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Dust off Your Finances: Spring Clean Your Financial House

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Spring is just around the corner, and with that comes the proverbial spring
cleaning. While most people recognize the value of scrubbing their homes, we recommend dusting off your finances as well.

Consider these tips to help ensure your financial house is cobweb-free.

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Settle In for a Review

  • Review the titling and ownership of all financial accounts. Make certain any accounts owned and titled in a trust, or have a Payable upon Death designation, will meet desired intentions if a transfer were to take place.
  • Review your credit report to make sure
    you’re in positive standing. You can request a free copy once every 12 months from annualcreditreport.com.
  • Review insurance policy and retirement account beneficiaries. This is particularly important if there has been a recent change in marital status. A spousal waiver will be needed if the beneficiary is not the spouse.

 Prepare for the Future

  • Execute a will and a living will. If these documents already exist, they should be reviewed on a regular basis. Circumstances and viewpoints change, which can heavily impact desired allocations and intentions.

Check Up on Your Cards

  • Check the interest rates that are being charged on all credit cards. For individuals who carry balances, consider consolidating to the card with the lowest interest rate or even contemplate a Home Equity Line of Credit as the interest may be tax-deductible.
  • Utilize a credit card that offers rewards. Many of these now carry no annual fee and offer cash back in addition to the travel and merchandise rebates.

Evaluate Your Employer Benefits

  • If financially possible, make the most of your 401(k) by contributing to the level that takes advantage of the full employer match.
  • Review your health insurance coverage options to ensure you are making the best selections for yourself and your family. If you are currently enrolled in a High Deductible Health Plan coupled with a Health Savings Account, review your contributions to make sure you are maximizing your saving options.

Examine Your Life Insurance

  • Make certain existing coverage will meet the financial needs of your family if any member were to pass away, not just the primary income source for the family. Also, if the only secured life insurance is provided by an employer, consider pricing other term policies. Remember employer-provided insurance may not transfer if there is a change in jobs.
  • Research long-term care insurance. Ask your insurance provider about this coverage to ensure it offers home health care in addition to nursing home care. Life expectancy is much greater than it used to be, and in-home and community care continue to rise in price.

Freshen Up on Your Investments

  • Review or create an investment policy statement (IPS). This is an agreement with a financial advisor that states your investment purpose, time frame and risk tolerance. An IPS clearly states the investor’s goals and helps provide clear expectations, consistent communications and true accountability for both the advisor and the investor.
  • Conduct homework for obtaining professional services from investment consultants, estate planning attorneys and certified public accountants. Seek references from trusted friends and colleagues and stick with specialists. Professionals will be able to offer insights and guidance that will help individuals succeed in reaching their financial planning goals.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.pulation Survey/Housing Vacancy Survey, Series H-111, U.S. Census Bureau, Washington, DC 20233.


As a Private Wealth Management regional manager, Brent is responsible for the growth and support of new customer relationships as well as supervision of regional sales associates. He is also responsible for oversight and delivery of the financial planning discipline within the region. With nearly 30 years of experience private wealth client relationship management, Brent is a seasoned banking professional with deep Texas roots. He attended the University of Texas at Arlington, where he earned a bachelor’s degree in finance, and is a Candidate for CFP® certification. He serves as a board member of the Dallas Parks Foundation.



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Market Minutes with KC Mathews

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Chief Investment Officer KC Mathews recently completed a two-day media briefing in New York City, where he shared his thoughts on current market conditions as well as information on his 2017 forecast with CNBC, CNN Money, and Bloomberg Radio. Listen to the brief podcast and read the articles below to learn more about what KC is expecting to see over the course of the year.

Also, read KC’s recent economic articles, which give more detailed information on where we’ve been and where we’re headed.

Follow UMB and KC Mathews on LinkedIn to stay informed of the latest economic trends.

Interested in learning more about our Private Wealth Management division? See what we mean when we say, “Your story is our focus.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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UMB: Insights – Financial Advice for Millennials

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Do young people really need a financial advisor? Phil shares why you DO need one as you move into adulthood. His advice is to:

  • Work with a financial advisor.
  • Establish a plan and put it in place.
  • Work toward achieving it!

Learn more in this continuation of our UMB: Insights series.

 

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Mr. Phillip Klevorn is a Regional Manager for UMB Private Wealth Management. He is responsible for Private Wealth Management in the St. Louis Region. He joined UMB in 2015 and has 22 years of experience in the financial services industry.



