Control the Controllables

life planningOur country has been devastated by the impact of the coronavirus in countless ways. It will be years before we fully understand the various ramifications of what COVID-19 has meant to us as a nation, world, and especially individually and within our families. While on the phone recently with wonderful clients in Mississippi, however, a thought occurred to me. Despite the pandemic, and perhaps even more so because of the pandemic, we need to “control the controllables.” We need to take back control over the many things that are within our reach – within our ability to influence a positive outcome. What do I mean by that? Read on – let’s explore that together in this month’s “Imagine That™”!

Do you Want Your Investments Protected From Volatility in The Stock Market?

As of February 25, 2021, the trailing 12 months rate-of-return on my Profit-Sharing Plan was 27.12% despite all the market turmoil! How did you do? To be fair, these figures are net of all fees except our advisory fee, which ranges from .25% to 1.25% per year. How is this possible when there were such significant losses in the first Quarter of 2020? Returns such as I detail above are not by accident, but from using a clever and low-cost strategy that uses certain Vanguard or Dimensional funds, but with a “guidance system” bolted on. It is not available from Vanguard, but through the platform we use. The guidance system provides protection of assets and peace of mind when the equity markets are in retreat, but an unlimited upside potential when things are going well – like now.

As a best practice, however, let me remind you that “Past performance may not be indicative of future results. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful, or that markets will recover or react as they have in the past.” 

Traditional investment strategies often fail. Newer strategies have come about, fortunately, which can create a more reliable, less stressful retirement, by:

  • Smoothing out portfolio fluctuations that occur because of market volatility
  • Protecting the value of your portfolio from large losses through a “trailing stop-loss”
  • Investing across all 11 sectors of the U.S. economy versus traditional models which usually do not

If you are not an investment client yet and want to learn more about protecting your investments from market volatility, please contact me to discuss your options. (Read further about this idea “Volatility: The New Normal. Why Traditional Investment Strategies No Longer Work Well.”)

Just Because You Have Insurance Doesn’t Always Mean It’s Sufficient

Having an insurance contract may not always be enough. I’ve seen clients this year who were under-insured or lacked the proper insurance for their business or various situations. Health classifications are not set in stone. We’ve had a few cases where existing insurance was issued with a less favorable health classification and no one had ever tried to make it better. By getting a better health classification, in several instances, we were able to lower the client’s cost while still having the same amount of coverage.

Long-term care insurance is often needed. I have met with many folks recently who were either missing long-term care insurance or had older-style coverage. The most current long-term care insurance has the most beneficial plan designs. We’ve helped clients who bought individual long-term disability insurance years ago be able to switch to long-term care insurance instead.

Clients owning investment property, apartments, or a building for their business often are not aware of money saving options. Reviewing their overall coverage often saves clients money on their current coverage. Many are surprised by how underinsured they are or find they are completely missing a form of insurance needed as a landlord or business owner.

Reviewing Estate Documents

Fundamental to good life planning is to have a “roadmap” for how our assets are to be transferred upon our death, or sometime even in a permanent disability/long-term care event. At Wealth Legacy Group®, Inc., we are frequently hired to assist clients in our propriety Critical Actions Roadmap™ process. In the course of that, we review all existing Wills, Trusts, Powers of Attorney documents, etc. It still surprises me how often these vitally important documents have become outdated – or are simply “missing in action.” If they do exist, they have often not been updated to reflect changes in law and/or a client’s personal situation. Frequently, clients only “situs” their trust (a fancy way of saying where their trust is located) in their state of residence without considering better options available in states such as Nevada, Alaska, Delaware and even South Dakota!

