In 1945, two brothers, Jacob and Samuel, were rescued from the Nazi extermination camp of Buchenwald. The rest of their family had been killed. The brothers joined other refugees that left Europe after World War II. Jacob came to the United States, became an engineer, and worked many years for a major corporation. Samuel immigrated to Australia and became an accountant.
Several years ago, Jacob died. He had never married. Samuel — by now quite elderly —came to the United States to settle Jacob’s affairs. What he found was financial chaos. Jacob had always lived frugally and invested widely. Unfortunately, he kept very poor records. Samuel spent several weeks rummaging through files, boxes, drawers, and even under couch pillows trying to gather together all the certificates, statements, and even uncashed dividend checks that Jacob had left behind. We will never be certain that all of Jacobs’s assets have been located.
Few people leave behind as chaotic a financial tangle as Jacob did, but I find that more than half of the people I advise after a death are not certain that they can identify all of a deceased’s investment assets.
The first lesson from this example is this: DO NOT KEEP STOCK OR BOND CERTIFICATES AT HOME OR IN A SAFE DEPOSIT BOX. KEEP ALL FINANCIAL ASSETS IN BROKERAGE ACCOUNTS.
Modern brokerage accounts now allow access via checkbook, electronic funds transfer (EFT) and charge cards. Have all dividends and interest payments deposited in your account; and, if you need cash, you may write a check. There is no reason for your heirs to search through your papers to find uncashed dividend checks.
As people get older, financial advisors and estate planning attorneys often advise clients to consolidate their assets. This is sound advice and greatly simplifies the job of managing an estate at death.
It is often possible to consolidate assets — even mutual funds that you have bought outside of a brokerage account — with a single financial advisor or team of advisors. This has the advantage of giving your financial advisor a better view of your assets and thus providing more comprehensive plans and advice. It also makes it easier for the surviving spouse or heirs to identify your investment assets.
Investment accounts with brokerage firms, money managers, and mutual funds typically make up the bulk of the assets of most families. It is not unusual for a family to have multiple accounts.
Be sure to make a list of your investment accounts. You may use that investment section of the workbook to do so.
From BEFORE I GO by Arie Korving. Available at Amazon.
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Market reacts to French election, tax cuts and earnings
The stock market had two back-to-back days with the Dow Jones Industrial Average (DJIA) up over 200 points. On Monday the market was reacting to the first round of elections in France.
The French election for President is often a two step process. If a candidate gets over 50% of the vote in the first round of voting he or she is declared the winner and becomes President. If no one gets to 50%, the two top vote getters face a run-off election which decides the Presidency.
In the first round that just ended, the candidates of the major French parties that had run the country for decades did not make it to the run-off. Instead, Marine Le Pen (usually described as “Far Right”) and Emmanuel Macron (usually described as a “centrist”) were the two top vote getters. They will face off on May 7th with the winner becoming President of France.
Macron, age 39, received 23.8% of the vote while Le Pen scooped up 21.4%. Macron formed his own party, splitting off from the Socialists. Macron is best known for marrying his teacher, a woman 25 years his senior.
It is generally assumed that Macron will win the next round with the French establishment uniting against Le Pen who wants to stop immigration and wants France to pull out of the EU. The results of the balloting caused a relief rally in expectation that France will stay the current course and remain in the EU.
The Tuesday market action was driven by exuberance over the Trump administration announcement that they were proposing a reduction in the corporate tax rate from 35% to 15%. If this passes, next year’s corporate earnings would be higher.
On the earnings front some of the big names in the DJIA reported better-than-expected earnings. Caterpillar, McDonald, Du Pont and Goldman Sachs were the biggest beneficiaries.
Stay tuned.
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