Tag Archives: Before I Go

Consolidating your assets

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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Retirement statistics

  • 65 – The age at which the average American expects to retire, up from 63 in 2002.
  • 26 – Percentage of baby boomers who expect to retire at age 70 or later.
  • $265,000 – the estimated amount a couple, both age 65, should expect to spend on health care.
  • 22 – Percentage of couples who factor health care costs into retirement.
  • 30 – Percentage of adults born in the 1940s and 1950s who have traditional pension plans.
  • 11 – Percentage of adults born in the 1980s who are expected to have a traditional pension plan.
  • 60 – Percentage of medical expenses that Medicare by itself covers.

If some of these statistics don’t scare you read them again.

For others, we may be able to help.

And read the first three chapters of Before I Go.

 

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Single Women and Investing

Women are in charge of more than half of the investable assets in this country.  A recent Business Insider article claims that women now control 51% of U.S. wealth worth $14 trillion, a number that’s expected to grow to $22 trillion by 2020.

Single women, whether divorced, widowed, or never married, have been a significant part of our clientele since our founding.  Widows that come to us appreciate that we listen and take time to educate them, especially if their spouses managed the family finances.  Once their initial concerns are alleviated they’re often terrific investors because they are able to take a long-term view and don’t let short-term issues rattle them very much.

Unfortunately, we have had women complain to us that other advisors that they’ve had in the past did not want to discuss the details of their investments and the strategy employed. Other women have come to us with portfolios that were devastated by inadequate diversification.

Our female clients are intelligent adults who hire us to do our best for them so that they can focus on the things that are important to them.  We are always happy to get into as much detail on their portfolios as they require.  Our focus on education, communication, diversification and risk control has led to a large and growing core of women investors, many of whom have been with us for decades.

Our book, BEFORE I GO, and the accompanying BEFORE I GO WORKBOOK, is a must-have for women who are with a spouse that handles the family finances.  Men who have always handled the family finances should also grab a copy and fill out the workbook.  If something were to happen to them, it would be a tremendous relief to their spouse to have such a resource when taking over the financial duties.  The first three chapters of our book are available free on our website.

We welcome your inquiries.

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How Advisors Can Help Surviving Spouses

Investopedia published an article we authored.

When the subject of death comes up, a term that’s often used to describe the feelings of those left behind is “loss.” But there is more to that loss than the loss of companionship. There’s also the loss of information, especially if the person who died also handled the family finances.

In my 30 years of experience advising families I have often had to help and council widows who depended on their husbands to manage the family finances. It’s fairly common for families to have several investment relationships. It’s quite rare to find that the spouse who managed the money actually did a good job keeping records and keeping his spouse “in the loop” when it comes to money management. And when her spouse dies, the widow has to deal with a host of organizations whose primary focus is on making sure that they don’t distribute money to anyone who is not entitled to it. The liability is too great. So we typically have a widow dealing with the death of a loved one, plus the Social Security Administration, the husband’s pension plan, and two, three or more brokerage firms who handled the couple’s investments. (For more, see: Estate Planning: 16 Things to Do Before You Die.)

Who Handles the Finances?

One of my earliest experiences was with a widow whose husband took care of all the family finances. He made the investment decisions, paid the bills and balanced the checkbook. He died suddenly and his wife did not know what to do. Childless and with no near relatives, she needed help. (For more, see: Estate Planning for a Surviving Spouse.)

While her husband’s will was up to date, during our first meeting she revealed that she knew nothing about her financial condition. She did not know how much she was worth, what her income sources were or what it cost her to live. It took a while to learn where all the investments were, what her income sources were and how much she needed to maintain her lifestyle. (For related reading, see: Advanced Estate Planning: Information for Caregivers and Survivors.)

Over the years I found that this situation was not uncommon. Balancing a checkbook, paying bills and making investment decisions does not appeal to a lot of people. They are happy to allow their partner to do that for them. The problem with this division of labor does not appear until the individual in charge of the finances disappears either through death or incapacitation.

