Contact Us

Home Equity Loan or 401k Loan? Both Have Risks


HELOC: A home equity line of credit (HELOC) is generally used to fund home improvements or for home-related emergencies. You can open a home equity line of credit and use it for as long as the draw period lasts, this is typically 5 to 10 years. The draw period is the time during which you can borrow from the HELOC. After the draw period, the repayment period begins, this typically lasts 20 years. The credit limit is based on the amount of equity that you have in the home, typically up to 85% of the value minus the amount you owe. This line of credit will often have a more favorable interest rate because it is backed with your home as collateral. HELOC’s usually have adjustable interest rates which fluctuate with the prime rate. Interest on your HELOC may be tax deductible, just like your mortgage interest. Some HELOC’s will have associated...

Read More

Three Estate Planning Tips to Avoid Probate


Probate is the process of validating the legitimacy of a will, distributing assets according to that will or intestate laws if no will is present, and paying any claims of the deceased’s creditors. This process is known to be fairly expensive, including costs such as hiring attorneys, appraisers, accountants, auctioneers, etc. The probate process can also be very lengthy, in extreme circumstances lasting a couple of years. The process is also open to public inspection. For these reasons, many people try to avoid the probate process all together. Here are three easy tips to avoid your assets passing through probate: JTWROS: Add a “joint owner with right of survivorship” to a bank account or other property. For married couples, using the distinction of “tenancy by the entirety” is another alternative. Be cautious of any taxable gifts this strategy may create, either immediately or in the future. Also be aware that there are...

Read More

Beneficiary Designations: What is the difference between Per Stirpes and Per Capita?


You’ve done your part to set up a will and properly named your beneficiaries on key accounts. You’ve made your first important moves in the sometimes complicated process of estate planning. Suddenly, a tragic death in the family has you wondering “What will really happen with my assets when I pass?” Properly setting up your beneficiary designations is critical to ensuring your wishes are followed when you’re gone.   When a Parent Loses a Child When a parent loses a child a “per stirpes” or “per capita” designation comes into play. These estate planning terms may seem like mere legal jargon, but they are crucial to ensuring that your assets pass to your heirs according to your wishes. The terms are added to a beneficiary titling to determine where the deceased child’s share of your inheritance will go.   Per Stirpes – This designation means that if one of your children dies before you, their...

Read More

FAQs About 3 Common Investment Accounts


What is the main difference between a Roth IRA and a Traditional IRA? In a Traditional IRA, contributions can be tax deductible and growth is tax-deferred. Tax is paid upon withdrawal in retirement. Roth IRA contributions are not tax-deductible. Qualified Roth IRA withdrawals and growth are tax-free. How do I decide which to choose? Choosing between the two types depends on your income tax bracket now versus the future. Since there is no way to tell the future, you will need to come up with an estimate for what your tax bracket will be in the future. This also depends on what your specific goals are for future saving. How can I estimate my retirement tax bracket? You can begin by looking at your current tax return and eliminating things like your wages since you will not be working anymore and adding things like Social Security or a pension benefit. There are even some helpful...

Read More

The 6-Point Checklist To Plan Your Estate

Senior Couple Meeting With Financial Advisor At Home And Smiling

Estate planning is a required consideration for anyone with assets, no matter how modest. It ensures your possessions, legacy and loved ones are protected in the case that anything were to happen to you. To help you effectively plan your estate, we put together a 6-point checklist. 1. Inventory First you should create a list all of all assets and any debts you have in your name, making sure to include both tangible and intangible assets. Tangible assets could be your house, valuables, car, boat, land, etc. Intangible assets would be bank accounts, retirement accounts, and life insurance policies. You should have all tangible assets valued by an assessor in order to document the value of each asset on your inventory list. Make sure to document any current or future debts that are held in your name also. 2. Draft Next, create a draft plan specifically identifying where each asset should go after you...

Read More

What you need to know after the death of a loved one


After a loved one passes there can be many tasks thrown your way all at once. If this is your first time experiencing the death of a close family member, the overall estate process can be foreign and very confusing. There are three paths in which your loved one’s assets will take to be delivered to their respective heirs: Through Probate This is when property of the loved one is either left to a specific individual through their will or the loved one died without a will (intestate) and the assets must be divided by the state. The probate process includes identifying all the deceased person’s assets and distributing them to creditors and heirs. This process begins by petitioning the probate court in one of two ways depending on whether the decedent passed with or without a will. With a will (testate): the executor named in the will presents the will for probate...

Read More

3 Ways to Reduce Your Tax Bill When Paying for College


1) American Opportunity Tax Credit - Did you attend college for an undergraduate degree in 2016? Then you may be eligible for the American Opportunity Tax Credit. The credit is available up to $2,500 for qualified tuition, fees, and course materials. Also up to 40% of this credit is refundable. This means that even if you do not owe any taxes this year you will still be eligible for a refund of up to $1,000. The credit may not be available if you are single and have income over $90,000 or if you are married and have income over $180,000. Other limitations apply; you should check with your tax preparer to see if you qualify. Another thing to consider is that the credit is also only available for the first four years of post-secondary education. So what if you’re in grad school? You may not be out of luck! 2) Lifetime Learning Tax...

Read More

Why Comparing Your Diversified Portfolio to an Index Doesn’t Make Sense


It is a common financial practice to compare investment returns to a benchmark in order to evaluate performance. Most investors impulsively compare their portfolios to those indexes the financial news outlets commonly report on such as the Standard & Poor’s 500 Index and the Dow Jones Industrial Index. The problem with this is these indexes were designed to track the fortunes of large American companies only, not the average investor’s diversified portfolio. The S&P 500 is made up of the 500 largest corporations listed on the New York Stock Exchange. It would make sense to use it to track the performance of the U.S. large company stock portion of your portfolio. But usually your portfolio contains other asset classes too, such as small company equity, international equity, and bonds. These asset classes within your portfolio are not included in the composition of the S&P 500, so comparing them to it does...

Read More

A Potential IRA Change with Big Tax Implications


Congress may be eliminating a prominent tax advantage of inheriting an IRA. The Senate Committee on Finance voted 26-0 in September to end the “Stretch IRA” for non-spousal beneficiaries. A “Stretch IRA” is a tax efficient way to pass assets to your heirs after death. Your beneficiaries inherit your IRA and are required to take the annual minimum distributions. However, they only owe tax on the withdrawals. The rest of the account continues to grow tax deferred. If this new rule is passed, it will dramatically speed up the liquidation process and eliminate the ability to stretch an IRA out to multiple generations. It will force non-spousal beneficiaries to pay tax on the entire IRA balance within a 5-year period. For example, Jack Doe passes away with a $500,000 IRA whose sole beneficiary is his daughter, Jane. Under current law, Jane can keep that money in her Inherited IRA, only paying tax...

Read More

Tips for Dealing with Student Loan Debt


The average student loan debt for an individual graduating from a 4-year New York State institution in 2015 was $30,104, according to a state-by-state study by the Institute for College Access & Success. This number increased 4% from 2014 and is expected to continue to rise in future years, according to industry experts. In an economic environment where it is nearly impossible to attain a high-paying job without a college degree, student loan debt is increasingly affecting the country’s financial health. There is some good news, however.  The availability of refinancing tools for students to manage and minimize their debt after graduation is on the rise. Refinancing student loans is very similar to refinancing a mortgage. Banks will start by looking at your credit score, annual income, savings, and college degree type to determine if you are eligible for refinancing and possible loan consolidation opportunities. Refinancing is possible for both private...

Read More