Archive for Financial Planning

The Financial Aftermath of a Natural Disaster

Financial Planningon October 19th, 2017No Comments

Content Collected By: Zach Bennedsen

The fires that have ravaged Northern California for the past two weeks are coming to a close but for many, the impact has just begun. Our thoughts are with those who have been affected by or have a loved one who has been affected by the California firestorms or the hurricanes in the southern regions of the country. For those faced with the financial aftermath of one of these disasters, we’ve collected tips from victims of prior firestorms, those in the insurance industry, and fellow financial advisors on what to do next. And, for those who were not affected by the fires, we hope this serves as a guide of preemptive steps to take, should you ever experience your own loss.

Evacuees:

Once you are safe, one of the first things to do is contact your homeowner’s insurance provider. Part of your homeowner’s policy covers for loss of use, which can provide for you to live in a home of like kind and quality, or a hotel, while you are away from your home. You may also be reimbursed for living expenses incurred above and beyond your deductible.

For those who have lost their homes:

While most homeowners have some sort of insurance coverage, the details and depth and breadth of the coverage varies considerably. Here are some specific recommendations for dealing with the loss of a home:

  • Secure Housing Quickly
    • As those who have been displaced look to rebuild their lives, it is likely that housing costs will be high and availability will be scarce as those who have been displaced look to rebuild their lives. Being proactive about securing housing will afford you the best possibility of finding a place that meets your wants, not just your immediate needs.
  • Request Agent Help
    • Your agent or broker is an expert in dealing with these kinds of events. We encourage you to enlist their help early and often.
  • Continue to Pay Your Mortgage and Contact Your Mortgage Lender
    • Following a house fire, you’ll still need to make your monthly mortgage payment. However, you should contact your mortgage company and make them aware of the situation. They may be able to make special arrangements because of your unique situation.
  • Get Organized
    • Many insurance carriers are overwhelmed between the recent hurricanes and fires. When you submit your claim, you will be competing with many other claimants and claims adjusters are only human. To help your claim process go as smoothly and as quickly as possible, it is important to be organized. Most carriers will require lists of damaged/destroyed property to obtain full value and the insurance carriers are more likely to handle an organized claimant more quickly than a less organized claimant. More specifically, an organized claimant will do the following:
      • Keep Notes: Keep notes of all conversations that you have with insurance companies, landlords, contractors, and city and county employees.
      • Be Detailed: For example, stating that you have a “dress shirt” is vague. Stating that you have a “Nordstrom, no-iron, regular fit, blue dress shirt worth $69.50” and including a link to the item on Nordstrom’s website is detailed.
      • Collect Photos of Their Home: Collect pictures of the inside and outside of your home from friends, neighbors and family members that will help you recall your furnishings and personal property.
      • Keep All of Their Receipts: Keep all receipts for expenses incurred during evacuation, loss of use, and items you buy to replace lost items. Use your phone to take photos of your receipts and store them in the cloud. Evernote, Google Drive, and DropBox are just a few resources to store images of your receipts in the cloud and allow you to write notes on the stored images.
      • Document Any Push Back: If issues become unresolved, documented push back or resistance from your Insurance Company is information that can be used to complain to the California Insurance Commission.
  • Understand the Replacement Value
    • Typically, HO-3 policies only reimburse the depreciated value (example a 5-year- old mattress is reimbursed at 20% of cost) and HO-5 policies provide full reimbursement. It is important to understand your policy’s settlement clause and if you don’t understand, ask your insurance agent for help.
  • Communicate via Email Whenever Possible
    • Email is a productive means of communication as it allows you to maintain a permanent, documented record should you need to reproduce the communication as evidence in the future. Of course, keep in mind that email is not considered a safe method of communication and you should never send personal information such as account numbers, policy numbers, birthdates, social security numbers and the like via email.
  • Avoid Using Any 3rd Party Adjuster
    • If it becomes necessary to use a 3rd party adjuster, be aware that their fee is negotiable. Typically, 3rd party adjusters don’t have guarantees and they charge a portion of the total available monies.
  • Ask for a Portion of Your Settlement Up Front
    • If your home has been damaged or is a total loss, some insurance companies will send you 20% right away to help you rebuild your life. As with any large sum of money, it is important to be mindful of how you spend it. As a note, the statute in California for people with a lender on the policy states that any amount over $50k on building property must be issued in the name of the lender and the insured. Furthermore, if there is a mortgage and a line of credit, the check will have three names to cash it.
Advice from Survivors who lost their homes to prior fires:

“The process starts right away – save receipts, they should cover temporary housing. And start looking for a place to live, people will price gouge if there’s a lot of people looking.”

