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With the PP-ACA, increased compliance regulations and higher tax rates impending from the Biden administration – not to mention the corona pandemic, venture capital based healthcare corporations and telehealth – physicians are more concerned about their retirement and retirement planning than ever before; and with good reason. After payroll taxes, dividend taxes, limited itemized deductions, the new 3.8% surtax on net investment income and an extra 0.9% Medicare tax, for every dollar earned by a high earning physician, almost 50 cents can go to taxes!
Introduction
Retirement planning is not about cherry picking the best stocks, ETFs or mutual funds or how to beat the short term fluctuations in the market. It’s a disciplined long term strategy based on scientific evidence and a prudent process. You increase the probability of success by following this process and monitoring on a regular basis to make sure you are on track.
General Surveys
According to a survey from the Employee Benefit Research Institute [EBRI] and Greenwald & Associates; nearly half of workers without a retirement plan were not at all confident in their financial security, compared to 11 percent for those who participated in a plan, according to the 2014 Retirement Confidence Survey (RCS).
In addition, 35 percent of workers have not saved any money for retirement, while only 57 percent are actively saving for retirement. Thirty-six percent of workers said the total value of their savings and investments—not including the value of their home and defined benefit plan—was less than $1,000, up from 29 percent in the 2013 survey. But, when adjusted for those without a formal retirement plan, 73 percent have saved less than $1,000.
Debt is also a concern, with 20 percent of workers saying they have a major problem with debt. Thirty-eight percent indicate they have a minor problem with debt. And, only 44 percent of workers said they or their spouse have tried to calculate how much money they’ll need to save for retirement. But, those who have done the calculation tend to save more.
The biggest shift in the 24 years has been the number of workers who plan to work later in life. In 1991, 84 percent of workers indicated they plan to retire by age 65, versus only 9 percent who planned to work until at least age 70. In 2014, 50 percent plan on retiring by age 65; with 22 percent planning to work until they reach 70.
Physician Statistics
Now, compare and contrast the above to these statistics according to a 2018 survey of physicians on financial preparedness by American Medical Association [AMA] Insurance. The statistics are still alarming:
The top personal financial concern for all physicians is having enough money to retire.
Only 6% of physicians consider themselves ahead of schedule in retirement preparedness.
Nearly half feel they were behind
41% of physicians average less than $500,000 in retirement savings.
Nearly 70% of physicians don’t have a long term care plan.
Only half of US physicians have a completed estate plan including an updated will and Medical directives.
Thoughts to Ponder
And so, to help make your golden years comfortable and worry free, here are ten important retirement questions for all physicians to consider:
How much money do you need to retire?
What is your retirement cash flow?
What is your retirement vision?
How to stay on retirement track?
How to maximize retirement plan contributions such as 401(k) or 403(b)?
How to maximize retirement income from retirement plans?
What are some other retirement plan savings options?
What is your retirement plan and investing style?
What is the role of social security in retirement planning?
How to integrate retirement with estate planning?
The opinion of a competent Certified Medical Planner® can assist.
ASSESSMENT: Your thoughts, comments and input are appreciated.
You’ve got a sense of your ideal retirement age. And you’ve probably made certain plans based on that timeline. But what if you’re forced to retire sooner than you expect? Aging baby-boomers, corporate medicine, the medical practice great resignation and/or the pandemic, etc?
Early retirement is nothing new, but it’s clear how much the COVID-19 pandemic has affected an aging workforce. Whether due to downsizing, objections to vaccine mandates, concerns about exposure risks, other health issues, or the desire for more leisure time, the retired general population grew by 3.5 million over the past two years—compared to an annual average of 1 million between 2008 and 2019—according to the Pew Research Center.1 At the same time, a survey conducted by the National Institute on Retirement Security revealed that more than half of Americans are concerned that the COVID-19 pandemic has impacted their ability to achieve a secure retirement.2
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There’s no need to panic, but those numbers make one thing clear, says Rob Williams, managing director of financial planning, retirement income, and wealth management for the Schwab Center for Financial Research. Flexible and personalized financial planning that addresses how you’d cope if you had to retire early can help you make the best use of all your resources.
So – Here are six steps to follow. We’ll use as an example a person who’s seeing if they could retire five years early, but the steps remain the same regardless of your individual time frame.
Step 1: Think strategically about pension and Social Security benefits
For most retirees, Social Security and (to a lesser degree) pensions are the two primary sources of regular income in retirement. You usually can collect these payments early—at age 62 for Social Security and sometimes as early as age 55 with a pension. However, taking benefits early will mean that you get smaller monthly benefits for the rest of your life. That can matter to your bottom line, even if you expect Social Security to be merely the icing on your retirement cake.
On the Social Security website, you can find a projection of what your benefits would be if you were pushed to claim them several years early. But if you’re part of a two-income couple, you may want to make an appointment at a Social Security office or with a financial professional to weigh the potential options.
For example, when you die, your spouse is eligible to receive your monthly benefit if it’s higher than his or her own. But if you claim your benefits early, thus receiving a reduced amount, you’re likewise limiting your spouse’s potential survivor benefit.
If you have a pension, your employer’s pension administrator can help estimate your monthly pension payments at various ages. Once you have these estimates, you’ll have a good idea of how much monthly income you can count on at any given point in time.
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Step 2: Pressure-test your 401(k)
In addition to weighing different strategies to maximize your Social Security and/or pension, evaluate how much income you could potentially derive from your personal retirement savings—and there’s a silver lining here if you’re forced to retire early.
Rule of 55
Let’s say you leave your job at any time during or after the calendar year you turn 55 (or age 50 if you’re a public safety employee with a government defined-benefit plan). Under a little-known separation-of-service provision, often referred to as the “rule of 55,” you may be able take distributions (though some plans may allow only one lump-sum withdrawal) from your 401(k), 403(b), or other qualified retirement plan free of the usual 10% early-withdrawal penalties. However, be aware that you’ll still owe ordinary income taxes on the amount distributed.
This exception applies only to the plan (including any consolidated accounts) that you were contributing to when you separated from service. It does not extend to IRAs.
4% rule
There’s also a simple rule of thumb suggesting that if you spend 4% or less of your savings in your first year of retirement and then adjust for inflation each year following, your savings are likely to last for at least 30 years—given that you make no other changes to your withdrawals, such as a lump sum withdrawal for a one-time expense or a slight reduction in withdrawals during a down market.
To see how much monthly income you could count on if you retired as expected in five years, multiply your current savings by 4% and divide by 12. For example, $1 million x .04 = $40,000. Divide that by 12 to get $3,333 per month in year one of retirement. (Again, you could increase that amount with inflation each year thereafter.) Then do the same calculation based on your current savings to see how much you’d have to live on if you retired today. Keep in mind that your money will have to last five years longer in this instance.
Knowing the monthly amount your current savings can generate will give you a clearer sense of whether you’ll have a shortfall—and how large or small it might be. Use our retirement savings calculator to test different saving amounts and time frames.
Step 3: Don’t forget about health insurance, doctor!
Nobody wants to spend down a big chunk of their retirement savings on unanticipated healthcare costs in the years between early retirement and Medicare eligibility at age 65. If you lose your employer-sponsored health insurance, you’ll want to find some coverage until you can apply for Medicare.
Your options may include continuing employer-sponsored coverage through COBRA, insurance enrollment through the Health Insurance Marketplace at HealthCare.gov, or joining your spouse’s health insurance plan. You may also find discounted coverage through organizations you belong to—for example, the AARP.
Step 4: Create a post-retirement budget
To make sure your retirement savings will cover your expenses, add up the monthly income you could get from pensions, Social Security, and your savings. Then, compare the total to your anticipated monthly expenses (including income taxes) if you were to retire five years early and are eligible, and choose to file, for Social Security and pension benefits earlier.
Take into account various life events and expenditures you may encounter. You may not pay off your mortgage by the date you’d planned. Your spouse might still be working (which can add income but also prolong certain expenses). Or your children might not be out of college yet.
You’re probably fine if you anticipate that your monthly expenses will be lower than your income. But if you think your expenses would be higher than your early-retirement income, some suggest that you take one or more of these measures:
Retire later; practice longer.
Save more now to fill some of the potential gap.
Trim your budget so there’s less of a gap down the road.
Consider options for medical consulting or part-time work—and begin to explore some of those opportunities now.
To the last point, finding a physician job later in life can be challenging, but certain employment agencies specialize in this area. If you can find work you like that covers a portion of your expenses, you’ll have the option of delaying Social Security and your company pension to get higher payments later—and you can avoid dipping into your retirement savings prematurely.
When you retire early, you have to walk a fine line with your portfolio’s asset allocation—investing aggressively enough that your money has the potential to grow over a long retirement, but also conservatively enough to minimize the chance of big losses, particularly at the outset.
“Risk management is especially important during the first few years of retirement or if you retire early,” Rob notes, because it can be difficult to bounce back from a loss when you’re drawing down income from your portfolio and reducing the overall number of shares you own.
To strike a balance between growth and security, start by making sure you have enough money stashed in relatively liquid, relatively stable investments—such as money market accounts, CDs, or high-quality short-term bonds—to cover at least a year or two of living expenses. Divide the rest of your portfolio among stocks, bonds, and other fixed-income investments. And don’t hesitate to seek professional help to arrive at the right mix.
Many people are unaccustomed to thinking about their expenses because they simply spend what they make when working, Rob says. But one of the most valuable decisions you can make about your life in retirement is to reevaluate where your money is going now.
This serves two aims. First, it’s a reality check on the spending plan you’ve envisioned for retirement, which may be idealized (e.g., “I’ll do all the home maintenance and repairs!”). Second, it enables you to adjust your spending habits ahead of schedule—whichever schedule you end up following. This gives you more control and potentially more income.
Step 6: Reevaluate your current spending
For example, if you’re not averse to downsizing, moving to a less expensive home could reduce your monthly mortgage, property tax, and insurance payments while freeing up equity that could also be invested to provide additional monthly income.
