Category: Wisdoms

‘Spoil’ Your Grandchildren Wisely

Many grandparents spend money on their grandkids, whether by chipping in on big expenses like tuition bills and travel expenses, or covering smaller costs like meals and holiday gifts. The inclination to be generous is understandable and many seniors say it brings them joy to support (or even occasionally spoil) their grandchildren. But lavishing them with gifts shouldn’t come at the expense of your or grandparents own financial security. If you’re seeking to find the balance between supporting your grandchildren and ensuring your own finances stay in healthy shape, here are four tips to keep it all in check:

1. Know what you can afford. No matter how much you enjoy splurging on your grandkids, your financial security should remain your first priority. There are many unknowns in retirement, including your longevity, the fluctuation of markets and the impact of inflation on purchasing power (a factor that’s particularly pronounced at the moment, with inflation rates at a 40-year high). Spend and gift within your means to maintain your own financial health in the future.

2. Determine if you’re giving or loaning. If you’re giving a gift, understand current federal tax rules, which are based on the calendar year. In 2022, you can give up to $16,000 to each family member before the federal gift tax is applied. If you are married, both you and your spouse may gift $16,000 (for a total of $32,000). And make certain the recipient knows it’s a gift for their own tax purposes, and so there is no uncertainty about whether or not they need to pay you back. If you are loaning money to a grandchild, be very specific about the terms and repayment, and consider having a written document that both parties sign and date. This can help safeguard your financial situation and ensure both of you are on the same page — now and in the future.

3. Talk about it. Many people tend to shy away from discussions about money and finances with their family. If you would like to help support your grandchildren or save for their future goals like college or a down payment on a home, be sure to communicate this with their parents. This can help your adult children do a better job with their own financial planning. For example, if the parents of your grandchild know how much you are expecting to contribute to their child’s education, they may be able to decrease the amount allocated to a 529 Plan and invest more toward other goals, such as their own retirement.

4. Establish boundaries. Even if you want to help your grandchildren financially, depending on their situation, it may not be appropriate to do so, or to repeatedly provide support. Everyone appreciates help, but if your grandchild needs to learn financial independence, there can be value in letting them live within their own means. Keep in mind the smart — and sometimes tough — financial lessons you learned as you made your own way as a young adult, and the pride that came with successfully overcoming challenges.

If you want to provide financial support to a family member, but haven’t incorporated it into your overall financial plan, consider consulting a financial professional. He or she can help you evaluate your financial needs and goals and create a strategy. A clear and realistic understanding of your own financial picture can help you identify how much you can comfortably give and stay on track with your own goals.

MICHAEL W. K. YEE, CFP,® CFS,® CLTC, CRPC®
1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
808-952-1240 | michael.w.yee@ampf.com
ameripriseadvisors.com/michael.w.yee

Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Private Wealth Advisor, Certified Financial Planner ™ practitioner with Ameriprise Financial Services, LLC, in Honolulu. He specializes in fee-based financial planning and asset management strategies and has been in practice for 38 years.

Many grandparents spend money on their grandkids, whether by chipping in on big expenses like tuition bills and travel expenses, or covering smaller costs like meals and holiday gifts. The inclination to be generous is understandable and many seniors say it brings them joy to support (or even occasionally spoil) their grandchildren. But lavishing them…
Grief and Bereavement — Part II

Continuing from my last article, I believe that clients really want the estate planning attorney to help them meet their needs so that they can reduce their fear, anxiety and anticipatory grief in light of their knowledge of their inevitable death.

These needs include the desire 1) for the client to grow, develop and enjoy the most meaningful life possible; 2) not to burden friends and family; 3) to establish and build strong family/friend relationships, and to know these relationships will persevere after death; 4) to make the transition after death as easy as possible; and 5) to ensure that loved ones dependent on the client during their lifetime have security, sustenance and shelter.

Avoiding probate and minimizing taxes are not ends in themselves, but doing these things helps the client minimize any burden placed on survivors and allows for more available resources for the surviving loved ones’ care. When we shift our perspective away from lineal matters, such as probate and taxes, and focus on the natural, often non-lineal, human emotions underlying the needs of each client when deciding to make an estate plan, we realize that we, as estate planning attorneys, must develop an additional skill set above and beyond technical tax and probate law, and utilize “the softer skills of counseling.”

