Category: Wisdoms

Irrevocable Life Insurance Trust Benefits

Including a trust that owns life insurance in your estate planning strategy can have the following benefits:

MANAGEMENT. If you have a large estate and plan to pass a significant inheritance to children, an Irrevocable Life Insurance Trust (ILIT) enables you to appoint someone to manage the trust’s assets. The trustee you select could be an individual, such as one of your adult children, or a financial institution. Be sure to select someone qualified to manage significant assets.

INCOME RATHER THAN PRINCIPAL. Many times, parents have one or more children who will not act responsibly if they receive a substantial or lump-sum inheritance, so they designate an insurance trust to receive the insurance proceeds. The trust holds and invests the trust assets and then pays income to the children, either for a specified number of years, with a lump-sum payout of the trust balance at the end of such term, or for the lives of the children. The trustee may also be given the discretion to distribute principal to the beneficiaries to cover education expenses or unanticipated healthcare or other needs.

TAX SAVINGS. If your estate is more than the federal exemption, it may be subject to taxes at a very high rate. An ILIT is an attractive planning tool for individuals with taxable estates. The trust can be used to leave an inheritance to family that is exempt from federal estate and income taxes. For this reason, many people like to combine a charitable remainder trust (CRT) with an insurance trust. With the CRT, parents can fund a trust, tax-free, that pays them income for life and the ILIT will provide their children with an inheritance.

National Kidney Foundation of Hawaii
808-593-1515 | www.kidneyhi.org | www.kidney.org

Including a trust that owns life insurance in your estate planning strategy can have the following benefits: MANAGEMENT. If you have a large estate and plan to pass a significant inheritance to children, an Irrevocable Life Insurance Trust (ILIT) enables you to appoint someone to manage the trust’s assets. The trustee you select could be…
Hawaiian-Style Estate Planning

Estate planning is the process of protecting that which is important (far beyond simply financial or physical assets) and then passing those important things on to our loved ones and future generations. Many concepts that are central to Hawaiian culture are particularly applicable to estate planning. Starting with the concept of ‘ohana (a very inclusive notion of family) all the way through lōkahi (a sense of unity — especially appropriate at the passing of a loved one), estate planning and the culture of our Islands interweave to form a rich tapestry of aloha.

The term ha‘aha‘a describes an attitude of humility, which promotes family harmony at stressful times. Stress may arise in dealing with the emotions associated with illness and death, and it may arise in dealing with the distribution of the assets of the deceased. It takes a measure of humility for family members to form closer bonds in light of these trials.

Sometimes, dealing with issues surrounding the disposition of a loved one’s remains, much less the disposition of assets, requires family members to talk out differences and come to consensus regarding what is the right, or pono, thing to do, as well as respecting the wishes of the deceased and the living. It is not uncommon for different family members to have different views of what a deceased person’s wishes were in various contexts. This may result in disagreements that can be both heated and destructive.

A complicating factor is that all of the disputing parties may be right, on some level. The deceased may have had many conversations with different members of the ‘ohana over the course of many years. It is easy to see how one family member could remember instructions given on one date that conflict with instructions given to another family member on another date. If both family members can come together through the process of ho‘oponopono, or making things right through talking out differences, a consensus may be reached that is healing and positive for all involved.

Ho‘oponopono is a delicate process, and a successful conclusion may depend on the leadership of an experienced individual who can help family members clearly express their views and then validate those views so that all involved can both understand and respect the feelings and positions being communicated. Although ho‘oponopono may be employed after the fact in resolving disputes, it can also be used while the senior family member is still alive to head off disputes and instill unity in the family, who will hopefully have a clear memory of what was communicated during the ho‘oponopono process.

Finally, the concept of mālama, or caring for and perpetuating one’s legacy, infuses and motivates Hawaiian-style estate planning. This extends from caring for one’s family to caring for one’s community through charitable giving. People from Hawai‘i tend to be generous when it comes to giving back to organizations that have benefited their families, such as hospice providers, hospitals, and church-related organizations.

Remembering our root values helps to ensure that we are leaving a legacy of aloha.