“When you are saving for retirement, time is on your side”. You lose that advantage when you’re forced to retire early, but having a backup plan that anticipates the possibility of an early retirement can make the unknowns you face a lot less daunting.
According to the website, Engage with Grace, we make choices throughout our lives — where we want to live, what types of activities will fill our days, and with whom we spend our time, etc. These choices are often a balance between our desires and our means, but at the end of the day, they are decisions made with intent.
Somehow when we get close to death, however, we stop making decisions. We get frozen in our tracks and can’t talk about our preferences for end of life care.
Death Studies
Studies loom out there — 73% of Americans would prefer to die at home, but anywhere between 20-50% of Americans die in hospital settings. More than 80% of Californians say their loved ones “know exactly” or have a “good idea” of what their wishes would be if they were in a persistent coma, but only 50% say they’ve talked to them about their preferences.
But, end of life experience is about a lot more than statistics. It’s about all of us.
Genesis and Epiphany
In the summer of 2008, Matt Holt (Founder of Health2.0) and Alexandra Drane (President of Eliza) met with some friends for dinner. Over their second cocktail, they got deep into conversation about these very topics. Many of us live with such intent — why do we put the end of our lives in someone else’s control? Why isn’t this topic a conversation that people are having? How could we help start it? And it hit them — What if we could work together to start a viral movement — a movement focused on improving the end of life experience? What if we took responsibility for starting a national (even global) discussion that, until now, most of us haven’t had?
Engage With Grace
The One Slide Project was designed with one simple goal: to help get the conversation about end of life experience started. The idea is simple: Create a tool to help get people talking. One Slide, with just five questions on it. Five questions designed to help get us talking with each other, with our loved ones, about our preferences. And we’re asking people to share this One Slide — wherever and whenever they can… at a presentation, at dinner, at their book club. Just One Slide with five questions to help get all of us talking about death. Just One Slide that we as a community could collectively rally around sharing — in meetings, at a conference, or over a drink.
This is the link to the slide, and this is what we are asking you to do …
Share it any time you can — at the end of presentations, at dinner, or at your book club. Think of the slide as currency and donate just two minutes whenever you can. Commit to being able to answer these five questions about end of life experience for yourself and for your loved ones. Then commit to helping others do the same. Get this conversation started.
Assessment
Let’s start a viral movement driven by the change we as individuals can affect …and the incredibly positive impact we could have collectively. Donate just two minutes to adding just this One Slide to the end of your presentations. Get others involved. Help ensure that all of us — and the people we care for — can end our lives in the same purposeful way we live them.
Just One Slide, just one goal. Think of the enormous difference we can make together.
Conclusion
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
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Posted on March 24, 2024 by Dr. David Edward Marcinko MBA
By Staff Reporters
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Financial hardship has led dozens of operators of senior facilities to file for bankruptcy over the past three years, with 13 companies filing petitions in 2021, 12 debtors filing in 2022 and 15 more in 2023, according to Gibbins Advisors.
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Notable Chapter 11 filings over the past year have included Evangelical Retirement Homes of Greater Chicago, which filed Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Illinois in June 2023 to sell its assets at auction. Also, Windsor Terrace Health, an operator of 32 nursing homes in California and three in Arizona, filed its petition in the U.S. Bankruptcy Court for the Central District of California in August 2023 listing $1 million to $10 million in assets and liabilities and unable to pay its debts.
More recently, Magnolia Senior Living, an operator of four facilities in Georgia, filed for Chapter 11 protection on March. 19 in the U.S. Bankruptcy Court for the Northern District of Georgia.
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The Great Recession of 2008 had a lot of downsides: People lost homes, jobs, and retirement savings, had their careers derailed, and were forced to learn what the heck synthetic collateralized debt obligations are. But according to recent research, it also made people in the US live longer.
Despite the convenience of avoiding probate, a TOD account does not inherently provide tax benefits or protections against estate or inheritance taxes.
Upon your death, estate taxes may apply if the total value of your estate exceeds the federal exemption threshold, which is $13.61 million in 2024. Most people won’t come anywhere close to this level. However, a handful of states do impose inheritance taxes, which are paid by beneficiaries, though these exemption amounts are also generously high.
For capital gains, beneficiaries get a step-up in basis to the fair market value of the assets at the date of your death, which can provide significant tax benefits if the assets have appreciated in value.
I’m a late career entry and 55 year old burned out doctor who wants out. Can I retire in 2 years with a pension of $6,100 a month (net). I have $825,000 in my 401(k) and 457 plan and a mortgage of $95,000 at 5.30%. I am not planning to move and will retire in place.
SOME THOUGHTS AND ANSWERS?
Congratulations on you solid retirement fund on top of a pending pension.
The first step you should take is to create a detailed budget for your retirement years. Consider expected living costs, healthcare expenses, travel and any other major expenses. Many folks make the mistake of setting up a monthly budget, but keep out significant milestones that are often costly, such as paying for a child’s college education or wedding.
Next, you should figure out your plan for housing. Mortgage payments, upkeep and taxes are important considerations. There was no mention of mortgage equity.
Another factor to take into account is state and Federal tax projections. If the 401(k) funds are all pre-tax dollars, any distributions will be taxable and there may be penalties if funds are withdrawn prior to 59 ½ years old. That will impact your retirement plan if you’re preparing to retire at 57-58.
It also sounds like you haven’t taken into account your Social Security allowance. It’s possible that your pension is one that comes with a government pension offset which would explain why you didn’t include it. On the other hand, maybe you’re thinking it’s far out enough that it doesn’t factor into your calculations?
Finally, you may want to look for a fee-only financial advisor that is paid directly by the client and doesn’t receive commissions for recommending financial products. So, advice is less biased. And get a fiduciary advisor which means they are required to put your best interests ahead of their own.
Also, someone with medical niche specificity. Good Luck!
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NOTE: This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.
Posted on December 23, 2023 by Dr. David Edward Marcinko MBA
By Staff Reporters
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Annual Gift Tax Exclusion Increased
Currently, you can give any number of people up to $17,000 each in a single year without taxation. For 2024, this will be increased to $18,000. For married couples, $36,000 will be available to be given to beneficiaries, tax-free, beginning next year.
Lifetime Gift Tax Exemption
Additionally, the IRS has announced that the lifetime estate and gift tax exemption will increase to $13.61 million in 2024. If a gift exceeds the annual limit ($17,000 this year, $18,000 in 2024), that does not automatically prompt a gift tax. The difference is simply taken from the person’s lifetime exemption limit and no taxes are owed.
A retirement nest egg of $2.5 million can likely produce an annual income of $100,000 for as long as you are likely to live. This is using the 4% withdrawal rate many financial advisors consider standard. After starting with the first withdrawal of 4% of the total, the annual withdrawal will adjust for inflation. For example, if inflation runs at the target 2% rate of federal policymakers, during retirement the retiree will withdraw:
$100,000
in the first year
$102,000
in the second year
$104,040
in the third year and so on …
According to this model and conventional wisdom, a 4% withdrawal rate will allow a portfolio to last for at least 30 years. This would permit a 65-year-old retiree to maintain consistent purchasing power until age 95 and beyond.
For most retirees, this will likely be adequate to maintain a satisfying standard of living. Only about 3% of 2,000 retirees surveyed by the Employee Benefit Research Institute in 2022 spent $7,000 or more per month, equivalent to $84,000 in annual spending.
This model does not include a number of other factors. For instance, nearly all retirees are eligible for Social Security. For 2023, the maximum monthly Social Security benefit for people who claim benefits at full retirement age is $3,627. That’s equal to more than half the spending of the top 3% of retirees surveyed by EBRI. And, like the standard withdrawal rate, Social Security benefits are indexed to inflation.
5 Variables for Retiring With $2.5 Million at Age 65
While $2.5 million could seem like enough to retire at 65, many factors could change the outlook.
1. Unexpected Healthcare Costs
The Fidelity Retiree Health Care Cost Estimate suggests an average 65-year-old couple could need (approximate, after taxes):
This assumes both spouses are enrolled in traditional Medicare, which between Medicare Part A and Part B covers expenses such as hospital stays, doctor visits and services, physical therapy, lab tests and more, and in Medicare Part D, which covers prescription drugs.
This figure does not include long-term care (“custodial care”), most dental care, eye exams and more, so your estimated healthcare costs in retirement could be considerably more.
2. Inflation
Inflation can powerfully influence retirees’ financial well-being. When inflation occurs, it reduces the purchasing power of money withdrawn from your retirement account. You can increase withdrawals to maintain purchasing power, but this risks more quickly depleting your savings.
3. Market Downturns
Inflation isn’t the only cause of market downturns. Business cycles and financial crises can exaggerate normal fluctuations in stock market valuations. If you’re selling investments to generate income for living expenses, you may want to sell more if valuations are down.
4. Longevity
While living a long life is positive, you could outlive the money you’ve saved for retirement. Many financial planners use life expectancy to age 95 or 100 when developing plans for funding retirement.
The Social Security Administration says an average 65-year-old male can live to age 83, while the average woman can live to age 86. However, people in their 80s and 90s also generally reduce their spending, with the exception of healthcare costs.
5. Estate Planning
Retiring at 65 with $2.5 million likely involved generating high income and savings, so there’s a chance you could have assets to pass on. With estate planning, adding members of your family as beneficiaries for homes you paid off with a mortgage may have long-term positives.
You may also want to think about any additional income streams. For example, if you own a medical practice or business, you may want to add your family as a beneficiary so they can decide to keep the business running or sell it.
The IRS Quietly Changed the Rules on Children’s Inheritance
The IRS just issued Revenue Ruling 2023-2, which had a substantial impact on estate planning, particularly where an irrevocable trust is involved.
