Wills 101: what you need to know

wills 101: what you need to knowIn our last blog post, we explained estate taxes which should be part of any thorough estate plan. Another part of that plan is a will. In this excerpt from author Joseph M. Maas’ book “Exit Insight: Getting to ‘Sold!’” pp. 168-170, we will explain the basics of the will:

As you know, the will is the legal document that determines the disposition of your property by identifying who will manage the distribution of your estate, and has the responsibilities for paying the estate tax on the assets of the estate, paying the liabilities existing at the time of death, and paying the costs of administration.

There are volumes written about wills! For our purpose, it is important to note that the will establishes the identity of your family. If you have children who will receive unequal portions of your estate, it is prudent to explain the reasons for the inequality to avoid a potential family dispute, which could end up in court. In addition, if you fail to name a child, some states permit the disinherited child to claim a portion of the estate.

The will also names your fiduciaries, or appointed representatives. Typically an executor may be sufficient. The executor is designated to ensure that all the property is distributed to the beneficiaries after all debts and taxes have been aid. The guardian’s role is strictly limited to the care of your minor children, to raise and educate them; normally your surviving spouse is the guardian. The trustee is named to manage assets in trusts; the trustee can be your spouse, a close family member or friend, a professional such as an attorney, or a bank.

There are several types of will, such as ‘simple will,’ a ‘contingent trust for the benefit of minor children,’ and a ‘marital deduction will.’ Your attorney will guide you with choosing the most beneficial type of will for your circumstances.

In addition, there are a variety of provisions for determining specific intentions, such as the survivorship provision, the spendthrift clause, the perpetuities savings clause, and attestation clause.

Finally, there is the testamentary letter, which can be a supplement to your will. The testamentary letter provides helpful information to your executor and family, and may also contain more personal information than belongs in a will, such as last rites and funeral services. The will has legal predominance, but the testamentary letter can clarify the decedent’s intentions.

This letter can also be useful in a variety of ways, including identifying the location of important documents, listing the names of your professional advisors, explaining large purchases or loans, and instructing your spouse about notifying certain agencies or companies like the Veterans’ Administration, the Social Security Office, etc. This letter is also helpful by including all the details that affect the business of the person’s life such as the safe deposit box’s location, changing the registration of bank accounts, vehicles, real property, IRA accounts, Keogh plans, etc.

Having a valid, properly executed, legal will is critical to ensuring your wishes will be carried out upon your death. If you don’t have one, we strongly recommend that you contact your attorney to create one now. If you have one, we encourage you to revisit it periodically and to review it with your financial advisors and other professionals to ensure that it adequately addresses your needs and gets updated when needed.

Have questions? Consult Maas’ book “Exit Insight: Getting to ‘Sold!’” available for just $24.95 at Merrell Publishing or Amazon.com, or call the financial planning experts at Synergetic Finance today at 206-386-5455.

To your wealth,

Author Joseph M. Maas





President of Synergetic Finance


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It’s time for a third quarter check-up!

Financial ReportSeptember 30 marks the end of the third quarter of 2014. Do you know how your investments are doing? You should receive statements (electronic or hard copies) from your advisors, asset holders or third-party administrators sometime this month.

It is easy to ignore them, file them away, or toss them in your inbox to read later, but we encourage you to take a few minutes to open up your statements to see how you’re doing. Making a little time can make a big difference.

Did your investments grow as predicted? Were there any unanticipated losses? Did you contribute more or less than you’d hoped to your retirement plans year to date? Are any adjustments needed to your investment or insurance products? For example, did you experience any major life change – marriage, divorce, job change, birth of a child, etc. – during the last quarter that could impact your short of long-term financial planning?

Keep these questions in mind as you review your third quarter and year-to-date results. If you have any questions or are considering the need for changes, contact your financial planner to discuss these items at your earliest convenience. The sooner you make any necessary changes, the sooner you’ll see results!

To your wealth,

Author Joseph M. Maas





President of Synergetic Finance

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Estate taxes: why you need a trained professional

estate taxes: what you need to knowThe estate tax is a tax levied on an estate being transferred from the deceased to a beneficiary. Estate taxes can be severe, consuming as much as 49% of the estate’s value, or even higher with the tax hit your estate might receive with a combination of both federal tax and the state estate tax levied by some states. Remember, this federal level of taxation is only for estates $10 million and over, with individual states having their own additional levels of taxation.

Thankfully, there are a number of tax rulings that can protect your estate. This section is intended only to flag your attention on the importance of using the services of professionals like your financial planner and attorney to steer your estate around these dangerous impediments to your estate’s transference.

In addition, there are a number of other taxes that can eat a chunk of your estate, such as the gift tax, the generation-skipping transfer tax, and the Kiddie Tax, to name just a few. Your estate’s taxation can also be influenced by various other factors, among which are divorced partners, minor children, and below-market loans to family members. These are all excellent reasons to use a team of professionals who will minimize the burden of your estate’s taxation.

Taxation is complicated, so enjoying the support of trained professionals is a sensible and wise money-saving tactic.

