About Ali

Each member of the team at Waldron aims to leverage their unique skillset and experience to help our clients solve their immediate challenges and achieve their long-term goals.

This week, we turn the Spotlight on Ali Swart, CFP®. Ali is a Partner & Managing Director of Waldron’s Wealth Planning Department, where she works to develop and implement comprehensive, goal-based wealth planning strategies for our clients.

For more than 12 years, Ali has been helping entrepreneurs and their families simplify their financial lives. After earning a Marketing and a Management Information Systems degree from Marietta College, she earned a Master of Business Administration from Florida Atlantic University.

Spotlight Questions

• Why did you join Waldron?
  • I wanted to work in a place where providing a high standard of care and advice is possible.
• What is the best advice you have ever received?
  • My Grandpa once told me “Adversity breeds character.” Those three words taught me to look at every challenge I’ve faced as an opportunity for growth.
• What is something people would be surprised to learn about you?
  • I raced motocross from age 5-13. I only stopped because I broke my wrist at a Loretta Lynn Qualifier and it ruined my summer AAU basketball. I dreamed of playing basketball in college and wanted that to be my focus.
• Which of Waldron’s cultural values resonates with you the most?
  • Driven to Make a Difference.
• What is your favorite quote or motto?
  • “Discipline equals freedom.” – Jocko Willink

Waldron Private Wealth (“Company”) is an SEC registered investment adviser with its principal place of business in the Commonwealth of Pennsylvania. Company may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. For information about the Firm’s registration status and business operations, please consult Waldron’s Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov.

This material is for informational purposes only and is not intended to be an offer, recommendation or solicitation to purchase or sell any security or product or to employ a specific investment strategy. Due to various factors, including changing market conditions, aforementioned information may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Company, or from any other investment professional. Investing involves risk, including the potential loss of money invested. Past performance does not guarantee future results. Asset allocation and diversification do not guarantee a profit or protect against loss. Company is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice. 

Disclaimer

Our podcast, Wealth Simplified, aims to bring financial literacy and education to anyone who wants to learn. Whether you’re a first-generation wealth creator or a steward to multi-generational wealth, we want to make the complex simple and the vision clear.

In our first episode of What The Finance, our new short-form monthly podcast, our own Ali Swart, CFP® discusses whether I Bonds may be an attractive investment in the current market environment.

“Are Series I bonds still attractive? We believe it’s important to look at the inflation environment as well as alternatives. Any time we ask ourselves if a particular investment is attractive, we always have to ask – well attractive compared to what?”

To learn more about our podcast and listen to this month’s episode, please visit: https://offer.waldronprivatewealth.com/wealth-simplified

Disclaimer

Inherent biases make it harder for women to get funding than men, and many women start later in life and juggle family commitments.

Women have made significant strides in the business world over the last few decades — even more so as the U.S. continues to rebound from the effects of the pandemic. In fact, according to a recent report from Gusto, women started 49% of new businesses in the U.S. in 2021, up from 21% in 2019.

As exciting as it may seem to start a new venture, female entrepreneurs are also up against a host of issues that their male counterparts do not always face. Family commitments, inherent biases and evolving gender roles make opening and running a successful business uniquely challenging for women. The lack of adequate outside support and advice can also create an untenable operating environment.

Below are some of the typical roadblocks women who own small businesses encounter, as well as guidance on how to navigate them.

Sustaining wealth and building a network. 

One of the major keys to growing a business is having the right network of people at your disposal to allow for natural expansion. This might mean a strong employee base, but it also includes outside support, such as business groups or professional counselors.

The 2020 annual report from the National Business Women’s Council states that 90% of women-owned businesses have no employees. This is primarily because most female-led businesses are service-based (event planning, marketing, writing, etc.) and do not lend themselves to having multiple employees. However, this type of organization is difficult to sell as ownership retires or decides to no longer manage the day-to-day.

One of the biggest decisions a business owner will make is when, and if, to hire employees. The decision to hire often comes down to available cash flow and whether an owner desires to actively grow her business.

For this reason, it’s important to determine whether a business will be utilized as a lifestyle business or be viewed as an asset to grow for future sale or legacy wealth. Many women begin their business as a passion-focused endeavor to earn income and live and work on their own terms. Others to grow and scale a business for future generations. Assembling a team of professionals that may include an accountant, attorney, business coach and financial adviser will aid decision-making in growing and investing in your business.

Effective business credit and funding. 

