Handling a death in the family is never easy. When you lose a spouse, partner, or parent, the grief can be overwhelming. In the midst of that grief, life continues. Arrangements need to be made, things to be taken care of, and you may find yourself suddenly responsible for closing out your loved one’s life. In recognition of this reality, Peak Wealth Planning has assembled a checklist that you may find useful at such a time. Click here to access the PDF Checklist of What to Do When a Loved One Dies. While the checklist is meant to help you identify the many tasks you’ll need to complete in order to close out your loved one’s life, the remainder of this article will expand on the financial transition of the assets they have left behind. On a personal note, I’d like to remind you too that you don’t need to do everything right away and all by yourself. Ask for help from other family members if you need it. Or, call your trusted financial or other advisors. Gather the deceased’s essential documents. If you are fortunate, your loved one had planned for the inevitable, organizing the essential documents and informing an immediate family member where the documents are located. A will, trust, or other estate documents. If none of these exist, you could face a long legal process when settling the person’s estate. Letter of Instructions. This is an estate planning document that addresses informal details that aren’t included in the will. It’s a letter that provides additional and more personal information regarding an estate. It can be addressed to whomever you choose, but typically, letters of instructions are directed to the executor, family members, or beneficiaries. Some things commonly included in a letter of instruction are the deceased’s funeral wishes, financial information, and location of assets. The letter is personal, so it can also convey the deceased’s life lessons and wishes for their future heirs. A Social Security card, statement, or number. Depending on your relationship to the deceased, you or their relatives may be entitled to benefits. Contact the Social Security Administration. Military discharge papers (DD-214). The DD-214 form is an important document for veterans and their families when it comes to leveraging benefits associated with military service, including funeral-related benefits. Deed to burial property and Copy of funeral prearrangements. If your loved one did Pre-Death Planning, then you may find a plan already with a funeral home and cemetery. Identify and collect all assets. Bank account and investment statements Life insurance policies Deeds/titles to real estate Car titles or lease agreements Keys for storage space and safety deposit box Any mortgages, bills due, or records of credit card statements Any social media platform information (if applicable) Last, but not least, look for a computer file or printout with digital account passwords. Prior to their loved one’s passing, some family members may try to centralize all this information or state where it can be found. Take care of some immediate needs. Contact a funeral home to arrange a viewing, cremation, or burial, in accordance with the wishes of the deceased. Using the deceased’s health care directive or letter of instructions, you’ll be able to answer key questions that best align with the deceased’s final wishes. For veterans, inquire about special arrangements with the Veterans Affairs office. Enlist help for the funeral and plan the reception. Relatives and friends may be needed to serve as pallbearers, create the funeral program, cook meals, care for children or pets, or shop for any items needed for the funeral or the deceased’s household. Contact the county clerk or recorder to request death certificates. Counties usually charge a small fee for each copy issued. Ten to 12 copies may seem excessive, but you may need that many while working with insurance companies and various financial institutions. The attorney, funeral home director, or your financial advisor can help you decide how many of each type are required. If employed, contact the human resources officer at your loved one’s workplace to inform them what has happened. The HR officer might need you to fill out some paperwork pertaining to retirement plans (401k, pension, etc), health benefits, and compensation for unused vacation time. Speaking with an attorney – this can be the lawyer who helped your loved one create a will or estate plan. Should your loved one die without a will, you may want to contact a lawyer for an overview of how the probate process will work and see to what degree you might become liable if your loved one had any outstanding debt obligations. Address financial, insurance, and credit matters. Work with an accountant or financial advisor to verify whether there are funds (from checking or investments) available to pay bills due while the estate is being settled. If not, contact an attorney or financial advisor for help liquidating funds. Identify all debts, obligations, and liabilities and settle them as appropriate. Creditors may want to know when existing debts will be paid, either by you or your loved one’s estate. Notify creditors. Obtain a current copy of the deceased’s credit report, and use this to help identify all credit card and loan accounts that need to be settled and closed. Notify other creditors, such as utility companies, and consider placing the monthly bills for these debts in your name (or another family member or the executor). Cancel services, subscriptions, and other automatic payments. Identify resources the deceased used. Cable, internet, cell phone, food delivery services, gym membership, country club membership, and other automated services were all part of what made the deceased’s life easier while living. Make plans to cancel these services. Notify credit reporting agencies – Experian, Equifax, and TransUnion – of their passing, which can usually be done online, over the phone, or by letter. Call the deceased’s life insurance agent to begin the claims process. Reach out to the deceased’s financial advisor and insurance professionals as well as the person overseeing their workplace retirement plan. These individuals will be able to assist in reviewing the beneficiary claims attached to the investment, retirement plan accounts, and insurance policies. Also, ask these professionals about the possible tax implications from inheriting these assets. Prepare to pay state and federal taxes for your loved one for the year of their death. Stop health insurance. If your loved one owned a small business or professional practice, a discussion with business partners (and clients) may be necessary as well as a consultation with the attorney who advised that business. Hopefully, your loved one had a business succession plan in place. Look after your future. Working through several of these issues may help bring closure to your loved one’s estate and provide mental space for you to celebrate his or her life. Will you be receiving an inheritance? When you are ready to move forward, if you are receiving an inheritance, consult with a financial planner or other trusted advisor to determine how property or investments may impact your future. Consult with an estate attorney to see if wills and trusts need to be updated. If your loved one was a trustee, the trust documents may need to be re-written. Do you have an estate plan in place? While no one really wants to think about these matters, spending the time to work through the necessary steps in advance and putting a plan in place today can minimize decision-making burdens later. Peak Wealth Planning can help you to craft a thoughtful and thorough estate plan, so your family can transition to life without you more easily. Final thought. Has it been more than 5 years since you updated your estate plan? Would you like to bulletproof your wealth for the next generation? If you have more than $2 million saved and need help from a wealth manager, the Peak Wealth Planning team can assist. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

U.S. Supreme Court Justice Warren Burger is famous for more than just his time on the bench. When he died in 1995, he left a 176-word will that gave no specific power to his executors. As a result, he reportedly cost his estate tens of thousands of dollars in attorney’s fees. Judge Burger’s case shows that even law-savvy individuals can make mistakes when it comes to writing their own legal documents. But giving executors the proper power is only one piece of the puzzle. How do you choose an executor? Can anyone do it? What makes an individual a good choice? Choosing an Executor For Your Will Many people choose a spouse, sibling, child, or close friend as executor. In most cases, the job is fairly straightforward. Still, you might give special consideration to someone who is well organized and capable of handling financial matters. Someone who is respected by your heirs and a good communicator also may help make the process run smoothly. Above all, an executor should be someone trustworthy, since this person will have a legal responsibility to manage your money, pay your debts (including taxes), and distribute your assets to your beneficiaries as outlined in your will. When do you consider hiring a professional to be your executor? If your estate is large or you anticipate a significant amount of court time for your executor, you might think of naming a bank, lawyer, or financial professional. These individuals will typically charge a fee, which would be paid by the estate. In some families, singling out one child or sibling as executor could be construed as favoritism, so naming an outside party may be a good alternative. Proximity Whenever possible, choose an executor who lives near you. Court appearances, property issues, even checking mail can be simplified by proximity. Also, some states place additional restrictions on executors who live out of state, so check the laws where you live. Keep Your Executor Informed Whomever you choose, discuss your decision with that person. Make sure the individual understands and accepts the obligation, and is made aware of where you keep important records. Have Alternatives Because the person may pre-decease you – or have a change of heart about executing your wishes – it’s always a good idea to name one or two alternative executors. Where’s the Will? It's a lot to leave up to the law but 68% of Americans do just that - including celebrities. Here are 10 famous people who died without having a will in place. Jimi Hendrix - one of the greatest guitar players of all time: The famed guitarist's siblings had been feuding since 2002, when their father, Al Hendrix, died and left Jimi's sister Janie in control of the musician's $80-million estate. Bob Marley - Jamaican singer/songwriter: After a 10 year legal battle that added up to $6 million, the Jamaican court ordered that control of Marley's estate remain with Chris Blackwell. Then in 2001, the estate passed to his widow and 10 children. Salvatore Phillip "Sonny" Bono - entertainer turned U.S. Congressman: His wife, Mary Bono, had to go through probate court to become the executor of her husband's estate, and Cher sued the estate for unpaid alimony. Pablo Picasso - famous artist: Dividing his assets took six years of contentious negotiations between his kids and other heirs. Howard Hughes - entrepreneur and billionaire: After several angry lawsuits, a judge finally declared that Howard died without a valid will and therefore split his fortune up among 22 cousins. Abraham Lincoln - lawyers and the sixteenth president of the United States: His estate was eventually settled two and a half years after his death, divided equally between his widow and two children. Martin Luther King, Jr. - civil rights leader and activist: After his death, his heirs formed a corporation to manage King’s estate, but then they fought over control of the corporation. Barry White - soulful entertainer: Upon his death, he left behind an outdated will that left 2 ex-wives, a long-term partner, and nine children unprotected. Stieg Larsson - Swedish author of The Girl with a Dragon Tattoo: When Stieg Larsson died intestate, his life partner, Eva Gabrielsson, who shared Stieg’s life for 32 years, was left out in the cold. Larsson’s father and brother inherited his entire estate, which includes the rights to his best-selling trilogy. Prince - multi-talented artist: While the estate passed to six family members, In the years following Prince's death, there was a furious debate over the value of Prince's estate between the estate's administrator and the IRS. What all these individuals have in common is that their wishes were unknown and it was left to the courts to decide what is to happen to their assets. In many cases, hard feelings and discontentment marred relationships between family members. And, oftentimes, individuals the deceased loved were left with nothing. The period following the death of a loved one is a stressful time and can be confusing for family members. Choosing the right executor can help ensure that the distribution of your assets may be done efficiently and with as little upheaval as possible. Final thought. Has it been more than 5 years since you updated your estate plan? Would you like to bulletproof your wealth for the next generation? If you have more than $2 million saved and need help from a wealth manager, the Peak Wealth Planning team can assist. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

