financial, estate & tax planning...trusts, estates, probate, corporations, llcs partnerships,...

Financial, Estate & Tax PLANNING2020

No legal advice is given in this publication and none of the information should be construed. For legal advice, please contact your attorney.

2 | SUNDAY, MARCH 1, 2020 INDEPENDENT RECORDFINANCIAL, ESTATE & TAX PLANNING GUIDE

CINDY UTTERBACKCPA, SHAREHOLDERAnderson ZurMuehlen & Co., P.C.

Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the fi-nancial goals that may be important to you, and each comes with a price tag at-tached. That’s where financial planning comes in. Financial planning is a process that can help you target your goals by evaluating your whole financial pic-ture, then outlining strategies tailored to your individual needs and available resources.

Why is financial planning important?

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a finan-cial plan in place, you’ll be better able to focus on your goals and understand what it will take to reach them. One of the main benefits of having a financial plan

is that it can help you balance compet-ing financial priorities. A financial plan will clearly show you how your financial goals are related—for example, how sav-ing for your children’s college education might impact your ability to save for re-tirement. Then you can use the infor-mation you’ve gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you’ll know that your financial life is headed in the right direction.

The financial planning processCreating and implementing a compre-

hensive financial plan generally involves working with financial professionals to:

� Develop a clear picture of your current financial situation by review-ing your income, assets, and liabilities, and evaluating your insurance coverage, investment portfolio, tax exposure, and estate plan

� Establish and prioritize financial goals and time frames for achieving

these goals � Implement strategies that address

your current financial weaknesses and build on your financial strengths

� Choose specific products and ser-vices that are tailored to help meet your financial objectives*

� Monitor your plan, make adjust-ments as your goals, time frames, or circumstances change

Some members of the teamThe financial planning process can

involve several professionals trained to focus on your overall financial plan, and coordinate tax, estate, investments, risk and financial plans.

The most important member of the team, however, is you. Your needs and objectives drive the team, and once you’ve carefully considered any rec-ommendations, all decisions lie in your hands.

Why can’t I do it myself?You can, if you have enough time

and knowledge, but developing a com-

prehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time, and en-suring that all angles of your financial picture are covered.

Staying on trackThe financial planning process

doesn’t end once your initial plan has been created. Your plan should gener-ally be reviewed at least once a year to make sure that it’s up-to-date. It’s also possible that you’ll need to modify your plan due to changes in your circum-stances or the economy. Here are some of the events that might trigger a review of your financial plan:

� Your goals or time horizons change � You experience a life-changing

event such as marriage, the birth of a child, health problems, or a job loss

Financial Planning: Helping you see the big picture

More Planning, PAGE 5

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INDEPENDENT RECORD SUNDAY, MARCH 1, 2020 | 3FINANCIAL, ESTATE & TAX PLANNING GUIDE

ROSE M. JAMESMORRISON LAW FIRM, PLLCtreasurestatetax.com

The most common misconception estate planning attorneys hear is that someone doesn’t need an estate plan because their client isn’t elderly or on death’s door. Below are the stages of life we go through and the estate planning documents we should have during each.

Young AdultsWe raise our children in the hope that

they will become independent adults, but as they take bigger steps into the adult world, it is important to be able assist them if an unforeseen accident occurs.

The last thing on the mind of a col-lege freshman is estate planning. She is thinking of classes, clubs, and if the boy in “Creative Writing” has a girlfriend. However, it is important that someone think about it; since parents who help their children with financial and medi-

cal matters will face challenges in con-tinuing to do so after age eighteen. Once a child is a legal adult, the ability of a parent to obtain medical and financial information ceases.

In order to get medical information or to make medical decisions, parents need estate planning documents. It is illegal for the hospital to provide information without a release. For this reason, young adults should execute HIPAA releases which allow medical providers to re-lease information. Young adults should also have durable medical powers of at-torney executed. This allows parents to make medical decisions, if the child is unable to.

New FamiliesIt is hard to think about a new baby

and estate planning at the same time. One is new and literally screaming with life. The other is dry and conjures sce-narios we don’t want to think about. However, estate planning is the one of

the best gifts you can give your family.There are two pieces to consider in

preparing your estate planning. The first is to nominate a guardian and conserva-tor for your minor children. A guardian can make decisions about your child if you die. This includes decisions about education, medical treatment, and so-cial life. Asking someone to serve as the guardian is a big decision and you should feel confident that the nomi-nated guardian will care for your chil-dren as you would have.

