Frequently Asked Questions
Find clear answers to questions about our consulting approach, services, and results we deliver.
Q&A
Estates & Trusts
What key estate planning tools should I know about?
Wills and trusts allow you to spell out how you would like your property distributed, but they also go beyond that. We can help you determine the best estate planning strategy.
How can a living trust help me control my estate?
A living trust can help control the distribution of your estate upon death. If you’re looking to plan, we’re here to help you.
What are the pitfalls of probate?
The probate process can be lengthy and complex. There are strategies you can use to help avoid the probate process.
How can my 'gift' benefit me and the charity?
To retain the tax advantages associated with charitable giving, your gift must be made to a qualified organization. However, it can benefit the charity financially and the giver receives tax benefits.
How can I build and preserve my estate?
Everyone has different circumstances; however, one example is life insurance. Life insurance can be used to help preserve the value of your estate for your heirs.
How can I control the distribution of my estate?
There are a number of ways your estate can be distributed to your heirs after your death. Each allows a different degree of control over distribution, and each poses different challenges and opportunities. Some of which are: Intestacy, Wills, Trusts, Joint Ownership and Contracts.
How will I pay estate taxes?
You do not pay estate taxes. The heirs of your estate will pay the estate taxes when they inherit your estate. Estate taxes are generally due nine months after the date of death. And they are due in cash. In addition to estate taxes, there may be final expenses, probate costs, administrative fees, and a variety of other costs. However, we can provide various options for preparing for this event well in advance.
Can I benefit from an A-B Trust?
An A-B trust can be an effective way to help reduce estate taxes and preserve family assets for heirs.
What gifting strategies are available to me?
Instead of making an outright gift, you could choose to use a charitable lead trust. With a charitable lead trust, your gift is placed in a trust. The recipient of the gift draws the income from this trust. Upon your death, your heirs will receive the principal with little or no estate tax. If you prefer to retain an income interest in your gift, you could use a pooled income fund, a charitable remainder unitrust, or a charitable remainder annuity trust. Finally, you could purchase a life insurance policy and name the charitable organization as the owner and beneficiary of the policy.
How can I benefit from a charitable lead trust?
Charitable lead trusts are designed for people who would like to benefit a charity now rather than later.
Q&A
Tax Planning
What is "capital gain" tax?
Capital gains are profits realized from the sale of assets; a tax is triggered only when an asset is sold, not held.
What is the "estate tax"?
Everything you own, whatever the form of ownership, is subject to federal, and possibly state, estate taxes.
What is the "gift tax"?
The federal gift tax applies to gifts of property or money while the donor is living.
How much money can I put into my IRA or Employer-Sponsored Retirement Plan?
IRAs and employer-sponsored retirement plans are subject to annual contribution limits set by the federal government.
What is a "required minimum distribution"?
Required minimum distribution is the annual amount that must be withdrawn from a qualified retirement plan/account.
What are the tax benefits of "Charitable Trusts"?
Americans give freely to support the causes they value, from churches, education, and the arts to medical research. Fortunately, current tax laws encourage and even reward philanthropy. Beyond the basic tax deductions for charitable giving, setting up one or both of the following types of trusts could provide financial advantages in addition to the personal satisfaction that comes from giving: Charitable Remainder Trust and/or a Charitable Lead Trust.
When must taxes be paid on an IRA and Employer-Sponsored Retirement Fund?
With traditional IRAs and most employer-sponsored retirement plans, taxes are not payable until funds are withdrawn.
What happens if I withdraw money from my tax-deferred investments before age 59.5?
Tax-deferred retirement account withdrawals before age 59½ generally triggers a 10% federal income tax penalty.
What is "tax deferral"?
“Tax deferral” is a method of postponing the payment of income tax on currently earned investment income until the investor withdraws funds from the account. Tax deferral is encouraged by the government to stimulate long-term saving and investment, especially for retirement.
Q&A
Cash Management
What are some tips for managing my money?
Everyone is going to be different; however, a sound cash management program uses a disciplined approach: accounting, analysis, allocation, and adjustment. We can help you with a money management plan.
How long will it take to double my money?
Before making investment decisions, it is helpful to determine the real rate of return on the investment. Risk tolerance also needs to be discussed. So we will work with you one-on-one to come up with an investing strategy that’s fit for you specifically.
What cash management tools are available?
Short-term cash management instruments can help you establish a sound cash management program. There are specific tools that we can introduce you to based on your specific needs as well.
How do money market mutual funds work?
Money market funds can be a highly liquid and effective cash management tool. The money market is the name given to the arena where most of this short-term borrowing takes place. In the money market, money is both borrowed and lent for short periods of time. Money market mutual funds typically purchase highly liquid investments with varying maturities, so there is cash flow to meet investor demand to redeem shares. You can withdraw your money at any time.
How can I better manage my short-term cash?
Managing short-term cash is based on liquidity. Everyone’s financial situation is different, but there are numerous investment alternatives available to help provide liquidity.
What advantage does a bi-weekly mortgage offer?
Biweekly mortgage payments can have a dramatic effect on the amount of interest homeowners have to pay.
What is a "reverse mortgage"?
A reverse mortgage turns the value of your home equity into usable cash, which you can use to supplement your income, finance home improvements, pay medical bills or debts, or even fund a family member’s college education. Instead of you making monthly mortgage payments, the lender pays you in the form of fixed monthly payments for the rest of your life, or as a lump sum or a line of credit that can be tapped when needed (up to a certain limit). The income you receive is generally tax-free and doesn’t affect your Social Security and Medicare benefits.
What are some smart ways to refinance?
If your mortgage was taken out within the past five years, it may be worthwhile to refinance if you can get financing that is at least one to two points lower than your current interest rate.
A fixed-rate mortgage could be your best bet in a rising interest rate environment, if you plan to stay in the house for several years.
Take out a new mortgage for the same duration as your old mortgage. The lower interest rate will result in lower monthly payments.
Another option is to exchange your old mortgage for a shorter-term loan.
We can help you determine which option is best for you based on your current situation and needs.
A fixed-rate mortgage could be your best bet in a rising interest rate environment, if you plan to stay in the house for several years.
Take out a new mortgage for the same duration as your old mortgage. The lower interest rate will result in lower monthly payments.
Another option is to exchange your old mortgage for a shorter-term loan.
We can help you determine which option is best for you based on your current situation and needs.
What about financial aid for college?
Financial aid for college consists of loans, grants, scholarships, and work study. Grants and scholarships are worth searching for because they don’t have to be paid back, unlike student loans, which require an ongoing financial obligation, or work study, which requires a work commitment. There are generally three sources for college grant aid; the federal government, state higher-education agencies, and colleges.
Still Have Questions? Let’s Talk Today!
Start the conversation and discover how we can help.
