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Summer Round Up

23 June 2014

Summer Roundup

I never thought I’d hear these words: “Minnesota reduces taxes”…via repealing the gift tax on lifetime gifts over $1,000,000 and raising the personal exemption to $1,200,000 per person, gradually increasing to $2,000,000 per person in 2018 1. Last month, Governor Dayton signed House Bill 1777. The highlights are: * MN estate tax exemption increases from $1.2M in 2015 to $2.0M in 2018. (Note, for 2014, the Federal tax exemption is $5.34M). * Taxable estates, in excess of personal exemptions, will now owe less state estate tax than under prior law. By 2018, rates will be between 10 and 16 percent 1.

Spring, err summer cleaning

Now that the long, cold winter (and spring) has turned to summer, we welcome new growth and fresh beginnings. It’s also financial literacy month- gasp – so why not combine the positive vibes of summer with some financial reflection and new resolutions? Here are a few steps to take in order to execute. One- write down your goals. Just like with New Year resolutions, you will be more effective if you pick no more than two to focus on. Get very specific about what each goal means to you and what outcome you envision three or six months from now. Instead of “I want to save more”, put goals into context like “selling our large home within two years and finding a condo downtown” or “travel twice a year to see family and friends at places like…” Write down one or two goals and look at them weekly to hold yourself accountable. Two- check the variables. Once your goals are clarified, you need to ensure the financial resources are defined as well. Do this by completing, or updating, a net worth statement. If you want us to build and manage this for you, we are happy to do so. You can use apps like Mint or buy Quicken and set up automatic feeds to banks, credit cards and Schwab to keep your net worth statement current. I personally use Quicken and update our statement the end of each month to track our progress. This exercise gives you a snapshot of your financial health and tracking it regularly gives you insights and motivation to stay on track toward the goals above. Three- step back and look at the horizon Many people do not step back and take a holistic view of all of their investments to ensure they reflect goals, current age and changing risk appetite. After the last five years in the market, perhaps your view of investing has evolved? Perhaps your stated goals have evolved but the intent of your investments hasn’t? If you have any concerns that some disconnect might exist, let’s get together and look at your big picture. Four- protect your life savings Recently, I received an unexpected call informing me that a widowed client was herself now sick with cancer. The outlook was cloudy and her children were thrust into action to ensure that her wishes, and the proper documents, were secure. Fortunately, we had updated beneficiaries on her retirement accounts and with a few new forms, executed a TOD (transfer on death) for her taxable dollars. These essential documents need to be in place for you to rest easy: 1. Last Will and Testament. Only about half of Americans say they have a will in place and without one, your wishes cannot be guaranteed 2. You don’t want uncertainty when it comes to executing your desires nor do you want a judge making decisions on your behalf. A will can be a simple solution to bypass all of this. If you do not have one, or have not updated in within ten years, you need to take action. 2. Beneficiaries named on Life Insurance, 401K accounts, IRA’s and/or taxable accounts in single name. 3. Financial Power of Attorney. This allows you to appoint someone to make financial decisions on your behalf if you were to become incapacitated. Without one, the court will determine who should have authority over your finances. 4. Health Care Directive. Not only does this document spell out who can make health care decisions on your behalf and what medical care you want – or don’t want- it relieves your relatives from making painful decisions under stress.


Use the energy of summer to rediscover your family’s financial goals and rejuvenate your financial health. A simple, four-step process can ensure you are on the right path by selecting no more than two motivating goals, updating your net worth statement, confirming your investments match your big picture ideals, and getting essential documents in place. 1 – Minnesota Revenue, Estate Tax 2014 law changes 2 – Yahoo! Finance. December 17, 2013 Investment advisory services offered through AdvisorNet Wealth Management. Brightline Group and AdvisorNet Wealth Management are unaffiliated companies. We are not a law firm or a substitute for an attorney or law firm. This article is for informational purposes only. While it is designed to provide accurate information on the subjects covered, it is not intended to provide specific legal, tax, or other professional advice. For a comprehensive review or specific personal assistance, always consult with an appropriate professional. Brightline Group does not provide legal or tax advice.