Why Estate Planning Matters at Every Stage of Life

When you hear the word estate, what comes to mind? For many people, it’s a million-dollar home, fancy cars, lots of money, land, or any expensive items that they own. The truth is, you don’t have to be wealthy to have an estate. In fact, almost everyone has one, whether they realize it or not. 

What’s an estate? 

Your estate is simply everything you leave behind when you die. It includes things like your home, any land that you own, retirement accounts, cars, bank accounts, life insurance policies, and any personal belongings. While we spend our lifetime building a legacy, it is important to think about what happens to everything included in your estate. That’s where estate planning comes in. It’s more than deciding who gets what when you’re no longer here: it’s about making your wishes known, providing for your loved ones, reducing costs and taxes, and having a plan in place when you can’t make the important decisions (Clifford, 2022). 

What happens if you don’t have a plan in place?  

Well, I’m glad you asked. Without a plan (a will or a trust) in place, state law decides who inherits your assets, and nobody wants that! This is why documents like a will, trust, durable power of attorney, and health care directive exist. They ensure your wishes are followed and provide clear direction for your loved ones when they need it most. However, getting the documents is only half the battle. 

What are beneficiaries? 

You must also make sure your beneficiaries are explicitly named inside your will, trust, and accounts. A beneficiary is simply the person or organization chosen to receive your assets.  

One of the misconceptions we frequently see is the belief that a will controls everything you own. The fact of the matter is not everything goes through your will, even if you have one. It’s important to know what assets your will covers and what assets bypass your will entirely. Assets such as IRAs and other retirement accounts, Transfer on Death (TOD) accounts, life insurance policies, and annuities (anything with a designated beneficiary) do not go through your will. In fact, your beneficiary designations on these accounts override your will every single time.  

For property controlled strictly by a will, beneficiaries usually receive their inheritance after the probate process ends. For a trust, they can get their assets much faster because a trust bypasses probate completely. You can also name primary or contingent beneficiaries to set the order of who gets what if someone passes away before you. (Link to previous blog post "Beneficiaries: A Blueprint" to learn more.) 

Naming beneficiaries on bank accounts, investment accounts, certain homes or vehicles depending on your state, and the accounts mentioned above is a great way to avoid probate1 and cut out the middleman. 

While probate can be a lengthy and expensive process, it does have one advantage: it can help protect your estate from creditors after you die. Because of this, probate is not entirely bad, just time consuming. 

Which is better, a trust or a will? 

Many people wonder whether they need a will or a trust. It really comes down to how complex your situation is. If you do not have many assets or dependents, a simple will can meet your estate planning needs while being less expensive than a trust. Otherwise, a trust may be worth looking into depending on your needs. 

There are several advantages to a trust due to its flexibility. If you ever become temporarily or permanently incapacitated, you can name a trustee to step in and manage your finances to handle whatever you cannot. They are also super helpful if you have more complicated assets, like owning property in different states. Plus, if you have young children, grandchildren, or anyone else who might not be ready to handle a large inheritance all at once, a trust lets you set clear rules. You can easily structure distributions, so they receive funds in gradual portions over the years rather than getting everything at once. 

While it is important to have a plan, estate planning is not a set-it-and-forget-it task. As your life changes, your plan needs to change right along with it. Major life events like marriage, divorce, growing your family, or losing a loved one are all great reasons to revisit your documents. As a good rule of thumb, we recommend reviewing everything every three years. 

What’s our “perspective”? 

No matter where you are in life, it is never too late or too early to meet with an estate attorney to create or review your plan. Taking this step protects what matters most and gives you and your loved one’s true peace of mind. Building a legacy takes time, but protecting it takes planning. 

References: 

Clifford, D. (2022). Plan your estate. Nolo. 

For additional resources on creating a simple will and the role of the executor, check out these links below:

• Trust and Will: trustandwill.com
• Legal Zoom: https://www.legalzoom.com
• Estate Exec: https://www.estateexec.com/Docs/Guide
• American Bar Association: https://www.americanbar.org/groups/real_property_trust_estate/resources/estate-planning/guidelines-individual-executors-trustees/

ETFs 101: Investing Made Easy

If you are new to investing and don’t know where to start, check out ETFs! 

