Blog   Tagged ‘financial planning’

Talk is not cheap when it comes to family money

  |  Posted by

The most important concept to understand when transferring wealth is the communication plan. It may be difficult, but here’s why you need to focus on it.

Click “continue reading” for more a more in-depth look at this topic.

 

Continue Reading

How to broach the subject of transferring wealth to your children and grandchildren

Money used to be a taboo topic—one your great-grandparents and grandparents would never consider discussing with the next generation. However, times have changed—and so has the thought on these conversations. People want to talk about it while they’re still able to, and there are many benefits to that.

Why the big shift? New wealth, complicated investing vehicles and legacy desires are a few reasons. Many people have seen the challenges that come with unexplained inheritance parameters and instructions. However, discussing your strategies with beneficiaries ahead of time can eliminate confusion, frustration and hurt feelings.

With money comes responsibility and expectations

Educating your beneficiaries on the responsibilities that come with inheriting wealth is important, particularly if you would like your wealth to live beyond the next generation. As you formulate strategies to leave your hard-earned assets to loved ones, you may wish to structure a plan that provides financial security for not only your immediate heirs, but theirs as well.

Start the conversation early

Your children need to be old enough to understand the information, but you can begin talking with them about areas like philanthropy as early as grade school. For example, if your family makes an annual donation, you can involve your children in choosing recipients. Discuss causes that are important to them. Maybe they love pets or want to help give other kids presents for the holidays. Talk about it and let them help pick who you support.

As your children enter the high school years, you can work with your financial advisor to help introduce fundamentals like budgeting and personal cash flow management. Then during their early to mid-20s, you can begin conversations about your estate plan.

Share the strategy

Wealth advisors, or financial planners, generally start the conversation with the older generation about how to share their estate planning details. This is one of the most significant services these advisors provide, because they assist in explaining the estate plan structure, and many times will facilitate the conversation about the strategy.

Inheritors have a lot of questions when discussing their trusts and the strategy behind them, sometimes misunderstanding the intent.  Wealth advisors are neutral parties who explain that securing assets until a certain age is a strategic step. Whether it’s done to ensure measured wealth disbursement or to enable the inheritor to mature before accessing funds, these decisions are made from a comprehensive planning standpoint.

Intergenerational wealth transfer is an extremely complicated process—it can be complicated to execute and emotions are always a factor. Talk with your wealth advisor—they can proactively counsel and assist in both building your strategy and communicating amongst generations. Having these conversations can be the difference in you leaving a gift and establishing a legacy.


Mr. Clyne is a Vice President, Wealth Advisor for UMB Private Wealth Management. He is responsible for delivering customized financial planning with an emphasis on the areas of risk management, investment and wealth transfer. He joined UMB in 2011 and has 11 years of experience in the financial services industry. He serves on St. Louis University Finance Department Advisory Board and Volunteer Lawyers and Accountants for the Arts.



Leave a Comment

Tagged: , , , , , ,

UMB Insights: Funding a Trust

  |  Posted by

We’ve already walked you through the process of estate planning. Today, we’ll explain how to fund that trust and give you an important reminder to update it as your life changes.

Continue Reading

Ms. Gattis joined UMB in 2009. As a Senior Financial Planner, she is responsible for working with clients to insure that they are finding a solution to reaching their unique financial goals. Ms. Gattis has 20 years of experience in the financial industry. Prior to joining UMB, she served as a Private Client Manager for US Trust. Ms. Gattis earned Bachelors in Human Resource Management and Masters in Business Administration degrees from Wichita State University.



Leave a Comment

Tagged: , , , ,

Paying off student loans doesn’t have to be a life sentence

  |  Posted by

Picture yourself graduating from college. You may have landed a great job and moved into your own apartment. Or maybe you’re getting some work experience with an unpaid internship and you’ve moved back in with your parents for a few years. You may also have close to $30,000 in student loan debt that you feel like you’ll be paying off for the rest of your life.

You’re not alone. Before you go off to college, you might want to consider alternatives to student loans. Many people realize too late that they can’t afford the debt from their college expenses. Tuition, room and board, books and other costs over four or more years add up quickly. Not to mention if you choose to pursue an advanced degree.