“Accept the help and don’t worry about inconveniencing anyone. People want to help, and to suddenly lose your home and stuff can be pretty overwhelming.”

“Don’t be in a rush to get everything done right away. Except for securing housing we realized after the fact that we would have made better decisions and gotten more insurance proceeds had we waited a couple of months.”

We’d like to extend a thank you to those who shared their tips and recommendations with us, especially our friends at Meritas Wealth Management.

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Making the Most of Music City

Financial Planningon October 19th, 2017No Comments

Summary By: Lauren Mireles, RP®

At Yeske Buie, we believe learning fuels potential. Embodying this company value, the Yeske Buie Financial Planning Team took full advantage of the opportunity to learn from some of the brightest minds in the profession at the Financial Planning Association’s recent Annual Conference in Nashville, TN. The entire Yeske Buie team took over Music City to support Dave as he received the P. Kemp Fain Jr. Award, and used the opportunity of being at the conference to the fullest; each team member attended three to five informational sessions per day during the 3-day conference. Topics of this year’s conference included behavioral finance, health care considerations, millennial needs, helping clients through a divorce, staying secure in the technology age, tax reform, employee development and more.

Reflecting on the experience, the team shared some of their most impactful learnings and the ways that they can incorporate these learnings into their work with Yeske Buie Clients.

 

Charitable Giving Trends: Leveraging Complex Assets to Maximize Impact for Your Clients

Lauren Stansell’s favorite conference session was on the topic of charitable giving trends:

This session was in the very last round of sessions during the conference and it was the most impactful (and entertaining) session I attended! The presenter, Bryan Clontz, CFP®, shared a wealth of knowledge and experience on complex (and sometimes extremely odd) assets he has helped Clients donate to charity. He explained the benefits of using certain types of assets (with large embedded gains, like the appreciated shares some Clients donate to their Donor Advised Funds) and he explained the pitfalls of using other types of assets (i.e. tax complications, inability for the charity to get use from the asset, etc.). This session opened my eyes to how much is possible with charitable giving and how the benefits and complexities can vary in different situations.

– Lauren Stansell, CFP®

Five Industry Trends Reshaping Financial Advice

Ryan Rasmussen and Daniel Tripp, members of our newest class of Financial Planning Residents, both expressed that the session titled “Five Industry Trends Reshaping Financial Advice” was their favorite session of the conference:

I thoroughly enjoyed the “Five Industry Trends Reshaping Financial Advice” session presented by Michael Kitces. This session informed planners of key drivers evolving the profession, and provided strategies for firms to thrive in the midst of change. Michael touched on the advancement of technology, the firm’s ability to differentiate their image, and a transition to working with Baby Boomers, Gen X, and the Millennial generation. The recommendations presented will help me at Yeske Buie adapt and thrive in a profession that continues to change at a rapid rate.

– Ryan Rasmussen

The presentation I enjoyed most while attending the FPA National Conference was “Five Industry Trend Reshaping Financial Advice.” Michael Kitces, a renowned thought leader in the financial planning profession, explored the role of technological disruption during the industrial revolution and made comparisons to the recent changes our society is undergoing due to the digital revolution. Kitces outlined five significant trends shaping the financial planning industry and explained how digital technology is disrupting the financial advice landscape. Michael stressed the importance of embracing digitalization, the need for financial planners to focus on new business models, and how differentiation is key to surviving in a very competitive business environment. Kitces also stressed that the advent of digital technology, far from eliminating the need for financial planners, will enable planners to serve clients more comprehensively and efficiently. He explained how those financial planners who embrace the new digital environment, while finding ways to leverage new technological tools to help clients better, faster, and in a more experiential way, will be the ones to prosper most in the new digital economy.

