• Wills
  While a will is important, remember, it has no power over contracts such as life insurance, IRA’s and annuities. These instruments pass by beneficiary designation. So for these instruments it matters who you listed as a beneficiary and not what your will says.
  
  
• Trusts
  Trusts are oversold. Most people have no need for a trust. It is often a big expense with no benefit. Many people have a trust drawn, but never fund it. Unless funded, the trust is a waste of money. Even if funded it may be a waste of money. You need to ask yourself, “What am I wanting a trust to accomplish!” The main value of a trust is to provide control of assets after you’re gone.
  
  
  • If you want to avoid probate, you rarely need a trust to do that. If its to minimize estate taxes, you rarely need a trust.
  •  If it’s to control funds for a minor or someone who is incapable of managing their own affairs a trust may be invaluable.
  •  If you want to provide your spouse an income from your asset but leave the asset to your children once you’re gone (often used when your spouse is not your children’s mother) then a trust can be invaluable.
  •  If you don’t have any unusual control challenges, then it’s unlikely you need a trust.

• IRA’s
  One of the benefits of your IRA is that it is protected by NC and SC law from probate. Your non-qualified investments (ie- not IRA’s) carry no such protections. There is an easy way to provide the same protections to your non-qualified investments such as stocks, bonds, mutual fund as your IRA’s carry—and its free.
  
  
  • Did you know if properly established, now you can make all your children and grandchildren, and anyone you like, a beneficiary of a portion of your IRA. Once you pass away, your beneficiaries can take this money over their life time, avoiding the huge tax that would occur with a typical lump sum distribution and allowing it to grow tax deferred the whole time. The impact on your beneficiaries is amazing.

What is the Purpose of your IRA
Why is it that your financial planner tells you to contribute as much to your 401(k) or IRA as possible? Then, once in retirement, they tell you not to spend it because of the huge taxes?


Are your holding money backwards?
While you might have all the right products are you holding them in a tax efficient manner? If you’re holding stocks and mutual funds in your IRA’s, you’ll pay ordinary income tax on all the gains. If instead you held the same products in a regular after-tax investment, you would pay long-term capital gains tax. Adding insult to injury you can’t write off your losses inside the IRA or 401(k).

On the other hand, holding CD’s outside of your IRA means you’re paying taxes on the interest every year. Inside of an IRA or tax deferred account you would not.

Do you have a Financial Advisor? Is he good? No matter how good he is, he has no control over world affairs, politics and economics, or insider trading, etc.

- Jim Heafner, CSA, MBA, Series 6, 63, 65

* Investment Advisory Services offered through Brookstone Capital Management, LLC, an SEC Registered Investment Advisor