Investments

So Uncle Harry's estate has finally been settled and you have been blessed with both his extensive wardrobe and a tidy sum of his investment portfolio. Harry was not only the sharpest dresser in the family, but the financial guru as well.

Bank Of America Investment Now, if you can just nurse your new holdings along, you may someday be able to retire in the standard to which you would like to become accustomed.

As much as £1 billion may be subject to inheritance tax over the course of 2007, in an entirely avoidable way. By failing to write life insurance policies in trust, the investment company Skandia argue, individuals could be losing out on millions in tax bills. Skandia pointed to previous data indicating millions of pounds of tax on life insurance policies not held in trust. If these insurance policies had been written in trust, Skandia say, the inheritance tax bill could be entirely avoidable.

Investment Opportunity First, however, there is the little matter of Harry's clothes taking up most of the spare bedroom. They need some immediate attention. Your guests coming up for the weekend will hardly have room to maneuver.

The successful accountancy "There was a perception that inheritance tax was for the rich. Now the realisation is that it can affect many more of us." With property prices soaring, many homeowners are finding themselves exceeding the inheritance tax threshold when all of the savings, investments, property and personal possessions are taken into account .

Banc Of America Investment But, now that you take a closer look, nothing seems to fit; the styles are way outdated and they are all men's clothes, not very appropriate for Harry's niece. Sorry, Harry! Your clothes are off to the Salvation Army Store.

(eB 500) Harry Potter and the Philosopher' (Adult Edition) Harry Potter and the Philosopher' (Adult Edition) Harry Potter is an ordinary boy who lives in a cupboard under the stairs at his Aunt Petunia and Uncle Vernon's house, which he thinks is normal for someone like him whose parents have been killed in a 'car crash'. R137.95

Banking Investment That was simple. Just don't stop now. Apply some of that same logic to the stocks, bonds, and other investments sitting in your new brokerage account.

Harry Potter has never played a sport while flying on a broomstick. He's never worn a cloak of invisibility, befriended a giant, or helped hatch a dragon. All Harry knows is a miserable life with the Dursleys, his horrible aunt and uncle, and their abominable son, Dudley. Harry's room is a tiny closet at the foot of the stairs, and he hasn't had a birthday party in eleven years.

Investment Solution Strategic Inheriting money is often a time of highly mixed emotions. Grief, pleasure and, sometimes, guilt combine for an experience that isn't easy to transition through. Decisions need to be made as to what to do with the new funds and, as is often the case, the beneficiary hasn't been prepared for the bequest. Simply keeping the inheritance intact and doing nothing else is often viewed as the best solution.

Inheritance tax can be a real sting. Having worked hard all of your life the taxman seems dead set on taking aware a substantial share of your wealth. However, as inheritance tax affects more of us, ways around footing quite such a large bill are becoming more common knowledge. Life insurance has a major role to play in reducing your inheritance tax liability. "There was a perception that inheritance tax was for the rich. Now the realisation is that it can affect many more of us." With property prices soaring, many homeowners are finding themselves exceeding the inheritance tax threshold when all of the savings, investments, property and personal possessions are taken into account .

Investment Banking Services Unfortunately, this can be a real mistake.

Bank Investment Like dealing with Uncle Harry's clothes, you need to sit down and go through the inventory of assets to determine what is a good fit for you and what should be consigned to the trash bin.

Alternative Investment As a guide, here is a number of things to keep in mind:

Online Investment Services (1) What are your Objectives?

Accompany Essential Investment Harry may have lived off his dividends for the last twenty years but, if you need growth instead of income, you need to look at the portfolio from your perspective. Harry may have owned the greatest bonds since Barry Bonds but, if they don't fit your objectives, how valuable are they?

Investment Company (2) What is your Risk Tolerance?

Investment Management Solution If Harry never met a "penny" stock he didn't like and you think pennies belong in loafers, you should probably reconsider the risk tolerance of the portfolio.

Investment Management Services (3) Was Harry doing any tax planning prior to his death?

Guide Investment Stock Check with the executor of Harry's estate to determine the "stepped up" tax basis of the securities you've inherited. If you do sell some of the investments, you should know what your potential capital gains might be. You'd be surprised at the number of securities that are retained in a portfolio simply because the owner doesn't want to incur a capital gains tax. When a security passes by inheritance, it acquires a new tax basis determined by the date of death value (yeah, I know there could be a six-month alternate valuation date, but I'm trying to keep it simple here), and that new tax basis is often just the excuse needed to weed out a security that hasn't performed well in years.

Investment Manual Solution 4). Is the portfolio looking a little "frayed" around the edges?

Investment Stock A security held for the past 25 years may have as much relevance in today's economy as a polyester leisure suit has in today's world of fashion. Pet Rocks, Inc. may have been Harry's comeback kid but, let's face it, it's probably seen its better days. Drop it like a bag of well . . . rocks.

Essential Investment Solution So, if you're one of the 100 million individuals who will inherit money this year, congratulations! Treat it wisely and it will return the favor many times over.

Citicorp Investment Services Glenn ("Chip") Dahlke, a senior contributor to the Living Trust Network, has 28 years in the investment business.

Fool Guide Investment Motley He is a Registered Representative of Linsco/Private Ledger and a principal with Dahlke Financial Group. He is licensed to transact securities with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY.

Fidelity Investment Services If you have any questions or comments, Chip would love to hear from you. You may contact him at dahlkefinancial@sbcglobal.net. You may also contact him at the Living Trust Network. Its web site is http://www.livingtrustnetwork.com

Investment Management Copyright 2006. Living Trust Network, LLC. All Rights Reserved

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