STEPHEN B. YIM, ATTORNEY AT LAW
2054 S. Beretania St., Honolulu, HI 96826
808-524-0251 | stephenyimestateplanning.com

Continuing from my last article, I believe that clients really want the estate planning attorney to help them meet their needs so that they can reduce their fear, anxiety and anticipatory grief in light of their knowledge of their inevitable death.
How to Reduce Your Investment Risk

During times of market volatility like we’ve seen since the start of 2022, it’s natural to feel a bit skittish about the stock market. It’s a potent reminder that there are risks to stock ownership. Individual stocks are not guaranteed to grow and may lose value. The good news is that the stock market has historically delivered a higher rate of return than other forms of investment in the same timeframe. With this in mind, there are strategies you can deploy to help insulate your portfolio from the natural up-and-down swings of the market, while staying invested for the long term.

■ Buy and hold. There will always be day-today fluctuations in the stock market. Plunging stocks can cause panic selling. Rising stocks can inspire over {Play}ly optimistic purchasing. A buy-and-hold investment strategy takes a long-term view to investing. It discourages buying or selling stocks in response to market dips and surges. Over time, portfolios
governed by this strategy tend to deliver more robust long-term results than ones guided by emotional decisions.

■ Asset allocation. This strategy involves holding investments across different asset classes to meet your investment objectives. Asset classes include stocks, bonds, cash and alternatives. Each asset class has a different risk profile and upside potential. How much you assign to each asset class will depend on individual circumstances such as your time horizon, tolerance for risk, need for liquidity, tax situation and your financial goals. Investors with a longer time horizon usually can tolerate more risk, so will hold a larger percentage of stocks within their portfolio. Investors with a shorter time horizon may hold more bonds or similar instruments that offer greater security, with lower yields.

■ Portfolio diversification. It is another strategy designed to help you spread risk across your portfolio. It involves selecting a variety of investments within each asset class to help minimize risk. For example, by putting your “growth stock” money into several companies that meet growth criteria, you are protected in the event one of those companies fails.

■ Dollar-cost averaging. This investment strategy takes a disciplined approach to purchasing investments. The idea is to purchase more shares of stocks, bonds and/or mutual funds when prices are low and purchase fewer shares when prices are high. The principal here is to be systematic in your purchasing. Dollar-cost averaging over time usually
results in lower average cost of shares in your portfolio, creating greater opportunity for profit as share values rise.

■ Find an ally for smart investing. Talk with your financial advisor to learn how to implement these and other investment strategies to help grow your investment portfolio. As with all investments, past performance does not guarantee future results. No investment strategy is guaranteed to be profitable or help you avoid losses. Common sense and a balanced approach tend to win the day.

MICHAEL W. K. YEE, CFP,® CFS,® CLTC, CRPC®
1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
808-952-1240 | michael.w.yee@ampf.com
ameripriseadvisors.com/michael.w.yee
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Private Wealth Advisor, Certified Financial Planner™ practitioner with Ameriprise Financial Services, LLC in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 38 years.

During times of market volatility like we’ve seen since the start of 2022, it’s natural to feel a bit skittish about the stock market. It’s a potent reminder that there are risks to stock ownership. Individual stocks are not guaranteed to grow and may lose value. The good news is that the stock market has…
Think Ahead About Future Health Costs

Thanks to ongoing advances in medical care, people are living longer than ever before. But that longevity comes with a cost.

According to the US Department of Health and Human Services, roughly 70 percent of Americans over age 65 will require some type of long-term care services in their lives — costing potentially hundreds of thousands of dollars. And as healthcare costs continue to rise, unforeseen medical needs can easily derail a family’s retirement plans if there is not a smart financial planning strategy in place.

Whether you’re planning for your parents or thinking about your own retirement, it’s important to consider how you’ll fund a post-retirement lifestyle — including paying for healthcare. How much will you need to save? How much should you be prepared to spend on insurance premiums and the care itself?

To help manage healthcare expenses in retirement, many people consider options like these:

 Long-term care insurance (LTCI): This may be the logical choice for many older Americans, as the funds can be used in a variety of ways — from assistance with daily activities to skilled care provided by medical professionals. But with LTCI, premiums increase with age. And each year after age 60, it becomes less likely that you or a loved one will medically qualify for coverage. LTCI often works best when purchased in your mid-50s.

 A traditional home equity line of credit: While this popular option can provide access to funds as needed to help cover medical costs, it requires a minimum monthly payment on any funds taken — which in time could become burdensome.

