Wealth management and financial planning; for individuals and businesses.
Wealth management and financial planning; for individuals and businesses.
Protect Yourself and Loved Ones from Fraud
Tom Furlong, Marcia Cammack • June 20, 2024
Fraud is an ever-present threat, becoming more sophisticated with the advancement of technology. It's crucial to stay vigilant and proactive to protect your finances and those of your loved ones. At Meritrust Wealth Management, we prioritize your financial security. Here are some essential strategies to help safeguard against fraud.
The Increasing Sophistication of Fraudsters
Fraudsters are continually evolving their tactics, using technology to trick even the most cautious individuals. They exploit vulnerabilities through phishing emails, phone scams, and fraudulent websites. Staying informed and vigilant is your first line of defense.
Trusted Contacts: A Critical Safeguard
One of the most effective measures you can take is to designate a trusted contact. This person can monitor your accounts and alert you to any suspicious activities. Having this conversation with elderly parents or relatives is essential to ensure their assets are safeguarded.
Credit Card Safety Tips
Credit cards are a common target for fraud. Implementing these strategies can help reduce your risk:
Use Different Cards for Autopay and Everyday Spending
Keep a separate credit card solely for autopay subscriptions, such as utility bills or streaming services. This way, your primary spending card is less exposed to potential fraud at restaurants, retail stores, or fuel stations. While this doesn't prevent fraud entirely, it can prevent late payment charges if your primary card is compromised.
Pay with Mobile Wallets
Mobile wallets offer a secure way to make payments. They use tokenization technology, which means your actual credit card details are never shared with the merchant. Payments require fingerprint, swipe, or password authentication, adding an extra layer of security.
Set Payment Limits
Most credit card providers allow you to set daily limits for various transactions, such as ATM withdrawals and online purchases. Adjust these limits to the minimum amount necessary for your day-to-day needs. This can help prevent large unauthorized transactions and can be easily managed through your card provider’s mobile app.
Practical Steps for Fraud Prevention
Review Accounts Regularly
Make it a habit to check your financial accounts frequently. If you spot any discrepancies or unauthorized charges, report them immediately to your financial institution. If you’re assisting an elderly loved one, familiarize yourself with their typical transactions and flag any irregularities.
Block Unsolicited Calls and Mail
Registering with the National Do Not Call Registry can help reduce unwanted sales calls. Visit donotcall.gov or call 1-888-382-1222 to register. Additionally, you can remove yourself from direct mail lists through the Direct Marketing Association’s website.
Be Observant
Scrutinize any communication that appears suspicious. Check the sender's email address for spelling errors and avoid clicking on unfamiliar links or attachments. Educate your loved ones on these warning signs and encourage them to verify suspicious messages with you.
Utilize Banking Safeguards
Many banks offer additional fraud protection measures, such as setting up fraud alerts and opening separate accounts for online purchases. Contact your bank’s customer service team to explore the available options and choose the best protections for your needs.
Talk to Your Meritrust Advisor
For personalized advice and additional strategies to protect your assets from fraud, contact your Meritrust Wealth Management advisor. We're here to help you navigate these challenges and ensure your financial security.
By staying informed and implementing these strategies, you can significantly reduce the risk of falling victim to fraud. Take action today to protect yourself and your loved ones.
The upcoming expiration of key provisions from the Tax Cuts and Jobs Act (TCJA) in 2026 could significantly impact your financial situation. With current tax rates still lower, there are key opportunities to consider today before these changes take effect. For those who prefer quick takeaways, here are some immediate recommendations: Key Recommendations: Consider Roth Conversions Now: Lower tax rates today, due to the TCJA, make Roth conversions attractive. However, your personal circumstances, such as age and whether you plan to move to a lower-tax state, should influence your decision. Plan for Changes to Mortgage Interest Deduction: The current $750,000 limit on mortgage interest deduction will revert to $1 million in 2026 when the TCJA provisions sunset, and home equity loan interest up to $100,000 will become deductible again. Take Advantage of SALT Deduction Expiration: The $10,000 cap on state and local tax (SALT) deductions will expire in 2026, potentially allowing individuals in high-tax states to deduct more of their taxes. Prepare for Miscellaneous Deductions: Deductions for unreimbursed employee expenses and tax prep fees, which the TCJA eliminated, will return in 2026 if they exceed 2% of your adjusted gross income. Review Estate Tax Planning: The estate tax exemption will revert to pre-TCJA levels in 2026. The exemption amount is expected to decrease from its current level of $12.92 million for individuals and $25.84 million for couples to approximately $5 million for individuals and $10 million for couples, adjusted for inflation. As we approach 2026, the expiration of certain provisions from the Tax Cuts and Jobs Act (TCJA) could bring significant tax changes. By acting early, you can take advantage of today’s lower tax rates while preparing for what’s ahead. One key area to consider is Roth conversions. Under the TCJA, tax rates are currently lower, making it an ideal time to convert traditional IRA funds into a Roth IRA. This strategy could be beneficial if you anticipate a higher tax bracket in the future. However, your personal circumstances matter. If you currently live in a high-tax state but plan to move to a lower-tax state in retirement, delaying the conversion might be a better option. Age also plays a role in deciding the best time to convert. Mortgage Interest Deduction Another major change tied to the TCJA is the mortgage interest deduction. At present, taxpayers who itemize deductions can deduct interest paid on the first $750,000 of mortgage debt, a limit set by the TCJA for debt incurred after December 15, 2017. However, when these provisions expire in 2026, the limit will revert to $1 million. Additionally, interest on home