In the last decade or so, more families have begun utilizing irrevocable trusts to protect their assets from spend-down in order to qualify for government benefits, such as Medicaid and VA Aid and Attendance. Prior to the issuance of this ruling, it was unclear whether assets passing to beneficiaries through an irrevocable trust would receive a step-up in basis, thereby eliminating any capital gains taxes that would otherwise be owed.
Historically, assets that are disposed of during an individual’s lifetime are subject to capital gains taxes on the increase in value of that asset over time. The amount of capital gains owed is determined largely by the difference between the value at the time of purchase and the value at the time of transfer.
Delta Dental of California data breach exposed info of 7 million people
“Delta Dental of California and its affiliates are warning almost seven million patients that they suffered a data breach after personal data was exposed in a MOVEit Transfer software breach.Delta Dental of California provides 24 months of free credit monitoring and identity theft protection services to impacted patients to mitigate the risk of their exposed data.”
At Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
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But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
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Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
Academic Team of Internationally Known Contributors
D. E. Marcinko & Associates is one of the most academically published authorities on the topic of financial planning and private wealth management for physicians, nurses and medical professionals. We have published 33 major peer reviewed textbooks redacted in the Library of Medicine, Institute of Health and the Library of Congress, in four languages, with over 5,025 online white papers, web-posts and related publications. These cover a range of financial planning topics from medical malpractice, risk management and insurance, to investment policy statement analysis and endowment funding management, and to taxation, retirement, estate and legacy planning.
Financial planning, business and strategic management, FMV for practice and clinics and related “hard” topics are included.
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We also include “soft” subjects from investor psychology, ethics and lost fortunes to luxury spending, from understanding the middle-class millionaire to the political philosophies of physicians and the affluent. Our corpus of work is regularly consulted by doctors, medical, business, graduate and nursing schools, to elite advisors, private and investment bankers, wealth managers, venture capitalists, academics and the press.
Posted on November 23, 2023 by Dr. David Edward Marcinko MBA
DONOR ADVISED FUNDS
By Staff Reporters
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Proponents of DAFs say that their structure encourages giving: The tax deduction encourages wealthy patrons to dedicate money for charity even before they’ve decided which cause to support. “Donors may have good reasons to postpone grants,” a Stanford Law School article says..
In one hypothetical, a tech founder who “sells a startup for millions of dollars” may want to donate her takings but is too busy to immediately decide how to direct the funds; a DAF is a good choice for this person, the law article notes.
However, while DAFs could in theory grow the charitable pie, in practice, they too often allow the donor the illusion of charity while letting them keep control of their funds, critics say.
While a gift to a DAF is treated the same as an outright gift to the Red Cross or United Way, in practice, it “effectively allows the donor to retain ongoing control over the charitable disposition and investment of the donated assets,” tax scholars Roger Colinvaux and Ray Madoff wrote in 2019. What’s more, “donors are under no obligation, and have no incentive, ever to release their advisory privileges to make the funds available for charitable use.”
And ultra wealthy donors get a substantially larger tax break than a middle-class worker. As much as 74 cents of every dollar given to charity comes back to the donor in the form of tax breaks, according to calculations by Colinvaux and Madoff, with the highest-earning donors getting the biggest benefits A person in the top tax bracket would save 37% of their federal income tax for every dollar they contribute with a charitable donation; a similar amount of state income tax; and, depending on what they donate and when, they can also avoid capital gains tax and estate tax. (By contrast, a typical worker who makes about $60,000 and doesn’t own stocks would save 22% from their cash contribution, in addition to any state tax savings.)
What’s more, because there’s no way to track donations from particular DAF accounts, they act as a form of “dark money,” allowing donors to give vast sums, essentially anonymously, to a range of potentially unsavory organizations, including nonprofits that advocate for specificpolitical causes or organizations classified as hate groups, IPS says.
“This allows DAFs to be used to hide transfers — similar to the way the ultra-wealthy use multiple shell companies to hide the movement of money among offshore accounts,” IPS writes.
All of these strategies are completely legal, the IPS notes, as are other potentially questionable tactics used by family foundations—such as paying family members to serve as foundation trustees or act as executives of foundations, sometimes at salaries in the hundreds of thousands of dollars a year. However, the IPS argues, they erode public trust in charities and the tax system overall.
“The fact that billionaires opt out of paying taxes, have these closely held family foundations and get to play God about where the money goes, that’s private power — unaccountable private power,” Collins said.
“At this point philanthropy is at risk of becoming taxpayer-subsidized private power.”
At Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
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But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
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Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
At D.E. Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
D.E.Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
***
But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
***
Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
TOD deeds are legal documents that can be filed in local land records offices, and do not require the notice of the beneficiary, though it’s probably a good idea to inform them. Each state has its own requirements as to what the deed entails. TOD deeds are offered in 27 states (and D.C.).
These deeds are revocable once filed. Beneficiaries have no ownership claim to your property while you’re still alive. You maintain full control of the property, including responsibility for any mortgage debt, taxes, liens and the like. Once you pass away, the property will transfer to your named beneficiary, along with any debts attached to it.
Before signing a transfer on death deed, there are a few things to keep in mind.
Pros
You retain ownership while you’re still alive. Your beneficiary only takes over once you pass away; until then, you make all decisions about your property, and can even sell it if you choose. This makes a TOD deed a better choice than, say, adding someone as a joint owner on your property. (In that case, you would need their permission before selling, refinancing, mortgaging or even improving the home.)
It is revocable. If you choose to withdraw or revoke your transfer on death deed, you can do so at any time. You can also replace an existing TOD deed with a new one, if desired.
It’s simple. Establishing a transfer on death deed is easy. It just requires signing the document and filing with your county land records office. You don’t even need to let the beneficiary know you’ve done it.
Anyone can be named you beneficiary. You can use a transfer on death deed to pass property to anyone when you die. This includes family members, friends, other loved ones or even charitable causes.
Cons
Joint ownership takes precedence. If the property is jointly owned with someone else, that ownership supersedes a TOD deed. The property will instead transfer to the other owner if you pass away. Once they also pass away, the TOD deed will go into effect (if still valid).
If your beneficiary dies first, your property goes to probate anyway. If you pass away along with or after your beneficiary, and don’t have a backup beneficiary named, your property will go through probate with the rest of your estate.
At Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
***
But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
***
Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
At D.E. Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
D.E.Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
***
But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
***
Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
At D.E. Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
D.E.Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
***
But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
***
Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
DEFINITION: A Health Savings Account (HSA) is a tax-advantaged account created for or by individuals covered under high-deductible health plans (HDHPs) to save for qualified medical expenses. Contributions are made into the account by the individual or their employer and are limited to a maximum amount each year. The contributions are invested over time and can be used to pay for qualified medical expenses, such as medical, dental, and vision care and prescription drugs.
A Health Savings Account [HSA] can be a good or bad investment to pass on, depending on who the estate planning heir is in relation to you. If you leave it to a spouse, they’ll be able to continue using the money for medical expenses with no taxes or penalties, said Pam Horack, CFP at Pathfinder Planning LLC of Lake Wylie, South Carolina.
“However, if you leave an HSA to your child, estate or other organization, it may be considered income in the year it is received,” she said. “They are not allowed to use the tax advantages for their own healthcare and the income could inadvertently throw your heirs into a higher tax bracket.”
Posted on September 3, 2023 by Dr. David Edward Marcinko MBA
More on End-of-Life Political Decisions from a Different Perspective – Since 2009
By Dr. David Edward Marcinko; MBA, CMP™
The controversial booklet Your Life, Your Choices begins by saying,
“There’s only one person who is truly qualified to tell health care providers how you feel about different kinds of health care issues—and that’s you. But, what if you get sic; or injured so severely that you can’t communicate with your doctors or family members? Have you thought about what kinds of medical care you would want? Do your loved ones and health care providers know your wishes?
Many people assume that close family members automatically know what they want. But, studies have shown that spouses guess wrong over half the time about what kinds of treatment their husbands or wives would want. You can help assure that your wishes will direct future health care.”
Contents
The booklet, initially produced by the VA Health System and now under revision, includes two areas of focus: 1] Planning for Future Medical Decisions, and 2] How to Prepare a Personalized Living Will.
Now, insofar as doctors, nurses and some other medical professionals are concerned – decisions of life, death or dismemberment are not an unusual or particularly contentious topic except for the lunatic fringes.
Yet, when taken in the context of HR-3200, they seem to be provoking wild outrage with talk of “killing grandma”, “government death squads”, etc all within the Obama Administration’s talk of healthcare reform. Still, this is not the point of my diatribe as I remain a neutral observer and pass no value judgment at this time.
What is the Point?
Just this! As a financial advisor for more than a decade, estate planning to reduce taxes, along with living wills and advanced directives are usual topics of discussion with clients. In fact, they are fairly boring and rote topics for estate planners, tax attorneys and accountants, too.
My wife and I have a living will, for example. And, although I am not sure that I could “pull her plug”; I did watch as she and her mother did so for my father-in-law [both wife and mother-in-law are Master-Degree prepared RNs]. So; why the impolite town-hall meetings and related controversy, now! Is it mere politics as usual, unusual, or is it something else?
Assessment
The onerous pages of this booklet seem to be page 21 and page 53. Take a look and decide for yourself.
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
At Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
***
But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
***
Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
At Marcinko & Associates our clients traditionally includephysicians [MD, MBBS and DO], dentists [DDS and DMD], podiatrists [DPM], Registered Nurses [RNs], Certified Registered Nurse Anesthetists [CRNA], Physician Assistants [PA] and Nurse Practitioners [NP]. A growing cohort of clients include medical technologists, physical, speech and occupational therapists, etc.
The above are naturally segregated into three career tranches: 1. New practitioners, 2] Mid-Career practitioners and 3] Mature practitioners. We serve them all and are fully prepared for any special needs situation that may arise in any tranche [death, divorce, adverse risk event and/or bankruptcy, etc].
