Can a Trust own and manage my business? The short answer – yes, it can; however, there is more to it. Trusts can own businesses and manage them for the benefit of your heirs, but there are nuances to consider.
S-Corp thoughts/considerations. For example, if your business is an S-Corp, you avoid corporate taxation, double taxation, because the shareholders receive the income and losses from the business (S-Corps are “pass through” tax entities). In other words, the business income gets treated like personal income for the shareholders, although certain exceptions apply. An S-Corp:
I suppose there are a lot of lighter topics that one could talk about on the dawn of a new year, however in my line of work every year around this time I find myself providing counsel to individuals and couples that have decided to go their separate ways. Generally, it's not the holidays or the new year that actually done the relationship in. Although the stress of the holidays coupled with unwanted conversations over politics with in-laws that may have over stayed their welcome certainly doesn't help a struggling couple find their way. Typically, the relationship has been broken or been breaking for a long time leading up to these conversations.
It's never easy for someone to open up about personal matters such as this and quite frankly especially when there are children involved, it can be a very emotional conversation. I decided to lay out some of the biggest takeaways and advice that I could give to someone facing the breakdown of a relationship and the prospect of a divorce or separation....
You have your “big stuff” booked. The venues, caterers, and photographer, whew, you take a deep breath. It’s organized and maybe even semi-payed for or you have already established payment plans within your budget! It feels amazing! You actually still have money! Except, you don't.
When you’re planning a wedding, there are a ton of little things that cost money that many brides and grooms forget about. All of these things, even if they are small amounts can add up quickly, pushing past your budget. Here are three things to think about and how to keep the costs low....
Should I get a trust? The short answer – it depends. There are several factors to consider; primarily, trusts help clients avoid probate (saving time and money), thereby privately distributing assets upon the grantor’s death. However, not everyone needs a trust. Consider the following factors:
How much of your estate will bypass probate? One of the main advantages of a living trust is being able to bypass the time and cost of probate (“probate,” definition: generally, assets are transferred from the decedent to the heirs; it is the process of administering an estate through the courts, a process that can take several months or years and can easily cost thousands of dollars). However, not all assets are subject to probate. For example, exemptions apply to jointly owned assets with rights of survivorship and assets with designated beneficiary forms, such as annuities, life insurance, and retirement accounts. Also, several states, such as Michigan, allow bank accounts to be “payable on death,” or “POD,” so beneficiaries can merely produce a death certificate and valid ID to access the account. Michigan also allows stocks and bonds to transfer-on-death (“TOD,” or “TOD” registration for securities).
Tis the season for giving thanks, for pulling our loved ones close to us and letting them know how much we appreciate and love them, for being charitable and spreading joy and good favor to those less fortunate and in need. For a lot of you out there (if you're anything like me) this is a time for reflection; this is a time to look back at the prior year and often during this time, I think about some of the families and situations that we were privileged to work with. Now in business, just like with our families, things don't always go the way we planned and every year there's a handful of circumstances and situations that create complex issues that we as a team try to collaboratively solve. Here are few situations that we encountered in 2016.
Disclaimer: We take our clients right to privacy extraordinarily seriously so these stories have been altered to protect the identity of our clients and serve only as an example of the said situation.
Millennials are often portrayed as the black plague for our country’s future. We are referred to as lazy, ungrateful, and incompetent. The consensus is that we will be detrimental to the future of our country because we don’t have a clue, but just how could that be? We are just beginning our adult lives and haven’t had a real impact on hardly anything yet. Most of the issues we face today started well before we were born. With our generation inheriting a seemingly endless national debt, a monumental student loan crisis, and little to no social security to utilize, how on earth could the most financially distraught generation be portrayed as becoming the wealthiest ever?
Here’s some insight into answering that question…
Knowing where your information is coming from is crucial to your consumption of knowledge. Deciphering among the credible and non-credible can be a challenging feat, but there are some basic questions you can ask yourself before forming a conclusion or deciding an outcome based off the data obtained from the media. It’s obvious that the way we collect information has changed dramatically, and the amount of material available to us is insurmountable and only continuing to grow. Consequently; as a direct reflection of the growth of good information, the growth of false or misleading content has developed itself as well. Leading us to ask the question, how do you navigate the bad to ensure you are consuming only desired, factual information? Here’s where I can help.
Some questions to ask yourself:
Well it is finally over. No more political advertisements interrupting my enjoyment of the World Series. My Facebook feed has finally started to get back to cat pictures, fake news, and 12 people I need to wish a Happy Birthday. The question on everyone’s mind now is, “what does this mean?”. The reality is for some time we may not know exactly and uncertainty is not fun for anyone. A few things are certain and those are what we need to concentrate on right now, especially when it comes to our retirement planning.
