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What You Need to Know!

A blog about keeping you up-to-date with the latest Financial Planning and Wealth Management news.

Are You Financially Prepared For The Next Hurricane?

Are you financially prepared for the next hurricane? It’s hard to believe that we have officially entered hurricane season.  There’s no time like the present to review insurance policies to make sure the appropriate coverage is in place and that your household items are properly documented.  Preparing early while you have the time will reduce any potential stress or panic when a storm is imminent.  While most of know what supplies we need to stock up on before a destructive storm, ensuring we are prepared financially is not always top of mind.  Do you have adequate insurance on your home, property, and business?  Are these insurance carriers financially secure?  Does your business have a continuity plan in place? While standard homeowner’s insurance covers the structure of your house for disasters, it is important to understand the elements that could affect your insurance payout after a hurricane and adjust your policies accordingly....
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Have you Considered a Donor Advised Fund to Achieve your Philanthropic Goals?

Planning for Success: Have you Considered a Donor Advised Fund to Achieve your Philanthropic Goals? As you contemplate your estate planning and leaving a legacy, you may want to recognize and give to charitable organizations or philanthropic causes that have made an impact on you.  Perhaps, you may want to encourage the beneficiaries of your estate to continue the legacy of charitable giving that you have maintained during your lifetime.  There are several options available to accomplish your charitable giving goals in your estate plan, and a simple and effective solution is with a donor advised fund.     Over the past decade, nonprofit fundraising has been rapidly transformed by new ways to give.  Donor advised funds are a popular way for donors to support nonprofits of all sizes.  Most people believe donor advised funds to be vehicles that streamline charitable giving during their lifetimes.  While this is certainly true, a donor...
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Planning for Death Taxes is Not Dead!

2022 STRATEGIC TAX PLANNING     PLANNING FOR DEATH TAXES IS NOT DEAD! By: Simon Levin, Esq. and Donald A. Kress, Esq.   With the failure in the Senate of President Biden’s “Build Back Better” (“BBB”) legislation ro pass, which already had dropped literally all of its original Draconian estate and gift tax proposals, the opportunity for creative and meaningful death tax planning is more alive than ever. After a short collective sigh of relief, taxpayers need to focus quickly on the facts that not only are all of the well-known planning opportunities still available, but, due to on-going adjustments for inflation, many of the benefits actually have improved.   Legislative Background   For 2022, the federal gift, estate and generation – skipping tax exemptions (the “Exemptions”) again have increased, this time to $12,060,000 ($24,120,000 for a married couple) from $11,700,000, and the gift tax annual exclusion has increased to $16,000...
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When Was The Last Time You Reviewed Your Estate Plan?

When was the last time you reviewed your Estate Plan?   Even if you have a sound estate plan in place, it canbe worthless for the people you love ifnot regularly reviewed nor kept up to date.  Most people believe their estate plan is done when they sign a will, trust, power of attorney or a living will, but estate planning is a lifelong process.  Your life will inevitably evolve as changes to laws, assets, family, and goals happen.  In absence of any major life events, we recommend reviewing your estate plan annually to ensure it is current and still reflects your desires. These are the four questions that you should ask yourself during an Estate Checkup. Has your family or household changed?   Marriage: Marriage instantly changes your legal status.  Regardless of whether it is your first marriage or fifth, you must take the proper steps to ensure your estate plan...
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Overprotected - Britney Spears

Planning for Success: “Overprotected” - Britney Spears    When Britney Spears burst onto the Billboard Charts at the age of sixteen, she instantly became one the world’s most beloved pop stars.  Despite Britney’s massive fame and fortune, she has never had full control over her own life.  Imagine becoming a worldwide sensation, amassing riches and fortune, but with the caveat of having to ask for permission on how and when it can be used.   As most of us remember, Britney suffered a mental breakdown in 2008, which led to the formation of a conservatorship.  Essentially, a conservatorship is an adult guardianship in which the court appoints representatives to control the individuals legal, financial, and personal decisions.  Initially when established, the conservatorship was meant to be only temporary; yet, in October 2008, it was changed to remain in effect for the foreseeable future.  For the past thirteen years, Britney’s father, Jamie, has...
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"Life is very tough. If you don't laugh, it's tough" - Joan Rivers

An individual’s residence and domicile are often narrowly perceived as the same; therefore, potentially missing out on tremendous tax benefits.  A significant aspect of the estate administration process is your domicile at the time of your demise, not where you were residing.  While you can have multiple residences in various states, you can only have one domicile.  Essentially, a domicile is a combination of two factors, the first is residency, and the second, an intent to remain for the foreseeable future.  Clients often look to establish residency in a jurisdiction with an attractive legislation for estate planning purposes.  Suffice it to say, Florida is considered a tax sanctuary fueled by its superior asset protection climate.  Currently, there are seventeen states that will impose either an estate or inheritance tax for estates that exceed a certain threshold.  Individuals located in these states with a considerable taxable estate could be required to pay...
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Is Your Estate Plan for the Average Joe?