Marcinko & Associates understands the complexity of financial and non-financial deal terms because we are also doctors. Our “hard” knowledge of your business comes from being actual healthcare facility owners, operators and medical practitioners [with additional professional licenses and expertise] enabling us to effectively analyze your business, take corrective measures and present your healthcare entity in the best possible and accurate light.
***
But, if you’re looking at this website, chances are you are fed up, burned out, seeking practice management techniques or a better work-life balance. Or, you are looking for a new non-clinical career, thinking of finance, investing, retirement, or all of the above. Perhaps you are just looking to regain the joy and meaning in your medical or professional career? This is known as “soft” psychology, coaching, personal consulting or fraternal advice.
***
Regardless, of your “soft” personal or “hard” corporate needs, our transparent Fees for Service [FFS] model is moderated for all colleagues based on the acuity and urgency of their engagements. Reduced rates and/or limited charity work may also be possible.
As a doctor and attorney, it is only logical for me to be the medical guardian for my adult learning and physically challenged cousin. So, I am here in Miami, Floridanearly every month for his physician appointments as well as social service visits. But, we also make sure we attend exciting and fun activities, as well!
In fact, last weekend was no exception as we went to the Sabrina Cohen Foundation for theirAdaptive Beach Daysevent during Brain Awareness Month every June.
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TheCohen Foundationprovides adaptive services for physically impaired people to participate in water activities, particularly in the ocean and beach activities. Miss Cohen was injured 19 years ago in a terrible accident and had a spinal cord injury. Instead of feeling sorry for herself, she created a foundation where she helps others enjoy life and activities outdoors. She received a 2 1/2 million dollar grant from the city of Miami and has a permanent site on the Beach in Miami. And, she provides services and activities for many people and is trying to take her foundation nationwide.
ME-P NOTE: The Illinois’s 11th Congressional District is in the state of Illinois. It includes parts of Cook, DuPage, Kendall, Kane and Will counties, as well some suburbs of Chicago and rural areas. So, please drop us a line and consider learning about and supporting Dr. Kent, regardless of your congressional district, affiliation and/or U.S. state.He is a political centrist and surely a rising new national star.
Posted on June 11, 2023 by Dr. David Edward Marcinko MBA
By Staff Reporters
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CRANIA: A delivery driver for the Anatomical Gift Association (AGA) of Illinois claims that after he complained about corpse storage protocol, he arrived at work to find three [3] severed heads in plastic containers in his office. The AGA denied it was retaliation, saying a desk full of skulls is just part of the job.
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Doctors on TikTok? Hospital re-brandings? Healthcare marketers are trying new strategies to reach patients—but they’re not always a slam dunk success.
Posted on April 25, 2023 by Dr. David Edward Marcinko MBA
By Staff Reporters
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1. Regional banks’ plight was Morgan Stanley’s perk. The bank saw nearly $20 billion in new client assets in the wake of the banking crisis that rocked smaller banks like First Republic. Why the bank became a “destination of choice” amid the crisis.
2. Taylor Swift was the only one asking the right question on FTX. The mega star didn’t sign a $100 million sponsorship deal with the crypto exchange because, unlike seemingly everyone in Silicon Valley, she did some form of due diligence.
4. It’s starting to get scary in the housing market. Foreclosure filings were up 22% in Q1 compared to last year, and repossessions are headed in the wrong direction as well.
Finally, Fintel reports that on April 21, 2023, Goldman Sachs maintained coverage of Tesla (NASDAQ:TSLA) with a Buy recommendation. As of April 6th, 2023, the average one-year price target for Tesla is $203.14. The forecasts range from a low of $24.58 to a high of $315.00. The average price target represents an increase of 24.63% from its latest reported closing price of $162.99. The projected annual revenue for Tesla is $118,517MM, an increase of 37.75%. The projected annual non-GAAP EPS is $5.70.
The S&P 500® Index was up 3.52 points (0.1%) at 4137.04; the Dow Jones industrial average was up 66.44 (0.2%) at 33,875.40; the NASDAQ Composite was down 35.25 (0.3%) at 12,037.20.
The 10-year Treasury yield was down about 7 basis points at 3.50%.
CBOEs Volatility Index was up 0.12 at 16.89.
Real estate and financials were among Monday’s weakest-performing sectors, while energy companies led gainers thanks to a jump of about 1% in crude oil futures. The U.S. dollar index fell to about 101.37, its weakest level since mid-April, while Treasury yields eased slightly.
Assessment: Without your passwords, your loved ones may be unable to shut down your Facebook page, access your accounts, and protect your personal correspondence.
National Healthcare Decisions Day (NHDD) exists to inspire, educate and empower the public and providers about the importance of advance care planning. NHDD is an initiative to encourage patients to express their wishes regarding healthcare and for providers and facilities to respect those wishes, whatever they may be.
NHDD was founded in 2008 by Nathan Kottkamp, a Virginia-based health care lawyer, to provide clear, concise, and consistent information on healthcare decision-making to both the public and providers/facilities through the widespread availability and dissemination of simple, free, and uniform tools (not just forms) to guide the process.
NHDD is a series of independent events held across the country, supported by a national media and public education campaign. In all respects, NHDD is inclusive and brings a variety of players in the larger healthcare, legal, and religious community together to work on a common project, to the benefit of patients, families, and providers. A key goal of NHDD is to demystify healthcare decision-making and make the topic of advance care planning inescapable. Among other things, NHDD helps people understand that advance healthcare decision-making includes much more than living wills; it is a process that should focus first on conversation and choosing an agent.
As of June 2016, The Conversation Project has been responsible for the management, finances, and structure of NHDD. NHDD’s founder, Nathan Kottkamp, continues to be involved in NHDD and provides leadership by ensuring the maintenance of NHDD’s high quality resources and support for the community.
DEFINITION: What is advance care planning for financial advisors and lawyers?
Advance care planning involves discussing and preparing for future decisions about your medical care if you become seriously ill or unable to communicate your wishes with your estate planning attorney or financial advisor. Having meaningful conversations with your loved ones is the most important part of advance care planning. Many people also choose to put their preferences in writing by completing legal documents called advance directives.
What are advance directives?
Advance directives are legal documents that provide instructions for medical care and only go into effect if you cannot communicate your own wishes.
The two most common advance directives for health care are the living will and the durable power of attorney for health care.
Living will: A living will is a legal document that tells doctors how you want to be treated if you cannot make your own decisions about emergency treatment. In a living will, you can say which common medical treatments or care you would want, which ones you would want to avoid, and under which conditions each of your choices applies. Learn more about preparing a living will.
Durable power of attorneyfor health care: A durable power of attorney for health care is a legal document that names your health care proxy, a person who can make health care decisions for you if you are unable to communicate these yourself. Your proxy, also known as a representative, surrogate, or agent, should be familiar with your values and wishes. A proxy can be chosen in addition to or instead of a living will. Having a health care proxy helps you plan for situations that cannot be foreseen, such as a serious car accident or stroke. Learn more about choosing a health care proxy.
Think of your advance directives as living documents that you review at least once each year and update if a major life event occurs such as retirement, moving out of state, or a significant change in your health.
Advance care planning is not just for people who are very old or ill. At any age, a medical crisis could leave you unable to communicate your own health care decisions. Planning now for your future health care can help ensure you get the medical care you want and that someone you trust will be there to make decisions for you.
Advance care planning for people with dementia. Many people do not realize that Alzheimer’s disease and related dementias are terminal conditions and ultimately result in death. People in the later stages of dementia often lose their ability to do the simplest tasks. If you have dementia, advance care planning can give you a sense of control over an uncertain future and enable you to participate directly in decision-making about your future care. If you are a loved one of someone with dementia, encourage these discussions as early as possible. In the later stages of dementia, you may wish to discuss decisions with other family members, your loved one’s health care provider, or a trusted friend to feel more supported when deciding the types of care and treatments the person would want.
What happens if you do not have an advance directive?
If you do not have an advance directive and you are unable to make decisions on your own, the state laws where you live will determine who may make medical decisions on your behalf. This is typically your spouse, your parents if they are available, or your children if they are adults. If you are unmarried and have not named your partner as your proxy, it’s possible they could be excluded from decision-making. If you have no family members, some states allow a close friend who is familiar with your values to help. Or they may assign a physician to represent your best interests. To find out the laws in your state, contact your state legal aid office or state bar association.
Will an advance directive guarantee your wishes are followed?
An advance directive is legally recognized but not legally binding. This means that your health care provider and proxy will do their best to respect your advance directives, but there may be circumstances in which they cannot follow your wishes exactly. For example, you may be in a complex medical situation where it is unclear what you would want. This is another key reason why having conversations about your preferences is so important. Talking with your loved ones ahead of time may help them better navigate unanticipated issues.
There is the possibility that a health care provider refuses to follow your advance directives. This might happen if the decision goes against:
The health care provider’s conscience
The health care institution’s policy
Accepted health care standards
In these situations, the health care provider must inform your health care proxy immediately and consider transferring your care to another provider.
Other advance care planning forms and orders from doctors
You might want to prepare documents to express your wishes about a single medical issue or something else not already covered in your advance directives, such as an emergency. For these types of situations, you can talk with a doctor about establishing the following orders:
Do not resuscitate (DNR) order: A DNR becomes part of your medical chart to inform medical staff in a hospital or nursing facility that you do not want CPR or other life-support measures to be attempted if your heartbeat and breathing stop. Sometimes this document is referred to as a do not attempt resuscitation (DNR) order or an allow natural death (AND) order. Even though a living will might state that CPR is not wanted, it is helpful to have a DNR order as part of your medical file if you go to a hospital. Posting a DNR next to your hospital bed might avoid confusion in an emergency. Without a DNR order, medical staff will attempt every effort to restore your breathing and the normal rhythm of your heart.
Do not intubate (DNI) order: A similar document, a DNI informs medical staff in a hospital or nursing facility that you do not want to be on a ventilator.
