Focus Partners | Advisor Solutions

Costly Wealth Transfer Mistakes to Avoid

Mon, 17 Mar 2025 12:01:00 GMT

Transferring wealth is a complex process that requires careful planning, clear communication, and regular updates. Your estate plan, which includes your legacy plan and trust documents, ensures that your wealth is distributed according to your wishes. However, without proper planning, costly mistakes—sometimes irreversible—can occur.

While estate planning can be an emotional process, it can also be incredibly satisfying and fulfilling. You’ve worked hard to build your wealth, so we believe it’s important to establish a plan that maximizes its impact and ensures your wishes are carried out.

At a minimum, legacy planning involves key decisions, such as:

These decisions can be overwhelming, which is why many people delay making them or avoid talking with their loved ones about their wishes. However, avoiding these discussions can lead to confusion and conflict down the road.

Common Mistakes in Estate Planning

Even the best-laid plans may change over time. Here are some of the most common pitfalls that can disrupt a smooth transfer of wealth:

1. Failing to communicate your wishes

Let’s face it—talking about death and money can make people uncomfortable. Many people avoid these conversations altogether, which can cause friction, confusion, and sometimes costly mistakes when a plan needs to be executed.

We believe it’s crucial to have open conversations with your heirs and estate planning professionals about your wishes. If they understand your decisions in advance, they will be better prepared to follow through when the time comes.

2. Choosing the wrong executor

Your executor is responsible for managing your estate and carrying out your wishes. We believe selecting the right person is essential—it should generally not only be someone you trust but also someone who has the willingness, skills, and ability to handle the job.

Many people name a family member or friend, but this isn’t always the recommended choice. If you don’t have a suitable candidate or anticipate conflicts, you may want to consider appointing a professional executor or corporate trustee.

3. Misinterpreting how trusts protect and distribute your assets

Trusts can provide a range of benefits and come in various forms, from straightforward to complex. Key factors to consider when establishing a trust include whether it allows you to manage your assets during your lifetime or only after your passing, the level of flexibility it offers, whether assets are shared or passed to a spouse, any special needs considerations, how the tax advantages flow, restrictions on when and how beneficiaries can access their inheritance, and other important elements that impact asset protection and distribution.

4. Misunderstanding how trusts handle the first and second deaths

Trusts can be structured in different ways to address various financial and estate planning goals. Some are designed to support a surviving spouse while reducing estate taxes, while others combine both spouses’ assets into a single trust for easier management during their lifetimes and a smoother transition after their passing. However, these trusts may offer less flexibility and be influenced by beneficiary decisions. We believe understanding how wealth transfer, taxation, and other factors operate based on the trust’s structure is crucial for effective planning.

5. Failing to revisit your estate documents regularly

Putting a plan in place is not a one-and-done process. It is important to periodically revisit your estate documents to ensure they reflect life changes, particularly after marriage, divorce, or the birth of children or grandchildren. People often neglect to title new and changing assets to the trust, including insurance policies that cover specific assets.

6. Overlooking the benefits of charitable giving for your heirs

Incorporating charitable giving strategies into your legacy plan may not only benefit the charities you support, but it could also benefit your estate through tax efficiencies. An advisor can help you structure your contributions in a way that maximizes the opportunity to both give and save.

Conclusion

Many of these decisions can be complicated. If you are unsure how to best set up your estate for a smooth transfer of your wealth, speak with a trusted wealth advisor who is a fiduciary. Your advisor will help you sort through options and potentially identify opportunities and pitfalls you may not have considered.

This is for informational purposes only. The information provided does not purport to present a complete picture, but Focus Partners believes the information is representative of issues and needs facing some clients and why they may seek this service. Nor should it be construed as, specific investment, tax, or legal advice. Individuals should seek advice from their wealth advisor or other advisors before undertaking actions in response to the matters discussed. No client or prospective should assume the above information serves as the receipt of, or substitute for, personalized individual advice.