SCOTT MAKUAKANE, Counselor at Law
Focusing exclusively on estate planning and trust law.
www.est8planning.com
808-587-8227 | maku@est8planning.com

Estate planning is the process of protecting that which is important (far beyond simply financial or physical assets) and then passing those important things on to our loved ones and future generations. Many concepts that are central to Hawaiian culture are particularly applicable to estate planning. Starting with the concept of ‘ohana (a very inclusive…
Working Part-Time in Retirement

Traditionally, retirement means leaving the workforce to pursue decades of relaxation. However, today’s retirees and pre-retirees are reshaping what it means to leave the workforce. Retirement may be an opportunity to pursue a small business, start consulting or land a side job that explores your passions. If your next phase includes earning an income, there are some financial considerations to keep in mind:

Social Security could be reduced

If you haven’t yet reached full retirement age (65 or older) and already collect benefits, the wages you earn through continued work could result in reduced Social Security payments. In 2017, an individual earning more than $16,920 who hasn’t reached full retirement age will see a $1 reduction in Social Security benefits for every $2 earned above that level. The earnings limit is higher in the year you reach full retirement age, and no longer applies after you reach full retirement age. If you haven’t already claimed Social Security, you may wish to delay your benefits to earn a higher amount later in life.

Prepare for higher taxes

If you are taking income from retirement accounts or generating earnings from your savings or investments, at least some of that money is subject to tax. Earning income from work may move you into a higher marginal tax bracket, meaning those distributions and investment earnings could be taxed at a higher rate. Be prepared for a potential bump in your tax bill.

Keep saving money

Ongoing work may allow you to preserve your retirement savings for later in life and even continue to build those savings. As long as you have earned income, you can put money away in tax-advantaged retirement plans. This includes an employer-sponsored plan, if it is available to you, a traditional IRA, or a Roth IRA. Contributions to traditional IRAs can only continue up to the year in which you turn 70-1/2. If you earn income past that point, you may be able to continue making contributions to a Roth IRA indefinitely, based on your income level.

Pay attention to health insurance

Even if you retain health care coverage from an employer, you should consider signing up for Medicare Part A at age 65. There is generally no cost, and it provides coverage for care in hospitals and other institutions. Talk to your employer about whether you should sign up for Medicare Part B (a monthly premium applies). You may be able to delay doing so if you are covered by your employer’s plan without being subject to a 10 percent annual penalty for delaying enrollment in Part B. Check the rules carefully before you turn 65.

Whatever your motivation for continuing to earn a paycheck, the income you earn could impact several aspects of your financial life. Evaluating and planning for the effects working will have on your finances may help you feel more confident about living decades in retirement.

MICHAEL W. K. YEE, CFP
1585 Kapiolani Blvd., Ste. 1100, Honolulu HI 96814
808-952-1222, ext. 1240 | michael.w.yee@ampf.com

Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC ®, is a Financial Advisor, Certified Financial Planner ™ practitioner with Ameriprise Financial Services, Inc.

Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.

Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2017 Ameriprise Financial, Inc. All rights reserved. File #1909079

Traditionally, retirement means leaving the workforce to pursue decades of relaxation. However, today’s retirees and pre-retirees are reshaping what it means to leave the workforce. Retirement may be an opportunity to pursue a small business, start consulting or land a side job that explores your passions. If your next phase includes earning an income, there…
Thanatology Makes Us Think

I am honored that Marian University accepted me into the Masters of Thanatology program this past Fall. “Thanatology? What is that?” is the common remark I hear when I tell people of my new adventure.

A thanatologist is a designated thinker about death. They help people die better than they otherwise might.

I believe every estate-planning attorney is a thanatologist. But we, like many of our clients, allow the underbrush of life, such as tax and probate, to cover up what we really face — our mortality.

In his book, A Commonsense Book of Death: Reflections at Ninety of a Lifelong Thanatologist, Dr. Edward Shneidman sets out 10 Criteria for a Good Death (page 132). Of the 10 criteria, two directly relate to estate planning.

First, it is common sense and good manners to complete the administrative chores associated with death, specifically to have a certified will and, if possible, a living trust. “Every responsible adult should assist his loved ones by doing these thanatological chores.”

Dr. Shneidman refers to the second criteria that directly relates to estate planning as “generative.” He states that a good death has a quality of being generative because, living between your parents and grandchildren, you take pains to relay family stories to the younger generation before you die.

Please consider taking on this thanatological chore of making your estate plan. Take the time to pass on family stories.