– Dan Tripp

CyberSecurity Issues in Financial Services: How to Stay Protected

There’s no question that cybersecurity is a hot topic in the financial planning profession and in society at large. Lauren Mireles’ favorite session was a presentation sharing ideas for how to keep your personal information and your Clients’ personal information safe in the age of technology:

The cybersecurity presentation was by far my favorite session. It is my belief that you can never be too knowledgeable in the topic of cybersecurity, especially because the techniques and types of cybercrimes are becoming more and more sophisticated by the day. The session shared examples of common and uncommon phishing techniques to be aware of, best practices in keeping information safe, and training programs for employees and Clients that help reduce the likelihood of a cybercrime. I also enjoyed the fact that the speaker was engaged with the audience and answered questions related to real experiences that firms and Clients have encountered. I feel more knowledgeable in the realm of cybersecurity and I feel more comfortable with my ability to share that knowledge with colleagues and Clients if the need arises.

– Lauren Mireles, RP®

The Leadership Pipeline: Recruiting, Mentoring and Developing the Next Generation

Zach Bennedsen and Ryan Klemm both thoroughly enjoyed the presentation by close friend and fellow CFP® professional, Cheryl Holland, on the topic of leadership development for the next generation of financial planners:

My favorite session would have to be Cheryl Holland’s “The Leadership Pipeline: Recruiting, Mentoring and Developing the Next Generation” presentation. As an aspiring young advisor in this profession, the presentation provided concrete examples of the opportunities that are possible going forward. I appreciated the attention given to a young advisor’s value in a firm and the ways to help develop their talent to better serve their Clients and the firm itself.

– Ryan Klemm

Cheryl Holland’s session on leadership pipelines had so many great takeaways. Cheryl’s firm uses thorough yet flexible timelines to map out an employee’s progression of responsibilities and proficiencies. We’ll certainly be able to incorporate some of her ideas to help bolster Yeske Buie’s own leadership pipeline.

– Zach Bennedsen

NexGen Mini-Talks

With a similar tone to Cheryl Holland’s session on developing the next generation of planners, Yusuf Abugideiri’s favorite session was a crowdsourced session titled “NexGen Mini-Taks”:

My favorite session was the NexGen Mini-Talks. Three young financial planners each had 10 minutes to share their thoughts about important issues the profession is facing. Russell Kroeger, one of our former Financial Planning Residents, spoke about ways to help young clients connect with their future-selves in support of their long-term financial planning goals. Roger Ma, an investment-banker-turned-CFP®, spoke about different service offerings and fee structures advisors could consider when launching a new firm. Brian Kelleher shared his ideas about mentorship and ways mentors and mentees can make the most of the relationship. It’s always exciting to see young financial planners feeling empowered to take on the challenge of furthering the profession!

– Yusuf Abugideiri, CFP®

Modern Day Literacy – More Than Just Words

Financial Planningon September 29th, 2017No Comments

Written By: Zach Bennedsen

How literate are you? If someone asked you this question, you might be offended. The underlying assumption that you are anything but fully literate seems insulting. What if instead, someone asked “how financially literate are you?” That prior indignation might turn to a sheepish shuffling of feet. Books, newspapers, emails, websites – words are all around us. Literacy is nothing less than a survival skill in today’s United States. But what about money? Isn’t that all around us as well? Credit cards, mortgages, auto loans, tax returns, college savings plans, 401(k)s . . . Is financial literacy any less of a necessary skill than orthographic literacy today?

The latest study conducted by the U.S. Department of Education and the National Institute of Literacy (2014) show that 86% of adult Americans have at least basic literacy skills. While many argue this percentage is appallingly low, we can at least say there is not a single school in America that does not teach reading & writing skills. As a nation, we’ve obviously decided that literacy is of paramount value. Can we say the same about financial literacy?