This represents the opinions of Focus Partners, may contain forward-looking statements, and presents information that may change due to market conditions or other factors. Nothing contained in this presentation may be relied upon as a guarantee, promise, assurance, or representation as to the future. This is prepared using third party sources considered to be reliable; however, accuracy or completeness cannot be guaranteed. The information provide will not be updated any time after the date of publication. Numerous representatives of Focus Partners may provide investment philosophies, strategies, or market opinions that vary. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Services are offered through Focus Partners Advisor Solutions, LLC (“Advisor Solutions”) and Focus Partners Wealth, LLC (collectively referred to in this document as “Focus Partners”), SEC registered investment advisers. Registration with the SEC does not imply a certain level of skill or training and does not imply that the SEC has endorsed or approved the qualifications of the RIAs or their representatives. Prior to January 2025, Advisor Solutions was named Buckingham Strategic Partners, LLC, and Focus Partners Wealth was named The Colony Group, LLC.

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Reframing Retirement: Focus on Fulfillment

Mon, 20 Jan 2025 12:01:00 GMT

Many individuals work tirelessly to build their wealth over the years. As retirement approaches, the focus often shifts from accumulating wealth to finding ways to truly enjoy it. Why is this so important? Studies show that depression rates among retirees are higher than those of the overall older adult population. Several factors contribute to this trend: identity and self-worth are often tied to careers, social networks can diminish, and the structure of daily life changes.

When discussing retirement transitions with clients, it’s common to encounter late-career professionals who say their current roles don’t always match earlier expectations. For example, senior leaders sometimes share that positions once seen as prestigious can feel less fulfilling than imagined. This often sparks deeper questions about purpose and satisfaction, especially as their career journey comes to a close.

Finding fulfillment post-career requires intentional planning and effort. To get started, a valuable exercise involves considering what life in retirement will look like — both broadly and in detail. Thought-provoking questions like what will you do on a quiet Tuesday afternoon or a Thursday morning? And w ho will you spend time with? can provide clarity. Reflecting on these aspects early can highlight what’s truly important.

To help with this exercise, Focus Partners Wealth Advisor Susan Strasbaugh, who specializes in retirement transition planning, created a Retirement Workbook that individuals can download and complete privately to contemplate their vision for life in retirement. The questions are centered around the non-financial aspects of retirement, and although some may be challenging to think about, consider this: After years of a structured work life, retirement offers a unique opportunity to decide what truly matters to you. The first step is to explore your core values. It’s not just about what you do — it’s about who you are becoming and how you choose to shape this enriching chapter of life.

Get The Retirement Workbook

For retirees who’ve made the transition into retirement, here are some common themes I’ve observed from those who appear most fulfilled:

1. Delegating financial matters.

People can easily become emotional when it comes to managing their money, which is why it can help to consult a credentialed and compassionate financial advisor. Professional support enables retirees to redirect their focus on living life rather than obsessing over market fluctuations or portfolio balances. Instead, they prioritize experiences like traveling, nurturing relationships, or pursuing passions, using their resources to create lasting memories.

2. Living in the present.

Those who dwell on past achievements or lament what’s lost often find themselves stuck. In contrast, the happiest retirees are eager to embrace the present, whether it’s by learning a new skill, engaging in creative hobbies, or simply enjoying the moment. Always been curious about how to make limoncello or homemade pizza dough? Now’s the time to do it!

3. Sticking to their mantra.

Many retirees find fulfillment by establishing and following a personal mantra, such as, “If it doesn’t make me healthy, wealthy, or wise, I let it go.” Others focus on giving back, dedicating time and resources to causes that align with their values.

4. Reflecting on legacy.

For many, legacy is not just about passing on financial wealth but also sharing values and lessons with the next generation. Discussing how time, talent, and resources can shape a better future often brings a deep sense of purpose.

Of these, the pursuit of legacy and philanthropy often delivers the greatest sense of fulfillment. Whether it’s giving back, healing old wounds, or shaping a narrative for future generations, these efforts tend to create meaningful connections and joy. Some also see it as a chance to write their own history.

Ultimately, fulfillment in retirement isn’t about simply passing time — it’s about designing a life filled with purpose and connection. Transitioning from a mindset of achievement to one of enjoyment and contribution requires deliberate effort but can lead to a deeply rewarding second chapter.

