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Family Wealth Decisions Group

This material is for use with the

general public and is designed for informational or educa-

tional purposes only. It is not

intended as investment advice and is not a recommendation

for your retirement savings.

Lincoln Financial Advisors

does not offer legal or tax advice.

Registered associates of Fami-ly Wealth Decisions Group

are registered representatives

of Lincoln Financial Advisors Corp.

Securities and investment advisory services offered

through Lincoln Financial

Advisors Corp., a broker/dealer (member SIPC) and

registered investment advisor.

Insurance offered through Lincoln affiliates and other

fine companies. Lincoln Fi-

nancial Group is the market-ing name for Lincoln National

Corporation and its affiliates.

Family Wealth Decisions Group is not an affiliate of

Lincoln Financial Advisors

Corp Branch address-6900 Jericho Tpke, Suite 101E,

Syosset, NY 11791

CRN-1925162-101717

Doug Lemons

Beth Ermanovics

Tyler D Simmons

Roy S Gilbert

Jul-Sep 2017

Thing to Consider

When Appointing an

Executor, Trustee, etc.

Discussing The “S” Word Quarterly Market

Commentary

Aesop’s Corner

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out our upcoming

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Ira’s Ira Tip

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IN THE CURRENT ISSUE...IN THE CURRENT ISSUE...IN THE CURRENT ISSUE... Our Team

Cybersecurity

Update

Re-thinking Your

Thinking

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By Pfeifer & Choi PLLC, Elder law Attorneys 90 Merrick Avenue / Suite 106 / East Meadow / NY 11554 / 516-222-1772

This article is reprinted from their September, 2017 newsletter

One of the most consequential decisions you will make when you are considering a will, trust

or a power of attorney is who will be your fiduciary. A fiduciary may be an executor, who ad-

ministers a will; a trustee, who administers a trust; or an agent on a power of attorney. They all

have the uppermost duty to act in your best interest. If a fiduciary violates his or her duty, you

can sue the fiduciary and/or bring criminal charges. However, such a remedy could be of little

use if the individual no longer has the money or property in his possession. Your fiduciary will

have access to a substantial part – if not all of – your assets. Thus, it is important that you pick

the right person.

A fiduciary is required to put your interests ahead of her own. The fiduciary must act in ac-

cordance with your instructions (which may be contained in the document itself); avoid con-

flicts of interest with you; keep your property separate and distinct; keep good records of all

transactions having to do with the fiduciary’s responsibilities; and disclose his role as agent

whenever he acts on your behalf. Your fiduciary may not use your assets for his own benefit

unless you have given him that authority.

Acting as a fiduciary is a hard job. For instance, an executor or trustee must make sure that

the assets are invested properly; keep good records of everything that came into and went out

of the estate or trust; carry out the terms of the will or trust; take into account the needs and

desires of all the beneficiaries; act fairly with respect to all of the beneficiaries; and render an

accounting to the beneficiaries so that they can see that the fiduciary performed her duties

properly. The fiduciary must have the integrity, competence, judgment, knowledge and skills

necessary to perform the job. Picking someone as executor, trustee or agent on a power of

attorney because they happen to be your oldest child or because you do not want to leave

them out may not be the best strategy. You may wish to ask the following questions when

picking a fiduciary:

1. Have you discussed your desire to appoint the individual as your fiduciary? You should ab-

solutely discuss your desire to appoint any individual as your fiduciary before you appoint

them. They may not be able or willing to take on the huge responsibilities of being a fiduci-

Things to Consider When Appointing an Executor, Trustee, etc.

(continue on next page)

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ary. You do not want to appoint someone who will be unable or unwilling to serve as your execu-

tor, trustee or agent.

2. Does the individual have impeccable honesty? If you have any doubts whether you can trust your

prospective fiduciary, you should strongly consider choosing someone else.

3. Does the individual have the time and ability to act as your fiduciary? People have a lot of commit-

ments in their lives: commitments to their families, careers, etc. In addition, the individual being

considered may not be in good health. Is the person able and willing to take on the additional re-

sponsibility of being your fiduciary?

4. Even if the individual you choose is able and willing to act as your fiduciary when you sign your

will, trust and power of attorney; she may not be able to perform the job later due to changed cir-

cumstances. Thus, you should always have a back-up fiduciary.

5. Does the person get along with the beneficiaries? Sibling rivalries or a trustee who is unable to dip-

lomatically deal with others can cause unnecessary strife or even cause disputes that end up in

court. One of the purposes of setting up your will, trust and power of attorney is to ensure that

things go smoothly without court intervention. Do not upend this goal with the wrong executor,

trustee or agent.

