The events in Charleston last week have left all of us — once again — searching for answers to what feels like a festering wound simmering under the surface of our culture.

But the grace notes we have seen coming from the hearts and mouths of survivors and family members of the victims might, perhaps, show all of us a way towards healing. Forgiveness, rather than offense (even when offense is completely justified), is truly a much stronger force.

In the meantime, let’s take notes on what those brave family members are doing.

Now … well, we’re almost to the end of June, which feels a little crazy to me. But here we are.

These months provide a different rhythm (especially for those who have young children in the home!), and in my opinion, it’s a great time to get organized in a way that you perhaps haven’t been in the past.

It’s amazing to me how many families and households don’t have a workable plan when it comes to handling the flow of paperwork that comes through their mailbox, and for tracking their online world.

In fact, the cloud-based nature of so many financial statements can lead us all into a bit of a lull: “Everything is online, so I can just throw away the paper statements”, or “If I really need something, I can always request a copy.”

And so people have begun letting their household filing system go to the dogs.

The problem with that is …

1) It’s actually not the case that everything can be available online — many statements are only kept a short amount of time “in the cloud”, and unless you are scanning them yourself, you often have to pay fees to retrieve older items.

and

2) Throwing away documents and trusting everything to “the cloud” can leave you vulnerable to ID theft (especially when you don’t employ a shredder!).

So, I’ve put together something that will (hopefully) provide you a simple plan, and perhaps a tiny little kick in the behind to get this into place.

Bridges’ Simple, 4-Step Plan For Organizing Your Financial Records
“You will never win if you never begin.” – Robert Schuller

When we’re privileged enough to have conversations with clients unrelated to estate planning, and more about their general financial world, we’re often asked about setting up a good system for keeping it all organized. Often, one of the major problems for many families is simply keeping track of everything! So here’s what we suggest…

1. Find a good home for your documents.
The best spot to set up a home financial center is where you find the bills and receipts generally piling up–even if it’s in the corner of your kitchen. If you don’t want your financial records on your kitchen countertop, store them away in a corner filing cabinet nearby. Better to use a space you usually go to than to try to form a habit of going to the upstairs study you visit only once a week.

2. Determine what you need to keep and what you can throw away.
Generally, you can get rid of grocery receipts, credit card slips for non-tax-deductible items, and ATM receipts you’ve already reconciled. Toss all your junk mail. You should hold on to receipts for anything that’s tax deductible, as well as medical expenses, past tax returns, and records of charitable contributions. Also keep insurance policies, investment purchase records, mortgage and property bills, and warranties and instructions.

3. Sort your papers.
Use four categories: bills, insurance policies and records, bank and brokerage statements, and other important documents. Then sort those papers into separate folders for each account, type of receipt (like transportation expenses or medical bills), insurance policies, etc. Toss the papers that don’t fit into any category.

4. Spend five to 10 minutes a day maintaining your files (or 30 minutes per week).
Open your mail near the trash bin. Circle the due date for your bills and file them in the proper order. Then save whatever you decide to keep in its proper folder.

I hope this helps.

Until next week then, I am warmly yours,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

We work hard for our clients.

Crafting elegant, tax-saving and easy-to-understand strategies to help you save on your taxes is a joy. And, of course, removing from our clients the annoying hassle of dealing closely with government paperwork, deadlines and personnel — while not exactly a “joy”, does also provide us with great satisfaction because we know that we get to serve our clients and help them not have to deal with stuff that isn’t exactly “fun”.

But sometimes (usually a rare instance), there are circumstances in which, despite great planning and implementation of strategy, things go sideways.

Last week, I wrote about estate planning, and I do want to touch on it one more time here today — despite the fact that it isn’t our primary area of service. It’s such a critical part of a family’s financial picture, but it doesn’t really get focused on sometimes until it’s too late.

You see, even the most well-crafted estate plan can be ruined by a poor choice of executor.

Of course, that said, we can always do our best to help our Greater Atlanta clients and their families deal with it and navigate through this poor choice, once it becomes apparent — but it’s always better if the choice is made well.