For informational and educational purposes only. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Third-party information may become outdated or otherwise superseded without notice. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. Please be advised that Focus Partners Wealth only shares video and content through our website, Facebook, LinkedIn page, and other official sources. We do not post investment advice on WhatsApp, Telegram, other interactive applications, or other similar platforms. Rather, Focus Partners Wealth provides investment advice only through individualized interactions. R-24-8030 .

Navigating Conversations About Inheritance With Adult Children

Thu, 21 Nov 2024 16:07:00 GMT

In this episode of Buckingham Perspectives, Chief Investment Officer Kevin Grogan covers an important conversation to have with adult children to minimize conflict and set your family up for financial success.

With families gathering and adult children returning home for the holidays, this could be a good time to initiate an important conversation with them about family legacy planning and wealth transfers. While this conversation can be difficult, it’s best to be fully transparent about your intentions and your adult children’s role in your estate planning. If you have adult children who will be your heirs, make sure they know where to find your key estate documents — such as wills, powers of attorney, and health care directives — and that they understand the broad strokes of your intentions. Being transparent about the inheritance they may expect and your wishes for carrying out your estate plan can help prevent future conflicts.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Certain information is based upon third-party data, which may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. Please be advised that Buckingham only shares video and content through our website, Facebook, LinkedIn page, and other official sources. We do not post investment advice on WhatsApp, Telegram, other interactive applications, or other similar platforms. Rather, Buckingham provides investment advice only through individualized interactions. R-24-7944.

Cybersecurity and Social Media: Keeping Your Financial Information Safe

Mon, 18 Nov 2024 12:01:00 GMT

While social media can be a fun way to stay connected with friends and family, it does come with some financial risks. This article explains how your personal information can be at risk through your social media accounts and provides tips to protect yourself.

Did you know that around 60% of the global population uses one or more social media platforms?

With so much of the population using social media, it’s hard not to appreciate its benefits. Businesses in all industries use the power of social media to connect with consumers, attract talent, increase brand awareness and provide opportunities for new business. People have instant access to information at their fingertips, including from top voices and leaders in a variety of fields.

While social media offers a wealth of insights, there are cyber threats that may lurk if you’re not careful. Private and public information published online can be the gateway for criminals to access personal email addresses, bank accounts, investment accounts and other private data.

Social media can be a doorway to fraud.

Cybercriminals try to trick victims into providing personal information through social engineering or impersonating well-known, trusted people online. Often, this may seem like a private conversation between someone you know. Social engineering might also look like an email from a legitimate source, like a coworker.

With these tactics, cybercriminals use psychological manipulation to get people to share information, download software or even visit unsafe websites that can install malware on your device. The cybercriminal then can retrieve data for financial theft, such as accessing bank accounts, opening credit in your name, or using your bank account to pay for streaming services or other online subscriptions.

Fraudsters are also commonly using social media messaging apps, including WhatsApp, to imitate nationally recognized financial thought leaders, attempting to trick unsuspecting individuals into investing in cryptocurrency and promising large returns. The fraudsters provide links to invest, and once they have what they want from their victims, they will shut down the social media account.

Social media and cybersecurity tips:

While it can be scary to think about what is shared online, you can take steps to keep your data safe and prevent it from being used for cybercrimes. The tips listed below are simple and easy to implement.

Sources:

Social Media Users 2024 (Global Data & Statistics) | Priori Data

Avoiding Social Engineering and Phishing Attacks | CISA

What is Social Engineering? | IBM

Unexpected messages on social media about investing are almost always scams | Consumer Advice

For informational and educational purposes only. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Third-party information may become outdated or otherwise superseded without notice. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. Please be advised that Buckingham only shares video and content through our website, Facebook, LinkedIn page, and other official sources. We do not post investment advice on WhatsApp, Telegram, other interactive applications, or other similar platforms. Rather, Buckingham provides investment advice only through individualized interactions. R- 24-7864 .

5 Financial Decisions to Consider Before Year-End

Wed, 13 Nov 2024 14:56:00 GMT

Year-end deadlines are coming up fast. In this episode of Buckingham Perspectives, Chief Investment Officer Kevin Grogan discusses five key financial moves you can make now that could pay off in the long run.

