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Defined Benefit Pension Plan Contributions

By Dan Madden, CFP®

Which of the following statements concerning the various actuarial assumptions used in estimating an employer’s contributions to a defined-benefit pension plan is correct? The higher the assumed rate of investment income, the larger the employer’s assumed contribution rate. The higher the employee turnover or termination rate, the larger should be the employer’s assumed contribution rate.…

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The Loss of One-Half of Marital Assets in a Spousal Application for Medicaid Long-Term Care Insurance

By Bruce Starks, CPA, CFP®

Good to Know Married clients could lose one-half or more of their jointly owned countable assets when a spouse applies for Medicaid Long-Term Care insurance (LTCi). Countable assets1 include cash, publicly traded investments and other assets. Today, we’ll focus on creating the awareness needed to potentially avoid the loss of countable assets. But first, let’s…

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Maximum Family Benefit

By Bruce Starks, CPA, CFP®

Course: Insurance Planning Lesson 10: Social Security Student Question: Does the maximum family benefit apply to a husband and wife that are both fully insured if the combined total between the two exceeds the maximum family limit? If I understand correctly, the maximum family limit only applies if there are beneficiaries within the family receiving…

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Calculating Basis of Gifted Stock

By Dan Madden, CFP®

Tom gave his son, David, a birthday present of Big M stock with a fair market value of $50,000. Tom paid gift tax of $11,700 as Tom had previously given David earlier this year a cash gift equal to the annual gift tax exclusion amount. Tom’s adjusted basis in the stock on the date of…

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CFP Board appoints new Managing Director of Center for Financial Planning

By Dan Madden, CFP®

CFP® Board Updates The CFP Board has named D.A. Abrams, CAE as the new Managing Director of the Center for Financial Planning. In this role, Mr. Abrams will provide leadership and vision to the Center as it continues its focus on diversity, inclusion, and sustainability of the financial planning profession. The CFP Board Center for…

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Crummey Powers

By Bruce Starks, CPA, CFP®

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…

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Fundamentals of a Will

By Dan Madden, CFP®

Which of the following statements concerning a Will is incorrect? A will can be altered, amended, or completely rewritten at any time before a person’s death. A will cannot be rewritten but can be amended at any time by a codicil. A will must be signed by the maker and usually must be witnessed by…

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Good to Know: Lesser Known Ways To Qualify for Medicaid Long-Term Care Insurance

By Bruce Starks, CPA, CFP®

Good to Know In our last blog, we identified three ways to manage the risk of long-term care expenses: Self-insurance for wealthy clients Private long-term care insurance for the middle class Medicaid for the desperately poor Today, our focus turns to a deeper understanding of Medicaid. Conventional wisdom holds that most Americans cannot qualify for…

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Cash Surrender Option

By Bruce Starks, CPA, CFP®

Course: Insurance PlanningLesson 13: Life Insurance Policy Provisions and Conditions Student Question: Concerning the cash surrender option, is this stating that I can receive an amount of cash from my whole life policy based on premiums paid, accumulated dividends and interest earned minus any loan repayment with interest? And can I cash out at any…

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