Let’s take a look at financial education requirements in America’s schools. According to the Council for Economic Education, only 20 states require high school students to take a course in economics, and only 17 require a course in personal finance. In a world where money is as important as reading, there seems to be a misalignment. To add another layer, in a study conducted by the National Financial Educators Council, more than half the participants aged 18-24 responded that “money management” is the high-school level course they thought would be most beneficial to their personal lives. Students want to learn about money, but schools are not necessarily offering the courses they crave.

If schools are not covering the basics, who will? Appreciating the importance of financial literacy for all ages, Yeske Buie has a program that provides resources to children and grandchildren of Clients from toddlers to college. Furthermore, we are happy to have a conversation with a child of any age – good money habits can never start too soon.

Since learning should never stop we are always open to helping Clients explore ways to increase their personal financial literacy. From conversations at the office to webinars to Client events, Yeske Buie offers many ways to learn more. After all, Learn Big is one of our core values!

Wrapping up, if you’d like a quick insight into your personal financial literacy, we share FINRA’s Financial Capability Study. Take the quiz, but don’t be discouraged if you don’t score highly – only 37% of participants are able to answer at least four of the five questions correctly.

We’ve shared some of our thoughts regarding a very broad issue today, and certainly have not covered every side of the conversation. If you have more thoughts to add, please don’t hesitate to reach out to us and share!

SOURCES:

Qualified Charitable Distributions – A Powerful Way to Give

Financial Planning, Yusuf Abugideirion September 21st, 2017No Comments

Written By: Yusuf Abugideiri, CFP®

Each year, many of our Clients share their charitable intentions with us and we work to ensure they’re able to express those intentions in such a way that they and the charity receive the maximum benefit. Examples of strategies we regularly employ include using Donor Advised Funds, donating appreciated shares of stock, and listing charities as beneficiaries in a Client’s estate plan. We’ll explore yet another strategy in this piece: Qualified Charitable Distributions (QCD) from a Traditional IRA.

First, it is important to note that there are several requirements that need to be met before one can take advantage of this strategy:

  • The account holder must be over age 70 ½
  • In virtually all cases, the distribution must come from a tax-deferred IRA – for simplicity, we’ll focus on Traditional IRAs
  • QCDs are limited to $100,000/year per person and must be transferred directly from the IRA to a qualifying charity

Once it has been determined that a Client meets these requirements, the next step is to determine the amount of the charitable distribution. Although each Client’s situation is unique, there are a few items we review in every case:

  1. Will the QCD be used to satisfy some or all of the Client’s Required Minimum Distribution (RMD)? As noted above, the account holder must be over age 70 ½ to qualify for this strategy, which is the age at which RMDs begin. Using a QCD to satisfy one’s annual RMD can have significant tax benefits (see below). Furthermore, it means that the charity is receiving “super-charged” dollars – the money in the IRA was deposited before being taxed, grew tax-deferred for the time it was in the account, and is received by the charity as a tax-free gift.
  2. How will the QCD affect the Client’s tax situation? When an account holder makes a QCD, the amount of the distribution is excluded from their Adjusted Gross Income (AGI). This can be a powerful strategy to employ for Clients with large IRA balances, as their RMDs will be commensurately large; excluding this income from their tax calculation can lead to significant tax savings. Furthermore, reducing a Client’s AGI could mean that they’re able to take larger deductions against their income for medical and miscellaneous expenses on Schedule A of their tax return.
  3. What other parts of the Client’s financial plan will be affected? The following is just one example of the “fringe benefits” of a QCD: by definition, if an account holder qualifies for a QCD then they also qualify for Medicare (eligibility begins at age 65). Medicare premiums are based on AGI; the lower the figure, the lower the premium due. If a Client’s AGI just above a given threshold, reducing their AGI by that amount can lead to savings of $1,000/year.

As mentioned above, there are a number of ways to build charitable giving into one’s financial plan. If the information above has piqued your interest in taking advantage of QCDs, please don’t hesitate to reach out to us to continue the conversation!

Monitoring, Alerting, Locking, or Freezing: what to do after the Equifax breach

Cybersecurity, Financial Planningon September 14th, 20171 Comment


We’re writing once again with one more round of information on securing your identity online, this time we’d like to talk about “freezing” or “locking” your credit reports. This is different from filing a Fraud Alert, which is added to your record for 90 days and signals to lenders that they should obtain additional proof of your identity before extending credit. If you file a Fraud Alert with one of the three credit bureaus, they are required to share that with the other two. The process is free but, again, you have to renew it every 90 days (IdentityForce has a reminder function if you go this route).