In this episode of Buckingham Perspectives, Chief Investment Officer Kevin Grogan covers five key financial items that may need your attention before the year is up.

If you have any questions, please drop us a note .

The Corporate Transparency Act: What Business Owners Need to Know

Fri, 01 Nov 2024 18:49:00 GMT

Business owners, are you sure you’re in compliance with the Corporate Transparency Act? In January, penalties will begin if you haven’t filed an initial report with your ownership details.

The Corporate Transparency Act (CTA), enacted in 2021, aims to curb illicit activities such as tax fraud, money laundering, and terrorist financing by requiring more detailed ownership information for certain U.S. businesses. Under this legislation, businesses that meet specific criteria must file a Beneficial Ownership Information (BOI) Report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), identifying individuals linked to the reporting company.

Romance in Retirement: Financial Considerations When Marrying Later in Life

Mon, 21 Oct 2024 12:01:00 GMT

Finding a partner whom you love and want to spend your life with is such a beautiful thing. However, for those in retirement, deciding whether to get legally married comes with unique decisions and possible ramifications, both good and bad. Before you reach out to a wedding planner, it may be wise to talk with a financial planner. To minimize your taxes, maximize your income, safeguard your assets and live happily ever after, I encourage you to review these important points before you say “I do.”

Consider how to merge your financial lives.

The first thing to discuss with your partner is your respective financial situations. Here are a few questions you may want to start with:

From there, you’ll need to talk through whether you plan to combine finances. If so, you may consider doing so partially or fully. Many couples choose to have one account for household expenses while keeping most accounts separate. This is a personal decision that each couple must make for their own partnership. A financial advisor, along with an attorney, can help you understand the implications of different options.

Taxes matter in marriage.

Taxes are often one of the first financial considerations for couples contemplating marriage. Your respective tax situations could change dramatically if you tie the knot. If your incomes are similar, filing taxes jointly may have minimal impact. However, if you have a significant difference in incomes, one of you may see a decrease in your tax rate while the other sees an increase.

An advisor can help you maximize tax benefits in the year(s) before your wedding. For example, if one partner is in a lower tax bracket, it could make sense to do a Roth conversion. With this approach, funds are moved from pre-tax retirement accounts to a Roth IRA, where future withdrawals are tax-free. This strategy could help reduce your lifetime taxes by minimizing the impact of future required minimum distributions (RMDs).

On the other hand, the partner with higher revenue may benefit from deferring income into future years while maximizing current-year deductions. It could make sense to increase charitable giving via a donor advised fund (DAF) contribution. Or if your state offers tax deduction funding, contributing to a 529 educational plan for your grandchildren may be a good option.

If you’re not yet Medicare age and on an Affordable Care Act (ACA) health insurance plan, your marriage could reduce or eliminate your premium tax credits. If you or your partner are on Medicare, your Part B and Part D premiums might be affected.

Additionally, certain tax credits may become more favorable after marriage. For example, a new electric vehicle qualifies for a $7,500 tax credit, and the income limits are doubled for a married couple compared to an individual.

Discuss joint retirement goals and income.

Your retirement goals may shift as you and your partner consider your lives together. You may wish to purchase a bigger home, an RV or spend more on travel. While combining households is typically less expensive than maintaining two separate ones, it’s essential to understand your joint financial needs.

If both of you are eligible to receive your own Social Security benefits based on your own earnings records, then getting married should not affect your gross Social Security benefits. On the other hand, if you receive or plan to receive benefits based on a late or former spouse’s record, getting remarried could impact your benefits, especially if you are under 60. Discussing your Social Security options with an advisor can help you and your partner maximize your lifetime benefits.

Similarly, if your late or former spouse served in the military, remarrying could result in losing Tricare For Life (TFL) benefits, which might be costly to replace with Medicare supplements and Part D plans. Other federal and military benefits can also be impacted by getting remarried.

Don’t overlook estate planning.

