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revocable trust

What is a Revocable Trust?

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A Revocable Trust – sometimes referred to as a “Living Trust” – is a lifetime trust that can be amended or revoked at any time during the creator’s life.  The creator (or “grantor”) of the trust typically also serves as trustee and is also a trust beneficiary during his or her life.   At the grantor’s death, the terms of the Revocable Trust direct how the grantor’s assets are to be distributed, essentially acting as a substitute for the Will. Nonetheless, the grantor still executes a Will.  This is because the grantor may have failed to transfer title of certain assets…
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planning

Basics of Estate Planning

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Lifetime and testamentary planning Contrary to popular belief, estate planning typically involves more than just signing a Will. It generally involves two sets of considerations: lifetime planning and testamentary planning. Lifetime planning may involve choosing decision-makers to make health or financial decisions on your behalf should you become incapacitated. For higher net worth individuals, lifetime planning may also involve establishing tax-efficient gifting strategies during life. A testamentary plan, on the other hand, will designate the individuals or charities who are to inherit your assets at death, and in what capacity (e.g., outright vs. in trust). In addition, a testamentary plan…
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life insurance

How Much Life Insurance Do I Need?

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The prospect of our inevitable journey to the pearly gates is a tough conversation to have in any context, let alone attaching a dollar amount to our existence. However, for many people, life insurance is the backbone of any strong financial plan. Without it, all your other financial goals can easily fall apart. Life insurance can replace lost income, pay off debts, leave a charitable legacy, and create an income and estate tax-free pool of capital, if structured correctly. But how much life insurance do I need, if any? As with most questions, the answer depends on the facts and…
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impact investing

Socially Responsible & Sustainable Investing

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Dating back to the 16th century, investors have expressed their social views by avoiding investments that are contrary to their individual values.  While this investment style is still employed today, the discipline has expanded to include the analysis of non-monetary factors that may have an impact on a company’s long-term sustainability.  These factors are commonly referred to as ESG (Environmental, Social and Governance).  However, there are many common misconceptions and applications of ESG analyses. In this blog and its corresponding white paper, we attempt to demystify socially responsible and sustainable investing. Definitions & Nomenclature CSR: Corporate Social Responsibility (also known…
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Should you own bonds in this low interest rate environment?

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Recently there have been a multitude of articles concerning how low interest rates are going to negatively impact investors. The conclusion of many of these articles is that your bond holdings should either be jettisoned or drastically changed in favor of riskier bond strategies that can earn higher returns. Below, we will highlight our view on why this is the wrong conclusion. The Role of Fixed Income in Your Portfolio Please note: the following applies to investors who seek a “balanced” long-term allocation, whether it be 75%/25% equity-fixed or vice versa, and does not apply to portfolios that are equity-only.…
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POAs

New Connecticut Uniform Power of Attorney Act to Become Effective October 1, 2016

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Changes to Connecticut’s existing power of attorney law will take effect on October 1, 2016.  Under the new law, a power of attorney (“POA”) that was signed before October 1, 2016 in compliance with the law in force at that time will remain valid.  A POA signed on or after October 1, 2016 must comply with the provisions of the new law. The new law differs from existing law in a few key ways.  First, the new law requires that a third party, such as a financial institution, either honor a properly executed POA or request additional information/documentation within seven…
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fiduciary

John Oliver & The Fiduciary Standard

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In his most recent episode, John Oliver did a great job uncovering several issues that plan sponsors and participants might find in their 401k plan.  We are proud to say our approach to advising retirement plans addresses all of these issues: Fiduciary– Many “financial advisors” do not act as a fiduciary to their clients, meaning they can act in a sales-like capacity (broker) rather than acting in their clients’ best interests.  Simply put – find someone who, both in practice and by law, must act in your best interest.  Sontag Advisory acts as a 3(38) ERISA fiduciary to our corporate retirement plan clients,…
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female advisors

Planning Considerations for Millennials

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Below, I explore some common planning considerations and issues that I encounter on a regular basis when working with clients and prospects in my generation, as well as steps that our firm has taken to better serve Millennial clients. Common Planning Considerations for Millennials Saving philosophy.  Many Millennials believe they are too young to have to worry about saving, which often reflects a belief that building retirement savings requires large financial sacrifices.  This is not true.  Education about the power of compounding over long periods of time can provide confidence that taking small steps, starting now, may be all that is…
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Alternatives & Individual Investors

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Alternatives are often a source of confusion for our clients and the investing public, and with good reason: there is no uniform standard for the definition of an alternative, and there is no investable benchmark to represent the asset class. How to Define Alternatives If there is one thing everyone can agree on, it is that "alternatives" are not old-fashioned stocks (think S&P 500) or old-fashioned bonds (think treasuries, high grade corporates, and the Barclays Aggregate index). I consider this the "smell test definition" - does it smell and taste like a stock or a bond? If not, it's an…
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behavioral finance

Our Habits Matter

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My five month old daughter is just beginning to understand the concept of cause and effect. She is learning that when she shakes her rattle it will make a sound and that when she giggles mommy and daddy will make a big fuss. In these small ways she is starting to form her first conceptions about the world around her. These initial observations will create the foundation for the development of her very first habits. While we have more control over our actions than a five month old, the reality is that our habits evolve in exactly the same way. When we observe…
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