Do not hospitalize (DNH) order: A DNH indicates to long-term care providers, such as nursing home staff, that you prefer not to be sent to a hospital for treatment at the end of life.
Out-of-hospital DNR order: An out-of-hospital DNR alerts emergency medical personnel to your wishes regarding measures to restore your heartbeat or breathing if you are not in a hospital.
Physician orders for life-sustaining treatment (POLST) and medical orders for life-sustaining treatment (MOLST) forms:These forms provide guidance about your medical care that health care professionals can act on immediately in an emergency. They serve as a medical order in addition to your advance directive. Typically, you create a POLST or MOLST when you are near the end of life or critically ill and understand the specific decisions that might need to be made on your behalf. These forms may also be called portable medical orders or physician orders for scope of treatment (POST). Check with your state department of health to find out if these forms are available where you live.
At enrollment, Medicare in the future could offer three advancedirectives with goals of care: DirectiveA: CONSENT to treat — inpatient medical treatment DirectiveB: CONSENT to comfort — home bound holistic care DirectiveC: CHOOSE against medical advice — outpatient palliative resources.
Remember, in 2023, do not trigger the US estate and gift tax. Last year’s inflation, the highest in decades, means married couples can now hand their heirs almost $26 million tax-free, $1.7 million more than in 2022 and $2.4 million more than in 2021.
The hike in the lifetime estate-and-gift tax exemption — adjusted for price growth annually by the Internal Revenue Service — is the largest since 2018, when the amount was doubled by Republican-passed legislation signed by former President Donald Trump the prior year. As a result, the individual exemption, which is easily shared between spouses, has rocketed to $12.9 million from $5 million in 2011.
But, richer Americans may be running out of time to pass on this much wealth. The exemption is slated to be cut in half in three years, when provisions of Trump’s tax law are set to expire. While even $26 million is a drop in the bucket for the ultra-rich, the exemption’s size shows why generational wealth transfers — estimated by research firm Cerulli to total almost $73 trillion in the US through 2045 — go largely untouched by the government.
Plus, financial advisors may use loopholes and leverage to multiply the amount of tax-free money available to heirs.
The decision to sell, buy or merge a medical practice, while often financially driven, and is inherently an emotional one for these impact investors who went into the profession largely because of a deep seated zeal to help others.
Still, beyond impact investing musings, there are other economic reasons for a practice valuation that include changes in ownership, determining insurance coverage for a practice buy-sell agreement or upon a physician-owner’s death, organic growth meter, establishing stock options, or bringing in a new partner; etc.
Practice appraisals are also used for legal reasons such as divorce, bankruptcy, breach of contract and minority shareholder complaints. In 2002, the Financial Accounting Standards Board (FASB) issued rules that required certain intangible assets to be valued, such as goodwill. This may be important for practices seeking start-up, service segmentation extensions, or operational funding. Some other reasons for a medical practice appraisal, and the considerations that go along with them, are discussed here.
Medical practice valuation may be required for estate planning purposes. For a decedent physician with a gross estate of more than current in-place tax limits, his or her assets must be reported at fair market value on an estate tax return. If lifetime gifts of a medial practice business interest are made, it is generally wise to obtain an appraisal and attach it to the gift tax return.
Note that when a “closely-held” level of value (in contrast to “freely traded,” “marketable,” or “publicly traded” level) is sought, the valuation consultant may need to make adjustments to the results. There are inherent risks relative to the liquidity of investments in closely held, non-public companies (e.g., medical group practice) that are not relevant to the investment in companies whose shares are publicly traded (freely-traded). Investors in closely-held companies do not have the ability to dispose of an invested interest quickly if the situation is called for, and this relative lack of liquidity of ownership in a closely held company is accompanied by risks and costs associated with the selling of an interest said company (i.e., locating a buyer, negotiation of terms, advisor/broker fees, risk of exposure to the market, etc.). Conversely, investors in the stock market are most often able to sell their interest in a publicly traded company within hours and receive cash proceeds in a few days. Accordingly, a discount may be applicable to the value of a closely held company due to the inherent illiquidity of the investment. Such a discount is commonly referred to as a “discount for lack of marketability.”
Discount for lack of marketability is typically discussed in three categories: (1) transactions involving restricted stock of publicly traded companies; (2) private transactions of companies prior to their initial public offering (IPO); and, (3) an analysis and comparison of the price to earnings (P/E) ratios of acquisitions of public and private companies respectively published in the “Mergerstat Review Study.”\
With a non-controlling interest, in which the holder cannot solely authorize and cannot solely prevent corporate actions (in contrast to a controlling interest), a “discount for lack of control,” (DLOC), may be appropriate. In contrast, a control premium may be applicable to a controlling interest. A control premium is an increase to the pro rata share of the value of the business that reflects the impact on value inherent in the management and financial power that can be exercised by the holders of a control interest of the business (usually the majority holders). Conversely, a discount for lack of control or minority discount is the reduction from the pro rata share of the value of the business as a whole that reflects the impact on value of the absence or diminution of control that can be exercised by the holders of a subject interest.
Several empirical studies have been done to attempt to quantify DLOC from its antithesis, control premiums. The studies include the Mergerstat Review, an annual series study of the premium paid by investors for controlling interest in publicly traded stock, and the Control Premium Study, a quarterly series study that compiles control premiums of publicly traded stocks by attempting to eliminate the possible distortion caused by speculation of a deal.
Buy-Sell Agreements
The ideal situation is for physician partners to put in place a buy-sell agreement when practice relationships are amicable. This establishes the terms for departure before they are required, and is akin to a prenuptial agreement in the marriage contract. Disagreements most often occur when a doctor leaves the group, often acrimoniously. Business operations of the practice decline, employee and partner morale suffers, feuding factions develop spilling over into the office, and the practice begins to implode creating a downward valuation spiral. And so, valuations should be done every 2-3 years, or as the economic circumstances of the practice change. Independence and credibility are provided, and emotional overtones are purged from the transaction.
Physician Partnership Disputes
Medical practice appraisals are often used in partnership disputes, such as breach-of-contract or departure issues. Obvious revenue declinations are not difficult to quantify. But, revenues may not immediately fall since certain Current Procedural Terminology [CPT®] code reimbursements may actually increase. Upon verification however, lost business may be camouflaged as the number of procedures performed, or number of patients decrease after partner departure.
Physicians getting divorced should get a practice appraisal, and either side may hire the appraiser, although occasionally the court will order an expert to provide a neutral valuation. Such valuations should be done in light of both court discovery rules and IRS requirements for closely held businesses. Generally, this requires the consideration of eight elements:
• Practice specialty and operating history
• Economic and healthcare industry condition
• Estimates of practice risks and future returns
• Book value and financial condition of the practice
• Practice future earning capacity
• Physician bonuses, dividends and distributions
• Intangible assets
• Comparable practice sales
Sometimes, the non-physician spouse may even desire a lifestyle analysis to evaluate the potential for under reported income, by a forensic accountant, or appraiser. A family law judge is often the final arbiter of different valuations, and because of varying state laws there may be 50 different nuances of what the practice is really worth.
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements.
Posted on November 18, 2022 by Dr. David Edward Marcinko MBA
By Staff Reporters
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DEFINITION: The Pew Research Center defines the middle class as households that earn between two-thirds and double the median U.S. household income, which was $65,000 in 2021, according to the U.S. Census Bureau. 21 Using Pew’s yardstick, middle income is made up of people who make between $43,350 and $130,000.
The American middle class is facing the biggest hit to its wealth in a generation going into the midterm election, although it is also entering the vote richer than it has ever been thanks to a decade of cheap money and the wealth boom it fed.
That’s the conclusion of a Bloomberg News examination that paired new wealth data with an exclusive Harris Poll of attitudes of the 100 million adults who sit at the core of the US economy and its politics ahead of the election.
Posted on July 3, 2022 by Dr. David Edward Marcinko MBA
Dubious Financial Specialists?
By Rick Kahler MS CFP®
Even if you work with a financial planner, there are times you may also need the services of a financial specialist such as an attorney, accountant, or insurance agent.
Conflicted
In a situation where the specialist’s advice may seem to conflict with the suggestions of your financial planner, as a rule the specialist always has the last word. After all, they are the experts. Their particular knowledge is the reason your generalist financial planner recommended consulting them in the first place.
Occasionally, however, a specialist’s recommendations may not be in your best interest. Most are skilled professionals who are very good at their jobs and provide a great service to their clients in moving the financial planning process forward.
However, as in any profession, there are exceptions.
One example of this is when a specialist’s knowledge doesn’t adequately cover the particular needs of a client’s situation.
Another example is a specialist who has a conflict of interest because of receiving commissions for the sale of financial products.
Both of these may be more likely to occur when specialists are chosen less because of their skills and more because of a prior relationship with the client.
While most specialists are open to listening to another point of view, acknowledging errors, or learning new information, some are not. It’s those specialists who lack needed knowledge and are unwilling to admit errors that cause financial planners to lose sleep.
A Choice
If a planner disagrees with the client’s specialist and says so, this can put the client in a difficult and unenviable position of having to choose between two trusted professionals, one of whom may have some incorrect information.
Unfortunately, the client usually doesn’t have the training or knowledge to know which. If the client is forced to side with one professional against the other, at best this damages the ongoing ability of the professionals to work together and at worst it finds the client firing one or both.
Planners who choose to keep silent about the disagreement and defer to the specialist can save face as well as retain working relationships with both the client and the specialist. They can only hope that the apparent poor advice the specialist has given the client works out in the long run.
Most planners I know will weigh the severity of the issue, as well as the strength of the client’s relationships with them and the specialist, when deciding how forcefully to oppose poor advice. If the consequences are significant, many financial planners will risk losing their relationship with the client to point out a specialist’s error.
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To Do List
What can you do to encourage your planner to level with you if one of your specialists is giving you advice that doesn’t serve you well?
I don’t have a definitive answer to this difficult question.
