvious achievements in their history?

 

8. Consider Location

The location matters because while there are many wonderful animal welfare organizations around the world, contributions to a foreign organization are not tax-deductible. It may be worth exploring where the organization is registered to be sure you can take full advantage come tax time.

 

Follow Your Heart…Wisely

As humans, it feels good to support organizations that are in alignment with our values. It is fulfilling to think that what cannot be done alone can potentially be done via a group of dedicated people who have developed the many nonprofits that help pets and animals all over the world. There is power in numbers, right?

There are plenty of resources out there that can help you make an informed decision. Take some time to do your research, and then choose the organization that speaks to your heart. Be sure to consult with your financial advisor about any ongoing or legacy donations you may want to include in your estate plan.

 

 

 

Written by Lafond Wanda. Exclusively for Merriman.com.

Lafond Wanda is a professional content writer, copywriter, content strategist, and communications consultant. She started young with her writing career from being a high school writer to a university editor, and now she is a writer in professional writing platforms Rated by Students and Top Writing Reviews—her years of expertise have honed her skills to create compelling and results-driven content every single time.

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable; however, Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal, or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always, please remember investing involves risk and possible loss of principal capital, and past performance does not guarantee future returns. Please seek advice from a licensed professional.

Financial Planning Items to Consider When Your Child Turns 18

Financial Planning Items to Consider When Your Child Turns 18

by | Jun 28, 2022 | Advisors, Caring for Dependents, Danielle Strumbeta, Family Talk, Tech Focus, Wealth Transfer

 

Turning 18 is a big milestone! At 18, we become legal adults (and we like to think that means we’re real adults), although kids who turn 18 now are often still heavily supported by their families. There are some financial planning items you should be thinking about when supporting your now adult child to set you both up for success.

Health Care Directive

When your child turns 18, you’ll no longer be able to make medical decisions for them. Given this, we highly recommend your child puts a health care directive in place (also called a living will or health care power of attorney) so you’re able to make their medical decisions should something happen and they’re unable to do so themselves. In this directive, your child can spell out certain medical wishes and name agents, such as parents, who can make their medical decisions or access their medical information if they become incapacitated. Your child can create an à la carte directive through an estate planning attorney or an online estate planning platform such as Legal Zoom. Of note, once your child begins a family of their own, they may want to update their directive so their significant other is their primary agent for making those medical decisions.

Durable Financial Power of Attorney

When your child turns 18, you’ll no longer be able to legally access their financial accounts unless you’re a co-owner. Similar to the health care directive, we highly recommend your child puts a durable financial power of attorney in place so you’re able to help pay their bills if something happens and they’re unable to do so themselves. Your child can name agents, such as parents, who can make certain financial decisions for them should they become incapacitated. As with the health care directive, your child can create an à la carte durable power of attorney document through an estate planning attorney or an online estate planning platform such as Legal Zoom. Your child may also want to update their power of attorney document once they have a significant other so that person is their primary agent.

Roth IRA Contributions

As soon as your child has earned income, they can begin contributing to an individual retirement account such as an IRA or Roth IRA. Usually, your child’s first years of earnings through part-time work or minimum wage jobs will be much less than in future years when they have a career job, which is a great time for them to contribute to a Roth IRA and benefit from compound interest. While they won’t receive a current tax benefit for their contribution (which they probably don’t need if they have very little income), they instead have the opportunity to invest and then withdraw those funds tax-free in retirement. Kids who work a part-time job may want to spend those dollars on entertainment or personal items, so they may not have extra dollars to save towards retirement; however, you can help kickstart their retirement savings by contributing to their Roth IRA if you’d like to support them in this way. Your child can contribute the lesser either of the total of their earned income or $6,000 for tax year 2022, and they don’t have to contribute the exact dollars they made. Thus, as a parent (or even a grandparent), you can gift them that amount of funds either directly to their Roth IRA or to their bank account for them to contribute the funds themselves.

