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Messages - Daniel J Turner

Oahu Businesses List Your Local Business Here for FREE / ATTENTION, SF Homeowners on Oahu!!! The END of Budget-busting electric bills!!!
HIGH Electric bills killing your budget? (If $1,200-1,800/mo high electric bills aren't a severe bother for you? Drive an electric car? WOW. I'm happy for you). For the rest of us, It's a BIG PROBLEM.

If you're paying more than $500/mo (most of you are well over $1,000/mo), you can change that and put those dollars into more important ideas like your retirement, college planning, or ANY OTHER WORTHWHILE endeavor!

As a Financial Advisor, I've helped several of my Clients install SOLAR VOLTAIC service for their home use.

It has meant everything to them to be relieved of that utility bill.

The "trick" is finding the way to finance it when you're fico has suffered and your savings reserves are gone. My financial planning tools are very effective for helping you meet your objectives and save you big money.

Text or Call Dan Turner, TODAY. Let's talk. 808-464-5292.

Do it, NOW (before your next billing cycle).

Dan Turner is the Principal Advisor at Akamai Wealth Management, LLC
1088 Bishop St. Executive Centre
Ste #3007
Honolulu, HI 96813
(CRD #322422)
NMLS #1016716 Equal Housing Lender; Geneva Financial LLC NMLS #42056
HI Ins License # 2342471

Advisory services are offered through “Akamai Wealth Management, LLC”. 
(AWM) a registered Investment Advisor registered in the State of Hawaii.
 All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current of future performance or indication of future results. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons.

Investing always involves risk and possible loss of capital.

AWM and Dan Turner ( Principal) are not attorneys or accountants and do not provide comprehensive legal or tax advice. For full disclosure of all relationships associations, affiliations, fees, charges, and capacities please request the ADV 2 A&B from Dan Turner.

Mr. Daniel J. Turner Can Now Do a Commercial Loan for Your Business! Click Here for More Information / Commercial Business Loans Click Here for More Information
I can do a commercial loan for your business! Contact me today, and with our Commercial Division, we can help find the best financing option. NOW available for Hawaii, HI, California, Oregon, Illinois, & Ohio businesses Text or Call Daniel J. Turner 808.464.5292.

Business owners and representatives may also email

#Commercial #Financing #Business #GenevaFi
Ask Your General Questions About Investments and Debt Reduction Click Here / Offset Mortgages in Financial Planning
Dear Reader; I've been involved with financial services since 1981; 32 yrs in Life, health, and annuities, 2 yrs Series 6 (Mutual funds); 14 yrs Series 7 (General Securities Registered Rep) and 11+ years in mortgage lending. I'm becoming more convinced that the most valuable part of my Financial Advisory practice is (in fact) my experience at solving problems using unique mortgage programs not commonly offered by regular Loan Officers. Among the programs I've used in mortgage lending would be the FHA Reverse Mortgage HELOC, Jumbo Reverse mortgage HELOC's, and the "Offset" mortgage. While I have resolved more issues with the FHA reverse mortgage than you can possibly imagine, let me focus today on the offset program.

Unlike a reverse mortgage, the "offset program" is not for everybody. One must have a FICO of +700, and significant cash flow for it to work. Additionally, it is not a "commodity" loan, and it requires me to hold a certification to be eligible to offer it to the public. FHA, VA, Conventional and similar programs are "commodity" loans. The Loan Officer (LO) has to navigate terms, rates, conditions, and if they can get 2 out of 3? They'll generally get the loan.

That's not the same with an "offset" program.

Another big deal is that one must appreciate quality. This is a quality loan, and can do more than just finance a property purchase or refinance. Many people consider these as "expensive". Yes. They are, and they do a lot more for the Borrower and do it far more efficently than the conventional loan product can. It will serve you for 30 years, and will (likely) be the last loan you have (it's THAT efficient).

Have you ever considered how a conventional loan works? Let's look at your recent monthly mortgage statement.

Find the Principal and interest component. convert the two into a ratio of the total P&I payment. If your payment is $2500/month, and your P is $500 of the 2500? thats a 1:5 ratio or only 20% of the payment actually reduces the debt. This is grossly inefficient, and opens the doors to highly qualified homeowners to change this scenario to their favor.

An "offset" mortgage is a HELOC with an attached Checking account. This means that (unlike any other type of HELOC), you can have direct deposit of all income streams from rentals, royalties, distributions, dividends, salaries, bonuses, commissions, etc into this checking account and have 100% of your pay received immediately reduce the debt dollar - for - dollar. Assume you get paid $10,000 on the 1st/15th and lets say your mortgage debt is $200,000.00. The 1st payment reduces your loan debt to $190,000, and then you spend back by paying your bills. Since you have the required positive cashflow of at least 20-25% over expenses each month, and let's assume that you have a 50% positive cash flow, you spend back $5,000/$10,000 and have a net gain on equity of $5,000.00, which corrects your debt balance to$195,000, and then, you get PAID again on the 15th, and the same thing ensues. Afterr 1 month (2 pay periods) you've reduced your debt by an astonishing $10,000! With 25-30% cash flow, a program like this reduces mortgage interest and mortgage duration by about 65%. That's a MAJOR difference, a savings of both TIME and COST, and that is after expenses. It's also a 30 year HELOC, not 10 with a 20 yr amortization.

Have you ever wondered why your bank has $50,000 of your money in a savings account paying you 1/10th of 1% per year but they charge you 3-5% on your mortgage balance? In an offset program, the interest you don't pay is greater than the interest you would have earned, so you place the deposit against your mortgage. If you need some, part, or all of the money? No surrender charges, and you can use your checking account to access it. or, your debit card(s), or, ACH, ETF, Wire transfer, etc.

I love working with programs like this; they are very helpful with regard to helping my clients build equity rapidly and cost-efficiently. If you think this might be a good "fit' for you (or that I might be a good fit for you), Call (or text) me today. 808-464-5202
and get your FREE "Generational Vault" for safekeeping your most important family records!

Copyright 2023 Daniel J Turner Akamai Wealth Management, LLC All rights reserved.

Daniel J Turner is a licensed Mortgage loan originator (NMLS#1016716) and is employed by Geneva Financial LLC (NMLS#42056). Mortgage lending activities are fully disclosed in the "Akamai" ADV 2-b as an "ouside business activity" as required by law. Dan can be found with his registration identifier number
CRD# 322422.

Investment Counseling / 12 Must Reads for Real Estate Investors (Oct. 6, 2023)
[font=proxima-nova, "Helvetica Neue", Helvetica, Arial, sans-serif]REAL ESTATE>[/font][/color]CRE WIRE
12 Must Reads for Real Estate Investors (Oct. 6, 2023)
Nightingale struck a deal to sell assets in order to pay back CrowdStreet Investors, reported Bisnow. Forbes listed 25 real estate tycoons among its latest list of billionaires. These are among the must reads from the real estate investment world to end the week.
WMRE Staff | Oct 05, 2023[/font][/size][/color]