Knowing the best ways to finance a business and fund growth can be a confusing, onerous process. Whether it’s through traditional lines of credit, outside investment or cash, deciding on the right approach can be overwhelming. For women, the process is often even more challenging.

Businesses led by women are 63% less likely to obtain venture capital (VC) funding than those led by men, according to researchers from Columbia Business School and London Business School. Women are also less likely to receive loan approvals from financial institutions simply because of biases against female business leaders. Research shows when women pitch venture capital, they are asked prevention-coded questions as opposed to promotion-coded questions received by men. Investors also tend to back individuals who share a similar background, leaving women at a disadvantage in front of a male-dominated financing team.

Sometimes, working with an outside consultant like a financial adviser can help you decide what option is best for you and your personal goals. They can also help you identify alternative funding options that you might not have thought of initially, such as grants or loan programs, and alert you if you are taking on too much debt.

Family and career balance. 

While we’ve made considerable progress in combating antiquated gender roles, some old habits are hard to kick. Women typically shoulder most of the household-task burden in families, including being the primary caregiver for children.

Aspiring female entrepreneurs are more likely to start their businesses once their children are of school age, putting them at risk for additional biases, such as ageism and traditional gender roles associated with being a mother and taking time out of the workforce to raise children.

The best way to combat this issue is to deepen your bench. No one person — woman or man — can run both a successful business and a successful household alone. You need advisers, employees, business groups, family members and others to fill in the gaps you simply cannot fill.

Start by joining small-business groups dedicated to women and partnering with like-minded professionals. National networking organizations such as International Women’s Forum have local chapters. Meetup.com is helpful for finding local, niche-oriented groups.  Set aside time for work vs. home life and use available resources without guilt.

Lastly, remember to take time for yourself. Mental health plays a major role in creating a sustainable business and home life.

This piece was originally posted in Kiplinger. Read more here.

Disclaimer

Improving women’s experiences with financial professionals starts with honest conversations and some smart questions. And picking the right pro – one who knows how to listen – is critical.

The personal finance industry has improved its female-focused inclusion in recent years, but there is still work to be done. Whether it be one-on-one meetings where goals and priorities are not truly addressed or where a woman feels left out of the conversation, women report feeling as though they’re not receiving the same guidance they want and need from an adviser.

Nevertheless, demand is there. Findings from Fidelity Investments’ 2021 Women and Investing Study revealed that 77% of women believe if they had a financial adviser to help them invest, they’d be more confident about their financial picture.

My experience in wealth planning makes clear that every client, regardless of gender, has different wants and needs. I find clients are most comfortable contributing to conversations when all parties commit to discussing services, goals, priorities and dreams surrounding the client’s financial picture.

For those seeking to nurture or improve relationships with female clients — and vice versa — keep these points in mind.

QUALITIES WOMEN TEND TO LOOK FOR IN ADVISERS

Female clients are not a monolith, and no two women are the same, but studies demonstrate trends women look for in advisers. According to Fidelity Investments’ Investor Insight 2020 study, women choose an adviser based on their reputation, expertise and personal characteristics. I like to shorten this to a “know, like and trust” relationship.

What do they know about their adviser? What do they like? What do they trust? Is there a personal connection in addition to a business relationship? Reputation and expertise play a significant role, but if a woman does not feel a connection with an adviser, the relationship will likely not be fruitful. In comparison, men tend to choose an adviser based on specific assets and services offered. Statistically, women are not more likely to choose female advisers over male advisers, but rather individuals who satisfy the key “know, like and trust” factors.

NEEDS AND SERVICES

Women want their investments and planning strategies to tie in with their values. An adviser may explain the best asset allocation or give advice on how the client’s portfolio should be structured, but unless they address how and why the complete financial plan is beneficial to and a reflection of her values, she may feel misunderstood or ignored in advising.

Getting to the root of the client’s values also opens the door for opportunities to educate them about their financial picture. For example, if a mother shares her priorities related to her children, she may be more interested in knowing how the investments and planning strategies benefit her family and children, as opposed to historical investment performance.

Many women want additional services to help navigate family dynamic issues, particularly regarding care for loved ones. Clients are often in situations where they’re caring for aging parents while simultaneously raising their own children. According to a recent Bank of America study on women and financial wellness, 58% of women who leave the workforce do so because of caregiving responsibilities. Working with an adviser to strategize care for a loved one will help mitigate financial and emotional stressors clients face.