The preceding text is an excerpt from author Joseph M. Maas’ book “Exit Insight: Getting to ‘Sold!’” pp. 167-178, available online at Merrell Publishing or Amazon.com.

Have questions about estate taxes? Call the estate planning professionals at Synergetic Finance today at 206-386-5455, or click here to send an email.


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Meet the Synergetic Finance Team

Choosing a financial advisor is an important decision. You want to work with someone you trust. Watch this brief YouTube video to meet the Synergetic Finance team and learn more about how we work with our clients to support their long-term financial success.

Do you know someone that we might be able to help? Click on the share link in the upper right hand corner of the YouTube video to tell your friends about us.

Questions? Want to set up a complimentary consultation? Email us here or call us at 206-386-5455. Ask for Connie, Katie, Johnny or Joe. We’d love to help!


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Building your lifestyle protection plan

There are three matters which must be examined thoughtfully and with prudence because they form the core of your financial prosperity.

The first of these is establishing how much you’ll need in annual income as you prepare for retirement, the second is resolving how large your investment portfolio will need to be, and the third is deciding the sale price of your business. All three are the sum that becomes your retirement security.

Think of this process as a metaphor. You have an accordion that will play a beautiful song, but to get the sound to come out right, you have to squeeze here, push there, and press all the right buttons at exactly the right moment while balancing the box on your knee and singing in accompaniment with a smile! It could be a bit tricky; and it’s so much easier when you have an accordion master helping you.

This accordion is your Lifestyle Protection Plan. In order to make a joyful sound, all the financial aspects of your life must be in accord.

lifestyle protection plan









The preceding passage is an excerpt from “Exit Insight: Getting to ‘Sold!’” by author Joseph M. Maas of Synergetic Finance. We’ll continue this discussion in our next post.

For more information on this topic, contact Synergetic Finance today or visit Merrell Publishing or Amazon.com to purchase a copy of the book for just $24.95, or $9.99 for the Kindle edition.





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Financial implications of marrying later in life

Synergy takes a holistic approach to financial planningWe always enjoy hearing that our clients have found a special partner to share their lives with, whether they are 30 year old business owners or 60 year old millionaires. When people marry later in life, however, there are financial implications that should be thought through. Here are just a few areas to consider:

Prior commitments: If your new partner is divorced, he or she may have financial obligations. In the case of divorce, for example, your new partner may have been ordered to pay half of his or her retirement fund to the former spouse. If your partner has adult children, how will your marriage impact them financially? Will you need to update your will to reflect the change? Also, if you have college age children, will you pay the tuition jointly or alone?

Prenup: Whether one or both partners are financially well off, it is worth considering a prenuptial agreement should things not work out. This can be a sensitive subject, because who wants to think negatively about the relationship when you’re about to start a life together? But it is a subject you can’t ignore. If either of you has substantial assets, consult an attorney to decide how assets would be divided should the marriage end within a specified time period.

Assets: In addition to traditional assets like homes and cars, talk to your financial advisor about other assets like insurance policies and how they will be affected by a new marriage. For example, if you have a life insurance policy that is part of your estate plan, will you add your new spouse as a beneficiary or remove any of the previously named beneficiaries? Does your will need to be updated?

Day-to-day finances: This can be tricky when two adults who have handled their own finances combine into one household. Discuss what financial responsibilities and bills each will take on, or if you combine your income and expenses at all. Each partner may have different expectations, so discuss this up front to avoid unpleasantness later on.

We recommend that you get your professional advisors involved to help you through this process. By working with an objective third party, you can remove some of the emotion from the situation and focus on practical matters. Once you’ve hammered out the details, you can focus on your marriage.

Questions? Concerns? Contact the financial experts at Synergetic Finance today.

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Coming soon: 401(k) Insight: Getting to “Retired!”

401(k) Insight: Getting to Retired! is coming soon.We’re excited to announce that our next book 401(k) Insight: Getting to “Retired!” is coming out soon. Co-authored by 401(k) experts Joseph M. Maas and John A. Flavin of Synergetic Finance, the second in the Insight Series from Merrell Publishing will tell business owners and employees everything they need to know about 401(k) plans.

Employers will learn how to create and manage a plan on behalf of their employees; employees will learn how to use their company’s 401(k) plan to help them enjoy retirement. Watch our blog for details about the book’s release and how you can purchase a copy.

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Insurance advisor and policyholder responsibilities

Life insurance and risk managementInsurance is not a very glamorous topic to discuss, but it is an important one. Continued from our Sept. 4 post, we’re going to discuss the responsibilities of your insurance advisor as well as your responsibilities as the policyholder.

Responsibilities of your insurance advisor:

  1. Create, recommend, and execute an insurance strategy that is consistent with your estate’s objectives, time restrictions, risk acceptance, guidelines, and limitations.
  2. Recommend appropriate insurance companies.
  3. Counsel you about the recommended selection and allocation of insurance assets.
  4. Continuously monitor the performance of your insurance assets.
  5. Recommend changes as necessary to meet your portfolio’s goals.
  6. Be available for meetings as necessary, and at your request.
  7. Prepare and discuss periodic reports.