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UMB: Insights – Common Questions for Wealth Advisors

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UMB Industry Insights

We’re continuing our UMB: Insights series by talking to a few of our wealth advisors about questions they hear all the time from their clients.

  • Am I going to be able to live in retirement the way I live today?
  • What kind of healthcare can I afford?
  • How can I maximize that and minimize taxes? How do I pass that on to the next generation tax-efficiently?

If you find yourself asking any of these questions, it’s probably time to meet with a wealth advisor.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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UMB: Insights – When to Engage a Wealth Advisor

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UMB Industry Insights

Belinda explains why you should start talking to a wealth advisor. They can help you see the big picture, set your priorities and customize your plans accordingly.

Learn more in this continuation of our UMB: Insights series.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Individual retirement trust: a new way to save for retirement

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An individual retirement trust allows you to maintain the tax advantages that come with saving and investing in an individual retirement account (IRA), while providing you with the long-term control of a trust. You may be familiar with the uses and benefits of an IRA, and you may have a good understanding of trusts, but this unique solution can be the best of both worlds.

Individual retirement trust: a new way to save for retirement

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The basics

An IRA, whether Roth or traditional, is a savings mechanism that allows you to invest funds for your future retirement. The sooner you begin putting money into an IRA, the more time your money has to grow before you reach 70½, the age at which you are required to begin taking distributions from the account. IRAs prepare you for retirement and provide tax advantages, allowing you to choose whether to make contributions tax-free (traditional) or receive your distributions tax-free (Roth).

A trust is an estate planning tool that allows you to set aside funds for specific beneficiaries to receive when you pass away. Trusts can be managed by a third party called a trustee. The trustee handles management of the trust, including things like managing trust investments, making distributions to beneficiaries and taking care of trust assets, both during your lifetime and after your death.

An individual retirement trust combines the tax advantages of an IRA with the long-term control of a trust. This type of account allows you to save for retirement while maximizing tax advantages and ensures your IRA funds are distributed according to your wishes. Simply select your beneficiaries—whether people, organizations or charities—and the percentage of funds each beneficiary should receive, plus any conditions you have in mind. Once you have selected beneficiaries and determined percentages of distribution, the trustee oversees all of the distributions, including adjustments you may direct over time.

Using an individual retirement trust allows you to bypass the complicated IRS requirements involved in naming a trust as an IRA beneficiary, which is an alternative option. The trust portion of the account also helps protect your legacy from asset seizure by the potential creditors of your beneficiaries. If your heirs inherit your IRA assets without the protection of a trust, funds can be taken by a beneficiary’s creditors in the event of a beneficiary’s bankruptcy.

Also, individual retirement trusts can be set up with disability provisions that ensure your accounts are maintained in the event of your illness or long-term incapacitation. In this case, the trustee will take over the management of your retirement fund investments, coordinate bill pay and administer distributions as set forth in the document—all without the need for a separate guardian or conservator.

Who can benefit from an individual retirement trust?

Individual retirement trusts offer a unique structure that may not work for everyone. Most importantly, this structure is best for those who already have significant retirement assets and are concerned about the future management of those assets.

If you are particularly tax-sensitive, you may benefit from an individual retirement trust because it allows you to maximize the tax deferment available through the stretch payout option, whether the IRA is a traditional or Roth account.

If you have divorced and remarried, this solution can help you streamline the inheritance process by allowing you to select a variety of beneficiaries with varying inheritance percentages. Step-children can be included, as can organizations of your choice. For blended families, individual retirement trusts are beneficial in that they provide extensive control over the distribution of assets. Specifically, beneficiary designations will not be changeable, even after your passing, which ensures the heirs you have chosen are provided with exactly what you have determined for them regardless of later marriages or life changes.

Individual retirement trusts are also good vehicles for those concerned with the use of the funds by heirs and seek to include limitations. Any amount set aside for a beneficiary that is more than the required minimum distribution (RMD) can be subject to the trustee’s discretion.

