Sleepaway camp, Markets & thinking about Inheritance - The Purpose Driven Investment (PDI) Group

Dear Clients,

A memory came up on my phone recently showing pictures over the year of my kids, Des & Liv.? It’s amazing how small they were and how much they have grown.?They are now 12 & 14…I can’t believe it?!! We recently dropped our kids off at sleepaway camp and having a couple of weeks of an empty nest has been great to reconnect without all of the day to day parental duties. I do miss them…sort of. But more importantly, it makes me appreciate my wife and kids that much more.?Our dog, Bochy, also misses them but appreciates the extra attention!

Markets on the Mind

Through my many years as a financial advisor, I've learned that while I love to study the economy and keep abreast of daily stock market news, most clients don't need or want that level of detail. Instead, here are the "big picture" things I'm thinking about this month. If you want to talk about how these or other factors impact your portfolio and your life goals, I'd be happy to discuss in more detail. Feel free to reply here or give me a call.

1. Earnings:? 2nd quarter earnings are in full swing.? With expectations elevated, the earnings and future guidance so far have been a mixed bag.??
2. Fed rate cut:? Markets are pricing in at least one cut before the end of the year of 0.25%.? The Fed will meet several times before the end of the year and it’s unclear when the cut in rates will occur.
3. Elections:? It has been a crazy couple of weeks in the U.S. presidential contest with an assassination attempt, the GOP convention where Donald Trump was certified as the candidate, the picking of his running mate, Ohio Senator, J.D. Vance, Joe Biden stepping down as the nominee and the Vice President, Kamala Harris, as the new presumptive nominee.? The Democrats convention starts August 19th and Election Day is November 5th.??

Inheritance?

This month's "Transitional Moments" section is about navigating an inheritance - financially and emotionally. If you find yourself closer to the bequeathing stage of life than the inheriting stage,?stay tuned for next month's email when I'll be covering the other side of this equation: the doubly difficult task of thinking about death AND money - two often fraught topics. We'll discuss preparing so that any assets you want to give away upon your passing are given in a way that follows your wishes, avoids taxes when possible, and best supports the people and organizations that are dear to you.

Transitional Moments

Oftentimes I meet or am referred to new clients during a transitional moment in their life. One of the most rewarding parts of my work is helping clients navigate these changes - not just the financial considerations, but also the complex emotions that transitions bring. And once the immediate logistics are sorted out, helping people to (re)define and fund their goals in light of the changes, and to live their purpose.?

Transitional moments happen to all of us - whether it's the death of a loved one, birth or adoption of children, getting married, going through a divorce, a financial windfall, or a major career change. Each of these changes can be incredibly emotional, entail several complex decisions, and require a mountain of seemingly tedious but critical decisions. Over the next several newsletters I'll go over some of those changes, and share key considerations and helpful FYIs based on what we've seen in helping clients.?

Transitional Moment: Inheritance

What a double edged sword inheritance can be - you come into money but you've likely lost a loved one - or several. In addition to the financial and pragmatic logistics, it's critical to acknowledge the emotional toll that comes with this financial windfall. Emotions that may come with an inheritance include relief from financial security an inheritance brings, grief, or shock. Depending on your relationship with the deceased, and with other family members, other complex and seemingly conflicting feelings may also arise.? In addition to the emotions an inheritance may bring, there are a number of critical financial and tax considerations you'll need to navigate. Below is a general list; if you are going through this, please call me and I will be there to listen, assist, and give guidance more specific to your situation.

• Find a therapist to help you process your grief or any other emotions that come up.
• The best steps vary based on the type of assets you inherit. Some common ones: Cash - If you can afford to wait, don't do anything with the first year. The grief and/or other emotions you're navigating, can make decision-making challenging. Put the funds in a short term holding account like a CD or a high interest savings account. Investments - When inheriting assets, the cost basis (AKA the cost to buy the assets) are stepped up to the value on the date of death.? For example, if an asset (say a stock or a home) was bought for $50,000 and is now worth $200,000, your cost basis would be changed to the current value of $200,000.? With this new cost basis, the taxes for the person inheriting the assets will be much lower when sold compared to the original owner of the asset.? Make sure the assets inherited have the cost basis “stepped up” to the date of death.? Consider talking to a professional tax advisor as well as your financial advisor to help you make decisions. Homes - If you do not plan to move into the inherited home, you'll likely want to sell quickly so you do not pay mortgage and (possibly stepped up) taxes on the property for longer than necessary. Talk to a professional financial advisor, tax advisor and? a real estate agent for guidance.
• Look at your own assets and debts Pay off high interest rate debt Choose which assets you'll keep and which you will sell, based on your own goals and life purpose.? I can work with you producing a goals based plan based on the new assets in your portfolio
• Consider if you would like to use any portion of the inheritance to honor the legacy of the person who has died. What this looks like varies so much from person to person. Some examples: going on a trip to somewhere that was meaningful to you both, donating in their honor, "adopting" a park bench or similar spot in their name where you can go to remember them, getting flowers delivered to yourself once per month,? starting a scholarship in their name, and/or giving money "from" the deceased to your children or other family members.

I am here to help in any regard…from dealing with an empty nest to helping through grief to brainstorming on goals and purpose.

All my best,

Chris

Christian?Ach???|?Executive Director??|?The Purpose Driven Investment (PDI) Group??|? J.P.?Morgan?Wealth?Management???|?560?Mission?St,?Floor?24??|?San?Francisco,?CA?94105??|?T:?415-772-3221??|?C:?415-215-5139?| Work Mobile: 415-845-8894?|[email protected]??|?jpmorgan.com/pdi-group?

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