Our Blog

DWM is committed to learning for its team, clients and friends. In this changing world, it’s extremely important to stay current in all areas impacting your financial future.

We encourage all of team members to “drill down” on current topics important to you and contribute to our weekly blogs.  Questions from our clients and their families are often featured in our blogs.  

Financial literacy for clients and their families is very important to us.  We generally hold an annual wealth management seminar for all of our clients.  We encourage regular, at least semi-annual, meetings in person with our clients to review family updates, progress on financial goals, asset allocation and performance of investments.  We’re happy to assist younger members of the family as part of our total wealth management program.

Here’s our latest blog:

 

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How to Make an Appropriate End to "Your" Era

Written by Ginny Wilson.

barbara-bush 2Barbara Bush was one of our country’s most cherished Grande Dames of politics and we were all saddened recently when she passed. With her signature white hair and pearls and her no-nonsense attitude, we were a little in awe, as well as inspired, by her example of family loyalty, faith, public service and good manners. She broke boundaries as the First Lady and championed education issues in her life, while remaining a loving wife and strong matriarch for her family. Regardless of what you think of her family’s politics, Barbara Bush was a woman to be admired.

Part of her legacy will now be the grace and dignity with which she managed her end of life. Surrounded by family at her home, she left this earth with the peace and comfort that we all might aspire to. Achieving that smooth and tranquil transition requires some planning, however. There are certain things that can and should be arranged and recorded ahead of time so that one’s loved ones are not unduly burdened and so that your own comfort and care are well-managed.

Caroline Feeney, in an article on wealthmanagement.com, recently outlined some of the lessons learned by watching Barbara Bush. We think these are valuable to review.

1.Understand Probate – Anyone who has been through probate will tell you to avoid it! Probate can be expensive, time-consuming and becomes part of the public record. Protecting your assets with proper titling and using a revocable or living trust can keep assets from going through the probate system. All revocable trusts remain private and anyone can set one up for their beneficiaries.

2.Plan for Contingencies – Think of all the scenarios that might come up. Select trustees and successor trustees with care and with a back-up plan. Consider the age, health and circumstances of beneficiaries, like substance addiction or divorce protection, when determining the age or terms of your designations.

3.Personal Property Memorandum – These are the softer, more sentimental items that you own. Houses and cars are protected by a trust or designated titling and a personal property memo provides a plan for the smaller tangible items. Someone will have to address these personal belongings when you are gone and, since you know them best, you should outline your plans for taking care of them. You only need to refer to the memo in a will or trust for it to be legally recorded. The list can be changed and updated, as you see fit, without involving a lawyer each time!

4.Palliative Care – Less than 30% of people have a Health Care Power of Attorney (HCPOA) that spells out the kind of care you want to receive and the people that you want making the decisions on your behalf if you cannot. The HCPOA allows an agent to make health care decisions, if you are incapacitated, for things like life support, tube feeding or organ donation. Consider those that might not be overcome with grief as agents who are tasked to comply with your wishes.

5.Prepare an inventory of all accounts – This includes a list of all bank and investment accounts with passwords, as well as all digital assets, including social media accounts. You can use a password vault or keep a handwritten list in a safe and then give access to one of your designated trustees.

6.Have Tax Planning Up to Date – The estate tax limits have increased in 2018 ($11.2M individual/$22.4M married couple), so most of us will not need to worry about estate taxes, unless the legislation changes again! It is still a good idea to have all of your information gathered, organized and up to date to make it easier for your executors, trustees and beneficiaries.

7.Designated Beneficiary Planning – We always help our clients make sure that all assets are titled properly, including real estate, investment accounts, qualified plans, bank accounts and life insurance policies.

8.Review Plan Regularly – Once you have a good plan in place, you should review it every year or two or as there are any life changes. At DWM, we keep copies of your documents with our own summary “estate flow” to help manage this.

9.Use Professionals! – This includes a recommended estate attorney to prepare your plan, as well as a professional wealth manager, like DWM, to review it.

10.Everyone Can Have an Estate Plan – You don’t need to be a famous, well-connected political icon, like Barbara Bush, to be thoroughly prepared.

Estate planning can be a daunting and sometimes complicated task. Many of our clients have trepidation about the process when starting, but every one of them feel a great deal of relief and accomplishment when they have done all the work and have a good estate plan in place. Helping our clients navigate all of the requirements and considerations of estate planning is a very important and satisfying part of what we do at DWM. We are not lawyers, but we know our clients well and can help them understand the many objectives and appropriate pieces of a good customized estate plan. Please let us know if you would like to review your estate plan with us!

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Supreme Court Overturns Ban on Sports Gambling

Written by Lester Detterbeck.

NBA slot machine

On Monday, the Supreme Court struck down the 1992 federal law that said states couldn’t “sponsor, advertise, promote, license or authorize” sports gambling. The ruling in Murphy vs. NCAA agreed with New Jersey that the law was an intrusion into states’ rights to regulate activity within their borders. NJ had waged a six-year battle against the NCAA, NBA, NFL, MLB and NHL to allow sports betting. NJ will now join Nevada as the two states with legalized gambling. More will certainly follow. Illinois and South Carolina have already introduced bills and are moving towards legalization.