Helping Manage the Transition

This is the point at which a trusted financial advisor can ride to the rescue. A good one is willing to go through records to see what it takes to run the household. He will be able to determine the survivor’s income. He will know how to identify the family’s investment and bank accounts even if the records are incomplete. Just as important, a financial advisor should be willing to provide more than simply financial advice to the surviving spouse. This is the point where questions arise about selling the extra car, upgrades around the home, moving to be nearer the children – or moving into a senior living facility. These may well be the questions a trusted advisor is able to answer. (For more, see: 6 Estate Planning Must-Haves.)

Advisors who are simply money managers will, at this point, probably find themselves replaced. According to PriceWaterhouseCoopers’ Global Private Banking/Wealth Management Survey, 2011, more than half (55%) of the survivors will fire their financial advisor following the death of a spouse. A lot of that will be due to the changing level of service that a surviving spouse needs. (For related reading, see: Why Do Widows Leave Their Advisors?)

But there is actually a better answer to the financial confusion that often follows a death. The best time to gather comprehensive information about family finances is when the couple is still alive.

Why a Will Might Not Be Enough

With due respect to the legal profession, will and trust documents are written to specify how assets are to be distributed at death. With few exceptions, they rarely get down to the kind of detail that allows the surviving spouse to take up where the deceased has left off.

What is needed is a specific book of instructions itemizing financial assets, their location and their ownership. Income will be vitally important to the surviving spouse. Realizing that income will change once one’s spouse dies, it’s important to know what the survivor’s income sources will be. Finally, the cost of maintaining the surviving spouse can be determined while both are still alive much more easily than after one has passed away. And since so many transactions now take place via password protected Internet portals, the survivor needs a list of those portals and passwords. (For further reading, see: The Importance of Estate and Contingency Planning.)

When someone dies, the surviving spouse will always have a period of grieving. But if a little though is given to preparing for the inevitable, grief does not have to be accompanied by fear of an unknown financial future.

To make it easy for couple who want to plan, purchase a copy of our book: BEFORE I GO and the BEFORE I GO WORKBOOK.  Contact us:

 

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Getting Cookies

Cookies are not really on my diet, but she brings them anyway.  “She” is a very sweet, lovely lady of a certain age who drops by regularly to chat and bring us cookies.

We got to know her when her husband died and a friend referred her to us.   She was a homemaker and her husband handled the finances.  When he died, he left a collection of stocks, bonds and mutual funds scattered among several investment firms.  She was not quite sure where everything was.  There was a funeral to arrange.  Then there were life insurance forms, social security forms, pension forms, and every day bills that needed to be paid.  There was so much paperwork involved in getting it all together that it was overwhelming to her.

That’s where we came in.  This was something we had done many times before.  In fact, we had written a book on preparing for this day: BEFORE I GO.  So we helped her make sense of it all.  And then we offered to help her manage it.

That’s when she started to bring us cookies and stopped to chat, even if there was nothing pressing we had to discuss.  They were nice, friendly visits that allowed us to keep up with her children and friends.  She would tell us about the trips she took and the people she met.  And despite the fact that we shouldn’t be eating them, we loved her cookies.

She stopped driving recently and we don’t see her coming in the door any more.  So today I’m going to the store, buy some cookies and stop at her house.  It’s her turn to get cookies.

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It’s National Estate Planning Awareness Week

We are reminded by an attorney friend of ours that October 19-25 is National Estate Planning Awareness Week. We are told that most Americans don’t have an estate plan. That means that there will be both confusion and probably squabbling when one of these people dies. Even worse, the whole thing can end up in court.

Contrary to popular belief, estate planning is not just for the wealthy. It’s for everyone who has someone they care about. Over the decades we have frequently helped people cope with the death of a spouse, a parent or just a good friend. Even with a up-to-date will or trust there is inevitably a great many loose ends that need attention.