If you instead freeze or lock your credit record, it cannot be viewed except by companies that have already extended credit to you and it remains frozen/locked until you unfreeze/unlock it. You must do this individually with each of the three credit bureaus. The credit bureaus are allowed to charge you each time you freeze or unfreeze your record, typically $10.  We have just finished locking or freezing my record with each of the three bureaus and wanted to share the experience in case you choose to take this extra step.

If you signed up for the free TrustedID service from Equifax, you have the ability to lock your credit report from the online dashboard. Here is the link to enroll in TrustedID if you haven’t already done so: https://trustedidpremier.com/consumer-registration/html/personal-info.html   If you do not wish to sign up for TrustedID, here is the link to put a security freeze on your credit record (we did not choose this option, but believe they will charge you $10 to do this): https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

Transunion will allow you to freeze your record but also offers a free service, TrueIdentity, which gives you the ability to lock and unlock your record whenever you like. The process was easy to complete, though it did involve several steps to confirm my identity. Here is the link: https://www.transunion.com/product/trueidentity-free-identity-protection

Experian does not offer a free service, but will allow you to put a security freeze on your credit report online for $10. Again, this was easy but required several steps to confirm my identity. As part of the process, you will choose or be given a PIN that you will use to unfreeze your record any time you’re applying for new credit. Here is the link to establish a freeze at Experian: https://www.experian.com/ncaconline/freeze#registration

We continue to believe that monitoring services like IdentityForce are valuable, not least because they monitor your personal information across a wide array of databases beyond the credit bureaus (including the so-called “dark web”), but a credit lock or freeze, while requiring a little extra work, is considered the gold standard in identity protection.

Financial Planning’s Mission During Life Transitions

Financial Planningon September 5th, 2017No Comments

Written By: Daniel Tripp

As summer slides into fall, signs of the changing seasons can be seen across the country and remind us of the rhythm of life’s changes. As financial planners, we are in a unique and privileged position to share in the rhythmic changes of our Clients’ lives. In fact, it is during periods of transition that financial planning takes on new meaning. When a Client experiences life changes, connecting with their financial planner proactively ensures they are aware of the opportunities and risks associated with the transition.

Over the course of a lifetime, everyone will experience life-changing events. In 1967, the psychiatrists Thomas Holmes and Richard Rahe found there are 43 life events which could be considered a “major” life transition. Their research determined that each of these life changes contributes in varying degrees to how people experience stress in their lives1.

At Yeske Buie, one of our favorite phrases is “We’re Good People to Think With®.” This phrase has no greater significance than when Clients find themselves experiencing one of life’s many transitions. Some examples of life changes include becoming a parent, losing a job, purchasing a home, graduating from college, experiencing the death of a spouse, getting married, retirement, divorce, moving, managing a health crisis, and caring for aging parents. One of the ways we view our role during these life transitions is to act as a sounding board and guide for our Clients as they seek to navigate the impact the transition is having on them and their families. During periods of change, there is often a great need for mental clarity, hence the reason we believe it can be helpful to “walk an idea around the block” with Clients to determine what planning items need to be addressed so they can focus on navigating the transition.

One of our favorite tools to get someone thinking about current and upcoming life transitions comes from our strategic partner, Money Quotient®, and is called the Life Transitions Survey. We use this survey as a starting point to begin a discussion of what’s been happening in our Clients’ lives since we last met. A few other helpful Money Quotient tools we may share include:

Another way we aim to help our Clients through transitory stages is by applying policy-based financial planning®. We believe in providing Clients with sound financial planning policies that are broad enough to encompass any event that might arise, but specific enough so there is never a doubt as to what actions to take in the face of changing circumstances. It is through the development and application of grounded financial planning policies that we facilitate sound decision making in the face of a complex external world.