What is an ETF? 

An ETF is an exchange traded fund that like a mutual fund holds a collection of assets such as stocks, bonds, or other securities. While both ETFs and mutual funds provide diversified exposure through pooled investments, ETFs offer several advantages that have made them increasingly popular among investors.

Source: https://www.westernsouthern.com/investments/types-of-etfs

What are the advantages of investing in ETFs? 

1. Instant Diversification 

ETFs can be designed to track: 

· Broad market indexes like the S&P 500, NASDAQ Composite, Dow Jones Industrial Average, or Russell 2000 

· Fixed Income, including U.S. Treasury, corporate, municipal, and international bonds 

· Specific industries such as technology, healthcare, energy, or financial services 

· Commodities like gold, oil, and timber 

· Investment styles for high growth or value stocks 

· Different company sizes, including small-cap, mid-cap, and large-cap stocks 

Because this collection or portfolio of securities can include a wide range of investments, one of the biggest advantages of ETFs is diversification. Imagine investing all of your money in a single company. If that company’s stock price declines, your investment could suffer significantly. An ETF spreads your investment across many companies or assets, helping reduce the impact of any one security performing poorly. With a single purchase, you can own a small piece of a broad section of the market instead of relying on the success of one company. 

2. Low-Cost Investment 

ETFs generally have lower expense ratios than many mutual funds. The expense ratio represents the annual cost of managing the fund. For example, SPYM has an expense ratio of approximately 0.02%, and QQQM has an expense ratio of approximately 0.15%. While these percentages seem small, investment costs can add up over time. Lower fees mean more of your money stays invested, which could mean more portfolio gains in the long run. 

3. Flexibility 

ETFs trade differently than mutual funds. Because they are actively traded on exchanges, many ETFs offer ample liquidity, making transactions straightforward and efficient for most investors. Buying and selling ETFs is often as simple as trading a stock through a brokerage account. Mutual funds, on the other hand, are priced only once at the end of each trading day. Regardless of when an order is placed, all investors receive the same end-of-day price. This flexibility from trading ETFs gives investors greater control over when they enter or exit positions. 

4. Passive Investment 

Instead of purchasing individual securities one at a time, an investor can buy a single ETF and gain exposure to dozens or hundreds of underlying holdings. Some ETFs achieve this exposure by tracking broad market indexes. Rather than trying to beat the market by picking the "perfect" combination of stocks, some passive ETFs aim to capture the entire market. This approach involves less trading of the underlying securities, lower fees, and more diversification than actively managed ETFs and mutual funds. Automating deposits to buy and hold passive ETFs can help investors build a strong portfolio with low costs and little to no effort. 

5. Tax Efficiency 

ETFs are often considered more tax-efficient than traditional mutual funds. Unlike mutual funds, you have more control on declaring capital gains. Unexpected capital gains may increase income for investors and cause them to pay additional taxes even if they never sold any shares of the mutual fund. While tax implications vary by individual circumstances, many investors appreciate the potential to reduce unexpected taxable income that ETFs offer. 

What should you consider when buying ETFs? 

Although ETFs provide convenient diversification, it is important to figure out what you want in your portfolio before purchasing one. Two ETFs may have similar names but very different investment objectives and risk levels. Some may focus on large, established companies, while others concentrate on emerging industries, small businesses, or international markets. Before investing, take time to review the fund's objective, top holdings, industries/sectors represented, expense ratio, and overall risk level. Morningstar.com is a great resource to use when researching ETFs. Once you’ve narrowed down the securities 

that align with your financial goals, risk tolerance, and investment timeline, look for the low-cost ETF alternative. 

Investing doesn't have to be complicated. For many people, ETFs offer a simple, affordable, and effective way to start building wealth while maintaining diversification. Successful investing is less about finding the perfect stock and more about consistently investing in a diversified portfolio over time. 

Sources:

https://www.ici.org/faqs/faqs_etfs

https://www.fidelity.com/learning-center/smart-money/what-are-etfs

https://investor.vanguard.com/investor-resources-education/taxes/tax-saving-investments

Trump Accounts – What Are They?

