Tuesday, March 24, 2009
Monday, March 2, 2009
Wills in 2009
The following are red flags:
- Formula Clauses in Wills. While common, it is suggested you use specific numbers in examples to reflect your intent.
- Grantor Retained Annuity Trust (GRAT). This is a strategy designed to avoid or minimize the gift tax that applies to a lifetime transfers of more than $1 million. There is talk of changing the terms of this annuity, which is based on section 7520 of the I.R.S. Code.
- Family Limited Partnerships are under attack and Congress may close this loop-hole very soon
- About half the states, including NY, NJ & CT, impose an estate tax and their exemption is smaller than the federal one ($3.5 M). In New York, for example, the exemption is only $ 1 M.
Miscellaneous
Money in IRAs or from life insurance policies are not covered in wills. instead, the money goes to the people designated in the beneficiary forms. It is still a good idea to have a copy of the designation form on file with your will and have your lawyer coordinate it with the rest of your estate plans.
What to look for in a Financial Planner
First, and foremost, your financial planner should have impeccable credentials. They should be free of black marks on their regulatory or disciplinary records. Second, they should act solely in your best interests, not theirs or act on behalf of their company's product.
Ask if they receive a commission for any product they suggest. It's okay to ask questions. In fact, be a pest!
Remember that there is no such thing as low risk, high return. And "market timing" is a myth. You cannot ride the market like a roller-coaster and think you know when to get off.
Finally, no one can predict certainty. As we all know, life is unpredictable. So be conservative and recognize your own limits. Most people aren't honest with how much investment risk they can handle. Try and visualize how the risk you face may actually play out. For example, if you have $1000,000 to invest with high risk, ask yourself how would your life change if in a year your investment dropped to $70,000? Gaining an accurate assessment of your risk tolerance is very important!
For more information reference Ron Lieber's article "Rules for the New Reality" NYT (February 26, 2009)
Sunday, March 1, 2009
Why iPhone Users are Willing to Pay
The best-selling computer book so far this year is "iPhone: The Missing manuel." What's interesting isn't the book, but that it's the most popular because it's a downloadable application for the iPhone, which indicates that iPhone users are willing to spend money according to Saul Hansell of the NYTs. He argues that Apple has created an environment that makes buying digital goods easy and common. Basically, by creating an infrastructure that supports one-click purchases of songs and videos, it is easy to add applications in the same paradigm.
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