  • Nightingale Strikes Deal To Pay Back CrowdStreet Investors By Selling Its Assets “The agreement could see investors receiving quarterly installments of roughly $4M over the next three years as the New York-based commercial real estate investment firm liquidates portions of its portfolio to satisfy the capital lost by investors who were led to believe they were buying slices of prime office buildings in Atlanta and Miami Beach.” (Bisnow)
  • A ‘Shadow’ Lending Market in the U.S., Funded by Insurance Premiums “Carlyle, KKR and Blackstone are among the private equity behemoths that have bought either stakes in other insurers or books of business from them. As of the second quarter of 2023, such firms owned nearly 9 percent, or about $774 billion, of the U.S. life insurance industry’s assets, up from just 1 percent in 2012, according to the most recent data from the insurance ratings agency AM Best.” (The New York Times)
  • The Richest Real Estate Billionaires In America 2023 “There are 25 billionaires on the 2023 Forbes 400 list who primarily owe their fortunes to real estate. These property tycoons are worth a collective $139 billion—about $5 billion more than the 24 in real estate were worth on the 2022 ranking.” (Forbes)
  • It’s official: Rent control is about wrecking apartments “Now the Supreme Court of the United States, in rejecting landlords’ challenge to rent stabilization Monday, has tacitly endorsed this affordability strategy. It allowed the state to continue capping rents in old apartment buildings, the properties most in need of upkeep.” (The Real Deal)
  • 70% of Households Finding It Harder to Pay the Rent “For the first time in decades, the rent-to-income ratio has reached 40%, marking one of the least-affordable rental markets ever, according to a new report from CoreLogic’s Economist and Principal, Yanling Mayer.” (
  • Blackstone's Americas Real Estate Division Bets on Canada. Here's Why. “The head of Blackstone's real estate group in the Americas says Canada's growing population has the world's largest alternative asset manager looking to step up investments in the country's logistics and residential property.” (CoStar)
  • Commercial Real Estate Could Bring Out More Bears “Higher interest rates aren’t just a thorn in the side of prospective residential real estate buyers and owners. Additionally, commercial real estate is feeling the pangs of a high-rate environment. That could bring out more bears in the sector.” (VettaFi)
  • KKR’s Matt Salem Talks New Strategies and Fresh Products in Tough CRE Market “Since 2017, its real estate credit division has grown from $2.5 billion in assets under management to $33.9 billion today; its total originations have skyrocketed from $2.4 billion to more than $35 billion today; its real estate investment trust — KKR Real Estate Finance Trust — has grown from $2.5 billion to $7.9 billion; and it’s now invested in $9.4 billion of securities, compared with $400 million back then.” (Commercial Observer)
  • U.S. Architecture Billings Index Reports Softening Business Conditions in August “Based on the latest AIA/Deltek Architecture Billings Index for August 2023, market conditions eased with a score of 48.1, marking the eleventh consecutive month of essentially flat billings at architecture firms. Any score below 50.0 indicates decreasing business conditions.” (The World Property Journal)
  • Could Discounted Loan Payoffs Be What Finally Restarts The CRE Debt Market? “Barring a shocking economic reversal, some regional banks will be forced to make a deal or foreclose on delinquent loans, which continue to rise in number. One form of deal that could rise to prevalence is the discounted payoff, or DPO, debt negotiators told Bisnow.” (Bisnow)
  • More Rentals Are on the Market. Why Are They So Hard to Find? “More than half the markets studied were less competitive than they were a year ago, when an average of 15 renters competed for each unit; this year it’s down to 10. Apartments are staying vacant longer, too, giving renters more time to search and consider.” (The New York Times)
  • Gensler taps new co-CEOs “The move comes as the firm's longtime co-CEOs step up to become co-chairs.” (San Francisco Business Times)

Estate Planning / Tips for Handling IRS Estate/Gift Tax Audits Pub 9/27/23 ""
irs-building-new-sign.jpg[font=proxima-nova, "Helvetica Neue", Helvetica, Arial, sans-serif]mphillips007/iStock/Getty Images Plus[/font][/color]
Tips for Handling IRS Estate and Gift Tax Audits
A respectful and honest approach may be your best bet.
Susan R. Lipp | Sep 27, 2023[/font][/size][/color]

[font=Georgia, Times, "Times New Roman", serif]At the recent Notre Dame Tax and Estate Planning Institute, Lou Harrison of Harrison LLP in Chicago gave some tips to practitioners who are tasked with defending clients against an Internal Revenue Service audit of their estate and gift tax returns. Lou started off by noting that things have changed at the IRS since the COVID-19 pandemic. The IRS is currently transitioning and adding staff (perhaps leaving fewer available agents to handle audits); there are many newly hired agents who may not yet be familiar or experienced with the complexities of the estate and gift tax statutes; and there are agents who are now working from home may not give each audit the same amount of attention as they would give if they were working from the office.

Among the unusual post-Covid events that Lou has also noticed: lost checks submitted with estate and gift tax returns, resulting in penalties assessed against the client (eventually the penalties are removed, but not without effort; a miscalculation of the estate tax due; a misinterpretation of the rules regarding portability; audits at the first spouse’s passing with no estate tax due; increased number of audits of grantor-retained annuity trusts and other idiosyncratic items; and unusual arguments about the level of discounts.

The bottom line isn’t to predict what will be audited, but to understand that these days, any items could be audited, even those noted below. And forewarning clients that an audit is possible will often soften the emotional blow to the client if an audit were to occur.
What’s Being Challenged?
Lou says that the most common IRS challenges continues to be with level of discounts taken for lack of marketability, and overall valuations and elements in a valuation. His network hasn’t seen many audits involving Internal Revenue Code Section 2701 (special valuation rules in the case of transfers of certain interests in corporations and partnerships); qualified personal residence trusts (QPRTs), post-term QPRT lease arrangements, grantor retained annuity trusts and credit shelter trust funding. This doesn’t mean, however, that  you shouldn’t be prepared for these types of challenges. All planning should be done with the same level of diligence and scrutiny as always; just don’t lie awake at 2 a.m. worrying that every position and planning that one has done will be reviewed in detail (or at all).

Know Your Agent
Lou recommends that you learn as much about the agent assigned to your audit as you can. Ask around to see if anyone has experience with that particular agent and find out what approach that agent typically takes.  Knowledge is power, and due diligence is an important step here.
Three Audit Approaches
Lou outlined three approaches he’s seen practitioners take to audits. The approach you take may depend on what you’ve learned about the agent, or perhaps what you’re most comfortable with.[/font][/size][/color]
  • Slash and burn. Come in with guns blazing, letting the agent know you’re familiar with the law and the agent shouldn’t waste their time on this. Explain why the law is in your favor.
  • Dragnet: Just the Facts. This can work sometimes in a bad facts, complicated case with a lot of documents. This is where one provides the documents being asked, without justifying why the taxpayer’s desired result is the correct one. That is, leaving it to the agent to agree or not agree and perhaps the transaction is too complicated for an ordinary mortal to untangle or want to untangle. But he’s seen this approach used in a case in which the more documents provided without explanation, the more the IRS was interested in unravelling the mystery; the IRS was willing to dig back 10 years to come to a dangerous taxpayer result.
  • Respect and honesty. This is Lou’s approach. Agents are lawyers, so respect their intelligence and try to be fair. This approach demonstrates that the taxpayer is acting in good faith. The ambience of the audit isn’t about winning or losing, but conveying to the agent that the goal is to reach a fair and reasonable result or to correctly apply the law, for both sides.  Discussions in an audit may be something like: “Here’s what I see as important factors or the relevant law in this case, What do you think?” This approach instills a good working relationship and fair outcomes.
[font=Georgia, Times, "Times New Roman", serif]According to Lou, though risk of an audit of the estate and gift return is low, you should prepare your client for that possibility. Also, both the client and their attorney need to be open and honest. If the IRS agent feels the agent is being treated unfairly or that facts or events are being portrayed incorrectly, that could lead to poor audit results and performance.   [/font][/size][/color]

Charitable Remainder / Bank of America study on Philanthropic/Charitable Giving
Giving with purpose

How affluent households contributed in 2022

Affluent households make up a large proportion of all charitable giving in the United States; understanding the priorities and motivations that underlie and shape affluent philanthropic engagement is key to understanding philanthropy overall.

Comparison of affluent households and general population households giving over time (Incidence and amounts)

That’s why Bank of America partnered with the Indiana University Lilly Family School of Philanthropy to develop the 2023 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households—the ninth in the biennial series on the philanthropic behaviors of affluent households in the United States.

Key findings

The affluent continue to lead in charitable giving
Volunteering is on the rebound among affluent Americans
Affluent Americans leverage a robust toolkit of strategies to achieve philanthropic goals
Affluent women are a force for change in the philanthropic sector
Religious organizations continue to receive the largest share of giving dollars by affluent households
The future of philanthropy relies on engaging the next generation of affluent Americans
What motivates affluent Americans to donate their time and money?

Guided by their values and beliefs, affluent households continue to lead in charitable giving, with 85% giving to charity in 2022. More than half of affluent households in America (54%) say their giving is very linked to the issues they care most about.

But with seemingly countless nonprofits and causes to choose from, how do affluent donors decide what to support? Nearly seven in 10 affluent donors said their personal values or beliefs led them to support specific nonprofits, and six in 10 indicated their interest in an issue area led them to give. Reasons affluent donors give to causes/organizations

In addition to giving, affluent volunteers spent an average of 135 hours volunteering with an average of two different organizations in 2022. The top three activities performed by affluent volunteers were: volunteering for a religious organization or ushering; collecting and/or distributing food, clothing, or other basic need items; and serving on a board for a charitable organization.

