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Vol. 78, No. 3, May 2024

FEATURED ARTICLES

Mental Accounting, Estate Bequests, and Retirement Satisfaction
Chet R. Bennetts, CFP, CLU, ChFC, RICP, CLF
Jason N. Anderson, CFP, CPA
Blain Pearson, PhD, CFP, AFC
This study examines the association between earmarking bequeathable assets and retirement satisfaction. Utilizing longitudinal data from the Health and Retirement Study, the authors examine the retirement satisfaction of retirees who have intentionally earmarked their bequeathable assets compared to retirees who have not. The findings suggest that earmarking bequeathable assets is associated positively with higher levels of retirement satisfaction.

Ambiguities in Per Capita Distributions: Navigating Complexities in Estate Planning and Life Insurance
Jill Bisco, PhD
Suzanne M. Gradisher, JD, MTax, MBA, CPA (inactive)
Jinjing Wang, PhD
Estate planning is a multifaceted process encompassing the accumulation, management, and preservation of wealth. Among estate planning tools like wills or life insurance policies, two common options for asset distributions are per stirpes and per capita. Per stirpes distribution, which is relatively straightforward and more widely used, directs the inheritance to the lineal descendants of a predeceased beneficiary. In contrast, the per capita method has varying interpretations in estate planning, financial planning, and insurance fields. This method encompasses several options. This article delves into the ambiguities in the per capita option, particularly the lack of a standardized definition. It underscores the necessity for financial professionals to navigate these distinctions effectively, ensuring clients’ objectives are met precisely and clearly in a field where precision and clarity are paramount.

Key Concerns for Financial Planning for Beneficiaries Subject to Guardianship
Lewis B. Hershey, PhD, MA
Harry L. Ehrenberg, CLU
People with disabilities are often targets for exploitation. Persons with disabilities subject to guardianship require additional planning protections to safeguard them from financial predation. This article reviews the literature on this topic and identifies key areas of concern that financial advisors should address to protect this vulnerable population.

DEPARTMENTS

Editor’s View
Should Plan Sponsors Adopt Pension-Linked Emergency Savings Accounts (PLESAs)?
Kenn Beam Tacchino, JD, LLM
Pension-linked emergency savings accounts (PLESAs) are a new option available for use in any defined-contribution plan. They originated with the SECURE Act 2.0 and were recently clarified by releases made by the Department of Labor and Internal Revenue Service. They present administrative challenges for plan sponsors in exchange for access to an emergency savings account linked to the retirement plan for plan participants.

Accounting & Taxation
New Beneficial Ownership Reporting Requirements
Bill Harden, CPA, ChFC, PhD
It is highly likely that financial service professionals, particularly those engaged in tax practice, will be asked by clients to either prepare or assist in the preparation of the beneficial ownership information (BOI) report. These professionals would be well advised to consult with their attorney and their malpractice insurance provider about the potential risks involved in taking on this type of work. It is also suggested that professionals make sure their engagement letters are specific with respect to the responsibilities of the various parties involved, including the updating of information when the company’s relevant information changes.

Advice for the Young Planner
Begin with the End in Mind: Applying the Planning Process to Your Own Practice
Matthew M. Stranix, CFP, RICP
Will it be a Lifestyle Practice with a comfortable life/work balance? Will it be a Growth Practice with an emphasis on more clients and more staff? Neither a Lifestyle Practice nor Growth Practice is inherently better than the other. It comes down to the planner identifying early in their career what is most important to them and what they’re looking to build. By “beginning with the end in mind,” the planner will have clarity on how to make business-level decisions in the early stages of their career to ensure their actions are aligned with their intentions

Entrepreneurship
Climbing the Digital Transformation Mountain
Kevin Tacchino, MSTFP
Zachary Piotti, MBA
Entrepreneurial clients are always searching for ways to do more with less. Planners can support their clients by introducing them to the concept of digital transformation. To help them further, they can provide basic guidance on how to avoid common mistakes with digital transformation by showing them the digital transformation mountain. This framework will help their clients understand their business value, select and pay for relevant/appropriate technology, and get the most out their teams–all of which will help them accomplish more with less.

Executive Compensation
Department of Labor Finalizes Rules to Prevent Misuse of Independent Contractor Status
Paul J. Schneider, JD, LLM
The issue of whether individuals should be classified as independent contractors has taken on increased significance as a result of the gig economy which began to grow following the Great Recession in 2009. To address this issue, the Department of Labor (DOL) has recently promulgated guidance (Final Regs.) that for the first time provides a regulatory framework for determining if workers should be classified as independent contractors or employees for purposes of the Fair Labor Standards Act. The Final Regs. return to the DOL’s longstanding position that the economic reality of the relationship between a worker and the alleged employer should be evaluated by considering all of the circumstances surrounding that relationship.

Financial Gerontology
Your Mindset about Aging Matters
Jodi Olshevski, MS
Aging is a natural process, but societal perceptions are often negative. Without awareness, this negativity can influence professional interactions with older clients. Learning to challenge our own age beliefs, stereotypes, and ageism can help to address this tendency we often have. Embracing a balanced view of aging along with an inclusive attitude is essential to communicate effectively and understand the varied needs of older clients. This column will introduce key concepts that build the foundation for understanding the benefits of a positive approach to aging.

Practice Management
To (Re-)Marry or Not to (Re-)Marry: Sorting Out IRA RMDs When Trusts Are Named as Beneficiaries
Douglas B. Richards, JD, MBA, CLU, CFP
The rules governing IRA required minimum distributions (RMDs) are complex. Throw the complexity of trusts on top of them and one begins to see the multiplicity of complications that can arise when they interact. This column will help sort it all out.