Author Archives: John Kvale CFA, CFP

August 2018 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our August 2018 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format as well as Video too!

Newbies – we like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Break In – We finally upgraded our Laptop, which means a new recording system of Audio and Video — five year old laptop technology was long in the tooth – Hope you Enjoy!

August 2018 Video

 

Financial Planning Tip (s) –

The PLUP – Personal Liability Umbrella Policy

In our post here, a shortened version of an article in the coming Newsletter, we review the PLUP or Personal Liability Umbrella Policy- You likely need one!

Cost

In a world of sometimes seemingly ever higher costs, the PLUP is very affordable. Experiences have shown annually, cost of usually between $200 – $500 for $1 Million – $2 Million in coverage.

Insures your base Coverage are correct

Another neat and settling feature of the PLUP is that it mandates that your standard or base coverage are correct.

What you are protecting Coverage

The most obvious assets at risk are after tax dollars such as checking, savings and investments including Revocable Trusts.

Estate Planning Part 1 – Wills and the Basics

In a reappearance due to constant usage, we also brought back our Estate Planning Series here, Part 1.

  • Will
  • Power of Attorney
  • Healthcare Power of Attorney
  • HIPPA – Release of health information
  • DNR- Cease and Decease – Do not Resuscitate

Estate Planning Part 2 – Trusts

In Part 2, a second repeat article, here, we discuss Trusts of all sorts and their usage.

  • Revocable Trust
  • Testamentary Trust
  • Irrevocable Trust
  • QTIP- Qualified Terminal Interest Trust
  • Credit Shelter A/B Trust
  • Generation Skipping Trust
  • Irrevocable Life Insurance Trust

Capital Market Comments

Small Business Optimism Hits All Time High –

With earnings booming it is not surprising to see Small Business Optimism reaching all time highs — It is always nice to recall that while there are fast moving machines, making trades in nanoseconds and huge amount of data is being deciphered electronically to get and edge – BUT and it is a big BUT – There is ultimately a human behind the machine!

She/he is pretty happy!

8-15-18 Gallup Small Business Optimism

Have a Great Day – Talk to you at the end of September!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

www.jkfinancialinc.com

street-cents

 

Monica’s Last Day Friday – But Wait? Hello Jen – The Whole Story

After 11 years with Cathy at the pilot position, saying goodbye to Monica after only 5 months feels like a revolving door at our office –

HOLD on just a second!

The Rest of The Story

Early in the year, Cathy gave us ample notice of her intent to retire (we are happy to report she is doing GREAT – enjoying every day away from the city streets!)

Through our contacts we began a search for Cathy’s replacement – to no avail!

About a two weeks before Cathy’s intended retirement we offered Jen Hill the job, but with an extra little household, she could not start until this fall, when all would be in school.

At that moment we had decided to struggle through the summer and just “Make it” until the end of summer.

Enter Monica!

Days before Cathy was to retire, we luckily found Monica – those that have met or spoke to her, understand the meaning of luckily.

Honoring our word, but knowing there was a fair amount of runway, this is the first announcement of how these events occurred.

Monica and Jen

This week Monica is training Jen and to see the two of them smile, chuckle, share the systems is wonderful – Was very nervous at the start of the week. All good!

Good News!

Feeling so lucky to have Monica over the summer, word was spread of her fantastic abilities and attitude –

We are very happy  to report a friend in the industry, luckily scooped her up in literally a seamless transition, as even her new office is about one block from ours!

Regular Lunch Catch-Ups for sure – She promises to be at the Holiday Party too!

It’s weird how in such a tight job market, we run into two great wonderful people to pilot the ship!

We will introduce Jen in the future, but today’s stage is a thank you to Monica – it’s been so great to work with you – We will miss you!

Have a Great “The Rest of the Story Day”

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Estate Planning Docs Part 2 – Trusts

Last Monday we replayed Part 1, here in our post, one week later we wanted to re-roll out Part 2 of this all important Document review, checklist and explanation – Enjoy!

Trusts, in our opinion are most helpful for organization, directives for minors, and very useful in avoiding Estate Taxes, just to name a few.

