We Need to Talk About Estate Planning

IF YOU HAVE DONE YOUR ESTATE PLANNING…GREAT!  WE NEED TO TALK

IF YOU HAVE NOT-WHY NOT?  WE NEED TO TALK

If you have done your Estate Planning, we need to see that your beneficiary designations are coordinated.  If you are not yet done, we need to talk about the beneficiaries and titling of your assets.

Most of us have recognized that over the years, everything we do in the world of business and finance seems to require more and more paperwork. New consumer information laws require disclosure forms; then there are those forms to comply with the Patriot Act and those for the Privacy Act. And because we live in such a litigious society, there are forms to protect you from not getting the right information and forms to protect those who give you the information. All in all, everything requires a document or form of some sort.

If you are a client of The Musuneggi Financial Group, you have undoubtedly been reminded numerous times of the need to have an updated will, beneficiary forms, powers of attorney, living will and family letter. Although having these documents was always important, in today’s world they are critical. Over the years, our firm has too often had to be party to situations where the lack of the correct documents has cost our clients time and money; and even put strains on their businesses; or on their relationships with family members, spouses and business partners.

We, once again, want to encourage you to meet with your attorney to be sure your documents are up-to-date. If you do not have the proper documents, we want to encourage you to get these as soon as possible. If you don’t know an attorney, we will be glad to introduce you to one who is a specialist in the areas of estate and business planning. If you update your documents, be sure to contact us, so that we can help coordinate your beneficiaries with your updated wills.

The way that your assets are titled is extremely important as to how they will be handled in case of your death, divorce or any other life changing situation. Be sure all of your investments, savings and bank accounts are titled correctly.

The way that your assets are titled is extremely important as to how they will be handled in case of your death, divorce or any other life changing situation. Be sure all of your investments, savings and bank accounts are titled correctly.

A FINANCIAL POWER OF ATTORNEY IS A MUST…AND HERE IS WHY

If you have accounts that are titled in your name only, you need to have a Financial Power of Attorney who can act on these accounts, if you are unable to do so. The solution may not be to add someone else’s name to the account. This could cause a gifting issue or other serious problems. Many married couples believe that because all of their accounts are held jointly, they do not need a Power of Attorney.

But IRA’s are owned individually; and if you are disabled, your spouse cannot automatically act on your behalf for these accounts. And if you are the person who normally handles an account for another, such as a parent or even an adult child, there may be times that you need to act on their behalf when they are not here to sign or give consent. A Power of Attorney can help resolve this issue, too. And with privacy laws, our firm is not permitted to give a child, a sibling, or even a spouse, information on another individual’s account, without written permission.

We are, therefore, requiring that all of our clients provide us with a copy of their Power of Attorney or we will provide you with an “Authorization To Provide Information” Form. Please fax the form to 412-341-0725, mail it to our office, or bring it to your next appointment. If you are not prepared to do a complete Estate Plan, we do have attorneys on our team who will prepare a Financial Power of Attorney as a standalone document.

As financial consultants, we feel it is part of our responsibility to help our clients survive any unexpected life situation that may arise. When you are in need of our help we want to be in a position to help. This is one way we hope to accomplish this goal.

Financial advisors do not provide specific legal advice and this information should not be considered as such. You should always consult legal advisor regarding your specific situation.

Rattled by the Market Drop? You’re Not Alone…

We witnessed an extraordinary move in the financial markets on Monday, March 9.

The Dow Industrials lost over 2,000 points, as Coronavirus fears continued to worry investors. At the same time, oil prices lost nearly 25 percent, on news that Saudi Arabia was dropping crude oil prices and raising production as well. Meanwhile, the 10-year Treasury bond yield touched an all-time low of 0.318 percent during the trading session, as unnerved investors looked for some stability.1

In times like this, we frequently hear that some find it difficult to stay committed to an investment program when fear has gripped the financial markets.

But for us, a quick look at recent history helps us keep these events in perspective.

Remember when the trade dispute with China ramped up back in February 2018? In just six trading days, stock prices had undergone a rollercoaster ride on their way to a 10-percent market correction. On February 8, 2018, CNBC reported that the Dow Industrials traveled 22,000-plus points over the course of February’s first full week of trading, due to trade-related fears.2

How about the 4th quarter of 2018? On October 10 of that year, the Dow saw an 800-point drop, largely due to rising interest rates and global economic concerns. And who can forget the holiday market trading two months later? It was a breathtaking event as the Dow lost over 600 points on Christmas Eve, then soared 1,000 points the day after Christmas.3,4

In the past few weeks, we’ll admit that we’ve done a few “double takes” at our computer screens, as we’ve watched major swings in stock prices and movements in the bond and crude oil markets.

