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Private Wealth Management: The Complete Reference for the Personal Financial Planner, 9th Edition

Book Description

Where financial advisors go for answers--revised and updated to address consequential legal and economic changes

From the oil crisis and stock market crash in the 1970s through deregulation into the 1990s to the 2008 financial crisis--every financial planner worth their salt turned to Victor Hallman and Jerry Rosenbloom's classic reference for answers. To maintain its iconic position in the industry, this bible of wealth development moves into its Ninth Edition to ensure today's professional investors and financial stewards have reliable guidance to the latest legislation, economic developments, and wealth management trends and techniques.

This latest edition of Private Wealth Management provides everything you need to operate with sophistication and savvy in today's markets--from setting financial objectives and executing the planning process to investing in equities and fixed-income securities to retirement income planning to methods for lifetime wealth transfers, and more. Written for the serious practitioner, this one-of-a-kind guide gives you a solid foundation for planning a prosperous financial future in the real world, which means it makes you an expert in:

  • Major new tax legislation, including the "Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010" and the "American Taxpayer Relief Act of 2012"
  • A variety of economic benefits and investment products
  • Changes in individual annuities and retirement products with an increased focus on retirement planning
  • Modifications to health and disability insurance
  • The Patient Protection and Affordable Care and Health Care Reconciliation Act of 2010
  • Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
  • New developments in estate and marital deduction planning such as "portability"

This completely updated edition remains a wealth-building and income management tool by presenting many useful strategies, including those for dealing with the current "super-low" interest rates.