So, this week, I have some words about this, as you consider your current executor of estate, and whether they fit the profile…

Dennis Bridges On What to Look For in an Executor of Estate
“You only have to do a very few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett

Your executor of estate is what is called a “fiduciary” which means he or she must be someone who will act in good faith when handling your affairs. He or she cannot take advantage of his or her position or unfairly profit from financial transactions from your estate. The executor will meet the standard of a fiduciary duty if he or she does a competent, honest job.

You want your fiduciary to be both trustworthy and capable of handling the tasks. You have to have complete faith in him or her. Make sure he or she understands the responsibility of the job and is willing to accept it. This requires a discussion before you make your Will.

It sounds a bit strange, but name someone who is healthy and likely to be around after your death. To be secure, you should definitely select at least one successor executor to serve if your first choice is unable or unwilling to do so when the time comes.

For many people, the choice is obvious — their spouse. Others select a close friend, a grown child or other close relative. If no obvious person comes to mind, make a list of your possible selections and use common sense (and this article as your guide) to make the wisest choice.

Remember, as I wrote last week …

An executor must:

* Obtain certified copies of your death certificate
* Locate Will beneficiaries
* Examine and inventory your safe deposit boxes
* Collect your mail
* Cancel credit cards and subscriptions
* Notify the SSA and other benefit plan administrators of your death
* Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
* Get bank accounts covered by the Will released
* Place notices in newspapers so creditors can make claims
* Hire a probate attorney

Either the executor or the probate attorney must:

* File court papers to start the probate process and obtain legal authority to act as your executor
* Manage your assets during the probate process, which usually takes six months to a year
* Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
* Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed

So the choice is important.

But lastly, as you make these decisions, consider telling your family exactly what you plan.

This gives you the chance to head off any possible disagreements among your family about how things “should” be handled. If you happen to die or lose capacity, it’s usually too late.

Eliminate surprises and keep those family fights at bay.

Perhaps the LAST thing to say is: make sure you have competent help by your side, in ALL things financial (especially when it comes to your existing finances and tax strategy).

And that, of course, is what we’re here for.

Until next week then, I am warmly yours,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

First off (and this doesn’t necessarily affect all of our clients), just a quick reminder thatthe second quarter estimated taxes are due on June 15th. This is the quarter that always sneaks up on everyone, as it’s only two months after April 15th — so don’t get behind!

Secondly, the summer is a perfect time to assess your financial picture from a holistic perspective. And by that, I mean: let’s look at your big-picture goals and your strategies, and create a workable plan, shall we?

In subsequent weeks, I’ll give you some “back of the napkin” strategies for a tax planning strategy, but I want to remind you of another component to a well-established financial plan today — one that doesn’t usually get handled well (as you will see).

Because the numbers haven’t changed much since last I saw them:

Over 50% of adults do NOT have a will or other estate planning instruments in place to protect themselves and their family. And, perhaps even worse, over 69% of parents have not yet named legal guardians who can raise their children if something happens to them. (And by “in place”, I mean something that would be legally recognized — not an “idea” that hasn’t been properly notated).

Those are scary numbers. Estate plans obviously provide great peace-of-mind for a family … and, of course, they can create a bunch of headaches if not handled correctly.

Believe me, I’ve seen a few doozies in my day.

Which is why it always helps to have someone in your corner. Whether or not we speak into your situation directly, we can also bring in specialized counsel. We aim to be your family’s advisors in all things financial, whether we have “skin in the game” (i.e. we get paid for it) or not. Our clients are our family, and we want to see you treated well by those who serve you.

So … all that said, consider this:

Dennis Bridges Offers Practical Tips For Your Estate Plan
“The noblest search is the search for excellence.” – Lyndon Johnson

You may have established an estate plan in the past, or you may not have gotten around to it, but it is critical that you ALWAYS have an up-to-date plan.

Most people are smart enough to keep their cars in good working order–it requires tune-ups, an annual physical check-up, etc. But I’m always surprised by the common misconception about how often they should have their estate plan reviewed.