Bank Accounts

If your child doesn’t already have a bank account, we recommend they open one and begin getting comfortable using it. Bank accounts and debit cards are tools they’ll need to use in today’s e-commerce environment. If your child is interested in going to school outside of their hometown, they may want to consider signing up for a bank account with a larger bank that may have branches or ATMs available in other areas. Of note, different types of bank accounts have various fees to be aware of, so it might be a good exercise for your child to read the fine print before opening an account to have an understanding of those possible fees so they can proactively avoid incurring them.

Building Credit

If your child doesn’t have an auto loan, student loan, or a credit card by the time they turn 18, we recommend beginning that conversation, as these forms of debt are tools that can help your child build their credit. Sometimes a bank or lender may not approve a credit card or loan for your child with no credit history, but they may be willing to do so with a secured or student card, you co-signing on a card with your child, or you adding them as an authorized user on one of your cards. The longer your child’s credit history, the higher their score might be, which may help them receive better interest rates or terms for auto or home loans in the future. Due to this, it can be advantageous for your child to open a credit card as early as possible and keep that card open for as long as possible. While credit cards with high interest rates and limits can be troublesome if they’re misused, you can certainly teach your child to treat their credit card like a debit card, meaning they should only spend money they already have in their bank account, which they then pay off each billing cycle or sooner to avoid late payments and interest penalties.

Tracking Credit

If they haven’t already done so, we also recommend your child creates logins for all three credit bureau websites—Equifax, Experian, and TransUnion—and regularly tracks their credit score to ensure there are no errors or fraudulent activity. Your child (and you, too!) may also want to consider freezing or locking their credit with each bureau to prevent fraud if they are not expecting a bank, lender, or landlord to check their credit at that time. If a bank, lender, or landlord is going to check their credit in the future, then your child would simply need to unfreeze or unlock their credit with each bureau beforehand.

Budgeting

Help your child learn to track their expenses and create a budget so they learn how to save for items they want and better understand what it costs for them to live or participate in activities with their friends. Even with supporting your child, you may consider having them use a credit card and bank account for all their expenses and pre-paying them or reimbursing them for expenses so that they have some accountability to a budget and learn to manage that. Mint.com by Intuit is a great tool for help with tracking spending, budgeting, and savings goals.

Aid and Loans for College

College is a major life decision for many 18-year-olds. Hopefully you’ve already been talking with your child about college well before they turn 18 and have had a chance to discuss their options for schools and how much you are willing or able to contribute toward their education costs. If you’re not able to fully support their college costs, it’s important to talk with them about their financing options. Please review our Demystifying College Financial Aid article for details they should know and consider with financing.

 

We’ve seen these financial planning items be invaluable for the families we work with and their kids, and we hope they’re helpful for you and your family as well. We’re always happy to help talk through specific situations and questions, so please don’t hesitate to reach out about yours!

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

Why Cash Isn’t Always The Best Donation

Why Cash Isn’t Always The Best Donation

by | Nov 16, 2021 | Charitable Giving, Sarah Kordon, Tech Focus, Wealth Preservation, Wealth Transfer

 

Whether it’s your time, money or a box of things from your garage – giving feels good. Donating cash or writing a check to your favorite charity is an amazing way to give back. It’s also fairly easy and the most obvious method for charitable donations, but it may not be the best strategy.  So, before you reach for your check book, make sure you understand your options.

One of the problems with donating cash at the bank is that for many people, there’s no Federal tax advantage.  That’s because the IRS doubled the standard tax deduction in 2018 and limited certain deductions we used to be able to itemize.  Depending on how you file and how old you are, the 2021 deduction is now between $12,550 for a single filer under age 65 and $27,800 for joint filers over the age of 65.  Therefore, if all your allowable deductions (including your charitable contribution) are less than this amount in a given tax year, you will not save any money in federal taxes by giving cash. In 2021, there is one exception to this that allows single filers to deduct up to $300 in charitable donations and joint filers to deduct up to $600, while taking the standard deduction.

The good news is, there are some options that can save you on taxes and allow you to direct more dollars to the non-profit close to your heart.