A conservator controls the minor child’s finances. The conservator should be a responsible person who will care-fully guard your children’s assets. The same person may serve as guardian and conservator, but you have may have rea-sons to separate the responsibilities.

The second piece of estate planning is ensuring that your children receive their inheritance when they are responsible enough to handle it. If a minor child’s parents die without an estate plan, the

parents’ assets will be held by the court for the benefit of the child. The child will receive the inheritance at age eigh-teen with no limitations. Few teenagers will choose to responsibly invest their inheritance, if there are no restrictions on how they spend it. Estate planning allow you to control how the funds are spent. It is important to note that des-ignating your children as beneficiaries on your life insurance does not prevent your children from prematurely receiv-ing funds.

While it may be uncomfortable to think about your child growing up with-out you, estate planning can alleviate concerns about caring for your children if the worst happens.

The Golden YearsYour children are out of the house and

you are almost retired or already on the

Estate planning for every stage of life

More Stages, PAGE 4

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4 | SUNDAY, MARCH 1, 2020 INDEPENDENT RECORD

DONNA WATSON LAWSONDIRECTOR OF DEVELOPMENTMontana Conservation Corps

Would you like to give to that nonprofit whose mission you admire, but you don’t feel you can make a substantial gift right now? Are you concerned that you make the most of opportunities to extend your financial assets while also participating in charitable giving. Then here are some things to consider. There are specific types of giving that can provide an individual or a couple the opportunity to support a charitable organization they re-spect without having to make a large, im-mediate gift. There are also ways to give even substantial gifts that help benefit one’s finan-cial situation as well as that of the charitable organization. Below are examples of ways to give charitably while maximizing your assets.

Donor Advised FundsA donor-advised fund, or DAF, is a giving

vehicle established at a community founda-tion or investment organization that allows donors to make a charitable contribution,

receive an im-mediate

tax de-

duction, and then recommend grants from the fund over time. A DAF allows individu-als with philanthropic desire to have their charitable funds professionally managed and distributed to desired causes at a frac-tion of the cost of a private foundation. Funds are invested for tax-free growth, and the donor can recommend grants to virtu-ally any IRS-qualified public charity over time. And when one contributes to a donor-advised fund, they are generally eligible to take an immediate tax deduction.

Charitable Gift AnnuitiesA Charitable Gift Annuity is a contract be-

tween a donor and a charity that provides the donor a fixed-income stream for life in exchange for a charitable donation. The do-nation is set aside in a reserve account by the charity and invested. An agreement be-tween the donor and the charity locks in the rate, amount, and timing of the payments the donor receives. The donor – the Annui-tant – becomes eligible to take a partial tax deduction for the donation, in addition to receiving a fixed stream of income from the charity for the rest of their life.

IRA CHARITABLE ROLLOVERTaxpayers at age 70½ are required to

start withdrawing funds from their tradi-tional IRA’s. The IRA Charitable Rollover rules allow individuals who are 70½ years old to donate up to $100,000 to charitable organizations directly from their IRA, with-

out that donation being counted as

t a x a b l e i n c o m e when it is with-d r a w n .

To qual-

ify, contributions must come from a tra-ditional IRA or Roth IRA, and they must be made directly to a qualified charitable organization. This is a great way to sup-port a charity without the withdrawal be-ing taxed!

DONATING STOCKBy donating stock that has appreciated for

more than a year, not only are you avoiding capital gains taxes, you are actually giv-ing 20% more than if you sold the stock to make a cash donation! The maximum federal capital gains tax rate is 20% on long-term holdings. If you donate the stock directly to a charity, there is no capital gains tax to pay! Plus, you are still eligible to deduct the full fair-market value of the asset you donated from your income taxes, up to the overall amount allowed by the IRS. (Provided you’ve held them for more than a year, appreciated assets including long-term appreciated stocks and property are generally deduct-ible at fair market value, up to 30% of one’s adjusted gross income.) And those appreci-ated assets can also include assets that are not publicly traded, like restricted stock or bitcoin. Another great way to help out your favorite charity while avoiding taxes and re-ceiving a tax deduction.