When marrying later in life with established assets, a prenuptial agreement often makes sense. This legally binding document can protect your respective financial interests as well as those of your heirs. Your estate planning attorney can help draft an agreement that makes sense for both partners. At the same time, it’s wise to review your overall estate plan. Your advisor and attorney can help talk through your wishes in what assets, if any, to leave to your new spouse. Additionally, it might make sense to name your new spouse in other documents, such as your medical power of attorney (POA), which could simplify things in a medical emergency.

If either of you have adult children, consider involving them in estate planning conversations to prevent surprises or resentments down the line.

Although it may not seem romantic to think of all the financial effects of marriage when planning your future together, understanding how this union could impact both of you is an essential part of your wealth plan. Since every situation is unique, an advisor can help you maneuver the fiscal implications of a partnership.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third party data and may become outdated or otherwise superseded without notice. Third-party information is deemed reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. R-24-7639.

What Kind of Returns Can You Anticipate from Your Portfolio?

Mon, 07 Oct 2024 12:01:00 GMT

When building an investment portfolio, clients commonly ask what rate of return is reasonable to expect over the long term. Related to that point, clients often wonder why their portfolio’s returns may be different relative to well-known benchmarks, or indexes like the S&P 500. Let’s dig into both.

What rate of return is a fair long-term expectation?

Many investors believe that an appropriate expected return for the broad U.S. stock market is 10% annually based on the long-term average. However, over longer periods of time, the difference between expected returns and actual returns can be substantial, particularly for high-risk portfolios. While staying invested over a longer time helps mitigate this difference, it does not eliminate this investing reality. One can get a sense of this by looking at the decade-by-decade annualized returns of the broad U.S. stock market and comparing it with a 10% expected return.

Returns by Decade for the U.S. stock market

The total market return came close to 10% in only two decades – the 1940s and 1960s – and it beat that expectation in four decades. This illustrates one of the primary challenges of investing: Returns can diverge significantly from expectations, even over long periods of time. Nevertheless, investors would be wise not to abandon their well-thought-out investment plan when this happens. A smarter strategy is to design your portfolio to mitigate this risk through broad diversification.

What drives differences in portfolio returns relative to well-known benchmarks?

For investors in well-diversified portfolios, the two main building blocks are high-quality bonds and stocks. Within the stocks category, you’ll not only have exposure to the broad U.S. stock market but also to international and emerging markets. Your portfolio may also have increased exposure to small company stocks and value stocks. That means there are four primary drivers of both expected and realized returns in your portfolio – but a market benchmark like the S&P 500 only captures one of those drivers. Importantly, the returns you earn in either an absolute sense or relative to a market benchmark may be different. Let’s look at the four primary investment categories and what the current indicators of returns are showing:

Returns on high-quality fixed income investments

A good indicator of long-term expected returns on fixed income, or bonds, is the current interest rate, or yield. Understandably, when interest rates are relatively high, as in the 1980s and 1990s, you can expect realized returns on fixed income to be higher. Similarly, you can expect lower returns during periods of low interest rates, like the 2010s. This means that the returns you can expect on fixed income, even over long horizons, can be different depending upon the historical starting point. Currently, we believe sensible long-term expected returns on high-quality fixed income are around 4%per year.

Returns on the broad U.S. stock market

For stocks, providing an estimate is far more complicated. A good place to begin is looking at starting price-to-earnings (P/E) ratios – which you calculate by dividing a stock’s current price by its earnings per share (EPS) – and expected inflation. Generally, investing in stocks when P/E ratios are lower tends to lead to higher long-term returns, as this indicates you are entitled to more earnings and dividends for each dollar invested. However, this relationship can be unpredictable. Currently, the P/E of the broad U.S. stock market is around 25. The long-term average has been around 16, indicating that U.S. stocks are expected to provide lower returns than in the recent past.

Returns on broad international and emerging markets

Returns by Decade for the U.S. vs U.K. Stock Market

The chart illustrates that returns can diverge across international markets even over longer periods of time. The way to mitigate this risk is to not concentrate your investments in any single country’s market. Currently, we believe realistic long-term return expectations for a globally diversified stock portfolio are in the 7%–8% per year range.