The states, the leagues and lots of others are all licking their chops to participate. The American Gaming Association estimates that $150 billion is wagered every year on illegal bets. Now, sports gambling could become more widespread, more systematic with an even larger market. Mark Cuban, owner of the Dallas Mavericks, believes that the overall value of sports franchises has doubled overnight. “It will increase interest in the arena or stadium, it will increase the viewership for customers online, and help traditional television networks.”

The NBA has discussed with state officials what it calls an “integrity fee” of 1% on all betting. The integrity fee would be needed, in part, to pay for more assistance to league officials to keep the league honest, thus policing players and coaches so that games are not “thrown” to win bets. MLB has proposed a .25% integrity fee. Ted Leonsis, owner of both the Washington Capitals and Wizards, said that the sport franchises need to be paid “equitably” for the content and “intellectual property” they provide to television.

Pennsylvania last year passed legislation to allow sports betting, which included a 36% tax on sports betting revenue. Nevada’s rate is 6.75%. While some states may resist on moral grounds (Utah’s anti-gambling stance is written into its constitution), most will jump on the bandwagon as soon as possible. It has been estimated that $245 billion in legalized sports betting could generate $16 billion in additional state tax income.

Sports data companies, like Sportradar and gambling companies, like MGM and Caesars Entertainment, are hoping to cash in. The betting public can now come out of the “underground” market. Legal bookmakers should do well-Nevada sportsbooks haven’t had a losing month since 2013.

And what about the players and their salaries? If the NBA received a 1% fee, under the current union contract, half of that would be owed to the players. So, if $50 billion of NBA related sports betting produced a $500 million “bonus”, half of that would go to the players. And, this extra money might raise the salary cap and cause crazy gyrations with many top players changing teams.

However, there’s only so much money to go around. Last year, Nevada’s sportsbooks had a 5% profit margin, according to the state’s gaming board. A 1% “integrity fee” would represent 20% of the profit. With everyone fighting for their piece of the pie, legalized gambling may not take off as quickly as expected.

Joe Asher, chief executive of William Hill US, part of a major British sports betting operation, cautions that tax rates and league fees could add to the complexities: “It’s not going to be easy to move customers from the black market into the legal market.” Time will tell.

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The Money Talk

Written by Grant Maddox.

 

 

kidsmoney.jpgIt’s no secret that today’s standard high school and college curriculums are missing a few very important details. One of the most overlooked areas is basic financial education. Discussing finances with your children can be a difficult topic to broach, but it is critical to their success in the long run.

 

One common misconception of having “the money talk” is the idea that kids must be sheltered from financial issues. In some instances this is absolutely true, but having a basic discussion about finances and instilling good values in your children is important. “The money talk” shouldn’t be seen as taboo, but rather as an opportunity to guide your kids and help them navigate potentially tricky financial issues and decisions that arise.

 

Here are some tips to help as you approach “the money talk."

 

1.Be honest.

 

Chances are that at some point in your life, you’ve experienced highs and lows in your finances. No need to hide it! These experiences provide a learning opportunity for your kids and allow you to be open and frank about the reality of financial decisions—they can handle it.

If you ran up debts in your past and had difficulty paying these back, this serves as an excellent teaching moment. Learning from those you respect can be just as effective as learning the lesson on your own.

Also, this may go without saying, but be careful not to spread falsehoods about your current financial situation. Remember, your kids can handle it and will almost always know when you’re not being completely honest with them.

 

2. Talk in values, not figures.

 

If you’re hesitant to share your financial situation with your children, that is normal. You are certainly not alone on this, but it doesn’t have to be scary. The good news is your kids don’t always want to know (or need to know) every detail of your financial life. Don’t sweat the small stuff—instead, focus on teaching them the basics. Ask yourself, what do they need to know, and what is often missed in standard education? Children should have a solid understanding of concepts such as saving, budgeting, paying down debt, developing healthy spending habits, and compounding interest.

 

3. Use real-world experiences.

 

Life is full of sporadic but important financial lessons that can be found in everyday experiences. It’s up to you to look for these opportunities and expand on them with your children.

If you’re going to the bank, you may consider taking your children with you. This is a great time to demonstrate how transactions work and, if applicable, how an ATM works. To take it a step further, you may even begin the discussion on how money can generate interest.

 

When your children start their first jobs and start receiving paychecks, this is a convenient time to discuss the importance of budgeting, paying bills, and taxes. Talk through what their goals are for each paycheck and how much they may need to save in order to accomplish these goals.

 

If you are planning a family trip, consider letting them in on the budgeting. Showing them your budget, planning activities you want to accomplish with this budget, and building a trip around this information will help make financial planning seem tangible to them. This may also be a good time to remind your kids that goals often require sacrifice, and not every trip activity will be accomplished.

 

Try giving your kids an allowance and taking them to the grocery store. The grocery store can be a clear example of “needs” vs. “wants.” Your children need nutrients but most certainly would like to have a few candies as well. However, with a set allowance, they won’t be able to afford them all!

 

In closing, whether you realize it or not, you play an important role in your children’s financial future. In their early years, they rely heavily on you for financial advice to help them form healthy financial habits (and the occasional $20 bill for the movies). At DWM, we feel it is essential to educate your children about finances early on, so they can be better prepared for the future. That’s why we created our new Emerging Investor program to help younger folks invest early on and get started on the path to financial freedom! To learn more about this exciting new program, check out the full description here: http://dwmgmt.com/blogs/123-2017-11-29-20-49-47.html.

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