You see, most people see estate planning as something you “do once” and never have to think about again. That’s just flat incorrect.

Just like your health can take a dramatic turn (for the better or worse) in a year, your estate planning decisions can change dramatically in a short period. Sometimes, something as simple happens as the people you’ve identified to serve as the guardians for your minor children moving out of state. That’s just one of many good reasons to revisit your estate planning decisions.

Plus, though there’s been a lot of talk in recent years about the higher estate tax threshold, there are many ways in which out-of-date plans can be “burned”, by not complying with new laws.

Your estate plan is a “living and breathing” plan (at least when done right) and therefore has to be maintained to reflect your life as it is today.

Second, PLEASE ensure you have chosen the proper executor.

Whether you’re dealing with significant sums, or with a more modest estate, choosing the person to handle these transaction is a critical decision for EVERY family.

It’s always a great idea to get professional advice in making these selections. But, if you choose to “go it alone” for some reason, here’s what you need to keep in mind as you consider who will be your executor:

An executor must:

* Obtain certified copies of your death certificate
* Locate Will beneficiaries
* Examine and inventory your safe deposit boxes
* Collect your mail
* Cancel credit cards and subscriptions
* Notify the SSA and other benefit plan administrators of your death
* Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
* Get bank accounts covered by the Will released
* Place notices in newspapers so creditors can make claims
* Hire a probate attorney

Either the executor or the probate attorney must:

* File court papers to start the probate process and obtain legal authority to act as your executor
* Manage your assets during the probate process, which usually takes six months to a year
* Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
* Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed

Of course, the open probate process is something you will absolutely want to minimize and even avoid. A sound plan does this.

But this right here (the choice of executor), is where it starts. In the future, I’ll have more to say on the subject of an executor and why that choice is so important.

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

Part of my early-Monday news scan this week brought me this story: http://cbsn.ws/1Q0chAV. One of the “highlights”: almost half of all US households could not come up with $400 to cover an emergency expense. They would need to sell something or borrow cash to do so.

If you find yourself belonging to that category, I’m going to help you today, I think. And if you don’t, I urge you to continue to live your financial life in such a way that you remain there. I have some ideas (11 of them, in fact) for you.

In my experience, if you want to get out of a hole, you study the behavior of those who have already made it out. And you do everything you can to copy that behavior.

Yes, some people have been fortunate enough to inherit wealth, etc. But many, MANY more of those who have wealth came about it in a different way.

+++
Before I get there, a big tax reminder: 2nd quarter estimated taxes are due on June 15th. Make sure to mail your Federal estimate with voucher #2 (1040-ES) and your check payable to the United States Treasury. Include your social security number and the words “2015 Form 1040-ES” on your check. Mail by June 15, 2015.

If you have state estimated taxes due, the procedure is very similar, except you are perhaps-obviously not paying the “US Treasury”, but rather the Department of Revenue for your state of income.
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Now, so that YOU do not find yourself in the unfortunate place of not being able to scrape up $400 in an emergency … read this now,

Dennis Bridges Discusses 11 Traits of the Financially Secure
“You cannot control what happens to you, but you can control your attitude toward what happens to you, and in that, you will be mastering change rather than allowing it to master you.” – Brian Tracy

Becoming a household that will be able to ride through instability and uncertainty is only going to become MORE important in future years, not less.

So, that being the case, here is a portrait of those who are able to achieve this status.

You’ll notice that these are just as significantly about your mindset as you relate to your finances, as about your behaviors.

Here’s what the Financially Secure look like …

1) He always spends less than he earns. In fact, his mantra is that over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2) She knows that patience is truth. The odds are you won’t become a millionaire overnight. If you’re like her, your security will be accumulated gradually by diligently saving your money over multiple decades.

3) He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

4) She realized early on that money does not buy happiness. If you’re looking for financial joy, you need to focus on attaining financial freedom.

5) He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

6) She’s a big believer in paying yourself first. It’s an essential tenet of personal finance and a great way to build your savings and instill financial discipline.

7) She also knows that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply “declare” to the universe that you want to be financially free. This is not a “Secret”.

