Global stocks rebounded Friday following positive U.S. and Chinese data. But U.S. stocks lost ground late and ended little changed. Investors appeared rattled after Federal Reserve Chair Janet Yellen said aggressive measures might be needed to rebuild an economy whose potential is slipping. For the week, the Dow fell 0.56 percent to close at 18,138.38. The S&P lost 0.95 percent to finish at 2,132.98, and the NASDAQ dropped 1.48 percent to end the week at 5,214.16.
Pay It Off –
In 2007, 44 percent of U.S. households had a credit card balance they carried over from month-to-month. By 2013, that percentage had fallen to 34 percent of households (source: Survey of Consumer Finances, BTN Research).
Most Ever –
U.S. retirement assets (DB plans, DC plans, IRAs) reached a record $24.5 trillion as of June 30, up 76 percent from $13.9 trillion on Dec. 31, 2008 (source: Investment Company Institute, BTN Research).
Of individual stocks in the S&P 500, 106 gained at least 20 percent during the first nine months of 2016 (change of the stock price without factoring in the impact of dividends) including 25 stocks that were up at least 40 percent YTD through Sept. 30, 2016. Additionally, 161 stocks (32 percent of the stocks in the index) have dropped in value since the end of 2015 (source: BTN Research).
WEEKLY FOCUS - Trusts: Potentially Powerful Estate Planning Tools
Congress has designated the third week in October as National Estate Planning Awareness Week. In recognition of the observance, this week’s article looks at trusts, increasingly popular estate planning vehicles. Used correctly in certain conditions, trusts can ensure individuals’ assets are distributed as they wish after their death and save their family time, money and paperwork. Although there are dozens of different trusts, they fall under four basic categories.
Irrevocable. In the absence of extreme extenuating circumstances, this trust cannot be changed or revoked. Once a grantor (person establishing the trust) transfers property into it, they can’t take it back. Because of this, an irrevocable trust is usually not subject to probate or estate taxes.
Revocable. Far more common than the irrevocable trust, a revocable trust allows the grantor to change or terminate the trust during their lifetime. Consequently, the trust’s assets are considered the grantor’s for creditor and tax purposes. The trust becomes irrevocable when the grantor dies.
Testamentary. Created through a will after death, this type of trust is created for young children, relatives with disabilities or others inheriting a large sum. It enables a trustee (the person the grantor designates to administer the trust) to distribute income as scheduled or needed. Often used in second marriages, a spousal testamentary trust can care for a surviving spouse but pass remaining assets to the grantor’s children after the spouse dies. Since all the funds are placed in the trust after death, they are subject to probate and transfer taxes.
Living. According to a recent AARP study, almost a quarter of Americans aged 50 and over have a living trust. This trust goes into effect immediately. It can be beneficial if the grantor wants their estate holdings to remain private, fears they may become unable to handle their finances due to a debilitating disease or holds out-of-state property – particularly one in which probate is burdensome.
Setting up and administering a trust can be more costly than creating a will, but may be worth the additional expense under the right conditions. Because there are so many choices and considerations, establishing a trust requires help from a financial professional and an attorney who specializes in estate planning. We would be happy to work with you, your attorney and tax professional to help you find beneficial solutions for your situation. Call our office to schedule an appointment with us and your other trusted advisors. Securities America and its representatives do not provide tax or legal advice.
The Dorion-Gray Team
Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. a Registered Investment Advisory Firm. Dorion-Gray Retirement Planning is a trade name of Dorion-Gray Financial Services, Inc. located at 2602 IL Route 176, Crystal Lake, IL 60014. Dorion-Gray and the Securities America companies are separate, unaffiliated entities.
Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classes. Neither asset allocation nor diversification guarantee against market loss or greater or more consistent returns.
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