Stephen B. Yim, Attorney at Law
2054 S. Beretania St., Honolulu HI 96826

808-524-0251 | stephenyimestateplanning.com

I am honored that Marian University accepted me into the Masters of Thanatology program this past Fall. “Thanatology? What is that?” is the common remark I hear when I tell people of my new adventure. A thanatologist is a designated thinker about death. They help people die better than they otherwise might. I believe every…
Making the Call for Help

On average, I get one to three calls a day from the public seeking advice about elder abuse. Fortunately, only about 20 percent of the calls involve matters needing my office’s involvement. The rest are from people that see “elder abuse” in our name and hope we can help with their situation. It is a learning experience for me as I research various resources available to seniors. (These are real calls with minor facts changed to protect the identity.)

“Hi. My wife has spent over $30,000 on a gifting program. She doesn’t think it is a scam but she has given these people a lot of money and hasn’t gotten anything in return. I think it is pyramid scam.”

Pyramid/Gifting Scams are considered investment frauds and can be reported to the Department of Commerce and Consumer Affairs (DCCA) office at 1-877 HI-SCAMS (1-877-447-2267). Additionally, you can report it to the Financial Crimes Unit at the Honolulu Police Department (HPD) at 808-732-3609.

“I want to report a timeshare company that signed up my dad. He didn’t know what he was signing and wants to get out of the contract. He is on a fixed income and should have never been qualified to make the purchase.”

For complaints against individual companies, DCCA’s Consumer Protection Division (808-587-4272) can investigate claims and seek civil restitution in certain instances.

“We just discovered that my brother stole $20,000 from my dad, but he doesn’t want to do anything about it. What can we do?”

This is a common call we get, and unfortunately, if the victim — the parent — doesn’t want to prosecute, law enforcement can’t really get involved (in most situations).

“Can someone from your office speak to our group about elder abuse?”

Yes. We have done over 400 presentations to various senior groups and organizations in the past 10 years.

“I live in the mainland and just discovered my father gave over $400,000 to two men he hired to do some house repairs. He says they are nice men who bring him lunch when they stop by. He doesn’t believe they are con men and doesn’t want the police involved.”

This is similar to the situation above concerning the son stealing from the dad. If he doesn’t want to prosecute the matter, the police can do very little.

What we see happen a lot is that the children will berate the parent to the point that the parent will stop speaking to the child. This then allows the con artist free rein to continue taking advantage of the senior. I caution children to adopt a non-judgement tone with their folks in order to get more information regarding the situation. In this situation, the daughter was able to convince her dad that these men didn’t have the father’s best interest at heart, and he allowed law enforcement to get involved.

To report suspected elder abuse, contact the Elder Abuse Unit at 808-768-7536 | ElderAbuse@honolulu.gov

On average, I get one to three calls a day from the public seeking advice about elder abuse. Fortunately, only about 20 percent of the calls involve matters needing my office’s involvement. The rest are from people that see “elder abuse” in our name and hope we can help with their situation.
Love, Honor and a Final Resting Place

Disney theme parks receive millions of visitors each year. Many park-goers repeat their visits annually, if not more often. Most of the time, their visits are routine (or as routine as they can be in a magical place). From time to time, however, guests do the unexpected. Disney cast members have a code language they use when referring to unusual events. The purpose of the code is to avoid alarming other guests. For example, if someone vomits on property, Disney staff refer to it as a “protein spill.” A particularly rude or difficult visitor is referred to as a “treasured guest.” The phrase, “Have a magical day,” even when uttered with a Disney smile, can mean the opposite when a guest has been especially troublesome.

One Disney code phrase is particularly interesting. A “white powder event” might sound like a staff member has discovered illegal drugs on property or there was a potentially dangerous chemical spill from which guests must be shielded. However, the phrase is used when someone attempts to spread the ashes of a deceased loved one on park premises. Many people ask to have their ashes spread at places that hold treasured memories for them, and Disney theme parks are not the exclusive venue for these requests.

More often than you realize, human ashes are scattered covertly at sports stadiums, concert halls and golf courses. Of course, these activities are inappropriate, and they are generally unlawful.

Disposing of your cremated remains on your own private property is generally not a problem, at least within the United States. Each state has its own laws when it comes to the practice, and federal laws and regulations apply when remains are scattered within the ambit of federal jurisdiction. Not surprisingly (as every Disney cast member knows), many people proceed without checking the applicable rules. While a “white powder event” may go unnoticed, it is important to realize it can be the subject of criminal prosecution.

