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Good to Know: Dangerous Mistakes In Retirement – Wrong Spend Down Strategies Slows Portfolio Growth
Good to Know Savvy financial advisors know that prudence in taking retirement distributions is balancing income tax efficiency in the current year against long-term retirement portfolio growth. While each client may present unique needs, a discussion starter to the question “where should I take my distributions from?” follows: First – Take the full amount of…
Percentage of Completion Method
Course: Income Tax Planning Lesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Question 5 (below) did not make sense to me. I started out by breaking down by year – 400,000/2,100,000*3,000,000 and so forth, but did not arrive at the correct answer. So then I tried adding up 3 year – 400+650+700/2100000*3,000,000. That…
Power of Attorney over Financial Affairs
Laura is concerned she will develop Alzheimer’s disease later in life similar to her mother. Which of the following documents should Laura execute to make sure her son is able to handle her financial affairs in the event she does develop Alzheimer’s disease? Durable springing power of attorney Nondurable springing power of attorney Durable nonspringing…
CFP® Certificants in the News: Women’s Initiative (WIN)
CFP® Certificant in the News According to the CFP Board, “the percentage of women CFP® professionals has remained flat at 23 percent for at least a decade.” Based upon CFP Board commission researched aimed at increasing that percentage, the “WIN Council” and “WIN Advocates” were created by the Board. Key information follows: “WIN Council Following…
Expanded Annual Exclusion Amount
Course: Estate Planning Lesson 5: Transfer Taxation II – Lifetime Transfers Student Question: Hi Bruce, I’m reading about the “expanded Annual Exclusion Amount of $155,000.” Just so I’m clear, is this an expansion from the “regular” $15,000 Annual Exclusion Amount? And what is it for? Thanks! Kevin Instructor Response: Hi Kevin, You are correct. The…
Owner of a Grantor Trust
In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…
Good to Know: Dangerous Mistakes In Retirement – Excessive Annual Withdrawal Rates
Good to Know Six of every ten Americans fear running out of money in retirement more than death. This is the first of three blogs addressing financially dangerous and avoidable retirement mistakes. Today’s focus is upon avoiding excess withdrawal rates from one’s retirement portfolio. Before we begin, let’s address the common phrase “safe withdrawal rate.”…
QTIP Marital Trust
Course: Estate Planning Lesson 10: Application of Estate Planning Concepts Student Question: HI Bruce- Can you help clarify for me seemingly contradictory information in the two sentences below regarding “disinheriting children”? The first sentence seems to imply that the surviving spouse could disinherit children. However, the second sentence states that QTIPs are often used to…
Calculating Gross Income in an S and C Corporation
A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C Corporation and an S Corporation. The C Corporation had net profits of $20,000, and the S Corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but…