Starting July 5^th, 2026, any American child born between 2025 and 2028 qualifies for a free $1,000 from the US government to kick start their financial future. This is the base of the new Trump accounts. What you may not know is that ANY child under the age of 18 can also open a Trump account with funds contributed by parents, grandparents and others. The free money for those new children makes this a no-brainer for parents, but the question is whether they should they be used for older children. And should parents continue to fund the Trump accounts annually? Are there better alternatives? 

At a high level, Trump Accounts were established by the One Big Beautiful Bill[1] as a way for children to begin building wealth. The best way to think about a Trump Account is as an Individual Retirement Accounts (IRA) that parents can open for their children to secure their financial future. They’re “baby bonds,” accounts that are funded early in a child’s life with the goal of compounding over decades, not years, to support financial security and help build generational wealth.

But is this what families want and need? Most savings for children are focused on education, and these accounts can be used for that purpose, but that is not the main goal. Although the accounts are intended to be easy to open (you can fill out IRS Form 4547 to create one), there are still significant unknowns. Currently, Trump Accounts appear to be limited in scope, with only one custodian and one brokerage involved. 

Like all tax-advantaged accounts, there are limits and provisions that must be followed. First, there is an annual limit of $5,000 that can be contributed[2].That can come from anyone. There’s also a provision that allows employers to contribute up to $2,500 of the $5,000 annual limit in a child’s Trump Account annually (so check those employer benefits). Contributions may also be given philanthropically, much like Michael and Susan Dell who are giving $250 for the first 25 million children under the age of 10 that do not qualify for the $1,000 from the federal government.

Investment options for Trump Accounts are limited. Funds must be invested in low-cost mutual funds or exchange-traded funds (ETFs) that are invested in primarily U.S. stock indices such as the S&P 500[3].  While this may keep things simple in investment selection, it might not give you the most diverse options that you may be looking for. 

From a tax perspective, the treatment is mixed. Contributions will generally be made with after-tax dollars, while contributions from your employer, a charity, or the government are made with pre-tax dollars. Withdrawals depend on what part of the account is being withdrawn. Withdrawing the after-tax amounts will be tax free, while any pre-tax amounts will be taxed at the child’s income tax rate. Much like the growth of a Traditional IRA, the growth is tax-deferred, being taxed as income when withdrawn.

Looking ahead, these accounts are clearly designed with retirement in mind. Once the child turns 18, they can fully access their Trump Account. At that time, it will be considered like a Traditional IRA. Meaning that there’s a withdrawal penalty of 10% if taken out before the age of 59 ½ and would be taxed as ordinary income rates. While your child’s retirement allows for many years of compounding, it limits the flexibility and practicality for more immediate financial goals. 

As with a Traditional IRA, there are exceptions to the 10% withdrawal penalty such as with purchasing a first home ($10,000 limit), educational expenses (tuition and fees, not room and board), or the birth of a child ($5,000 limit per child), but the withdrawal amount will still be taxed as income.

As a result, the real-world use case for Trump Accounts is likely smaller than it initially seems. For many families, priorities such as emergency savings, retirement planning for parents, and education funding will be the priority. In that context, placing funds to a long-term, relatively inflexible account would likely not be the most efficient choice. While educational expenses can be used from the Trump Accounts once they change to a Traditional IRA at 18 years old, the 529 plan is more tax friendly with tax-free earnings for qualified educational expenses and the ability to be used for room and board.

For those new babies in the family, you certainly want to take advantage of the initial $1,000 government contribution, but they are probably not the best option for older children or for continuing contributions. In fact, if the overall goal is to cover educational expenses, we prefer the state-sponsored 529 plans.  

Ultimately, Trump Accounts are an interesting addition to the financial field, but as they currently stand, are unlikely to be the first solution for most families. They work best as a supplemental tool, especially when taking advantage of initial funding opportunities, rather than a replacement for more established and flexible strategies.