Returns on value and small company stocks

The final driver of portfolio returns for some investors is whether their stock allocation looks significantly different from the overall global equity market, particularly whether it is tilted toward companies that are smaller and have lower P/E ratios. Over the longer term, we believe these tilts can be incrementally additive to returns. However, this also means that the returns of tilted portfolios will, by definition, be different from the market over both shorter and longer periods of time.

Conclusion

It is important to understand how your portfolio may differ from market benchmarks. For example, the S&P 500, an index tracking the performance of 500 U.S. stocks, likely only provides insight for how a portion of your portfolio is performing. Expected and realized performance of bonds, international stocks and other diversifying investment strategies will be key to setting reasonable expectations. Speak with your wealth advisor if you have questions about your portfolio allocation and whether you’re on track to meet your goals.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third-party data and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. Please be advised that Buckingham only shares video and content through our website, Facebook, LinkedIn page, and other official sources. We do not post investment advice on WhatsApp, Telegram, other interactive applications, or other similar platforms. Rather, Buckingham provides investment advice only through individualized interactions. R-24-7652

Are Risk and Return Always Related?

Tue, 01 Oct 2024 13:24:00 GMT

When you accept more risk, you should expect higher rewards. But is this always true?

A fundamental principle of investing is the risk-return tradeoff. When you accept more risk, you should expect higher rewards. But is this always true? And how should it guide your investing decisions?

Most investors understand that risk and return are related. Take bonds and stocks, for example. While bonds typically offer lower returns than stocks, they are considered safer investments. When investors take on more risk, they should expect to be compensated for that additional risk. However, sometimes investors might be taking on unnecessary risk without extra compensation. Investing in a single stock is a good example. That’s because a single stock has the same expected return as the overall market, but it’s riskier than investing in a diversified portfolio of stocks. Research by Dimensional shows that over a 20-year period only about 20% of stocks outperform the market. If you have questions about the relationship between risk and expected return and the implications for your portfolio, speak to your wealth advisor. If you have any questions, please drop us a  note .

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third-party data and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. Please be advised that Buckingham only shares video and content through our website, Facebook, LinkedIn page, and other official sources. We do not post investment advice on WhatsApp, Telegram, other interactive applications, or other similar platforms. Rather, Buckingham provides investment advice only through individualized interactions. R-24-7700 .

How to Align Your Charitable Giving With Your Values

Mon, 23 Sep 2024 12:01:00 GMT

Sara sighed as she stared at the stack of envelopes on her desk, the ones from the charities she had given to in the past. Next to it lay a blank page titled “2024 Giving Plan.” She had promised herself this year would be different – she’d have a clear strategy for her donations. But now, faced with the pile, Sara felt overwhelmed and confused. How could she possibly choose among the countless worthy causes? And how much should she give to each?

As year-end deadlines loom, Sara’s dilemma may be familiar. Deciding whom to give to, when and how much is challenging until you have aligned your giving plan with your values, charitable causes and the organizations you support. Here are steps you can take to prepare your gifting intentions this season.

1. Discover where you are on your charitable journey.

Giving is a learning process. While there is no right answer to where we want to be on the path, it’s worth reflecting on where we are now and where we might like to be:

Additionally, you might be navigating this process with others. Discuss your thoughts on giving with your spouse and family. Talking about money can stir up emotions just like any other vital conversation. That’s why it’s important to develop a shared family purpose. Reflecting on your values will help your purpose take shape.

2. Define your values.

Taking a moment to articulate our values is crucial to making financial decisions such as charitable giving. Writing them down makes them conscious and helps inform our thinking and planning. What are the values that you and your family aim to live by?

3. Decide which causes touch your heart.

Charitable giving isn’t just about finances – it’s about making a real difference. Determine causes that matter most to you by taking time to reflect on these questions:

Now, consider what philanthropic causes are working to bring about those solutions. These might be humanitarian, religious, educational, cultural or environmental efforts.

When we discover the overlap between our values and causes that resonate, we become more focused on choosing which organizations to support.

4. Evaluate organizations.

Choosing the right organizations for you to support requires careful consideration. A little bit of research can help make informed decisions:

If you want to dig deeper, you can also:

Remember, it’s not just about choosing well-known names. Sometimes smaller, local organizations can have a more direct impact on causes you care about.