These are a few examples of ways to give charitably while maximizing your assets. This information is not intended as tax or legal advice; your tax treatment may vary depending on your circumstances. Before making a gift through one of the avenues described above, please consult with your personal, financial, or legal advisor. But whichever route you go, please consider charitable giving. Donations to charitable organizations will make a di�erence in the lives of others. It will make a di�erence in your life as well.

FINANCIAL, ESTATE & TAX PLANNING GUIDE

Giving in to your desire to give charitablygolf course. With this extra time, you should dust off your estate planning and confirm it’s still appropriate.

One of the most common changes made to an estate plan is a change of fiduciaries. When your children are young, it doesn’t make sense to have them act as your agent under power of attorney or as the per-sonal representative of your will. Now that they are adults, it may make more sense for your chil-dren to fulfill these roles rather than others.

In prior years, you may have had an estate plan that prevented the dissipation of your assets and held them to be used for things like college or first homes. This was appropriate when your chil-dren were young enough to think that a sports car might be a good investment. If your children are responsible, it may make more sense to simplify your estate plan. You may also wish to pro-vide for your grandchildren or other family members.

Finally, it may also be neces-sary to deal with split families or children with special needs or financial issues, which require more sophisticated planning

As a rule of thumb, reexamine your estate plan every five to seven years or when a major life event occurs. You put in the work to establish a good estate plan. Don’t let the work go to waste by failing to update your estate plan to accommodate your life.

Stagescontinued from Page 3

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Financial planning and retirement go hand in hand. Without e�ective planning, many people would never be able to retire, while others might have to work much longer than they hope to. While financial planning is essential to achieve long-term goals, planning also can make it easier for people to meet their everyday financial needs. Managing money is a big respon-sibility, and it’s one that many people may need help with. A recent survey from Pew Charitable Trusts found that 55 percent of Americans spend as much or more than they earn. That’s not only compromising their financial futures, but also making daily life more stressful, as the American Psychological Association’s annual “Stress in America” survey routinely finds that money is a top cause of stress among mil-lions of Americans. Adults who are finding it di�cult to manage their money on a day-to-day basis may benefit from the services of a financial planner. Financial planners can help people create e�ective long-term financial plans, and they also can be vital resources for people who need help manag-ing their money every day.

� Planners can look at things from an unbiased perspective. An honest assess-ment of monthly expenses is essential when creating a monthly budget. However, many people tend to be biased when it comes to their monthly expenses. For example, some

may feel that three streaming service sub-scriptions are something they cannot live without. That can make it di�cult to trim some of the fat from their monthly expen-ditures. A financial planner will begin by examining your monthly expenses and may or may not make unbiased suggestions re-garding where you can save.

� Planners have the time. The average household is a hectic place. Adults with commitments at work and home often cite a lack of time as one of the reasons they aren’t more on top of their finances. A 2018 survey from Bankrate.com found that 16 percent of respondents aren’t saving more money because they haven’t gotten to it. Financial planners have the time to help clients save, and over time a planner can be an expense that pays for itself if families are saving more as a result of enlisting the services of a planner.

� Planners have the expertise many peo-ple lack. One of the reasons people struggle financially is that it can be hard to navigate the world of investments, insurance and taxes. Planners have the financial literacy necessary to navigate those waters suc-cessfully and can help people realize both their short- and long-term financial goals. Financial planners don’t just help people plan for retirement. Many planners are equally e�ective at helping clients achieve their daily financial goals as well.

How financial planners can help you every day

� You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)

� Your income or expenses substan-tially increase or decrease

� Your portfolio hasn’t performed as expected

� You’re affected by changes to the economy or tax laws

What if I’m too busy?Don’t wait until you’re in the midst of

a financial crisis before beginning the planning process. The sooner you start, the more options you may have.

Is the financial planning process complicated?

Each financial plan is tailored to the needs of the individual, so the com-plexity will depend on your individual circumstances. But no matter what type of help you need, a financial profes-sional will work hard to make the pro-cess as easy as possible and will gladly answer all of your questions.

What if my spouse and I disagree?

A financial professional is trained to listen to your concerns, identify any underlying issues, and help you find common ground.

Can I still control my finances?