 Reverse mortgage loan: This is an often-overlooked option. A reverse mortgage can give you access to a new source of funds without the time-sensitive restraints of long-term care insurance, or the limitations of a conventional home equity-based loan. It’s very similar to a traditional home equity loan or home equity line of credit, but it’s designed with the needs of older adults in mind and offers much more flexibility — read on to learn more.

The benefits of a reverse mortgage line of credit

A reverse mortgage can support your healthcare needs and much more. Similar to a traditional home equity loan or home equity line of credit, a reverse mortgage provides access to funds that can be used as needed to cover retirement healthcare costs:

• Costly prescriptions
• Care not covered by major medical insurance
• Medical and non-medical in-home care, such as a physical therapist or home health aide
• An alternative or supplement to your long-term care policy
• Home modifications that can make your home safer and more comfortable

Healthcare needs often arise from unexpected events, such as a heart attack or fall. A reverse mortgage line of credit can help you build a more comprehensive financial defense. One big advantage of a reverse mortgage is its flexible repayment feature: No principal and interest payments are required until the last surviving borrower passes away or moves out. However, you can opt to pay down your principal and interest if and when you choose; no prepayment penalties apply. As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance and maintenance.

REVERSE MORTGAGE FUNDING LLC
1585 Kapiolani Blvd., #1100, Honolulu, HI 96814
808-234-3117 | pihara@reversefunding.com
reversefunding.com
Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages. This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency. © 2019 Reverse Mortgage Funding LLC, 1455 Broad St., 2nd Floor, Bloomfield, NJ 07003, 1-888-494-0882. Company NMLS ID # 1019941. For licensing information, go to www.nmlsconsumeraccess.org. Not all products and options are available in all states. Terms subject to change without notice. Certain conditions and fees apply. This is not a loan commitment. All loans subject to approval.

Thanks to ongoing advances in medical care, people are living longer than ever before. But that longevity comes with a cost. According to the US Department of Health and Human Services, roughly 70 percent of Americans over age 65 will require some type of long-term care services in their lives — costing potentially hundreds of…
Trust Basics

A trust is created when a person transfers “stuff” to a trustee with the understanding that the trustee will manage it for the benefit of one or more beneficiaries.

“Stuff” includes any kind of property you can own: real property, such as land and buildings (including timeshares) and personal property, such as bank accounts, stocks and bonds, and personal effects.

The person who transfers the stuff to the trustee is called a “trustmaker” (also known as a settlor, grantor or trustor). Usually, the trustmaker is also the trustee (or perhaps co-trustee) and the initial beneficiary of the trust.

It is common for couples to create two separate trusts and to be the co-trustees of both of their trusts during their joint lifetimes. When one spouse dies, the other can either be sole trustee or co-trustee with one or more individuals or a trust company.

Once assets are transferred to the trustee, the trustmaker no longer holds legal title to them — even if the trustmaker and the trustee are the same person. Thus, if the trustmaker dies or becomes incapacitated, the trust continues and the successor trustee (who is named in the controlling document) takes over administering the stuff in the trust.

A trust is controlled by a “rulebook” called the “trust agreement.” The trust agreement sets out the rules about how the trust will be run. If the rulebook says that the trustmaker can revoke it or change it, the trust is what we call a “revocable trust.” People create revocable living trusts so that their stuff will not go through probate after they are gone, or through conservatorship if they become incapacitated during their lifetimes, as well as to protect the assets that their loved ones will inherit.

If the rulebook does not allow the trustmaker to change or revoke it, we have what is called an “irrevocable trust.” Irrevocable trusts are used in many estate plans. They allow trustmakers to make gifts but keep the recipients from having complete control over the gifted assets. They can help provide tax savings, creditor protection and expert management of assets.

Trusts are often the building blocks of effective estate plans. They provide simplicity, flexibility and predictability in dealing with your assets. They also give you the peace of mind of knowing that you have arranged your affairs to ensure that your wishes will be carried out and that future transitions (such as your incapacity or death) will be much easier on your loved ones.

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

A trust is created when a person transfers “stuff” to a trustee with the understanding that the trustee will manage it for the benefit of one or more beneficiaries. “Stuff” includes any kind of property you can own: real property, such as land and buildings (including timeshares) and personal property, such as bank accounts, stocks…
Grief & Bereavement — Part I

Grief is a natural response to the loss of someone special. The process of grieving allows the griever to adapt to a new world of existence without the loved one. If allowed to proceed through the grieving process with minimal guilt, anxiety, stress, unresolved issues and conflict, we can help each griever experience their grief fully and allow the griever to validate and honor the life of the deceased, and affirm and strengthen relationships with survivors.