Private Wealth Management, Ninth Edition, is the cornerstone of financial planning.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Contents
  5. Preface
  6. Part I Introduction
    1. 1. Nature and Objectives of Private Wealth Management
      1. Need for Wealth Management Services
      2. Wealth Management over a Family’s Economic Life Cycle
      3. Focus on Objectives and Planning Strategies
      4. Financial Planning Process
      5. Case Example—Personal Financial Statements
      6. Ethics and Wealth Management
    2. 2. Environment for Wealth Management
      1. Institutional Environment
      2. Economic Environment and Wealth Management
      3. Tax Environment and Wealth Management
    3. 3. Valuation Concepts in Wealth Management
      1. Capital Accumulation Concepts
      2. Valuation Factors for Estate Planning and Wealth Transfer
  7. Part II Investment Planning and Financial Management
    1. 4. Basic Investment Planning and Strategies
      1. Investment Theories
      2. Factors in the Choice of Investments
    2. 5. Common Stocks
      1. Stock Valuation Concepts
      2. Portfolio Development and Analysis
      3. Diversifying a Common Stock Portfolio
      4. Decisions Concerning Selling Common Stocks
      5. Dollar Cost Averaging
      6. Types of Orders in Buying and Selling Common Stocks
      7. Margin Accounts
      8. Selling Short
      9. Investment Categories of Common Stock
      10. Some Theories (Strategies) of Common Stock Investment
      11. The Case for Long-Term Investments in Common Stocks
    3. 6. Real Estate and Other Equity Investments
      1. Real Estate
      2. Oil and Gas Ventures
      3. Impact of Passive Activity Loss Rules
      4. Put and Call Options
      5. New Issues or Initial Public Offerings
      6. Commodity Futures Trading
      7. Gold and Other Precious Metals
      8. Art, Antiques, Coins, Stamps, and Other Collectibles
    4. 7. Fixed-Income Investments
      1. Ways of Taking Returns from Bonds
      2. Corporate Bonds
      3. Municipal Bonds (Munis)
      4. U.S. Government Obligations
      5. Other U.S. Government and Agency Securities
      6. Mortgage- and Asset-Backed Securities (Pass-Through Securities)
      7. Floating-Rate Bonds and Funds
      8. Market Discount Bonds
      9. Zero-Coupon Bonds (Zeros)
      10. Preferred Stocks
      11. Guaranteed Principal Fixed-Income Investments
      12. Cash Equivalents (Liquid Assets)
      13. Conversion Privileges in Fixed-Income Securities
      14. Bond Ratings and Investment Quality
      15. Strategies for Investing in Fixed-Income Securities
    5. 8. Investment Companies and Alternative Investments
      1. Kinds of Investment Companies
      2. Why Invest in Mutual Funds?
      3. Limitations of Mutual Funds
      4. Types of Funds and Planning Considerations
      5. Unit Investment Trusts
      6. Regulation of Investment Companies
      7. How to Invest in Mutual Funds
      8. Withdrawals from and Redemptions and Exchanges of Mutual Funds
      9. Mutual Funds and Their Investment Objectives
      10. Index Funds
      11. Exchange-Traded Funds (ETFs)
      12. Tax-Managed Funds
      13. Mutual Fund Performance
      14. Mutual Fund Expense Ratios
      15. Factors Involved in Selecting Mutual Funds
      16. Tax Aspects of Mutual Funds
      17. Closed-End Companies
      18. Look Out for Buying a Dividend
      19. Hedge Funds and Private Equity Funds
    6. 9. Asset Allocation Strategies and Financial Management
      1. Steps in the Asset Allocation Process
      2. Financial Management
  8. Part III Income Tax Planning
    1. 10. Income Tax Fundamentals
      1. The Federal Income Tax on Individuals
      2. The Federal Income Tax on Corporations
      3. Pass-Through Business Entities
      4. Federal Income Taxation of Trusts and Estates
      5. State and Local Income Taxes
    2. 11. Income Tax Reduction and Management Techniques for Individuals
      1. Tax Elimination or Reduction
      2. Shifting the Tax Burden to Others
      3. Allowing Wealth to Accumulate Without Current Taxation and Postponing Taxation
      4. Taking Returns as Capital Gains
  9. Part IV Financing Education Expenses
    1. 12. Education Planning
      1. Importance as a Financial Objective
      2. Nature and Growth of Education Costs
      3. Estimating Education Costs
      4. Financial Aid Considerations
      5. Tax “Breaks” for Education Costs
      6. Strategies in Planning for Education Costs
      7. Advance Funding for Education Costs
  10. Part V Retirement Planning, Stock Compensation, and Other Employee Benefits
    1. 13. Retirement Needs Analysis, Social Security, and Employer-Provided Qualified Retirement Plans
      1. Retirement Needs Analysis
      2. Social Security (OASDHI)
      3. Characteristics of Employer-Provided Retirement Plans
      4. Regulation of Qualified Retirement Plans
      5. Nonqualified Retirement Plans
      6. Pension Plans
      7. Profit-Sharing Plans
      8. Savings (Thrift) Plans
      9. Cash or Deferred Arrangements—Section 401(k) Plans
      10. Illustration of the Power of Tax Deferral
      11. Stock Bonus Plans and Employee Stock Ownership Plans (ESOPs)
      12. Hybrid Qualified Retirement Plans
      13. Retirement Plans for the Self-Employed (HR-10 or Keogh Plans)
    2. 14. Other Employer-Provided Retirement Plans and Employee Benefits
      1. Other Employer-Provided Retirement Plans
      2. Other Employee Benefits
    3. 15. Individual Retirement Accounts and Annuities (IRAs)