Additionally, a strong personal connection to a charity may offer guidance. For example:

5. Find alignment with your values, causes and organizations.

Bring focus to your charitable giving plan by examining where your values, causes and organizations overlap. Are the causes you’ve supported in the past truly in line with your values? Do the organizations you’ve given to take care of those causes effectively?

Try dropping some charities you’ve given to out of habit. That means you could increase support for organizations with a high level of alignment.

Seek Alignment in Your Charitable Intentions

6. Create your charitable plan.

Once you’ve considered your values, causes and organizations, your charitable vision should come into focus. Define your purpose with a charitable mission statement, or statement of purpose. In other words, how will your plan help support your vision for a better world?

Example: The purpose of my/our charitable plan is to honor our professional experience in the medical field by funding innovative research and supporting organizations that provide health care in underserved communities.

Other essential items to consider:

Your options for giving might include cash, appreciated assets, a donor-advised fund (DAF), qualified charitable distributions (QCDs), a charitable remainder trust (CRT), or a combination of these. Working with your wealth advisor can help decide which options fit best with your overall financial plan. Your advisor can also help ensure more of your donation goes to your intended charitable causes rather than to taxes.

Conclusion

By following this structured approach to your charitable giving, you’ve taken significant steps toward aligning your donations with your values and maximizing your impact. Remember, effective philanthropy is a journey, not a destination. As you implement your giving plan this year, you’ll gain insights that will help you refine your strategy for the future.

Don’t let the complexity of charitable giving overwhelm you. With a clear understanding of your values, chosen causes and preferred organizations, you’re now empowered to make meaningful contributions that reflect your personal mission.

Understanding the VIX: The Market’s Fear Gauge

Tue, 17 Sep 2024 14:56:00 GMT

With commentators talking about the volatility index (VIX) rising, should this cause alarm for investors?

Back in early August, the VIX closed one Friday at 23, and by Monday, it spiked as high as 65. The VIX is a measure of the market’s expectation of volatility over the next 30 days, calculated based on S&P 500 index options. S&P 500 options are financial instruments that investors use to hedge against or speculate on market movements. Generally, the VIX rises when there is greater uncertainty or fear in the market. Although investors can use the VIX to get a sense of the market’s expectation of future volatility, it’s not a statistically significant predictor of market movements. When volatility spikes or the stock market declines, this could be an opportunity to rebalance your portfolio by buying stocks at lower prices. While monitoring the VIX can be useful, it’s important to remain calm during periods of high volatility and stay focused on your long-term goals.

VIX interpretations:

If you have any questions, please drop us a note .

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third-party data and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. Please be advised that Buckingham only shares video and content through our website, Facebook, LinkedIn page, and other official sources. We do not post investment advice on WhatsApp, Telegram, other interactive applications, or other similar platforms. Rather, Buckingham provides investment advice only through individualized interactions. R-24-7680.

What to Know About the New RMD Regulations

Mon, 09 Sep 2024 12:01:00 GMT

In July, the IRS issued final regulations related to required minimum distributions (RMDs) from retirement accounts, clearing up some of the controversy and uncertainty surrounding changes made under the SECURE Act and the SECURE 2.0 Act.

The final regulations, which go into effect on Jan. 1, 2025, confirm that non-eligible designated beneficiaries — generally someone other than the original account owner’s spouse — must take RMDs annually to satisfy the 10-year rule for withdrawals. Beneficiaries who were supposed to take RMDs from 2021 to 2024 don’t have to make up for missed distributions and will not face a penalty.

These regulations will bring significant changes to the landscape of retirement account distributions and tax planning. Here are some key developments to be aware of as you begin planning for next year:

Key Highlights of the Final Regulations

The 260-page document provides extensive guidance on specific scenarios affecting both eligible and non-eligible designated beneficiaries. Here are some notable points:

Proposed Regulations and the SECURE 2.0 Act

Alongside the final regulations, the IRS released new proposed regulations to address questions from the SECURE 2.0 Act passed in late 2022. These include:

Implications for Financial Planning

These new regulations add complexity to tax planning for retirement accounts, particularly after the original owner’s death. It’s important to consult with financial planning professionals who understand the new rules and their implications.

