“Do You Have Your Act Together?”

I was thrilled to be asked to be on Paul Higgins’ TV show, Business in “The O.C.” to talk about the “What You Need to Know Kit^TM“, Matters at Hand and the wealth management challenges facing people. The segment provides an abundance of information about managing estate and financial planning - and getting organized! We discussed the organizations that Matters at Hand supports, such as Girls Inc. and UCI’s Merage Center for Investment and Wealth Management. Plus, we talked about Comerica Bank, which is a great community partner and resource for women business owners. Of course, we chatted about me, too! Have a look at the videos to hear all about it!

On June 26, I was delighted to be the keynote speaker for the Women in Business event sponsored by Cox Business. The luncheon of 100-plus attendees was held to honor women who were nominees of the Women in Business award presented by the Orange County Business Journal. My presentation - titled “Keys to Wealth Management - Do You Have Your Act Together?” - delved into what the average 35-55 year old needs to know about his or her wealth management affairs. During a series of provocative questions, I challenged the attendees to focus on issues such as estate planning, investments options, insurance, budgeting and more. To get a taste of the questions, see the Wealth Management Quiz above.

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I’m very proud to announce that Matters at Hand is sponsoring the “Keys to Wealth Management” supplement in this week’s edition of the Orange County Business Journal. It’s an excellent resource to discover what you need to learn to handle all aspects of wealth management. My article discusses the results of our national market research study that shows the main reasons why people want to buy our wealth management “WHAT YOU NEED TO KNOW KIT^TM.” Click above on my blog to take my “What You Need to Know Wealth Management Reality Check Quiz” to check your knowledge.

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OC METRO BUSINESS magazine featured Matters At Hand founder and “What You Need to Know Kit” creator Camille Jayne in its June 19 cover story titled, “Business Is Booming.” 

Jayne talks about the role NAWBO (National Association of Women Business Owners) Orange County plays in helping entrepreneurs flourish. 

“It takes hard work and discipline to run your own business,” says Camille Jayne, a former president of that group. “But more and more, women are finding it a satisfying alternative to the corporate world.”

Read the article > 

IRVINE, Calif., April 30, 2008 - Matters at Hand^TM, a wealth management consulting service (www.matterstathand.com) dedicated to helping people get their estate planning and financial affairs in shape, announced today the national launch of its new “WHAT YOU NEED TO KNOW KIT^TM.” The Kit is an all-in-one educational resource guide and organizational tool that simplifies the complexities of all areas of wealth management - from estate planning, investments options, life, disability and long term care insurance, taxes, and property/casualty insurance to budgeting and more.

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Keys To Wealth Management

Do You Have Your Act Together?™

Volume V, March, 2008

Last month I was in a doubles tennis match and two of my buddies mentioned they enjoyed reading this column but many of the answers were still “over their heads”.  Mind you, one of them is a family law attorney, and the other is a Regional President of a large corporation. They felt what they really needed was a simple, easy to understand, lay person’s “education” on the basics.

Coincidentally, many advisors in our network have asked if we could “bottle” what we do for our clients into a really easy to read/easy to use resource guide and organization product. A tool to help people get started so they are better informed, less stressed and feel more in control about their wealth management situation. Great idea ­ thank you! Help people to know what they need. 

So, we listened, and are launching the “What You Need To Know Kit™”!
The 3 part Kit includes:

1. The Binder: an easy to read resource book filled with concise definitions, information on products you¹ll need, and the questions to ask your advisors. Overviews of trust and insurance products, investment and tax vehicles, education savings plans to long term care. All the things to consider, and the do’s and don’ts to guide you.  A guide designed to help you take care of you, your assets, your family and others. 

2. The Box: an annual filing box system that comes with pre-printed folders giving you an easy way to file all your important documents, bills and statements for the entire year!

3. The CD: easy to fill in, customizable spreadsheets and letter templates to help you determine your net worth, manage your budget, fund your trusts, get insurance claims, etc. Formulas included! 

Give the “What You Need to Know Kit” as a gift to yourself, your children, your clients or employees. Kits will be available April 1st. Order online: www.act.mattersathand.com/kit or call 1-800-705-2911.

Help yourself and others to get in control. Guaranteed to improve your game! 

Q: I am 51% owner in a C Corp, and we are expanding into Europe. Any reasons from a tax standpoint to switch to an S Corp?

D. Dean McCormick III, CPA, MBA, President, McCormick Wealth Insights, www.mccinsights.com

Q: As founder of an early stage company, should I create a Grantor Retained Annuity Trust to hold my shares as a wealth transfer tool to later generations?