6. Is a person fair-minded? This is particularly important if the fiduciary is also a beneficiary of your

estate. If the individual will put his interests ahead of the other beneficiaries, you should pick some-

one else as your executor or trustee.

7. Does the person have the skills to manage the assets or is the person capable of receiving instruction

that will allow her to properly manage the assets? Not everyone is capable of being a fiduciary. If

the person is not sophisticated in handling financial matters, he is not a good choice. If the individu-

al cannot handle her own finances, she is not a good candidate for executor, trustee or agent of a

power of attorney.

8. Will the person be there when you need them? Your parents are wonderful and you trust them im-

plicitly. However, if your parents will be in their 80s when your children reach majority, they may

not be the best choice as your executors and trustees.

9. Should you choose a professional trustee? A professional trustee will charge fees but sometimes a

professional trustee is the best choice. They can provide expertise that individuals may not be able

to provide. An institutional trustee will not get sick or pass away. The professional trustee does not

have a conflict of interest with other beneficiaries of your will or trust.

Things to Consider When Appointing an Executor, Trustee, etc.

(continue on next page)

4

Some traits to look for in a fiduciary: the person should be honest, organized, tactful, even-

tempered, fair, responsible and financially astute. Choose your fiduciary wisely because you

and the beneficiaries of your estate will depend on her willingness and ability to do the job

properly.

CRN-1913650-100417

Things to Consider When Appointing an Executor, Trustee, etc.

5

In our experience, introductory meetings with prospective clients often begin a discussion about the pro-

spective client’s performance and continue with their comparisons to some benchmark or some other per-

son’s performance.

The reason for this is pretty simple: this is a common experience when dealing with financial advisors and it

is what is heard on the radio, seen on TV and read about in newspapers. These have been the traditional

conversations.

The belief that one’s portfolio is performing “well” generates a feeling of comfort and well-being. In some

cases, we suggest that although the feeling may be genuine it may not be based on rational information.

Often the performance assumptions are based only on “beliefs” and not on facts. They may not accu-

rately represent performance over a meaningful period of time and may not address asset allocation is-

sues or management of investment risks at all. Sometimes they address the performance of a single ac-

count or part of a portfolio.

Even if the performance assumptions are accurate, there often is no connection between this perfor-

mance data and its sufficiency to attain any particular goal.

For most people, the time, effort and process to gain a true understanding of how changes in their in-

vestment portfolio may positively impact their lives appears to be an overwhelming task that the client

is unable to pursue on his or her own.

Last, but probably not least, the knowledge and understanding of the true picture of how their current

portfolio may impact their lives may impose accountability for the results, possibly leading to discom-

fort and discontentment.

Although portfolio size and performance does matter, so does the rate of utilization of those resources –

hence the new conversation about the “S” word.

Again, in our experience, cash flow and spending discussions were almost never a serious part of our cli-

ents’ prior advisory relationships. As a result, cash flow analysis and sustainable spending discussions were

often neglected. Why?

It is uncomfortable to talk about spending. Many people may not want to know how much they spend

and where they spend it…as with that knowledge comes accountability. It’s sort of an “ignorance is

bliss” outlook.

Most people have no idea what they spend and they don’t really know how to go about arriving at a

good and useful estimate of their spending. Bad estimates used for planning actions may be as harmful

as ignoring the subject entirely.

Therefore, the crucial discussions clients should have with financial advisors should include:

Personalized cash flow analyses

Evaluations of how different investment AND spending decisions may impact the probability of suc-

cessfully achieving a future desired cash flow outcome

DISCUSSING THE “S” WORD

(continue on next page)

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Expansive conversations including all of a client’s assets (investments, real estate, businesses, collecti-

bles, longevity, etc.) and how they are managed synergistically to positively impact the client’s life

Employing a process to make clients active participants in the identification of financial issues and their

resolution. Although advisors need to provide objective advice about all reasonable alternatives availa-

ble, the client needs to take on accountability for their ultimate decision to act or not act.

We would be happy to discuss the issues raised in this article. Remember, we are here to help.

Roy Gilbert, JD*, CLU, ChFC

*Licensed, not practicing

CRN-1913633-100417

DISCUSSING THE “S” WORD

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By now, you have probably read about and/or heard about the great Equifax Hack. As bad, as large and

as troublesome as that hack might be, it is only one of many large recent intrusions into our digital

lives.