Estate Tax Review

Estate taxes are the tax that is incurred upon the final death of an estate member. Unlike Federal taxes, Estate taxes are accessed on the TOTAL VALUE of all assets less liabilities. Currently these taxes begin just under $5.5 million for a single person and if done correctly can be double ($11 million total) for married couples. Above these total amounts, the tax rate quickly gets to 40%. For this reason, the popularity and needs of many of the following Trusts have grown and will continue.

Trusts – All Type ReviewLivingTrustEstatePic

Over the last several years we have grown warmer to the use of Trusts. Residing in Texas, a low cost probate state, Trusts frequently have lessor place in the Estate plan. However, we are finding more and more uses for them, and as such wanted to have a detailed list of the various Trusts – This is the second, and more deep dive to our original Estate Planning Doc Summary.

Revocable Trust – By far the most common and most commonly misunderstood Trust of the bunch. Revocable means it can be changed at the grantors request. Due to this fact, there is very little tax or liability avoidance. The key positive for this trust is organization, especially over state borders. In high probate cost states may prevent substantial probate costs.

Testamentary Trust – Trust that is usually embedded in a Will and is created upon the grantors death. Testamentary trusts can take many forms, but are a key aspect of Estate planning for minors, estate tax, and generational transfers. It has virtually no existence until the grantor passes away.

Irrevocable Trust – The Hulk of Trusts. Being Irrevocable, once established and funded, this Trust is a beast. Estate tax, liability, inheritance are just a few items that can be addressed with an Irrevocable Trust. The biggest issue of this type of trust is it what makes it a beast, Irrevocable … once you put assets in it, there is no turning back. Careful use is advised.

QTIP Trust : Qualified Terminal Interest Trust – Most common set up by Grantor to give direction to assets beyond the spouse. Frequently used in second marriages to protect children from a prior marriage. Created and resides most frequently in a Will.

Credit Shelter/A:B Trust – Type of trust that is used to help minimize Estate taxes by maximizing the first person in a married couples Estate tax exemption upon death commonly resides in a Will. Can give directives to eventually end up to a non-spouse beneficiary, but living spouse maintains control during lifetime.

GST or Generation Skipping Trust – This handy estate planning trust gives relief to Grantors by jumping a generation and essentially skipping the Grantors children and passing to the grandchildren. Income may be distributed to the children, but the ultimate beneficiary will be the grandchildren. Under current law there is Estate tax relief from this trust.

ILIT : Irrevocable Life Insurance Trust – This trust is very useful in getting life insurance proceeds out of a Grantors estate. While life insurance is free from Federal taxes in most cases, proceeds are included in an Estate for Total Estate Tax purposes. Done correctly, the ILIT trust can limit most if not all of the proceeds from an estate and thereby estate taxes.

Pat yourself on the back (especially if you are still awake and made it this far.) With a reasonable understanding of these types of trusts, you now have deep knowledge of the types of Trusts available. Reach out if you have any questions.

Have a Great Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Finish Your Summer Project Reminder – Back to School – Friday

We had a slew of Summer Projects that were going to get done just as summer started… You know the kind!

Summer Project Reminder

The unofficial end to Summer occurs next week with the following Monday being the day the swimming pools close and summer says fair-well-

We had multiple projects, computer, office, storage closet – and a few others that mostly were completed….

Dang it goes fast-

Have you completed your Summer Projects? Better Get Going!

Back to School

Our two started school this week-

5abadd6e-c152-4a26-9474-16fba40f85fc

One full time tennis academy-

The other full time middle school!

7350eeff-d12f-4d76-bd6f-7b4b6308c175

Why are they so much for excited to Get OUT of school, than go back?

Ahhh… it’s a Friday, enjoy your weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

PLUP – The Personal Liability Umbrella Policy – A Savior if you need it, especially for the cost

Insurance can be a costly word to many, but in this post we discuss in an abbreviated form from our coming Newsletter, the  PLUP – You may not want to leave home without it!