The goal of our resources and practices, of course, is to help one plan for change. This is not the same as predicting change; we know the future is fundamentally unpredictable because we live in a dynamic and ever-changing world. The role of a financial planner, then, is to help Clients think through the opportunities and challenges that may lie ahead and to empower Clients to navigate life transitions confidently. We look forward to sharing in our Clients’ life journeys and we are always available to embrace the role of coach, active listener, or sounding board during life’s most turbulent events. If you find yourself experiencing one of life’s many significant changes, please do not hesitate to contact us.

RELATED:

  1. Holmes-Rahe – The Social Readjustment Rating Scale

Is a Mortgage Refinance Smart for You?

Financial Planningon August 24th, 2017No Comments

Written By: Ryan Rasmussen
Could you be making your mortgage payments more efficiently? Refinancing may offer you the opportunity to align your mortgage more closely with your broader financial goals. That said, refinancing is a complex decision, and many factors will affect your interest rates and optimal payoff timing. In this piece, we explore some of the considerations you may think about when it comes to refinancing your mortgage.

As is the case with any financial decision, it’s important to consider your personal financial goals before coming to a final decision. When it comes to refinancing your mortgage, one of the best reasons to do so is to lower your interest rate on your existing loan. This can decrease the amount of interest paid and lower your monthly payments, all while increasing the rate at which equity is built. Also with refinancing, homeowners have the option to shorten the term of their mortgage. This strategy will help pay off the home quicker and reduce the amount of interest paid. By doing this, you might expect to make similar or greater monthly payments compared to your current rate. Individuals may find it advantageous to refinance into a fixed rate mortgage if they have adjustable rate mortgages and are expecting a higher rate upon their next rate adjustment.

With interest rates evidently being an important factor, examining the interest rate variables is often a smart place to start for homeowners exploring refinancing. These variables include:

  • Credit Score: The better your credit score, the more likely you are to receive lower interest rates. According to Experian, a credit score above 700 is considered good. To better your credit score, be sure to make payments on time and lower your debt to credit ratio.
  • Federal Reserve Rates: If the Federal Reserve decides to decrease rates, generally market rates are reduced as well. The Federal Reserve has currently adopted an interest rate range that is advantageous for consumers wanting to refinance.
  • Shopping Around: Try comparing rates among mortgage brokers, credit unions, or individual banks. Keep in mind that some lenders offer promotional rates at varying times throughout the year.
  • Terms: The longer the term of the mortgage, the more likely you are to find higher interest rates. Shorter term mortgages come with larger monthly payments.

Low rates alone do not necessarily indicate whether a refinance is advantageous, however. The amount of time you plan on living in your current home and the closing costs are also important factors. If projected time in your house is short, the closing costs may consume any savings from a refinance.

The choice between longer-term mortgages (typically 30 years) and shorter-term mortgages (typically 15 years) involves a number of tradeoffs and some strategic possibilities. While longer-term mortgages will have a slightly higher rate of interest than their shorter-term cousins, they also have smaller payments because they’re amortized over a longer period of time. Those smaller payments free up additional cash flow that can be used to pay down higher cost debt or increase retirement savings. This can also be done in sequence, using the extra cash flow to first pay down credit card balances and then later increase retirement plan contributions, perhaps taking fuller advantage of employer provided matching funds. While it’s true that more interest will ultimately be paid over the longer borrowing period, this is offset by the fact that the after-tax cost of mortgage interest is typically much lower than the expected return on investments. That difference can add up to big bucks by the time retirement arrives due to the effect of compounding returns.

Refinancing is not the optimal strategy for all consumers and, in many cases, homeowners may be better off sticking with their existing loan. However, there are many circumstances where one could benefit from using this financial tool. Whether you want to lower interest rates, shorten your loan term, transition from a variable rate to a fixed rate, or lower your monthly mortgage payments, do not do it alone. We at Yeske Buie want to partner with you to navigate you through this process. Through conversation and planning, we can work together to ensure your financial goals align with the refinancing strategy that will best serve you. Please reach out to any member of the Financial Planning Team for assistance assessing your current mortgage.