A consequence of all of these hacks may be that some of our personal, confidential, financial and/or

medical information may now be available to strangers and fraudsters.

This is scary. I am from the generation where we protected valuable information with notes in safe de-

posit boxes and by ripping up the carbon paper receipts from retail transactions. Times have changed.

Our protective actions need to also change.

I bet all of us have good locks on the doors of our homes. Many of us probably have burglar alarm sys-

tems connected to central stations to facilitate police notification. We probably have alarms for our cars

as well. These measures may dissuade some potential invaders, but not the dedicated burglar. Alt-

hough the alarms may alert us and the police to a break-in after it occurs, they may not prevent it.

There are credit monitoring programs available which can provide alerts in the event your digital space

has been breached, however, monitoring programs by themselves cannot keep you safe.

We suggest taking additional protective actions, regardless of whether you have engaged a monitoring

program. A few of them may include:

Review your credit reports at Experian, Equifax and Transunion annually;

Freeze your files at each of the above credit reporting companies;

Freeze the files of your minor children at each of the above credit reporting companies;

Maintain strong password entry to your mobile devices start-up or home screens. Some devises

may allow fingerprints as a password;

Maintain strong passwords (especially for your email and financial relationships) and a mechanism

to retain them and change them regularly;

Sign up for email or text alerts regarding activity in your bank account or on your credit or debit

cards;’

Make sure your anti-virus and anti-malware software (on your mobile devises as well as on your

computer) is updated.

There are many more strategies you can employ to protect your confidential and personal information.

We would be happy to discuss additional details on those as well as the ones listed above.

THE TAKEAWAY FROM THIS IS THAT WE ALL NEED TO ACTUALLY TAKE SOME AC-

TIONS FOR PROTECTIVE PURPOSES

Please contact us if you have questions about these strategies. Remember, we are here to help.

CRN-1913629-100417

Cybersecurity Update

8

In the Investment News Morning Email I received on 9/26/17, there was an interesting compilation

of client statements made to advisors over the years that the advisors considered as “cringe-

worthy”.

Although I don’t know that I would use that characterization, I do understand the emotions behind

them and I believe that they result from an incomplete understanding of some underlying facts and

concepts.

Some of the examples cited that I have heard during my years in practice include:

I’ll deposit more in investments when they start performing better

When would that be? Isn’t the secret to making money in investments buying low and

selling high?

I would like to borrow from my 401(k) to pay for a vacation (or to pay off a credit card bill or

pay off my mortgage)

Why would you use your retirement funds prior to retirement if it is not an emergency?

I want to buy a home because it is a good investment

USA Today published an article by Morgan Housl of The Motley Fool stating that for

many “… a house is a large liability masquerading as a safe asset”.

I’ll make _______ (fill in the blank) the beneficiary in my will / of my life insurance / of my

retirement accounts, as I know he/she will do the right thing for my kids

Why take the risk of an unintended beneficiary when you can remove that risk by naming

your intended beneficiary?

If you have questions about any of the above, please feel free to contact us to discuss them. Re-

member, we are here to help.

CRN-1913645-100417

Re-thinking Your Thinking

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Quarterly Market Commentary

So far, 2017 has been a year of progress in the investment world against a backdrop of uncertainty and

concern. While most asset classes continued to build on gains, unsettling global events generated head-

lines. Deplorable acts of violence occurred, both in the United States and abroad. Of course, we feel

deeply saddened by the senseless loss of life no matter where it occurs.

North Korea continues to test missile technologies in defiance of global prohibitions. On the domestic

front, political posturing and polarization seem to occur daily with continued partisan accusations and

counterattacks. No matter what side one is on, it gets pretty annoying after a while. We occasionally

hear some say they are tired of it all and don’t know how to invest in this environment. We understand.

Noted investor, Warren Buffett was recently asked why he had been largely silent about political is-

sues. He said that during his lifetime he had lived under 15 Presidents, purchasing equities under 14 of

the 15. The one President he had not bought stocks under was Herbert Hoover. He quickly added that it

was because, at the time, he was only two years old. Apparently, Mr. Buffett needed a few more years

to learn to read and acquire some investment capital. Then, he was good to go.

Like Mr. Buffett, we know we have a job to do. We have to manage capital capably in all environ-

ments. Perhaps Theodore Roosevelt, whose administration was well before Mr. Buffett was born, said

it best. “Do what you can, with what you have, where you are.”