Is Your Estate Plan for the Average Joe?   While no one likes to think of their own demise or what needs to be done to efficiently transfer assets and protect the interest of each beneficiary, it is imperative as a business owner .  Efficacious estate and succession planning will provide a lifeline for not only the survival of your business, but your employees and their families.  An effective estate plan clearly outlines how your assets are to be distributed when the time comes.  Ultimately, this will ensure your business can continue to run smoothly as the appropriate steps towards a successful succession have been thoroughly planned. With the Dolphin’s season opener right around the corner, the estate of Joe Robbie distinctly comes to mind.  In the mid-1960’s, Joe Robbie co-founded the Miami Dolphins, which at the time played in the old American Football League, shortly before the merger with the National...
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When There's No Will, There's No Way - Florence Griffith Joyner

Having a will or a trust is essential, but it is only effective if upon your demise, the documents can be located in a timely manner.  The family of Florence Griffith Joyner found themselves in this predicament.    Florence Griffith Joyner was a famous American track and field star, whom most notably, won three gold medals and a silver in the 1988 Olympic Games in Seoul, South Korea.   Florence broke records in both 100 and 200 meters, earning her the nickname Flo Jo, for being the fastest woman of all time.  She was only 38 years old when she passed away in her sleep from an epileptic seizure.  Florence had taken the basic steps to ensure that her wishes would be fulfilled by a will.  Unfortunately, her husband could not locate the will and was therefore unable to file it within the required 30 days of her death per California...
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You Have All The Influence You Choose To Have - Philip Seymour Hoffman

Most of us have envisioned what it would be like to be the beneficiary of a multimillion-dollar estate; however, it is rarely cherished by the beneficiary, the complexity of planning involved to not only protect their interest, but future generations as well.  Envision being the beneficiary of a $35 million estate, only for it to be reduced by roughly a third, this was exactly what occurred to Philip Seymour Hoffman’s estate.  Due to his decision to choose a simple estate planning technique, approximately $12 million will never make it into the hands of his family; instead, being consumed by unnecessary taxes and fees that could have easily been avoided. Philip Seymour Hoffman passed away leaving behind his beloved girlfriend and their three young children.  While he certainly had the means to hire a top estate planning attorney to develop a comprehensive estate plan; however, Philip took the advice from his accountant...
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The Layup of A Lifetime - Kobe Bryant

While it may seem like a distant memory, it has been a little over a year since the legendary Kobe Bryant and his 13-year-old daughter, Gianna, tragically passed away in a helicopter crash.  Kobe’s untimely death at the young age of 41, highlights just how critical it is for every individual to not only develop an estate plan ensuring their loved ones are properly protected, but to ensure the documents are swiftly updated to reflect recent life events.   Bryant’s earnings, between his salary and endorsements during his 20-year career with the L.A. Lakers, are estimated to be roughly $650 Million.  Kobe had a comprehensive estate plan in place.  His estate plan included a trust to not only protect his assets, but to reduce his potential estate tax liability and ensure his wealth is properly passed on to his family.  Kobe’s trust was created to allow his wife and daughters to...
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Coronavirus and the Market Impact

Coronavirus and the Market Impact
It was just two weeks ago the markets were looking at all time highs and consensus was building about an economic recovery continuing based on higher earnings forecasts.  We don’t often experience black swan events but the coronavirus outbreak, by definition, could be possibly considered the black swan event of 2020.  It is early in the outbreak, but markets are seemingly reacting as if some level of economic downturn or recession is on the horizon.  We won’t know for sure what the toll will be on the economy or financial markets until later this year.  We can draw from several historical virus pandemics to get an idea of what happened to economic activity, but every situation and recovery is different.  Here are our quick thoughts on what has transpired so far and what our team at Coral Gables Trust is doing about it.   Government Action   It didn’t take long...
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The most successful investor sometimes needs expert advice.

The most successful investor sometimes needs expert advice.
We’ve all heard of the “millionaire next door,” the investor who quietly amasses a fortune by living within his or her means, buying the right securities, and faithfully staying the course through various stock- and bond-market cycles. Perhaps we even know a few such people.   This sort of person typically eschews the services of a financial planner, reasoning that his or her own strategy has worked so far, and that the financial planner’s fee is an unnecessary expense. But financial planning by an objective professional — one who has no proprietary products to sell —is an investment that will pay for itself many times over, just like a good security.   An adviser will take many things into account when advising a client, including the time horizon (age of the family), its short- and long-term financial goals, and the timing and nature both of cash inflows and outflows.   The...
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Building stronger client/advisor relationships on a personal level.