Back to Basics: Trusts, Trustees and Beneficiaries

Financial Planningon August 9th, 2017No Comments

Written By: Hannah Quakenbush

While anything from planning your next vacation to planning your next trip to the dentist can seem more fun than reviewing your estate plan, taking time to think about how your assets will flow after you are gone is extremely important. Aside from ensuring that your desires are met, thoughtful estate planning will also be immeasurably valuable to your loved ones.

You might be surprised how important an understanding of your estate plan is to your adult children, other important members of your family, and friends who you have elected to play a role in your estate plan. This understanding of roles and responsibilities is especially critical if your estate plan includes a trust. In this space, we’ll discuss a few things of which the beneficiaries (or any interested party) of your trust should be aware.

Trusts may name a variety of individuals to specific roles, each with its own responsibility for the trust to be successful. A trust typically has one or more:

  • Grantors
  • Trustees
  • Beneficiaries

Grantors
A trust begins when the owner of property creates a trust for the benefit of himself, herself, or others. This person is known as the Grantor. The Grantor also has the responsibility of creating the terms or rules of the trust and determining who will benefit from the assets.

Trusts typically fall into two core categories — living trusts (also referred to as inter-vivos trusts) and testamentary trusts. Living trusts are created while the individual is still alive; testamentary trusts are established through a last will and testament and do not come into existence until you die. A living trust is a document that creates a process to manage and distribute an individual’s assets during their lifetime. Living trusts exist in two forms: revocable and irrevocable.

  1. Revocable Trust – a trust in which the provisions may be altered or revoked at will. The grantor, or creator, of the trust maintains complete control over it. Assets titled in the name of the trust can be reclaimed at any time.
  2. Irrevocable Trust – a trust in which the person who created the trust cannot terminate or change the terms of the trust. A trust also becomes irrevocable when the person who created the trust dies.

Trustees
The trustee is the person in charge of administering the trust. The trustee has a fiduciary duty to all beneficiaries of the trust, meaning they are expected to act in the best interest of the beneficiaries. The trustee must follow all of the terms of the trust document and is responsible for: the investment and protection of the assets in the trust, tax return filings, reporting to the beneficiaries and making distributions as permitted by the trust.

Beneficiaries
A beneficiary is an individual or entity (a charity, for example) who is identified to receive the funds from a trust. There are two broad categories of trust beneficiaries – current and remainder. Current beneficiaries are those who are presently receiving benefits; remainder beneficiaries (often the grantor’s children) begin to benefit only after the current beneficiaries have died. Conflicts can arise when the remainder beneficiaries feel that the current beneficiaries’ needs and/or wants are draining “their” inheritance; this can be addressed proactively by having an open discussion explaining the grantor’s desires to the beneficiaries.

The rights of a trust beneficiary depend on the type of trust and the type of beneficiary.

  • If the trust is a revocable trust, the grantors have full control. Beneficiaries other than the grantor have very few rights. The grantor can change the trust at any time, and he or she can also change the beneficiaries at any time.
  • Irrevocable and testamentary trusts cannot be changed except in rare cases by court order. Beneficiaries of an irrevocable or testamentary trust have rights to information about the trust and to make sure the trustee is acting properly. The limit to these rights depends on the type of beneficiary.

The following are five common rights given to beneficiaries of irrevocable and testamentary trusts:

  1. Payment. Current beneficiaries have the right to distributions as set outlined in the trust document.
  2. Right to information. Both current and remainder beneficiaries have the right to be provided with enough information about the trust and its administration to have the knowledge to enforce their rights.
  3. Right to an accounting. Current beneficiaries are entitled to an accounting- an annual detailed report of all income, expenses, and distributions from the trust.
  4. Remove the trustee. Current and remainder beneficiaries have the right to petition the court for the removal of the trustee if they believe the trustee isn’t acting in their best interest.
  5. Terminate the trust. In some circumstances, if all the current and remainder beneficiaries are in agreement, they can petition the court to terminate the trust.

Yeske Buie is always here to support you in having these conversations with the members of your estate plan. We also offer family meetings to facilitate the conversation and answer any questions you might have. If you have any questions about any aspect of estate planning or would like to schedule a family meeting don’t hesitate to reach out to a member of our financial planning team!