Domestic Equities: Despite all of the drama around the North Korean missile testing and the ever-

present political wrangling, U.S. stocks continued their upward march. This was likely due to the pro-

spect of corporate and individual tax cuts. We view equities as the opportunity to own part of a busi-

ness. After years of sluggish growth lingering from the financial crisis, it is hoped that tax reform can

bring a needed jolt to the economy, permitting businesses to increase earnings and employment. Bear in

mind, however, political matters are often messy and protracted. For the third quarter, the S&P 500

tacked on a 4.5% return. This brings the return of the index to 14.2% for 2017. Smaller stocks were not

left behind. The Russell 2500, a gauge of smaller U.S. stocks increased 4.7% and is up 11.0% for the

calendar year.

International Equities: After years of underperforming U.S. stocks, international equities are closing the

gap. This should not come as a surprise. From a valuation standpoint, foreign equities were valued at a

lower price-to-earnings ratio and higher yield than their U.S. counterparts. Stocks in developed markets

rose 5.4% for the third quarter. For 2017, the index has jumped 20%. The story for emerging markets

stocks was largely the same. After a considerable period of lagging the U.S. markets, some wondered

why they owned the once popular emerging markets stocks at all, but 2017 provided the answer. The

Emerging Markets Index advanced 7.9% for the third quarter, and surged 27.8% for calendar year

2017.

Fixed-Income: Since the days of the financial crisis when the government pushed bond yields to histor-

ic lows, some have been calling for a dramatic rise in yields. For now, this has not happened. Despite

multiple rate increases and a strong stock market, the bond market has taken it all in stride. The Bar-

(continue on next page)

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Quarterly Market Commentary

clays Aggregate, a measure of the total domestic bond market, eked out a 0.8% increase for the quarter.

For the year, it notched a 3.1% gain. High-yield bonds also had positive results. These bonds, from low

quality issuers, have greater default risk but are generally less affected by rising rates. As the economy

strengthened, the High-Yield Index rose, and is up 2.0% for the quarter and 7.0% year-to-date.

As we enter the final quarter of 2017, it is important not only to look forward but to look back. During

the third quarter of 2017, the financial markets marked something of an anniversary. There was no cele-

bration. Not many people even noticed. Ten years ago, on August 9th, 2007, a French bank announced

it had frozen access to $2.2 billion in sub-prime hedge funds. Those hedge funds turned out to be the

canary in the coal mine. That day marked the beginning of what would be the most far-reaching finan-

cial disruption since World War II. It would affect everyone from homeowners in the U.S. to pensioners

in Iceland and just about everyone in between.

We mention this not because we expect an imminent repeat of that global crisis. The point is that by fol-

lowing prudent, disciplined, and mathematically-informed principles, investors can survive even the

worst of financial times and flourish in the years that follow.

We have been through a lot over the past 10 years. Including difficult declines and roaring rallies. In the

years ahead, we will likely encounter more of each. Echoing Roosevelt’s thoughts, we will be there do-

ing all we can, with everything we have, where we are. That is our continuing commitment to you.

Call us if there is anything you would like to discuss. We are always here to help. CRN-1916660-100617

% Return as of 09/30/2017

Equity Indexes 3rd

Q YTD 3 Yr

S&P 500 4.5 14.2 10.8

Russell 2500 4.7 11.0 10.6

MSCI EAFE 5.4 20.0 5.0

Emerging Market 7.9 27.8 4.9

Wilshire REIT 0.6 2.4 9.7

Bond Indexes

TIPS 0.9 1.7 1.6

Aggregate 0.8 3.1 2.7

Governments 0.4 2.3 2.0

Mortgages 1.0 2.3 2.4

Investment Corporate 1.3 5.2 4.1

Long Corporate 2.0 8.5 6.1

Corporate High-Yield 2.0 7.0 5.8

Municipals 1.1 4.7 3.2

Cash Equivalents

3-Month T-Bill 0.3 0.5 0.3

Consumer Price Index 0.1 1.5 1.0

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In recent conversations with my daughter, it struck me that she is very different from me in what she spends her money on. She was born in 1993 and graduated from college two years ago. She immediately secured gainful employment, and moved into an apartment of her own. This sets her apart from many of her friends who still live with their parents. My wife and I recently visited our daughter at her apartment in upstate New York. We were surprised that she doesn’t own a land line. Her iPhone is her connection to the world. She also doesn’t pay for cable. She watches television online and does most of her reading online. She often works from home. She shops online. She is on Facebook throughout the day. She values “experiences." After this visit I was prompted to explore the spending habits of millennials, those children born after 1981. Millennials are now the largest generation. Baby boomers (born 1946 to 1964) no longer hold that distinc-tion. There are eighty million millennials in America alone and they represent about a fourth of the entire population. They have $200 billion in annual buying power.1 According to the Department of Labor, unlike older generations, 2/3 of millennials rent rather than owning homes. In comparison to other generations, millennials spend the largest share of their budget eating out. They also spend the most on motorcycles. Millennials spend less on entertainment than baby boomers and Gen Xers (born 1965 to 1981), and they also spend less on apparel than baby boomers and Gen Xers.2