In Hawai‘i and other states blessed with beautiful coastal areas, it is common for ashes to be scattered at sea. While this is a beautiful gesture, it may violate the federal Clean Water Act, which requires cremated remains be scattered at least three nautical miles from land in water that is at least 800 feet deep. This means no scattering at beaches or wading pools. On top of this, the EPA requires 30 days advance notice of a scattering at sea. If you have lived in Hawai‘i for any length of time, you know that these rules are rarely observed or enforced. However, this does not give anyone license to flout the law.

If you would like your ashes to be spread somewhere special after you pass away, get advice from your attorney as you complete your estate plan. That way, you can tailor your request to ensure that none of your loved ones will end up in jail for carrying out your wishes.

SCOTT MAKUAKANE, Counselor at Law
Focusing exclusively on estate planning and trust law.

est8planning.com
O‘ahu: 808-587-8227 | maku@est8planning.com

Many people ask to have their ashes spread at places that hold treasured memories for them, and Disney theme parks are not the exclusive venue for these requests.More often than you realize, human ashes are scattered covertly at sports stadiums, concert halls and golf courses.
Are You Ready for Emergencies?

The wrath of natural disasters has been on full display in recent weeks as hurricanes, earthquakes, wildfires and floods have ravaged large swaths of the world. While our first thoughts go to the victims of these tragic events and the challenges ahead for recovery, it may also cause you to step back and think about your own preparedness for a natural disaster. If you’re feeling under prepared, from a financial standpoint, for the possibility of an unwelcome weather event, consider creating an emergency plan.

Create A Plan. Just as you plan ahead for your retirement or children’s college tuition, you need to prepare for risks related to a financial emergency. Any type of unforeseen event could jeopardize your financial security. Work with your financial advisor, estate planner and attorney to identify and address potential financial risks.

Protect Your Property. One common concern in such events is catastrophic damage to your home. Start by making sure your property is appropriately insured. Review your homeowner’s insurance policy to make sure there is sufficient coverage for unforeseen events. Remember that typical home insurance does not include coverage for flood damage, which needs to be purchased separately. Homeowners may assume they are not at risk of such damage, but unusual circumstances might mean your risk is greater than you think, so it’s best to double check. Those who rent their living space should consider renter’s insurance.

In the case of disasters like a flood or tornado, you want to make sure you have sufficient coverage for possessions, including valuables, vehicles (e.g. cars, boats, ATVs), and technology. Maintain good records of the valuable items you own and keep them in a safe place. It can be helpful to take pictures of your property before and after an event to help the insurance claims process.

Establish An Emergency Fund. A general rule of thumb is to have at least three-to-six months’ worth of expenses saved in case of an emergency. Consider saving more if you have children or live in an area where severe weather threats are more common. Keep these funds in accounts that offer liquidity like a money market fund or in bank savings. Make sure you have some cash on hand in case power outages or other issues prevent ATMs from working.

The money you set aside could be used for temporary housing, medical care or to cover your essential expenses if you’re unable to return to work. The funds can also jump-start your relief and clean-up efforts.

Safeguard Your Information. When unanticipated events occur, you will need access to your financial information and personal identification documents. Store copies of your insurance policies, financial account statements, medical information, Social Security cards, driver’s licenses, passports and other important records in a secure location, such as a bank safety deposit box or a secure electronic vault. Having documentation readily available allows you to quickly verify your identity and work through your emergency plan after disaster strikes.

Recent events remind us of the importance of having an emergency financial plan in place to help protect against worst-case scenarios.

MICHAEL W. K. YEE, CFP
1585 Kapiolani Blvd., Ste. 1100, Honolulu HI 96814

808-952-1222, ext. 1240 | michael.w.yee@ampf.com

Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC ®, is a Financial Advisor, Certified Financial Planner ™ practitioner with Ameriprise Financial Services, Inc. in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 33 years.

Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.

Ameriprise Financial Services, Inc. Member FINRA and SIPC.

