Should I Lend Money to My Brother?

Should I Lend Money to My Brother?

Question: I am not independently wealthy, but I have enough to be comfortable. My brother has always struggled with money. Recently, he asked me to lend him money to help buy a car. What should I tell him?

Answer:  In my experience, loans to family and friends tend to complicate relationships and often lead to misunderstandings. This may sound harsh, but if you lend money to a friend, you had better be prepared to lose a friend. And if you lend money to family, chances are you are setting yourself up for some unpleasant drama.

Trusts for Wealth Management

Trusts for Wealth Management

Question: I keep hearing about different kinds of trusts, especially revocable and irrevocable trusts. What are they and why are they important?

Answer: When properly designed and carefully used, trusts can be powerful wealth management tools. They can turn potential tax liabilities into charitable gifts and lifetime income streams. They can help protect assets from litigation and spurious legal claims. They can help establish and extend family wealth.

Special Treatment for Trusts at the FDIC

Special Treatment for Trusts at the FDIC

Question: I am confused by the rules for FDIC insurance.  I thought the limit for coverage was $250,000, but my friend says CDs owned by my trust can be insured for a lot more. Who is correct?

Answer: Thanks for your question. The good news is you are both right, but many people don’t realize that bank deposits made by revocable trusts get special treatment by the FDIC. Let me see if I can clear up some of the confusion.

The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that protects depositors in United States banks. If you deposit money in an insured bank and that bank fails, the FDIC guarantees you get your money back, up to a certain limit.

Brokers and the Fiduciary Standard

Brokers and the Fiduciary Standard

Question: Should I be concerned about President Trump’s executive order last week that repeals the fiduciary rule for brokers? Sounded like a good thing to me that brokers should put client’s needs ahead of their own! 

Answer:  Last Friday, President Trump signed an executive order instructing the Department of Labor (DOL)  to review (not repeal) the previous administration’s order that was due to take effect April 10th.  The rule requires registered representatives of brokerage firms (brokers) who are paid commissions for sales to adhere to a fiduciary standard when giving advice on retirement plans, including IRAs. The DOL may postpone the effective date while it reviews the rule.