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Answering a knock at the door, Doug found the sheriff with a summons. Doug, who serves as co-trustee with his mother for a family trust created at his father’s death, was being summoned for failing to file a required trustee’s report with the county commissioner.  His mother’s long-time CPA was responsible for managing the investments and preparing and filing all the tax returns and commissioner’s reports for the trust, so Doug had no idea there was a problem.  All he ever did was sign the forms that the CPA told him to sign.

Doug is a busy salesman who travels frequently.  He called us in desperation after his friend, who is a client of Focus, referred him to us.

Doug, as trustee, was being personally fined for failing to file an accounting report of the trust’s activity for the prior year. We contacted his mother’s CPA, who apologized for forgetting to file it and quickly prepared the report.  In the meantime, the commissioner found errors in the report filed two years ago and rejected it.  The CPA re-filed that report.  The commissioner then rejected the most recent report, which CPA revised and re-filed.

Doug was almost frantic by this point, but after reviewing all the records for the trust, we were able to explain that the CPA, in addition to failing to file the reports, had also been selling investments to the trust.  When he changed employers the prior year, he sold and replaced almost all of the investments in the account, which generated a huge capital gain for the trust (as well as substantial commissions for himself). To avoid having the trust pay the taxes on this gain at the higher trust tax rate, he directed Doug, as trustee, to distribute the sale proceeds to his mother so that the gain would be taxed on her personal return.

This very large cash distribution, along with several accounting errors and the unfiled report, was the gist of the commissioner’s concern.  And, when Doug’s siblings learned of the excessive and inappropriate distribution to the mother, they criticized his performance as a trustee.

As Doug became fully aware of his personal liability as trustee, he became more and more anxious and frustrated.  “I feel like I am trying to chase a runaway train here”, he complained. “Please help me put the brakes on!”

We laid out the various issues and problems to Doug, along with our plan to correct them.  It took several months.  At our recommendation, Doug engaged an experienced trust attorney to correct the previous commissioner’s reports and amend prior tax returns. Doug then transferred the trust assets away from the CPA/salesman and into our disciplined investment management program. Now the commissioner is happy, his siblings are happy and Doug is relieved not to have to worry about seeing the sheriff again.

“I am ready to fire the guy who has been managing my investments,” said the busy entrepreneur, “and I’m that guy!” Don, a young executive, has already been involved in two start-up companies and is currently working for the third. Like most successful business owners, he is energetic, intelligent and insanely busy. Don understands investing, probably better than most, but he claims this leads to his undoing. “I get enamored with a certain strategy or a few companies that I know well and over time, I expose a huge portion of my portfolio to it”.

Then he gets busy with something else and ignores his accounts for several months. He has paid the price more than once for being hyperactive, then neglectful. Don has been a student of business and executive performance for several years and has decided that he needs to hire professionals for investment management, just as he has hired technology, human resource, accounting and legal professionals for his businesses. He saw our firm listed as one of the top wealth managers in Wealth Manager Magazine and was interested in our passive investment philosophy (read more about our investment philosophy here).

Don also admitted that he was still holding a large block of restricted stock from a prior venture that had lost money. “I should have sold it years ago, but I just never had time to go through all the steps required.” Restricted stock shares have a complicated process involving the corporate legal department and the percentage of ownership. In addition, the company had relatively few shares that traded daily, so we created a plan to sell the shares gradually to avoid a negative impact on the share price. Using our access to institutional trading services, we were able to do this without increasing the trading costs.

Don’s wife really appreciated our financial planning process which allowed her to see, for the first time, that their goals for their retirement and their children’s education can be met. We were able to help them choose the most appropriate refinancing option for their home, set a savings goal for their children’s education, and coordinate their contributions among their multiple retirement plan options.

Don is relieved to have someone he can trust to take the responsibility for managing his family’s wealth. “Before partnering with Focus, my own family’s finances were a nagging worry. I know now that we are in good hands and I can concentrate on building my business and enjoying my kids while they are still young.”

“My husband just died. We were married for 60 years, and he did everything for me. I just don’t know what to do.” When Cecile came to our office, she was sad and overwhelmed. Her husband, John, died without explaining any of the family finances to her. She brought in a pile of bank statements, investment reports, paid bills, tax returns – anything she could find that had to do with numbers. It was no wonder that she was confused. John, as he aged, had set up savings accounts and small IRAs in multiple banks, and he didn’t keep very good records. He was like the squirrel who buries nuts in the back yard, and accounts continued to sprout up for several years after he died.

We organized Cecile’s papers and sat down with her to call the banks and other institutions where they had accounts. Cecile gave her permission over the phone and then we did the talking. It took piles of forms and letters to close those accounts and consolidate all the funds into a new account in just her name and a retirement account for her. Cecile could now see how much money she really had, and began to feel more secure after we developed a cash flow plan showing her how much she could spend each month. We set up a twice-a-month deposit to her checking account and designed a conservative investment portfolio for her.

We also took her to meet with an estate planning attorney to update her will. Cecile liked the recommendation to create a revocable living trust so that, in the event that her health prevented her from managing her affairs, one of her children could easily step in and help out. We handled all the account transfers for her and she was good to go.

Cecile is doing pretty well now. She still receives an occasional statement from an unrecognized source (one of the nuts sprouting), and some extra small life insurance policies have turned up. And then there was the day that she stopped by to tell us her car had died, and she was terrified of trying to buy a new one. No problem. We discussed what she wanted, did some research on the internet, and sent Helen out with her to negotiate the deal. Cecile breathed a sigh of relief when she drove her new car home and thanked us for helping her. We smiled and said “That’s what we’re here for.”