There are many reasons for and benefits of volunteer work, including personal fulfillment. When asked how personally fulfilling affluent individuals found their volunteering to be, 62% said this form of charitable activity was very or completely fulfilling.

Beyond making financial gifts and volunteering, many affluent households create positive change, take action, and express their values using various tools as both consumers and investors. Most affluent Americans (79%) say they sometimes or always align their purchasing decisions with their values. Twenty-two percent of affluent individuals indicated they had a charitable giving vehicle they use to make charitable gifts, and 54% of affluent households with a net worth between $5 million and $20 million have or plan to establish a giving vehicle within the next three years.

In 2022, 4.9% affluent households used a donor-advised fund to facilitate their giving. Their top reasons for doing so were tax considerations, ease of administration, and charitable impact.

Looking at some standouts: Affluent women, religious organizations, and generational philanthropy

Our study found that affluent women are driving positive change through their economic influence and strategic philanthropy. Eighty-five percent of affluent household charitable giving decisions were made or influenced by a woman, and significantly more women (42%) than men (33%) spent time volunteering in 2022.

Not only were affluent women at the forefront of philanthropic activities in 2022, they were also significantly more likely to select women’s and girls’ issues as one of their top three most important causes/issues compared to men (17% and 5%, respectively). The top three of these causes included reproductive/health rights, women’s health, and addressing violence against women.

Percentage of affluent households giving to religious/spiritual organizations over time

Religion was a focus for affluent Americans’ giving in 2022. Twenty-two percent of affluent individuals chose religion as one of their top three most important causes/issues, and religious organizations continued to receive the largest share of giving dollars by affluent households. The overall percentage of affluent households giving to religious organizations, however, has declined sharply—from 47% in 2020 to 39% in 2022.

In looking to the future, we found that next-generation individuals (Millennials and Gen Z, born in or after 1981) were significantly more likely to indicate they sometimes or always align their purchasing decisions with their values compared to older individuals (those born before 1981). When asked about what causes/issues mattered most to them, younger individuals were significantly more likely to say climate change and education are more important to them, compared to older Americans. Important causes/issues by age

Not only do younger and older Americans rank causes/issues differently, their giving to charitable subsectors also differs. The top three causes/issues areas where younger and older affluent Americans give at significantly different rates were:


Despite the economic uncertainty of 2022, the generosity of affluent Americans remains, and it is clear that philanthropy among affluent households is a reflection of their personal hopes, beliefs, and values. They choose to support their communities and its members through giving and volunteering, with the goal of driving positive change now and for future generations.


This year’s study, conducted in January 2023, reflects charitable giving and volunteering strategies in 2022. The target population was comprised of adults aged 18 and older residing in the United States whose annual income was at least $200,000 or whose total assets were at least $1 million (excluding primary residence) for the 2022 year. The median income and wealth levels of the participants exceeded the threshold, at $350,000 and $2 million, respectively (average income was $523,472 and average wealth was $31 million). As in the previous three studies, the 2023 study included oversamples of affluent donors based on age, race and ethnicity, gender and sexual orientation. Statistically significant differences among these various segments are highlighted, where relevant. The final sample size for the study was 1,626 qualified interviews.

For a copy of the 2023 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households, please contact your advisor.

1 Indiana University Lilly Family School of Philanthropy, Philanthropy Panel Study (PPS),
2 Indiana University Lilly Family School of Philanthropy, Philanthropy Panel Study (PPS),
3 Answers have been abbreviated; full text is available upon request.
4 Answers have been abbreviated; full text is available upon request.
This publication is designed to provide general information about ideas and strategies. It is for discussion purposes only since the availability and effectiveness of any strategy are dependent upon your individual facts and circumstances. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for the final recommendations and before changing or implementing any financial, tax, or estate planning strategy.

Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.

Donor-advised fund and private foundation management are provided by Bank of America Private Bank, a division of Bank of America N.A., Member FDIC, and a wholly-owned subsidiary of Bank of America Corporation.

Institutional Investments & Philanthropic Solutions (also referred to as Philanthropic Solutions” or “II&PS”) is part of Bank of America Private Bank, a division of Bank of America, N.A., Member FDIC, and a wholly-owned subsidiary of Bank of America Corporation (“BofA Corp.”). Trust, fiduciary, and investment management services are provided by wholly-owned banking affiliates of BofA Corp., including Bank of America, N.A. and its agents.
Investment Portfolio Risk Management Click Here / The FDIC is in TROUBLE.
Bank Stocks Can’t Catch a Break With Rates Staying Elevated
by Bloomberg News
September 27, 2023

There may not be respite in sight for beaten-down bank stocks as attention shifts to 2024 and a prolonged period of elevated rates, according to analysts.

Midsized banks are “not out of the woods yet,” said Morgan Stanley’s Manan Gosalia in a note on Wednesday. Meanwhile, Wedbush and Truist Securities analysts said the group will continue to be challenged in 2024.

“‘Survive until 2025’ is a phrase that has been recently attributed to [commercial real estate] investors/borrowers, but we think the saying also applies to Regional and Community banks as higher interest rates weigh on profitability,” Truist Securities analyst Brandon King wrote.

Bank stocks have been roiled this year by the collapse of multiple regional lenders, including Silicon Valley Bank. The sector has failed to stage a meaningful rebound since the tumult began in early March, with the KBW Bank Index down 23% this year, compared to a 11% gain for the S&P 500 Index.

The sustained pressure that banks face having to pay more to hang on to their deposits amid high interest rates adds to the list of woes for the hard-hit group, which is also facing heightened regulatory expectations. Those issues, combined with uncertainty around credit resilience in an economic downturn, have pushed investors to the sidelines even as the sector’s valuations have cheapened.

“Street estimates are too optimistic for 2024 net interest income in a higher for longer environment,” Gosalia wrote.

Gosalia, who cut his recommendations on Zions Bancorp and Valley National Bancorp to underweight Wednesday, expects the upcoming third-quarter earnings season to be a so-called sell-the-news event.

Wedbush’s David Chiaverini anticipates upcoming earnings will be “underwhelming,” but that net interest income guidance cuts should be less harsh than in recent quarters. He’s still maintaining a cautious outlook for the sector, saying that consensus estimates for 2024 may be elevated because they probably incorporate funding cost relief given prior expectations for more significant rate cuts.

“The acute phase of bank stress is clearly over, but in its wake several challenges have become exacerbated including funding challenges, balance sheet constraints, dampened loan demand, and potential negative credit migration as CRE maturities are dealt with,” he wrote. “We believe these headwinds could weigh on bank valuations into 2024.”

END of Article

What does this article mean for YOU?

As an Advisor, I look at financial reports (Profit/Loss statements, Cash flow, Balance sheets, etc.).

The FDIC is an insurance company, and before I recommend a carrier for insurance coverage, I look at their balance sheet.

Specifically, I'm very interested in their reserves capacities. If you don't have the claims reserves to pay claims, you're not an "insurance company"; you're a fraudulent entity posing as an insurance company.

First, let's look at the FDIC balance sheet. It tells us the WHOLE story of why this article is relevant. It also opens the reasoning as to why YOU should be concerned whether you're a private citizen or a public (any commercial entity) company.

FDIC opened 2023 (January) with $123BB in assets. In March, they had 3 claims from insolvent banks - Silicon Valley, 1st Liberty, and Signature Banks could not keep their reserves available because of poor regulation/oversight and poor internal asset management (IMHO). Just 3 banks required over $34BB to resolve the issues for depositors who lost funds when these banks went into receivership. That leaves a net reserve capacity (notwithstanding additional insurance premiums paid by 4,844 other Federal Reserve Banks (FED banks) of approximately $84BB. The problem isn't the $84BB remaining. The PROBLEM is the 4,844 other banks who have toxic assets due to rising interest rates from the FED.
***Editor note 12/07/2023 - As of their end of July statement, FDIC has only added an additional $750 million to their reserves.

WHY Bank Assets Are Toxic
When a Bank loans money that it retains in its portfolio, that is an "asset" to the Bank, and a liability to the Borrower. When YOU deposit cash in a savings/CD, etc. that is a LIABILITY to the bank and an asset to YOU. Bank assets include loans they make, and investments in other entities like Treasury Notes, Bills, and Bonds (among other things).

An asset is determined to be "toxic" (to the bank) when it cannot be sold from the bank asset portfolio due to substantial loss of principal value, or risk of insolvency or other concerns regarding the ability to liquidate (sell) the asset at par or a premium above par.