Other findings are just as interesting. A recent report by Morgan Stanley found that millennials are spending more on expenses like rent, cellphones and personal services which leaves less money for buying clothes.3

Jason Dorsey, an expert at the Center for Generational Kinetics, noted that millennials prefer to spend mon-ey on experiences and technology. Having a cell phone is essential. Phones serve as the chief modes of com-munication. Also, millennials place less emphasis on owning and more on sharing, bartering and trading to secure goods and services. As a result, businesses such as Zipcar, Uber and home rental site Airbnb have flourished.4 Finally, young millennial women love makeup.5 I can personally attest to this observation. When we visited our daughter, I was amazed at the amount of makeup she owned. Bottles of makeup filled sever-al makeshift shelves in her bathroom. Millennials have a significant impact on how Americans are spending their money today. I find myself won-dering if these patterns will change as millennials move out of their parents’ homes, pay off student loans and start raising children. Let us know what you think? Doug Lemons, CFP® 1https://www.forbes.com/sites/danschawbel/2015/01/20/10-new-findings-about-the-millennial-consumer/#1a7d297b6c8f 2https://blog.dol.gov/2016/11/03/spending-habits-by-generation 3http://www.businessinsider.com/consumers-spending-less-on-apparel-2015-5 4http://www.businessinsider.com/how-millennials-are-spending-money-2016-3 5Ibid

CRN-1853651-072417

Spending Habits of Millennials

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A woman had a hen that laid a very fine egg every day which she sold at a good price. She pondered how she might get two eggs a day. To accomplish this, she fed her hen a double portion of food each day. The hen never laid two eggs in a day and ultimately grew fat and quit laying eggs altogether.

The Moral of this Fable is:

Avariciousness may result in overreaching

The woman had a great deal already, but would not be satisfied until she had it all. Unfortunately, the reasonableness of her goal and her method of pursuing it was not well considered. As a result, in her pursuit of more, she ended up with less.

As investors, we always want a greater return and often we diminish the existence of risk of loss in that pursuit. Perhaps we should make sure that greater returns are rea-sonably possible and the strategies used will not cause damage elsewhere. Para-phrasing Mark Twain, it is not only what you don’t know that can hurt you, but it’s also what you think you know for sure that’s not really so that can pose insidious, invidious harm.

Do you make sure that you understand all of the risks of financial decisions you make and their potential ramifications in other areas of your life?

CRN-1913622-100417

AESOP’s CORNER

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Ira’s IRA TIP

CRN-1913638-100417

Ira, the IRA man

Ira's IRA TIP

Many of us were expecting significant income tax

changes under the new administration – however, they

have not happened yet. Therefore, please remember that

distributions from retirement accounts are not subject to

the 3.8% surtax on net investment income, but they can

cause your eligibility to the surtax by increasing your

income to reach the eligibility threshold.

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Location Date Subject Time

Syosset Office October 17, 2017 Medicare 8:00am-9:00am

Syosset Office October 26, 2017 Quality of Life 4:00pm-5:00pm

Syosset Office November 14, 2017 Social Security Planning

8:30am-9:30am

Syosset Office November 30, 2017 Savvy IRA Planning for CPA’s

4:00pm-5:00pm

Syosset Office December 12, 2017 Savvy Cybersecurity 8:00am-9:00am

Syosset Office December 21, 2017 Medicare 9:00am-10:00am

We continually try to offer some basic educa-

tion to professionals as well as to our clients

and others who are interested.

Please examine the topics below and sign up for

any presentations that interest you. Refresh-

ments will be served at each presentation.

You may sign up by calling Beth Tinelli at

516-682-7564. You may also email her at

BethT@FamilyWealthDecisions.com or contact

her on our website:

http://www.familywealthdecisions.com/contact

If you would like to arrange for a private or closed

educational event, please contact us.