Financial planning professionals make recommendations, not decisions. You retain control over your finances. Recommendations will be based on your needs, values, goals, and time frames. You decide which recommendations to follow, then work with a financial pro-fessional to implement them.

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Planningcontinued from Page 2

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To heal, help and inspire hope


RETIREMENT ACCOUNTS AND CHARITABLE PLANNING

JEANNE SAARINENEXECUTIVE DIRECTORThe Foundation for the Diocese of Helena, Inc.

The “Setting Every Community Up for Retirement Enhancement” Act, aka the SECURE Act, was signed into law on De-cember 20, 2019. The SECURE Act, which went into e�ect on January 1, 2020, changes many of the rules governing retirement plans, including several provisions relevant to making charitable IRA rollover gifts (also known as qualified charitable distributions or QCDs.)

Under the SECURE Act, the charitable IRA rollover, or QCD, remains a terrific way to make a tax-free gift to a nonprofit char-ity (like the Catholic Church!) using your traditional IRA.

How Do I Qualify? � You must be 70½ years old or older at

the time of the gift � Gifts must go directly from your IRA

to the charitable organization (your Catho-lic parish and diocese qualifies!)

� Gifts must come from a traditional or Roth IRA account

� Gifts cannot exceed $100,000 per do-nor per year

� You cannot receive a benefit in return for your gift, such as tickets to a gala

Benefits of a Charitable IRA Rollover Gift (QCD)

The SECURE Act increased the age at which you must start taking required minimum distributions (RMDs) from 70½ to 72. Once you reach 72, one of the great benefits of a QCD is that it will count towards your RMD. However, even if you have not reached age 72, there are still good

reasons to consider a QCD at 70½. First, a QCD o�ers all the benefits of an income tax charitable deduction, even if you don’t itemize your deductions. You can’t claim a deduction for your QCD, but your QCD is not included in your income. Your QCD is always a tax-free gift.

Another reason to consider a QCD at 70½ is to reduce the balance in your IRA. At age 72 or older, your RMD is based on the balance in your IRA at the end of each year multiplied by a factor published by the IRS. You may be in a position where you don’t want or need the income from your IRA. Higher income can increase your Medi-care premiums and create other tax issues. Consider making QCDs starting at 70½ to reduce the balance in your IRA.

Another change brought on by the SE-CURE Act is the elimination of the stretch IRA for many beneficiaries. With a few ex-

ceptions, children and other non-spouses who are more than 10 years younger than you no longer can stretch their withdraw-als from an IRA they inherit from you over their life expectancy. Instead, they must withdraw and pay income tax on all funds within 10 years. This change means that it may be most tax e�cient for you to support the Catholic Church and provide for your heirs by making QCDs during your life and setting aside other assets to pass on to your loved ones.

For help on gift planning to the Catholic Church, please contact The Foundation for the Diocese of Helena, Inc. While the Foundation does not provide legal or tax advice (and the information contained in this article shouldn’t be considered as such), we will work closely with you and your advisers throughout this important process.

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Saving for retirement is an es-sential component of financial planning. Adults can save for retirement in various ways, and one of the simplest, most popu-lar ways to do so is to enroll in an employer-sponsored 401(k) plan.

Enrolling in a 401(k) plan can be a wise decision. According to a recent report from Fidelity Investments, the average 401(k) balance rose 8 percent in the first quarter of 2019. Investors seem to be taking notice of such returns, as Fidelity also noted that the average 401(k) employee con-tribution reached $2,370 in the first quarter of 2019, marking a 15 a percent increase from the year prior.

When enrolling in a 401(k) plan, professionals may wonder how to choose their investments. Such plans typically include an assortment of funds. There are a host of factors to consider when

choosing 401(k) investments, and the following are some strategies that can help investors make de-cisions they’re comfortable with.

� Read the enrollment bro-chure. Brochures might not be

the most exciting reads, but 401(k) brochures, which should be provided when employees enroll in a plan, typically in-clude a detailed rundown of the investment options within a

given plan. As valuable as these rundowns can be, a recent sur-vey from Prudential Investments found that 42 percent of investors don’t know how their retirement assets are being allocated. Inves-tors who know how their 401(k) contributions are being allocated are in better position to address market fluctuations, giving them more control over their money.