A living trust is a popular consideration in many estate strategy conversations, but its appropriateness will depend upon your individual needs and objectives. What is a Living Trust? A living trust is created while you are alive and funded with the assets you choose to transfer into it. The trustee (typically, you) has full power to manage these assets. But using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations. A living trust will also designate a beneficiary, or beneficiaries, much like a will, for whom the assets are managed to benefit upon your death. The named trustee administers your assets to support your beneficiaries. If you create a revocable living trust, you may change the terms of the trust, the trustee, and the beneficiaries at any time. You can also terminate the trust altogether. This flexibility, of course, comes with a cost. There is some administrative work involved to re-title your assets into the revocable living trust. Your financial advisor or attorney can help you do this efficiently. What are the Advantages of Creating a Living Trust? The living trust offers a number of potential benefits, including: Avoid Probate - Assets are designed to transfer outside the probate process, providing a seamless, private transfer of assets. Manage Your Affairs - A living trust can be a mechanism for caring for you and your property in the event of your physical or mental disability, provided that you have adequately funded it and named a trustworthy trustee or alternative trustee. Ease and Simplicity - It is a simple matter for a qualified lawyer to create a living trust tailored to your specific objectives. Should circumstances change, it is also a straightforward task to change the trust’s provisions. Avoid Will Contests - Assets passing via a living trust may be less susceptible to the sort of challenge you might see with a will transfer. What are the Disadvantages of a Living Trust? Living trusts are not an estate planning solution in and of itself, and you should not exclusively depend on one. They won’t accomplish some potentially important objectives, including: No Asset Protection - A living trust does not protect assets from creditors while you are alive. However, there may be asset protection for beneficiaries following your death. A living trust is considered a “countable resource” when determining your Medicaid eligibility. Cost - There are costs associated with setting up a revocable living trust. An attorney drafts the document and your assets will need to be re-titled in the name of the trust. Administration - There is some paperwork involved to re-title your assets (bank account, investments, real estate) into the trust. Not all assets are easily transferred to a living trust. For example, if you transfer ownership of a car, you may have difficulty obtaining insurance, since you are no longer the owner. Taxes - A living trust is not a mechanism to save on taxes, now or at your death. Your financial advisor and estate attorney can help you decide whether a living trust makes sense for your unique situation. Final thought. Has it been more than 5 years since you updated your estate plan? Would you like to bulletproof your wealth for the next generation? If you have more than $2 million saved and need help from a wealth manager, the Peak Wealth Planning team can assist. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

When you think about your legacy or creating an estate plan, a will likely comes to mind first. Our prior post covered the benefits and key components of a will. However, that isn’t enough. A will specifies your wishes after your death. There are several key documents that can specify your wishes while you are living. In order to allow loved ones to manage your healthcare wishes and financial matters there are several documents you should consider. In the event you become unable to act or communicate for yourself while living – or if you were to pass away unexpectedly – it is important to have powers of attorney for healthcare and finances, a living will, a revocable living trust as well as joint ownership of certain assets. The table below outlines the purpose of each document, the date of effectiveness, and whether a court is required to enact its power. And if you’d like a print friendly version of these tables to talk to your estate planning attorney, click here. Essential Financial Documents Essential Healthcare Documents Final thought. Has it been more than 5 years since you updated your estate plan? Would you like to bulletproof your wealth for the next generation? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

September is Emergency Preparedness Month. Part of being prepared is taking care of your family in the event something unexpected happens to you. This includes having an estate plan in place to handle your financial, healthcare, and even your social media-related wishes. These topics as well as an overview of what to do when a spouse or partner passes away will be covered throughout September. Only 45 percent of adults have a will or other estate documents in place, which may not be entirely surprising. No one wants to be reminded of their mortality or spend too much time thinking about what might happen once they’re gone. This article will discuss the 4 key components of a will. Next week we will provide an introduction to other essential estate planning documents related to your financial matters and healthcare. So if you haven't yet, subscribe. You'll become a Peak Wealth Insider and gain valuable financial educational tools. What is a Will? A will is an instrument of power. Creating one gives you control over the distribution of your assets. If you die without one, the state decides what becomes of your property, without regard to your priorities. A will is a legal document by which an individual or a couple (known as “testator”) identifies their wishes regarding the distribution of their assets after death. A will can typically be broken down into four main parts. 1. Executors Most wills begin by naming an executor. Executors are responsible for carrying out the wishes outlined in a will. This involves assessing the value of the estate, gathering the assets, paying inheritance tax and other debts (if necessary), and distributing assets among beneficiaries. It’s recommended that you name at least two executors, in case your first choice is unable to fulfill the obligation. 2. Guardians A will allows you to designate a guardian for your minor children. Whomever you appoint, you will want to make sure beforehand that the individual is able and willing to assume the responsibility. For many people, this is the most important part of a will since, if you die without naming a guardian, the court will decide who takes care of your children. 3. Gifts This section enables you to identify people or organizations to whom you wish to give gifts of money or specific possessions, such as jewelry or a car. You can also specify conditional gifts, such as a sum of money to a young daughter, but only when she reaches a certain age. 4. Estate Your estate encompasses everything you own, including real property, financial investments, cash, and personal possessions. Once you have identified specific gifts you would like to distribute, you can apportion the rest of your estate in equal shares among your heirs, or you can split it into percentages. For example, you may decide to give 45 percent each to two children and the remaining 10 percent to a sibling. The law does not require that a will be drawn up by a professional, and some people choose to create their own wills at home. But where wills are concerned, there is little room for error. You will not be around when the will is read to correct technical errors or clear up confusion. When you draft a will, consider enlisting the help of a legal or financial professional, especially if you have a large estate or complex family situation. Depending on your circumstances, an attorney or financial advisor may also suggest that you have a power of attorney for financial or healthcare matters, a living trust, and a living will. These items will be covered in our next post. Preparing for the eventual distribution of your assets may not sound enticing. But remember, a will puts the power in your hands. You have worked hard to create a legacy for your loved ones. You deserve to decide what becomes of it. Final thought. Are you comfortable with your progress towards retirement? How about helping future generations meet their financial goals? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Regardless of what your dream retirement looks like, prudent financial preparation and actionable strategies can help you maximize your income and bring your visions to life, while managing your risk. Peak Wealth Planning believes strongly in the value of experienced guidance and objective information when navigating your transition into retirement. Many university employees have complex financial situations, and it’s very common to have questions and concerns about meeting your expenses in retirement. A financial advisor can help you understand your current financial circumstances and develop strategies to move you toward your goals and help you live the life you imagine. A financial advisor can assist you in the following ways. Simplify the complexities of confusing retirement plan options. Ensure you are saving enough to meet your retirement income needs. Advise you on whether to take lump sum or steady payouts when you retire. Provide confidence that you can pay your bills during retirement and enjoy your life. Develop a strategy to cover health insurance costs when you stop working. Help create a plan to cover long-term care costs so you do not burden your children. Next Steps Throughout our retirement guide series for university employees, we investigated four common questions: When can I afford to retire? How will I pay for health care in retirement? What should I know about my retirement plan? How can a financial representative help me? We hope you’ve found this series informative as well as a helpful starting point for details to consider as you approach retirement. If there is a question you’d like addressed in a future series, please submit it here. While retirement planning is complex, you can create a more comfortable retirement tomorrow by taking the steps you need today. Most of all, we want to encourage and support you as you prepare for retirement and for this next stage of your life. Remember, as you navigate your transition from work into retirement, we are here to serve as a resource for you and your family. We are happy to answer questions you may have about your financial situation, SURS, employee benefits, or future goals. We work with several University of Illinois employees on an annual financial planning fee basis. If you have any questions about the information presented in this series, please don’t hesitate to contact us. We enjoy and appreciate the opportunity to help you pursue your retirement goals and live your best life. Final thought. Are you comfortable with your progress towards retirement? How about navigating your retirement benefits? