Featured market and investment news from 9258.

April 2019 Newsletter

April Market Commentary

Global stocks continued their march higher in April with U.S. and international stocks gaining. This is the 4th consecutive month of gains for stocks! US bonds (Barclays U.S. Aggregate Bond Index) took a breather in April providing a flat return. Year-to-date, U.S. bonds also have positive returns. The positive returns for bonds is impressive, giving that inflation concerns are muted.

Corporate earnings season kicked into high gear in mid-April. For the most part, corporate earnings are exceeding low expectations. While earnings hit a soft patch in the first quarter, companies are expected to see improving results as the year progresses. Recession fears have faded after U.S. GDP expanded 3.2% in the first quarter. While this was higher than expected due to inventory building, economists expect U.S. GDP growth to be near 2% or better for each quarter the rest of the year.

Tame inflation and moderate GDP growth have moved the Federal Reserve to the sidelines as investors no longer expect any interest rate hikes for the rest of 2019. While the Federal Reserve was blamed for the weak stock market in the 4th quarter of 2018, it is mostly responsible for the stock market recovery in 2019 with their decision to hold interest rates at current levels. Therefore, in the short-term, the US/China trade negotiations are front and center for investors. The daily gnashing of teeth for the on-again/offagain China trade negotiations is leading to increasing volatility in the financial markets due to the uncertainty of consummating a favorable trade deal.

Higher tariffs may pose a risk to the U.S. economy. Inflationary pressures could result from tariffs, which may lead to businesses raising consumer prices. In addition, this might lead to production bottlenecks, as the U.S. supply chain may be disrupted if our trading partners retaliate. While investors have been complacent about the trade war in recent months, no progress in a trade deal may lead to a market selloff. On the other hand, a trade deal could spark a rally in the stock market, leading to new highs.

As we noted last month, we remain optimistic regarding solid growth in the U.S. economy and improving corporate profitsin the second half of 2019. Since we can’t predict the outcome of trade deals, we believe staying focused on your long-term goals is the answer to navigating the current environment. If you should need any assistance in reviewing your financial objectives, please feel free to reach out to us to schedule an appointment.

Basic Estate Planning

Regardless of your family situation, everyone should have a basic estate plan. Whether your motivation is the appropriate distribution of your assets or simply to provide an orderly process to those that survive you, this is a critical component to anyone’s financial plan. Many clients can get overwhelmed by the thought of an estate plan or may feel it’s only needed for the ultra-high net worth individuals. Also, with the new tax laws and much higher estate tax exemption levels, many don’t feel the sense of urgency to create an estate plan. While there is certainly very complex estate and tax planning that can be done for the ultra-high net worth individuals, there is a basic set of documents that everyone should have simply for protection and peace of mind for their
family. Below is a summary of each basic estate planning document.


The two main objectives of your will are to identify the executor of the estate and to appoint guardians for your minor children. While the executor is a very important decision, they do not have “to go it alone.” What’s important is naming an executor who can handle the process, but hire professionals, like attorneys, CPAs, and financial advisors, when needed.

Obviously for any parents of minor children, naming a guardian is probably the most important aspect of any estate plan. You likely do not want the court to determine who will raise your children. While guardians are often other family members, it can also be unrelated friends. However, if you do wish for someone unrelated to be your guardian, it’s important to have a will that clearly names the person and documents your intentions. Also, keep in mind that the executor and guardians can be separate parties. It’s more important to name the right people vs. naming just one person to do everything.

Finally, if your estate plan does include a revocable trust (more detail later), then the will is a very simple document. It would simply name the executor, guardian and likely state that all assets simply “pour over” into the trust to be distributed according to that document. Having assets titled and beneficiaries designated appropriately is a key aspect of avoiding the probate process, which may or may not be a cumbersome and/or public process depending on the state and county in which you live. If you do not incorporate a revocable trust in your estate plan, it’s likely that language will be incorporated into your will to create a trust upon your death (called a testamentary trust). While this approach still handles the distribution of assets, it will not avoid the probate process. You must have a trust in place prior to death, with appropriate asset titling and beneficiary designations, to avoid the probate process.

Healthcare Power of Attorney

This is a very simple document that varies by state to document who you wish to provide authority to make health care decisions on your behalf if you are incapacitated. It also typically includes a HIPAA release to allow certain individuals access to your healthcare information.

Financials Power of Attorney

This is a very simple document that varies by state to provide authority to handle your financial affairs if you are incapacitated. They would have access to your financial accounts and be able to handle certain transactions on your behalf. In a very basic sense, it allows them to “pay your bills.” Obviously, given the ability to make financial decisions, the naming of someone should be carefully considered. Also note that this document ceases its authority upon your death. At that point, either your executor or trustee would have the financial authority to act.

Living Will

This is another straight forward document that simply identifies your end of life treatment wishes. It also can document your organ donation wishes if you haven’t already done that through your driver’s license registration. This document makes it known to your family and doctors as to not leave that decision-making burden on your family.

Revocable Trust

One primary reason to establish a revocable trust while you are alive is to avoid the probate process. While for many the probate process may not be that onerous, for others it could be something to truly avoid. For example, if you are a private business owner, you absolutely would want to set up a trust to avoid having to value and report such private information to the courts as part of a probate proceeding. Do you really want the public to know the value of your business, including your competitors and/or potential buyers?

Another reason to establish a trust is to provide for an orderly disposition of your assets, especially if you have minor or young adult children. Your guardian will always have the right to assets to provide for the health, education, maintenance and support of your children. However, support and maintenance may be viewed very differently so it’s important to name a guardian and trustee who understands how you would have wanted your children to be raised, and the values you want them to retain beyond your passing. As with naming your executor, naming your trustee is a crucial decision. There is an added decision where you could name a corporate trustee vs. an individual. There are pros/cons to each and beyond the scope of this article. Assuming you decide to name an individual, they can hire professional advisors to assist them. Additionally, it does not have to be the same person as the guardian of your children. In some situations, it may be better to separate those duties and have your trustee handle financial decisions while your guardian handles the raising of your children.

A potential benefit of adding a trust is creditor protection. If one of the spouses is in a high-risk profession, such as a physician, it may be best to hold assets in the spouse’s revocable trust. Additionally, having assets in a trust upon your passing may help your children if they are going through a divorce. Obviously, the last thing you want is a required outright distribution to your child from your trust as they are going through a divorce. While assets can be kept separate, any co-mingling of assets may cause problems.

While all these decisions around the trust may seem overwhelming, keep in mind that the trust is “revocable” and you are able to change its terms at any time during your lifetime. From a day to day practical standpoint, having a trust doesn’t impede access to assets. It’s more about account registration and appropriate beneficiary designations. We recommend a review of the trust, and the entire estate plan, every five years or more frequently as life events happen. What may seem appropriate when your children are young may not seem as appropriate when you see them in their later teen years or as adults off on their own making their own decisions. While discussing your end of life wishes is not likely on your “bucket list”, the peace of mind it can bring that your affairs are in order is well worth the effort to establish a basic estate plan.

With the help of a trusted financial advisor and a competent estate planning attorney, this process can be quite simple. We do have clients ask whether they can take the “cheaper” route and use online services/documents, but we do not recommend this approach. Much like a financial advisor, having a trusted estate planning attorney for your family in their time of need is crucial. Please don’t short cut the process or further delay it. Contact your financial advisor now and either put an estate plan in place or have them review what you do have.

Share This Story!

Subscribe to our newsletter

Get our market insights, tax tips and company updates right in your inbox.
Scroll to Top