When one thinks of making an estate plan, visions of rolling-hill estates and large brokerage accounts may come to mind. Clients often say that they want to establish an estate plan “to minimize tax and avoid probate.” Attorneys spend a great deal of time in post-graduate law school to learn the complex tax and probate laws to help clients with these goals. When we examine these goals in more depth, we find that they often represent unmet human needs which are expressed by avoiding probate and minimizing taxes. Clients experience these needs with emotions and feelings.

In realizing that each one of us will die one day, to different degrees, we experience fear, anxiety and anticipatory grief, because unlike any other living species existing on the planet, we humans share an acute awareness of our ultimate demise.

STEPHEN B. YIM, ATTORNEY AT LAW
2054 S. Beretania St., Honolulu, HI 96826
808-524-0251 | www.stephenyimestateplanning.com

Grief is a natural response to the loss of someone special. The process of grieving allows the griever to adapt to a new world of existence without the loved one. If allowed to proceed through the grieving process with minimal guilt, anxiety, stress, unresolved issues and conflict, we can help each griever experience their grief…
Choosing a Dignified Death

A Provider Order regarding Life Sustaining Treatment (POLST) says what measures should be used to keep you alive in a medical emergency. It is different from an Advance Directive in that it will be followed by emergency personnel, provided that they are aware of its existence. If you don’t have a POLST, emergency medical technicians (EMTs) are required to do whatever they can to restore and stabilize your heartbeat and breathing and take you to an appropriate facility for treatment. They will not read your Advance Directive and try to figure out how it might apply to your situation.

In some cases, resuscitation is not appropriate or wanted. A POLST, being a medical provider’s order, will be followed by the EMTs. Your Advance Directive will not come into play until you are in the hospital. At that point, the EMTs may not have done you any favors by keeping you alive. If you would not want to be resuscitated, talk with your doctor about having a POLST. If you would want the EMTs to follow normal lifesaving procedures, you do not need a POLST.

Your POLST should be printed on lime green paper so it is immediately recognizable. Post a copy by your bed and carry one with you when you leave home. Make sure loved ones know where to find it in an emergency.

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

A Provider Order regarding Life Sustaining Treatment (POLST) says what measures should be used to keep you alive in a medical emergency. It is different from an Advance Directive in that it will be followed by emergency personnel, provided that they are aware of its existence. If you don’t have a POLST, emergency medical technicians…
How Will Rising Interest Rates Affect You?

The Federal Reserve (the Fed) has begun what it says will be a series of interest rate increases in an effort to slow the economy and temper the current surge in the inflation rate. At the start of 2022, the federal funds rate stood at near zero percent. By May, the Fed moved the federal funds rate 75 basis points (0.75 percent) higher.

What does this mean for you and your money? While Fed actions directly impact large financial institutions, they also resonate throughout the financial markets. In indirect ways, your personal finances can be affected by Fed policy.

Four ways the Fed’s rate hikes in 2022 could impact your bottom line:

1. HIGHER BORROWING COSTS

While the Fed’s rate hikes don’t directly affect most types of consumer loans, the direction the Fed sets on interest rates tends to carry over throughout debt markets. This could include:

• Home mortgages: Adjustable-rate mortgages will be the most directly affected, as they change in conjunction with general interest rate trends in the market. If you have a fixed rate mortgage, you won’t see any change.

• Automobile loans: While a variety of factors affect how interest rates are set on vehicle loans, you can expect these rates to increase as well.

• Student loans: Federal student loan rates are set and will not be directly affected. However, borrowers working with private lenders will likely see rates move higher as they are tied to the Fed funds rate.

2. MODESTLY HIGHER SAVINGS RATES

Investors have not earned much in terms of interest on bank savings accounts, money market accounts or certificates of deposit in recent memory. While it seems reasonable to expect that yields may improve modestly, the change may not be dramatic. Even with historically low interest rates, investors have directed significant sums to these types of vehicles. In the current market environment, some investors still have a desire for such “safe haven,” high liquidity investments regardless of the interest rate earned.

