Broker Check

Quarterly Newsletter- 07/27/2017

July 27, 2017

Dear Clients,

Throughout our lives, we are taught to save as much as possible. But what happens to all of our savings after we die? According to the National Endowment for Financial Education, 70 percent of people who come into sudden money are broke within a few years.[1]

Instead of this happening to your estate, you could consider gifting a portion of your assets to your heirs while you are still alive. One benefit of doing so is that you will be able to enjoy seeing your family members use part of your money- whether it be to put a down payment on a home, fund educational expenses, or to take a vacation of a lifetime. Another benefit of gifting your assets before you pass away is to get a preview of what your heirs are going to do with their inheritance and get them involved with an investment professional. After observing their behavior, you can decide if you would still like to give them all of your money or would prefer to make other arrangements after your passing, such as donating to a charity or establishing a scholarship fund.

Many of you have elected to start the gifting process by funding college 529 savings plans or custodial accounts. If you have done this- great! It is important to remember that 529 plans should be used for college expenses as soon as the student begins attending school. Don't plan on saving this money or using it for anything else other than college.

Custodial accounts are gifts to minors made prior to them turning age 18. Because minors are not legally allowed to maintain an investment account, a custodian must be included on the account to make financial decisions. If you had previously set up a custodial account and your minor is now older than 18 (if you live in California) or 21 (if you live in another state), you will need to transfer the account into the child's name or convert it to a joint account with you and the minor as co-owners. If you feel like you are in this situation, we can assist you with the transfer.

Again, we want to thank you for the opportunity to serve you and your family. Please contact our office to discuss gifting options for your heirs or with any questions.