Federal US Teasury debt has yielded approximately 1.5 - 2.25% yields for the past 8 years. Many Banks (of the 4,844) have been laddering these 30 yr long treasury Bonds as an ongoing matter of practice. This is akin to "Dollar Cost Averaging" in your 40?/457 pension plan where you work. High and low interest rates over time help reduce cost and blend rates to provide steady and reliable interest income. This is an acceptable practice until the FED announces (2022 Feb) their intention to start raising interest rates to alleviate inflation.

US 30 yr duration Treasury Bonds (the most typical bonds found in bank portfolios) are generally sold incrementally at $1,000/bond (aka "PAR"). When interest rates RISE, bond values (the "PAR" price of the bond paid at issue) FALLS.

So what was paid initially 4-6 yrs ago to acquire a 1.75% yield coupon Treasury Bond @ $1,000 with a 30 yr duration isn't worth $1,000 per bond when Fed rates climb to 4.5%. If you think about it, ask yourself this question - "Why would I buy a bond yielding 1.5% when I can buy a brand new bond @4.5%?" The answer is, you wouldn't. You would expect the holder of the 1.5% paper (bonds are referred to as "paper") to substantially DISCOUNT the par value from $1,000 down to possibly $600 (+/-).  Imagine the Bank portfolio holding 40% of its assets in US 30 yr Treasury bonds and this happens? To come up with the cash needed to take care of depositor demands would be a terrible hit on assets (in combination with the requirement to mark these bonds to the market with regard to their actual value. IOW, to not correct the valuation of the low rate paper to correctly reflect the value inside the Bank's portfolio is fraud. So, 40% of the portfolio losing 40% of par would correct the value to show a 16% loss of equity. (40% of X / 40% discount to par).

A look at the annual prices for Bank stocks in Honolulu, HI (I believe) shows a direct negative correlation of fed rate hikes and a corresponding loss of stock price value. If you live in a Condo or Homeowners association in Honolulu or (Hawaii in general) go ask your board Treasurer "where is the reserve account held?"

Most likely, at a Hawaii bank savings account earning 1/10th of nothing and WELL OVER the FDIC insurance limits of $250,000.00.

Did you know the FDIC is under no obligation to insure and indemnify losses that exceed the insurance limits? FACT. The FDIC can also defer the repayment of eligible/insured deposit funds on a repay schedule of 5% per year over a 20 year deferral? (FDIC hates when I point this out). The FDIC is STILL repaying claims from 2008-9.

You're actually doing your Board a great favor in kindness as they have "vicarious responsibility" for anything that goes wrong.

Here's the logic behind the fact that all of the reserves of your association are in the bank and earning nothing: "The board has a fiduciary responsibility to keep the reserves in a "safe and liquid manner". That doesn't mean "high risk, high yield"; It means they should sacrifice yield on the altar of safety and liquidity. I agree with this principle of principal. The flaw in their thinking is that in almost all cases, they have ignored the "undue concentration" of having it all in one account in one bank. There aren't very many ways to divide a deposit like that and still have the FDIC protections if $250,000 per account. The deposits are only as safe as the deposit insurance, and 3 banks used up 25% of their reserve account, with 4,844 other banks waiting to see if they survive the next round of interest rate hikes by the FED.

That's right. (Not counting) the new premiums paid into the reserve claim account, just 3 bank failures used 25% of the reserves, and only 8-10/4,844 more failures would seriously compromise their claim paying abilities. (BTW,"inflation" is over 25% presently;  the FED is NOT done raising interest rates, which will trigger more failures as banks continue to become more insolvent. The time to sell those 1.5% - 2% 30 yr bonds would have been no later than before March of 2022. Neither the regulators for the FDIC or the bank wealth management caught or saw this coming, and so, here we are on the cusp of (what I see to be) the greatest banking failure since the 1930's depression. The banks simply cannot afford to sell off these assets, and they can't afford to hold them until FED interest rates return to record low levels.

If your Condo association had $2mm in a deposit account for safe keeping, and the bank fell into FDIC receivership, what would happen to the deposits above the limit? What would that loss do to your Association solvency?

It doesn't get better when you realize how much of the asset portfolio (60% remaining) is invested in Corporate Bonds that are not federally guaranteed/backed.

The Banks have no reserves. They have a ZERO deductible insurance plan through the FDIC. It (appears) the FDIC hasn't taken in the premium needed to cover the losses caused by the act of raising interest rates to stop inflation. YOU PAY for that insurance with higher loan rates and lower savings rates.

If this all sounds absurd and incompetent? You get it.

I would URGE anyone who is in a Condo association who has reserves in the bank with undue concentration to CALL US TODAY. I have solutions that will satisfy the Board of Director's fiduciary responsibility for safety and liquidity that eliminates the bank FDIC insurance and solvency issues. 808-464-5292 Dan Turner, Akamai Wealth Management, LLC; CRD #322422

"Bloomberg News" is an Independent Business/Financial News reporting source; "Advisor Hub" is a professional Financial Advisory website. All expressed opinions below the end of that article is covered by Copyright 2023 Akamai Wealth Management, LLC Daniel J Turner, Principal Advisor, All rights reserved.
Estate Planning / May be Coming To an IRS Estate Audit Near You...
A Sneak Peek at the Potential 2024 Estate and Gift Tax Rates
Wherever there's change, there's also opportunity.
Matthew F. Erskine | Sep 22, 2023


[font=Georgia, Times, "Times New Roman", serif]Bloomberg recently released its predictions for the tax rates in 2024. These prognostications are based on the Chained Consumer Price Index for all Urban Consumers (C-CPI-U) data reported from September 2022 to August 2023 by the Bureau of Labor Statistics. The IRS relies on this data for annual adjustments to account for inflation. Here are the anticipated changes:

Unified Credit Against Estate Tax and Generation Skipping Transfer Tax Exemption Amount (§2010, §2631):[/font][/size][/color]
  • For estates of decedents who pass away in 2024, the basic exclusion amount for determining the unified credit against estate tax under §2010 will be $13,610,000. This represents an increase of $740,000; and
  • The GST exemption amount for generation-skipping transfers under §2631(c) will also be $13,610,000 in 2024, reflecting an increase of $740,000. (If a taxpayer uses the entire exemption and the exemption amount increases in a future year, the taxpayer may claim the additional amount in that year.)

[font=Georgia, Times, "Times New Roman", serif]Valuation of Qualified Real Property in Decedent's Gross Estate (§2032A):
  • If the executor elects to use the special use valuation method under §2032A for qualified real property, the aggregate decrease in the value of the property resulting from this election cannot exceed $1,390,000 for estates of decedents who pass away in 2024.
[font=Georgia, Times, "Times New Roman", serif]Annual Exclusion for Gifts (§2503, §2523):[/font][/size][/color]
  • The value of gifts made to any person (excluding gifts of future interests in property) that are not included in the total amount of taxable gifts under §2503 for the calendar year 2024 is $18,000. This represents an increase of $1,000; and
  • The value of gifts made to a non-citizen spouse (excluding gifts of future interests in property) that are not included in the total amount of taxable gifts under §2503 and §2523(i)(2) for the calendar year 2024 is $185,000.
[font=proxima-nova, "Helvetica Neue", Helvetica, Arial, sans-serif]Planning Opportunities: "Use it, or Lose it"
Related: Biden’s 2024 Green Book Tax Proposals
There are several estate and gift tax techniques that can be used during rising inflation. Here are some of the best techniques:[/font][/size][/color]
  • Take advantage of the increased lifetime gift tax exemption and generation-skipping transfer (GST) tax exemption. The IRS has increased the estate, lifetime gift, and GST tax exemption in response to inflation rates in 2022, offering an opportunity to preserve wealth for generations;
  • Use the annual gift tax exclusion to transfer wealth tax-free. The annual gift tax exclusion allows individuals to give up to a certain amount of money to another person each year without incurring gift tax;
  • Consider making gifts of appreciating assets. Appreciating assets such as stocks or real estate can be gifted to heirs, allowing them to benefit from future appreciation while avoiding estate and gift taxes;
  • Use a grantor retained annuity trust (GRAT). A GRAT allows individuals to transfer assets to a trust and receive an annuity payment for a set number of years. At the end of the term, any remaining assets in the trust pass to the beneficiaries tax-free;
  • Consider a charitable lead annuity trust (CLAT). A CLAT allows individuals to transfer assets to a trust that pays an annuity to a charity for a set number of years. At the end of the term, any remaining assets in the trust pass to the beneficiaries tax-free; and/or
  • Use a family limited partnership (FLP). An FLP allows individuals to transfer assets to a partnership and then gift or sell partnership interests to family members. This can help reduce the value of the estate and gift tax liability.
[font=Georgia, Times, "Times New Roman", serif]These are some of the most effective methods for preserving and transferring wealth in a tax-efficient manner. However, the rules surrounding these techniques can be complex and change over time. Start taking steps now to protect your clients assets and ensure their lasting legacy.
Matthew Erskine is managing partner at Erskine & Erskine.[/font][/size][/color]
Investment Portfolio Risk Management Click Here / "Safe" Money
By Dan Turner, Principal Advisor Akamai Wealth Management, LLC Copyright 2023 All rights reserved