Even those who have the proper documents in place often overlook the fact that they usually don’t get into the kind of detail that the people who are left behind really need. That’s why we have published a set of books specifically designed to cover the subject of estate planning and more. You can get a copy of BEFORE I GO and BEFORE I GO WORKBOOK from Korving & Company or order it from Amazon.com.

To read the first three chapters free, go HERE. And if your estate plan is non-existent or out of date, this is a wake-up call.

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What Your Executor NEEDS to Know

We live in an age when everything about us seems to be public. Facebook has our pictures, the pictures of our kids, our cats, where we go, and who our friends are. Computer hackers have our e-mail addresses, our social security numbers and our deepest secrets (if we ever worked for the government). So it’s only natural that we try to hold on to as much of our privacy as possible. Unfortunately, that means that the people who we appoint to take care of our affairs after our death are often in the dark.

Here is how one on man described the situation when he asked his sister where her estate planning documents were.

Years ago, my sister named me as her personal representative, but she hadn’t given me copies of any of her estate-planning documents. Eventually, I took a trip to Phoenix to visit her and my brother-in-law, in part to discuss this very topic with her. When I asked her where she kept the documents, she led me into the guest bedroom. She opened the door to the closet, bent down and uncovered a well-camouflaged “secret compartment” in the carpeted floor. In the compartment was a locked metal box with a combination lock.

I looked at her incredulously and asked how she could expect me to be able to open the box without knowing the combination. “Oh, you’ll find that in the butter dish in the fridge,” she told me.

There was no way I would’ve found the lockbox under the trapdoor in the closet in an obscure room of her house — not to mention the combination. In fact, I wasn’t even sure I’d be able to get into her house, which was in a gated community with a coded keypad.

We have experienced similar situations many times and it is one of the reasons we wrote BEFORE I GO and the accompanying workbook.

You executor needs to know where your important papers are, how to get to them, how to access bank and investment records and any important computer files. If you do not leave them with clear instructions, you are running a huge risk that either your wishes won’t be followed or that you will have created a huge burden on your executor and cost them precious time and additional stress.

If you are interested in our guide book, you can download the first three chapters of BEFORE I GO for free by going HERE.

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4 Reasons Why You Need a Good Financial Advisor Now

A good financial advisor has a number of roles: planner, investment manager, educator who is willing to teach you about investing, and sounding board with whom you can share your fears and aspirations.

Why is a Registered Investment Advisor (RIA), a fiduciary who puts your interests ahead of his own, so important now? People often get over-confident during a Bull Market. It’s when the market gets scary that financial professionals really prove their worth.

We have all heard the old sayings about being diversified, buy low and sell high, and stay the course. That’s often harder to do than it looks, especially in trying times such as these, when investor psychology overtakes reason. A financial advisor’s job sometimes involves protecting investors from themselves. And to protect them from all the bad advice that’s out there and from the bad actors in the industry.

  1. The first thing that a fiduciary does is tell their clients that despite what you hear, no one can time the market. There may be some people who are exceptionally good at stock picking, but those rare individuals are not giving away their advice to you on TV, in Money Magazine, or in newsletters; I don’t care what they claim. If they exist at all, they are managing their own portfolios on an island in the Caribbean.
  2. The retail financial services industry has an incentive to sell you expensive products as often as possible. And they are very good at it. Don’t get caught in the frequent trading trap; it’s not to your benefit. A fee-only RIA does not have an incentive to sell you investments to earn a commission.
  3. Investors typically allow their portfolios to get too risky during the good times. When the stock market is going up, it’s too easy to get caught up in the excitement and ignore asset allocation guidelines. A good investment manager will rebalance your portfolio regularly to keep you from running into a Bear Market with a portfolio overloaded with risky stocks.
  4. A fee-only RIA works for you. Stockbrokers, insurance agents, even mutual fund managers, work for the companies that pay them. They are legally required to work in the best interest of their employers, not their clients. Some of them do try to work in their clients’ best interests, but there can be large financial incentives to do otherwise. A fee-only RIA works only for you. We act in your best interest and use our expertise to allow you to take advantage of opportunities in good markets and weather the bad ones.