Women also cite career coaching and salary/income coaching as services they find lacking with their advisers. For people who are still working, receiving feedback about how they can advance in their career or negotiate a salary to earn more money goes a long way in empowering them to advocate for their personal, professional and financial needs. Having this conversation and the others discussed here help build trust between the adviser and client.

QUESTIONS WOMEN SHOULD ASK ADVISERS EARLY ON

As described above, men and women differ in the qualities they seek in an adviser. Because of this difference, men and women often ask different questions when interviewing potential candidates. Women often focus on relationship-based questions while men ask more service-based questions. Below are several helpful questions women (and men) can ask to gauge their relationship with an adviser and the types of services and resources they can expect to receive. These questions might differ based on whether a client is looking to choose a new adviser or continue with an existing one.

If a client is looking to choose a new adviser, she might ask various questions related to expertise, scope of service and the adviser-client relationship, such as:

• Who is your typical client?
• What is the demographic you typically work with?
• How are you compensated?
• What does an engagement with you look like?
• What services do you provide? Will those services extend to my family?
• Do you ever partner with other professionals with different areas of expertise?
• How will you hold me accountable to my goals?
• These questions lay the foundation for developing a road map for success, and help clients gain a clear understanding of what their goals are and how strategic partnership with an adviser will provide accountability for those goals.

QUESTIONS ADVISERS SHOULD ASK ALL THEIR CLIENTS

From the beginning of their engagement, advisers should start by setting goals and getting to know their client. For existing relationships, it’s important to revisit these questions periodically:

• What’s important to you?
• What does investing do for your family?
• What are the goals for your family?
• What legacy do you want to leave for your children or grandchildren?
• How can I help you be accountable and achieve the goals we set forth?

By prioritizing these introductory questions from the start, advisers can establish a stronger foundation of trust and understanding with their clients.

ADDRESSING BOTH SPOUSES IN ADVISING

Advising couples has greatly evolved. Fidelity Investments recently reported that over 70% of millennial women now invest outside their workplace retirement plans. That percentage just five years ago was only about half that figure. It’s essential that advisers work to engage both spouses to create a comfortable and inclusive environment.

In many married couples, husbands often take the reins in investment conversations with advisers, but this dynamic is changing. Women are increasingly becoming the family breadwinners, and women control nearly 90% of household budgeting decisions. Women also statistically outlive their male partners and, therefore, are likely to be responsible for their financial health longer into their retirement years. Engaging both spouses encourages a balanced level of input and allows the adviser to develop a more comprehensive planning strategy with the couple — one that honors all parties’ wants, needs and values.

LOOKING AHEAD

The industry has made strides toward more equitable conversations about women and finance, but there’s still much work to be done to foster environments that acknowledge and respond to women’s priorities and include them in decisions that ultimately impact their success and livelihood.

As advisers begin asking impactful questions and addressing both spouses when advising couples, women will be more equipped with the knowledge, tools and resources they need to ensure holistic financial planning is a meaningful, highly valued experience.

This piece was originally posted in Kiplinger. Read more here

Disclaimer

The 2020 election is approaching with many important issues at the forefront of each candidate’s campaign. But there are other issues not as widely discussed yet equally important – one being Social Security reform. It is common knowledge the Social Security trust fund runs a deficit each year and any changes to the Social Security funding or payment structure would impact many.  Here are the top 5 things you need to know about the proposed Social Security changes: 

Apply OASDI (the payroll tax) on earnings above $400,000 

The 12.4% Old-Age, Survivors, and Disability Insurance tax (the payroll tax) is applied to every workers’ earnings up to $137,700 in 2020 ($142,800 in 2021). Employers and workers split this tax equally. Biden has proposed applying the tax to workers earning more than $400,000. Workers earning between $137,700 and $400,000 would not experience an additional tax. This additional tax revenue would be used to boost income into the Social Security trust and assist in paying additional benefits proposed by Joe Biden. 

Donald Trump has not made a specific proposal for Social Security for a second term. Instead, he focused on the passage of the 2017 Tax Cuts and Jobs Act with the idea that this passage would stimulate the economy. His stance was a thriving economy would create jobs and therefore add payroll taxes generated from these jobs.  

As a response to the pandemic, Trump paused the payroll tax for those earning $104,000 and under from September 1 to December 31, 2020; however, the tax must be recouped from workers’ paychecks between January 1 and April 30, 2021.  

