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Tag Archives: life cycle financial planning

Regional Economic Risk and Your Personal “Plan B”

Posted in Business Planning, Life Cycle Estate and Financial Planning
Lately I’ve been thinking a lot about what a “Corporate Event” at Humana might mean for Louisville. A rosy analysis I’ve heard suggests that Aetna might buy Humana, and then move its headquarters here. We’d all love that outcome (sorry, Hartford). Other Humana transactions may have collateral effects on our city that are to put… Continue Reading

Managing Risk: Inheritance Strategies for the Upper Middle Class

Posted in Estate Planning, Life Cycle Estate and Financial Planning, Long Term Care Insurance, Retirement Planning
Several months ago I read Cut Adrift: Families in Insecure Times by Marianne Cooper, a Stanford sociologist. Cooper’s chapters on the extremely professionally successful upper middle class and their project of “doing security” were particularly interesting. These families were operating an increasingly unstable career and social environment, and devoted tremendous energy to enhancing their own financial security.… Continue Reading

Managing Volatility: Inheritance Strategies for the Lower Upper Class

Posted in Estate Planning, Life Cycle Estate and Financial Planning
This week I’ve been reading Claire Tomalin’s Jane Austen: A Life. That’s risky for me to admit, as surveys show the female/male ratio of “Janeites” runs about 25:1. Mockery from readers may be unavoidable, and even deserved. I think one of the most interesting aspects of Tomalin’s biography is how it shows the Austens and… Continue Reading

Overfunded 529 Plans: Avoiding Too Much of a Good Thing

Posted in Income Tax Planning, Life Cycle Estate and Financial Planning
The expense of college for children and grandchildren is a troubling issue for almost all of my clients. I think this is because at an instinctual level, long before crunching any numbers, clients know what the charts below show: college costs have gone truly exponential in the last one and a half generations, far outstripping… Continue Reading

A Critical Look at Roth IRAs: The Marshmallow Is Not Always What It Seems

Posted in Income Tax Planning, Life Cycle Estate and Financial Planning, Retirement Planning
In the late 60s and early 70s at Bing Nursery School on Stanford’s campus, Walter Mischel conducted the famous “Marshmallow Experiment” on delayed gratification. Preschoolers were offered a choice between one marshmallow or cookie right away, or two if they waited about 15 minutes. When researchers tracked down study participants as adults, they found that the… Continue Reading

Exercising Stock Options and Selling Shares: May the Odds Be Ever in Your Favor

Posted in Business Planning, Income Tax Planning, Life Cycle Estate and Financial Planning
If you have been working since the late ‘90s, you have probably collected some great stories about exercising stock options and other equity-based compensation. Some are unqualified success stories, like the time my college roommate’s father pulled up outside the college dorm in 1998 in a brand-new zippy BMW convertible (top down, naturally), and told… Continue Reading

Noncompetition Agreements and Your Career: On the Beach When You Don’t Want to Be

Posted in Asset Protection, Business Planning, Life Cycle Estate and Financial Planning
Noncompetition agreements are a common fact of life for many of the mid- and senior-level executives I represent in estate planning, and for business owner clients with employees. Because noncompetes are such important features of the life cycle estate and financial planning landscape, I sat down with my colleague Rebecca Weis to learn more about… Continue Reading

Deciding to Rent or Buy Your House: A Tale of Two Cities

Posted in Life Cycle Estate and Financial Planning
People often decide between renting or buying a place to live based on preferences and instinct: What do you want to do? If they are incrementally more analytical, they may explore “how much house” they can “afford”. This approach is grounded in capabilities. What can you do? I think the most useful approach to important financial… Continue Reading

Should You Get a Prenuptial Agreement?