Personal Liability Umbrella Policy – AKA PLUPinsurance -slip-up-709045__340

This coverage is an add-on to your auto or homeowners policy. This coverage kicks in as a pseudo major medical similar upper limit coverage for liability should you need the extra protection. Given the cost, it is easy to see this coverage is not utilized frequently, but had the personal experience above been slightly different, maximum limits could have easily been met, needing the Umbrella for continued asset protection.

Cost

In a world of sometimes seemingly ever higher costs, the PLUP is very affordable. Experiences have shown annually, cost of usually between $200 – $500 for $1 Million – $2 Million in coverage. (Yes that is correct, two to five hundred dollars annually.)

Insures your base Coverage are correct

Another neat and settling feature of the PLUP is that it mandates that your standard or base coverage are correct. The reason for this is that the Umbrella Policy actually sits on top of your standard coverage, again similar to a major medical policy sitting on top of your standard health coverage, to only kick in when the base coverage are maxed out. 

What you are protecting Coverage

The most obvious assets at risk are after tax dollars such as checking, savings and investments including Revocable Trusts. In a bad situation, without the PLOP policy these assets may be at risk in the event of a liability judgement is made on you.

Accident Examples

The crazy accident at your home, where an acquaintance falls down unexpectedly and injures themselves badly and you later find out that this acquaintance is not so friendly and has a desire to hold you accountable for their incident.

Those with kids that may have kid friends over and a similar occurrence from above happens.

Anyone who drives the streets today has some possible liability. As mentioned in our personal opener, the outcome of the personal situation could have been much different.

Watch for a more detailed article in our coming Newsletter, meanwhile, if you do not have a PLUP, you may want to call your insurance agent and check into it!

Have a Great “PLUP” Covered Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

Estate Planning – Total Document Summary – Part 1

This is another redo of an article/post of several years back. We reference this so much we thought it a good idea to present it again, especially to those who may not have seen it originally – As a reminder, we like all of your Estate Planning Documents to have a virtual home in your Vault for easy, safe continued access! Ok – Let’s get going – again!

The term “Estate Planning” gets thrown around frequently, sometimes by us. Recently we tossed the term out and upon finding we did not have an article with a total summary of “Estate Planning Docs” an article was born.

Break in – If you have not reviewed your documents in five + years, now is a good time… let us know, as we should have a soft copy of file … if not…send us one please!

Estate Planning Docs

Will – Document that directs non-beneficiary directed assets (Ex ..house, property, cash and regular investment assets) and may create trusts for minors, names a Custodian, Executor and may also create trusts and Trustees for estate tax minimization and other uses (see final statement in article below on Trusts.)

Power of Attorney– Financial document that appoints someone other than you to make most financial decisions in your absence. Generally this document immediately becomes effective upon authorization, as opposed to upon disability.

Healthcare Power of Attorney – Document that appoints someone to make important healthcare decisions if you are unable. Think un-conscience and need to approve some type of procedure.

HIPPA – Allows your appointed person to receive medical information on your behalf. This is the ant-privacy document to counter unintended consequences of many of the recently enacted privacy laws.

Living Will- Cease and Decease – DNR – These titles are one in the same and are frequently confusing. This document allows medical professionals to NOT mandate all possible care, should you become deceased mentally, but not in body function. DNR stands for do not resuscitate, and is probably the most explanative title.

We will dig more into Trusts in a specialized post (Part 2)  just dealing specifically with that area of Estate Planning!

Now you have a great all-in-one spot for just what the heck all those “Estate Planning” docs are… and us too !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

JK Street Cents Logo

Optimism Hits All Time High – PLUP Preview – Near Summers End Friday

Small business owners are really feeling happy –

This recent Gallup/Wells Fargo Poll of small business optimism is at all time high-  Nice!

8-15-18 Gallup Small Business Optimism

The PLUP

Do you have a PLUP? You likely should have one!

Next week we discuss the PLUP as a preview to a greater detailed article in the coming Q 4 Newsletter – yea, its hard to believe, but the last quarter of the year is nearing.

Today is a Friday, nearing the end of the summer and the month….

Get out to the pool, enjoy those special in your life, it goes fast!

Talk to you next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com