As the registered Investment Advisor Representative (IAR) for Akamai, my focus is to help people who would rather live their lives and be free of the responsibility that comes with managing their own wealth vs. those who still insist upon doing it themselves.
This may raise the question, “Why shouldn’t I continue doing it on my own; look how well “I’ve done over the past 30-45 years”?
Well, that’s because your premise is deeply flawed. You haven’t managed your own wealth over the past 3-4 decades as much as you’ve WITNESSED it, and seen the importance of “Dollar Cost Averaging” (DCA).
Here’s the proof of my assertion: From 2020 through the present day, we’ve had no less than 4 market corrections that reduced the indexes by at least 25% or MORE. Where was your money when these corrections hit?
99% of you were still in the market and you lost substantial ‘paper’ wealth.
Not to worry! You continued to (unconsciously) invest the same sums at the same times in these down markets and rode them back to even higher values than before.
But you had nothing to do with it; you were caught in the market, and you benefitted by staying the course. It wasn’t YOU or YOUR “management” abilities that regained your value; it was the Certified Financial Analysts and Wealth managers who did the heavy lifting. You were a participant. Your job was to continue believing in the proven skills of management to restore value. You paid them fees for the work they do, and you benefitted from DCA and professional management, and diversification.
“But, Dan! I had great returns after these crashes! I did that!
Respectfully, no. You didn’t. You continued to make contributions which bought low priced shares, but make no mistake – the nice double digit returns you made after a market correction were “recovery” not growth. It became growth after the account share value reached the high mark price before the correction.
I know this may seem awkward for you, but I’m doing this exercise with you for two reasons:
1.     To show that you should not manage your wealth; hire someone (me0 to do it; and
2.     Things have changed since you retired, and they started changing in the years before you retired.
-You know very little about investing.
-You really don’t have an investment philosophy because you’ve limited yourself to the aggressive nature of investing from your youth to now. That is to be expected, but you’re still investing like a 30 yr old. This leads to tragic investment results, and it leaves you with only yourself to blame. IF you do something dumb and lose thousands of dollars? Who will you complain to? Will the ultimate solution of your inevitable catastrophe be “Wal-Mart” (the employment, not the stock)?
You’re 55 or older. You’re not a darned kid anymore but you’re still investing your money like one. You’ve lost the advantage of DCA in benefiting from market corrections...and you may have already learned the painful lesson that “Losses HURT more than gains can HELP”. That’s a rule. You want gains, but you cannot afford uncertainty. How do you cover this?
Safe Money Investing is the answer.
Many people are wrong when they see the term “Safe Money” and immediately think “Oh. He’s just trying to sell me annuities”. Well, annuities are safe money with great returns and no losses. My happiest Clients are annuity owners.
But that is not the only solution to safe money. There are now many programs that are earning index rates that can help you reduce your standard deviation risk to below 10 (ideal) without sacrificing growth.
Dr. Moshe Milevsky is the Professor of Finance at the University of Toronto, Canada. In July of 2021 he wrote one of his most famous papers on safe money investing titled “IN DEFENSE OF ANNUITIES”. Dr. Moshe is a well-known (in my circles) authority on risk management and investing with 17 + published papers during his past 23+ year career. He is also an “Adjunct” professor for the famous “American College of Financial Services” in Bryn Mawr, PA; He has proctored a couple of my courses, and I was deeply impressed with his granular understanding of risk management, and his ability to express it in ways that you might use to talk with your Irish Setter or Golden Retriever.
I would URGE you to google this and read it for yourself, but the general premise is this: “If you invested a single dollar in January 1, 1970 in the S&P 500 index and reinvested any dividends, in 50 yrs ending with December 31, 2020 that “Dollar” would have doubled 180 times to the value of $181.00 (which I thought was pretty remarkable).
His analysis used to derive this conclusion also pointed out that considering each month as a measurement of the 50 year term, the 600 monthly periods (12 x 50 yrs) could be classified as such:
-15% of the 600 months had negative returns of 2% or less with the greatest loss being over -22% in one month;
-70% of the months returned positive gains between -2% and 6%;
-15% were gains above 6% with the largest gain 16% in 1 month.
Dr. Moshe posited the following argument:
“There are two camps. One camp says, “I want to take the risk of higher returns and I’m willing to take the risks of loss as well. These people earned $181.00 over the invested sum ($1.00) and they occupy the two 15% marginal camps.
The other camp says, “I am willing to forego high value monthly gains if I can also eliminate losses greater than 2%. These folks occupy the 70% middle category. It is remarkable to point out that they performed quite differently than the risk takers.
Their $1.00 invested in January 1 of 1970 through December 31, 2020 yielded a STUNNING $531.00 growth!
This exposes three fundamental facts:
2.     By ELIMINATING RISK to the greatest extent possible, one can actually IMPROVE the portfolio growth over fully invested accounts!
3.   This assumption uses a cap of 5%. Imagine if the cap was 7%? 9%? 12%???

There is NO REASON to take market exposures if accepting less risk (even with substantially lower returns) yields higher account values. In fact, increasing the draw income becomes safer and can reduce “Sequence of Returns” risk which is the greatest destroyer of retirement income even more than a crackhead grandchild.
How does “SAFE MONEY INVESTING” Differ from what I do now?
“Safe Money” investing (to the greatest extent possible) uses market tools that can reduce standard deviation in a portfolio and stabilize the basic capital from market corrections, and thereby improve overall accumulation. This surplus created by a lac of market correction losses can be used to enhance income, yield, or both.
Investment Portfolio Risk Management Click Here / "What's Your Investment Theory?"
Aloha!~We've not met, but I'm an Investment Advisor Representative and principal advisor for "Akamai Wealth Management, LLC" here in downtown Honolulu. My job is managing your investment/wealth (or, I can help you create it). Whether you don't have any, want to have it, or have been exceedingly successful, or, anything in between? I'm your hucklebearer. ;)

I've been in financial services for over 40 years. During that time, I was a Life, Health & Fixed Annuity guy (32 yrs), a Mutual Fund guy (series #6 -2 yrs) and a series #7 stockbroker (16 yrs). I worked extensively with Credit Unions dealing with payroll deduction financial planning "on-the-fly" for membership development, and also helping credit unions manage their reserves by investing in bond ladder strategies. I've been mortgage licensed & registered since 2012. My specialty is solving problems, and investment asset management.

For decades, I've been a huge proponent of "Alpha"-based investing in active portfolio management. Using technical analysis to spot trends and fundamental analysis to spot winners, I also traded stocks for clients who had that "taste" for a more aggressive effort of accumulating equity. For decades, this was an undisputed pathway to prosperity.

Now? I'm not so sure. (Yes), if you're under 50? a strong dollar cost averaging (DCA) strategy into a volatile Equity Traded Fund (ETF) or open ended mutual fund is still the most efficient way to take advantage of (both) up and down market cycles and grow wealth by discounting the price of shares by taking advantage of market pricing swings (corrections).
But, if you're above age 50, your timeline is shorter before retirement and that needs to be addressed differently than by using the effective DCA strategies of a younger person.

In July of 2021, Dr. Moshe Melevsky released his white paper entitled "In Defense Of Annuities". He showed with statistical data and fact how taking market risk while additionally subjecting oneself to Sequence of Returns risk, taxation, and other relevant and critical exposures was not necessary. Before you tune out because you think I'm pushing fixed annuities, Please reconsider; I'm not. I'm actually and correctly endorsing the principles of "Safe Money" investing as a contrast to market oriented and risk exposure to unstable and constantly changing markets.