 

Qualified Charitable Distribution (QCD)

Once you reach age 72, you will be required to start distributing a certain percentage from your pre-tax retirement accounts, such as IRAs and 401(k) plans. These required distributions are taxable as ordinary income, unless they are given directly to a charity as a Qualified Charitable Distribution (QCD).  This is an excellent strategy for many people, even when giving smaller amounts.  By giving directly from your IRA, you eliminate taxes on the amount given (up to $100,000 annually) regardless of whether you itemize or take the standard deduction.  Unlike other charitable deductions, QCDs also reduce your Adjusted Gross Income (AGI).  This is important because your AGI is a factor in many other tax calculations, so reducing it can also reduce your Social Security taxes and Medicare premiums, increase your medical expense deductions, and help you qualify for certain tax credits.

To highlight the effectiveness of this strategy, here is an example of a couple who wants to donate $10,000

 

Clustering Contributions

If you tend to give every year and your itemized deductions are close to the standard deduction amount, clustering your contributions can be very beneficial.  For example, if you give $20,000 every year you might instead give $40,000 this year and nothing the following year.  This would allow you to itemize in the year you donated $40,000 and take the standard deduction the following year.  Even if you itemize, if your itemizations don’t exceed the standard deduction by the amount of your charitable contributions, clustering your contributions can increase your total deductions over a multiple year period.  This strategy is particularly useful if you have unusually high income one year from the sale property, a business sale, a large bonus or vesting employee stock. If you are able to cluster your contributions using a cash donation, this year may be particularly beneficial for some people since the IRS has waived the usual 50% of income deduction limitation for 2021.

 

Donor Advised Fund

Many people want to take advantage of the clustering strategy, but feel an obligation to give to a certain organization every year, don’t want to give it all away at one time, or are not ready to decide which charities to donate to. In this case, using a Donor Advised Fund may be appropriate.  These funds allow you to cluster several years of contributions for an immediate tax deduction and then to donate them over time. Until the funds are donated, they can be invested and grown tax deferred.

 

IRA Designated Funds

While the IRS does not allow QCDs from IRA accounts to Donor Advised Funds, you are permitted to make a QCD to a Designated Funds. Unlike Donor Advised Funds, Designated Funds have predetermined charitable beneficiaries, so they do not give you the flexibility to determine the organizations at a later date.  They do offer an immediate tax deduction and allow for flexibility on the timing the organization receives the funds.

 

Donating Appreciated Assets

For anyone who owns appreciated assets outside of qualified retirement accounts, donating these assets without selling them first can be a great strategy.  It’s particularly useful for people that have a highly concentrated stock positions and want to reduce their risk by selling some of the stock.  I think seeing a simple example highlights the tax benefits best.

  • An Oregon couple purchases stock for $10,000. Years later the stock is worth $50,000.
  • If sold, they would have a $40,000 taxable gain. The couple has $200,000 of other taxable income, so they would owe 15% in Federal long-term capital gains taxes, 3.8% in Net Investment Income tax and 9.9% state income tax – totaling $11,480 in taxes. This reduces their donation and possible deduction to $38,520.
  • If they instead donate the stock directly, they avoid the federal and state taxes on the sale, the charity receives a larger donation, and they receive a larger deduction.

 

Estate Planning

You can also incorporate charitable giving into your estate plan by naming a charity as a beneficiary on an investment account or in your trust or will.  This is often utilized by people who want to leave a legacy behind.  Since you receive a tax deduction on your estate taxes, this is a particularly good strategy for people who have a taxable estate and want to have access to funds during their lifetime.

When incorporating charitable giving into your estate plan, it’s important to consider how assets are taxed depending on who they are left to.  For example: an IRA that is left to individuals will be taxable as ordinary income to your heirs, non-retirement accounts may receive a step-up in cost basis (basically forgiving the tax on investment gains) and Roth IRAs are passed tax-free.  It’s therefore advisable to leave IRAs to charity and leave your non-retirement accounts and Roths to your friends and family.