Again and again our discovery process shows how little thought has gone into deciding how much and in what fashion to leave assets to family and friends. Providing an outright distribution to heirs, for example, may sound appealing and logical, but it frequently does not provide the best outcomes. Having outright distributions – either in a lump sum (the worst possible way statistically) or even in “installments” – generally provides zero protection for beneficiaries against creditors, the IRS, and divorcing spouses on those assets that have been distributed. (If interested in reading about “Estate Distribution Options for Beneficiaries” please request a copy by emailing

Reviewing your Will can be extremely important. Recently we began working with a wonderful couple who had years before removed one of their children from their Wills because of her emotionally abusive and personally destructive behavior. When reviewing the terms of the Will with the clients, they realized their daughter was still excluded as a beneficiary even though her life circumstances had changed for the better. The clients are having their estate planning attorney draft a new Will to include their daughter as a full beneficiary. They are also destroying the existing Will as it would likely cause lasting emotional pain and suffering on their daughter.

Here is another idea – a recent update for consideration by successful families. I call it a Family Values Trust™. The original concept developed from conversations between two leading figures in their respective planning worlds – estate planning attorney, Marvin Blum, and family wealth strategist, Tom Rogerson. What can families do to pass along the virtues and values that helped create the family wealth to begin with – and not merely leave an inheritance with no guidance? The purpose of this Family Values Trust™ is not about passing along financial wealth. Instead, it is to help heirs and beneficiaries learn – develop – implement – grow – pass forward various “soft skills.” These might include: enhanced communication, clarity of purpose, the creation of family goals and a family mission statement, plus other skills that help beneficiaries in their family and work lives, as well as giving back to respective communities. (Read further about this idea “Avoiding Shirtsleeves to Shirtsleeves In Three Generations”)

More than 200 years ago, Benjamin Franklin said that, “In this world, nothing can be said to be certain, except death and taxes.” Ben’s wisdom is just as relevant today. While I understand the reluctance to address our own mortality, we all have an “expiration date” and someday will meet our Maker. COVID-19 is an important reminder that we responsibly can and should plan ahead so that our loved ones are properly cared for and our wishes honored.

Tax Planning to Keep More of Your Hard-Earned Income in Your Pockets

Despite the host of challenges which COVID-19 had brought us, many clients reported strong financial results last year, and some even expect to have their best financial year in 2021.

What are you doing to practically lower your taxes? It is possible to generate significant tax deductions for this year if everything is completed by December 31st or look ahead to next year and beyond.

In 2022, or even a few years down the road, are you or your business anticipating the sale of an appreciated asset? What are you doing to actively plan for how to deal with paying the capital gain taxes? Depending on your situation, there are five or six tools and techniques which can be used to eliminate or defer the paying of capital gains taxes. Please contact me to discuss which option may be best for you. (Read further about this idea “Six Strategies to Reduce Your Taxes in a BIG Way! After a Liquidity Event (If Same Tax Year) & at Year-End.”)

Asset Protection May Be Desired

A large percentage of our clients own investment property in their Living Trust or individual names. This provides no asset protection to them, except for the insurance in place. I’ve helped clients with the transfer of the property into a Limited Liability Company (LLC), so they are now protected from liability. Please contact me if interested in obtaining greater asset protection and we can review the differences between a California LLC, a Nevada LLC, and several other state’s LLCs. If your estate size is quite large, an IRS approved international jurisdiction may also be considered to shield your assets.

Conclusion Take Control of the Things Within Reach

While the coronavirus has upended life as we know it, there are many things we can focus on to take back control and regain some normalcy in our lives. By controlling the controllables, we can direct our energies into obtaining positive outcomes.

What are you doing or have done to take back control for you – your family – your business – of your life and thoughts during this time of global challenge? Let us know. We will share the best and most creative ideas in future newsletters! We are in this together and we will emerge stronger than ever for the challenge.

As well . . . do you need a review of any the above items in your own planning? We offer a 20-minute free consultation to discuss anything that is on your mind or a concern for you or someone you care about. Perhaps you would like to learn more about our Critical Actions Roadmap™ to see if it can help plan for your future. Taking back control of the controllables . . . “Imagine That™”!

Imagine That™! is a complimentary monthly newsletter provided by Wealth Legacy Group®, Inc. that addresses various topics of interest for high-net-worth and high-income business owners, professionals, executives and their families. 
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Written by R. J. Kelly – February 2021