Our Clients generally are not needful of this relief, or appropriate candidates for it—but we felt this is very important for the community to know, and to pass on. I have a long relationship with Andy, and consider him a wonderful resource. 4/16/2020 Author: Andrew M. Thaler Esq. Most small business owners unavoidably have to either incur business debt in their own name (think of an American Express Card) or personally guarantee business debt. The Coronavirus has had a devastating effect on small business. Many small businesses will simply not be able to weather the storm and survive. In this scenario, an inability of non-operating companies to pay its debts will leave small business owners with personal liability on business debt. Now is the time […]
Continue readingCategory Archives: Planning Opportunities
Observations on Life Insurance Companies and Products
I saw this list (excerpted) of observations from a Life Insurance sales person, and it is worth looking at, keeping in mind the sales oriented goals: Will Life Insurance Policies Pay Out on Death from a Pandemic? Individual life insurance policies DO NOT EXCLUDE deaths from a pandemic. Some Employer provided life insurance policies MAY EXCLUDE pandemics, war and terrorism. How Will Insurers’ Financial Health Be Impacted By The Corona Virus? Life insurance company portfolios are actually impacted negatively due to increased Death claims from the coronavirus but are positively impacted from the elimination of annuity payouts on the death of annuitants. Are Life Insurers Still Able to Conduct Physicals for New Policies? YES. And, Some companies have Eliminated the need for Physicals for […]
Continue readingCongress Waives Required Minimum Distribution Rules
The changes are coming fast and furious. The CARES Act ( the “Act”) waives the required minimum distribution rules for certain defined contribution plans and IRAs for calendar year 2020. This provision provides relief to individuals otherwise required to withdraw funds from such retirement accounts. If an individual has taken their RMD, they can redeposit it if sixty days have not elapsed since the date of the distribution. Hardship IRA/401(k) Withdrawals for Younger Participants The Act will allow coronavirus related withdrawals from their 401(k) and IRA accounts up to $100,000 during 2020 and avoid the normal 10% penalty for those not of the required minimum age of 59.5. Reasons for Coronavirus related withdrawals include (1) An account owner diagnosed with COVID-19, or (2) A spouse […]
Continue readingVirtual Notary Now in New York by Gov. Cuomo’s Executive Order
Great News for those of us trying to help our clients stay safe, Effective March 19th: New York Governor Andrew Cuomo signed an executive order allowing for documents to be notarized virtually using audio-video technology, which those in the real estate industry say is a necessary step to keep business moving during the COVID-19 pandemic. As part of the executive order, Continuing Temporary Suspension and Modification of Laws Relating to the Disaster Emergency, any “notarial act that is required under New York State law” is allowed to be performed using audio-video technology if the person seeking the notary’s services, if not personally known to the notary, presents valid photo ID to the notary during the video conference. According to the executive order, the notary and […]
Continue readingUnfortunately, Estate Planning Must take Political Considerations in Account in 2019
In recent decades, phased in changes to estate tax exemptions, and unexpected surprises which dramatically changed rates and exemptions have made estate tax planning more difficult and complicated. Despite the changes, the underlying strategies remained similar over the last fifty years, using tried and true techniques built on rulings and loopholes inhabited by tax lawyers and advisors who were intent on keeping their client’s wealth intact for future generations. Those strategies are now threatened, and the time to use them may be running out. The “sunset” of the current generous estate tax Exemption of $11.4 million (after indexing annually for inflation) in 2026 presents a huge challenge. The Exemption declines back to the 2011 level of $5 million (before annual inflation adjustments are included). State […]
Continue readingWhy Trusts Really Matter
In this post, I provide a recent article from the brothers Blattmachr which appeared in Leimberg Information Services Estate Planning Newsletter, getting down into the nitty-gritty about just how trusts can help us, and our families. It’s worth a read. Disabilities of Beneficiaries Few, if any, attorneys would fail to recommend strongly that a client put his or her assets in trust for a family member who is under a legal disability, such as being a minor or being incompetent. Giving or bequeathing assets outright to a minor or an incompetent is a recipe for disaster, resulting in maximizing court interference with the management of the property, reducing flexibility in the use and investment of the property for the benefit of the person for whom it […]
Continue readingNY Law Allows Planning for Digital Accounts
On September 29, 2016, a bill was signed into law by Governor Cuomo adding Article 13-A to the New York Estates Powers and Trust Law (the “EPTL”). This legislation is New York State’s version of the “Uniform Fiduciary Access to Digital Assets Act” (the “Act”) which nineteen (19) other states have also enacted into law. The Act is effective immediately. It is meant to provide certainty to all types of fiduciaries – including: trustees, executors, administrators, agents under a power of attorney and guardians – in their efforts to acquire access to digital assets. They now have the authority to gain access to, manage, distribute and copy or delete digital assets. The Act covers digital assets used for personal use and does not apply to […]
Continue readingTwo Risks in Retirement Planning that are Frequently Ignored
Retirees experience heightened vulnerability to “sequence-of-returns risk” once they are spending from their investment portfolio. Poor returns early in retirement can force the sustainable withdrawal rate well below what is implied by long-term average market returns. The returns experienced near your retirement date matter a lot more than most people realize. Retiring at the start of a bear market is incredibly dangerous. You might enjoy positive average market returns over 30 years of investing, but if negative returns are experienced in the early stages when you start spending from your portfolio, wealth can deplete rapidly through withdrawals, leaving a much smaller nest egg to benefit from any market recovery, even with the same average returns over a long period of time. Retirees face the risk […]
Continue readingBe Careful Relying on Online Retirement Calculators
The Wall Street Journal highlighted a recent academic study at Texas Tech University WSJ Article, Damato & Tergesen that found the results misleading and incorrect in two thirds of the thirty six free or low cost tools which the researchers tried. In the examples highlighted, the online calculators significantly overstated the level of confidence which the data indicated would be safe for a secure retirement. The researchers recommended being careful to avoid oversimplifying a process which requires commitment and effort to 1) provide an analysis that suits your individual circumstances and needs, and 2) understand the strengths and weaknesses of results obtained, and how to use them wisely. The Will Doctor notes that our growing faith and dependence on automated simple solutions to complicated lifestyle questions is […]
Continue readingAssumptions for Risk and Investment Returns
The effectiveness of any effort to assess your future financial security depends on using assumptions about many variables. These include your life expectancy, saving and spending levels over time, inflation, and hypothetical investment returns on your savings. Each variable must be considered very carefully, and the results need to be viewed under multiple scenarios. This gets complicated, especially since there are competing methodologies about how to build the variables, and much of this guesswork is getting more scientific (and accurate) on a daily basis. Of course, it is very obvious to everyone that there will be a lot of room for disagreement about future investment returns, depending on how the computations are made, and the weight of historical returns over different time periods. Bessemer Trust […]
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