equity loans of up to $100,000—regardless of the loan’s purpose—will once again be deductible. If you have a large mortgage or home equity loan, these changes could increase your deductions, offering valuable tax savings. It’s important to review your mortgage situation and plan for these upcoming adjustments. SALT and Miscellaneous Deductions The state and local tax (SALT) deduction cap, which was a hallmark of the TCJA, is another significant change set to sunset in 2026. Currently, the deduction is capped at $10,000, limiting the benefits for individuals in high-tax states. Once the cap expires, you’ll be able to fully deduct state and local taxes if you itemize your deductions. Additionally, miscellaneous deductions, including unreimbursed employee expenses and tax preparation fees, were eliminated by the TCJA. These deductions will return in 2026, allowing those whose expenses exceed 2% of their adjusted gross income to claim these deductions once more. Estate Tax Changes Another significant change on the horizon is the estate tax exemption. Under the TCJA, the estate tax exemption was doubled, allowing individuals to pass on up to $12.92 million and couples up to $25.84 million without incurring federal estate taxes. However, when the TCJA sunsets in 2026, this exemption will revert to pre-TCJA levels, approximately $5 million for individuals and $10 million for couples, adjusted for inflation. This reduction in the exemption amount could affect your estate planning, especially for those with significant assets. Take Action Now With the expiration of the TCJA provisions on the horizon, now is the time to start planning. Whether you’re considering a Roth conversion or want to understand how these changes to deductions could impact you, it’s essential to consult with your financial advisor. Once November’s election is over and we have added clarity about potential tax policies, we will be prepared to execute a proper plan for you. If you’re already a client, reach out to your advisor today to discuss your options. If you’re not yet a client of Meritrust, don’t wait—call to speak with one of our advisors or schedule a meeting today. Together, we can review your current financial plan and ensure you’re maximizing the opportunities available before the TCJA sunsets in 2026. These potential tax changes could have a lasting impact on your financial future, and being prepared to take action quickly could help you secure greater financial stability for the years ahead.
Watch as your Meritrust Team discusses the basics of Social Security and Medicare while covering some of the ways in which financial planning can help you make the right choice for you and your goals.
Key Points: Impact on Business Valuation: Life insurance proceeds must be included in the business valuation for estate taxes. Potential for Higher Estate Taxes: This could push estates over the exemption limit, increasing tax liabilities. Liquidity Concerns: Without proper planning, businesses may face liquidity challenges when covering estate taxes. Alternatives Available: Different buy-sell structures can help avoid these issues. As a business owner, planning for the future involves many complex decisions, especially when it comes to protecting the value of your business and ensuring a smooth transition in the event of an owner’s death. The recent Supreme Court decision in Connelly v. United States has introduced significant changes that could affect your estate planning, particularly if your business relies on an entity-purchased buy-sell agreement. Understanding the Supreme Court's Decision The ruling centers on how life insurance proceeds are treated within entity-purchased buy-sell agreements for estate tax purposes. The Supreme Court has ruled that these proceeds must be included in the business’s valuation within the deceased owner’s estate. However, the repurchase obligation—essentially the cost the business incurs to buy back the shares—cannot be used as an offset against the fair market value (FMV) of the business. This change could result in a higher valuation of your business, potentially increasing the estate's value and leading to larger estate tax liabilities. What Does This Mean for You? As a business owner, you might now face a situation where your estate's value is inflated due to the inclusion of life insurance proceeds, pushing you over the current estate tax exemption limit. This could result in a significant increase in the taxes owed upon your passing, creating challenges for your heirs and possibly requiring them to sell business assets to cover these taxes. Liquidity Issues: This ruling could also introduce liquidity challenges. Without additional life insurance or proper planning, your estate might struggle to cover the increased tax liability, putting the future of your business at risk. How to Protect Your Business Thankfully, there are strategies available to mitigate these potential issues: Cross-Purchase Buy-Sell Agreements: In this structure, each business owner holds a life insurance policy on the other owners, allowing the proceeds to bypass the business entirely. This structure can help avoid inflating the business’s valuation. Cross-Endorsement Structures: This approach reduces complexity by allowing each business owner to endorse their life insurance policy’s death benefit to the other owners, simplifying administration while avoiding the estate tax impact. Insurance LLC: Forming an LLC to own the life insurance policies can centralize and streamline policy management, although this requires careful structuring to ensure it avoids the same tax implications as entity-purchase agreements. Trusteed Buy-Sell Agreements: By placing the life insurance policies under the control of a trustee, the proceeds can be used to facilitate the buyout without increasing the business's estate valuation. Next Steps If your business has a buy-sell agreement in place, now is the time to review it with your financial advisor and legal counsel. Ensuring that your planning is up-to-date and compliant with the latest legal developments is crucial to protecting your business’s future. We’re here to help you navigate these changes and find the best solutions for your unique situation.
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Disclosure
Securities offered through Kestra Investment Services, LLC, (Kestra IS) member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC, (KestraAS). Kestra IS and Kestra AS are affiliated entities. Kestra IS and Kestra AS are not affiliated with Meritrust Wealth Management. Investor Disclosures https://bit.ly/KF-Disclosures.
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