Your responsibilities:

  1. Observe the progress of your insurance portfolio and be alert about the progress toward your goals.
  2. Be cognizant of the insurance policies’ objectives and how they serve your plan.
  3. Discuss and instruct your advisor to make appropriate changes to the plan, and approve or disapprove of your advisor’s recommendations; be engaged.
  4. Provide your advisor with information about your financial circumstances and risk acceptance; be sure to notify your advisor about changes to your information.
  5. Read, understand and ask questions about the information in your insurance policies’ contracts.
  6. You are responsible for exercising your rights, as attained through the insurance policy purchases, and through your agreement with your advisor.

If you have any questions about the roles that your independent insurance advisor or you play in working toward your short-term and long-term financial goals, it is important to discuss them openly as soon as possible. Confused? Have questions? We can help! Contact Synergetic Finance today with your questions or concerns.


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Designing a life insurance portfolio

In previous posts, we’ve discussed the importance and benefits of using life insurance as part of your long-term financial plan. Life insurance is a flexible, financial tool that can help you protect your assets and reduce your risk. It is particularly useful as an estate planning tool. Once you and your independent insurance advisor have discussed your options, we encourage you to:

  • Outline your insurance strategy in writing.
  • Develop a portfolio of diversified insurance policies that will provide short-term and long-term protection at acceptable levels of risk.
  • Delineate risk protection in the insurance portfolio.
  • Recommend an allocation strategy for insurance policies.
  • Create guidelines for the selection of insurance companies and diversification of insurance assets.
  • Identify evaluation criteria for assessing the insurance portfolio’s performance.
  • Promote continuous and effective communication between the advisor and the client.

In a future post, we will discuss the responsibilities of a good insurance advisor as well as your responsibilities as the insured or policyowner. In the meantime, we encourage you to contact us with any questions or to view past articles on the subject.

Life insurance: the basics

7 surprising benefits of life insurance

To your success,

Author Joseph M. Maas





President of Synergetic Finance

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Working with a business broker

j0433118You’ve worked too hard and too long to risk selling your business by yourself. You need a professional who knows how to sell businesses, where to advertise, and has industry contacts. The chances are you’ve not sold many businesses in your career, and now is not the time to learn.

Engaging Your Broker’s Services

When seeking a broker to sell your business, your due diligence is required in selecting the most suitable firm. Some things to think about:

  • You want to know how your broker will advertise your business and their budget for this purpose.
  • If your sale is confidential, you’ll want to know how the broker will advertise, yet keep your identity unknown.
  • Does your broker think a cash sale is best for you, or a price with terms?
  • Determine that the broker is a good fit for your type of business; has the firm previously sold a business of your type and size, and in your location?
  • Remember that time kills deals…so is the broker experienced in moving the process along rapidly?
  • Be clear about the frequency of contact you expect from your broker; if you want frequent updates, say so.
  • Find out how quickly the broker responds to buyer inquiries, and the protocol for moving prospects forward.
  • Inquire about how many listings the broker has and determine if he or she is too busy to be a good selection for you.

Reviewing the engagement proposal

Once you have selected the broker you believe will do the best work for you, the broker will require you to sign an engagement letter detailing your working relationship. This letter states the terms of the services and the fees you will pay. Most engagement letters have standard language; some of the elements you should expect are:

  • The services you are hiring, such as preparing a marketing brochure, working with specialists on your behalf, advertising your business’s availability, filtering inquiries, and recommending worthy prospects.
  • Limitations of the services the broker will provide.
  • A term for performance; 3 – 24 months is typical.
  • Client’s responsibilities in support of the effort.
  • A disclaimer describing the broker’s potential for performance.
  • A description of the fees, discussed below.

The broker’s fee

Brokers are compensated either hourly, through a success fee, by a retainer, or by combinations of these options. Here are some details:

Success Fee: A success fee is a commission based on a percentage of the sale price, or a dollar amount. Typically, a success fee is between 5 – 12% and the smaller the sale, the higher the percentage.

Advisor’s Fee, or Retainer: Brokers expect to be paid for their hard costs and minimal services whether you sell or not. If the sale is successful, their fees may be deducted from the success fee. The retainer may include the advertising budget and other upfront costs the broker will commit to doing, such as meeting with members of your professional team.

Reverse Fee: As mentioned above, most of the time a broker will present a graded fee schedule with a higher fee percentage for a smaller sale price. A reverse fee schedule works like this:

Assume that you and your financial planner have determined your business has a value of $700,000 and you have set this as your top price. The broker tells you they charge 10% on all sales under $1 million. However, the broker also tells you his firm will try to sell your business for over a million, and if they do, will you be willing to pay 15%? Do the math and you’ll see that a reverse fee is desirable.

The previous passage is an excerpt (pp. 359-361) from author Joseph M. Maas’ book “Exit Insight: Getting to Sold,” available online now at Merrell Publishing and Amazon. You can also visit us online or call 206-386-5455 for more information about selling your business.


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