Bruce Starks, CPA, CFP® – Page 20

Value of Life Insurance in Buy-Sell Agreements

Course: Insurance PlanningLesson 17: Business Uses of Life Insurance Student Question: Do buy sell agreements accounts for projected growth of the company? Do the life insurance benefits increase over time to account for projected growth, or perhaps can they invest and grow conservatively to keep up with inflation (or COLA on the plan)? Instructor Response:…

The CFP Board Exam and the 10-Year Rule

CFP® Certificants in the News CFP Board generally considers regulations fair game on the CFP Board exam if they become effective within six months of the exam date. Simple enough, right? As you might suspect, that’s not always the case. We’ll analyze the IRS’s recent re-interpretation of the stretch-IRA killing required distribution rules as a…

Carryover Basis

Course: Income Tax PlanningLesson 15: Property Transactions Student Question: I have a question from this question below regarding the 1033 election for involuntary conversions. “Sparky’s office building was destroyed by fire on January 2nd of last year. The building had an adjusted basis of $620,000. On January 15th of this year, the insurance company paid…

Four Reasons NOT to Rely on Social Security Disability Insurance

Good to Know You just asked your client about their long-term disability plan. They replied “I have that covered. I have Social Security Disability Insurance.” Here’s a hint for the rest of this article—your client probably does NOT have this risk “covered” if that’s the only disability insurance they have. There are at least four…

Revocable versus Grantor Trusts

Course: Estate PlanningLesson 9: Income Taxation of Trusts and Estates Student Question: Can you refer me to a comparison (or just write a few notes) on how a grantor trust differs from a revocable trust and how a non-grantor trust differs from an irrevocable trust? They seem synonymous respectively to each other. Thank you! Instructor…

Understanding the Relationship Between Coupon Rates and Duration

Course: Investment PlanningLesson 9: Fixed Income Securities Student Question: There is a question regarding duration that I continue to struggle with. Which of the following are true: Can you explain #1 and #3? Instructor Response: Thank you for your question. This can become a bit convoluted. Let’s unpack the word “duration” first. Duration is nothing more…

Does Your Client Really Need an Estate Plan?

Good to Know How many of your clients think a great evening is sitting around a roaring fireplace on a cold night, drinking an excellent Merlot, and discussing death with their sweetheart? The author’s guess (and hope!) is about zero. Yet, even though that romantic setting is not the best time to discuss estate planning,…

Clarifying Tort Liability

Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: Hi- I have a few questions regarding tort liability. Negligence is Tort Liability? Why isn’t it contractual? Are all torts criminal in nature? Instructor Response: Good questions here. See below for my response to each. Yes Tort law and…

How Financially Resilient Were Americans During the Pandemic?

CFP® Certificants in the News You may be surprised by some of the conclusions drawn about our financial resilience as a nation according to an article posted in CFP Board’s FINANCIAL PLANNING REVIEW dated May 12, 2022. We’ll frame this discussion in three parts: Context, Methodology, and Findings. Context According to the article, “the economic…

Social Security Survivorship Challenge

Good to Know It’s been said that there are two kinds of CFP Board exams—those that test Social Security moderately and those that test it heavily. From a larger perspective, CFP Board tells us that almost one of every five questions on the average exam will test the examinee’s knowledge of the Retirement Savings and…