Bottom line:

An individual retirement trust can help you achieve the tax advantages of an individual retirement account paired with a comprehensive asset management plan for your heirs–now and in the future. You will be able to build and customize your legacy with multiple beneficiaries, long-term control and detailed asset distribution options. Combining an IRA with a trust can streamline your legacy administration and simplify the process in one efficient document.
 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Mr. Conley is a vice president and legal counsel for UMB Private Wealth Management. He is responsible for reviewing estate planning documents and working with attorneys, clients, trust and bank associates regarding various legal issues that arise in the creation of trusts and estates. He joined UMB Private Wealth Management in 2000. Mr. Conley is an attorney and Certified Public Accountant. He is licensed to practice law in Kansas and Iowa.



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Financial Word of the Week: Generation-skipping transfer tax

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Financial Word of the Week - Generation-skipping transfer tax

The generation-skipping transfer tax (GST tax) is a separate transfer tax that is imposed on certain transfers and may apply in addition to any gift or estate tax due. The purpose of the GST tax is to tax the transfer of assets passing to a person more than one generation beyond the donor (i.e., “skipping” a generation). This flat-rate tax is calculated at the maximum estate tax rate applicable at the time of the transfer. (In 2015, the maximum estate tax rate is 40 percent.) However, like the gift and estate tax, there are certain exemptions that may apply to help avoid or minimize the impact of the GST tax. For example, there is a lifetime exemption that allows you to transfer a certain dollar amount of assets without incurring this tax. In 2015, the exemption amount is $5,430,000. In addition, there is an annual exclusion available that currently allows for the transfer of $14,000 to any individual without the GST tax being imposed.

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One of the keys to the GST tax rule is that it is designed to only tax certain transfers – those involving a transfer of assets to a person one or more generations down the line. For family members such as grandchildren, this is straightforward. For example, a gift from a grandparent to a grandchild would skip the donor’s child’s generation and would, absent an applicable exemption, be subject to the GST tax. However, for non-family members, whether a transfer skips a generation is not always as apparent. For gifts to unrelated individuals, the Internal Revenue Code deems a gift to someone more than 37 ½ years younger to have “skipped” a generation and is therefore subject to the GST tax.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Financial Word of the Week: Gift tax annual exclusion

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Financial Word of the Week - gift tax annual exclusion

The gift tax is a transfer tax imposed on any gift you give someone during your lifetime. However, the Internal Revenue Code provides each individual with a gift tax annual exclusion. The annual exclusion is the amount of property one individual may give each year to another individual without incurring any gift tax consequences. This number is adjusted annually for inflation and is currently $14,000 per donor per donee in 2015. “Per donor per donee” means that each individual donor may give $14,000 each to as many individuals as the donor wishes. For example, in 2015, each parent can give to each of their three children $14,000 in gifts, for a total of $ 28,000 per child.

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Financial Word of the Week: Power of Attorney

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Financial Word of the Week - power of attorney

A durable power of attorney is a legal document where you as the “principal” designate an agent to handle the matters described in the document during your lifetime. A power of attorney is “durable” only if it provides that your agent may act even if you are disabled. In addition, there are many different kinds of power of attorney:

  • ordinary – revocable and automatically terminates upon the death or incapacity of the principal
  • springing – become effective only when needed, at some future date or upon some future occurrence, usually the principal’s incapacity
  • general – authorizes an agent to transact business for the principal
  • special – limits the agent’s authority to only a specified matter.
  • durable – remains in effect during the principal’s incapacity

Powers of attorney are central part of most estate plans, and provide a mechanism outside of court guardianships and conservatorships for management of your affairs. It can be a useful complement to a revocable trust, as the trustee would not have powers regarding assets not held in the trust. Rather, the agent can deal with assets held outside of the trust and other business that the trustee may not be able to handle, such as signing your income tax returns or dealing with a retirement asset.

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Financial Word of the Week: Credit Shelter Trust

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Financial Word of the Week - credit shelter trust

A Credit Shelter Trust (also known as family trust, non-marital trust or bypass trust) is one that is usually employed as part of a married individual’s estate plan. Upon the death of the first spouse, it is funded with the estate tax exempt amount, sometimes referred to as the Unified Credit. Such a trust is often structured to provide benefits to a decedent’s surviving spouse, without triggering estate tax upon the second spouse’s death. Property in the credit shelter trust can then pass through to descendants upon the death of the surviving spouse with no estate taxes paid by the estate of either spouse. In 2015, the estate tax exempt amount is $5,430,000.

In light of the high exemption amount, it is always a good time to update your estate plan with your legal advisor.

 

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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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