� Involve a financial planner in your 401(k). Financial planners can be an invaluable resource that can help investors in myr-iad ways. Some investors may be surprised to learn that outside planners can even help them with their employer-sponsored 401(k) plans. Provide a planner with detailed information about your 401(k), including a rundown of the plan’s investment options, and share your retirement goals. A financial planner can then help you choose the funds from your plan that best align with your

goals and your comfort levels in regard to risk.

� Monitor your investments. While investors need to rec-ognize that markets fluctuate, they still need to keep an eye on how their 401(k) investments are performing. Keep an eye out for funds that consistently lose money or provide little to no re-turn, as they’re likely not worthy of your investment dollars. In-vestors should not overreact and immediately move money around when typically strong funds take a dip, but they also should not accept poorly performing funds as part of the risk of investing. It’s a balancing act, and savvy investors know to keep their eyes peeled and to make changes when necessary.

Choosing 401(k) funds is a decision to take seriously, and one that can be made simpler by enlisting the help of a financial planner.

Tips when choosing your 401(k) investments

Marc G. Buyske, LL.M. Frank C. Crowley, M.S.

Providing Estate Planning and Probate Services

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PLANFOR YOUR FutureLike YouPlan for YourVacation

To learn how to support Carroll studentsthrough your estate plan, contactMichael McMahon, Vice President forInstitutional Advancement, at 406-447-5528.

Planning for a vacation requires selecting a destination,making reservations and packing your bags. Anotherarea of life requires good planning—your estateplan. A good estate plan can ensure you are preparedfor the future and you have what you need whenyou need it.


During the prime of their lives, people typically don’t give much thought to scenarios in which they become ill or are facing the end of life. Sickness and mortal-ity are not easy conversations to have, but it is important for ev-eryone to approach these heavy topics with close family members so that individuals can rest easy knowing their needs will be met if or when their health falters.

An advanced healthcare direc-tive — also known as a living will — is a legal document in which a person lists the specifics of medi-cal care and comfort actions they desire should the individual no longer be able to make decisions for themselves due to illness or incapacity. The legal advice re-source Legal Zoom says the living will may list certain things, such as whether life support is desired or if pain medication should be administered. A living will should

not be confused with a traditional will, which is a legal document that explains wishes for financial and personal assets after a person dies. Living wills also di�er from living trusts, which address how assets will be managed if a person becomes incapacitated.

A living will is not always a ne-cessity if a person does not have strong feelings about decisions made on his or her behalf while not cognizant. However, for those who do want to have a say in care, a living will is the best method for ensuring choices will be car-ried out. The following are some other questions people should ask themselves concerning liv-ing wills.

� Do I want to remove the burden of tough choices from my loved ones? A living will re-lieves grieving loved ones of the responsibility of making chal-lenging decisions of invoking

life-saving procedures or not — particularly if they’re not sure what you desire.

� Do I have firm feelings about life-saving methods? A living will allows you to spell out pref-erences on insertion of feeding

tubes, if you want specialized hy-dration, if you want to be hooked up to life support if brain function is minimal, and a host of other scenarios.

� Is cost preventing me from drafting a living will? Cost need

not be a factor in setting up a liv-ing will. You can download a free template from any number of on-line legal sources. Local hospitals often have forms as well, which can be notarized for only a few dollars. These forms are gener-ally comprehensive and can help you answer all the questions and write in specifics.

� Have you selected a trusted person to carry out wishes? A health care proxy, according to the American Bar Association, is a person appointed by you with the authority to make decisions for you if you are unable to ex-press your preferences for medi-cal treatment. Together with the living will, the health care proxy, also called a durable medical power of attorney, can fulfill your wishes accordingly.

A living will is an important component of medical and estate planning.

Things to know before drafting a living will

ARE YOUR DUCKSIN A ROW?Beyond caring for family after you’re gone, do your plansinclude making a difference in the lives of others? Imaginean endowment at St. Peter’s Health bearing your name,or that of a loved one, that will live on to benefit futuregenerations in our community. It’s possible, and we canhelp you get your ducks in a row to achieve it!

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Discussions about retirement planning typically include mention of individual re-tirement accounts, or IRAs. IRAs are retire-ment investment vehicles that can be used in place of or in conjunction with 401(k) plans.