Increase the special minimum benefit for those who worked for 30 years  

The special minimum benefit was created to provide low income earners with adequate benefits. Biden wishes to increase this benefit to 125% of the federal poverty line. Currently, the lowest benefit is $886 per month and would increase to $1,301 per month (per 2019 figures). It should be noted that this impacts very few people. According to 2020 Congressional Research approximately 32,000 of the 64 million Social Security recipients receive the minimum benefit.   

A higher benefit for those receiving Social Security for more than 20 years 

Biden has proposed increasing benefits by 5% for those receiving benefits for at least 20 years. The 5% would be phased in at 1% each year for 5 years beginning in your 16th year. 

Increase benefits for survivors or widowed spouses 

Social Security currently offers survivor benefits equal to 100% of the deceased spouse’s benefit, but this replaces the surviving spouse’s existing benefit. This means that a couple receiving Social Security income could see a 50% reduction in household benefits if both spouses’ had similar benefits. Biden’s plan would allow survivors the option of collecting 75% of the total benefit received by the household before their spouse died, as long as the new payment does not exceed certain thresholds.  

Changing the Cost-of-living calculation 

Currently, Social Security receives COLA adjustments based on the CPI-W. Biden had proposed Social Security receives its COLA adjustments based on the CPI-E which is an index more focused on goods for older Americans.  

As mentioned above, Donald Trump has currently not made a specific proposal for social security for a second term. However, it is clear Social Security reform must be addressed in the future regardless of a Democratic or Republican win.

Disclaimer

Saving and preparing for retirement can be an exciting prospect – throwing out the alarm clock, enjoying travel, and starting new hobbies.

But when you look to the future, there is a sobering component as well – the majority of us will need to plan for long-term medical care. According to Longtermcare.gov, 70% of people turning 65 today will require some amount of long-term care, with men averaging 2.2 years of care and women averaging 3.7.

For many investors, paying for long-term care and understanding how this expense can impact your spouse and heirs is a stressful thought. But like most challenges which we would rather put off – attacking this issue head on is the best way to move forward. And while there are many valid concerns people have about long-term care, there are plenty of misconceptions too. In many cases, the fears are bleaker than reality. To alleviate some of the unwarranted anxiety, I’ve identified the five most pervasive myths I’ve encountered as a financial advisor and clarified what the reality is.

1. I need to be totally broke to qualify for Medicaid

• In 2018, the national median cost for long-term care in a nursing home with a private room was $8,365/month; an assisted living facility cost around $4,000/month.
• Individuals entering into a long-term care arrangement will likely pay by one, or a combination, of three options – self pay, long-term care insurance, or a form of government assistance. Medicare does not cover nursing home or assisted living services.
• To qualify for Medicaid, the individual receiving care must have less than $2,000 in assets, although that figure can be higher depending on the state.
• If you’re married, your spouse can retain up to $126,420 (2019) in joint assets, which also varies by state.
• Your primary residence is not a countable asset as long as your home equity is less than $585,000. And the value of your home is excluded regardless of equity if your spouse or a dependent lives there.

2. I should give away all my money to qualify for Medicaid

• To combat people giving money away or transferring assets to family, Congress enacted the 5-year look back rule. Any money gifted or transferred within a 5-year period of someone entering a nursing home will still be counted as part of their assets. The penalty imposed for transferring assets in such a scenario is a delay in receiving Medicaid benefits. The length of the delay depends on the amount of money transferred within the previous 5 years.

3. I can’t have any income to qualify for Medicaid

• Medicaid limits income to 300% of the Federal Benefit Rate (FBR) to qualify for assisted living care ($2,313/month in 2019). If your income from a pension, social security, or investment income is greater than 300% of FBR, you would not qualify for assistance; however,
• Most states have guidelines to determine if an individual is “medically needy”, meaning if the cost of care reduces your income below $2,313/month, you would start to qualify. For example, if your income is $6,000/month but your care costs $4,000/month this would bring your income below the $2,313, and you would qualify for assistance to help offset the difference.

4. The nursing home will take my house

• Nursing homes are not interested in owning real estate. In fact, a patient has the right to retain a primary residence even if they are receiving care in a nursing home or assisted living facility, under the premise that if they recover from their ailment and no longer require long-term care, they would need somewhere to live. The primary residence is also protected if a surviving spouse or minor dependent continues to reside in the home. Once the patient, surviving spouse and their dependents pass, there is a Medicaid “estate recovery” provision the state may pursue to try recover money when the property is sold. The key to remember is that the state wants to recover cash proceeds from the sale of a home – not the home itself. Therefore, it is unwise to sell a home while a patient is in nursing home care. There are many ways to protect a home and its sale proceeds, but these strategies should be discussed with an elder law attorney and your financial advisor.