 

State Programs

For my fellow Oregonians, The Oregon Cultural Trust is an underutilized resource that can allow you to double your impact when donating to one of 1,400 different Oregon non-profits. You can see which organizations qualify on their website: www.culturaltrust.org. By making a matching donation of up to $500 per person you will effectively have your match refunded to you in the form of a tax credit, which reduces your tax due dollar for dollar. The matched amount is then granted to cultural nonprofits across Oregon. Residents of other states may have access to similar programs.

 

Charitable Gift Annuity

For people who need additional income a charitable gift annuity can be a good option to consider. In exchange for the donation, the charity provides an income stream for your life, or some other set period of time, and you receive an immediate partial tax deduction.

 

Charitable Trusts

If you have significant assets that you would like to donate during your lifetime, you might also want to consider a charitable trust or a foundation.

Charitable trusts are irrevocable, so once assets are put into the trust you cannot use them for any reason not specifically outlined in the trust.  The benefit is that you are able to donate appreciated property, receive an immediate tax deduction, and avoid capital gains on the sale.  There are two main types.  A Charitable Remainder Trust provides income to the charitable donor for life or some other specified period and at the end of the period the remaining assets go to the designated charity.  A Charitable Lead Trust is the opposite.  Income goes to the charity for a specified period and the remaining assets revert back to the donor or another named beneficiary.  You will need an attorney to draw up the trust and having a professional trustee is often recommended, so this is best for more complex assets and larger donations.  If this sounds appropriate for you, you may need to act fast. There is a tax proposal to tax the gains for the non-charitable portion of the trust, notably reducing the tax benefit of this type of donation.

 

Foundations

A family foundation or private foundation can be appropriate for individuals who would like their charitable work to continue long after they are gone, by passing the torch to future generations.  The donated funds are invested tax-deferred.  Unlike other options you have the ability to hire staff, including your own family, to operate the foundation.  Foundations are highly regulated and can be expensive to administer, so they are usually only pursued by families with significant assets.

 

Not all of these strategies will be appropriate for everyone and what makes sense for you one year may not be best the following year, so it’s important to work with your professional team on an ongoing basis. Talk with your financial planner about how this fits into your overall financial plan, to ensure you are balancing your generosity with your ability to achieve your other financial goals. Your planner can also help you narrow down your options, coordinate with your accountant and estate planning attorney, and consider options for taking advantage of higher deductions, such as Roth conversions or realizing investment gains in a lower tax bracket. If you are not currently working with a financial planner, you can learn about the advisors at Merriman at www.merriman.com/advisors.

 

You can download a PDF of this article here.

 

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax or legal or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always please remember investing involves risk and possible loss of principal capital and past performance does not guarantee future returns; please seek advice from a licensed professional.

Advisory services are only offered to clients or prospective clients where Merriman and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Merriman unless a client service agreement is in place.

 

Where To Start With Estate Settling

Where To Start With Estate Settling

by | Sep 21, 2021 | Aaron Spencer, Caring for Dependents, Estate Planning, Family Talk, Tech Focus, Wealth Transfer

 

Over the 25 years or so that I have been practicing and serving families, one of the crucial points that has surfaced time and again with clients is one that tends to occur after a spouse or family member has passed away, and they seek out our help. Quite understandably, most people have little or no experience in settling an estate and essentially do not know what needs to be done. There are a myriad of actions to be accomplished, each one of them important, and no one knows in what order tasks need to be completed, let alone how to weave through the legal dynamics. So what can we do to help?

About 10 years ago, I finally grew so frustrated with not being able to help several of my client families settle estate matters after a death that I decided I was going to solve the matter myself. I went back through all of my estate planning books to seek out as many action items as I could locate. In addition, I went through dozens of other legal and financial websites to gain as much knowledge as I could. The problem was not in locating information on estate settling but rather not to drown in the vastness of it. Ultimately, I realized that my task was to consolidate and distill as much information as possible into a short and clear format that we could share. The result was a composition of knowledge written in simple English that went through peer review multiple times to create a master end-of-life checklist.

