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Make protection a priority
Every day in the news, we are bombarded with stories of loss and tragedy. I often find myself thinking of the family members who are left behind when someone suddenly dies. The emotional impact of the death or disability of a loved one is traumatic in itself. However, amidst their grief, families affected by tragedy must continue to pay their bills, care for children and attend to mundane financial considerations. If the primary earner of a family dies prematurely or is seriously disabled, this can have a catastrophic effect on a family’s financial stability.

Drown out the Noise – You Are Smarter than You Think

I spent a couple days earlier this week at an investment conference. Whilst there, I was reminded of the volumes of empirical evidence supporting our investment philosophy. It was reassuring and affirming.  Even though I’m “in the business,” I’m not immune to the noise that is everywhere.  Talking heads on TV telling us which stocks are winners; newspapers telling us the sky is falling; co-workers telling us how great their investments are the greatest thing since sliced bread. These distractions are ever-present, and it takes true resolve to not be swayed by these externalities. Clients will often ask what we think of a particular event (How will Brexit impact me?) or security (Should I buy some Apple?) or perceived future risk (But what if Trump is elected?).  These questions are relevant and valid, but they shouldn’t cause you to deviate from your long-term strategy.

Exercise Your Right to Vote While Abroad

Unless you’ve been living on a remote island with no access to communication for the last several months, you are no doubt aware of the highly controversial U.S. Presidential election campaign in which the nation is currently embroiled. Regardless of your political affiliation or preference (or abhorrence) for one candidate over another, this election cycle has reiterated the importance of being a part of the political process. The stakes are high as the candidates have widely diverging views on topics such as economic policy, immigration reform, gun control, LGBT rights and everything in between.
Participating in a general election while abroad requires advance planning in order to ensure you are registered for an absentee ballot by the applicable deadline. The Federal Voting Assistance Program (FVAP) recommends mailing your ballot in at least 4 weeks before the election. Some states now allow voted ballots to be submitted by email or fax, though this means you may have to waive your right to a secret ballot. Many states also now offer verification services to voters to help track registrations and ballots.
Even if you have enrolled as an absentee voter in the past, you will need to complete a new Federal Post Card Application for each election cycle. The State Department recommends doing this each January to account for any mid-term elections.

To learn more or to complete your absentee ballot registration, you can visit the following sites:
U.S. Department of State:
Federal Voting Assistance Program (FVAP)

Risk Warnings and Important Information

The above article does not take into account the specific goals or requirements of individual users. You should carefully consider the suitability of any strategies along with your financial situation prior to making any decisions on an appropriate strategy.

MASECO LLP trading as MASECO Private Wealth is authorised and regulated by the Financial Conduct Authority, the Financial Conduct Authority does not regulate tax advice. MASECO Private Wealth is not a tax specialist. We strongly recommend that every client seeks their own tax advice prior to acting on any of the strategies described in this document.

By Ashley Scher

Protecting Your Estate from an Uncertain Future: The $4m Quandary

Where will you be in five years? Ten years? Twenty years? Perhaps the answers to these questions are straightforward, but for many expatriates, there is tremendous uncertainty in longer-term planning. Job changes, family obligations and retirement goals can affect not only one’s physical trajectory, but also tax residency and domicile situation. Additionally, what starts as a two-year job secondment can turn into 20+ years in residence outside of the US. Given the fluid nature of such circumstances, many people avoid planning altogether and put it in the “too complicated” or “deal with later” mental buckets.

Unfortunately, taking no action can be a costly mistake. An individual’s domicile can have a significant impact on the complexity of one’s estate planning. Even if your plan is to return to the US in retirement, if you’ve been in the UK for many years or maintain your primary home here, you may be considered deemed domicile in the UK for inheritance tax purposes and thus have a large potential UK liability. In the US, one’s estate can grow to $5.45m USD ($10.9m for married filing jointly taxpayers) before estate tax is assessed. In the UK, however, the limit is much lower, currently £325,000 per individual or £650,000 for a married couple. The difference between the two tax regimes is nearly $10m USD (depending on the exchange rate). Therefore, for those who are currently deemed domicile in the UK but who intend to leave in the future to break these ties, there is approximately $4m USD at risk which could be lost to tax if death occurs in the interim.

One solution is to use insurance to help protect against this potential liability. For example, term insurance can be a low-cost strategy (depending on age and health) to bridge the gap until the domicile ties have been broken. There are also hybrid plans that can have lower initial premiums renewed every ten years on a guaranteed basis. These plans are often attractive for those who don’t know exactly when they may break their domicile ties. This type of planning is complex and may require legal counsel to ensure the policy is not includable in the gross estate. It is certainly worth pursuing advice to ensure beneficiaries aren’t surprised with an extra $4m tax bill.

Risk Warnings and Important Information
The above article does not take into account the specific goals or requirements of individual users. You should carefully consider the suitability of any strategies along with your financial situation prior to making any decisions on an appropriate strategy.

MASECO LLP trading as MASECO Private Wealth is authorised and regulated by the Financial Conduct Authority, the Financial Conduct Authority does not regulate tax advice. MASECO Private Wealth is not a tax specialist. We strongly recommend that every client seeks their own tax advice prior to acting on any of the strategies described in this document.

Ashley Scher

Be Brave, and Go Bargain Shopping

I had no idea how useful my psychology degree would be when I began working in finance. The study of behavioural finance has a growing audience as more and more economists, advisors, and investors realize that despite best intentions, emotions impact financial decision making, often in a detrimental manner. Most savvy investors accept that markets are efficient and that having a well-diversified strategy is a key to long-term success; those concepts are straightforward. However, sticking to one’s strategy in the face of plummeting stock prices and negative portfolio performance requires resilience and discipline.

It is tempting to consider dialling down risk or holding off on deploying surplus cash. After all, markets could fall further and you could be in a worse position six months or even a year down the road. That’s true, but unless you have a very short time horizon, such short-term volatility should not be a cause for concern. In fact, it is completely normal and expected. When market corrections occur, remind yourself that stocks are “on sale” and there are bargains to be had. By ignoring your emotional propensity to cash in and shove your money under the mattress, you can significantly improve your long-term performance potential. By buying into the market as it approaches a trough, you are helping to lower your average cost and giving yourself significantly more upside potential than if you wait until recovery is underway. But be wary of trying to time the bottom; market timing doesn’t work, and it will just leave you frustrated and anxious.

There will always be a new crisis, but it will not be the undoing of the global economy. We have survived the Great Depression, world wars, oil embargoes, terrorism and bubbles too numerous to count. Markets react quickly, and in the long run, you are far better off participating than sitting on the sidelines. Your portfolio strategy is your blueprint for success. Stick to it to give yourself the best chance for long-term positive performance. Block out the “noise” from the media (remember, they get paid to sell stories not provide financial advice). Rebalance and be patient. This, too, shall pass.