5. A trust will totally protect me

• A trust is a good place to start when planning for asset protection, but you must factor in the 5-year look back and understand any limitations a trust might place on access to your assets.
• Any asset transferred into the trust will be subject to the 5-year look back.
• Any liquid asset, such as a brokerage account transferred to a trust, becomes an asset of the trust which you will not be able to access outside of predetermined distributions from the trust.
• Transferring real estate to a trust means the ownership is changing hands, which may trigger the estate recovery process and may also incur transfer taxes depending on your state and county.

When planning for your retirement and for the transfer of assets to your next generation, medical expenses must be factored in. The good news is that there are many ways you can protect and invest assets to prepare for future medical expenses, including long-term care insurance, annuities and medical trusts, among other structures and strategies. If you integrate future medical expenses into your long-term financial plan, you can put your anxiety to rest, and focus on all of the great things you plan to do in retirement.

Disclaimer

When we think about integrating life insurance into a client’s financial plan we often start with the traditional needs – a family with young children, a client that may face estate taxes, or someone who wishes to pass on a legacy to family or a charity. But the potential role for life insurance can extend into tax planning, estate planning and investment management as well.

“What is the best age to start drawing social security benefits?” is one of the most frequent planning questions our clients ask. 

To make the most of your social security income, you need a thorough understanding of the rules, and an integrated strategy that fits your unique circumstances.

So, let’s start with the basics:

Know the rules

• The earliest you can draw social security is age 62 (unless you are a widow, and then you can draw as early as age 60). For each year you delay drawing up until age 70, your benefit will increase by about 8%. Full retirement age (FRA) is generally between age 66 and 67, depending on your birth year, and waiting until you reach FRA means that you will receive 100% of your earned benefits. If you can wait longer than FRA, your benefits will continue to increase by roughly 8% each additional year until you reach age 70 when benefits are capped. Age 70 is also the latest you can elect to start drawing.
• A married couple can utilize a spousal benefit strategy. This is when one spouse can draw up to 50% of the other spouse’s FRA benefit. This is typically utilized when there is a large difference in how much each spouse has earned during their lifetime. If the higher earning spouse draws early this will permanently reduce what the other spouse can receive. It should also be noted that a spouse will receive a reduction in their spousal benefit if they draw before their FRA.

Understand your expenses

• For some, social security will represent a significant portion of retirement income. Others may have additional sources of income, such as pension plans, investment income, or annuities. In either case, understanding how much income you need to support your lifestyle will play a key role in making the appropriate social security decision.

Think about longevity

• Social security is one of the few income sources that is guaranteed for life. Social security also typically gets a Cost of Living Adjustment each year determined by the Bureau of Labor Statistics. As people are living longer, having an adjusted lifetime income will become an even more valuable component of your planning strategy.
• For those with longer life expectancies, it is typically recommended that you wait until you reach FRA to maximize the benefits you will receive.
• For those with health concerns or a shorter life expectancy, drawing early may be the right choice.
• Planning for the longevity of both spouses is important when using a spousal benefit. When one spouse’s benefit is higher than the other’s, the longer a spouse can wait to draw will impact not only the amount of their own benefit, but the benefit of the surviving spouse as well.

Determining when to begin drawing social security income depends on many factors, including how long you can comfortably wait, what your cash flow needs are and whether a spouse’s needs will be part of the equation. But when you have a comprehensive understanding of both the social security election framework and what role it will play in your particular financial situation, your decision will be a lot easier to make.

If you have any questions about how to integrate social security benefits into your retirement planning, feel free to contact us.

Disclaimer

As of this post, the Mega Millions jackpot is up to $1.6 billion. That is beyond life changing, that is island buying.

With all the billboards, social media posts and articles, it would be hard to not be aware of how big the jackpot has grown. So, against your better judgement, you may have been swept up in the mania and purchased a ticket. But what would happen if you actually won? Many people have probably worked this part out extensively – what they would buy, how fast would they quit their job, where would they move or travel to. But most people have spent less time imagining how this would affect their tax planning strategy and their estate plan. The odds are pretty good that many people who actually win large jackpots have devoted exactly zero time to working through such considerations.

