Articles Archives - Cornerstone Wealth Strategies

29MarMarch 29, 2023

529 College Savings Conversion to Roth IRA

Transferring wealth to children will become a touch easier in 2024. Buried in the estimated 4000-page Consolidated Appropriation Act of 2023 that passed at the end of 2022, was the SECURE 2.0 Act of 2022. The enactment of SECURE 2.0 heralded many changes for the retirement system in the United States. One provision dealing with 529 accounts contained under Section 126 of SECURE 2.0 allows parents an option for funding a child’s retirement account. But, first some background is in...

26JanJanuary 26, 2023

Be Prepared to Take Beneficiary IRA Distributions in 2023

In 2019, The SECURE Act changed the rules concerning the distributions from pre-tax Individual Retirement Accounts (IRAs) inherited through beneficiary designation (a so-called “Beneficiary IRA”). As with many such changes to the tax rules, this new rule took time to dissect and fill in “best guesses” for how the new law functioned where the statutory language was perhaps ambiguous. It also took time for regulatory agencies like the IRS to weigh in on their interpretation of the rule. Fast forwarding...

25JanJanuary 25, 2023

Prenuptial Agreements

Couples are often wary to bring up the dreaded P word when discussing their nuptials. After all, who wants to ostensibly discuss a divorce when there is an impending marriage to consider. Oftentimes the desire to avoid the topic is rooted in a fundamental misunderstanding of the use and benefit of a prenuptial agreement. These agreements are not only helpful in a divorce setting, but from a planning perspective, they can be essential to carry out an effective estate plan....

06DecDecember 6, 2022

Per Stirpes or Pro Rata? You probably want Per Stirpes

Periodically checking and updating beneficiary designations on retirement accounts and life insurance is prudent. The next time you navigate the online portal or the old school paper form to write in your updated beneficiary selection, look a little harder at some options you may have previously overlooked. Often, the beneficiary selection is paired with a radio button (online) or a checkbox (paper) that allows you to choose if the named beneficiary’s distribution is per stirpes or pro rata. Which should...

05OctOctober 5, 2022

How to Avoid the Death Tax

As Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.” Taxes come in a wide variety of flavors (e.g., income taxes, property taxes, sales taxes, and gift taxes). But, perhaps one of the most misunderstood taxes is colloquially called the “death tax” – more appropriately called the “Estate Tax.” Critics call out the inherent unfairness of a tax that appears to tax assets that have already been taxed at least once...

28JulJuly 28, 2022

Loans Against Investment Accounts

Though most Americans have at least a passing understanding of the ability to use the equity in a house to obtain a low-interest loan though a Home Equity Line of Credit (HELOC), a lesser-known option for obtaining a quick line of credit financing might offer more compelling benefits for some. The financing option is available to individuals or businesses that maintain a non-retirement investment account and may provide lower rates than comparable HELOCs with the potential for faster processing times. The...

21JunJune 21, 2022

When should I take Social Security?

One of the most important and common questions that retirees face is when to take social security benefits. Regrettably, there is no “one-size fits all” solution to the question. The social security question has many considerations, but we hope to provide some thoughts to help guide the decision. As with all financial decisions, the Cornerstone team is always available to help plan for your specific situation. So, when should you take social security benefits? It starts with your retirement goals and...

21JunJune 21, 2022

Co-Signing Liability

On occasion, you or someone you know might be asked to co-sign a financial obligation for the purchase of a car or a house or the lease of an apartment or commercial space. Sometimes the request is simply to co-sign on a personal loan, so the borrower has access to needed funds. More often than not, this request is made by family and friends. But what are the risks? Is there a better alternative? Though the term “co-sign” does not have...

21JunJune 21, 2022

Selling the Family Business to Children

Parents that have built a successful business and have raised capable children might find the proposition of selling the family business to the children compelling. As with so many decisions in life, this proposition comes with pros and cons, but properly structuring the transaction is always vital. At the outset, the parents must take a hard look at the business and the real prospect of a qualified heir apparent to take over the business. The reality is that only 30% of...

23MayMay 23, 2022

How Do Blended Families Structure Their Wills?

When people come together and vow to spend the rest of their lives together in wedded bliss, they sometimes bring to the relationship a child or children from a previous relationship. Maybe after the union, the couple shares a child of their own in addition to the children from previous relationships. This is the typical “his, hers, theirs” family scenario. This article looks at some planning issues to consider when structuring a Will for a blended family. The threshold question is...