Bruce Starks, CPA, CFP® – Page 22

Social Security Retirement Benefits

Course: Insurance PlanningLesson 10: Social Security Student Question: This question (below) doesn’t quite make sense to me. Could you clarify why the correct answer is D? Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following? A) Both $250…

CFP Board Pass Rates—July 2022 Exam

CFP® Certificants in the News This article will summarize pass rates, note consistency with prior exam results, and highlight demographics related to the July 2022 CFP Board exam. We begin with pass rates. Consistency First-time exam takers scored an average of 69%, compared to 67% (March 2022) and 62% (November 2021), and Repeat exam takers…

Beta as a Measure of Risk

Course: Investment PlanningLesson 1: Key Principles of Investing Student Question: In the CFP Board question below I’m wondering why (1) is part of the correct answer. How is beta a measure of systematic, non-diversifiable risk? On the page, it talks about how beta is a measure of risk for a security compared to the overall…

Clients Are Not Locked Into High-Tax States

CFP® Certificants in the News encourages membership in the Financial Planning Association. Later in this article, we will reference a highly topical article appearing in the Journal of Financial Planning. We will feature a strategy that high-income clients can use to slash their state income tax rates in this report. But first, let’s admit that…

Taking Advantage of Down Markets

Good to Know A decorated marine combat veteran and friend of the author once compared being under enemy attack to corrections in the stock market. His advice was to “stay in your foxhole when the bombs are falling and make no sudden moves.” While many would completely agree with this Marine’s timeless advice, others would…

Crummey Powers

Course: Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion?…

Having Your Cake and Eating it Too: Equity Swap Contract

Good to Know Think about this situation. You have a client who has a significant amount of their wealth in a concentrated position. This might be because they are an executive with a company and have received equity-based compensation over the years or simply have accumulated the position through an inheritance or other means. Regardless…

Custodial Accounts and Gifting

Course: Estate PlanningLesson 13: Case Study Online Student Question: If a check given by Mary to Peter was deposited into a custodial acct where Mary was the custodian, doesn’t that mean that Mary didn’t give up ALL control, so it’s not a complete gift? Instructor Response: Generally, the donor must give up all ownership and…

Get In Trouble with the SEC — You’re In Trouble with CFP Board

CFP® Certificants in the News CFP® certificants licensed to sell securities are subject to SEC’s Regulation Best Interest (Reg BI) if they make recommendations to retail customers. This article illustrates the reach of Reg BI into potential CFP Board discipline. Here’s the game plan: Identify key terms, Disclose SEC involvement in a Reg BI violation,…

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:…