The “Checklist: After a Death Occurs” was constructed to assist our clients and their families so they could understand most of the basic estate settling matters that must be pursued after a loved one has passed. The document is arranged in a priority-driven format, so from top to bottom, front to back, the most important estate marshalling activities are listed first. The current iteration is about six pages long and contains an additional short checklist at the end for a surviving spouse.

There is also a third checklist that we created in addition to these main two. The third list is a pre-mortem checklist for someone who is ailing or terminally ill, designed to assist family members with estate matter topics while the individual is still alive. We hope these tools will be useful to you and your family, and we would love to hear back if they help.

 

 

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

Filling the Various Estate Planning Roles

Filling the Various Estate Planning Roles

by | Aug 23, 2021 | Advisors, Caring for Dependents, Estate Planning, Lowell Parker, Wealth Transfer

 

At Merriman, we partner with our clients to ensure no stone goes unturned with respect to their complete Wealth Management plan. One of the more complicated issues clients face is crafting and updating their estate plans.

This is not surprising as estate planning preparation and upkeep come with difficult questions—both qualitative and quantitative. The burden of these questions can often drive folks to put off the discussion and leave their plan vulnerable. The purpose of this brief post is to let you know that it does not have to be so difficult.

This article serves as a starting point to initiate the estate planning discussion. It is a discussion of the various estate planning roles you need to fulfill. Like most things, having a process and a plan will lead to peace of mind and planned success.

Let’s start with the various roles that need to be filled:

  • Guardian
  • Trustee
  • Financial Power of Attorney (POA)
  • Medical POA
  • Executor/Personal Representative.

One commonality for all these roles is proximity. If you can find someone close, that is a prudent solution. For example, in selecting a guardian for your children, it is best they are local to avoid changing schools, establishing new friends, etc. Similarly, if there is property to sell in your estate, it is best to have a local executor, as opposed to having someone across the country who is unfamiliar with the local scene and would have to travel extensively to manage the estate.

A Guardian is someone who looks after and is legally responsible for your children until they are adults. This person should embody all the traits you would want in someone who will take care of your kids in the event you are no longer around. Often, this is a family member with close proximity (as outlined above). Keeping your kids in their current environment is so important, especially when they are already trying to deal with your absence.

A Trustee is the person who has control or powers of administration over the trust assets in your estate. The trust assets do NOT belong to the Trustee. Rather, the Trustee is safeguarding the assets per the terms of the trust and for the trust benefactors.

The role of Executor “triggers” if one or both spouses pass away. This person’s job is to fulfill all of the requests and wishes as outlined in your will. This person should have high financial competence and a good understanding of what you own and how you want your assets distributed. Technically, they will follow the wishes as outlined in your estate plan. However, we advise clients to draft a less formal letter of instruction to confirm your wishes are carried out as precisely as possible.

The next two items are in effect during your lifetime. A Financial POA grants that person the ability to make financial decisions on your behalf if/when you no longer have the ability to do so of your own accord. A Medical POA functions the same but is related to medical decisions. Both of these roles should be set up with your initial estate plan.

If you have already crafted your estate plan, take a few minutes to consider who is currently filling these roles. Are they still the right person for the job? If not, who is better suited? If changes are required, let your estate planning attorney know and get to work on updating your documents. If you have yet to complete your estate plan, consider who would best serve in the aforementioned roles. If you already have an estate planning attorney, get to work on crafting your plan. If not, let us know, and we can connect you with one.

Another tool you can use to begin to formulate your plan is our “After Death Occurs” checklist. While this outlines a post-mortem list, it also serves as a great tool to get you thinking about the roles described above.

At Merriman, our goal is to ensure clients’ plans are buttoned up from top to bottom. While we emphasize financial planning and investment portfolio management, we also partner with our clients to ensure they are covered in the areas of estate planning, taxes, and insurance. Ensuring your estate plan is taken care of will provide peace of mind on your journey to Investing Wisely to Live Fully.

For additional reading on this topic, check out our ebook The Transparent Legacy for advice on conversations you must have with your loved ones before it’s too late.

 

 

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such. Advisory services are only offered to clients or prospective clients where Merriman and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Merriman unless a client service agreement is in place.”