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CFP® Practice Question of the Week: Insurance
James is planning to insure his commercial policy. In looking over two quotes and comparing some of the policy language to his own personal policies, he has become very confused regarding the different types of deductibles. He asks you, as a certified financial planner, which of the following deductibles are typically used in commercial property…
Student Question of the Week: Estate Planning
Student Question from: SteveCourse: Estate Planning – Contingent versus Vested Beneficiary Student Question: Hi Dan, I am a bit confused as to why in the example “Northwestern University” and “my son” are not considered having a future “contingent” interest in the trust since they do not receive the interest until the wife, Jane Gold dies.…
CFP® Practice Question of the Week: Must Know Tax Rules, Kiddie Tax
Your client Beauregard has a daughter named Constance, age 16. Constance qualifies as a dependent on Beauregard’s income tax return. She has a passion for broadcasting and earned $3,000 as a part-time announcer in a local radio station this year. Beauregard transferred $100,000 into a high yield bond fund for Constance last year. The bond…
CFP® Practice Question of the Week: Financial Planning
Five years ago, John and Barbara, who are in their mid-50s and have one adult child out of college, experienced a sharp increase in income (ten times) within a two-year period. Their lifestyle and the complexity of their financial situation increased respectively. Their income statement’s bottom line increased and their assets/liabilities expanded as well (third…
Student Question of the Week: Insurance
Student Question from: Bill M.Course: Insurance – Replacement Cost Student Question: I don’t understand Question 2. Why does the client have 97.2% of the coverage he needs? Doesn’t he have $14,000,000 in coverage? I thought he just had 77.7% of the required coverage. Where am I messing up? Peter purchased an apartment building for $15,000,000…
Good To Know: Will & Testament
What’s in your Last Will and Testament? Estate planning practice in the last two generations frequently included a Testamentary Trust for benefit of a couple’s children at the death of a parent. This trust was known by a variety of names, including “Bypass Trust”, “Family Trust”, or “Credit Shelter Trust”. Rather than specify the exact…
CFP® Practice Question of the Week: Financial Planning
This question uses the same facts as the previous practice question: Harold and Mary Anne Miller are a married couple in their early 40s with three children, ages 7, 10, and 12. Harold earns $350,000 per year as General Counsel of a mid-sized IT firm and Mary Anne is a homemaker. They have major assets…
Student Question of the Week: Investments
Student Question from: Ben H.Course: Investments – Bonds and Interest Rate Relationship Student Question: From mid contraction to trough in the business cycle cycle, why do bonds do well? I don’t understand the relationship between bonds value going up if interest rates are going down? Please help. Thanks Instructor Response: Hi Ben! Your question brought…
Student Question of the Week: Taxation of Trusts and Estates
Student Question from: Harry F.Course: Estate Planning – Taxation of Trusts and Estates Student Question: In the statement below, regarding complex trusts, it states, “If income from the trust is distributed, it is taxed to the beneficiary; if accumulated, the tax is paid by the trust.” So, would double taxation occur if a trust accumulates…