Month: December 2019

If you die without a will, the court will decide how to distribute your assets among your heirs.

This process will take place in one or more state probate courts, depending on where your assets are located, and it will be based on state laws.

This can be expensive, and your estate may have to shoulder court costs and pay for any legal advice your heirs may require. Is this what you want?

Probably not. Your estate represents a significant amount of work, and it is natural for you to want to leave as much as you can to your heirs, as efficiently as possible.

One way to do so is to avoid probate court altogether. How? To avoid probate, increase the number of items in your estate that are transferred without a probate procedure. Here are three ways to achieve that.

1. Register assets as “joint tenants with rights of survivorship” or “transfer on death.” You can specify that many of your assets, such as securities and brokerage accounts, be set up as “transfer on death”. Similarly, other assets (such as properties) can be titled as “joint tenants with rights of survivorship.” Upon your death, these assets will bypass probate court and go directly to whomever you specify.

2. Ensure retirement accounts have a designated beneficiary. Many retirement accounts (such as IRAs and 401(k) plans) and insurance products allow you to name who should receive the assets when you die. These assets are excluded from your probate estate and transferred directly to your heirs.

3. Place assets in a revocable living trust. A revocable living trust is a legal entity that has the power to hold legal title to assets. Assets in revocable trusts provide for a direct transfer of assets to your beneficiaries.

Feel free to reach out to us if you need guidance with this process.

The concept of indexing is simple: Instead of trying to beat the market, you try to meet the market. But is indexing the right approach for you?

The 1976 launch of the Vanguard 500 Index Fund created an entirely new philosophy of investing: holding all the stocks in the market instead of trying to pick potential winners.

Index funds, as they are called, are thus considered passive investments, and they often have lower turnover and lower fees than actively managed mutual funds.

Today, index funds track all kinds of market indices. There are more than 1,000 index funds and exchange-traded funds (which are similar to index funds) available. Many of them target specific countries (such as China), industries (such as technology), and even strategies (such as long-short investing).

The strategy has often worked. Many studies have shown that the bulk of traditional mutual funds have not been able to keep pace with index funds over time. But it is hard to determine if an index fund is right for you, and if so, which one.

If you think index funds are right for you, you may want to stick with the basics, such as choosing one U.S. stock fund, one international stock fund, and one bond fund.

Or you might use index funds for certain allocations (such as large-cap stocks) and use actively managed mutual funds where manager expertise and research may be more beneficial (such as small-cap stocks).

We can help you determine whether indexing is suitable for you based on your individual financial situation and goals.