Wealth From Wisdom MAY 2018

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May 2018

ONE LESS THING to Worry About

That’s why we’re here — to answer your questions and to give you one less thing to worry about.”

Heading into the second quarter of the year, things have been hectic. With the new tax legislation coming into play, the Cornerstone team has been immersed in all the fine details. We’ve been busy helping clients prepare for the 2018 tax year. There have been a lot of questions and concerns regarding the new tax laws. For instance, with changes to the income tax brackets, everyone wants to know where they fall and whether they should expect any changes in what they will owe. In other words, it may be good news for some, while others may find themselves with a bigger tax bill going forward. We have also heard from a number of people regarding the market correction this past February. As you know, the market fell about 10 percent. At a glance, it was a startling drop, but for long-term investors, this period of higher-than-average volatility was little more than a blip on their radar. It’s certainly been an interesting 2018. One thing that really impresses me, however, is how proactive our clients have been. Whether it’s about taxes, market volatility, or anything else, clients often ask, “Is there anything I should be doing?” Or they may ask, “How is this going to affect my investments?”

Seeing this proactive approach and awareness makes me happy as a wealth

adviser. Whether it’s asking questions or staying up-to-date on what’s going on in the financial world, proactivity is always a positive. We love getting questions and we love answering them. After all, that’s why we’re here — to answer your questions and to give you one less thing to worry about. On the homefront, I am thrilled it’s spring. I’ve been outside

landscaping around the house. Over the winter, I did quite a bit of indoor organization. I was able to get my workroom in order and knock out a few other projects, including a top- to-bottom redecoration of one of our rooms. I also helped my 12-year-old daughter upgrade her room. She decided it was time to transform her space from a younger-looking room into something more mature — or, at least, to match her preteen vision. We got her room painted, and she did the rest. I’m sure it won’t be long until we’re back in there, upgrading her room to meet her teenage sensibilities.

With spring kicking into high gear, my daughter has gotten back into soccer. We watch her play on the weekends and make a family event out of it. We always have a great time hanging out on the sidelines and cheering her on. As I look ahead to the rest of the year, I’m thrilled about what’s on the horizon, and I look forward to helping our clients pursue their goals with financial confidence. As we work our way through market volatility and a changing tax landscape, I appreciate the trust our clients place in Cornerstone.

– Scott Toms

www.CornerstoneWealthGroup.com | 1

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3 Things to Do Before the Trip TravelingWith the Grandkids?

that you are an irresponsible grandparent. Instead, think about how you felt when your own children were young, and take steps to alleviate the parents’ concerns. If your daughter asks you not to be on your phone while in crowded public places because she’s concerned you might lose sight of her child, promise to keep the phone in your pocket. If your son-in-law wants regular updates, make time before bed for your grandchild to call home and tell her father about all the fun she’s having. A little compromise can lead to less stress and more fun for everyone. Pack Necessary Documents You need to have some form of ID for your grandkids. Older kids can use a driver’s license, but if you’re traveling with little ones, find a copy of their birth certificates. You also need copies of insurance and prescription cards and a notarized letter from the parents granting you permission to authorize medical care in case of an emergency. It’s also a good idea to have This category of trust can also be used as a method of transferring assets upon death, much like a will. However, unlike a will, trusts are not subject to the court- supervised probate process. In many states, the probate process is slow and expensive, and it can open up your estate to public scrutiny. Upon death, your wishes are final, and at this point, the trust becomes irrevocable. Irrevocable Trusts Generally speaking, an irrevocable trust cannot be modified or terminated without explicit court approval — neither while you are living nor after death. An irrevocable trust is a separate legal entity from its “creator.”

a letter of permission for your grandkids to travel with you. Make sure the letter is signed by all legal guardians, especially if your grandchild’s parents are divorced. You don’t want to accidentally cause a custody dispute. Plan a Trip You’ll Both Love When planning your itinerary, ask yourself if your grandkids will have fun, too. You might be excited to visit an art museum, but a younger child might not appreciate it as much. This doesn’t mean you shouldn’t visit museums or historical sites! In fact, most of these places offer kid-centric activities, like scavenger hunts, that can help a younger audience engage with the environment. Just be sure to think of your grandchild first when planning. There’s nothing like the adventure of travel to bring generations closer together and create lasting memories. These tips will help you ensure those memories are good ones. Happy travels! While the concepts surrounding an irrevocable trust sound stringent, this category of trust does allow for considerable flexibility. Irrevocable trusts set up before death can be used to hold life insurance policies, gifts to be made available to beneficiaries on future dates (specified by you), or funds set aside for future charitable donations. Beneficiaries pay taxes on what they receive from an irrevocable trust. Next month, we will look at the specific types of trusts that can fall into either of these two categories. There are a number of types of trusts that can be paired with different rules and allow their creators to meet specific objectives. In the meantime, call Cornerstone Wealth at 866-485-8505 with any questions you have about creating trusts.