Many investors like IRAs because they give them a certain measure of choice in regard to their investments while allowing investors to postpone paying taxes on gains until money is withdrawn during retire-ment.

One common misconception about IRAs is that there are only two types, when there actually are many more. Depending on which definitions and resources you go by, there are as many as 11 types of IRAs. Fi-nancial advisors can help people choose the appropriate IRA based on their needs and goals. Here’s a look at just a few of the more popular IRAs.

Traditional IRATraditional IRAs are very popular, accord-

ing to data from the Investment Company Institute. Classic features include a tax break

of up to $6,000 initially, and investment earnings are not taxed as long as the money remains in the account. Money Manage-ment International says one advantage of a traditional IRA is that contributions can be taken as tax deductions in the tax year they are made. This type of IRA might be good for someone who anticipates being in a lower tax bracket upon retiring, since taxes are paid when funds are withdrawn.

Roth IRAA Roth IRA is di�erent than a traditional

IRA in various ways. Contributions to a Roth IRA are not tax-deductible, but funds will grow tax-free. Also, with a Roth IRA, the taxes are paid upfront, so account hold-ers will not pay taxes when the money is withdrawn. This is beneficial for those who expect their income tax bracket to rise after retirement.

SEP IRAThis type of IRA is a traditional IRA, but

one set up and funded for employees by an

employer. SEP stands for simplified em-ployee pension. Employers must contribute equally to all employee accounts, and per-sonal contribution limits are much higher for these accounts than on other tax-favored accounts.

Spousal IRAThe financial resource The Motley Fool

notes that spousal IRAs are either traditional or Roth IRAs funded by a married taxpayer in the name of his or her spouse who has less than $2,000 in annual compensation. The couple must file a joint tax return in the year of the contribution.

Education IRA (EIRA)Not all IRAs are strictly for retirement

funds. EIRAs help pay for higher education. No tax deductions are allowed, but deposits and earnings may be withdrawn tax-free so long as they are used to pay for higher edu-cation.

IRAs are tax-advantaged tools for setting aside funds for retirement and other needs.

The various types of IRAs

(406) 442-9600 | (800) 443-3086 | 40 W. 14th St., Artisan Block | Helena, MTdadavidson.com | D.A. Davidson & Co. member SIPC

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MIKE SCHECHTMANFOUNDER AND EXECUTIVE DIRECTORBig Sky Institute for the Advancement of Nonprofits

Endowment development seminar series & the 2020 Helena Endowment Challenge Fund

Are there nonprofits in Helena you love, that you’d like to see become more finan-cially secure? Endowments are an invalu-able tool for long-term sustainability, but many nonprofits have felt that building an endowment was too complicated, and way beyond their reach.

Let’s change this.Big Sky Institute for the Advancement

of Nonprofits (BSI) is conducting a series of endowment development seminars this winter to provide training and hands-on assistance to Helena-based nonprofits to help them establish endowments, and start building assets. The seminars are being of-

fered in response to BSI’s survey of nearly 100 Helena nonprofits. The impressive 65% response rate was very revealing about what nonprofits believe they needed.

At the top of this list of survey respon-dents are terrific nonprofits that feel stuck; they want help in starting their endow-ments. Of equal concern are the forward-thinking nonprofits that have established endowments, but unfortunately have negli-gible assets. They are feeling woefully stuck because they don’t know how to cost-ef-fectively begin building their endowments’ assets.

Help these wonderful nonprofits to get unstuck.

Acquiring knowledge about endowments is an essential building block, but it’s not enough. Endowment development is a dif-ferent kind of fundraising. It’s a lot easier to do story telling about great programs be-

ing conducted in the here and now. It’s a lot easier to talk about genuine stories of infants, children, families and elders who benefit from stellar programs and high-quality ser-vices. It’s a far more daunting proposition, however, to ask for donations for needs and opportunities that are somewhere o� in the future.

Challenge grants that require a match are a time-proven booster shot to help any fun-draiser be more confident, and be more ef-fective in raising funds, including donations to endowments. BSI has committed to raise at least $5,000 to be used as challenge grants with 2 to 1 match requirements. This will le-verage an additional $10,000 for the endow-ments for a total of $15,000 in new endow-ment assets. $10,000 for challenge grants will result in $30,000 in new endowment assets.

Donate to help these nonprofits.Donations to BSI’s 2020 Helena Endow-

ment Challenge Fund will be used in their

entirety to provide endowment building challenge grants. With your help, we can assist as many as 20 Helena-based non-profits get unstuck, and get on a roll. $5,000 in donations will result in $250 challenge grants; $10,000 in donations will result in $500 challenge grants. Obviously, more is better, and BSI welcomes investments both large and small.

BSI was established in 1999 with a mis-sion to build Montana’s communities through strengthening nonprofits and ex-panding philanthropy. In anticipation of challenging conditions for nonprofits, BSI created the Helena Development Initiative in 2013 to provide professional development seminars, training programs and associated resources to help Helena area nonprofits with skill development to increase the ef-fectiveness of their fundraising. Launched in 2018, BSI’s endowment development seminar series is the newest component of its Helena Development Initiative.

Helena Development Initiative: Professional Development for Excellence in Fundraising

Investors should watch out for fees in the fine print According to the U.S. Securities and Exchange Commission, questions can be an investor’s best friend, particularly when it comes to fees. Fees might be referenced in the fine print when signing an investment agreement, but they can be anything but small as a portfolio grows and accumulates more assets. The SEC notes that, over a 20-year period in which investors invest $100,000, 1 percent annual fees can reduce the size of a portfolio by as much as $30,000 (based on annual returns of 4 percent). In such a scenario, an investor paying 1 percent annual fees and netting annual return of 4 percent would have a portfolio worth $180,000 after

20 years. However, an investor who pays just 0.25 percent in annual fees and invests the same amount of money while earning the same returns would have a portfolio worth roughly $210,000 after 20 years. When opening an investment account, the SEC advises investors to ask about the total fees to purchase, main-tain and sell a given investment. In addition, investors are advised to ask if there are ways to reduce or avoid fees. The SEC also recommends that investors inquire if there are any ongoing maintenance fees related to an account and how much an investment has to increase in value before an investor can break even.

Mike Schechtman, Executive [email protected]

406-443-5860P.O. Box 1514

Helena, MT 59624-1514www.bigskyinstitute.org

MANY NONPROFITSFEEL STUCK

THEY NEED HELP INSTARTING ENDOWMENTS

ENDOWMENT DEVELOPMENT SEMINAR SERIESTHE 2020 HELENA ENDOWMENT CHALLENGE FUND

NEEDS YOUR SUPPORT!

Donate to help BSI provide endowment-buildingCHALLENGE GRANTS.

$250, $500, $750, $1,000 levels and more!

Contact us and let us know how we can help you to help nonpro�ts move toward long-term sustainability.

CHALLENGE GRANTS that require a match are a time-proven boostershot to help any fundraiser be more con�dent, and more effective inraising funds, including donations to endowments. BSI has committed

to raise at least $5,000 to be used as challenge grants with 2 to 1match requirements.This will leverage an additional $10,000 for the

endowments for a total of $15,000 in new endowment assets. $10,000 forchallenge grants will result in $30,000 in new endowment assets.

Your Gift will be Matched Dollar for Dollar by the State of MontanaDOUBLE YOUR IMPACT WHEN YOU INVEST IN HELENA COLLEGE

MONTANA ACCESS SCHOLARSHIPS

www.helenacollegefoundation.org 447-6927


TARA A. HARRISHarris Law O�ce PLLC

Do traditional IRAs or employer spon-sored plans make up a significant percentage of your assets? Do you plan on leaving these retirement assets to your children or other non-spouse heirs? If the answer to either of these questions is yes, now is a good time to review your estate plan.

After receiving bi-partisan support in Congress, on December 20, 2019, the President signed into law the Setting Every Community Up For Retirement Enhance-ment (SECURE) Act with an e�ective date of January 1, 2020. The SECURE Act made some positive changes to qualified retire-ment plans, which include traditional IRAs and employer-sponsored plans. First, the SECURE Act increases the age you must begin taking required minimum distribu-tions (RMDs) from 70 ½ to 72. Second, the SECURE Act removes the age limit for con-tributing to your qualified retirement plans if you are still employed. Third, the SECURE Act allows some permanent, part-time em-ployees to contribute to an employer-pro-vided retirement plan. Fourth, the SECURE Act allows each parent to withdraw up to

$5,000 penalty free in the year of a birth or adoption of a child.