In 2007, Gabe and Martha West were both age 61 and excited at the prospect of retiring in 2010. After reading Sandi’s article, The Decision Decade, they wanted to seriously prepare for their dream life after work. Gabe and Martha wanted a retirement readiness plan that they could follow as a roadmap for the next three years and into retirement.

The Wests are fortunate to have two guaranteed sources of retirement income – Gabe’s pension that is indexed for inflation from his career as a military officer and Martha’s social security. They also both contributed the maximum amount to their current employers’ 401(k) plans and over the years, they had built an investment portfolio worth over $250,000.

Their plan was to sell their house in 2010, pay off their mortgage, retire and move to a smaller, less expensive house with little or no mortgage. They were confident that Gabe’s pension and Martha’s social security would cover their basic needs. As a cushion, they had their investments and their 401(k)s for other discretionary expenses.

When 2010 arrived, Gabe and Martha were very nervous about walking away from their paychecks. Fortunately, at age 64, they were both healthy and enjoying work. The retirement they envisioned three years ago felt like it was slipping away due to the economic downturn. Their investments, retirement plans and the house were worth less than in 2007. They also realized that they probably wouldn’t be able to sell the house in the current market. In their original scenario, they could afford to pay for health insurance until Medicare kicked in. Now, that expense seemed daunting.

The Wests wanted to update their 2007 plan in the spring of 2010 to see what their choices were. We determined that if they waited just three years they could still have the retirement they had planned for. Waiting afforded them the advantages of adding to their savings and 401(k)s for 3 more years and staying on their employers’ health insurance plans. By waiting until age 67 to take her social security, Martha will receive an 8% increase in her check. They believe it is likely the real estate market will recover enough by 2013 to allow them to sell their house and downsize. Martha and Gabe feel it is definitely worth waiting three more years to have the retirement they want.

Linda was 55 when Bob suddenly announced that he was leaving her. After 25 years of marriage, she hadn't seen it coming and was in a state of shock and disbelief for many months. They had worked side by side to build a successful business but, knowing that she couldn't manage it on her own, Linda let Bob buy her out.

When we first met Linda she was renting an apartment. The house had been sold and the money split according to the divorce settlement. She was devastated and said that she felt like a bird without a nest. Although she had finally been able to find a new job she was sad, lonely and facing what she believed to be a bleak future.

The cash from the sale of the home and the buyout seemed like an enormous sum because she had never had so much money all at once. She began to dream of having a cottage in the country where her children and grandchildren would come to visit. It would be an idyllic place where the family would gather to create happy memories.

Linda's attorney referred her to us for financial planning. Linda asked for help in determining how much she could spend on a vacation home. Our multi-year cash flow projections helped Linda to realize that the cost of building or buying a country home would put a severe strain on her budget, her current lifestyle, and her long-term financial independence. Linda was disappointed with the results but agreed to hold off on buying a home.

Over the next few years, Linda kept revisiting the idea of building the perfect family retreat. She flipped back and forth between plans to spend all her money on a dream home and the fear of being destitute and becoming a "bag lady". As her only sounding board, we reminded her that the numbers just didn't work and we were able to discourage her from invading her savings or taking on a large debt. We suggested that she rent a house at the beach each year and have the clan gather for a carefree reunion. They tried it and they all loved it. No debt, no maintenance hassles, no hurricane insurance. Just a fun week that all enjoyed.

Fast forward seven years. Linda has decided to buy a condo that is well within her means and she can still afford the annual beach trip. Next year she is cutting back to part time work and will be spending more time travelling to visit her children and grandchildren. This time the numbers work. The condo isn't huge, but Linda's sense of freedom and security are priceless.

It had been less than two weeks since Molly had unexpectedly and tragically lost her husband in a skiing accident while they were on vacation. A stay at home mom with a young toddler, Molly was six months pregnant when she met with us. "My husband only had one small life insurance policy, but thankfully we have some savings". As she said this she glanced down at her son, then turned back to us and asked "How long will this last?"

Molly had quite a few moving pieces in her life, which included two homes with mortgages, a baby on the way, no income and a family that lived outside the area. She wanted to move into the vacation home that was closer to her parents and she planned to sell her primary home. Together we outlined her cash flow needs, savings and an expected sell date and price for her home. She was absolutely certain it would sell before the twelve month estimate we had agreed upon, but we reassured her that we were planning for a worst case scenario- better to be prepared for the worst than to hope for the best.

Over the next few months we worked very closely with Molly organizing and consolidating her accounts, setting up the monthly deposit from her investments to her checking account and managing her investments. Molly adhered to the spending limits in her plan, but she often expressed that she just didn't think the frugality was really necessary. We helped Molly select a team of advisors-an accountant, a realtor, and an attorney. Together we became Molly's sounding board.

As the months passed, Molly's baby boy arrived and the house had still not sold. She became anxious as the housing market and economy began to decline. We met more frequently to keep a close eye on her investments and her cash flow needs. Because we had already built in a lower than hoped for sales price and a longer than expected time on the market, she began to feel reassured and her anxieties started to subside.

One morning Molly dropped in the office to tell us about a part time job she had secured close to her parents home. She was absolutely delighted! Things were falling into place for her. She was now living in her former vacation home near her parents, both her children were doing very well, and there was also a contract on the other house at a price higher than our worst case scenario. She is so grateful for our patience, time and sound advice and now she can see her future unfolding before her.