A: Consider annual exclusion gifts first. You and your wife can annually gift $24,000 of stock to a grantor trust per beneficiary. Assuming your stock is at $1 now and appreciates to $24, you’ve made a tax free transfer of $576,000 to a child in a grantor trust which you control. A GRAT (an irrevocable trust that pays fixed annuity payments over time with the property in the trust eventually going to a beneficiary), might be a better idea after you have exhausted your annual exclusion gifting.

Renee M. Gabbard, Partner, West Coast Chair of Estate Planning, Paul Hastings, www.paulhastings.com 

Q: Are Index Funds a good strategy investment, and if so, for what percent of my investable assets?

Keys To Wealth Management

Do You Have Your Act Together?™ 

Volume IV, February, 2008 

Who understands the difference between which advisors do what, or the designations & certifications they should have to be considered “qualified” in their area of expertise? At times, it looks like they have alphabet soup after their names, but better to be over than under qualified. 

“Territories” are getting blurred as some advisors want to be your one stop shop. Beware if they want to sell you insurance, do your taxes, write your trusts, manage your investment portfolio, etc., but will they do windows? 

I think each one should specialize in their key area, if for no other reason to maintain independence. Investment advisors are usually fee versus commission based. If an attorney says “I am an estate planner,” ask if they regularly prepare ILITs, GRATs, QPRTs, etc. If they farm those out to specialists, then it might be OK to have them do a simple trust, but go to a specialist for more advanced planning. It depends on what you need. CPAs can be estate tax and/or income tax planning specialists. Some CPAs will do 706 estate tax returns, as well as some estate planning attorneys. Some not. 

Types of advisors and key qualifications are:

§         Accountant: Certified Public Accountant (CPA); Masters of Science in Taxation (MST)

§         Corporate Trust Officer: Certified Trust Financial Advisor (CTFA)

§         Estate Planning Attorney: JD certified specialist in estate planning, trust administration, probate, with a tax degree

§         Investment Advisor: Certified Financial Planner or Advisor (CFP or CFA); Chartered Financial Consultant (ChFC); Certified Investment Management Analyst (CIMA)

§         Life Insurance Broker: Chartered Life Underwriter (CLU); State license # for life and health; Chartered Advisor for Senior Living (CASL)

§         Property/Casualty Insurance Broker: State license # for fire and casualty; multiple out of state licenses a plus. Make sure to ask! 

Q.  As a partner in my LLC, can my company buy/pay for my key man life insurance and have the full death benefit go to my spouse if I die while employed?

A. Generally, key man life insurance is life insurance owned and payable to a business. The above scenario should be labeled a “bonus plan.” Under a bonus plan the business pays for life insurance owned by the employee (i.e. the insured). The employee has access to any cash values and designates the spouse as beneficiary who receives the tax free death benefit. For a partner or member of an LLC, the premium payment is treated as a distribution equal to the premium, with little tax impact.

Robert J. Waltos Jr., CLU, CFP, MSM, Managing Partner, The Waltos Group / Northwestern Mutual,  www.waltosgroup.com 

Q. Does a Corporate Trust company manage portfolios differently from a brokerage company, and do they need to be named as Trustee to manage monies?

A. No, a Trust company need not be named as Trustee to manage money. When a Trust company manages your money, you have a dedicated portfolio manager rather than a broker or a manager of managers. Advice is objective as Trust companies don’t underwrite securities or hold bonds in inventory. The fees for trustee services, when needed, are generally included as part of any asset under management.  Some trust companies also provide for the management of real estate and business assets.Kimberly Dwan Bernatz, Vice President, Wealth Management Advisor, First American Trust, FSB

www.firstamtrust.com 

Q: I am a widower in my mid 70s with a $10M estate. Is our $6M second to die life insurance policy enough for my kids to avoid estate taxes?

A. Unfortunately, no.  If a life insurance policy is owned in an irrevocable life insurance trust (“ILIT”), it will provide adequate liquidity to pay the potential estate tax if your estate does not grow much more.  This assumes you and your wife had the proper A/B trust. A life insurance policy, inside an ILIT or not, will not avoid estate taxes. This can only can be accomplished with proper planning and implementation of a zero estate tax plan.  Ask your advisors for help.

Danniel J. Wexler, Attorney and Counselor, Quinlivan Wexler, LLP

www.qwllp.com

Keys To Wealth Management

Do You Have Your Act Together?™

Written by Camille Jayne, Founder, Matters At Hand™

Who of us didn’t install a house alarm until after burglars ran off with the plasma TV? Or during the recent fires, knew if the replacement value of our house was sufficient?  Or learn how to be more tax efficient each year? It is human nature to procrastinate about things – especially if we don’t understand them.  