Building stronger client/advisor relationships on a personal level.
Within the financial services industry, opinion is mixed on whether wealth management professionals should give clients advice on personal matters, on issues that do not relate to the client’s economic picture. Some practitioners give this practice a wide berth, reasoning that giving personal counsel could lead to trouble or damage the advisor-client relationship, especially if the client disagrees with the advice or the recommendation works out badly. But here’s another way of looking at it: judiciously handled, extending guidance to a client on non-financial matters can strengthen the relationship and provide benefits for both client and financial professional. You have to proceed carefully, of course, and the recommendations you give must be at arm’s length, and solid advice. Some advisors just talk, talk, talk, and go through the numbers with the client. But if you instead listen, you can learn so much more. Listen with empathy and be an active listener....
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Fee-free, passive funds are attractive, but it’s about more than beating an index.

Fee-free, passive funds are attractive, but it’s about more than beating an index.
Last summer, Fidelity Investments became the first financial company to offer no-fee index mutual funds, and quickly attracted about $1 billion into two portfolios. This has several implications for wealth management companies, and for investors.   The funds the company is offering — one each focusing on U.S. and international stocks — are passive funds; they are built to mirror a market index. Active strategies, on the other hand, comprise stocks chosen by an advisor and their team of analysts.   Passive funds are a lot cheaper than active funds, and over the past five years, they’ve had a stronger growth rate, partially because the fees are lower. They are the go-to product for millennials who have just begun investing. The thinking goes: ‘When the market is as strong as it is, why would I pay someone more to choose stocks for me?’ This product is starting to creep into the...
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Retired? Rewards vs. risks should still guide your investment decisions.

Retired? Rewards vs. risks should still guide your investment decisions.
Advice on amassing sufficient assets and investing them well to build a healthy retirement is easy to find. Books, online resources, lectures, magazine articles, a talk with your financial advisor — even blogs like this — can be invaluable tools for the investor just starting out and those who want to proactively manage their financial futures.   But what about that day, six months after your 70th birthday, when you’re facing the prospect of taking annual required minimum distributions from your IRA or 401(k)? The Internal Revenue Service demands that you withdraw a percentage of your tax-sheltered funds — the amount will vary depending on myriad factors including the type of plan you have, your life expectancy, and the age of your spouse, and other considerations — and pay taxes on those withdrawals.   Guidance at that juncture is somewhat harder to find, but here are some factors we at Coral...
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The importance of financial planning update one.

The importance of financial planning update one.
It seems as if the importance of personal finance management has always been a cultural touchstone. “If you fail to plan, you are planning to fail!” Ben Franklin declared in America’s colonial days. In 19th century England, Charles Dickens has Mr. Micawber recite his own recipe: “Annual income 20 pounds, annual expenditure 19 [pounds] 19 [shillings] and 6 [pence], result: happiness. Annual income 20 pounds, annual expenditure 20 pounds ought and 6, result: misery.” Ideally, individuals and families should set realistic, achievable goals and then prioritize those goals according to their values. Ideally, this should all evolve in a logical, painless and orderly way. Yet the prospect of taking one’s financial affairs in hand can be daunting. According to the National Association of Personal Financial Advisors, in 2012, 56 percent of U.S. households lacked a budget, 40 percent of adults had no savings other than retirement funds, and 50 percent of...
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Consumers should prefer traditional wealth managers to robo-advisors. Here’s why.

Consumers should prefer traditional wealth managers to robo-advisors. Here’s why.
Today, online transactions are so prevalent that it’s hard to imagine a financial life without them. How would we buy an airline ticket, transfer money between accounts, book a vacation, pay bills, or keep track of expenses without internet connectivity?   But there’s one area in which consumers seem to prefer a human encounter to computer clicks. The acceptance of robo-advisors — online software that allows clients to manage investments — once ballyhooed as the next major trend, has been slow to catch fire. Some observers say that only one-half of 1 percent of assets under management are enrolled in such arrangements, and that the number will only increase to 2 percent by 2022. We at Coral Gables Trust Company know there are many good reasons for that.   Let’s be clear: there are situations in which robo-advisors , or plug-and-play programs, can be very useful. For the young investor just...
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Yes! Florida continues to be a robust State for jobs.

Yes! Florida continues to be a robust State for jobs.
This week we've invited Mason Williams, our Chief Investment Officer, at Coral Gables Trust Company to give us a quick insight and share his predictions on the latest local and national job report numbers for South Florida. Yes! Florida continues to be a robust State for jobs. I was recently asked at a conference would South Florida continue to show job growth in Q4 of 2018 and into 2019? Yes! I responded. Because of its strong and steady annual job growth rate of 2.4% compared to the national rate of 1.9% over the past year, and because of the state unemployment rate of 3.8% matching the national average of 3.8%. Yes! Florida is and will continue to be job strong.  When we look at the South Florida/Miami-Dade metro area key indicators, the unemployment rate of 3.9% is also in-line with the state and national average.  And further north, the Broward metro region...
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