One thing I can suggest is that communication is essential. It’s important that you fully and openly explore any disagreement a planner expresses, no matter how insignificant it sounds.
My second suggestion is to minimize the chances of getting poor advice in the first place. Avoid anyone who might have a conflict of interest, especially if they receive commissions for selling you something. Don’t assume a professional you’ve worked with in other areas is qualified for this particular concern.
Assessment
Make sure your planner has thoroughly researched the specialist’s expertise, and don’t be afraid to ask questions about anything you don’t fully understand. Partner with your financial planner to choose a specialist carefully in the beginning, and you increase the likelihood that all of you will be able to work effectively as a team.
Conclusion
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Posted on June 10, 2022 by Dr. David Edward Marcinko MBA
A financial planning challenge
By Rick Kahler MS CFP®
One of the challenges in financial planning is the strong taboo in our society against talking about money. Another powerful taboo is talking about death when someone has a serious illness.
When someone is diagnosed with cancer, for example, the focus is almost always on treatment and recovery. Rarely is there any discussion of what happens if the treatment doesn’t work. There seems to be an unspoken belief that if we don’t talk about it, it won’t happen.
For example, in a recent presentation to financial advisors at the Insiders Forum in Phoenix, she pointed out that many doctors shy away from talking about dying until the very end.
Given this strong reluctance to talk about both money and dying, how can you work with a financial advisor to deal with the financial and emotional issues that go along with a family member’s serious illness?
Here are some suggestions based on Dr. McClanahan’s talk:
Don’t expect someone facing a serious illness to give you an accurate prognosis of their disease, as they are often in denial. McClanahan suggests turning to “Dr. Google” for accurate information. Specifically, she recommends the National Institutes of Health (www.nih.gov), which has statistics on every disease imaginable.
Learn to interpret what doctors say. For example, when a cancer patient is told chemotherapy has a 25% chance of working, the average patient hears “working” as “being cured.” “Working” actually means there is a 25% chance of the tumor shrinking. Often the chances of being cured are far less than 25%, and the physical effects of chemotherapy can be devastating to one’s remaining quality of life. McClanahan says, “Most of what we do to people at the end of life is unnecessary torture.”
Find out early about options for palliative care. This is multidisciplinary care focused on treating the symptoms of treatment, relieving suffering, and improving the quality of life. Because of denial and unwillingness to talk about what happens if they don’t get better, many patients never get into palliative care or get into it way too late. Similarly, most patients wait too long to get into hospice care. The average time in hospice care, according to McClanahan, is just 19 days.
Share your money concerns with the advisor. McClanahan says that anxiety over having enough money to pay for their care and the resulting effect on the family finances are two of the top concerns patients have. Interestingly, most financial advisors focus instead on whether advance directives, estate documents, and funeral plans are in place.
Call the advisor’s attention to signs that a person’s illness is advancing. These can include a shortened attention span, not remembering details of conversations, word-finding difficulties, inability to multitask, mental fuzziness, and depression. Ask advisors to deal with these symptoms: meet early in the day, address the most important issues first, keep meetings short, include family members as appropriate, and put action items in writing.
Realize that sharing your emotions is part of financial planning. Serious illness affects people in many different ways, but the underlying concerns are always emotional. Discuss those concerns with the advisor, and work together to create a comprehensive plan addressing both death and recovery. Remember that, as McClanahan put it, “preparation for a negative outcome does not reduce the risk of cure.”
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The role of the financial planner
The role of a financial planner is to help clients prepare for the future, including the end of life. When that future becomes “now,” don’t hesitate to ask for the planner’s emotional support as well as financial advice.
Conclusion
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Posted on April 15, 2022 by Dr. David Edward Marcinko MBA
[By Staff Reporters]
Digital Messages for Loved Ones From Beyond the Grave
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No one wants to die. Even people who want to go to heaven don’t want to die to get there.
And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because death is very likely the single best invention of life.
It is life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away.
Beginning in 2022, there will be few situations in which a patient can receive a bill for out-of-network care they believed would be covered by their insurance company. This new rule should especially benefit patients in emergency situations who don’t have the time or luxury to dig up the details on every provider they encounter.
The No Surprises Act also requires insurance companies to provide patients with at least 90 days of coverage if an in-network provider moves out of network. That way, patients aren’t forced to switch providers immediately if such a move happens while they’re in the middle of a treatment plan.
Now, the No Surprises Act does have its limitations. Patients can still get a bill for out-of-network care if they visit an urgent care clinic for non-emergency purposes. Also, if consumers are informed that the care they’re about to receive is out of network and they give written consent to move forward, then they may get billed for that care even once the new rule takes effect.
Posted on February 24, 2022 by Dr. David Edward Marcinko MBA
Start-Ups for the End of Life
By MIT Technology Review
One Main Street
Cambridge, MA 02142
Technology has changed the way we grieve, but it’s also starting to make a difference to the way we deal with death’s logistics, too.
The New York Times reports that startups—often run by millennials, it drily notes—are increasingly creating digital tools that help people plan for their demise.
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Assessment
Though for those determined not to admit defeat, cryogenics is still an option:
KrioRus, the only company outside of the U.S. prepared to put your head on ice after you die, will do so for a modest $12,000. It still doesn’t know what to do further down the line, though.
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Here are eight things to keep in mind as you prepare to file your 2021 taxes.
1. Income tax brackets have shifted a bit
There are still seven tax rates, but the income ranges (tax brackets) for each rate have shifted slightly to account for inflation. For 2021, the following rates and income ranges apply:
Tax rate
Taxable income brackets:Single filers
Taxable income brackets:Married couples filing jointly (and qualifying widows or widowers)
10%
$0 to $9,950
$0 to $19,900
12%
$9,951 to $40,525
$19,901 to $81,050
22%
$40,526 to $86,375
$81,051 to $172,750
24%
$86,376 to $164,925
$172,751 to $329,850
32%
$164,926 to $209,425
$329,851 to $418,850
35%
$209,426 to $523,600
$418,851 to $628,300
37%
$523,601 or more
$628,301 or more
Source: Internal Revenue Service
2. The standard deduction has increased slightly
After an inflation adjustment, the 2021 standard deduction has increased slightly to $12,550 for single filers and married couples filing separately and $18,800 for single heads of household, who are generally unmarried with one or more dependents. For married couples filing jointly, the standard deduction has risen to $25,100.
3. Itemized deductions remain the same
For most filers, taking the higher standard deduction is more practical and saves the hassle of keeping track of receipts. But if you have enough tax-deductible expenses, you might benefit from itemizing.
The following rules for itemized deductions haven’t changed much for 2021, but they’re still worth pointing out.
State and local taxes: The deduction for state and local income taxes, property taxes, and real estate taxes is capped at $10,000.
Mortgage interest deduction: The mortgage interest deduction is limited to $750,000 of indebtedness. But people who had $1,000,000 of home mortgage debt before December 16, 2017, will still be able to deduct the interest on that loan.
Medical expenses: Only medical expenses that exceed 7.5% of adjusted gross income (AGI) can be deducted in 2021.
Charitable donations: The cash donation limit of 100% of AGI remains in place for 2021, if donations were made to operating charities.1
Miscellaneous deductions: No miscellaneous itemized deductions are allowed.
4. IRA and 401(k) contribution limits remain the same
The traditional IRA and Roth contribution limits in 2021 remain the same as in 2020. Individuals can contribute up to $6,000 to an IRA, and those age 50 and older also qualify to make an additional $1,000 catch-up contribution. If you’re able to max out your IRA, consider doing so—you may qualify to deduct some or all of your contribution.
The 2021 contribution limit for 401(k) accounts also stays at $19,500. If you’re age 50 or older, you qualify to make an additional $6,500 catch-up contribution as well.
5. You can save a bit more in your health savings account (HSA)
For 2021, the max you can contribute into an HSA is $3,600 for an individual (up $50 from 2020) and $7,200 for a family (up $100). People age 55 and older can contribute an extra $1,000 catch-up contribution.
To be eligible for an HSA, you must be enrolled in a high-deductible health plan (which usually has lower premiums as well). Learn more about the benefits of an HSA.
6. The Child Tax Credit has been expanded
For 2021, the American Rescue Plan Act (ARPA) has temporarily modified the Child Tax Credit requirements and amounts for household incomes below $75,000 for single filers and $150,000 for married filing jointly.
First, the ARPA has raised the age limit for dependents from 16 to 17. In addition, the child tax credit has increased from $2,000 to $3,000 for children age 6 through 17 and up to $3,600 for children under 6. If your income exceeded the above limits but was below $200,000 for single filers or $400,000 for joint filers, you’ll receive the standard child tax credit of $2,000 per child.
The IRS began sending monthly advance Child Tax Credit payments to eligible families in July and sent its last advance in December. If your dependent didn’t qualify for the child tax credit, you may still qualify for up to $500 of tax credits under the “credit for other dependents” (see IRS Publication 972 for more details). Tax credits, which reduce the tax you owe dollar for dollar, are generally better than deductions, which reduce your taxable income.
7. The alternative minimum tax (AMT) exemption has gone up
Until the AMT exemption enacted by the Tax Cuts and Jobs Act expires in 2025, the AMT will continue to affect mostly households with incomes over $500,000. Still, the AMT has investment implications for some high earners.
For 2021, the AMT exemptions are $73,600 for single filers and $114,600 for married taxpayers filing jointly. The phase-out thresholds are $1,047,200 for married taxpayers filing a joint return and $523,600 for all other taxpayers.
8. The estate tax exemption is even higher
The estate and gift tax exemption, which is indexed to inflation, has risen to $11.7 million for 2021. But the now-higher exemption is set to expire at the end of 2025, meaning it could be essentially cut in half at that time if Congress doesn’t act.
The annual gift exclusion, which allows you to give money to your loved ones each year without incurring any tax liability or using up any of your lifetime estate and gift tax exemption, stays at $15,000 per recipient.