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Many different retirement plans exist, providing an array of options for creating retirement income that help you support your desired lifestyle. While the best way for us to answer your specific questions is to meet with you personally, we’ve developed a list of common retirement plan types and some specific concerns you may want to think about. Defined-Benefit (DB) Plans Defined-Benefit (DB) Plans also are known as “pension plans” and guarantee a lifetime retirement benefit to participants based on factors such as age, years of employment, and salary. Though DB plans are disappearing, they are still common among public school systems and universities across the United States. If you are enrolled in a DB plan, your employer takes care of investing all contributions to the pension fund and bears the risk of providing the guaranteed level of retirement benefits. Participants in DB plans have some special financial planning issues. Federal rules like the Windfall Elimination Provision (WEP) mean that your pension income may reduce your Social Security benefits, depending on the rules in your state. DB Plan participants may be able to choose among different retirement income options and schedules. Because of budgetary issues, some employers have sought to reduce or modify their responsibilities to pensioners. If you are concerned about possible reductions in your benefits, consult with your financial advisor or wealth manager about strategies to help mitigate your risk. Defined-Contribution (DC) Plans Defined-Contribution (DC) Plans are the most popular employer-sponsored retirement plans available today. The most common types are 401(k)s, 403(b)s, 457s, and Thrift Savings Plans. As a plan participant, you decide how much to contribute to your plans from each paycheck, allocate your money between the investment choices available to the plan, and assume all investment risk. Often, your employer will match some of your contributions. Your money grows tax deferred because contributions are made with pre-tax income. Once you retire, you retain control over your assets and can choose to roll them over into an Individual Retirement Account (IRA), an annuity or other type of account. If you participate in a DC plan, regular contributions to the plan and selecting the proper investments are the two most important factors to create a sufficient retirement nest egg. Hybrid Retirement Plans Hybrid Retirement Plans combine features of both defined-benefit and defined-contribution plans. For example, your employer may offer a cash-balance plan that they contribute to as though it were a defined benefit plan — but employees have the option of receiving the retirement income either as a stream of payments or a lump-sum distribution. Lump sums are popular, because investors can roll them into an IRA or new retirement plan, allowing retirement savings to potentially continue growing. The new Retirement Savings Plan (RSP) offered by SURS (the IL State Universities Retirement System) is a hybrid plan with a 7.6% match to an employee’s 8% contribution from each paycheck. Once an employee meets eligibility requirements, she has several options to choose from including rolling funds to an IRA or purchasing an annuity with or without survivor benefits. Supplemental Retirement Plans Supplemental Retirement Plans are provided by some employers to allow you to save more for retirement beyond what’s contributed to your primary retirement plan. For example, your employer may offer a defined benefit pension plan as well as an optional 457 or 403b defined contribution plan. If there are gaps in your retirement plan, it is best to spot them early while you can course correct instead of waiting until your retirement is imminent. As you near retirement, you will want to consider questions like these: How much income do you need in retirement? Will my pension or defined contribution plan provide sufficient income? Do you need survivor-benefit options for your spouse? What other sources of income do you have? Do you plan to work after retiring? What is the age difference between you and your spouse? What are your health care insurance options? Do you have long-term care insurance? Contribution limits, early withdrawal penalties, and other details can vary a great deal from one plan to another. It’s a good idea to review your retirement plan benefits with your employer or with a qualified financial representative from SURS if you work for a university in Illinois. No matter what type of retirement plan you have, a financial advisor can help evaluate your options and choose a strategy designed to maximize your retirement income while protecting your wealth. Final Thought. Are you comfortable with your progress towards retirement? Do you need help navigating complex retirement plans? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Health care expenses are a major concern for today’s retirees, and those who aren’t planning ahead may find themselves in trouble down the road. With life expectancies rising, today’s retirees can expect to live well into their 80s. Combine longer life spans with rising medical costs — and the fact that health care expenses can skyrocket during a serious illness — and retirees have pressing needs to prepare for. These needs may be for healthcare or help around the house with activities of daily living such as getting dressed, showering, and preparing meals. Healthcare According to a recent survey, a couple retiring may need to spend up to 92% of their lifetime Social Security benefits on out-of-pocket health care costs. And for people 65 and older, the average health savings account balance is only $4,911. Not being adequately prepared for health care expenses could greatly jeopardize your ability to retire comfortably. And those who retire earlier may need even more assets to cover their health care costs before they are eligible for Medicare at age 65. Fortunately, with adequate preparation and personalized strategies, you can help tame health care costs in retirement. Everyone’s health care needs are different, which is why it’s important to consider factors like your age, health, and family medical history when estimating your potential expenses. You also should determine whether you are eligible for any employer-sponsored health care once you retire. Any benefits you receive could reduce your out-of-pocket costs and, thus, the amount you need to save for medical expenses. The University of Illinois System, Illinois State University, and other Illinois public universities, offer fully paid health insurance for those who have more than 20 years of service credit and draw a pension or annuitize at least 50% of their retirement saving plan (RSP) account. In addition, retirement health care plan accounts like a Health Savings Account may be available through your employer and can help provide a tax-advantaged way to save for future health care expenses. A financial advisor can help you determine whether this option is available to you and how it may fit your overall retirement objectives. For most retirees, Medicare will form the backbone of their health care plan. Medicare has gone through some significant changes due to the Affordable Care Act (ACA), and with a new presidential administration, there’s no way to predict how it may change in the future. A financial advisor can help you stay abreast of details like eligibility, coverage, deductibles, and benefits. Long-Term Care It is also important to think about how you will pay for services to help you remain independent if you need help with daily living. Help can be provided for dressing, bathing, preparing meals, using the bathroom, and moving around your home safely. Help with daily living is called long-term care (LTC) and can be provided in your home or an assisted living facility. According to a 2018 Genworth study, having an in-home health aide for 44 hours each week costs an average of $50,000 per year, and the national average annual cost of a private room in a nursing home topped $100,000. Generally, Medicare and employer-sponsored insurance do not cover long-term care. An investment advisor or insurance broker can help you consider your current health, family medical history, and other factors, and help you evaluate your options for funding your long-term-care (LTC) needs. Having a plan to fund your long-term care needs can reduce the burden placed on your children and relatives as you age. If you are thinking about retirement, make sure that you have a plan to fund your long-term care needs as well as your healthcare expenses. These can add up to more than $300,000 for the average couple. You may need a combination of savings and investments, health insurance, and long-term care (LTC) insurance to cover these costs. In the absence of a plan, you may need to spend down your assets to an almost impoverished level to qualify for state programs such as medicaid to fund these costs. Final thought. Are you comfortable with your progress towards retirement? Do you have a plan to pay for long term care and health care? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

If you are concerned about being able to retire, you are not alone. Many Americans worry about whether their retirement savings will be enough to live comfortably. In fact, when Americans think about retirement, the top concern for many is a fear of running out of money — which they fear even more than death. The decision to retire is a very personal one that depends on a number of important factors, such as your age, financial circumstances, health, and family situation. You also need to know whether you are eligible to collect a retirement benefit from your pension or sponsored retirement plan. Be aware that many traditional pension plans have both age and service requirements you must meet before you can start collecting a retirement benefit. If you work for the University of Illinois (including UIS, UIC, or UIUC) or another state retirement system and have questions about your eligibility, be sure to speak to your financial advisor about your specific circumstances. Know Your Unique Needs Today’s retirement culture demands that retirees develop personalized retirement strategies that reflect their unique financial life. From using online calculators for estimating withdrawals to creating a retirement strategy with a financial advisor, you can approach retirement planning in many ways. As you look ahead, you will need to understand how various factors such as life expectancy, wealth, income needs, risk, and market environment affect your calculations. With these details in place, you and your advisor can develop a strategy designed to balance your current cash flow while preserving your long term income needs. If you have run the numbers and think you may have a retirement-income shortfall, do not panic. Several strategies can help you increase your potential retirement income or reduce your expenses. Know How to Address Any Retirement Gaps Increasing your savings rate may allow you to make up your retirement shortfall. Contribute as much as you can to tax-advantaged retirement plans, and consider opening a Roth IRA or taxable investment (brokerage) account. If you are 50 or older, use catch-up provisions to boost your retirement contributions. Delaying retirement can help you buy time. By working longer and adding to your savings, you will have more time to grow your assets, increase Social Security benefits (if you are younger than 70 and qualify to receive these funds in your state), and shorten the amount of time your savings must last. University of Illinois employees do not contribute to Social Security, so that will likely reduce your retirement income. Downsizing your home and living expenses can help you decrease the income you will need in retirement. Many retirees are empty nesters who can reduce their expenses by moving into smaller homes. This can save you money on maintenance, insurance, and property taxes. And, it will provide you more funds and time to travel, visit with friends, and enjoy unique experiences. Working during retirement can create extra income while keeping you active and doing something you love. Many educators retire but continue teaching part time. Senior administrators become consultants and professionals. Other retirees pursue passions for gardening, lecturing, or writing. Keep in mind, though, that working while collecting payments may affect your Social Security benefits if you are younger than your full retirement age. Managing Social Security and Pension limitations can help you prepare to have the retirement income you need. At least 15 states do not offer Social Security to professors, teachers or administrators, and not every educator qualifies to receive pension benefits. If you work in public education and do not pay Social Security taxes at the government job that provides your pension, the Government Pension Offset (GPO) may reduce your Social Security spouse, widow, or widower benefits by up to one-half. Further, if you do receive Social Security and are eligible for a pension based on earnings that your Social Security does not cover, the Windfall Elimination Provision (WEP) may reduce your benefits. To manage your retirement gaps, you need to know your specific restrictions and opportunities. A financial advisor can take a look at your overall circumstances and help you design a strategy with the goal of maximizing your retirement income. Your advisor will be able to help you design strategies to address any gaps or additional planning challenges in your Social Security or pension benefits. With their support, you also will be able to develop tactics that help balance the need for growth against your risk appetite, time horizon, and future goals. Final thought. Are you comfortable with your progress towards retirement? How about helping future generations meet their financial goals? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