What is "Safe Money"?

"Safe money" is an investment practice that limits the exposure of your investment principal to market fluctuation. In short, you reduce the risk of loss while maximizing your potential for gain. While you would be (partially) correct to presume this includes Fixed Equity Index Annuities (FEIA's) that is but one of many aspects of safe money investments (which DO have their own appropriate place in retirement income planning).

"Slow & Steady Winds the Race" said the sage AEsop in "The Tortoise & The Hare". This is imperative, as in age 55+ You simply cannot afford losses. "Losses HURT you far more than GAINS can HELP you." Avoid losses of your principal.

Why is that important? Simply, when your acount value falls from $100,000 to 75%? That's a 25% loss. If you're over 55? You've seen these losses happen several times in the past 30 years. One may believe that in order to recover, the following year growth must be 25%; in fact, NO. It requires a 33% gain to offset that 25% loss. Yes, the problem is that most of us can't do simple math to realize that (which is why having your own personal advisor is a very big deal).

But additionally, think about the past 4 market corrections we've endured. The shortest duration recovery has most recently been the 2020 March-December correction from the corona virus and the ham-handed reaction of our governement regarding how to stop a virus by scaring people to death (but,I digress - more on this later). Typical recoveries average 4-8 years. In a retirement portfolio, you continue to need income, so you'll continue to drain equity from a portfolio with depressed stock prices. If your life expectancy from 65 is 30 years (average), expecting 3 market collapses with a duration of 5 years each is the idea of you spending half of your retirement recovering, and selling off shares of your portfolio at a discount valuation to provide you a lifestyle. You didn't see your cost of living cut in half, but you DID see your portfolio drop by half, and almost overnight!

Another problem with this is how deceiving it can be. After a 1 yr loss in excess of 40%, you see the next year recover 22%! Great news, right? That's not a gain, Folks. And your broker is reluctant to point that out. That's a recovery of the prior years losses. It comforts us, and we gain confidence, but the candid unvarnished fact is that it did not need to be this way. Overwhelmingly, we stay with what we know. We are reluctant to change what we used to (during our working/accumulation years) grow our account values to these magnificent sums. But its disingenuous to not accept the fact that (with very few exceptions) NONE OF YOU did anything out of the ordinary to create these massive gains. You built this pile of money by very simply coming in every day and doing your job while allowing the Payroll department to defer a portion of your income to a pretax account that you now control. But, all you did was dedicate it. DOLLAR COST AVERAGING did all your heavy lifting, and now that you've stopped working? You're not saving any longer! You're spending! DCA works BOTH ways. It builds wealth when you contribute; it destroys wealth when you withdraw money for retirement.

To be very candid with you? You cannot manage your money in retirement in the same manner you used to create it.
This is when "Safe money" wins, is also when DCA loses.

If you think about it? There are other areas (perhaps MANY other areas) that age/life has compelled you to change the way you do things in order to continue enjoying life. I had to give up tennis because of my bad knees; I then had to give up golf because of my bad shoulders. (Hopefully, I won't need to give up sex because of a bad...well, nevermind. ;-) Changing your investment strategies is every bit as necessary. DCA cannot perform, and your notion the market will continue to glide effortlessly skyward for you is both silly and naieve.

Well, back to the Melevsky White paper...Moshe did a study that he published in 2021 that looked at the month-to-month returns of the S&P 500 from 01/01/1970 to 12/31/2020. Exactly 50 years. 600 monthly periods were measured. He considered all dividends would be reinvested. He used a DOLLAR invested on 1/1/1970, and in that 50 yr period, it compounded 180 times to reach (what I consider to be) an astonishing value of $181.00. Keep in mind this used monthly gains and losses to aggregate the value.
Moshe analyzed the data using statistical math (He is the Professor of Finance at the University of Toronto and also teaches adjunct courses at the prestigious "College of Financial Services" in Bryn Mawr, PA) and quickly recognised that there was a "bell curve" aspect to the monthly returns and it looked like this:
-15% of all monthly returns were under -2% (losses) with the worst monthly loss at -22%;
-70% of all months were returns that would be considered "modest" by most investors; -2 up to 6%;
-15% of all monthly returns were in excess of 6% up to 16% (best monthly return).

This creates two possible schools of thought;
1. Those who were interested in attaining the highest possible returns while acepting the risk of enduring the lowest losses. This group experienced turning $1.00 into $181.00 as mentioned previously.
2. The second group who said, I am willing to give up the expectation of high returns (6%+) in exchange for never suffering a loss greater than -2%. These "investors" turned that SAME DOLLAR with reinvested dividends into $529.00 vs $181.00!!!

You now see that it does make a GREAT deal of sense to take risk of losses when you're feeding the account every payday and benefitting from DCA; You can now also see that when there are no further contributions to buying into a market with DCA? All you have remaining to show for it is risk, and limited rewards.

During the loss cycle of 4-7 years of moving forward with Safe Money is overwhelmingly more valuable in maintaining your purchasing power than earning double digit returns to get your account back to its original value. The geat news with safe money is also the liquidity aspect. Most Safe Money accounts have no (or shorter) surrender charges and rival and even exceed the returns found in the FEIA programs even when considering average consulting fees.

Safe Money is the solution. Call me TODAY and schedule your free time (yes, of course I'll comp your parking! :-D )
Charitable Remainder / Escaping the sect 1031 trap...

Essentially, the IRC 1031 is the same as an "IRA for Real Estate".
The diffference is that because you don't deduct the value of the homes in your account, you get to maintain the Long Term Capital Gain taxation status (preferred over ordinary income). You also get to stave off the claw back of the depreciation that is typically taken from the Investor. All of this is rolled forward and deferred from property to property until:

1. Death; then your Heirs get a step up in the cost basis from what you originally paid to the valuation at the time of your death), or
2. Do nothing; eventually, you die (see article 1 above) while maintaining the rental income and depreciation benefits. Mortgages and refinancing typically provides cash out for your life style but diminished income by doing this.
3. Take some, or part, or all of your 1031 properties out of your left pocket, and place them in your right pocket and escape all of this.
Most Real Estate investors want 4 things: 

-Capital growth,
-Tax benefits, and

They get the first 3, and spend their time chasing rent checks, repairing replacing, fixing, etc their properties. This is not a "hobby". If you own more than 2-3 properties? It's a full time job. When you're 30-50? You can get away with the time commitments, but age has a way of changing our perspectives on life, and we come to recognize that it may be time to find other ways of getting the 3 benefits of real estate from other ways, and (hopefully) find freedom in the process.

The real hold back is the reclaimed and substantial taxes due that has been rolled forward for 20-25 years along with the depreciation clawback when these properties are liquidated and no further properties are purchased to protect these gains.

The solution is the use of the "Charitable Remainder Trust" or some variation of that model.***NOTE - I did not say "donate your property to charity" AT ALL. Not at ALL.

Set up your charitable trust with the consultation of your legal services provider. As this is the most audited strategy, using highly focused legal technicians is paramount. Reach out to me for (Hawaii property owners) qualified legal representation (I know a few).

First, target your high value properties. Have them appraised. Donate these properties by transferring the titles to your Charitable Trust. Depending on how you structure your trust to meet your goals and objectives:

1. You may receive a very significant tax deduction, as well as reducing the value of your estate for federal estate tax purposes;
2. You get GROWTH. The liquidated value is invested professionally to a Fiduciary standard with targeted growth ranges in mind. 6-8% is not uncommon, and is approximately what you enjoyed with the property growth rate.
3. You get INCOME for 2-20 years as you decide. On a 10 yr payout (middle ground) a property drawing $30k/ yr in rent worth $1mm will bring in approximately $110,000/ yr of income (Some of this may also be tax friendly for you) - almost a factor of 4 TIMES the income of rent alone. AND...
4. You get FREEDOM.

By donating your properties to your own charitable trust? All the taxes you would have paid are now paying YOU. At the end of the term you selected? The "remainder" of the remainder trust goes to your favorite charity (or, charities).

Without much complication, we can even make substantial provisions for your Heirs and have THAT excluded from your estate values as well.

Of the 3 options for escaping the Section 1031 program (Die, do nothing, or start your own charitable trust? 
OPTION 3 is the winner.

Please reach out to me for more information. You may have Investors who would love to talk with me.

