Tag Archives: Estate Planning

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

Hello and Welcome to our September 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!

This is month two of our upgraded Laptop, which means a new recording system of Audio and Video — while still working the kinks out, we are getting the hang of it – Enjoy!

September 2018 Video

Financial Planning Tip (s) –

The Emergency FundMoney - dollar-941246_1920

In our post here, a shortened version of an article in the coming Newsletter, we review all, about a much needed Emergency Fund, and the levels for certain scenarios.

Reasons to be slightly bigger-

  • Possible Job Change – Need to be higher on emergency funds
  • New Family Member- Higher is better
  • New Home – Expect unforeseen expenses – they always occur (Has anyone ever built or bought a home in less time and for less money than they thought? Nope, it’s in our nature)
  • Salary Fluctuations i.e. Commissions – Error on the higher side of that emergency fund
  • Others dependent on you – Business owner, large family, solo income earners, college or wedding – Higher is better

Reasons for a normal to smaller Emergency fund-

  • Dual Similar Incomes – Lower Emergency fund is ok
  • Very stable Job – Smaller side of the living expenses will
  • Very fixed income stability – Pensions, Social, etc.

High Deductibles – Why to Consider

In this post, we discuss the reasons for considering a Higher Deductible lifestyle –

Break In – There are always situations that a High Deductible will not work, we are just pointing out the advantages, under the correct circumstances!

Auto Insurance: One of the best ideas to consider a high deductible – take a look here at the great examples of why.

Home Owners: Another great coverage to consider a higher deductible.

Health Insurance: Once again a good one, but certain situations can easily negate the advantages of this!

Capital Market Comments – Interest Rates and Bonds

Short Term Headwinds Of Higher Rates on Bonds

This busy chart gives a great picture of the short term effects of interest rates on bond. Coming from such an extended long period of unusually low rates, we are reminding ourselves along with everyone else, this is very normal phenomenon and will correct itself with time by putting extra dollars in our pockets in the form of higher yields.

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

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

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

 

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

1 Minute Video New Vault Series – Continued Updates and New Reports

In a neat coincidence of the subject of the last video for this series, we had intended on reminding that additional information, updates and constant improvements are a part of our New TOTAL Vault.

Continued Improvements and Updates

Last week, after our most recent Video, new updates were made for a more clean look on the landing page…

We have only touched the Tip of the iceberg of the powers that our New TOTAL Vault contains … giving us many more features and powers to roll out in the future.

Estate Planning Graphs is one of our favorites and is being rolled out on a case by case basis due to the complexity.

Have a great Continued Improvements 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

Coming Soon ANOTHER Sizzling New Vault Feature – Estate Planning Flow Chart (Clients)

In our final sizzle feature (most likely) for this year (16) for our New Total Vault, we wanted to wet your appetite and let you know this feature is available and will be rolled out slowly due to the complexity.

Estate Planning Flow Chart

We get the Wills complete, the Trusts are set up, the beneficiaries appointed, and the decisions made. Then we stick all those fancy documents in our New Total Vault and the originals in our safe place…and…. well …. we forget what we set up !

NOT ANY MORE !

Your New Total Vault has not only an Estate Planning Flow Chart, but an all inclusive calculator and estimator.

Check this out:

Easy to visualize — once set up, can be created with live information at the click of a mouse!

Flow Chart for Estate Planning

Here is the calculation section:

Estate Flow Chart Calculations

 

Our Goal is to have this up and running for everyone as we review our Estate Planning Documents… Lofty… yep…just a step for steppers!

If you have  a desire to complete this early,  just let us know, we will move you to the top of the working group !

Have a Super 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

 

June 2016 Video, Planning Tip-Economic and Capital Market Monthly Review, By John Kvale

We are at the half way point of the year. In this review of the year so far and preview of the remainder, we look longer than our regular month for sentimental and digital diary reasons!

Here is our  June 2016, Extended view – Economic and Capital Market Review, with a great financial planning tip, and of course our Video for your viewing and listening pleasure.

Hope you enjoy!

June 2016 Video

 

Financial Planning Tip –

Estate Planning Docs In One Box

After discovering we DID NOT have a comprehensive high level Estate Planning article, a two-part series was happily created – for the record more articles similar to this are expected due to their popularity and handy reference ability:

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. .

Healthcare Power of Attorney – Document that appoints someone to make important healthcare decisions if you are unable.

HIPPA – Allows your appointed person to receive medical information on your behalf.

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.

Estate Planning Docs Part Two – Trusts

TRUSTS – ALL TYPE REVIEW

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.

Testamentary Trust – Trust that is usually embedded in a Will and is created upon the grantors death.

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.

QTIP Trust : Qualified Terminal Interest Trust – Most common set up by Grantor to give direction to assets beyond the spouse.

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.

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.

ILIT : Irrevocable Life Insurance Trust – This trust is very useful in getting life insurance proceeds out of a Grantors estate.

Here is a link to the original detailed post.

Economic Update

Brexit changes our view on rates

With the British vote to exit the European Union, the Federal Open Market Committee (FOMC) lead by chair Janet Yellen will be hard pressed to raise rates. The only reason we can see higher rates sooner rather than later now would be some (multiple reports needed) major inflationary factors that feed through to the economic reports- While big advocates of higher rates and our research shows rates have been raised during an election year, it’s likely off the table for the remainder of the year.

Brexit changes US Presidential Election

Brexit may also change the US Presidential election as the polls of the British were so far from accurate, we expect many to have less confidence in our current US Presidential polls.

Capital Markets Update

New all time high?

With the afore-mentioned rate increase off the table and possible international perceived disruption due to Brexit – US capital markets  may be the recipient of fresh capital from global corners of the world.

New highs (S&P 500) would not surprise us at this time and the odds are now better than not from our perch. Minor expansion in Bunny like fashion (explanation to come upon occurrence) looks possible, of course twists and turns have been the norm lately.

7-5-16 SP 500

Earnings are the ultimate driver of equity prices, and US capital markets are currently frothy if not overpriced.  We think they can get more overpriced due to the above concerns.

7-1-16 PE Ratio SP 500

 Long term average is 15!

Have a Great Day!

See you again at the end of July !

John A. Kvale

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

 

 

Estate Planning Docs Part Two – Trusts

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