What are the tax implications?

For starters, if you won $1 billion, $100 million or $10 million, you would find yourself in the top federal income tax bracket, as lottery prizes are considered earned income for that year, and so right off the top, 37% of whatever giant number you won would be gone. And if you have an investment portfolio, landing in the highest federal tax bracket would also move you into the highest capital gains tax bracket of 20%. If you win a lottery jackpot, you do have the option of taking a lump sum or of structuring your winnings as an annuity, which would be a set annual payout, typically over the course of 30 years. But with a large figure like $1 billion, whether you take a lump sum or an annuity payout, you are still going to be over the annual earned income top bracket – over $500,000 for single filers, or $600,000 for couples filing jointly. And depending on your state of residence, there may be state taxes on your winnings as well; state tax rates on gambling winnings, which is what a lottery prize is, vary by state and range from 0% to as high as 8.82%. And in some states, there are local taxes to be paid as well – in New York City for example, the city tax is an additional 3.9%. But regardless of the state you live in, 24% of your jackpot will be withheld automatically when you are declared the winner, and you will be responsible for setting aside and paying whatever else you owe. There are many more tax implications to consider, but this overview gives you a basic foundation for what to expect when you hand in your winning ticket.

How would this affect my legacy?

Prior to winning the lottery, you may not have given much thought to estate planning. With a significant lottery win, and really, without a significant lottery win, your estate plan should always be a priority. Estate planning encompasses a number of considerations, but on a very basic level, it means committing your wishes for your home, vehicles, and any other assets you possess to record. Depending on your situation your estate can be very complex or it can be straight forward. Whatever your situation may be, you need an up to date, executed will clearly expressing what you want to happen to your liquid and illiquid assets. An executed will allows an estate to pass easily through probate and reduces time and expenses for your loved ones. That said, winning a large lottery jackpot will add a whole new level of complexity to your estate plan. If you elect an annuity payout, you have to consider what you wish to happen to the remainder of your prize if you should die before the 30 years are up. Would you want it split equally among your children and your spouse? Would it make sense to provide a percentage of the prize to your beneficiaries, and the rest to a trust with specific provisions as to how and when distributions would be paid? Do you have any philanthropic intentions that should be included? There are also estate tax questions you must consider – the jointly filed estate tax exemption in now $22.4 million, which means you can pass along $22.4 million to your children, friends, or whoever you’d like free from federal estate tax. The rest of the money in your estate which will be passed on at your death will be subject to a federal estate tax of 40%, and potentially additional state inheritance taxes, too.

There are many strategies you can employ to protect your assets and to make sure they are distributed how and to whom you wish. But to make sure your wishes are carried out faithfully, it is recommended that you work out a vision for your legacy with a trusted financial advisor. If you have never worked with a financial advisor before, you may have a lot of questions about your options in the marketplace. Most of the advertising out there is from large investment banks who claim to offer comprehensive financial advice but are oftentimes simply investment managers pitching their own proprietary products, and who have hundreds of clients for whom they have limited to zero availability. On the other end of the spectrum are Registered Investment Advisors, who operate under the fiduciary standard, which means they are required to always work on behalf their client, in support of their stated objectives.

At Waldron, we take it a step further. We serve a select number of clients so that all of our financial advisors are able to meet with every client they serve, and to develop independent investment portfolios and estate planning and tax planning strategies that are customized to support each clients’ unique and specific goals, and updated as life events occur. If you are lucky enough to purchase a winning ticket, be one of the outliers who doesn’t end up in a National Enquirer story about tragic lottery winners. Find a financial advisor who you trust and take full advantage of your windfall.

Disclaimer

When it comes to estate planning, most people know the basic documents they should have in place, such as a will, power of attorney, and healthcare directive. 

We give careful consideration to the big picture items, but what about digital assets?

With our ever-expanding digital footprint, plans should also be made for your Gmail, Netflix, iTunes and Facebook accounts, and those beloved airline miles. Will your surviving spouse or executor know which websites to visit if they need to pay your utilities or make a mortgage payment? Will they have the credentials and authorization to access them? Are they aware of the other accounts you use which may also need to be closed?

Digital assets are a largely neglected part of the estate planning process, with a far from comprehensive collection of laws governing their management after a user has passed on. Terms of service agreements (which few actually read) generally dictate what happens to an account after an account holder dies, but without specific authorizations in place or login credentials, surviving spouses or other family members will likely run into significant red tape when they try to manage or close them. Google has implemented an “inactivity account manager” so a user can specify what happens to their account after a period of inactivity, and many other firms are implementing contingencies as well, but it is up to the user to take advantage of these options and provide directives.