© 2017 Ameriprise Financial, Inc. All rights reserved. File #1892811

The wrath of natural disasters has been on full display as hurricanes, earthquakes, wildfires and floods have ravaged large swaths of the world. While our first thoughts go to the victims of these tragic events, it may also cause you to step back and think about your own preparedness for a natural disaster.
Part II: Zero Chance of A Lottery Win

In the October/November issue of Generations Magazine, I explained that it is better to make a logical and legal argument against someone being a winner of a lottery, as opposed to showing them they are a victim of a lottery scam.

The following facts prove that you have a zero percent chance of winning a lottery if you live in Hawai‘i.

There are no registered lotteries in Hawai’i. Businesses that operate in Hawai’i must register with the Department of Commerce and Consumer Affairs’ Business Registration Division. This allows the state to regulate businesses and ensure compliancy with local laws. The only states that don’t have state lotteries or don’t participate in multi-state lotteries are: Hawai’i, Alabama, Alaska, Arkansas, Oklahoma, Utah and Wyoming.

Tax liability only occurs after the money is received. Once you receive a lottery payout, Uncle Sam wants a fair share, because prize winnings are considered income. The state and federal governments collect taxes after, not before, you receive your money (either earned or won).

In lottery-participating states, you must buy the ticket yourself and in person. Lotteries were created to generate revenue for states conducting the lotteries. These states receive a portion of the purchase price of the lottery ticket and place taxes on the prize money.

If you want to participate in the lottery, you must physically go to that state and buy a ticket yourself. It is illegal for businesses to buy tickets for non-residents. If tickets were bought online, there would be no control over who won the lottery. You cannot win the lottery if you didn’t enter the contest yourself.

It is illegal to play foreign lotteries while in the United States. Governments from every country (including the U.S.) want to regulate funds that enter and leave their economies. This includes lottery winnings. No government wants to lose millions to someone outside their country. Therefore, lotteries are specific to residents.

You have time to collect your money. Lottery-participating states allow ticketholders a set amount of time, typically one year, to receive winnings. For every day that a state holds the unclaimed lottery money, interest is collected on the money. States benefit when money isn’t claimed right away.

You are required to notify the lottery that you won. The lottery doesn’t notify you. Millions of dollars have not been claimed in lottery winnings because no one went to the lottery office in the participating state to present the winning ticket.

If you live in Hawai’i and are contacted by a lottery or sweepstakes, you now know the truth. And you also know how to break the news to a scam victim.

To report suspected elder abuse, contact the Elder Abuse Unit at 808-768-7536 | ElderAbuse@honolulu.gov

In the October/November issue of Generations Magazine, I explained that it is better to make a logical and legal argument against someone being a winner of a lottery, as opposed to showing them they are a victim of a lottery scam. The following facts prove that you have a zero percent chance of winning a…
Family Peacekeeping Methods

Central to the Hawaiian culture is the value of ‘ohana,’ or family. Maintaining the “family health” was of utmost importance and was achieved through the regular practice of ho‘oponopono. In the article, “To Set Right Ho‘oponopono A Native Hawaiian Way of Peacemaking,” Manu Meyer discusses how families practice ho‘oponopono.

Traditionally, ho‘oponopono discussions were facilitated by a haku, who assisted the family in working out problems through a series of discussions. This led to understanding of each family member’s perspectives and resulted in mutual forgiveness and resolution.

Ho‘oponopono has been compared to the modern-day Alternative Dispute Resolution. A key difference is that ho‘oponopono was not only used to resolve dispute, it also was used to prevent disputes within the family.

According to Roy William & Vic Pressor of Preparing Heirs, “Sixty percent of transition failures were caused by a breakdown of communication and trust within the family unit.” The potential influx in trust litigation is foreseeable, due to the aging demographic of baby boomers, Hawai’i’s high cost of living and the increase in multigenerational homes.

Encouraging clients to partake in often difficult and sometimes messy family discussions, while everyone still is alive and able, is integral in preventing unwanted litigation. A haku or a ho‘oponopono facilitator may be effective in resolving family disputes.

Stephen B. Yim, Attorney at Law
2054 S. Beretania St., Honolulu HI 96826

808-524-0251 | stephenyimestateplanning.com

Central to the Hawaiian culture is the value of ‘ohana,’ or family. Maintaining the “family health” was of utmost importance and was achieved through the regular practice of ho‘oponopono. In the article, “To Set Right Ho‘oponopono A Native Hawaiian Way of Peacemaking,” Manu Meyer discusses how families practice ho‘oponopono. Traditionally, ho‘oponopono discussions were facilitated by…
An Estate Plan For your Digital Assets

You have a digital estate if you send emails, participate in Facebook and other social networking sites, do online financial transactions, play internet games, or store photos and other important files in the “cloud.”