Financial Consulting / Do YOU Own Any Financial Planning Tools?
 The FED raised the discount rate today by yet ANOTHER 200% over the original base now at 4.50%. Add 2 percentage points (200 bps) and you now have 6.5% mortgage rates. Remember the 2.8% rate of a mere 2 yrs ago? You were holding out for 1.9% that never came?
Oops! (I didn’t mean to crush your toes). How clumsy of me. 😉
Lessons to learn from this:
  • “Pigs get fat; Hogs get slaughtered. It’s ok to be the pig; just don’t be the hog.” Greed creates need.
  • Nothing is “static” until it’s dead.
  • When the Federal Reserve (“da Fed”) tells you they intend on raising the interest rates? BELIEVE THEM.
  • Incrementalism boiled the frog. Pay attention.
  • If you’ve been holding off to purchase a different home? Negotiate your best price now, and BUY IT.

A great strategy is to purchase your new home with a (open - ended) HELOC. You can get a great teaser rate for 2-4 years and then refi later. If you’re over 55, I would use this strategy and calculate the mortgage rate for a common fixed rate loan and pay it on the heloc. DO NOT USE the heloc. It’s simply a way to finance your purchase (nothing else) and nothing more. Take full advantage to make additional payments on the principle to reduce your debt without the large up-front mortgage interest that normally attends conventional 30 yr (closed ended) mortgage programs.

"Buy a blouse, LOSE your house!" Take 9and use) your home equity seriously. If you need to use it at all? Use it to BUY appreciating assets. NOT collectible stuff. Not cars. Not vacations. By making more than the interest payment several times a month, you can kill your debt in less than a decade. No prepayment penalties.
By making the estimated payment (vs an interest only payment), you can drop the principal SUBSTANTIALLY during that low interest rate period. When it comes to an end? GET A REVERSE HELOC MORTGAGE (DO NOT use a fixed interest rate reverse as they are useless for retirement planning in any on-going sense of strategic use) for the unpaid balance, and repurpose the same monthly payment to investments and create yet ANOTHER non-qualified investment account that can be used for any good reason with few if any negative side effects.
The FHA Reverse HELOC has MULTIPLE advantages over any other type of loan or financial tool:
  • It can never be taken from you (unless you use it to break the law);
  • It is a “FEDERALLY INSURED, FEDERALLY regulated and guaranteed “safe” way to finance or refinance a residential mortgage or purchase.
  • Reverse HELOC mortgage interest is tax deductible regarding the original financed debt; up to $750,000, and only the interest based upon the original mortgage sum. Interest generated from the use of the 2nd year HELOC is not deductible under current tax laws but may be legally used to shelter wealth assets for Medicaid protections that are expanded by the deferred Reverse mortgage interest. These payments of mortgage interest by the HELOC are zero cost tax deductions.
  • The HELOC provides approximately (age adjusted basis) 24-32% MORE EQUITY than the fixed rate FHA reverse, and is a primary reason for avoiding it.
  • Any of the strategies employed in a reverse can be changed. While the interest rate and maximum loan amount cannot be altered, the growth factor of the HELOC feature makes this an incredibly flexible financial planning tool for retirement.

As the mortgage interest accumulates in the reverse, it can be paid down with your new reserve account, and that payment will trigger a 1098 for mortgage interest that can offset much (if not all) of the taxes due from the liquidation. This “payment” will now be immediately available in your Reverse HELOC, and this account is currently growing/adding new available equity without a need of an appraisal or any other expense at approximately 8.5% TAX FREE.
This improvement in guaranteed equity growth will continue unfettered until you both die, or leave the home. This will protect your equity for your Heirs and cannot be considered “income”. Think about that in conjunction with most government benefit plans.
Alternative strategies would include (but are not limited to) converting some, part, or all of your HELOC balance into Tenure guaranteed income for life that may be suspended, increased, or reduced (by you) at no charge upon demand. You may also convert chunks of your HELOC balance into term payments for your needs. You may also use your HELOC to pay off secured notes, and then redirect the payments to the reverse, and every dime will become immediately available to you in the line of Crédit and add new equity at the prevailing mortgage rate.

If you realise that in a battle of retirement problems and issues that you're virtually unarmed, CALL ME. Do it, now.
Daniel J Turner, Principal Advisor
Akamai Wealth Management, LLC
1088 Bishop St. Executive Centre Ste 300
Honolulu, HI 96813
808-691-9200 office
808-464-5292 direct

Advisory services are offered through “Akamai Wealth Management, LLC”. 
(AWM) a registered Investment Advisor registered in the State of Hawaii.

Dan Turner (NOT Akamai Wealth Management, LLC) is mortgage licensed in HI, CA, OR, OH, and IL.
 All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current of future performance or indication of future results. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons.

Investing always involves risk and possible loss of capital.

AWM and Dan Turner ( Principal) are not attorneys or accountants and do not provide comprehensive legal or tax advice. For full disclosure of all relationships associations, affiliations, fees, charges, and capacities please request the ADV 2 A&B from Dan Turner.

Investment Counseling / Your Relative/Spouse just passed on, and you’ve recently inherited their IRA
 The inherited IRA is perhaps one of the most complicated and financially dangerous circumstances in Retirement planning today, and may (inadvertently) involve navigating through estate planning, tax planning, and retirement/financial planning strategies. You should not try this at home.
An uninformed decision could cost you thousands in unnecessary taxes, and no one to hold responsible but yourself. Read on if you know someone who is dealing with the recent death of a Spouse, as your friendship in this matter can actually be measured in dollars. Or, if YOU find that you now have this circumstance in your lap…for the purpose of this article, I am only talking about the SURVIVING SPOUSE of the IRA holder – the primary beneficiary.
Very few IRA accounts are the original $2,000/yr IRA’s opened in the 80’s. Now, we have the most common format called the “Rollover IRA” and is usually the proceeds of a pension plan, 401-k, 403 b-7, or 457 TESP plan. The spouse rolled these funds into the “rollover IRA when they retired, and allowed the funds to continue growing tax deferred until the “Required Minimum Distribution” (RMD) forced distribution age of 70.5 yrs of age (which became age 72), and then age 73, and is anticipated to be age 75, or you inherited the IRA account at the passing of your Spouse, which lands you on this page. Lemme see if I can be of help…
When your Spouse set up the account, it had a beneficiary designation for a primary and contingent beneficiary. When they died, the funds was transferred to you. DO NOT roll it into your checking/savings bank account as this will cause you a big taxation mess, and the IRS won’t be very forgiving. Children or other Heirs cannot roll this over, and the greatest amount of latitude and possible choices is granted to the surviving spouse. Part of the problem is the choices are numerous, and without guidance, you may accidentally put yourself into a problem you could have avoided.

Under reg 72-t, the IRA can be annuitized using a life expectation table provided by the IRS (how thoughtful!) ;-)

Recently, the CHARM Act of 2020 changed the rules of this and created unique and dangerous circumstances for the Heirs of the account. Reg 72-t allows someone under 59 1/2 to access the funds at their attained tax bracket of taxable income plus the distribution based upon either mortality or essentially equal distributions paid over a period of years as established by the relevant IRS tables. That has been changed to a ten year window regardless of life expectation (that did allow someone to decide in what years they would take distributions (for tax planning and protections), and recently changed to ten (more or less) equal distributions
that force the Heir or recipient to expose the entire account to taxes regardless of the bracket creep it could trigger.

A solution to this event could be the use of a Charitable Remainder Uni-Trust (CRUT) that allows the donation of highly appreciated real estate, stocks or IRA accounts. The Donor(s) estblish their own legal charity Trust, and then make donations of their estate property (mentioned above) that are valued before the transfer to the Donor's own charity trust account, and then sold/liquidated inside the trust. This eliminates the taxes due and converts the sum into an income stream that is tax favored for up to 6 years while providing substantial income for 2 up to 20 years. This can be extended to numerous beneficiaries after the death of the final Donor and/or paid to a family wealth transfer trust (Irrevocable/ILIT). This also allows for the ability to fund substantial Life insurance or annuity programs to expand the sum of tax free monies available to the Heirs at the death of the last Grantor. In the last year of the Grantor - chosen payout, a substantial donation of 10% of the funded sum is paid to one or more Charities that are chosen by the Grantors. (Yes - the donation part is inescapable without the substantial wrath of the IRS, but the value received by the trust is overwhelmingly larger than the donation.

If this idea appeals to you and/or you'd like to hold a deeper conversation to expplore your possibilities? Call me today.

Sadly? The deceased cannot make plans.

Estate Planning / Wills v Trusts

 A recent survey conducted by “” indicates that 68% of Americans do not have a will (candidly, I thought it was much higher than that!)

While it’s unclear if the 68% have made other arrangements (e.g. transfer on death, Joint-tenancy provisions, present day gifts, etc) or just outright done nothing to plan their estate transitions, it’s also unclear what percentage use a Living Revocable Trust but is estimated at approximately 2-3% of the population.
Let’s discuss the differences between a Will and a Trust...

A will is a testamentary document. It’s also the tool of the Probate Court in the county you live in, and is there to provide the Court with some relevant certain idea of how your residual wealth should be distributed after expenses. The first line in your will typically reads: “I direct that all of my just and due debts be paid from my estate as soon as practicable.” Not your grieving Spouse, or your children; not your favorite charity, not your par amour. Your creditors. That would also include officers of the Court which is pretty substantial. Attorney(s), Judges, Bailiffs, Accountants, Appraisers; Even the Executor/Executrix get paid (although) there is no greater “thankless job” than being stuck as the Executor of an Estate, and they don’t have to post a bond, but can end up needing one.
Everything you own makes up your estate. Debt is also a part of your estate, as the act of settling it involves the legal system, and we all understand there’s no “free lunch” when it comes to legal services (dead or alive).
Notice it doesn’t say “as soon as possible”. “Practicable” lacs a sense of urgency. The Court obtains an appraisal of the entire estate of titled and untitled property, including chattels, collections, art, shoes and sox and underwear, plates cups, saucers, pots and pans, tools, and everything else. You owned it? They appraise it.
The problem with this is an appraisal isn’t a valid estimate of value, because there is no downside pull. A willing buyer and willing seller can negotiate/argue/dicker over the value of an object until they agree. That’s called a “fair market price”. The appraisal is only one side of this equation, the sellers opinion. This will over inflate the value of the estate. In most estates, the attorney charges a fee based upon that gross estate value, as does other Court officers. If there isn’t enough cash (Liquidity) in the estate, an auction/estate sale is sued to sell of the articles of inheritance as the Attorney does not want your “Hummell” collection as compensation; they want the cash value of that collection.
Additionally, the term “Probate” comes from the Latin term “Pro Batum” which means “a place to do battle”. Not to be confused with verbatim, the letter “u” really makes a difference here. This means anyone who has a claim can present their case to the Probate judge and be granted a hearing, and that can lead to litigation and contests to displace existing beneficiaries (and more commonly) displace the wealth of the estate and redistribute it outside the expressed wishes of the deceased (you). Whenever you hear of families having horrible fights over estates? Now you know where that comes from. The Will opens this can of worms. Oftentimes, the litigant will prevail over the estate and falily because they have a contingency attorney who works for free and takes a percentage of the settlement. The Heirs must defend the estate with an Attorney who works on retainer. It may be paid by the residual estate, but not likely. Defense is typically at the heirs expense.
An unseen pitfall of the Will and Probate Court is the need for the family to petition/appeal to the Judge to get permission to list/sell the home.
There are a LOT more reasons why you should avoid probate, and books are written every year explaining these points of concern.

Among these reasons could be
-No privacy. Probate is a matter of public record 9as is also) the content of your estate.
-No urgency to complete the process. Heirs want to be paid; attorneys want to be paid...forever. I know of estate cases in Probate court that are well over 100 years from the death of the Estate owner.
-Legal dispute - Once again, the very definition of the latin word "Pro batum" provides the only necesssary clue.
-A LOT of fees. Legal, appraisal, accounting, court, it seems endless, but Probate is a great economic stimulus for those who work in the probate system.
-Family fighting - Good solid families frequently turn into savages and beasts over getting their fair share of the residual estate. Probate invites these matters.
-Judicial discretion: The Judge can throw your will out and disregard it in part or in full, and the Court can rewrite it to meet the needs of the court.
-Lac of liquidity compels auctions. I used to LOVE going to Estate Sales...until I finally looked in the eyes of the family members who attended and watched me carrying their chattels away without any regard for their feelings about the matter. But, the fact is, the memebrs of the court system don't want your Mother's "Hummel" collection. They want the cash from the SALE of that collection without regard for the fact that you wanted that collection. They get paid before YOU do.

There are more unsavory aspects of the probate system, but as Matthew Broderick learned in that 1983 movie, "War Games "Probate is like "Geothermal nuclear war. They only way to win is to not play. How about a nice game of chess?"

Let’s now turn our attention to the “Inter-Vivos” Trust (commonly known as the Revocable Living Trust. As with corporations, the Trust is considered to be a living person who acts on the behalf of the estate. It’s very simple.
There are but four (moving parts):
  • The Grantor of the trust. Typically, it’s the owner(s) of the estate.
  • The Trustee. Typically is also the Grantor except if the trust is irrevocable (but that’s a conversation for another day).
  • The Successor Trustee. Takes over and executes the trust after both Grantors have passed on.
  • The Beneficiaries. These people and/or entities will inherit the corpus of the residual estate.
VERY simple. There is no court involvement beyond filing a simple form or two. An attorney is not necessary. None of the other “court officials” are needed, either. A trust is a private affair of the family and is not public record. A trust is incontestable. That means if your brother doesn’t like the split? The trust is almost impossible to sue, and generally, courts throw out such cases immediately. I knew a family who had every reason to sue their late daughter’s estate, and they spent over $50,000 in legal expenses just to be thrown out of court during the first 5 minutes of the hearing. You would have a better chance suing the attorney who drafted and advised the Client for malpractice than suing the trust itself. It’s considedd “bullet proof” protection from claims.
A trust also allows broad capacity for strategic planning for the legacy of the family. As an example, you have 2 children. One is 33 and living on their own, the other is 13 (whoops!) 😉 and still very dependent on you. It’s unfair for the elder son to get his share and the younger son must use his inheritance to just get through high school. Circumstances like this can be corrected with a trust. A will cannot do anything.
A trust also allows for a corporate Successor trustee. This is a very convenient thing, and safer for the family/Heirs especially if they demonstrate the inability to manage resources well. Unfortunately, many states consider investment and asset management incompetence at a felony level, and successor trustees actually do have a fiduciary duty (Albeit limited fiduciary) duty. Using a Bank trust department may be a great solution to that risk. Additionally, The corporate trustee has an infinite life span, doesn’t develop dementia, is insured against mal or misfeasance, and doesn’t have emotional ties to the beneficiaries. Bank Successor trustees are not often used, but they should be used a lot more than they are.
If you have a modest estate (under $10mm) a great resource for a Living Revocable Trust is for a very modest price, you get a state specific trust, durable Power of attorney (DPOA), for medical AND for asset management, a Living will, a Pour-Over will (captures property and assets that you fail to register into your trust) that will meet your general needs and concerns and eliminate probate court involvement for your heirs. There are others, and you should shop to see what you can come up with. These trusts can be emailed to you as a template that you fill out and submit, and they complete the work and send you the product by email or by registered courier (e.g. UPS, FEDEX, etc) and they YOU take it to your credit Union or a notary service to sign it into effect. ***It is IMPORTANT/IMPERATIVE that you bring the titles of all your real property and bank/investment accounts to be titled into your trust. This is called FUNDING the trust. An unfunded trust will be put through probate court, settled as intestate, and the remaining estate after expenses will then be funded to the trust and distributed to the Heirs. This is insanely expensive and time consuming, and a grossly unnecessary cost.
Ultimately, the tool you choose to distribute your estate is entirely your business. I had a Client I repeatedly urged to get a trust to protect her two sons. After several months of gentle reminders, she interrupted me and said, “Dan, I know that you mean well, and that you care. I have no interest in making anything about my death simpler for my boys, as they have punished me with their disregard for decades, and I hope you can respect my decision with this.” Of course, the boys were schmucks, and they got what they deserved. They lost well over $100k, and took over 3 years to settle her estate.
I never said a word. 😉
***Dan Turner is not an attorney. He does not practice law. Nothing in this article or any other words spoken or written should be construed as legal advice. If you have concerns about the future of your financial affairs, feel free to reach out to me and I can help refer you to competent legal counsel.
Daniel J Turner, Principal Advisor
Akamai Wealth Management, LLC
1088 Bishop St. Executive Centre Ste 3007
Honolulu, HI 96813
808-691-9200 office
808-464-5292 direct