8) When it came time to set his savings goals, he wasn’t afraid to think big. Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

9) He realizes that stuff happens, and that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner, and can be triggered from multiple sources: the death of the family’s key breadwinner, divorce, or disability that leads to a loss of work.

10) She understands that time is an ally of the young. She was fortunate (and smart) enough to begin saving in her twenties, so she could take maximum advantage of the power of compounding interest on her nest egg.

11) He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four. Little about external “signals” of wealth actually matter to him.

And a little bonus, if you will: She doesn’t pay taxes which could have been avoided with a simple phone call to her tax professional. She plans ahead, before tax time.

Give us a call today: (770) 984-8008

I am, warmly, yours,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

Memorial Day weekend often feels a little … jarring, at times.

Burgers, pools, picnics — set against the solemn backdrop of remembrance for the sacrifice of so many thousands who have laid down their lives so we can have those freedoms.

However, when you talk to veterans (as I get the chance to do in the course of our tax preparation work), they do often tell you that these very freedoms (the ones much bigger than backyard barbecues, of course) are exactly why those sacrifices are worthwhile.

So in a sense, parades and picnics are exactly the right sort of thing to honor those men and women who made the ultimate sacrifice.

But let’s do remember that Memorial Day is much more than simply the “start of summer”.

Moving forward … it’s probably accurate to say that with the official start of summer, we are moving into the wedding season.

So I thought I’d give some short advice for the happy couple, whether before they are married or for those with a few years under their belt.

Before You Say “I Do”: Dennis Bridges’ Marriage and Money Checklist
“The only way around is through.” – Robert Frost

Many young couples start out married life without a clear idea of how to handle their finances — leading to stress, arguments, and long-term marital problems.

And correspondingly, there are some couples for whom finances have become a painful wedge. So, though I don’t fashion myself to be a “marriage expert”, I have seen many financial partnerships work well … and more than I’d like, of those that didn’t.

Here are some ideas for you, a marriage and money checklist of sorts.

1. Confront issues directly.
Whether you are in a pre-marriage stage, or are already working through your partnership, it’s crucially important to learn the skill of conversation about finances. There can be so much mental anguish over shame, fear and past pain that unhealthy communication patterns begin to emerge.

So give yourselves the gift of honesty, and make a list of hard topics that you can tackle over time.

As an example, many couples are afraid to talk about the three D’s: debt, death, and disability. Take time to discuss these fears instead of avoiding them. Planning will help you both feel better.

2. Explore your attitudes.
How we were raised has an enormous effect on how we deal with money. Depending on what your home was like as a child, you likely heard many different attitudes expressed around the dinner table, and they have undoubtedly shaped your understanding as an adult. Whether from poverty, or from abundance, your background is extremely powerful.

So, if you and your spouse’s money attitudes differ, talk about how you were raised and work towards a compromise where you can strengthen each other’s weaknesses.

3. As an exercise, trade financial tasks.
If one of you usually pays all the bills, switch for a couple of months. You or your partner may get a crash course on how much running the household actually costs. Keep track of all spending for at least one billing cycle (usually one month) to actually see where your money is going, and decide which expenditures can be decreased or eliminated. You might even find opportunities to give.

4. Keep some (small) finances separate.
A joint checking account is useful, but maintain some kind of separate amount of money as a “slush fund” or sorts, whereby you can each make purchases without mutual consent. Keep these amounts small (you always want partnership in the big amounts), but a sense of independence (however symbolic) will help both of you feel you have equal footing in the relationship, even if you have a big difference in salaries.

5. Collaborate on some kind of financial planning.
Find a way to work together on a small, money-related project, whether playing the stock market or saving towards some small goal. Pick something that doesn’t carry emotional weight, and see it as an exercise. You’ll find that working together in a small way will help you in a BIG way, as your decisions become more significant.

6. Agree together that you won’t pay excess taxes.
Obviously, this is what we are here for, and perhaps one of the best gifts you can give yourselves is a workable plan as it relates to a tax strategy.

I am, warmly, yours,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA