June - Sumner Wealth Management

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- June 2019 -

 
 

Dear Visitor,

 A WILL or A TRUST? 

One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it. A will is a document that directs who will receive your property at your death and it appoints a legal representative to carry out your wishes. By contrast, a trust can be used to begin distributing property before death, at death or afterwards. A trust is a legal arrangement through which one person called a “trustee,” holds legal title to property for another person, called a “beneficiary.” A trust usually has two types of beneficiaries one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies.

What Is a Will?

A will is important to have, as it allows you to communicate your wishes clearly and precisely. It is advisable to work closely with an attorney to create and update your will.

When there is no will:

Without a will, the state in which you reside decides how to distribute your assets to your beneficiaries according to its laws. This is known as dying intestate and the resulting settlement process may not produce the results that you would prefer for your survivors. You can prevent this from happening by having documents drafted that reflect your wishes.

Contents of the will

A will generally includes:

  • Designation of an executor, who carries out the provisions of the will.
  • Beneficiaries—those who are inheriting the assets.
  • Instructions for how and when the beneficiaries will receive the assets.
  • Guardians for any minor children.

What is a Trust?

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.

Since trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than they might to assets that are transferred using a will. Additionally, if it is an irrevocable trust, it may not be considered part of the taxable estate, so fewer taxes may be due upon your death.

Assets in a trust may also be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.

Other benefits of trusts include:

  • Control of your wealth. You can specify the terms of a trust precisely, controlling when and to whom distributions may be made. You may also, for example, set up a revocable trust so that the trust assets remain accessible to you during your lifetime while designating to whom the remaining assets will pass thereafter, even when there are complex situations such as children from more than one marriage.
  • Protection of your legacy. A properly constructed trust can help protect your estate from your heirs' creditors or from beneficiaries who may not be adept at money management.
  • Privacy and probate savings. Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.

Why naming beneficiaries is important

For assets that move outside the will and probate process, if the named beneficiary conflicts with anything stated in the will, then the named beneficiary prevails. This means the named beneficiary will receive the asset, rather than anyone else named in the will, and usually the asset will not have to go through probate.

Thus, it's essential to name beneficiaries on assets that allow it—such as IRAs, 401(k)s, and brokerage accounts—and to keep those designations up to date. Note that, generally, if you are married and you name anyone other than your spouse as a 401(k) beneficiary, consent of your spouse is required.

 What the Markets Look like

Equities1

Close

Week

YTD

1-Year

S&P 500

2,873

4.46%

15.7%

5.8%

DJIA

25,984

4.77%

12.7%

5.4%

NASDAQ

7,742

3.91%

17.3%

2.5%

Foreign Stocks

 

3.24%

11.5%

-3.9%

Emerging Markets

 

1.04%

5.3%

-9.8%

 

       

Top Three S&P 500 Equity Sectors2

YTD

Information Technology

23.5%

Real Estate

21.5%

Industrials

18.3%

 

       

Bottom Three S&P 500 Equity Sectors2

YTD

Health Care

5.7%

Energy

7.9%

Utilities

14.4%

 

       

Bonds3

Week

YTD

1-Year

Yield

10-Yr. Treasury4

0.55%

6.5%

10.4%

2.09%

US Bonds

0.36%

5.2%

7.4%

2.62%

Global Bonds

1.20%

4.5%

4.7%

1.57%

Munis5

0.20%

4.9%

6.7%

2.04%

 

       

Market Indicators6

 

As of

Fed Funds Target

2.50%

6/7/2019

Inflation

2.10%

04/30/2019

Unemployment

3.60%

05/31/2019

GDP

3.10%

03/29/2019

 

       

 

1.Source: FactSet. S&P 500 is represented by the S&P 500 Index, DJIA is represented by the Dow Jones Industrial Average, NASDAQ is represented by the NASDAQ Composite Index, Foreign Stocks are represented by the MSCI EAFE Index and Emerging Markets are represented by the MSCI Emerging Markets Index.

2.Source: FactSet. Sectors based on S&P 500 Index sector indexes.

3.Sources: FactSet. 10-Yr Treasury is represented by the FTSE 10-Year Treasury Bond Index, US Bonds are represented by the Bloomberg Barclays US Aggregate Index, Global Bonds are represented by the Bloomberg Barclays Global Aggregate Index and Munis are represented by Bloomberg Barclays Municipal Bond Index.

4.10-Year Treasury yield is calculated using the Federal Reserve H.15 Report.

5.Munis yield is calculated using yield-to-worst.

6.Sources: Fed Funds Rate, Federal Reserve; Inflation and Unemployment, US Department of Labor; and GDP, US Bureau of Economic Analysis.

 

About Sumner Wealth Management

Our firm assist individuals, families, and businesses in proactively preparing themselves for a broad range of financial decisions and life events by helping our clients gain income protection, financial stability, with a solid plan.  We are an integrated, Wealth Manager Specialists. 

Mark Sumner
Financial Advisor

Sumner Wealth Management, Inc.                                                                                                                                          PO Box 4446                                                                                                                                                  
Mooresville, NC  28117                      
Direct (704) 905 - 3594                                         
www.sumnerwealthmanagement.com                                  


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   Sumner Wealth Management | 704.905.3594 | www.SumnerWealthManagement.com

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If a recommendation is included in the above email, please contact me for additional investment information supporting the recommendation.

Fee based advisory services offered through SSN Advisory, Inc. a registered investment advisor