Don’t get caught off guard
As you prepare to file your taxes for 2021, here are a few additional items to consider.
If you’re not retired, the 10% early withdrawal penalty that was waived for retirement account distributions in 2020 has been reinstated for 2021.
If you’re age 72 or older, make sure you’ve taken your required minimum distribution (RMD) from your retirement accounts or else you face a 50% penalty on any undistributed funds (unless it’s your first RMD, in which case, you can wait until April 1, 2022).
If you haven’t contributed to your retirement accounts already, now is the time. Review your earnings for the year and take advantage of any deductions that can lower your tax bill. Also, keep an eye on Washington for any last-minute tax changes that could affect your return before you file. Tax season will be here before you know it, and it’s never too early to start preparing.
1Operating charities, or qualifying public charities, are defined by Internal Revenue Code section 170(b)(1)(A). You can use the Tax Exempt Organization Search tool on IRS.gov to check an organization’s eligibility.
Posted on November 15, 2021 by Dr. David Edward Marcinko MBA
Bundle Charitable Giving Through Donor Advised Funds
By Rick Kahler CFP®
With changes to standard and itemized deductions under the new tax law, many CPA’s and tax attorneys are recommending a strategy of bunching or bundling deductible spending into alternate years. I wrote about this approach a few weeks ago.
One way to bundle charitable deductions efficiently and effortlessly is through a Donor Advised Fund (DAF).
Here’s how it works
Suppose you budget $15,000 a year for charitable donations. Around half of this goes to local charities you support regularly. The rest you give in different ways, depending on the needs you become aware of throughout the year.
You could double your denotations to charities you support regularly and give directly to them every other year, but you would lessen your ability to give spontaneously. Giving through a DAF allows you to keep that spontaneity. A DAF allows you to make a large, tax-deductible gift in one year, but decide in the future (a day, ten years, or 100 years later) when and how to distribute that gift. The money stays with the DAF, which invests it, until you instruct the DAF to disburse the funds to the charity of your choice.
New tax laws
With the advent of the new tax law, DAFs have become all the rage in charitable giving. According to an article in Advisor Perspectives by Ken Nopar, the senior philanthropic advisor for the American Endowment Foundation, there are now 300,000 DAF accounts. This is twice the number eight years ago and nearly four times the number of private foundations. But all DAFs are not equal, so establishing one should be done only after some thorough investigation.
Some of the areas the article suggests that you explore with your financial planner or tax preparer are:
1. What is the appropriate amount to donate to a DAF account? Donate too much or too little, and you may not realize the maximum benefit from your gift. Be sure to check with your tax preparer.
2. With some DAF sponsors, it’s possible for your financial advisor to continue to manage your assets in well-diversified, low-cost investments. Otherwise, you may be forced to choose from a very limited number of funds with higher expenses—funds your advisor would be unlikely to recommend. Management by your advisor, in many cases, can produce greater returns, actually allowing you to donate more.
3. Investigate these things before choosing a DAF: The fees they charge, whether they appear to have enough staff and experience to administer the DAF properly, how promptly they send out grants, whether they can accept complex assets like appreciated real estate, and whether you could transfer the fund to another DAF sponsor if you should want to do so.
4. Also ask about limitations and requirements. Some DAFs may limit how much you can give each year to individual charities. Others require a certain percentage (sometimes 50% or more) to be donated to the DAF sponsor itself. A DAF’s rules may require the entire balance to be distributed to the DAF sponsor upon a donor’s death.
As Advisor Perspectives notes, many CPAs and attorneys are providing wise advice in recommending that clients establish DAF accounts. It would be a good idea to take that advice one step further and consult your financial advisor first. Otherwise you might end up with a DAF sponsor that may not be the best fit for your needs or those of the charities you support.
Assessment
As good as bundling donations to a DAF can be, don’t make a decision to use one based on the tax advantages alone. Just as with any investment, it’s important to do your research carefully before you write a check.
Conclusion
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Posted on June 17, 2021 by Dr. David Edward Marcinko MBA
Dr. David E. Marcinko is at your Service
Dr. David Edward Marcinko MBA CMP® enjoys personal coaching and public speaking and gives as many talks each year as possible, at a variety of medical society and financial services conferences around the country and world.
These have included lectures and visiting professorships at major academic centers, keynote lectures for hospitals, economic seminars and health systems, keynote lectures at city and statewide financial coalitions, and annual keynote lectures for a variety of internal yearly meetings.
His talks tend to be engaging, iconoclastic, and humorous. His most popular presentations include a diverse variety of topics and typically include those in all iMBA, Inc’s textbooks, handbooks, white-papers and most topics covered on this blog.
Posted on May 7, 2021 by Dr. David Edward Marcinko MBA
David Swensen, the chief of Yale’s endowment fund, died Wednesday evening at 67 after a nine-year battle with cancer.
Known for laying the groundwork for the modern venture capital- and private equity industries, Swensen made Yale’s endowment office the hottest place on campus. He diverted Yale’s money from just stocks and bonds into more alternative assets like hedge funds, real estate, and even timber (he knew).
Swensen’s strategies grew Yale’s endowment from $1.3 billion in 1985 → $31.2 billion in 2020. It’s currently the second largest university endowment, trailing only Harvard’s.
In 2019, Yale’s endowment accounted for about a third of its entire operating budget.
The “Yale model.” Boasting returns better than some top hedge fund managers, Swensen could have traded it all in for a glamorous Wall Street high rise and a cartoonishly eye-popping salary, but he remained dedicated to the university. Swensen instilled the same principles in his mentees, who were scouted by private sector firms before ultimately following in his higher-ed footsteps.
Posted on December 28, 2019 by Dr. David Edward Marcinko MBA
More on DAFs
By Rick Kahler CFP®
In A Christmas Carol, Charles Dickens has a scene where two charity workers raising funds for the poor approach Ebenezer Scrooge on Christmas Eve.
” What shall I put you down for?” “Nothing!” Scrooge replied. “You wish to be anonymous?” “I wish to be left alone,” said Scrooge.”
Scrooge may not be alone in his desire to be left alone. With 60% of Americans supporting presidential candidates’ proposals for wealth taxes, financial transaction taxes, higher capital gains tax rates, and increases in income taxes, many of our affluent neighbors are just not feeling the love this Christmas.
Nevertheless, there are still millions more who want to give. Charitable giving, though, can be more complicated than it was in Scrooge’s time. For example:
Are you bunching your itemized deductions into every other year and would like to give a substantial amount to charities this year, but you haven’t had time to research which charity you want to support or you want to spread the giving out over time as opposed to giving it all this month?
Do you support a number of charities and would like to support even more, but find the IRS requirements for documenting your gifts to be burdensome?
Would you like to set aside a sum of money for your favorite charities that could generate an annual income forever, but forming a foundation or charitable trust is beyond your reach?
All the above are possible with a donor-advised fund.
Let’s say you wanted to give small amounts to fifty different charities. Rather than write fifty checks and obtain fifty receipts, you can make one gift to the fund, which distributes the money to the fifty charities. You only have to provide one receipt to the IRS.
You can also make a charitable gift to the donor-advised fund that qualifies as a deduction on your 2019 tax return, but you can delay the distribution of the funds until sometime in the future. This gives you time to explore the various causes you may want to support.
What really sets a donor-advised fund apart from other types of charitable giving is that you can decide how your donations are used, much as you would if you set up your own foundation. You can even create either an endowed or a nonpermanent fund for a particular purpose, such as a specifically-designated scholarship fund in memory of a loved one.
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Case Example:
One example of a donor-advised fund is the Black Hills Area Community Foundation. The BHACF supports scores of local charities and special projects. However, almost all financial institutions like Fidelity, TD Ameritrade, and Schwab have relationships with donor-advised funds.
While DAFs create an easy-to-establish, low-cost, flexible vehicle for charitable giving as an alternative to an expensive and complex private foundation, they are not hassle-free or without costs. Many charge a combination of fixed quarterly fees and an annual percentage of the undistributed funds. There is also a reasonable amount of administrative work involved. One DAF that I use assesses a penalty of $500 if the account is closed in under a year. They work best when a person anticipates significant contributions and a long-term giving plan.
Every donor-advised fund has different charities, minimums, processes, and costs, so it’s important to do your homework. Research whether the fund approves of the charities you want to support, as well as the costs involved.
Assessment
A donor advised fund may be a good way to take a large deduction this year, reduce the administrative hassles and costs of setting up a foundation, and still give to causes you choose to support.
Your thoughts are appreciated.
BUSINESS, FINANCE, INVESTING AND INSURANCE TEXTS FOR DOCTORS:
Posted on November 29, 2018 by Dr. David Edward Marcinko MBA
On Medical Directives
By Rick Kahler CFP®
One important component of estate planning is a document, usually called a medical directive, which can include a living will, that sets out your wishes for end-of-life care and a health care power of attorney that designates someone to make medical decisions if you are unable to do so. A medical directive addresses important issues that are inevitable, but that most of us don’t want to think about or talk about. Consequently, many people leave their family members and medical providers with no guidance.
If you have not executed a medical directive, I strongly recommend doing so. If you do have a living will, I suggest you review your document periodically to be sure it still provides the best options for carrying out your wishes.
Example:
Recently I’ve encountered two situations where medical directives that had been perfectly valid and appropriate at the time they were executed had become potentially useless. In both cases, a family member designated to make end-of-life decisions had subsequently developed dementia that affected their competency to make those decisions.
This possibility is one reason why, if your medical directive designates your spouse, it’s wise to name an alternate as well. Your spouse, aging along with you, may not be the most capable person to make hard decisions when the time comes.
It’s also a good idea to communicate your specific wishes to both your primary and alternate designees. Discuss with them, as well, whether they believe they will actually be able to carry out your wishes. Unfortunately, I have seen cases where family members, with the most loving of intentions, were so hesitant to make decisions that their inaction violated their loved ones’ last wishes.