“A number of Peak Wealth Planning clients are entrepreneurs. This article will help you differentiate your business from the competition and may lead to a higher price if you ever sell your business in the future”. - Peter Newman of Peak Wealth Planning Would you like to save legal fees, time and energy? Would you like to add value to your business and protect what drives customers to your company? Would you like to differentiate your business from the competition? Then, ask: Do we have an IP Strategy? An Intellectual Property (IP) Strategy is about developing inspired ideas informed by IP, protecting features most important to the consumer, and securing valuable and business relevant assets. An IP Strategy is not about simply acquiring intellectual property. Instead, an IP Strategy guides the development of intellectual property assets (IP Assets) – trade secrets, trademarks, trade dress, patents and copyrights – that help add value to a business. A successful IP Strategy cultivates IP Assets that could leave your competitors asking: How do we get around that? Intellectual Property A basic understanding of intellectual property is important prior to developing an IP Strategy and building IP Assets. Typically, one or more of the following are used to help build a business’ identity and protect its products. Trade Secrets: Confidential knowledge that is not known by others that gives your business a competitive advantage. Good candidates for trade secrets include information about your business such as your supply chain, product costs, and your list of customers. Trademarks: A word, slogan, phrase, or design that helps to identify and distinguish your business as the source of your products and/or services. A trademark option for your company or your products is one that is distinguishable from competitors but not descriptive. As a note, domain names do not go through a trademark registration process and should be considered alongside trademark registration. Trade Dress: The visual appearance, characteristics, and overall “look and feel” of a product or its container, packaging, or design, that uniquely signifies the source of the product to consumers. Patent: A government-issued property right given to an inventor to exclude others from making, selling or using their invention for a set period of time. Patents may be obtained for inventions such as products, processes or methods. Copyrights: Protects original works of authorship fixed in a tangible form. Sales literature, slide presentations and advertising copy may all be eligible for copyright protection. Intellectual Property Strategy The IP Strategy begins with a business: Thinking through where their business is, Thinking ahead to where their business is going, and Thinking around where the competition, industry and consumers may be in the future. At its core, an IP Strategy is built with the business in mind. Without an IP Strategy, investments in intellectual property may be made, often at extensive legal costs, that do not propel your business goals forward. Some businesses may develop an IP Strategy internally, but many enlist legal assistance specifically to develop an IP Strategy and expand IP Assets. When choosing legal counsel ensure they have the ability to see the larger business picture and, ideally, help you think through, think ahead and think around. Think Through Think through where your business is at, where it is going and how it may be currently distinguished from the competition. Thinking Through an IP Strategy can be by a business team simply asking whether they are protecting what is most important to customers purchasing decisions and whether there will be a competitive advantage obtained by IP protection. Understand that your goals will be unique, and will differ drastically if you are: an entrepreneur starting a business, a small business owner taking crucial first steps towards protecting intellectual property from theft, a family business growing assets for the coming generation, and an established business owner developing a profitable exit strategy through a business sale. However regardless of the stage you find your business, consider the following questions: Have you already developed IP Assets that distinguish you from the competition? Are there gaps in your IP Assets that may leave you exposed to competition? In thinking through your existing business, you will undoubtedly identify valuable intellectual property but may also see gaps. One client, although pursuing patent protection, went through an IP Strategy exercise only to find that his trade secrets were not protected and trademarks not secure. As a result of this exercise, the client quickly filled these gaps with confidentiality agreements, employee agreements and registered trademarks. Think Ahead Think ahead to where you would like your business to be in the next three to five years. As you start your business, are you developing the IP Assets that could sustain you in growth? Are you building and adjusting your IP Assets for your current business needs? As you plan to sell your business, are you formally registering the IP Assets that will make your company attractive for sale? In my experience, businesses must think ahead to acquire valuable IP Assets. One client of mine files trademark applications and domain names that they have the intention of using three (3) years in the future to insure that the names are not unwittingly used by another. Another client started well in advance of the sale of his company to begin formalizing the trademark registration process. All clients thought ahead prior to acquiring additional IP Assets. In thinking ahead, an IP Strategy will help you make the best possible decisions on where to invest your resources into IP Assets. Think Around Consider what challenges your business may encounter from competitors, new regulations, evolving consumer preferences and other outside factors. While you may have a good feel for where you are at and where you’d like to go, an IP Strategy can help challenge you to look around corners where your business and competitors may be heading. Are you doing competitive analysis to identify what IP Assets competitors may have? Such analysis can include monthly patent searches and routine trademark registration filings. Are there changes to your industry that could potentially impact your products or services? Will you be able to meet evolving consumer preferences? As a business thinks around a challenge, they put themselves in the shoes of their competitors, the changing marketplace and customers. My clients often build entire strategic planning sessions to challenge themselves to think around what may be coming around the next corner. One client who anticipated Internet of Things (IoT) filed patents on where they believed the marketplace was heading and filed a series of patent applications on where they thought the industry could go: Good news! They guessed right! Final Thought With an IP Strategy developed, you can more efficiently use the services of an intellectual property attorney to develop intellectual property assets (IP Assets) that move your business towards your goals.Instead of simply obtaining intellectual property, an IP Strategy can take tools such as trade secrets, trademarks, trade dress, patents and copyrights and turn them into valuable IP Assets for your business. The development of your IP strategy is not a single task that is completed only once. Your IP strategy should be developed and evolve over time, and you should refine your IP strategy as frequently as you evolve your business strategy. Many firms, including my own, offer a free introductory consultation regarding intellectual property. I encourage you to take advantage of this opportunity to begin evaluating where your business may be, where it is going and what the future may hold. At a minimum, please reach out to me with an email, LinkedIn message or call so I can ask: “Do you have an IP Strategy?” - - - - - - - - - - - - - - - About the Author Vince Egolf is an attorney specializing in intellectual property and technology law. With over 20 years of experience, he has the privilege of representing clients such as Whirlpool, the Wm. Wrigley Jr. Company, BISSELL Homecare and many others. Now, as the founder of Egolf IP Law, PLC, he brings these experiences to helping small to medium sized businesses grow and protect their companies. If you’ve questions, please reach out to Vince at vince@egolfiplaw.com or 616-681-1090 (text/call). Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Guest post by Sue Crockett, Executive Director of Minnesota Center for Employee Ownership Studies show that employee ownership is one of the best ways to protect workers and businesses in times of crisis. With 4 million baby boomer owned businesses in the U.S. looking to retire in the next 3-5 years, having a plan in place as to how you want to leave your business is imperative. What will be your legacy? Business owners that spent their life building up their company with the help of the employees and community do not usually want to just walk away OR be faced with the threat that the company will be relocated, merged or closed down. They want to reward their employees and keep the jobs in their community; thus, employee ownership is a great option to consider. Employee ownership models allow owners to: 1) capture market value with tax advantages, 2) enjoy flexibility and craft an exit strategy, and 3) anchor businesses in communities and retain good jobs. What is an ESOP? In general, an ESOP is a retirement plan for employees used to purchase stock from a business owner that creates a real financial future for them. In 1974, Congress passed a law that created ESOPs – Employee Stock Ownership Plans. The law says an owner can sell some or all of their business (10%, 30%, 49%, 100%) to their employees. The employees pay nothing. The business takes on a loan from a bank or other lending source to pay the owner full fair market value for the business. The Federal Government and the State of Minnesota both stipulate that “If your company becomes ESOP owned and meets certain criteria, the business may never have to pay taxes again on the profits for whatever portion of the business is owned by the employees.” Meanwhile, the tax savings pay off the loan. And once the loan is paid, what can your business do with all that extra cash? It can grow – new buildings, more employees, and expansion of the overall business. What can your business do with all that extra cash? It can grow! If you sell 100% of your business to your employees through an ESOP, you may also be eligible to defer paying tax on the sale. You can keep full control of the business, but now your employees have a real stake in the game. So what are the advantages of an ESOP? It is a flexible, tax-advantage tool for business succession It is a way for the owner to take some, or all, the money off the table It provides employees with a real financial future Are there disadvantages of an ESOP? An ESOP may not be for everyone – considerations for implementing an ESOP include the size of the company, value of the company, expense to implement and the repurchase liability it creates. ESOPs are best suited to a company of 20 or more employees that is financially sound. Smaller companies may want to consider the alternative of a Worker-Owned Cooperative. The Good News Studies from Rutgers University show that companies that are employee-owned fare better in down economies and certainly have done better during the Covid pandemic. Why? When employees have a stake in the game, they want the business to succeed as it will not only benefit them in the long run but give them a sense of pride that they helped create that success. ESOPs create wealth equity for all employees no matter their rank in the company. A great legacy! ESOPs create wealth equity for all employees no matter their rank in the company. So you are ready to sell to your employees, now what? You will need well informed advisors and service providers, including specialized legal, valuation, fiduciary, and possibly a lender as well. You will also want to answer some questions like: What are some key goals in selling your company? Have you had your company valued? This is an important step. What is the current culture of your business? Do you want to sell a portion of the business or 100%? Do you want to stay active in the business? Final Thought. If you are interested in having a conversation about the benefits of selling your business to employees, please reach out to Sue Crockett or the Peak Wealth Planning