      1. Basic Concepts
      2. Types of IRAs
      3. IRA Rollovers and Direct Transfers
      4. Financial Institutions That Offer IRAs
      5. IRA Investments
      6. Planning Issues for IRAs
    4. 16. Planning for Taking Distributions from Retirement Plans
      1. General Considerations Affecting Planning
      2. Taxation of Benefits from Qualified Plans and IRAs
      3. Planning for Distributions from Qualified Retirement Plans and IRAs
    5. 17. Individual Investment Annuity Contracts
      1. Fundamental Purposes of Annuities
      2. Types of Individual Annuities
      3. Parties to the Annuity Contract
      4. Phases of Annuities
      5. Investment Returns on Annuities
      6. Expense Charges on Annuities
      7. Withdrawals and Loans
      8. Exchanges of Annuities
      9. Annuity Payout Options
      10. Annuity Death Benefits
      11. Guaranteed Minimum Benefits Under Variable Annuities
      12. Underwriting of Individual Annuities
      13. Taxation of Nonqualified Annuities
      14. Charitable Gift Annuities
      15. Using Life Insurance Values to Provide Retirement Income
      16. Planning Issues for Nonqualified Annuities
    6. 18. Employee Stock Compensation Plans
      1. Types of Plans
      2. Provisions of Stock Option Plans
      3. Valuation of Stock Options
      4. Some Caveats Concerning Stock Options and Other Plans
      5. Planning Issues Regarding Stock Options and Other Stock Plans
  11. Part VI Charitable Giving
    1. 19. Charitable Giving Techniques
      1. Basic Tax Principles
      2. Planning Techniques
  12. Part VII Insurance Planning and Risk Management
    1. 20. Basic Insurance Principles and Selecting Insurers
      1. Personal Risk Management
      2. Basic Insurance Principles
      3. Considerations in Choosing an Insurer
      4. Considerations in Choosing an Agent or Broker
      5. Information about Financial Advisers
    2. 21. Life Insurance and Social Security
      1. Sources of Life Insurance Protection
      2. Types of Individual Life Insurance Contracts
      3. Definitions of Life Insurance for Income Tax Purposes
      4. Single-Premium Life Insurance
      5. Some Important Life Policy Provisions
      6. Cash Values and Nonforfeiture Options
      7. Uses of Policy Dividends
      8. Settlement Options
      9. Supplementary Benefits Added to Individual Life Insurance Contracts
      10. Planning and Using Life Insurance
      11. Substandard Risks
      12. Nonmedical Life Insurance
      13. What Actions Can an Uninsurable Person Take?
      14. Group Life Insurance
      15. How Much Life Insurance Is Needed?
      16. Life Settlement Transactions
    3. 22. Health and Disability Income Insurance
      1. Sources of Health Insurance Protection
      2. Disability Income (Loss-of-Time) Coverages
      3. Medical Expense (Health) Coverages
      4. Health Savings Accounts and Health Reimbursement Arrangements
    4. 23. Long-Term Care Insurance and Medicaid Planning
      1. Basic Planning Approaches
      2. Long-Term Care (LTC) Insurance and Other Arrangements
      3. Medicaid Planning for Long-Term (Custodial) Care
    5. 24. Property and Liability Insurance
      1. Property Insurance
      2. Personal Liability
      3. Homeowners Insurance
      4. Automobile Insurance
      5. Other Property and Liability Policies to Consider
  13. Part VIII Estate Planning
    1. 25. Estate Planning Principles
      1. Objectives of Estate Planning
      2. Methods of Property Disposition
      3. Property and Property Interests
      4. What Is Meant by the Probate Estate?
      5. Gross Estate for Federal Estate Tax Purposes
      6. State Death Tax Value
      7. The Net Estate to One’s Heirs
      8. Settling the Estate
      9. Trusts in Estate Planning
    2. 26. The Transfer Tax System
      1. Impact of American Taxpayer Relief Act (ATRA) of 2012
      2. Applicable Credit Amount (Unified Credit) and Applicable Exclusion Amount
      3. Federal Gift Tax
      4. Federal Estate Tax
      5. Federal Generation-Skipping Transfer (GST) Tax
    3. 27. Lifetime Giving and Other Intrafamily Techniques
      1. Making Lifetime (Inter Vivos) Gifts to Noncharitable Donees
      2. Sales Within the Family
      3. Loans to Family Members
    4. 28. Marital Deduction Planning, Postmortem Planning, and Estate Liquidity
      1. Marital Deduction Planning
      2. Marriage Equality and Tax Planning
      3. Postmortem Estate Planning
      4. Estate Liquidity
    5. 29. Life Insurance in Estate Planning
      1. Taxation of Life Insurance
      2. How to Arrange Life Insurance
      3. Gifts of Life Insurance
    6. 30. Revocable Living Trusts and Property Management Arrangements
      1. Revocable Living Trusts as a Will Substitute
      2. Joint Property with Right of Survivorship
      3. Property Management Arrangements to Deal with Physical or Mental Incapacity
  14. Part IX Planning for Business Interests
    1. 31. Types of Business Entities and Business Planning
      1. Potential Issues
      2. Characteristics of Closely Held Businesses
      3. Types of Business Entities
      4. Further Thoughts on the Legal Liability Issue
      5. Check-the-Box Regulations
      6. Income Tax Basis in Business Interests
      7. Factors in Choice of Entity
      8. Disposition of Business Interests
      9. Chapter 14 Special Valuation Rules
      10. Should a Business Interest Be Sold or Retained for the Family?
      11. Estate Liquidity Through Section 303 Redemptions
  15. Index
  16. About the Authors