But just like always, we are here to help you and your family answer any questions that might surface. Whatever decisions you’re considering, we’d be honored to support you through them. Reach out to us anytime.

Sincerely,

The Musuneggi Financial Group

This material was prepared by MarketingPro, Inc.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Citations.

1 – cnbc.com/2020/03/08/dow-futures-drop-700-points-as-all-out-oil-price-war-adds-to-coronavirus-stress.html [3/9/20] 

2 – cnbc.com/2018/02/09/dow-travels-20000-points-in-wild-week.html [2/8/18] 

3 – cnbc.com/2018/10/10/us-markets-bond-yields-and-data-in-focus.html [10/18/18] 

4 – cnbc.com/2018/12/26/us-futures-following-christmas-eve-plunge.html [12/25/18] 

Are You Committing These Financial Illegalities?

Some people make money moves that may get them in trouble

Provided by Christine Pikutis-Musuneggi

Americans do many things with their money and invested assets, most of them on the up and up. However, there are exceptions; cases in which people unintentionally bend or break the law. Here are a few examples, from the cavalier to the ridiculous.

Signing a check that is not your own. Have you ever wondered, “If a relative is no longer able to sign their checks, may I sign for them?” The safe answer is yes – if you have been granted power of attorney (POA) for your relative. POA gives you the legal ability to handle any financial transactions on their behalf – including writing checks.1

However, depending on the state in which you reside, you may be permitted to sign on behalf of another as long as you follow some specific rules. First, you need to have written permission from the person on whose behalf you wish to sign. Second, make sure to clearly write “P.P.” before that person’s signature. This abbreviated form of the Latin “per procurationem” roughly translates to “by proxy” and indicates you have permission to sign on their behalf.1

Overestimating non-cash donations to a charity or nonprofit. Imagine this. Someone donates a van to a food bank. In the donor’s mind, that van is worth the original purchase price of $6,500. Unfortunately, the fair market value of the van turns out to be substantially less due to depreciation. However, the donor reports the value to the Internal Revenue Service (I.R.S.) at $6,500. If the I.R.S. disagrees (and it very well might, assuming decent documentation is available), the donor might be in for a tax penalty. It’s important to remember that this information should not be construed as tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.2

Forgetting to report 100% of income. Some people intentionally misstate their incomes to the I.R.S., and other people neglect to report miscellaneous forms of income like royalties, freelancer payments, dividends, prizes, and so on. A penalty may await them.

The chances of forgetting the odd W-2 or 1099 form rise when a taxpayer moves during a year or works several jobs. Tips must also be taken into account when filing a federal tax return; the I.R.S. provides Form 4137 to help individuals determine any additional Social Security and Medicare taxes they may owe as a result of tips and wages not reported on an individual’s W-2 statement.3,4

Forgetting estimated tax payments. If an individual’s freelance income is significant enough that they expect to pay more than $1,000 in taxes from such activity, then estimated tax payments must be made quarterly to the I.R.S. Penalties may be triggered if quarterly deadlines are ignored.4

Deducting too much in business-linked expenses. This can also invite an I.R.S. penalty, and business owners, executives, and entrepreneurs can fall prey to this common tendency. The I.R.S. finds that less than 7% of such deductions are intentionally overstated or made up.5

Ruining money. Making U.S. paper currency or hard currency unusable is a federal crime. If someone intentionally or unintentionally defaces, perforates, glues together, or mutilates bills or coins to the degree that they can no longer be used in commerce, it is a violation of federal law.6

If you are guilty of negligence, it sure beats being guilty of fraud. The standard I.R.S. penalty for a reporting mistake on your 1040 form is 20% of the unreported amount. Contrast that with the 75% civil penalty for tax fraud. Of course, negligence can be viewed as fraud – and that alone should make people think twice about inaccurately stating details of their personal finances.7

Christine may be reached at 412-341-2888 or christine@mfgplanners.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations:

1 – thelawdictionary.org/article/signing-a-letter-on-someone-elses-behalf/ [7/3/2018]

2 – investopedia.com/articles/pf/07/avoid_audits.asp [5/29/2018]

3 – irs.gov/forms-pubs/about-form-4137 [11/6/2018]

4 – irs.gov/newsroom/heres-how-and-when-to-pay-estimated-taxes [11/5/2018]

5 – irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses [11/5/2018]

6 – usa.gov/currency [2/26/2018]

7 – irs.gov/tax-professionals/summary-of-preparer-penalties-under-title-26 [11/5/2018]