team. - - - - - - - - - - - - - - - About the Author Sue Crockett is the Executive Director of the Minnesota Center for Employee Ownership. In 2019, the Employee Ownership Expansion Network (EOX) began to create a network of State Centers for Employee Ownership across the country. The purpose of this grass roots effort is to provide education and outreach on the benefits of all forms of employee ownership to workers, businesses, and the communities in which they reside as well as being a hub for resources to business owners and their advisors. The MNCEO was the second state center EOX assisted in opening when it was formed in early 2020. The mission of the MNCEO is to be the local unbiased “boots on the ground” hub to help guide MN business owners and their advisors on their options when starting their ownership transition process. You can save the work of researching on your own and turn to the Center for guidance on deciding if an ESOP is right for you. About Peter Newman & Peak Wealth Planning Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Do you have plans for cashing out of your business through a company sale? You have worked many years to grow the business and serve your customers. It is successful and generates a good lifestyle. Most of your net worth is tied up in your business. You have a well trained team of employees and a growing customer base. Now you are considering exit options. You may be thinking about: Reducing your involvement in the day-to-day operations A complete exit to start your next chapter in life Reduce your concentration of wealth with a full or partial exit Rewarding employees who helped grow the business Invest proceeds to generate income for you today and generations to come Which option should you choose to exit your business? Understanding your priorities will help balance the PROS and CONS of your exit plan. This article will summarize the following four exit strategies: Sale to Strategic Buyer Sale to Private Equity Minority Equity Investment aka Partial Sale to Family Office Sale to Employees (ESOP) Outright Sale: Private Equity or Strategic Buyer If you want to maximize your wealth, consider a sale to a private equity (PE) firm or a strategic buyer. You have the option for an outright 100% business sale to a private equity firm or to a strategic buyer (usually a competitor). With an outright sale, you can achieve a full exit, meaning you get all your cash to spend or invest after the sale and paying taxes. And, with an outright sale you can completely exit, removing business risks from your life and start your next chapter. Alternatively, some buyers may ask you to stay on with a rollover of part of your equity and incentivize you with additional compensation if the company flourishes under a new buyer. Rollover equity is not a good choice if you want to walk away completely, but it may be a great choice if you want to diversify your wealth by selling a significant portion of the company. If you rollover equity, it is very important that you evaluate the new decision makers and decide whether you can ‘get in bed’ with them and work well together. One of the downsides of a sale to a strategic buyer or a private equity firm is that there may be management or employee turnover after the sale. And, most private equity firms will sell the company again within 5 to 10 years. If you sell to a strategic buyer or a PE firm you are giving up decision making authority. If you are considering an outright sale of your company, make sure to factor taxes and the payoff of debt into calculating how much cash you will have after the transaction. One of the benefits of selling today is that capital gains tax (in 2021) are at a historically low rate. Many experts think capital gains rates will increase in the near term. Partial Sale: Family Office Perhaps you love working in your company and want to keep growing it for the next 10-20 years. However, you recognize that most of your wealth and financial risk comes with owning and working at the company. There are several family offices that will consider allowing you to run your business indefinitely but provide you with a partial buyout of up to 50% equity today. Family offices like stable well run businesses that generate steady income and aren’t subject to the whims of Wall Street noise. If you find a family office whose values and vision align with yours, that may be a good option to ‘take some chips off the table’. After you receive the cash, you can work with a financial advisor to reinvest in a diversified pool of investments. It is important to work with your bank, attorney, and financial advisor to look at debt structure and debt guarantees before finalizing a minority equity sale. One of the benefits of a minority equity sale is that you can continue to participate in the profits of the business for the equity you retain. The typical strings associated with a minority equity investment have to do with taking on lots of debt or making major strategic decisions. If you do sell part of the business to a family office, in the future if you desire a full exit, most family offices will be pleased to accommodate you when the time comes. The benefits of a partial sale to a family office may come with a lower sale price than if you sold to a strategic buyer or PE firm. Partial Sale: ESOP Another way to partially exit your business is to sell to your employees. This can be done with an Employee Stock Ownership Plan or ESOP. The benefits of an ESOP include partial (or full) liquidity for you and the option to continue to be involved in the business. Rewarding employees who have helped take care of your customers and grow the firm may be one of your goals. For certain company owners, rewarding employees who may be like family could be your top priority. With an ESOP transaction, management can continue to own part of the business and participate in its growth and profitability while helping employees improve their own financial lives with equity ownership in retirement accounts. An ESOP transaction can be more complicated than an outright sale as the selling shareholder(s) are often asked to take back a portion of the debt on the sale or retain equity for a period of time. So, for those wanting a full and immediate exit, this may not be the best choice. Our next article in this series ‘What will be your legacy’ further explores the benefits of an ESOP as an exit strategy. If you are thinking about selling a successful business, there are many options available. It is important to consider the following criteria before getting too far down the road to a sale. 1. Is your goal to maximize cash today? 2. How important is it to take care of your employees? 3. Do you want to walk away from the business completely? 4. How much of your net worth is tied up in the business? 5. How much business risk and responsibility do you want in the future? Final thought. Selling a business can be one of the most important events in your life. If you, or a friend, is interested in starting a conversation about business exit strategies, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Guest post by Shaun McGehee, Director at Prairie Capital Advisors, Inc There are several paths a business owner can take when it comes to transitioning ownership. For example, an owner may sell to a strategic buyer (competitor), to a financial buyer (private equity firm or employee stock ownership plan) or to the company’s management team (management buyout). The owner may also decide that a full or partial sale is several years in the future, but is interested in exploring gift and estate tax planning strategies or buying out another owner. Whether a business owner is selling all or a portion of the company or engaging in a transaction that requires a valuation, knowing what the company is worth is critical. Obtaining a business valuation, or appraisal of the company’s worth, will give the owner a competitive edge. This is because valuation is the heart of business transactions and corporate decisions. By going through the valuation process, an owner will come to understand the drivers that positively and negatively impact value. Armed with a valuation, an owner can make intelligent business decisions. Key Value Drivers Business owners should know the value of their business and what factors drive value. Most business owners understand that private businesses are typically priced as a multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”). EBITDA serves as a proxy for cash flow, the lifeblood of any business. Companies with higher growth potential and greater free cash flow (discretionary cash flow available to owners) typically command higher multiples of EBITDA. Generally, multiples increase as the company’s size increases. In other words, a company with $20 million in revenue and $2 million in EBITDA will likely be valued at a greater multiple than a company with $10 million in revenue and $1 million in EBITDA. In addition to a company’s size, there are internal and external factors that affect value. External drivers include market conditions such as the range of multiples that publicly-traded companies in the same or similar line of business command. Lending conditions, industry specific factors and government regulation are also examples of external market conditions that may positively or negatively impact value. A business owner typically has little to no control over the market conditions that affect value, but does have control over the internal value drivers. Internal value drivers include the company’s margins, management team depth and experience, customer concentration, business plans and growth strategies. Generally, companies with experienced and deep management teams and solid growth command higher valuations. The aforementioned key value drivers are a few of the factors that impact valuations. It has often been said that valuation is an art and a science, and business owners should, at the very least, have a basic understanding of the theory and application of business valuation. The Valuation Process 1. Identify Business Owner’s Objectives. The first step in the valuation process is scoping the engagement. This critical first step outlines various administrative issues such as identifying the goals and objectives of the business owner, the valuation process and the standard of value to be employed in the valuation. Business owners should recognize that like beauty, value is in the eye of the beholder. That is, the same business interest may have a materially different value depending on the standard of value assumed in the valuation. Just a few of the various standards of value include: Fair Market Value Fair Value Investment Value Use Value Book Value The most common standards of value are fair market, fair value and investment value. The standard of value applied in the valuation is specific to the goals and objectives of the business owner and should be discussed at the outset of the engagement process, prior to conducting any valuation analysis. In certain circumstances such as selling to an ESOP or for gift and estate tax reporting, the standard of value is mandated by law. In those instances, if the business owner desires to sell shares to the ESOP or gift shares to family members, trusts or to charity, the appropriate standard of value is fair market value, which is the price between a willing buyer and seller, with each having reasonable knowledge of all relevant facts and neither under compulsion to buy or sell. The standard of value applied in the valuation is specific to the goals and objectives of the business owner and should be discussed at the outset of the engagement process, prior to conducting any valuation analysis. 2. Data Gathering. Once the valuation assignment is scoped out, the valuator will begin the second step which is the collection of data. During this phase, the valuator will conduct initial due diligence which includes, among other things, the collection of financial data, background and history of the enterprise, budgets, customer lists, business plans, and other important documents. 3. Due Diligence and Management Discussions. Step three is a continuation of the second step, with the difference being that step three is far more detailed as the valuator actively engages in detailed discussions with the business owner and dives deep into the inner workings of the business. This step usually includes an on-site due diligence meeting with the business owner and/or key members of the management team. 4. Build a Valuation Model. After the valuation analyst conducts in-depth due diligence, he or she begins step four, building the valuation models. In conducting the valuation portion of the analysis and developing the concluded work product, the valuation analyst typically considers various valuation approaches deemed to be appropriate in estimating the value of the company. The generally accepted approaches and methods may include: Income Approach – Discounted Cash Flow Method – Analyzes the company’s forecasted cash flow stream, estimates its future economic returns and “converts” those returns into a value estimate. Market Approach – Guideline Publicly Traded Company Method – The guideline publicly traded company method looks at the market pricing multiples of comparable companies in the industry that are adjusted against the earnings of the subject company. 