But how can we get educated without someone trying to sell us something?  We’re in luck!  On January 26^th UCI’s Paul Merage School of Business is opening the doors of its Center for Investment and Wealth Management to the public for a one day conference: Your Life, Your Wealth, Your Legacy. Dean Policano hopes all of you, your families and your clients will come to learn from the best advisors in OC.   Learn about:

-       estate planning tools to transfer property that preserve wealth and relationships;

-       4 taxations on property - how to manage or avoid them;

-       how corporate trustees help preserve family relationships and limit liability;

-       tax efficient strategies and tactics;

-       setting up the right trusts to fit your family situation, especially blended families;

-       life insurance and gifting strategies that enhance wealth management;

-       property & liability insurance plans to limit exposure and increase coverage;

-       creating liquidity, managing risk and tax exposure in company stock/stock options;

-       investment planning principles to better grow your assets and plan for retirement;

-       wealth building strategies and succession planning for business owners;

-       long term care planning for you, family members and employees;

-       designing family missions and foundations to educate your children and secure your legacy.

It will be a great day to “learn from the best”. It’s at the Center Club, so you know the food will be good!  Seats are limited, so call 949.824.6042 or www.merage.uci.edu/go/educationalseries to sign up.  Say/input CJUCI to get a $50 discount! 

Q.  Can I have my business provide & pay for long term care insurance for just some of my employees? 

A. Yes. Companies can choose to pay part or all of the LTC premium for employees who meet a certain criteria. This is one of the few health-care-related benefit programs that can be offered on a discretionary basis. Plus, a company that pays for some or all of its employees’ premiums may deduct a portion of the premiums paid for these tax-qualified policies, depending on how the business is structured.

Todd Tripp, Field Director, Northwestern Mutual Financial Network, www.nmfn.com/toddtripp 

Q. My advisor is suggesting all mutual funds for my $1M portfolio. Is that best, or does that just add extra fees? 

A. A mutual fund portfolio matched correctly to your goals and risk tolerance can be very cost effective.. Your advisor should suggest low cost mutual funds, often referred to as “institutional” class shares.  Many mutual funds are offered in different share classes. Avoid A, B or C class shares which have higher fees.  Institutional class shares are often far more cost effective than many fancy sounding investment vehicles typically marketed to high net worth individuals. 

 Ed Runyon, Principal, Runyon & Bowes Wealth Management, www.runyonbowes.com  

Q: What is tax exempt bond financing, and when can this type of financing be an option?

A. It is long-term financing for projects over $2.5 million at rates 25% below traditional business loans, achieved because a bank “co-signs” through an irrevocable letter of credit.  Manufacturers, nonprofit organizations and companies involved in “green” activities are eligible.  Funds are used to purchase improved or unimproved land, building construction, renovation and new equipment. If time allows (process takes longer), it is well worth it due to much lower overall costs.

Melissa Pollard, SVP, Comerica Bank, Middle Market Lending,  www.comerica.com

Do You Have Your Act Together?™

Written by Camille Jayne, Founder, Matters At Hand™

A primary reason for managing your wealth is to reduce the risk of losing your assets to taxes, bad advice or market changes. Suggestions to help shield you from these factors:

Tax Minimization

• Avoid having the government be your biggest “charity”. Ask your advisor if your life insurance policy needs to be in an irrevocable trust. In some cases (excluding spouses), if a policy is not in such a trust, estate taxes can take almost half of the death benefit.
• Just having a revocable trust does not reduce the risk of your assets being taxed in probate unless you put those assets into the name of your trust–called funding your trust. Fill out the forms to do this! Everything except your retirement accounts, one checking account and regular cars, should be in your trust. Check your statements. If you see the trust name, Trustee or a “TTE” after your name, then the account is in the trust.

Bad Advice

• If you buy property with a partner and you want your share to go to your heirs, set it up as Tenants in Common, in your trust. If you want your share to go to your partner with right of survivorship, set it up as Joint Tenancy–don’t be led into the wrong one.
• Before you get married, good to put all your assets in the name of your trust, proving them as separate property. Any earnings on those assets in trust will be yours going forward. Ask an attorney about mixing community earnings after marriage with separate property, to protect you from bad advice.

Market Changes

• At any age, having a diversified portfolio is important to reducing risk due to market crashes. A combination of large cap stocks, quality bonds and real estate can provide growth and minimize loss.

Q: May I give my residential property to my children and still receive the Prop 90 benefit when I purchase a replacement property?

