What do Harry S. Truman and Hindu goddesses have in
common? Both were invoked to describe Federal Reserve Chairwoman Janet Yellen’s
speech at the Jackson Hole Economic
Policy Symposium last week.
In her opening comments, Yellen confirmed the economy
had improved and suggested more data was needed before the Fed could determine
its path. She said:
“…our understanding of labor market developments and
their potential implications for inflation will remain far from perfect. As a
consequence, monetary policy ultimately must be conducted in a pragmatic manner
that relies not on any particular indicator or model, but instead reflects an
ongoing assessment of a wide range of information in the context of our ever-evolving
understanding of the economy.”
Afterward, some Wall Street professionals empathized
with Truman, the 33rd President of the United States and a native of
the ‘Show Me’ state, who once lamented the lack of resolute economic advice
available. Truman pined for a ‘one-handed economist’ who wouldn’t hedge by
saying, “On the one hand… on the other hand…”
Barron’s reported on the speech saying, “In discussing the labor market… Yellen introduced so
many qualifications that, instead of the proverbial two-handed economist, she
more resembled a Hindu goddess with a half-dozen or more appendages.”
No matter what anyone made of Yellen’s
remarks, she was in the catbird seat compared to European Central Bank (ECB)
President Mario Draghi who spoke after her. Unemployment in the Eurozone stands
at 11.5 percent compared to 6.2 percent in the United States. The range of
unemployment across the region is quite significant, from 5 percent in Germany
to 25 percent in Spain.
Investors and analysts may not have
received the insights they’d hoped to gain about U.S. monetary policy, but it’s
important to remember that one person’s hedging may be another person’s careful
analysis.
mind the gap. Here
in America, some of the most important gaps that need to be filled are in
estate plans. It’s not enough to have a plan. You also need to make sure all of
the components of your plan – from retirement accounts to investments to
property – are properly coordinated. Often the gaps in estate plans are related
to:
·
Beneficiary designations: Many financial assets – such as bank accounts, life
insurance policies, brokerage accounts, annuities, and retirement accounts – give
you the opportunity to name a beneficiary. Typically, assets pass directly to the
named beneficiary regardless of instructions in a will. Consequently, it’s
important to review beneficiary designations and make sure they align with the
intent of your estate plan.
It’s also important to know the rules
guiding investment distributions to beneficiaries. Generally, there are two
possibilities:
o
Per stirpes
distribution indicates if a beneficiary dies before the account owner does, the
beneficiary’s share will go to his or her heirs.
o
Per capita distribution
indicates each beneficiary receives the same amount. If a beneficiary predeceases
the account owner, his or her share goes to the other named beneficiaries.
·
Joint ownership of assets: While joint ownership is common for spouses, joint
ownership with children and other relatives has the potential to create some
estate planning headaches. Forbes.com suggests estate plans should include “a
will, revocable living trust (for most people), and financial and health care
powers of attorney – which can accomplish all of the same goals as joint
ownership, without the risks and complications.”
A 2013 survey of wealthy
investors found nearly 72 percent of participants did not have complete estate
plans. If you feel you fall into this category, you may want to schedule a
meeting with us to assess your estate tax liability, determine
your most important goals, and structure a plan that fits your needs. Once in
place, you may want to review your estate plan regularly to ensure it is in
line with current laws and regulations and that it still expresses your goals.
Weekly Focus –
Think About It
“No matter what people tell you, words and ideas can
change the world.”
--Robin Williams, actor and
comedian
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