What happens to your digital estate if you become incapacitated or die?

There are both federal and state laws that come into play, along with the agreements you “signed” when you created your digital assets. When you set up your various internet accounts, do you remember checking a box on each website concerning the “terms of service?”

Unless you acknowledged having read and agreed to each vendor’s terms of service, you would not have been able to create those ‘online accounts.’ Who really reads all of that legal gobbledygook fine print? If you do, you are exceptional. The rest of us are stuck with agreements we never read and probably would not understand if we did.

The typical “terms of service agreement” says that you are the only person who can access your digital assets. If you are incapacitated or dead, that could be tricky. If somebody tries to get information about your digital assets pretending to be you, he or she is probably violating federal law that defines such activity as “fraud.”

This is true even if the person trying to access your accounts is your personal representative who needs information about your digital assets to do his or her job. The applicable federal law does not take noble motives into account.

Most of the 50 states now have laws on the books that give someone the authority to access your digital asset while acting under a properly drafted durable power of attorney, or under court appointment as your conservator or personal representative. Those laws have gone through a painful evolution. The various internet providers, the public and the government have grappled with issues of privacy and personal freedom versus the need for your fiduciaries, and sometimes, the government, to look into your digital estate.

The state laws differentiate between the content of what the law calls your “electronic communications” and the catalog of your electronic communications. Under the law, accessing a list of your communications is much easier than accessing what you said in those communications, but there are hurdles to be addressed either way.

Generally, your fiduciaries can get the catalog of your electronic communications even if you did not expressly permit them to do so in your terms of service agreements. When it comes to email, the catalog includes the name of each sender, the email address of each sender, and the date and time each message was sent. It does not, however, include the subject lines or contents of your email messages.

Even if you do consent to your fiduciaries being able to access the content of your digital assets, most internet vendors will require not only proof of your death or incapacity, but in many cases, a court order.

So stay tuned as the law continues to evolve, and (we hope) order emerges from the chaos.

SCOTT MAKUAKANE, Counselor at Law
Focusing exclusively on estate planning and trust law.

www.est8planning.com
O‘ahu: 808-587-8227 | maku@est8planning.com

You have a digital estate if you send emails, participate in Facebook and other social networking sites, do online financial transactions, play internet games, or store photos and other important files in the “cloud.” What happens to your digital estate if you become incapacitated or die? There are both federal and state laws that come…
Keep Stock Market in Perspective

The stock market has enjoyed an extended period of strong performance that dates back to the end of the last bear market in early 2009. While stock market performance can be measured in myriad ways, it’s the Dow Jones Industrial Average that has surpassed several 1,000-point milestones so far in 2017: The Dow first topped the 20,000 mark on Jan. 25, before passing the 21,000 level just over a month later.

Then in early August, it broke through the 22,000 mark. As August ended, the seemingly smooth sailing market rally hit a few bumps. While no one can predict the future, market strategists and analysts suggest that we could see some additional market volatility in the months ahead.

How do investors keep all of this in perspective while trying to manage their portfolios? Here are three points to keep in mind as you follow the stock market:

The real value of each underlying move in the Dow index diminishes as the market rises.

While the Dow Jones average is often used to provide a general reading on the state of the market, the index includes the 30 largest company stocks. When the Dow Jones Industrial Average climbs higher, the actual impact of each change in its price is reduced. For example, when the Dow broke through the 2,000 barrier in January 1987, it marked a notable 100 percent increase from the 1,000 level first reached nearly 15 years earlier. By contrast, when the Dow moved 1,000 points to reach 22,000 between March and August of this year, it represented just a 4.5 percent increase.

The same perspective applies to day-to-day market moves. The stock market makes headlines when the Dow Jones average moves up or down 100 points in a day. Twenty years ago, when the Dow stood at about 8,000, a 100-point move in the market represented a 1.25 percent change in value. Today, a 100-point move is equivalent to less than a half-percent change. In short, 100 points in the Dow Jones Industrial Average doesn’t mean what it used to.

