John Tetzloff, CLU, FICF, LUTCF, is the Catholic United Financial Advanced Case Specialist and Trainer. He leads estate planning seminars throughout the Upper Midwest and has more than 20 years experience in estate planning and financial preparedness.
When a Catholic United Financial Sales Representative meets with a member, one of their goals is to help them "Understand Their Assets." What that means is having a discussion to explain the different types of assets a person has, the tax rules of each asset, and how these assets will ultimately pass to their loved ones upon death.
Let's start with the first step in "Understanding our Assets": What assets do I have in my estate? This may seem like a simple statement, but many people don't have a good understanding of the makeup of their estate assets. For that matter, many folks haven't taken the time to get a "big picture" view of their estate to fully realize what they have and the effect each asset has in their planning.
The first type of assets most people have are liquid assets. These are things like checking and savings accounts, money market accounts and certificates of deposit. The most common reason for this type of asset is liquidity, or the ability to spend at any given time. Because of that liquidity, the interest rate on bank products is typically low. For those who tend to "hold" money in bank products for longer than one year or more, there are longer term investments that may have a higher interest rate. By discussing short- and long-term needs, we can help determine where there may be better choices to invest.
Another asset most people have in their estate is their property. This could be real estate, tangible personal property, or investment property such as stocks and mutual funds. While most of these assets are for everyday use, some are designed as investments. As with all investments, it is important to realize the risk-reward concept. Our Sales Representatives frequently have a conversation regarding how much risk a person can take with their investments and then explain what Catholic United has to offer in terms of that risk tolerance.
Another retirement asset is the Roth IRA. The Roth IRA can provide an excellent place to grow dollars for retirement as well as provide some nice tax advantages along the way. Making sure we have a balance of taxed and non-taxed retirement investments is crucial in the planning process.
Two common assets that insurance companies provide are the annuity and life insurance. An annuity is a great alternative to bank products if one needs a longer-term investment. Due to that longer time frame, annuities typically earn more than your short-term investments and have some tax-deferred benefits as well. Life insurance is also a vital piece of a person's asset mix. We know that life insurance provides the protection for our loved ones when death occurs to replace lost assets, pay debts and keep our family in the same life style. There are also many living benefits to life insurance as well with tax-advantaged cash values and flexibility of premium. Our Catholic United Sales Representatives can assist in determining the correct amounts of insurance for each individual situation.
One of the most valuable services Catholic United Financial provides is a comprehensive overview of a person's estate. In other words, helping that person understand "what they got" and how it all fits together.
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