Many thought this would happen immediately if Trump won the Presidency but as we have seen the opposite was the immediate reaction as the most indexes roared for 7 straight days higher. That’s not to say the danger is over or likewise that a collapse is pending just around the corner. One thing we do know for sure is that we are at all-time highs in most indexes and that alone should have you making sure you have prepared your portfolio. The number of people we see for initial consultations that tell us they are moderate or even conservative in their risk tolerance only to be shown the way they are investing is sometimes quite a bit more aggressive, is still surprising to me. Many of you are investing still like it is 1999 or maybe more appropriately like it’s 2007. Make sure you know your risk tolerance and your portfolio reflects it properly.
If you're anything like me then you dread going to the doctor, you dread going to the dentist, you dread shots, medical checkups, exams and tests that you can't pronounce the name of. Just like most people when I hear the phrase "checkup", my "I don't want to do that" sensors immediately start to go off. The term checkup is innocent enough but it can be associated with varying levels of pain, discomfort and scariest of all: the unknown! Of course for me anyways these feelings and associations all happen in the blink of an eye, subconsciously. As a parent of two it certainly is my job to help my children understand the benefits of getting a checkup and to help them overcome the fear, the uncomfortableness and the potential pain of the dreaded exam. So, in that parental spirit and without further ado, here are my six reasons why doing a mortgage checkup is less painful than a medical checkup and something every homeowner should have on their annual to do list:
I recently returned from a trip to North Carolina. The reason for the trip was simple. We wanted to spend a few days with some friends who do not live near us, and we wanted to enjoy the beautiful countryside without the interruption of all of the news and noise that populates our life.
Our main physical activity was our daily hikes in the mountains. On day 2 we woke to a soaked earth and wet leaves. During the night, the wind and the rain combined to create a slick surface. In addition the trail we were taking featured exposed roots, rocks, and a steep drop off to one side, causing us to make adjustments to how we hike this trail.
If you die without an estate plan, your loved ones may have to go through the probate court process, wasting time and money. In probate, you run the risk that the court’s decisions may not be consistent with your goals; rather, intestate succession (the process automatically applied when there is no trust or will) determines how your assets are distributed. Estate planning does not have to be expensive; however, even the most basic plans will offer you the following benefits:
As the proverb states, “an ounce of prevention is worth a pound of cure.” Read more at http://www.keilenlaw.com/articles/
The generations that pre-ceded the millennials typically have a different way of thinking when it comes to money. Does this mean that we shouldn’t take their advice and follow in their footsteps? Not exactly, but take the advice with a grain of salt. The financial world is ever changing and the one that previous generations grew up in is vastly different than the world we live in today. Here are a few of the topics that advice is commonly given on:
1. We hear “Don’t get a credit card.” – You should actually get a credit card to build up your credit. Just because your parents or grandparents paid for everything in cash, doesn’t mean that you can’t use this tool to help grow your credit score. A prompt and consistent record of credit card payments can have a significant impact on curving this score. There are also some significant rewards associated with certain credit card providers that can provide for numerous rewards such as cash back, airline vouchers, and hotel stays.
The first few days after getting engaged are a complete whirlwind. Your days are filled with phone calls, texts, an incredible amount of love expressed from friends and family, and a billion questions that you probably don’t have the answer to. Once it settles down, reality sets in, and planning begins. The average cost of a wedding in the United States is over $32,000. Like Wut? Now for some brides, that’s totally reasonable, and if you have the money HEY, why not? “It’s the most important day of your life!” However, for my fiancé’ and I, $30,000 could go towards so many other things. It’s $30,000 you could have for retirement, multiple vacations and so much more. We just aren’t willing to drop that much money for one, single, day. Nor are we willing to ask our parents (and neither should you), who are all in retirement to sacrifice their income and future, for our big day.
With a budget well below the national average, my fiancé and I sat down and really thought about what we had to have and what was most important to us, and what we could do without....
The student debt crisis is completely out of hand. It has become one of America’s biggest financial mistakes not only topping $1.3 trillion, but growing more than $2,000 every second. This is leaving millions with crippling debt that will follow them for decades to come. How did we get here?
We all have financial goals, and one of the most common goals for parents is paying for their son or daughter’s college education. Although admirable, when someone wants to help foot the bill you can’t, and shouldn’t if you are putting aside your own retirement plans. CollegeCalc, says the average public university in Michigan will cost between $8,000-$12,000 dollars per year which is just for tuition. That doesn’t include the high interest rates backed by the government or any of the extra costs that come with higher education....
Both, Clients and Financial Advisors, need to be on the same page in order to work together effectively. The start of the New Year is a good time to discover whether your resolutions are compatible.
So, whether you are looking for a financial advisor for the first time, reassessing the one you’re working with or looking to work with someone new, be sure to ask to speak with current and past clients of the advisor you are considering working with. Get as much information about the successes, experience, education and ongoing training of the advisor that you can. If you are reassessing, be honest and tell your current advisor why you are reconsidering the relationship if appropriate. It’s your life and your money, so be committed to understanding everything your advisor suggests before diving in to a specific course of action. If you don’t understand something, keep asking questions until you do understand....