Continue Reading

Student loan delinquencies in the U.S. are rising quickly. Student loan debt is also on the rise. The average student loan debt was $17,233 in 2005. In 2012, it had climbed to $27,253, an increase of more than 58 percent in just seven years.

Student Loan Delinquencies
Information from research done by FICO Labs

This debt increase combined with a slowly recovering economy has created an unstable situation; one that’s leading many to default on their student loan payments.

You might think defaulting on a loan isn’t a big deal. But, when you default on a loan, your credit rating drops and it’s more difficult to get approval for new credit. It’s a vicious cycle and it’s only getting worse. As more people default on their student loans, more of the population has lower credit scores, less access to credit and less opportunity to help grow the economy.

But this doesn’t mean you should skip college and go straight to working full-time. Student loans aren’t the only option to help pay for education. You do need to be prepared though. Don’t wait until you’re a senior in high school to start thinking about the following options:

  • Research scholarships and grants. As opposed to loans, students don’t have to pay back these types of financial aid.
  • Once you’re accepted to a school, research the least expensive options for non-tuition expenses (used books, on-campus housing, meal plans, etc.).
  • Get involved in the process so you can learn valuable financial lessons for the future. If you’re involved in the process from the start, you will have a better understanding of how to manage your money after college.

 

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. Stone serves as vice president, financial center manager and is responsible for leading the execution of sales and client experience within the financial center. He joined UMB in 2005. Stone earned a Bachelor of Science in Management from Baker University in Baldwin, Kan.



Read One Comment

Tagged: , , , , , , , , , , , , , , , ,

Financial planning is a marathon, not a sprint

  |  Posted by

Whether you have just started the race and you are at the beginning of your career, or you are closing in on the finish line of retirement, you should stay on track with your financial planning. Much like running a marathon is different than a sprint, planning long-term financial goals is different than simply paying your bills every month. A knowledgeable financial partner can coach you through this and make the process seem less daunting. Similar to a mile marker showing you what point you are at in a marathon, certain life events signal when and how you should financially prepare.

Continue Reading
  • Just starting out

    Start saving as soon as possible to set the pace for this long-distance run. Consider opening a savings account and set aside whatever you can from each paycheck. With most banks, you can set up an automatic transfer from your checking account to a savings account so you won’t even have to think about it. Also consider a retirement fund—either a 401(k) or similar employer-sponsored plan, or an Individual Retirement Account (IRA) separate from your current job.

  • Planning for a family

    Thinking about starting a family? This is an important decision and one that you must be prepared for financially. Much like training before you run a marathon, adjusting your budget and saving for having kids is important. Paying for medical bills when the baby is born or financing adoption fees is no simple task. Not to mention childcare and other expenses related to children once you have them. Bottles, diapers, clothes, toys, it all starts to add up quickly!

  • Children’s education

    If your children plan to pursue higher education after high school, you will need to save for that expense. A four-year degree is estimated to cost $442,697.85 for students enrolling in 2031 if tuition increases seven percent per year. Does that number make you nervous? Planning ahead and starting to save when your children are born will help with some of that anxiety.

  • Pre-retirement

    As you see the retirement finish line in the distance, it is important to meet with your financial partner(s) to understand when you can retire and feel comfortable with your finances at that time. Ask how your retirement fund(s) is/are performing and whether or not you need to increase/decrease your contributions. Want to spend your retirement vacationing at that lake house you have always dreamed of? It doesn’t have to be a dream if you start budgeting now.

  • Post-retirement

    Now it’s time for the post-run cool down and stretch. After you retire, it is more important than ever to monitor your finances. You aren’t contributing to a retirement fund or planning to pay for your children’s college; instead you are now working on a fixed income and have to ensure that it will last for the rest of your life.

Marathon runners train very hard for a long time to prepare for those 26.2 miles. Often they don’t do it alone and will work with a trainer who helps them through the preparation. Utilize the expertise available at your bank and start preparing for the long-term so you can reach the finish line when and how you want.

 

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. Miles serves as assistant vice president and banking center manager in Denver. He is also a member of the UMB Consumer Advocate Team. He joined UMB in October of 2007. He is currently studying Organizational Leadership at Colorado State University.



Leave a Comment

Tagged: , , , , , , , , , , , ,