3. THE BOND MARKET

Fed interest rates strategies don’t impact the bond market directly, but Fed policy is watched closely by bond investors. This year, along with raising short-term rates, the Fed has also begun reducing the role it plays as a buyer in the broader bond market. That action could lessen demand for longer-term bonds, which can drive up interest rates. Even before the Fed initiated its new policies, the bond market already anticipated the change and interest rates began moving higher on most types of bonds.

4. THE STOCK MARKET

The stock market also tends to react to the Fed’s news, and with the central bank taking steps to slow the economy, investors anticipated the potential negative effects on publicly-traded companies. As a result of this and other factors, stocks lost value at the start of the year. It may be a good time to talk with your financial advisor about whether any of the changes mentioned above require you to update your financial plan.

MICHAEL W. K. YEE, CFP,® CFS,® CLTC, CRPC®
1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
808-952-1222, ext. 1240 | michael.w.yee@ampf.com
www.ameripriseadvisors.com/michael.w.yee
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Private Wealth Advisor, Certified Financial Planner™ practitioner with Ameriprise Financial Services, LLC in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 37 years. Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser. Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. Ameriprise Financial Services, LLC. Member FINRA and SIPC. ©2021 Ameriprise Financial, Inc. All rights reserved.

The Federal Reserve (the Fed) has begun what it says will be a series of interest rate increases in an effort to slow the economy and temper the current surge in the inflation rate. At the start of 2022, the federal funds rate stood at near zero percent. By May, the Fed moved the federal…
Protect Pets After You’re Gone

Growing up, my family always had a pet. From dogs to cats to frogs and even a chicken for a day, pets have always been a part of my life. Today, our pet family consists of three dogs, a guinea pig, a bunny and frogs.

Our pets are not just animals but members of our family. And like our family members, we want to ensure that they are taken care of after we are gone. If you’re an animal lover like me, you worry about what will happen to your pet if something were to happen to you, then a pet trust may be your answer.

Many of our clients have pets that they love and want to ensure that they are cared for and provided for after they pass. A pet trust allows pet owners to set up a support system for their pets after they’re gone. The trust appoints a trustee who will manage the money put aside for the pet. It appoints a caretaker beneficiary who will take care of and love the pet for the rest of their life. We also work closely with our clients to prepare a memorandum of intent. This memorandum allows our clients to leave specific instructions on how to care for their pets — this can include specific food sensitivities, grooming, medical care and even burial or cremation.

If this is something you are interested in, we recommend contacting your attorney.

STEPHEN B. YIM, ATTORNEY AT LAW
2054 S. Beretania St., Honolulu, HI 96826
808-524-0251 | www.stephenyimestateplanning.com

Growing up, my family always had a pet. From dogs to cats to frogs and even a chicken for a day, pets have always been a part of my life. Today, our pet family consists of three dogs, a guinea pig, a bunny and frogs. Our pets are not just animals but members of our…
Making the Rules Beyond Your Lifetime

How do you stay in control of your stuff while you are able and assure that your wishes will be carried out when incapacity or the grim reaper catch up with you? Sorry to rub it in, but at least one of these possibilities is going to happen to you and odds are that both of them will. You have an opinion about the kind of healthcare you want to receive throughout your lifetime and you have an opinion about who should enjoy your stuff when you are done with it. Turning your wishes into reality will require you to act on your opinions and put them down on paper. You need to develop the rulebook — your estate plan — that will give you the final say over your assets and your healthcare.

And remember that your rulebook will need to change over time. In the future, your health, family situation and assets will change. Your comfort with your list of hand-picked decisionmakers who will someday step in and make choices will change. The laws that affect your estate plan will change. With these changes, you will need to adjust your rulebook in order to be confident that your wishes will be followed at every phase of your life — and perhaps beyond your lifetime.

Talk with your trusted advisors about the best way to put your rulebook in place and then how to keep it current as circumstances change.

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

How do you stay in control of your stuff while you are able and assure that your wishes will be carried out when incapacity or the grim reaper catch up with you? Sorry to rub it in, but at least one of these possibilities is going to happen to you and odds are that both…
Making Your Money Last in Retirement

Having spent decades saving for retirement, it can feel like a major shift for retirees to spend down their hard-earned assets. Research by the Employee Benefit Research Institute found people with $500,000 or more in savings at retirement spent down less than 12 percent of their assets over 20 years.(1) Many of these retirees are reluctant to dip into their principal for fear of running out of money due to the anticipation of increased healthcare expenses and other factors. If you share these concerns about the longevity of your savings, here are steps you can take to help you feel more confident:

 Understand the arc of retirement spending. Annual expenses generally are highest within the first few years of retirement. This is because retirees are often taking advantage of their newfound leisure time to pursue hobbies, travel, dine out and shop. Spending tends to slow down with advancing age. You may find it reassuring to realize there’s a good chance your lifestyle expenses in retirement could level out or decrease over time.

