Trusts are effective financial planning tools based on a structure that is simpler than it may seem. The creator of the trust contributes something of value into the trust and creates instructions as to how it will be managed and eventually disbursed. The trustee is responsible for keeping the property safe and managing and distributing it according to the instructions. The beneficiary is the person or entity that eventually will get the property in the trust.

Trusts may be useful in estate planning, asset protection, and providing for elderly parents or other family members who may be unable to manage their own affairs.

Establishing a trust isn’t especially difficult, but it’s not a do-it-yourself project. It’s important to work with an attorney to be sure the trust complies with legal requirements and will actually carry out its intended purpose.

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If you’re a Baby Boomer, or your parents are, here’s a ray of sunshine to brighten your day: Boomers have so severely underfunded their retirements that Congress may turn to their children to bail them out.

This is the gist of an article in the April issue of Financial Advisor magazine by Dr. Somnath Basu, professor of finance at California Lutheran University. He notes, “The problem could be as big, if not bigger, than the 2008 financial crisis.”

A new study by the Center For Retirement Research, Boston College, detailed on CNBC.com, finds the retirement years for Boomers will be much leaner than for their parents. An estimated 51% of them will be unable to maintain their current lifestyles in retirement.

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Is Rick Kahler smarter than a fourth grader? Maybe not when it comes to creating Internet videos. His own opinion, according to a May 1 article in Financial Planning magazine, is, “A third- or fourth-grader could do more with video than I can.”

Still, Rick is one of a handful of planners cited in the article as among the first to use online video to market their services and communicate with clients. He says using private client-only videos to guide clients through forms and money exercises helps him and his clients use their time more efficiently.

Read the piece by Samantha Allen, titled “The Producers,” here.

Does that new employee in your financial planner’s office look too young to know anything about financial planning except how to apply for college loans?

Don’t worry, he or she might have more education in financial planning than you think. According to an article by Jason Kephart published April 29 in Investment News, increasing numbers of colleges are offering majors in financial planning.

This is good news for planning firms and their clients, according to several planners, including Rick, who were interviewed for the article.

Read the entire piece here.

Since the death of singer Whitney Houston, I’ve seen several articles from attorneys and financial advisors about the errors in her estate planning. They have summarized three areas where it was badly flawed:

1. Lack of privacy. Ms. Houston had a simple will that was subject to public probate, rather than a living trust that would have kept her affairs private. Anyone with thumbs and access to the Internet can see a copy of her will.

2. Lack of protection from claims, con artists, and circumstances. The estate, estimated to be worth over 20 million dollars, was left to Ms. Houston’s daughter, Bobbi Kristina Brown. A vulnerable young woman just barely of legal age will receive three huge payouts over the next decade and become a multi-millionaire by the time she’s 30. A trust could have given her some limits and structure, as well as providing for advisors to help her learn how to manage her wealth and protect herself from predators.

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The recent discussion of the “Buffett Rule” proposal to increase taxes on the wealthy has focused attention on U. S. tax rates. It’s giving Americans a chance to better understand our tax policy and the economics of the free market system.

Mitt Romney, the probable Republican Presidential candidate, has come under attack from both Democrats and other Republican primary candidates for his high income and net worth and his low overall tax rate. The arguments are that Romney made his money by the wrong type of capitalism and that he pays too little in federal taxes.

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The KFG blog is one of five financial planning blogs chosen this week as “great resources for professional planners, do-it-yourself planners, students and faculty” as well as “good examples of how to set up and write a financial planning blog.”

Brent Carnduff, a member of the Internet community SocialTurns, encourages members of the financial industry to make effective use of social media. On April 16, he posted his list of “5 Financial Planning and Retirement Blogs to Follow.” Rick’s blog was one of the five.

Read the entire article here.

Mutual funds that use futures contracts to invest in commodities are regulated, like other mutual funds, by the Securities and Exchange Commission. A recent rule change will require them to be registered with the Commodity Futures Trading Commission as well.

A recent Investment News article cited several advisors and fund managers, including Rick, who doubt whether the double registration will do anything for investors except increase their costs. Rick said, “If anything, we need the right regulation, rather than trying to force two different regulators to mesh.”

Read the entire article here.

Recently I read a news story about a small business owner whose landlord was not renewing her lease. A chain restaurant was buying the building and intended to raze it. The business owner was distraught, as she had recently spent $30,000 to remodel the property.

One common reaction to stories like this is anger at a landlord for unfairly selling a building out from under a tenant. Another is, “Why would tenants spend so much money remodeling a building they didn’t own?”

Neither response sees the whole story.

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I had no hat and no sunscreen to protect me from the scorching heat in the Australian vineyard. Yet I couldn’t leave as I listened to Leigh telling his family’s heartfelt story of grit, passion, and struggle. Standing among the vines seemed a fitting place to hear it.

Many people unassociated with business know little of the risks associated with pursuing a dream and turning a passion into a vocation. In today’s America, when blaming the wealthy for the country’s woes is encouraged, there is a growing notion that those who have wealth got it from their parents or through unethical and shady pursuits. While that is certainly true of some, they are the extreme minority. Research shows that 85% of those who build wealth acquire it the “old fashioned way” by either working hard, risking much, spending little, or saving much.

So it was with Leigh’s family. Continue Reading »