What You Should Know

If you are an individual or a business and you need to choose a CPA, there are many guidelines which might be helpful. They fall into these categories:

1. Determine your needs and desires, immediate and narrow, and longer-term and broader and make an assessment of your own particular circumstances, quirks and preferences.

2. Gather several candidates, using various methods such as (a) referrals from close associates (b) directories such as CPAdirectory.com (c) searches among information sources such as industry publications, articles, Internet search engines, etc.
more...

Can my financial planner and advisor truly help me get what I really want?
Is "sensitive" financial services the next big thing or just another sales gimmick in different clothing?

It seems like it came out of the blue, but the "sensitive" approach to personal financial services has been boiling under the surface for several years. It now has exploded on the scene to be perhaps the most radical change in financial services since personal financial planning became a legitimate profession two decades ago.
more...

Due in part to the recent growth in the stock market and the economy in general, many of our clients have sufficient assets to put them into a marginal Federal estate tax bracket of approximately 50%. Any inheritance from parents will also be subject to estate tax at 50% in the client's (child's) estate. We frequently recommend that the parents leave the child his or her inheritance in trust for the child's lifetime instead of outright to the child. The trustees typically are the child and another person, such as the child's sibling or spouse. The income of the child's trust is paid to him or her currently. In addition, in the discretion of the co-trustee, the principal can be invaded for the child. Upon the child's death, the trust is divided into shares for grandchildren, with each grandchild's share retained in trust for the grandchild until specified ages such as 30 and 35. The property in the trust avoids estate tax in the child's estate, since he or she does not own it. To discourage the foregoing technique, Congress enacted a generation-skipping transfer tax that is imposed at the child's death. The tax basically replaces the estate tax that would have been paid if the child had been left the property outright. However, the law provides for a $1,000,000 per parent exemption from the tax. If both parents are living, they can "skip" generations with an aggregate of $2,000,000, saving $1,000,000 or more in the children's estates. An additional benefit of all of the foregoing is that the child's inheritance is protected in the event of a matrimonial dispute. Under the law of most states, inherited assets are not subject to division in a divorce. As a practical matter, inherited assets are often commingled with the child's own assets and become subject to division. Leaving part or all of each child's inheritance in a lifetime trust identifies the inheritance as a child's separate property and prevents it from being divided by the divorce court. Furthermore, under the law of most states, the trust is protected from creditors such as malpractice creditors or business creditors. There are significant advantages to the child with this type of planning. However, it should be emphasized that this technique does not affect the estate taxes in the parents' estates. Non-citizen spouses. Most married clients can defer estate tax by leaving assets directly to their spouses. If your spouse is not a U.S. citizen, then you have been entitled to a marital deduction only for assets left to a "Qualified Domestic Trust". The requirements are complex and have been changed several times. The new federal legislation provides that if you satisfied the requirements in a Will (or living trust) executed before November 5, 1990, then your estate is eligible for the marital deduction even though you have not updated the Will to reflect the various changes. You should nevertheless contact your attorney if your spouse is not a citizen and if you have not recently updated your estate plan, because the changes in the law since 1990 permit a much less restrictive type of trust to be used.

The hottest trend going today in financial services is Account-Aggregation. The internet now makes it possible for people to easily access all their updated financial information in one spot at the click of a button. Here is why both CPAs and their clients stand to benefit - and big time.

What is account-aggregation
Account-Aggregation is a term referring to the process of consolidating an individual’s various financial accounts, such as bank accounts, investment accounts and insurance information, in one spot, easily accessible to the individual and to his or her advisor. This process has greatly increased in popularity within the last year, with the proliferation of websites offering aggregation, including major financial companies (Citibank’s MyCiti.com) and large brokerage firms (Greentrak.com for high-end clients of Merrill Lynch, Paine Webber, and myCFO.com) as well as financial websites such as Yodlee.com and OnMoney.com who are tied in with major portals. MyAccounts on America Online has the potential of eventually bring aggregation to millions and making aggregation an everyday word.
more...

A credit card is a lot like wine. Most people I know can use credit cards almost daily and can drink one or two glasses with their dinner, and their lives seem to go on smoothly. Occasionally these same people overspend with their cards or they overdrink at a party, and they get a debt headache or a wine hangover that takes a little time to wear off. However, some people I know indulge too often in credit cards and in wine, and are not built to handle it. They use the freedom of borrowing to overspend and fill an emotional or psychological need now, robbing their future. They use the bottle of wine to drown fears or disappointments too hard to face today. Perhaps these people are better off without any credit cards and better off without any wine.
more...