These conversations are not easy. Yet they are essential. One of my clients recently was faced with the possibility of making end-of-life decisions for her father. Several years earlier, he had executed a medical power of attorney and living will document naming her as his designated agent. At that time, the two of them had talked about his wishes, so she knew the choices he would want her to make.
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For now, my client was spared the necessity of making these difficult decisions because her father recovered. But, faced with the reality of “someday” contingencies becoming “right now” hard choices, she felt capable of doing what had to be done. She told me that what gave her the strength she needed was not the responsibility of being designated in the living will document. It was the conversations she and her father had had, both at the time he signed the document and during his recent illness.
“I made him a solemn promise that I would make the choices he needed and wanted me to make,” she said. “It felt like a vow that I couldn’t ever go back on.”
It may not be especially difficult for a family member to agree to become the designated representative in a medical directive. If the agent named in a healthcare power of attorney is in good health, the need to make hard decisions is somewhere in the future and can feel theoretical.
But at the time of a medical emergency or a draining final illness, a family member who is frightened, grieving, and exhausted may find actually making those decisions to be the hardest thing they’ve ever had to do.
Assessment
Giving your family members the clarity and direction to make end-of-life decisions for you requires more than putting their name into a document. It requires choosing someone who is willing to carry out your wishes, communicating your wishes to them through conversations, and checking periodically to make sure they are still willing and able to carry out the solemn promise that a living will entails.
Conclusion
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Posted on June 6, 2018 by Dr. David Edward Marcinko MBA
What Are You Passing On?
By Rick Kahler CFP®
Fiduciary, client-centered financial planning is dynamic, ongoing, and evolving. The collaboration between client and planner is a relationship that often lasts for a client’s’ lifetime.
Sometimes that relationship even extends beyond a client’s lifetime if they have children or leave money to a foundation. It’s not uncommon for clients’ children to become the stewards of their parents’ financial legacy via an inheritance or being appointed the overseers of a trust fund. Nor is it unusual for the children to become clients of the financial planner, either as they create their own financial success or as they inherit from their parents.
Children often form partnerships with a parent’s financial planner as their parents age and they become caretakers of their parents’ financial affairs. It’s very common that at some point, a child will have a durable power of attorney. This responsibility includes not just paying bills, but maintaining the investment portfolio, selling real estate, and making a plethora of other financial decisions that are crucial to the parents’ wellbeing. If children don’t have good money skills or don’t know about the specifics of their parents’ finances, the task can be overwhelming. A planner’s help can be invaluable.
Evolution lack
Sometimes, however, that next generation of relationships doesn’t evolve. I once had a long-time client who developed dementia. My financial planning meetings were now with his children, who had no understanding of the history I had with their father or the investment philosophy of the portfolio. They questioned everything I was doing: the investments, our fees, our philosophy.
Eventually, the children suggested I liquidate the portfolio and loan the money to them to use in their business. Even though they had the legal right to direct me to do that, I resisted.
This created a real emotional conflict of interest. Even though my client had legally passed the decision-making on to the children, what they wanted was not in his best interest. And knowing my client as I did through our long relationship, he would have not agreed in the least to what they requested. I decided I would rather face a judge as a result of acting in the best interest of my client instead of following the requests of the children. Fortunately, they didn’t persist.
Example:
When the client passed away, almost immediately the children called and asked me to liquidate their father’s investments and distribute cash as quickly as possible. Before long, I heard that much of the father’s estate was being squandered. After I had worked closely with this man for so long and helped him build that estate, this saddened me.
Yet this client’s legacy was no longer my concern. When children become stewards of their parents’ legacies, the money belongs to them. They might feel chained by guilt and obligation to carry out a parent’s wishes. They might squander a parent’s legacy on ill-advised pursuits, spending, and investment schemes. Ideally, they will have developed enough financial and emotional intelligence to follow a more balanced middle path.
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To help children find that middle path, perhaps the best legacy parents can leave is their values. This can be done by teaching children about finances, family businesses, and family history, by leaving ethical wills, and above all by example.
Assessment
Those values and the financial legacies to support them start a new cycle. Inheritances are meant to support children’s own dreams and quests for meaning. Unless the funds are left to a trust, the decision-making is literally and figuratively out of the hands of both the parents and their financial planner. The planner, as a torchbearer for clients, has the responsibility to pass that torch to the next generation.
Conclusion
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Posted on November 17, 2017 by Dr. David Edward Marcinko MBA
Important for your Financial Health
By Patrick Bourbon CFA
The last few weeks of the year are often a mad rush so we thought that it is a good time to share this checklist of important items to consider before the calendar year ends, all related to your investments and finances so that you can reach your goals and dreams faster.
1. Review your IRA – 401(k) / 403(b) retirement accounts – Are you on track for a comfortable retirement?
2. Start tax planning! It’s not too early to think about taxes – Asset location & Tax efficiency
3. Rebalance your portfolio
4. Harvest your capital losses
5. Check your emergency fund
6. Review your insurance policies
7. Contribute to your Health Spending Account
8. Take your Required Minimum Distribution
9. Contribute to your 529 Plan
10. Determine your net worth
11. Check your credit score
12. Check your beneficiaries
13. Update your estate plan
14. Maximize your business deductions
15. Spending and automated savings – You want to look ahead
Assessment
Short and sweet.
Conclusion
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Posted on August 30, 2017 by Dr. David Edward Marcinko MBA
Death is Inevitable
By Rick Kahler CFP®
As inevitable as death is, given the way we avoid planning for it we seem to believe we will evade it if we don’t talk about it. Two-thirds of Americans don’t have a will or a health care advanced directive.
Financial planners like myself often preach that everyone must have both. However, there are exceptions to most rules, as well as times that the best preparation in the world goes awry.
No will
Here are some scenarios where you may not need a will.
First, you have no minor children and you don’t own anything of value or that you want to bequeath to someone.
Second, you do have assets, but all of them are transferable without a will. These include retirement accounts, annuities, assets like homes or bank accounts that are owned jointly, and assets like brokerage accounts or real estate that will Transfer on Death (TOD) to a named beneficiary.
Health care advanced directives
What about a health care advanced directive (HCAD)? This is any document that gives instructions or appoints someone to give direction about your health care. Living wills and Health Care Durable Powers of Attorney are two of the most popular HCADs.
Many people think you must use a state-provided form for a HCAD to be effective. According to the Commission of Law & Aging, most states do not require a form but do require your HCAD to be properly signed and witnessed. It’s best to have your directive drawn by an attorney, as most forms are too general or include generic options that may not apply to your needs or wishes.
Another myth is the notion that HCADs are legally binding on health care providers and their institutions. They are not. An advanced directive just gives healthcare providers immunity if they follow your instructions. The healthcare providers can refuse to comply with your directive. This is especially true in an emergency situation where the attending EMS must attempt to resuscitate you and get you to a hospital. In some states, if you and your doctor have signed a special form and you wear a special identification bracelet the attending EMS may choose not to resuscitate you.
Also, just giving your directive to your doctor is no guarantee that the directive will show up in your medical records. You, or your proxy, must check with each institution you visit or are transferred to and be sure it’s on file.
Some people fear that naming a health care agent means that you give up your right to make health care decisions. That is not true. A person retains the right to make all their own healthcare decisions unless they become incompetent.
Many people don’t do directives because they think they must understand all the choices and be crystal clear about their wishes. This is not necessarily the case. If nothing else, a directive appoints a person you trust to make decisions. And as with any legal document, you may always change your directive when you wish.
If all your relatives who can legally make healthcare decisions for you agree, you may not need an HCAD to stop treatment near the end of life. Still, a living will can make the decision less difficult. It becomes very important in the event your closest relatives disagree on what is best for you.
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Not today – DEATH!
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Like any good estate planning, the best strategy for both wills and HCADs is to focus on what you would like to happen today, rather than anticipating events and circumstances into the future. Then, as well as communicating your wishes verbally, put your thoughts in writing and provide copies to your doctors and loved ones.
Conclusion
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Posted on August 13, 2017 by Dr. David Edward Marcinko MBA
Estate Planning
By Jason Dyken, MD MBA
[Dyken Wealth Strategies]
Dear David,
It’s not uncommon for people to assume that having a will in place is enough to ensure their assets will pass to their named beneficiaries in the manner they desire. However, certain financial assets, including 401(k) and IRA retirement accounts, as well as life insurance policies bypass a will or trust.
One benefit is that when the account owner dies, the assets go directly to the beneficiaries named on the accounts, bypassing the probate process. However, because these beneficiary designations override your will, they need to be carefully coordinated with your overall estate plan.
Some of the most common mistakes people make in regard to beneficiary designations include:
Forgetting to update named beneficiaries in the event of divorce. If your previous spouse is still listed as the beneficiary on your retirement account or life insurance policy at the time of your death, the assets will go to your ex, regardless of whether he or she is a named beneficiary in your will.
Naming minor children as beneficiaries or contingent beneficiaries. In the event you and your spouse predecease your children, they could directly inherit large sums of money from retirement accounts or life insurance policies—assets that are not governed by stipulations you may have included in your will or trust documents. Avoid leaving assets to minors outright. If you do, a court will appoint someone to look after the funds which can be a time consuming and expensive process.
Using beneficiary forms that don’t allow your assets to pass “per stirpes,” or equally among the branches of a family. For example, let’s say you name your three adult children as the beneficiaries of your IRA. If one of them predeceases you, you might want that child’s share to go to his or her children. However, many standard beneficiary forms don’t include per stirpes provisions and only allow per capita provisions where your two remaining adult children would share the assets. In certain cases, you can ask to include non-standard language to the beneficiary form, but make sure the financial services company actually has the capabilities in place to manage per stirpes distributions first.
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Assessment
An estate planning attorney or financial advisor with experience in estate and legacy planning can help ensure your beneficiary designations are up-to-date and aligned with your wishes and preferences.
Conclusion
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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
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