Savings Plan for Children

Attribute	Trump Accounts	529 Plan	UGMA/UTMA
Tax Treatment	Tax-Deferred Growth	Tax-Free Growth; Tax-Free Withdrawals for Qualified Education Costs	Taxable
Non-Qualified Withdrawal	Taxed at Ordinary Income Rate and 10% Early Withdrawal Penalty	Taxed at Ordinary Income Rate and 10% Early Withdrawal Penalty	Capital gains tax
Investment Options	Low-cost US Equity Index Funds/ETFs	Plan selected mutual funds and index funds	Any investment
Qualified Uses	Retirement; Exceptions for higher education, first home	Higher Education, K-12 Tuition	No restrictions
Account Owner	Owned by Child	Owned by Account Owner	Child takes full control at age 18-21
Best Used For	Long-term retirement wealth building with possible Roth conversion	Tax-Free growth for college and education costs	Maximum Flexibility

 

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[1] https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

[2] https://trumpaccounts.gov/

[3] https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions

How are those predictions going for you?

Every year the CFA Society of Mississippi hosts economic and investment experts from around the country to prognosticate about the future at the Forecast Dinner. While nobody (not even these experts!) has a crystal ball, the exercise can be amusing, intellectually stimulating and sometimes yields surprising insights!

This year carried a positive message of resilience in the American economy and global stock markets but there was one large blind spot.

What did they miss? The Forecast Dinner took place mere days before the US launched attacks on Iran - nobody specifically predicted this. There was, however, a salient observation when Bob Carney noted that "we are not as vulnerable to energy shocks in the Middle East." Net imports of oil have been declining in the US since around 2005 and in 2020 we became a net exporter of oil. That being said, oil is a global commodity and the price here is impacted by events around the world.

While we are unlikely to run out of oil, we will still bear higher prices as the war drags on. Before the Forecast Dinner, oil was comfortably in the $60 range. Last week it spiked as high as $120. This means higher gas prices which mean higher prices for every product that needs to be delivered to store shelves or your door. On a recent road trip, I watched gas prices climb from around $2.50 to $3.50 as I drove the family to North Carolina.

Energy prices were in the spotlight even before the war as new data centers come online, using massive amounts of electricity. This surge in investment is balanced by the potential for increased electricity costs.

Is there a bright side to any of this? The overall message was positive. Specifically on the energy front, panelists noted that there was growing interest in alternatives like nuclear energy. This sort of investment takes a long time to turn into electricity generation. 

Besides the impact to our energy use, data centers have been the primary destination for investment in our economy. In 2025, it was estimated that $425 Billion would be invested in new data centers and up to $7 Trillion would be invested over the next 5 years! At the forecast dinner this was likened to the space race. These are real dollars being invested mostly by large companies with the cash flow to do this. While there is a speculative aspect of some of this investment, the dollars flowing are real.

Why is that investment important? Jack Manley noted that there were two basic levers we could pull to grow the economy: more people or better tools. AI investment promises better tools coming which is important as our population growth slows. Infrastructure investments such as those in the electric grid are also improving our economic tools.

What else drives the economy? Consumer spending makes the bulk of our economy. Tax refunds are up 10.6% this year thanks to some new deductions from the last tax bill. Most of that money is will end up spent soon in the hands of those lucky taxpayers. One risk is lower stock prices. Higher income earners account for 40% of spending, their spending comes from brokerage accounts so lower stock prices mean less consumer spending.

But what about the market? Over the past several years, the story was that the market was driven my the "Magnificent Seven" large technology stocks. While market concentration is a concern at any time, these companies were generating real profits and significant cash flows. There was substance under their dominance. Last year, that script flipped. In the US, smaller stocks performed well and have continued to lead this year. International stocks came out on top last year as lower valuations, positive growth and currency effects lead to higher market prices.

What is happening in the market now is the opposite of the concentration risk that dominated the story for the last few years. "Market rotation" refers to the positive sign of different groups of stocks in a diversified portfolio taking the lead as different sectors grow. While it is easy to look back over 15 years and see the dominance of large US stocks, the value of a diversified portfolio is keeping an investor from the worst years of any single asset.

What does this all mean for my portfolio? There was a question about gold. While it has performed well, they cautioned about thinking of gold as something that will make you rich - rather something that helps you stay ahead of inflation. We have used gold in portfolios very specifically to target uncertainty and volatility in the markets which aligned very well with the advice: “Do not lose sight of the role that Gold plays in your portfolio.”

If you missed the dinner, or just want see how the predictions have stood up these past few weeks, click here to watch the CFA Society of Mississippi's 22nd Annual Forecast Dinner.