5. Review Draft with Owner. Step five in the valuation process entails reviewing preliminary schedules with the business owner. Depending on the valuation assignment and the terms and conditions outlined in the engagement letter, the preliminary schedules may or may not communicate all of the assumptions and value conclusions. This may be to protect independence, but in all cases this serves as a quality-control measure. 6. Presentation of Results. Step six is when the valuation analyst formally prepares the report and ultimate deliverables to the client. Part of the deliverable is a formal presentation to the client. This includes an oral presentation of the report and detailed explanation of the conclusions reached. Parting Thoughts It is never too early to start planning the transition of a business. Ideally, business owners should discuss their goals and options with their financial advisors years before any ownership transition transaction. There are usually complex issues to address, such as tax implications, management succession and owner’s legacy. Business owners should understand the key value drivers and engage in active discussions with their financial advisors to implement a strategy to meet their goals. - - - - - - - - - - - - - - - About the Author Shaun McGehee joined Prairie Capital Advisors in 2004. He has extensive experience advising middle-market companies, shareholders and trustees on employee stock ownership plan (ESOP) transactions, fairness opinions, leveraged buyouts, capital raising, mergers and acquisitions (M&A) and other strategic advisory engagements. Shaun is also instrumental in the training process for all employees on technical and strategic initiatives, both as part of the onboarding process and as employees advance in their careers at Prairie. Further questions about this topic may be directed to Steve Ryan. Steven joined Prairie Capital Advisors in 2018. He specializes in new business development initiatives for Prairie. He has over 25 years of new business and banking experience with clients throughout the country. You may email questions to sryan@prairiecap.com or call him directly at 630-657-8157. - - - - - - - - - - - - - - - About Peter Newman and Peak Wealth Planning Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Have you worked hard to grow your family business? If so, your efforts are integral to the economy and keeping more than half the US workforce employed. Whether you suffered or prospered during Covid-19, concerns about continuing to operate your business may have crossed your mind. According to the Conway Center for Family Business, family businesses account for 64% of the U.S. Gross Domestic Product (GDP), yet 57% of family businesses have no formal succession plan. While the number may shock you, it is not surprising that many small business owners are consumed by the myriad responsibilities of running their businesses. Nevertheless, owners ignore succession preparations at their peril and possibly at the peril of their heirs, customers, and employees. There are a number of reasons for owners to consider a business succession structure sooner rather than later. Let's take a look at two of the reasons business owners need to prioritize their business's succession structure. The first reason is taxes. Upon the owner’s death, estate taxes may be due, and a proactive strategy may help to better manage them. Failure to properly prepare can also lead to a loss of control over the final disposition of the company. A company may need to be sold to pay estate taxes depending on the financial situation. Second, the absence of a succession structure may result in a decline in the value of the business in the event of the owner’s death or an unexpected disability. Succession options may include an outright sale, a planned transfer of ownership to family members, or selling to employees. Working with your advisors on a plan for succession can avert a crisis and bring you and your family peace of mind. The process of business succession is comprised of three basic steps: 1. Identify your goals. When you know your objectives, it becomes easier to develop a plan to pursue them. For instance, do you want future income from the business for you and your spouse? What level of involvement do you want in the business? Do you want to create a legacy for your family or a charity? What are the values that you want to ensure, perhaps as they relate to your employees or community? 2. Determine steps to pursue your objectives. There are a number of tools to help you follow the goals you’ve identified. They may include buy/sell agreements, gifting shares, establishing a variety of trusts, or even creating an employee stock ownership plan if your desire is that employees have an ownership stake in the future. 3. Implement the strategy. The execution step converts ideas into action. Once it's implemented, you should revisit the strategy regularly to make sure it remains relevant in the face of changing circumstances, such as divorce, changes in business profitability, or the death of a stakeholder. Keep in mind that a fundamental prerequisite to business succession is valuing your business. Our next blog post will discuss the key value drivers, benefits, and process to obtaining a professional valuation of your business. As you might imagine, business succession is a complicated exercise that involves a myriad of tax rules and regulations. Before moving forward with a succession, consider working with legal, financial, and tax professionals who are familiar with the process. Final thought. Peak Wealth Planning cares deeply about its clients and wants to preserve continuity in the extremely unlikely event I were unable to continue with the firm. We have put in place a formal succession plan. If you know a business owner who can use help with succession planning, the Peak Wealth Planning team can assist. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Homes are hot right now. According to realtor.com, the April national median listing price for active listings was $375,000, up 17.2% compared to last year. If you are selling your primary home or vacation home for a profit, be aware of the tax rules. The rules do vary for primary and vacation homes. Primary Home Sale If you owned and lived in your home for two of the last five years before the sale, then up to $250,000 of profit may be exempt from federal income taxes. If you are married and file a joint return, then it doubles to $500,000. To qualify for this exemption, you cannot have excluded the gain on the sale of another home within two years to this sale. Please consult a professional with tax expertise regarding your individual situation. This profit would be excluded from your taxable income. In fact, the sale may not need to be reported unless you receive a Form 1099-S or do not meet the above requirements. If you sold your home at a loss, unfortunately, you can’t deduct the loss. There Are Exceptions Even if you do not meet the above requirements, you may qualify for the exclusion on primary home capital gains if you meet one of the criteria below. If you receive the house in a divorce settlement If you are able to count short-term absences as time lived in the house If a surviving spouse who has not remarried can count the time that the deceased spouse lived in the house. The five-year test period can also be suspended for up to ten years in cases where any spouse has served on “qualified official extended duty” as a member of the military, foreign service, or federal intelligence agencies. Even if you don’t pass the five-year rule test, a reduced exclusion may be available if you have a change in employment or health, or because of unforeseen circumstances, such as divorce or multiple births from a single pregnancy. Have a discussion with your tax-preparer to learn more. Vacation Home Sale You may be obligated to pay capital gains and other taxes on the sale of a vacation home. If you own the home for more than a year, you’ll pay long-term capital gains taxes, and the tax rate depends on your income level. If you own the property for less than a year, you’ll pay short-term capital gains taxes, and the rate is the same as your ordinary income-tax rate. For most taxpayers, it’s advantageous to wait at least a year after purchasing a second home before selling. If you use your vacation home as a rental property, the taxes are more complex. You may have to pay taxes on depreciation you have previously written off. An introduction can be found in the article Selling a Vacation Home: Understanding Capital Gains on the Sale of a Second Home on Zillow. Taxes on the sale of a vacation rental are complicated. Please speak with a knowledgeable tax professional regarding your situation. Contact me if you are thinking about selling your home and would like to have a discussion about reinvesting the proceeds in real estate or another asset. Final thought. Are you comfortable with your progress towards retirement? How about helping future generations meet their financial goals? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

An estimated 721,000 vacation homes sold last year. If you are one of the many folks sharing your second home with family and friends or generating rental income, don’t overlook protection of your new asset. When it comes to insuring your second home, you may find that the coverage you need is quite different from what you have on your primary home. The Unique Risks of a Second Home Your current homeowners policy may allow for coverage of two properties under one policy, but because there are unique risks with a second home, a separate policy may be more conducive to obtaining the coverage you need. Here are some of the special risks you may need to cover. 1. Long Periods without Occupation An unoccupied home can invite trouble. Without a presence, there is no one to fix a leak, respond to weather damage, or even report a fire. It also may become a target for burglars. 2. Isolated Location While seclusion may be a top priority for a vacation home, it also means that you may be far removed from the services that can prevent larger losses, such as a fire hydrant or fire department. 3. Renters Renting out your home when you’re not using it may be a good idea to offset the costs of ownership. However, having renters (or even guests) may increase your liability to any damage or injury associated with their stay. Be sure to work with your insurance agent to secure the right coverage. The decision to do short or long term rentals may dictate the type of coverage best for your vacation home. Protect your Wealth Discuss the benefit of raising your personal liability coverage to protect you from risk to your wealth that may come with offering your home to guests and renters. In addition to proper insurance, you may want to consider titling your rental home in a corporate entity to protect you from liability or a lawsuit. Your attorney can help evaluate the pros and cons of a corporate entity. Consult with your realtor or neighbors in your vacation home community to locate a reputable property management company to perform maintenance and look in on your home if you will be away for extended periods. Being properly insured helps, but preventing a claim in the first place is the best strategy. Final thought. Are you comfortable with your progress towards retirement? How about helping future generations meet their financial goals? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Many of you know that I’m a real estate investor at heart. At a very young age, whenever we traveled with my family on vacation, I would always grab a copy of the local real estate books and pour over the properties. Often, they seemed out of reach financially. But, I tried to remind myself that we were only there for a week and it was better to enjoy the trip instead of obsessing over how to find, locate, and purchase a well priced property. Several of my clients have indicated that they might want to own a vacation home. Further, they believe it may turn out to be a good secondary source of income. The purpose of this article is to compare my experience of owning a vacation rental near Winter Park, Colorado, with renting a condo for a month in Key West, Florida. Due to Covid-19, my partner -- who works in pharmaceuticals -- had the flexibility to work remotely in late 2020. We decided to look somewhere warm in the U.S. where we could get some work done with reliable internet but also go to the beach and do some snorkeling when the workday ended. We plunked down $6,000 for a month-long rental in December 2020 in the Florida Keys. Our condo had two bathrooms, two bedrooms (for whomever is snoring), plus a pool and hot tub right outside our door. There was never anyone at the pool, so it felt like our own private oasis. Further, we could easily bike to snorkeling spots in Key West and hike to Fort Zachary to hang out. I remember thinking that $6,000 was a lot of money to plunk down on rent, but while at the unit, I had some interesting feelings about renting this condo. I noticed that despite its good condition, the condo had a number of small items that needed to be fixed: the wood front door needed refinishing, knob came loose on the laundry door, the kitchen cabinets were beginning to show their age, and there was a bit of rust on the Sub-zero refrigerator from the salt air. Having remodeled a number of homes, I notice the little things. And, I accidentally broke a dish in the kitchen. For a second, I paused to make a list of items that would need attention. And, I started imagining how much they might cost. To get high dollar rental amounts, you or your property manager have to constantly reinvest in keeping your unit pristine. An Epiphany Then, I remembered, this beautiful Key West condo isn’t my property. I don’t have to worry about these nagging little details. When Jerome and I leave, we simply turn in the key and have fond memories of sitting by the pool after work, reading on the couch, sipping bourbon and walking to Louie’s Backyard for dinner. Contrast this to when I visit our home in Colorado, I keep a running list of items we need to improve, fix or replace. I said to Jerome the other day that we should probably have someone refinish the bathtubs to make them look new. And, we are constantly checking with our cleaning person to make sure the water is shut off so it doesn’t freeze. Yes, we have plenty of insurance, but a burst pipe would probably mean that we couldn’t use or rent our home for a year given the scarcity of reliable contractors in our small mountain town. Rent three years in a row in the same location before you commit to a purchase. Try It Out First If you are thinking about buying a vacation home to rent out, my strong suggestion would be to rent at that location for at least three years in a row and rent for at least a full month each year. That way, you get to meet the locals, see what you will really do when you are not in vacation mode, and determine what the traffic, restaurant, shopping, and activity scene is all about. Whether you do yoga, fish, ski, volunteer, work from home, hike, bike, golf, or have other hobbies, you will want to make sure you are not bored or too isolated from what you enjoy doing. Remember a few days vacation is very much different than being at a place for months at a time. Vacasa, a popular vacation home rental property lists the top 25 markets for vacation homes to purchase. Consider test driving one of these communities for several years in a row before you commit to ownership. Final thought. Do you have interest in real estate investing? Reach out to me to discuss your real estate ideas and how they fit into your wealth management goals. Are you comfortable with your progress towards retirement? How about helping future generations meet their financial goals? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Many of us have undertaken remodeling projects during Covid-19. If you are like most homeowners, you love selecting the fixtures, fabrics, and paint colors of your home improvement project. But there is one very important item that you may overlook—making certain you are properly insured. Why Proper Insurance Matters You may need to review your insurance before beginning any home improvement project since it can expose you to additional financial risks. If you choose to act as your own general contractor (in other words, you organize and order supplies while hiring subcontractors for the work), you may be opening up yourself to additional liability (such as an injury to a worker or third party) that may not be fully covered by your current homeowners insurance policy. Whether it’s an extra room or an updated bathroom, many home improvement projects will increase the value of your home. However, too many homeowners fail to review their current policy’s replacement value limits, which may no longer be high enough to cover any losses that occur after your home improvement. Obtaining additional coverage shouldn’t wait until you’ve completed the remodeling. After all, at any point in the process, you will have supplies and completed work that may not be covered under your existing policy. Ask your insurance agent about increased limits, liability insurance, and workers’ compensation. To ensure that you are properly covered, meet with your insurance agent before starting your projects and discuss with him or her any need for modifying your current insurance coverage. Final thought. Insurance is a complex topic. If you need guidance to understand what you need to protect what you have spent a lifetime building, consider reaching out to me and gain some peace of mind. Are you comfortable with your progress towards retirement? How about helping future generations meet their financial goals? If you have a net worth over $2 million and need help from a wealth manager, the Peak Wealth Planning team can assist you. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

When it comes to phishing, it is possible to lose everything with just one click. Phishing scams in the United States caused a loss of $19.7 billion in 2020. The scammers manipulate our emotions. As the capstone article for our Mental Health Awareness contributions, I want you to be informed so you can protect yourself and your lifestyle. -- Peter When you heard that someone was scammed $12,000 on the internet, what might have gone through your mind? Victim was gullible, greedy, or both? Someone may not be very good with technology? Or perhaps you may think that you will never fall victim to such a scam. Read on to learn the tactics scammers use. Doing so will empower you to recognize their strategies and avoid the situation in the first place. What is phishing? Scams begin with phishing - an email, text message, or phone call pretending to be from a reputable source (e.g. Amazon, Microsoft, Paypal, etc…) in order to convince you to reveal personal information. In the example laid out by Mark Rober in Glitterbomb Trap Catches Phone Scammer, it was an Amazon email telling the receiver they had an uncollected credit, and the company wants to refund it. But in reality, the scammer is trying to connect with you to obtain your personal information such as a bank account or credit card number. Or, you may receive an unexpected check for $8,000 in the mail. After you’ve deposited the money, someone will call and ask for your bank account information so they can retrieve their $8,000. Next thing you know, your bank account is completely empty. How to Protect Yourself From Phishing Scams Scammers are constantly repackaging new ways to perpetrate old ploys. Whether you’re contacted by phone, mail, email, text, or in-person, the following tips provide advice on how to spot a scam. A Generic Greeting: Since phishing emails are sent out in bulk, they often use generic greetings with no personalization (like “Dear User”) or may skip the greeting all together. A Deceptive Email Address: Carefully review the sender’s email address, because a phishing attack can be off by even just one letter. For example, an email may be from “returns@amazan.com” in an attempt to fool you into thinking it’s a legitimate message from the Amazon support team. Remember, your brain will fill in missing letters for you -- something these scammers are counting on. Misspellings or Grammatical Errors: Many phishing emails come from cybercriminals in foreign nations. If the language in any email seems awkward or just not in the normal tone of the assumed sender, treat it with caution. Request to Update or Verify Account Information: Scammers will often generate emails that prompt you to verify your account information, spoofing well-known and trusted institutions. When you click the link, it goes to a fake login page that is generated to seal your credentials. If you receive a message like this, contact the company directly and not with the information found in this particular email. A Sense of Urgency: The goal of a phishing attack is to trick you into clicking on a bad link or attachment. Using social engineering tactics, scammers create messages that elicit an emotional, immediate response. This urgency is a major red flag. Deceptive URL’s: The linked text in an email doesn’t have to represent the true destination. To check the link without clicking on it, hover over the text and the actual destination URL will appear. In phishing emails, the URL may still closely resemble an authentic site so be on the lookout for extra dots or a missing letter. An Attachment: In the age of phishing, all attachments should be approached with caution, particularly if you were not expecting an attachment. Contact the sender directly before opening. If an email seems odd or out of character, it is best to exercise caution. Do not click on any links or attachments. If you receive a phone call requesting your bank account, credit card number, or personal information, do not share this information over the telephone. Ask them where they are calling from. Then, do your own research to contact the company directly. Do not use the phone number given to you by the caller. If you suspect there may be foul play, contact your local law enforcement. What to Do After Recognizing Warning Signs If you see any of the warning signs above then it's best not to engage with the scammer at all. If you have concerns about whether a request is legitimate, speak to a trusted friend, family member, or local law enforcement. If in doubt or if emotions are high, take a pause and get a second opinion from a trusted advisor. There is no harm in waiting a few days so you don’t react and share information with a criminal. Reporting Resources: Anti-Phishing Working Group (APWG). The APWG is an international coalition unifying the global response to cybercrime. You can help their efforts! If you got a phishing email, forward it to the Anti-Phishing Working Group at reportphishing@apwg.org. If you got a phishing text message, forward it to SPAM (7726). National Fraud Information Center. Fraud.org is a project of the National Consumers League. This organization reports fraudulent activity to the federal government and maintains detailed records of fraud incidents. It also provides links concerning whom you can contact within your state for assistance. Federal Trade Commision Fraud Reporting (FTC). You can report phishing attacks to the FTC. Your report is shared with more than 3,000 law enforcers. Internet Crime Complaint Center. The FBI and the National White-Collar Crime Center run a site called the Internet Crime Complaint Center. It features many tips and other helpful information about avoiding email scams and what to do if you fall victim to one. It also offers a link for filing a claim against a third party who stole your identity or made an attempt. Getting Scammed Can Impact Your Mental Health The repercussions of financial scams and identity theft -- the two primary goals of phishing scams -- can be long lasting. From financial loss to closing compromised accounts and restoring your credit score to working with institutions like the IRS, the stress can be overwhelming. Low self-esteem, anxiety, and feeling out of control are just some of the emotions victims of phishing scams can experience. One of the contributing factors that elongate these emotions long after a financial crime occurs is the fear of revictimization. Victims of identity and financial fraud may experience revictimization because their personal information has already been compromised, so there’s a chance that their names are still available on the black market. Avoid these financial and emotional impacts of fraud by taking preventative measures to protect your personal information from scammers. View emails, text messages, and phone calls from individuals you do not know with a heightened level of scepticism. Look for red flags, monitor your accounts, and seek help if anything seems off. - - - - - - - - - - - - - - - About the Author Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind. Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.