What is Wealth: The Size of Your Life or the Size of Your Wallet?

Articles of Interest, Financial Planningon July 27th, 2017No Comments

Written By: Cole DeLucas

What is wealth? At Yeske Buie, we make our stance on this question very clear. For us, it’s about the size of your life, not the size of your wallet®. The difficulty of this, for some, is that while the size of your “wallet” is quantifiable, the size of your life is more ambiguous. One data-driven measure of the quality of life that is being referenced more often is the Social Progress Index. Here, we explore how this index is trying to redefine traditional measures for quality of life.

In 2016, UK Business Insider released an article describing the Social Progress Index (SPI). The goal of this index is to measure the capacity of a society to meet the basic human needs of its citizens and establish the building blocks that allow citizens to improve their lives and meet their full potential. The index aims to challenge the way society defines quality of life and illustrates how GDP may not be the only way, after all, to calculate the quality of life of a country’s citizens. The SPI is broken down into three categories: basic human needs, foundations of well-being, and opportunity. In these categories, the Index measures social progress strictly by looking at the outcomes of a country’s initiatives. For example, rather than calculating how much a country spends on healthcare, the Index focuses on the health and wellness actually achieved by that country. The Index has evaluated and ranked 128 countries based on these categories and the rankings can be explored using the map below:

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Like Yeske Buie’s focus on the size of one’s life, the Social Progress Index shows how wealth is not the defining factor in measuring one’s quality of life. Rather, living in a place that can provide more to life than just money, such as social freedoms, accessible healthcare, education and personal safety can make you feel wealthier than the richest person alive. Using resources like the ones available through the SPI website, you can explore how you define a high-quality life. We also have resources on our website including our Live Big list and our post titled “Attitude of Gratitude” that share different perspectives on finding meaning in life.

For more information on the Social Progress Index, please visit the following links:

Social Wellness Support

Financial Planningon July 11th, 2017No Comments

Written By: Camille Bouvet, CFP®

The word “wellness” is often prefaced with an adjective: for example, physical wellness, financial wellness, or social wellness. If you are unfamiliar with the term, social wellness involves having meaningful relationships and creating a support system that includes family members and friends. This kind of care may include fostering your own social wellness or helping a loved one you support in your social network. No matter the reason for the care, being in such a role may sometimes feel intimidating or overwhelming and discovering resources can be one of the most powerful ways to ease these feelings. In this piece, we share resources that may help you feel more comfortable in a caregiving role.

Your Employee Assistance Program
Your workplace may offer assistance as a benefit and can guide you in determining next steps. You may have access to counseling to help sort through your feelings, put things in perspective, and identify the next best step. They can also point you to other resources in your area such as referrals for eldercare and dependent care. Seek out your human resources department for more information.

Community Assistance
The purpose of most community agencies is to provide services to individuals who need help. Remember that you are entitled to these public services – you’ve earned it by way of your tax dollars and you deserve it!

Not sure what’s the best way to find support in your local community? Start by visiting the AARP’s Home & Family Caregiving-at-Home section and enter your city and state to learn about events, news and resources near you.

You can also visit The Family Caregiver Alliance which aims to support families nationwide caring for adult loved ones with chronic, disabling health conditions. Visit www.caregiver.org to learn about their educational materials such as videos, online classes, and an online dashboard to track your information and locate support.

Eldercare Resources
We have featured several pieces written by eldercare expert, Dr. Jim McCabe on the topics of authentic conversations, housing for aging parents, and how to age well. If you find yourself in a position of providing eldercare, we encourage you to read these articles and other available resources on Dr. McCabe’s Eldercare Resources website.

And of course, don’t forget about the rest of your social wellness support team when in a time of need. We would love to be one of your first calls when you aren’t sure where to start with your social wellness, financial wellness, or anywhere in between! Don’t hesitate to call us and let us know how we can help in planning to care for your loved one.


“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, Who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be? Your playing small does not serve the world. There is nothing enlightened about shrinking so that others won't feel insecure around you. We are all meant to shine. And as we let our own light shine, we unconsciously give others permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.” ~Marianne Williamson