Unfortunately, the SECURE act is not all rainbows and sunshine. Perhaps the most concerning part of the SECURE Act is its elimination of what has been referred to as the “stretch” for most non-spouse ben-eficiaries. The SECURE Act requires most non-spouse beneficiaries to complete all distributions within 10 years of the year of your death. Besides spouses, there are some exceptions in which the 10-year rule either doesn’t apply, including not applying to disabled beneficiaries, chronically ill ben-eficiaries, and beneficiaries not more than 10 years younger than the decedent. Or, as in the case of minor children, the 10-year rule is delayed and doesn’t begin until the minor child reaches the age of majority.

To understand the significance of this change, it is important to understand what the law was prior to the SECURE Act. Un-der the old law, if a non-spouse was listed as a beneficiary on a qualified retirement plan, the beneficiary in most situations could “stretch” out the RMDs using his or her own life expectancy. You may be asking what are RMDs and why do I care. This is why you should care. RMDs are the mini-

mum amount the IRS requires you to with-draw each year based upon the value of your qualified retirement plan and your life ex-pectancy. Non-spouse beneficiaries of qual-ified retirement plans are required to begin taking RMDs December 31st, the year after the qualified retirement plan owner’s death. The RMDs are taxed at ordinary income tax rates. Depending upon the age of your ben-eficiary and his or her financial condition, this could bump the beneficiary into the next tax bracket, thus paying higher taxes as a re-sult of inheriting your qualified retirement plan. Here’s an example: If you die owning a traditional IRA and it passes to your adult child, then your child will take the tradi-tional IRA as an inherited IRA. The RMDs used to be calculated using your child’s life expectancy. So, if you daughter was 45 years old at the time she inherited your IRA, then she used to be able to stretch the RMDs over time using her life expectancy. Thus, reduc-ing the amount of the RMD and the ordi-nary income tax she paid. The SECURE Act eliminated this planning method. Instead, now your 45-year-old daughter will have to complete all distributions within 10 years of your death, thus increasing the RMDs and accelerating the ordinary income tax paid.

It also has the potential of bumping your daughter into the next tax bracket at a time when she may be at the height of her career and income-earning potential.

Fortunately, the law did not change how spouses inherit qualified retirement plans. Surviving spouses may still roll-over their deceased spouse’s qualified retirement plan into their own. However, it does impact the surviving spouse’s beneficiaries.

If you are concerned about the impact this may have on your beneficiaries, you should talk to your attorney, financial advisor, and/or tax advisor about strategies to reduce or-dinary income tax liability passing to your beneficiaries upon inheriting your qualified retirement plan. Now is also a good time to revisit your beneficiary designations on your qualified retirement plans and review your estate plan. If your estate plan includes a re-vocable living trust, do you have your trust listed as a primary or contingent beneficiary of your qualified retirement plans? If yes, re-view the language of your trust and talk to your attorney and/or advisors on whether this is the best approach considering the changes in the law.

Being proactive now will help avoid un-intended consequences after you are gone.

The SECURE Act: What does it mean for your estate plan?

Call to schedule afree consultation

to discuss estateplanning, probate,and guardianships.

TARA A. HARRISHARRIS LAW OFFICE PLLC

825 Great Northern Blvd.,Ste. 318Helena,MT 59601Ph: 406.513.1412www.harrislawmt.com

9 FRIENDSHIP LANE, SUITE 100MONTANA CITY, MT 59634406 449-1200

GENERAL PRACTICE OF LAWINCLUDING

Estate Planning

Wills & Probate

Business - Corporations & LLCs

Real Estate

Guardianships

www.MontanaCityLaw.com [email protected]

STEVEN J. SHAPIROATTORNEY AT LAW A PROFESSIONAL CORPORATION

INCLUDING

406.449.1200

Remember when you got to be in the Vigilante Parade, or whenthe Marlow Theater was open, but you can’t lay your hands onthe original article? Help has arrived.Type your name, or yourfamily’s name, into the Independent Record archive systemand the actual page will appear on your computer screen. Sorelive those special events, read about signi cant events in ourhistory, or explore how your family has made news over theyears. The Independent Record archives stretches back to the1920s, with some editions dating as far back as the 1870s.

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