ACE Class Report #69 – Advanced Financial Planning.
Begin: 5/27/2024
Finish: 7/29/2024
Title: Advanced Financial Planning
Instructor: Paul Mata
Why I choose to take this class;
I took this class to learn about policies for transference of wealth upon my demise. It is to minimize probate of my estate and estate tax liabilities and also how to invest without worries.
What I learned from this class:
Increasing (or maintaining) your FICO score:
Strategies to improve your FICO score: 1) Pay bills on time, 2) Having a good credit history, do not close account, 3) Keep credit card balance low,4) Avoid bankruptcy, 5) Separate accounts after divorce, 6) Avoid excessive inquiries, 7) Apply only for credit when it is needed, 8) Don’t use credit clearing services, 9) Correct inaccuracies in your credit report, 10) Call Consumer Credit Counselors (800-388-2227) for help.
Invest in Commodities:
Use ETF or buy actual gold.
Bonds:
When interest rates increase, bond value decreases. Consider Zero Coupon Bond – TRowe Price, to raise capital for business.
Life Insurance:
Type of insurance: 1) Term, 2) Whole, 3) Universal Life – EF Hutton in 80’s, 4) Equity Index Universal Life.
Real Estate:
Types of real estate investments: 1) Home, 2) Rental, 3) Financial Instrument Real Estate, 4) Real Estate – Storage units.
Stocks:
Stock market are driven by technology and consumerism. Ways to purchase stocks: 1) single issue, 2) Mutual funds, 3) Exchanged traded funds ETF, 4) Options, 5) Dividend Reinvestment Program, 6) High Yield Dividend paying stocks, 7) Stocks that are high process – wait for split.
Crypto currency:
Crypto – 10% currency, 90 % Technology. Block chain began in the 80’s by Bank for recording transactions, creates an unerasable ledgers. Bit Coin – digital gold only 21 million coins available. You have to report to IRS of your ownership in Crypto and pay annual taxes based on increase in value of your crypto holdings.
Retirement Planning:
IRA – A contributory plan that allow for tax deferred accumulation.
ROTH Ira – A contributory plan that allows for tax deferred accumulation, and is not deductive. Funded with after -tax dollars.
Small Business:
Used for Tax deductions which otherwise cannot be deducted.
Asset preservation:
For maximum protection consider a domestic asset protection trust – also know as an unincorporated business organization trust (UBOT. Benefit of UBOT:1) Privacy, 2) Limited Liability, 3) Not subject to probate,4) No state or inheritance taxes, 5) No Estate taxes, 6)minimize and /or avoid income taxes, 7) Reduce capital gain taxes, 8) Separate investment program.
Estate Planning Check list:
1) Last will and testament.
2) Revocable Living trust.
3) Beneficiary designation.
4) Advance Healthcare directive.
5) Financial Power of Attorney.
6) Insurance Policies/ Financial info.
7) Proof of Identity documents.
8) Title and Property deeds.
9) Digital Logins and passwords.
10) Funeral Instructions.
Estate Planning:
1) Everyone should have a will.
2) Will can be Holographic – can be hand written but should be witnessed by at least two people.
3) Every will must go through a probate.
4) All wills are public record – anyone can see the details. Probate last for 9 months and anyone can try to make a claim on your estate.
5) Probate is expensive – states will impose a statutory fee based on gross value of your estate.
6) To avoid probate you must place your assets in Living Trust (Living or Revocable)
– A living trust is still your property and can be revoked at anytime – any assets in a living Trust are subject to confiscation.
– An irrevocable Trust cannot be revoked, the assets do not belong to you any longer. Trustee has fiduciary to invest and care for assets.
7)Trust live beyond your life – Do not go to probate.
8) Trust are private – Not recorder anywhere.
9) Trust cost more than a will, but considerably less than probate.
10) Trust must be funded – Assets placed in a trust by changing the ownership – anything that has a title can be placed in a trust (i.e house, car, boat, real estate, bank and investment accounts).
– Assets without title can be listed in a trust document or assign the assets to the trust.
– Any access with beneficiary designation does not have to be put in the trust since it is already a ‘will substitute’.
11) You still need a will even though you have a trust. Name you executor, pays funeral expenses and final expenses. And have Pour-over that states that all you assets in pour over into the trust.
12) Every estate may potentially have to pay estate taxes.
13) Estate taxes are paid on the net worth of the estate. The tax starts at 37% on any amount over the unified credit limit (currently $11.5 millions).
It is important to plan your estate and leave it to your beneficiary.
How will this class contribute to my success upon release:
This estate planning course taught me a lot about investment and estate planning to minimize probate and taxation. This information can be shared with with the Geriatric community to help them manage their assets.