Markets can retreat from record levels.

Just as stock markets can rise, history shows they can fall as well. In the spring of 1999, the index reached the 11,000 mark. It moved higher for a few more months before a severe bear market occurred. The Dow dropped to 7,286 in 2002 before returning to the 11,000 level in 2006. Similarly, the market topped 14,000 in 2007 just before the start of another severe bear market. It fell and did not reach that level again until early 2013.

No one can guarantee what will happen to stocks over the next week, month or year. Stock markets are unpredictable in the short-term, as fluctuations are part of the market’s behavior over time. Price swings are a reality for stock investors, but over time, stocks historically have recovered.

Indexes may not represent your portfolio.

While indexes often generate headlines, their performance may not be reflective of your own portfolio. Emotions run high when there are market swings, but don’t let fear get the best of you. Stock market swings can act as a reminder to review your financial position, making sure that your asset mix matches your long-term goals. The most important factors of your investment success are your goals, the time you have to invest, your risk tolerance and your commitment to save.

Reacting to the stock market or speculation about events that may happen in the future might make for interesting dinner conversation, but remember that it’s not a proven investing strategy.

If you need financial planning help, consider working with a financial advisor you trust.

MICHAEL W. K. YEE, CFP
1585 Kapiolani Blvd., Ste. 1100, Honolulu HI 96814

808-952-1222, ext. 1240 | michael.w.yee@ampf.com

Michael W. K. Yee, CFP®, CFS®, CLTC, is a Financial Advisor, Certified Financial Planner™ practitioner with Ameriprise Financial Services, Inc. in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 30 years.

Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.

Ameriprise Financial Services, Inc. Member FINRA and SIPC.

©2017 Ameriprise Financial, Inc. All rights reserved. File #1875690

The stock market has enjoyed an extended period of strong performance that dates back to the end of the last bear market in early 2009. While stock market performance can be measured in myriad ways, it’s the Dow Jones Industrial Average that has surpassed several 1,000-point milestones so far in 2017: The Dow first topped…
Zero Chance of Winning the Lottery

Over the years, I have spoken to countless people who believed they had won the lottery. They told me on the phone that they knew it was the real thing or they stopped by my office to show me letters, emails, credit cards or business checks proving they had struck it rich and beat the odds.

The chance of winning the lottery is 296 million to one.

They were confident about their soon-to-be riches, but their families advised them to meet with me because these “winners” had already spent thousands of dollars on alleged taxes and fees to support the purported prize.

In past issues of Generations Magazine, I have highlighted these scams, identifying earmarks proving the non-existence of lotteries, sweepstakes, government grant money giveaways and insurance bonus payments.

Those telltale signs included:

◆ Instructions to keep a secret that they won money (so no one could verify the truth)

◆ Instructions to act very soon or the money would be lost (to create a sense of urgency)

◆ Advance payment (for alleged taxes or fees) before they received money

When I explained these signs, many seniors politely nodded their heads, but they still believe they had won. They went through the motions of listening only to placate the person who brought them into my office. After hearing the shtick from the con men who informed them of their lottery winnings, they believed they were of that .000006 percent of the public who wins.

My approach to these victims changed when I met “Edith.” Over the course of six months, she had sent $135,000 to someone claiming to represent a mainland lottery. Edith was very guarded and skeptical that our discussion applied to her.

She had developed a relationship with the alleged lottery worker and trusted him enough to follow his instructions. Edith believed that despite all the warning signs I pointed out to her, she was extremely lucky to have won a lottery in Hawai‘i.

Talking to Edith gave me an idea: What if I could prove she didn’t win the lottery instead of telling her she was a scam victim? As a trial attorney, isn’t my job to convince people, using the law and objective facts? I thought that I could undo scam artists’ brain washings using this logic. And I made a case to Edith to prove she had a zero percent chance of winning a lottery.

In the Dec/Jan 2018 issue of Generations, I will cover the legal arguments that prove that winning the lottery in Hawai‘i is impossible.

To report suspected elder abuse, contact the Elder Abuse Unit at 808-768-7536 | ElderAbuse@honolulu.gov

Over the years, I have spoken to countless people who believed they had won the lottery. They told me on the phone that they knew it was the real thing or they stopped by my office to show me letters, emails, credit cards or business checks proving they had struck it rich and beat the…