The regulations introduce several scenarios where careful planning is essential:

Conclusion

The IRS’ new final and proposed regulations will have a significant impact on retirement account distributions and tax planning. These rules introduce more complexity but also provide opportunities for strategic planning. Working with a wealth advisor who understands the nuances of the new regulations can help you navigate the changes and make informed decisions about your options.

5 Reasons to Start Succession Planning for Your Business

Mon, 26 Aug 2024 12:01:00 GMT

For business owners, deciding how and when to sell your company can be challenging to navigate. In fact, it is arguably the most important financial decision you will make. If keeping the business close to you is important, the most common transitions are to children, family members, key employees or an employee stock ownership plan. If you want to achieve the highest possible sales price, you might consider a strategic sale to a third party or even go public. Ultimately, this decision will have a big impact on your life for many years after the transition. Planning early – typically at least five to 10 years before you exit – can make all the difference. Here are the top five reasons that business owners should not delay succession planning:

1. It’s crucial to build a multi-disciplinary team.

When preparing to sell, most business owners have no idea who to contact to discuss a succession plan. No single advisor has the knowledge and experience to deliver an optimal succession plan. Therefore, a multi-disciplinary team is required and will typically include various professionals throughout the process, including financial planners, estate planners, attorneys, tax planners, business valuation services, investment bankers or business brokers, among others. Contacting a certified exit planning advisor is key to getting the process started. The certified exit planning advisor will be the quarterback of the engagement and will utilize the appropriate resources on your team when needed throughout the process.

2. You’ll have more time to factor in personal financial goals.

A good succession plan should address the business owner’s financial matters and personal goals. Does the exit of the business need to fund your retirement lifestyle? Are you ready to shut off all income streams from the business, including personal expenses covered like health care or life insurance? Are you ready to enter retirement, or would you prefer to stay involved with the business in some capacity? Working with a certified exit planning advisor can help you consider these critical questions in advance. The advisor will then be able to provide better guidance on your exit strategy options and will help determine the strategic value and fair market value of your business.

3. You’ll have more time to envision life without the business.

Often the hardest part of succession planning is imagining your life without the business. Most owners devoted countless hours, days and years to growing the company. Often, owners build a strong emotional attachment with their business and say, “I feel like I’m selling my child.” There is also the fear of losing control or being needed: What if the new owner doesn’t do things how you did? What if the new owner completely changes the company? Having the appropriate team in place to help prepare you for your next stage of life is key to developing a successful succession plan.

4. The cost of planning early outweighs the cost of doing nothing.

Of course, there will be costs incurred when developing any succession plan, particularly for services rendered from the various professionals that will guide your exit strategy. However, the cost of doing nothing is much more detrimental, not only for you but also for your family and employees. To create a successful succession plan, you should start planning approximately five to 10 years before your planned exit. This will help ensure you examine all possibilities and achieve the greatest value from the sale.

5. The process will be easier to navigate.

Approximately 50% of business transitions stem from a planned retirement timeline, while the other 50% occur after one of the “five D’s”: death, disability, divorce, disagreement, or distressed business. No matter the circumstances, creating a succession plan is a complicated, time consuming and emotional process. However, working with a certified exit planning advisor will make it easier to maneuver each step and ensure you’re not overlooking any critical element. The certified exit planning advisor will design a comprehensive plan that addresses the key areas of an exit strategy, including business, personal, legal, financial, tax and insurance considerations, as well as unexpected events.

Conclusion

Every business owner will eventually exit their business, whether voluntarily or involuntarily. Since your company is probably your largest and most complex investment, it plays a key role in your personal retirement plan. When the time comes to sell, it’s not only important to maximize profit but also to consider your personal and professional goals. Aligning your unique situation with the right exit strategy is essential for developing a successful succession plan.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third-party data and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information. Please be advised that Buckingham only shares video and content through our website, Facebook, LinkedIn page, and other official sources. We do not post investment advice on WhatsApp, Telegram, other interactive applications, or other similar platforms. Rather, Buckingham provides investment advice only through individualized interactions. R-24-7537