BC Journal

#Finterms: Probate

Probate is a legal process that governs the distribution of a deceased person's Probate Assets.

Probate Assets definition:
• Assets that do not pass by operation of law (such as jointly owned property)
• Assets passing by operation of contract (such as life insurance or IRAs that have named beneficiary other than the estate)
• Assets owned by a properly drafted trust at the time of death

Probate process includes:
• Proving that a deceased person's will is valid.
• Appointing the executor* (or administrator if the deceased dies without a will) who will oversee the probate process for the deceased’s estate.
• Identifying the probate property.
• Inventorying and valuing (via appraisal) the probate property.
• Paying debts, taxes and expenses of probate.
• Distributing the remaining property as the will directs or as state law directs, if the deceased died without a will (intestate).

*The executor/administrator is a fiduciary and must act with good faith, diligence, and honesty on behalf of the estate to preserve the estate assets for the benefit of its heirs.

#finterms #probate #executor

Second Quarter Market Commentary

Repositioning and repricing for the future is what the market is in a constant process of doing. Reacting and adjusting to inflation, economic, and corporate data along with digesting the corresponding FED policy responses has all lead to significant volatility this year.  In fact, the level of this volatility has been nothing less than record breaking so far this year. As they say, records are meant to be broken, but we obviously prefer not to be breaking such ominous new ground.   

On January 3rd, the S&P 500 topped out at 4796. As of the close of the second quarter, the S&P 500 stood unsteadily around 3785. This represents a 21% retracement from its high-water mark at the beginning of the year. On June 13th, the S&P 500 (and several broad market indices) officially entered bear market territory (as represented by a decline in value of 20% or more). Now add that fixed income is having its worst year ever and it won’t surprise you to hear that 2022 is off to one of the most difficult starts we have seen in decades. 

#Finterms: EBITDA

The acronym "EBITDA" stands for earnings before interest, taxes, depreciation and amortization.

EBITDA is a metric that measures the profitability for a business and is often used as a basis of comparison between companies given that it shows earnings before the influences of various accounting treatments and financing decisions. Put another way, EBITDA also serves as a proxy for core profitability given non-operating elements are removed in its calculation.

#finterms #EBITDA #profitability #business

#Finterms: Required Minimum Distribution (RMD)

A Required Minimum Distribution (RMD) is the amount of money that you must withdrawal from your Qualified Retirement Accounts every year, beginning in the year that you turn 72. 

Qualified accounts to be included in the RMD calculations are IRAs, 401(k) plans, 403(b) plans, 457 plans, profit sharing plans and qualified defined contribution plans. 

Note: Roth IRAs and Roth 401(k)s are not included in RMD calculations.

The amount of the distribution changes annually, as it is calculated by dividing the balance of all your tax deferred assets as of December 31st of the previous year, by an age-based factor determined by the IRS. 

There are some special situations that allow you to defer certain RMDs, but generally they must be taken at the mandated time or you risk paying a penalty equal to 50% of the amount that should have been taken.

#finterms #finance #retirement #RMD #qualifiedinvestments