Article by Brian James of C.E.L & Associates, Inc. As part of Mental Health Awareness month, I’ve asked an expert to share his insights into the emotional and mental traumas that impact families during a divorce. Brian James is a divorce mediator with 26 years of experience in the field. If you’ve questions for Brian, you can find his contact information at the end of this article. -- Peter In life, next to the death of a loved one, divorce is the most stressful time in someone’s life, followed by moving to a new house or new city coming in third. Most, if not all of the people reading this blog, have experienced the loss of a loved one at some point in their lives, have a close friend who has lost a loved one and know someone who has gotten divorced during their lifetime. Though my parents divorced when I was in high school, and I moved away to college a year later, I have been happily married for 25 years, with our 2 sons in college. My father killed himself in 2002 and my mother passed away in 2019 after suffering from dementia in the final years of her life. For me, these life experiences were tragic. Though I have not personally experienced a divorce, as a Divorce Mediator in private practice in Illinois and Wisconsin, I work with people every day who are going through the divorce process and moving at the same time. “When working with clients, one of the first things I advise them is to be careful who they go to for advice, comfort, and information.” During a divorce, people experience a wide range of emotions, sometimes in the same day, such as: Shock and denial about the fact they are getting a divorce. Pain and guilt as to what they may have done to cause the divorce. Anger as to why their spouse does not want to be married to them anymore. Bargaining with yourself on how to get your ex to change their mind (be nicer, lose weight, get a better job, be a better parent, etc.). Letting go and knowing there is nothing you can do. Acceptance and ready to move forward with your life. Helping clients and their children with the emotional rollercoaster that is divorce is challenging to say the least, as everyone deals with their emotions differently. Throw in the fact they may be moving out of a house they raised their children in, have memories, realize they may have to downsize to an apartment and throw out personal items that are important to them, one can understand why divorce is such an emotional process. Finding the right people to help you work through the emotions of a divorce is critical not only for your mental health, but also the mental health of your children and your soon to be ex, especially if you have children together and need to effectively co-parent for years to come. As a Divorce Mediator, I work with clients on the “business side” of the divorce process, helping them reach parenting agreements that are good for their children and financial agreements that are equitable and make sense. If there were no emotions in a divorce, my job would be much easier. However, this is not reality in a divorce. When it comes to mental health, and how to help my clients process their emotions, though I have learned a lot in my 26 years of working with families, I rely heavily on marriage and family therapists, psychologists, co-parenting counselors, psychiatrists and religious leaders to help me help my clients. When working with clients, one of the first things I advise them is to be careful who they go to for advice, comfort, and information. Though friends, family, co-workers, the internet, books, magazines and lawyers may all be of some benefit, friends, family, co-workers and attorneys are biased and the internet, books and magazines may have incorrect information, information not relevant to your specific situation and/or the information may not even be relevant in the state you live in. Unfortunately, these resources may only make your mental health worse. For me, this is where I rely on the professionals to help my clients during this difficult time in their lives, to help them process their emotions in a productive way, see the “light at the end of the tunnel”, help them communicate better with their soon to be ex and every other emotion they have at the time. In my experience, the right mental health professional for my clients and their children makes a world of difference in how they are affected by a divorce. Do not kid yourself, everyone is affected in some way by a divorce. Even if it is amicable, civil, and you are both on the same page on how you will be co-parenting your children. Divorce is an ending of an important chapter in your life and there will be emotions surrounding it. You may not know how or when they will pop up, but they will. Any time I see someone getting overloaded, having that blank stare on their face all the time, unable to focus, crying uncontrollably, or in the first 4 stages of emotions listed above, I do not hesitate to refer them to someone who can help them. Advice for Divorcing Parents I asked for words of wisdom from professionals that specialize in counseling families and children during divorce. Below is their advice. All Major Losses Need to Be Mourned Dr. Rob Siegel, Psy.D. One of the most important factors that I would want parents who are divorcing to be aware of is that Divorce is a major loss for them and for their children. All important losses need to be grieved. All too often parents are focused on other emotions that accompany aspects of the divorce -- new freedoms, on built up resentment, and/or focus on the competitive adversarial conflict in their attempts to "win" in their divorce litigation -- but avoid the loss itself. When parents are distracted by these other emotions/aspects that accompany divorce they often have a hard time understanding their children's needs. Children are much more focused on the loss and without their parents understanding and supporting them they are vulnerable to significantly more emotional pain and turmoil. If parents can focus on the loss and seek their own support to grieve the loss of their marriage, then they can transition easier to a co-parenting relationship and be more available to help their children mourn the loss as well. I would encourage all parents to consider seeing a therapist to help them find ways to mourn the loss of their marriage. Give Children a Safe Space Alison Koehler, LCPC As a psychotherapist for over 25 years in private practice, it has become a commonplace to see children of divorced parents sit in front of me with looks of confusion, sadness, fear, anger and pain. The life these children imagined they would have is not at all what it is to them at that point. I believe the most important things parents can focus is not only how they need to continue to make their children feel safe and that things will be ok, but also to do their best in getting along with their spouse throughout the divorce process. Do not ever say or indicate anything negative about the other parent in front of your child. Do not ever involve them in the ongoing court process, emails or financials. DO talk to your kids together and during a time where there is some time to do so, like a weekend or some family time, not on a special day, holiday or birthday. Remind your children how loved they are by both parents. Make sure the focus is on routine and change things as little as possible (such as sports activities, school activities, carpooling and so on). It is a hard topic to talk about but being honest with your children about divorce can actually help them understand and heal. Kids are going to want to know what is happening or changing. Tell them what you can, but let them know nothing is set in stone. Let them know who will be leaving the home and when they will see the other parent. With that being said, they do not need to know why you are getting divorced; instead, let them know that the two of you will be happier living separately, that you have tried to make the relationship better but can’t, and that the two of you will always remain friends. That may be tough to say for some, but this is a time for parents to be selfless and say things for their kids to avoid hurt. Other Useful Resources: If you or someone you love is in a mental health crisis due to a divorce, please do not brush it off as “they will get over it”. Get help for yourself and/or assist your loved one in finding a therapist, support group, psychiatrist, etc. If you have one, reach out to your company’s Employee Assistance Program (EAP) or obtain referrals for mental health professionals in your area. The emotions someone experiences as part of a divorce do not magically disappear once the divorce is over. With that, here are some resources you may want to access if you or someone you love is in need of help: National Alliance on Mental Illness (NAMI) Better Help (online counseling services) Centre for Interactive Mental Health Solution (CIMHS) The Lilac Tree (Divorce Support in Evanston, IL) WINGS (Domestic Violence Support in Rolling Meadows, IL) A Safe Place (Domestic Violence Support in Lake County, IL) Though this list could go on and on for multiple pages, the most important thing to remember is that mental illness does not magically go away. The only way to fight it is to seek help. - - - - - - - - - - - - - - - About the Author Brian James is an experienced Divorce and Family Mediator with offices throughout Chicagoland and Southeastern Wisconsin. The first 10 years of his professional career, Brian worked in the Criminal Justice System helping domestic violence and divorcing families resolve family conflicts and structure parenting agreements. He assisted with the healing process that took place after these life-changing events had occurred. His approach to mediation is client-driven. By aiding his clients with the resolution of their divorce issues outside of the courtroom, Brian helps create a win/win situation for all parties in a divorce. In divorce mediation, Brian helps people work through their conflicts while teaching them problem solving, empathy and self-determination, while at the same time, giving them the ability to make informed decisions for themselves. When confronted with a conflict, if Brian’s clients refer to what they learned in mediation, he believes they will be much better off and be able to resolve their conflicts on their own. To learn more about the divorce mediation process, please contact him at his C.E.L. and Associates, Inc. office by calling (312) 524-5829 or visit his website, www.yourdivorce.org.