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Executive Summary:  1. Concentrated stock / position.  2. College expenses. 3. Death – premature – sickness – accident.  4. Disability Income (Insurance) 5. Diversification – inadequate. 6. Divorce – self – children – grandchildren? 7. Downsizing. 8. Drivers – teenagers – liability. 9. Estate documents complete - up-to-date. 10. Estate distribution not as wanted. 11. Estate plan not optimized – paying unnecessary taxes. 12. Estate taxes liquidity available to pay – avoid forced sale.  13. Health insurance, 14. Homeowners insurance.  15. Illiquid assets. (Art, jewelry,)  16. Long Term Care. 17. Pension. 18. Privately owned business. 19. Real estate - rental - commercial. 20. Second marriage – yours – mine – ours. 21. Social Security. 22. "Toys" (planes, boats etc.) sufficient insurance including umbrella Liability, 

  1. Concentrated Stock Position (also see Privately-owned business; Diversification: Many "self-made" high net worth people  (i.e. you didn't inherit the great majority of your assets) gained some or the very great bulk of their assets from e.g. a business they started and still own - stock-based compensation as a top executive of a public company, a non-diversified (or low diversified) venture capital "win," etc. Good long-term prudent financial planning / investment management dictates you diversify as much as you can as soon as realistic.
  2. College expenses: What have you done are you currently doing to save money to pay for college for children / grandchildren?
  3. Death of a primary or either breadwinner. Premature / sickness / accidental: How much life insurance is required to maintain your family's lifestyle / future needs / current home / education. How much life insurance is currently in force? When does it expire or suffer a predetermine large rate increase? (e.g. typical term insurance.)
  4. Disability Income (Insurance) The typical working breadwinner (i.e. not retired) has a large / very consequential projected future income. Based on current income from work plus potential promotions / raises etc. Unless you happen to be in the lucky few of lottery winners / inherited wealth / IPO recipient etc., a Needs Analysis might show a very significant decline in future projected retirement income / net worth should you become unable to work.
  5. Diversification: See also concentrated stock position, privately held business. If your current or especially projected future net worth is primarily held in liquid assets of any kind - e.g. publicly-traded securities - and / or personally owned investment real estate / etc., conservative diversification gives you the best chance of avoiding a catastrophic loss of net worth should one security, company, industry or asset class fall on hard times.
  6. Divorce: A difficult emotional topic, to be sure. A long-term marriage without a pre-nuptial agreement could not uncommonly face cutting net worth in half. Seek counsel to be sure your potential loss is not significantly greater. And review liquidity needs with financial advisor(s.) Also see Estate Distribution: Is a potential inheritance protected from a divorce of a child or grandchild?
  7. Downsizing: Financial and / or non-financial reasons. More convenient location - work - commute - grandchildren. Updated / ease of use / one level living / better amenities. Community.
  8. Drivers: Might it be possible to remove / change ownership of the vehicle(s) any teenagers drive? Do the owner(s) of the vehicles used have the maximum possible liability insurance, as well as coverage for damage to the vehicles?
  9. Estate documents + Beneficiary Designations: Are Wills, Trusts, Beneficiary Designations and other documents complete? Signed? Location of copies known by all relevant parties and secured? (e.g. attorney office etc.) How recently have documents been reviewed? Do documents include accurate and up-to-date assets? Family members? (new grandchildren, spouses of grandchildren, etc.) 
  10. Estate distribution: Should both parents die prematurely, do current wills, trusts etc. provide the "best" distribution to future generation(s?) Are Lump Sums avoided or not used for heirs who are unwilling or unsuitable by education or temperament to manage significant inherited assets? Are "staged" distributions (e.g. 1/3 at 25, 1/3 at 30, etc.) avoided because if death occurs shortly thereafter, the heir is still faced with managing (and potentially mismanaging one large sum.) Or is outside professional management structured to be required, either lifetime or until an older age? Also see Divorce.  Is a potential inheritance protected from a divorce of a child or grandchild? Note that Beneficiary Designations could supersede Wills & Trusts unless a Trust / Trustee is named Beneficiary in the appropriate documents. 
  11. Estate Plan Not Optimized: Are you taking advantage of all legal and useful strategies to minimize the ultimate Federal Estate Tax due?
  12. Estate Tax Liquidity: If the estate is of such size that it is probable that Federal Estate Tax will be due at 2nd death, are there sufficient liquid / near-liquid assets in place to pay the tax and avoid a forced sale of less liquid assets?
  13. Health Insurance: Sufficiently large dollar coverage to protect against an expensive illness? Flexibility to seek treatment anywhere, especially e.g. at major academic medical institutions when most helpful?
  14. Homeowners' Insurance: Sufficiently large dollar coverage for all risks? Clear understanding of what, if any, payments required from Home Owner? Ease of claim and repair process? Properly coordinated with other insurance - motor vehicle, liability, umbrella, personal high value articles?
  15. Illiquid assets: Properly insured as completely as possible or realistic. Up-to-date valuation documents in the event of loss, damage or possible sale? Too much illiquid assets and not enough liquidity for foreseeable events?
  16. Long Term Care: Is the current residence conducive to aging-in-place? Could an outside / professional caregiver be accommodated? Even if assets / resources are sufficient, does it make better financial sense to transfer some of the financial risk to Long Term Care insurance, if you can qualify medically / health underwriting?
  17. Pension(s): Both spouses. Do you have up-to-date documentation from provider about the exact amount to be paid, or the choices based on age, spousal or single, and other possible choices? Is the financial provider of the pension payments clear? Is that provider large and stable enough to count on payments to be provided?
  18. Privately-owned Business: Is ownership properly documented by attorney / legal documents? Is there an up-to-date an outside valuation? Should there be? Is there a Succession Plan in place? Is it funded? Can the heirs / surviving spouse readily and with low stress receive their ownership value (all or most) in liquid or easily convertible assets?
  19. Real Estate (non-primary residence.) Rental, Commercial, inhabited by other family members. Is ownership of all real estate clear and legally documented? Do all owners have up-to-date estate documents with proper provisions for what happens with the deceased's ownership share of real estate? Are there up-to-date written valuations of all real estate? For primary residence, after death of second spouse is distribution of the primary residence clearly documented and practical?
  20. Second Marriage - "Yours, Mine, Ours" Do both spouses have up-to-date estate documents? Does the surviving spouse, regardless of which spouse dies first, have the choice of remaining in the primary residence until death? If not, have other residential arrangements been made? Are all jointly-owned assets identified and covered in the appropriate estate documents? Have or will all the adult children of both spouses been properly informed of all relative estate plans?
  21. Social Security: Have both spouses successfully gathered their own Social Security documents and know their benefits per Social Security? Are both spouses clear about the most financially beneficial way to claim their benefits?
  22. "Toys" - e.g. boats, planes, vehicles etc. Is ownership legally documented? Is estate distribution clearly documented in owners' estate documents? Is there sufficient insurance, especially including liability and umbrella?

Investments in securities do not offer a fixed rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. No system or financial planning strategy can guarantee future results.

Diversification does not assure a profit or protect against loss in a declining market.

 Thursday, February 4, 2021

While offering but not requiring implementation of advice, products and / or services through us. 

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