 Plan for healthcare costs. Healthcare is consuming an increasing proportion of many retirees’ income. You can start preparing for these expenses today by researching your insurance and savings options and developing a strategy to cover your needs. Your options could include a combination of the following: Medicare, Medigap supplemental insurance, health savings accounts (HSAs), long–term care policies, continuing health insurance through your current or former employer, and other dedicated healthcare savings. Having funds and protection in place can help you feel more prepared to handle a medical emergency or more routine care.

 Understand the level of risk in your portfolio. As you turn your savings into income, it’s important to review your portfolio and assess your level of risk. This means ensuring that you have a diversified portfolio that suits your anticipated spending and balances your needs for liquidity and growth. For example, consider having a year to several years of easily accessible investments to provide income in case of a market downturn or an unexcepted financial event in your life. At the same time, it’s important to also have investments that are positioned for growth, or at the minimum, keep up with inflation. Many retirees spend decades in retirement, so plan your investment strategy with longevity in mind.

 Devise a sustainable withdrawal strategy. A well-crafted retirement income plan can help you avoid running out of money and feel more confident about spending your hard-earned assets. Tally up your various sources of retirement income, which may include Social Security, annuities, retirement assets and other investment earnings. Then, decide which assets you will tap into first, and when you will claim Social Security benefits. Remember that at 72 years of age you are required to take required minimum distributions from your traditional IRA and employer-sponsored retirement plans, so work this income into your plan.

 Consider the tax consequences. Reducing taxes on retirement income is a priority for a great number of retirees, yet many feel understanding the tax impacts of drawing down assets is complex. Starting the planning process early and seeking guidance from a tax and financial advisor can help you feel more secure in your strategy.

MICHAEL W. K. YEE, CFP,® CFS,® CLTC, CRPC®
1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
808-952-1222, ext. 1240 | michael.w.yee@ampf.com
www.ameripriseadvisors.com/michael.w.yee
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Private Wealth Advisor, Certified Financial Planner™ practitioner with Ameriprise Financial Services, LLC in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 37 years.

Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser. Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

1 “The Employee Benefit Research Institute’s Spending in Retirement Survey”. EBRI, 2021. Ameriprise Financial Services, LLC. Member FINRA and SIPC. ©2021 Ameriprise Financial, Inc. All rights reserved.

Having spent decades saving for retirement, it can feel like a major shift for retirees to spend down their hard-earned assets. Research by the Employee Benefit Research Institute found people with $500,000 or more in savings at retirement spent down less than 12 percent of their assets over 20 years.
Adequate, Equal, Equitable or Fair?

Parents often struggle with the concepts of equal, equitable, fairness and adequacy when it comes to the distribution of their assets among their children. Defining these terms will help us make the decision that most closely reflects our intention.

Adequate means the minimum amount of money needed for survival. The adequacy level has been met if our children are independent and not in need, and if we can be reasonably sure that they will not become dependent.

Equal means giving the same dollar-amount to each child. This means that we change our focus as parents from meeting the individual needs of our children to simply and equally dividing of our assets among them, without consideration of their station in life.

Equitable means having the same financial opportunity to reach a specific objective considering current personal conditions, but without regard to how those happened.

Fair means having a non-discriminatory attitude regardless of personal conditions, but with regard to how it happened. If one child chooses not to work and is still living at home, and one child works and is living independently, leaving the house to the non-working child may be equitable (each having a place to live) but not fair, and in a way, penalizes the working child.

STEPHEN B. YIM, ATTORNEY AT LAW
2054 S. Beretania St., Honolulu, HI 96826
808-524-0251 | www.stephenyimestateplanning.com

Parents often struggle with the concepts of equal, equitable, fairness and adequacy when it comes to the distribution of their assets among their children. Defining these terms will help us make the decision that most closely reflects our intention.

Category: Wisdoms

Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Private Wealth Advisor, Certified Financial Planner ™ practitioner with Ameriprise Financial Services, LLC, in Honolulu. He specializes in fee-based financial planning and asset management strategies and has been in practice for 38 years.