W e could all use a vacation, and if you’re looking to bond with your grandkids, a trip might be the perfect answer. It’s fun for you, and getting away from Mom and Dad for a while is thrilling for any kid. But before you board a plane to Italy with your granddaughter or rent an RV for a trip to Yellowstone with your grandsons, there are a few things you need to check off your to-do list. Don’t Let the Parents Worry Letting their kids go on a trip without them can be nerve-wracking for parents. Don’t view parental worries as an implication

REVOCABLE & IRREVOCABLE TRUSTS Be Aware of These Differences

Trusts can be incredibly beneficial for families. They protect assets and help manage said assets in both life and death. But not all trusts are the same. They fall into two categories: revocable and irrevocable. Revocable Trusts A revocable trust, also known as a living trust, lets you modify it during your lifetime. If you wish, you can even terminate the trust. Fundamentally, you are in control of this trust, and earnings generated by any assets held in this trust are reflected on your income-tax returns. Additionally, you can manage the assets in the trust yourself, or you can hire a financial advisor to manage the assets according to your provisions, with you serving in a supervisory role.

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What You Need to Know About Withdrawing Money in Retirement Wealth From Wisdom Radio Highlights

Life is full of surprises, and things don’t always go according to plan. Unfortunately, one of those surprises for a lot of folks is an early retirement. This month, host Paul West, along with co-host, Jim Caldwell, chat about how to prepare for an unexpected retirement — what to do now and steps to take later. Here are a few highlights. First, if you retire unexpectedly or anticipate you’ll have to retire earlier than you wanted, you are not alone. About 60 percent of Americans do not retire on their terms. Perhaps they’re downsized out of a job, their health takes a turn, or a loved one is in poor health and needs extra care.

out of the game earlier than expected. When that happens, you are no longer building up your assets, which would have allowed you to retire on your terms. In short, you may be left scrambling to pick up the pieces. The question you need to ask is this: If you were forced to retire today, would you be prepared? A lot of things may change as you head toward retirement, and you must be able to adapt to those changes. One way to be prepared is to construct a comprehensive financial plan. This isn’t a one-and-done plan — something you look at once and put on the shelf, never to look at again. Your plan should give you the flexibility you need to make adjustments as those curveballs come your way.

Last, but certainly not least, your financial plan should not be created with just you in mind — it should incorporate your spouse and any other immediate family members. Should something happen to you, a comprehensive plan will tell them what to do next. Are you ready for life’s next curveball? Find out more steps you can take to protect yourself and your family at wealthfromwisdomradio.com, and be sure to check out the podcast dated Jan. 27, 2018, on preparing for unexpected retirement!

It can be any number of things. But no matter the cause, you may find yourself


Sautéed Zucchini and Squash With Feta


• • • •

1 zucchini

• •

2 teaspoons fresh thyme 1/4 cup crumbled feta cheese Salt and pepper to taste

1 summer squash

1/2 medium red onion

2 tablespoons extra-virgin olive oil

INSTRUCTIONS 1. Cut zucchini into 1/4-inch-thick semicircles. Dice onion. 2. Heat a large skillet to medium high. Add olive oil, onion, and thyme. 3. Once onion is soft (about 2 minutes), add zucchini and squash. Season with salt and pepper; cook 4–5 minutes until squash barely begins to caramelize. 4. Place in serving bowl and top with feta.

Answer on page 4

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Sudoku Answer


• One Less Thing to Worry About PAGE 1

• Secrets to a Great Family Vacation PAGE 2

• The Major Differences of Revocable & Irrevocable Trusts PAGE 2 • What to Do When Life Throws You a Retirement Curveball PAGE 3

• Sautéed Zucchini and Squash With Feta PAGE 3

• The Key to a Memorable Vacation PAGE 4

Enrich Your Vacation Buy LocalWhenYou’reAbroad

The virtues of buying locally sourced food and supporting small businesses have been widely extolled. But we rarely think to apply the same practices when we travel. Many Americans spring for all-inclusive packages when planning their next summer vacation, but doing so means they’ll miss out on some of the best aspects of the culture they’re visiting. Part of the joy of traveling is having new experiences you can’t have at home. Whether you’re in another state or another country, you owe it to yourself to seek out the unique aspects of that location. But to find the character and quirks of your destination, you’ll have to explore beyond the hotel lobby. Food Why have a cheeseburger from a fast-food chain when you can try a local favorite?

A great way to start is by asking your taxi driver or hotel concierge about their favorite place to eat. You’ll discover new foods and flavor combinations, and the locally owned restaurant is sure to appreciate your business! Art Just as your town probably has local artisans who produce unique and interesting work, the same is true for your vacation destination. Anyone can get a gift shop bauble that was mass-produced somewhere else. Take the time to peruse market stalls and craft fairs while you travel. It can lead you to some truly special souvenirs, and you’ll support the arts and traditions of the region! People While you’re out sampling local restaurants and exploring local markets, you’ll meet

plenty of local people. Don’t be afraid to strike up a friendly conversation. You can make new friends around the globe and learn about their unique experiences. One of the most enriching experiences in life is meeting new people and gaining new perspectives. Memories Treasured memories are the best souvenir you can bring home from any vacation. So you owe it to yourself to get out and explore!

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