A: No. The original property must be sold, not gifted. Prop 90 allows people over age 55 or permanently disabled to transfer their property tax base from their old home to a new home, once in their lifetime. Property taxes then remain the same regardless of the value of the new home. To qualify, the new home must be of equal or lesser value than the old home, and both homes must be in the same county or in the counties of Alameda, LA, Orange, San Diego San Mateo, Santa Clara or Ventura.­

- Corinne Myre, CPA, Sweek Connolly & Co., www.sweekconnolly.com

Q: What is the benefit of getting second to die life insurance over individual life insurance policies?

A: A second to die life insurance policy insures both spouses and pays off at the second death. This type of policy is more affordable since it is based on both life expectancies, allowing you to purchase more insurance for the same price as an individual policy. The death benefit creates liquidity to pay estate taxes, which are due at the death of the second spouse. These policies are typically owned in an irrevocable life insurance trust (outside the estate), to avoid estate taxes.

- Tyler Terry, Financial Advisor, Northwestern Mutual Financial Network, www.nmfn.com/tylerterry

Q: My business of 45 employees needs a good 401-K plan. What should I look for to choose a good provider?

A: Key factors to consider in a 401-K plan provider are administrative fees, quality investment choices, and user friendly technology and service. A full service provider takes fiduciary responsibility for record-keeping, participant education and investment portfolio oversight. Consider using an objective retirement consultant to facilitate the selection of a quality provider as well as a third party administrator, if needed.

- Carolanne Chavanne, CFP, Comerica Bank Wealth & Institutional Management. www.comerica.com

Camille Jayne leads educational lectures on wealth managmenet. Contact Camille at cjayne@mattersthand.com if you would like her to speak to your group.

Advisors financially support the education of Wealth Management

Do You Have Your Act Together?™

Written by Camille Jayne, Founder, Matters at Hand™

Welcome to our monthly column on Wealth Management. If you’re anything like our Matters at Hand clients you are great at what you do, and successful at making money. But do you have your act together when it comes to makingsure:

1. your money is invested the right way?
2. half your life insurance benefits won’t go to the government versus your kids?
3. you have enough liability insurance to protect your net worth if someone sues you?
4. if you get married that your assets are protected to stay yours when half of us get divorced down the road?
5. you’re not paying too much in taxes now –­or after your death?
6. your trust has everything in it?

Didn’t score so well? Don’t feel bad-you’re not expected to have your act together on all the myriad of wealth management issues on your own. There’s a growing epidemic that as our lives get busier, we spend less time managing and protecting our wealth, putting at risk our ability to enjoy the best life now and leave a secure situation for others.

Let us help! We’ll explain in these columns (in lay people’s terms so even I can understand) what you need to talk to your advisors about. And each month, expert OC advisors will answer your questions. We’d love you to write into our forum: www.act.mattersathand.com. We’ll address as many of your concerns as we can in the months ahead. And the forum will give you on-going access to many of the best advisors in OC. Everyone needs a wealth management team. As life goes on, I don’t know what I’d do without mine.

My hope is that when people ask you “Do you have your act together?” you’ll be able to soon answer “Yes!”…well, at least as it relates to Wealth Management!

Q: How do I know if I need umbrella liability insurance, and if so, how much versus my other liability coverage?

A: If your net worth exceeds the limits of liability insurance currently carried on your home and/or auto policies, you need umbrella liability insurance. This excess personal liability insurance minimizes the risk of financial ruin due to a lawsuit. Depending on your earnings, $3M-$5M in coverage is the norm. It is surprisingly inexpensive coverage for the protection and peace of mind it gives you.

– Lupe Erwin, Private Client Services, Wood Gutman & Bogart, www.wgbib.com

Q: My friend drew up a Qualified Personal Residential Trust (QPRT). What is it and when should one consider getting one?

A: People who want to reduce estate taxes and protect their homes from creditors should consider a QPRT. In addition to providing estate tax savings, a desirable by-product of a QPRT is current asset protection. A QPRT allows a person to transfer their personal or vacation residence to an irrevocable trust and still use it. The trust, versus the person, owns the home which makes it unattractive to creditors who otherwise might want to execute a judgment lien against it. These days, no small worry.
– James K. Leese, Partner, Ferruzzo & Ferruzzo, LLP, www.ferruzzo.com

Q: My mother just passed away and made me Trustee of an irrevocable trust. I have no idea what I should do. Where can I get help?

A: Consider getting an attorney to explain the trust and fiduciary responsibilities. Since your duties will be on-going, see if the trust allows you to appoint a corporate co-trustee to help reduce your administrative/record keeping tasks. Another option is to engage a corporate trustee as the trust’s investment advisor ­you keep control over trust decisions, yet get professional investment advice that reduces your exposure to claims by current or future beneficiaries over improper investment decisions.

– Kenneth E. Petersen, Jr., VP, First American Trust, FSB, www.firstamtrust.com