During volatile markets, we focus on the important things that really matter, not the daily chatter. We keep open lines of communication with our clients, helping them make sense of what’s going on, providing perspective, and helping them distinguish between what’s just noise and what’s a genuine trend. We work hard to control risk and manage portfolios to help our clients maintain confidence in their financial future.

If you want to receive our weekly commentary, view our latest guides, or get a free download of the first three chapters of our book “Before I Go”, or just find out about us, visit us at http://www.korvingco.com.

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Where Should I Keep My Estate Planning Documents?

The Hook Law Firm has a good article on where you should keep your estate planning documents.  Read the whole thing.

They make a number of good points.

  • Make sure that you have original copy of your will.  Copies may not be accepted for probate.
  • Make sure someone knows where your important documents are.
  • Make sure that people you trust to use the documents can get to them.
  • Destroy old or out-of-date documents to avoid confusion.

We offer a set of books: Before I Go and Before I Go Workbook to guide people through the process of preparing their estate for their heirs.  You can order a copy at Amazon.com or get an autographed set directly from us for $25.  Just send us a check made out to Korving & Company, 1510 Breezeport Way, Suite 800, Suffolk, VA 23435.

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Korving & Company – Suffolk Small Business of the Year

We are very proud that Korving & Company has been named Suffolk Small Business of the Year by the Hampton Roads Chamber of Commerce (HRCC).

HRCC Suffolk SBOY award 2015

We were honored at a luncheon on Norfolk sponsored by the HRCC on June 12th. Pictures of the event can be found on our Facebook page.

Here is what Inside Business had to say about us:

Father-and-son duo Arie and Stephen Korving have more than four decades of experience in financial advising between the two of them.

Arie Korving entered the business in 1986, working for a global wealth management firm, and Stephen joined him at the firm in 2004, after working in institutional money management. Branching out to start Korving & Co. in 2010 gave them the opportunity to provide individualized financial advice to clients. Their purpose is managing money but putting people first is at the core of what they do.

“We know our clients,” Stephen said. “We manage money for them to help them achieve what it is they want.”
Today, they have clients in every stage and circumstance of life, from the widow in an assisted living facility to the corporate executive. The common denominator among clients is that they remain with Korving & Co. for a long time, some for over 20 years.

Because of Arie’s establishment in the industry and his ability to maintain relationships, they are not just nationwide but across countries, Stephen said. Given the nature of how they invest, long distance relationships with clients have never been an impediment.

“We are a family business that works with families,” Stephen said. “We do for our clients what we would do for our family members if they were in the clients’ situation.”

“We decided to run this business to help people achieve their goals and we want to do it in a highly ethical, highly transparent way,” Arie added.

It is this type of personalized guidance that has kept the company increasing at 15 percent to 20 percent per year, a rate that they want to continue to see as long as it provides the opportunity to work with people in a meaningful and impactful way.

This principle was further established during the market crashes of 2000 and 2008, after which the company decided to become totally independent of large investment firms, allowing them to provide service based on their clients’ needs.

“It really resonates with people when you can say let’s find what you really want to do rather than what the market wants to do,” Arie said. “That type of risk control is an important service we offer.”

Located in Suffolk, they are truly a small business by choice with only one other employee beside themselves on payroll. By staying small, they are able to grow in relationships and be involved in the community, Stephen said.
Arie recently published a book, “Before I Go,” which shares his life experiences from an educational standpoint. They also have had articles in local publications and are currently rated No. 4 in financial blogging in Virginia and in the top 100 in the U.S….

Their bottom line is helping people. “We can continue to grow in the amount of money we manage, but we want to maintain the very personal relationships we have with people,” Arie said.
“People never want to think of themselves as a number.”

We welcome your inquiries.

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