Here are some recommended steps to take to ensure your digital assets can be managed or closed after you have passed on:

Virtual Asset Identification Letter (VAIL)

Create a VAIL and share it with your spouse or other trusted family member, ideally as a hard copy secured in a safe and in a digital storage account. This letter is an inventory of all your online accounts, and should include login information, answers to security questions and PINs. Your VAIL should not be included in your will, as a will becomes public record once you have passed and your will goes into probate.

Digital assets to be included in your VAIL:

Banking and securities accounts

• Checking/savings
• E-Trade, Fidelity, or any other trading platforms that you use
• PayPal
• Credit cards

Email accounts

• Gmail, Yahoo, and any other accounts that you use

Computing/social media/digital accounts

• Desktop, laptop, smart phone, tablet
• Facebook, Twitter, Instagram, LinkedIn
• Online picture libraries such as Shutterfly or Snapfish
• iTunes, Spotify

Loyalty programs

• Airline miles
• Retail store rewards

Household accounts

• Utility companies such as phone, cable, power, garbage
• Debt accounts such as mortgage, automobile, and student loans
• Insurance providers for home, auto, life, and health

This list is not exhaustive, if you think of more relevant accounts, be sure to include those as well.

Include executor access language in your power of attorney

Language must be added to your power of attorney documents to specify your executor’s ability to access electronic communications and digital assets. If available, include your state’s statute for the Uniform Fiduciary Access to Digital Assets legislation. Currently, 39 states have adopted the act.

Provide guidance and direction for protection or disposal of digital assets

Do you really want your executor to read all of your emails? Do you want your heirs to have access to online picture libraries? Document your wishes for transferring or terminating your digital accounts to ensure they are handled the way you want them to be.

Consider an online vault

Companies such as Everplans and Dropbox allow clients to upload documents and store them securely. Many financial firms utilize software programs that have a vault included – ask your financial advisor if that’s an option.

Utilize a password manager

Programs like LastPass can store usernames and passwords for all of the websites you use. You create one master password to access all of them.

It may take a few hours to organize all your accounts and to document your login and security information, but it will take you a lot less time than it will for your surviving spouse to try and navigate through each of your accounts’ customer service departments, at a time that’s already extremely challenging. And keep in mind, if a surviving family member is unauthorized or unable to access an account, they may not be able to close it or to retrieve or protect the assets stored there. The time you spend now planning for the management of your digital assets will provide you with peace of mind, and will make things much simpler for your surviving spouse or other trusted family members.

Disclaimer

With my husband and I working full-time, and a new baby at home, time is in short supply.

Time is actually a little bit more than scarce, it’s like unobtainium from the movie Avatar. However, one service I have found which not only saves me time, but improves the end results, is curbside pick-up from the grocery store. It saves me time because I can review my list and submit my order in a quiet, focused environment. Most parents can appreciate the struggle of keeping a child occupied in the shopping cart while trying to review your grocery list and follow an efficient route around the store. With online ordering, I can place my order after my son has been put to bed. Being able to focus in peace allows me to cross-check my order with my shopping list and double-check what I have in the kitchen so I won’t needlessly buy something I already have.

Curbside service at my grocery store (Giant Eagle) costs $4.95 for pick-up or $12.95 for delivery. So far, I have stuck with curbside pick-up, but with online ordering, the actual visit to the store to pick up my groceries is much easier too. Rather than walking around the store and trying to figure out where they moved the cream cheese (stores reorganize their shelves every 6 months or so to make sure you have the opportunity to walk by every impulse item), I simply park at a reserved spot and call the pick-up hotline. A curbside team member rolls a cart to my car and loads everything in the trunk – I don’t even have to get out of the car. Once you’ve placed your initial order shopping is even faster, as you can copy and edit previous orders, so staples like your preferred type of eggs, milk and deli meat are already specified. And if you like to scan the weekly circular for specials or use coupons, all the sales are featured on the online interface, and coupons can be entered when you place your order.

Gargantuan parking lots, infinity lines at check-out, and changing store layouts can be aggravating – throw in an eleven month old who really wants out of the shopping cart and you truly have a situation to avoid. Luckily, curbside grocery pick-up allows you to do just that.

Disclaimer