Posted in Asset Protection, Blended Families, Estate Planning, Life Cycle Estate and Financial Planning
Whether or not to get a prenuptial agreement before getting married isn’t an easy decision. The advisability of a prenup turns in large part on whether the default law that will govern the marriage if it ends by death or divorce is agreeable. If you can live with the default rules, a prenup might not… Continue Reading

Protecting Your Personal Pension From Volatile Equity Markets

Posted in Life Cycle Estate and Financial Planning, Retirement Planning
Our previous post explored a model of the cost of the promise you make to yourself to fund your retirement, but that model omitted a very important real-world risk: volatile equity markets. Most recently, the 2008 stock market crash changed many retirement plans for the worse. A 2009 study by the Urban Institute, “What the 2008 Stock… Continue Reading

Delayed Retirement Effects of Investment Costs and Behavioral Tendencies

Posted in Life Cycle Estate and Financial Planning
Most people know (at least in the abstract) that choices have consequences. Choices you make to manage your behavioral tendencies (or not) and about your investment costs may have tremendous consequences for when you can retire. I built a model to explore the tradeoffs between retirement age, investment costs, and behavioral tendencies. Like any model,… Continue Reading

What Is Your Investor Personality Profile?

Posted in Life Cycle Estate and Financial Planning
Successful investing presents practical and emotional difficulties. Reducing those difficulties as much as possible turns on your answers to two questions: Do you believe markets are efficient? Can you manage your behavioral tendencies? After you have thoughtful answers to those two questions, it’s easier to make good decisions for you about choosing an investment style… Continue Reading

Avoid the Wolves of Wall Street When Forecasting Investment Returns

Posted in Life Cycle Estate and Financial Planning
We live in a world of nearly infinite, nearly free information. That includes financial information, commentary, journalism, and forecasts. Among this clutter, it can be very hard to decide what deserves attention, what’s worthwhile, and what to believe. Print, television, and Internet journalism thrives on readers and viewers. In a media landscape that is so… Continue Reading

Chuck Yeager, The Right Stuff, and Your Income Growth Trajectory

Posted in Life Cycle Estate and Financial Planning
The Right Stuff (1983) is a movie that’s begun to be fully appreciated only recently. One of its best scenes is when the iconic test pilot Chuck Yeager (played by Sam Shepard) takes a very dangerous flight in an NF-104 Starfighter in December 1963, attempting to break the world altitude record. At the edge of space above the… Continue Reading

A Sherlock Holmes Approach to Your Income Statement

Posted in Life Cycle Estate and Financial Planning, Retirement Planning
homesandwatsonI think “budgets” are the reason many more people don’t have a sensible strategy for reaching their financial goals. The word “budget” creates obstacles in two ways. First, budgets imply choices, tradeoffs, and the unpleasant word “no.” Second, most people lack even half the clarity about their spending that’s required to make a reasonably accurate budget. Without good… Continue Reading

Use a Total Balance Sheet for Your Estate Plan, Including Invisible Assets and Liabilities

Posted in Estate Planning, Life Cycle Estate and Financial Planning
A financial plan should be a thoughtful alignment of your income, expenses, saving, and asset allocation that makes it more likely you’ll achieve what matters most to you. Your estate plan is financial plan’s autopilot, ensuring that your capabilities carry out your goals, even if you’re not around to supervise things yourself. Using the Quadrant-based life cycle planning… Continue Reading

Demography, Destiny, and Your Family’s Estate Plan

Posted in Estate Planning, Life Cycle Estate and Financial Planning
positivismo-conceito-e-resumo-de-suas-caracteristicas-1It’s unclear whether Auguste Comte really said that “demography is destiny,” but you can and should use demographic data to make better estate and financial planning decisions. As we’ve noted, an estate plan often represents a set of predictions about a family’s future, predictions that will be improved when the plan considers the family’s Longevity Distribution. Your… Continue Reading

Improve Your Estate and Financial Planning With an Integrated Life Cycle Perspective

Posted in Life Cycle Estate and Financial Planning
While we’re still near the “New Year’s Zone”, I want to suggest a resolution for clients and their advisors: think about your estate and financial planning in an integrated way, from a life cycle perspective. People often analyze their lives in segments, even though they’re living them as a unitary whole. It’s valuable to keep… Continue Reading