Mountain Views News          Saturday, August 16, 2014

B2

BUSINESS NEWS & TRENDS

Mountain Views-News Saturday, August 16, 2014 

FAMILY MATTERS By Marc Garlett


LISTINGS LINGO

 As if the language of real estate weren’t confusing 
enough, the wave of bad lending practices and loan 
defaults of recent years have added more terms that 
have subtle but important shades of difference. 
When you prepare to speak with an agent about 
buying or selling, make sure you understand the 
lingo.

 First, realize that the word ”foreclosure” does not 
describe a property, but the legal process by which 
a homeowner loses their interest and the bank or 
lender assumes ownership. It’s a legal term, not a 
property description.

 If you’re buying, you go to tour ”foreclosures,” per 
se. You’re probably going to look at ”Real Estate 
Owned” listings, or REOs. These are properties 
that the lender has taken back after the foreclosure 
process is complete. You may see these advertised as 
”bank owned.”

 Then there’s another type of listing described as 
a ”short sale.” This may qualify as a ”distressed” 
property, but it is not yet in the hands of the bank or 
lender. The homeowners and the lender have reached 
an agreement to sell the property for less than the 
owners owe on their mortgage.

 The short sale is an attempt at compromise between 
the two parties, keeping the sellers out of foreclosure 
and credit history ruin, and keeping the lender out 
of the costly process of foreclosure and expensive 
business of property management.

If You Don’t Trust Your Kids 

with Money, You Need a Trust


WHEN SHOULD YOU DUMP

A MUTUAL FUND 

By Greg Welborn

While most parents have the best intentions 
when it comes to teaching their children about 
handling finances wisely, sometimes the lessons 
don’t take. In addition to concerns about 
spendthrift behavior, some children experience 
substance abuse or have mental issues that make 
giving them access to wealth a problem. This is 
where a trust can be a parent’s best friend.

 Trusts allow you to put controls on the 
distribution of your wealth. For example, you 
could elect to make partial distributions at 
predetermined ages throughout a child’s life, or 
select a trustee who will make the decisions on 
regular intervals of asset distribution. A trustee 
may also be a good choice to manage the assets 
and make investment decisions that are better 
suited for those with the professional capacity to 
do so.

 Trusts can also protect your heirs from a future 
divorce or creditors. In the case of a special 
needs child, a trust can be set up to provide 
supplemental financial support that doesn’t 
disqualify them for important government 
benefits.

 One of the most commonly used trusts is a 
revocable living trust, where you transfer assets 
into a trust that you control while you are still 
living. 

 After your death, those assets pass to your 
heirs outside of probate (an unnecessary, 
expensive and totally public court process). 
This helps your heirs avoid the hassle and cost 
of going to Court and doesn’t tie up the assets, 
which are generally frozen during the probate 
process unless protected by a trust.

 Setting up a trust happens in three, equally 
important phases. First, the trust must be 
drafted to meet your family’s unique needs and 
achieve your specific goals. Then, your assets 
MUST be retitled in the name of the trust. And 
finally, since trust laws are changing all the time 
(not to mention your assets, financial holdings, 
and family situation) it is necessary to review 
your trust regularly to ensure it remains up to 
date, continuing to protect your assets and your 
family for the rest of your life. 

 And just like the proverbial stool, unless all 
three phases of a trust are handled correctly, it 
will fail. Unlike many estate attorneys who only 
focus on the first phase of trust planning, I lead 
my clients through all three phases so they can 
ensure a legacy of love and financial security for 
their families, no matter what.

 If you would like help planning for the safe, 
successful transfer of wealth to your family’s 
next generation, call my office at 626-355-
4000 or visit www.GarlettLaw.com for more 
information. 

 

Marc, a local attorney, father, and CASA 
volunteer (Court Appointed Special Advocate for 
Children) is on a mission to help parents protect 
what they love most. His office is located at 49 S. 
Baldwin Ave., Ste. G, Sierra Madre, CA 91024.

One of the toughest investment decisions 
you’ll have to make is dumping an investment. 
Whether it’s a specific stock or, as I want to 
address here, a mutual fund, you can’t put your 
portfolio on autopilot and forget about it. You 
have to know when to buy and when to sell. So 
when should you dump a mutual fund?

 There are key personal reasons for dropping 
the hammer. If your goals change – especially in 
how long you’ll be investing – then it’s perfectly 
normal to change funds. If you need to rebalance 
to maintain the proper balance between bonds 
and stocks, then you should also be willing to 
sell. And, if there are some substantial tax losses 
you can use and you can find a similar fund in 
which to put the proceeds, then sell.

 There are also fund-specific issue. These 
can be tougher to ascertain. If a mutual fund 
becomes too large for its category, even if it’s 
still “succeeding”, you should move on. The 
larger the asset base, the tougher it is for the 
manager to successfully implement his or her 
strategy. Changes in investment strategy or key 
personnel should also be red flags. If you use a 
fund managed by Bob to invest in large utility 
companies, and you find that Suzy has taken 
over to invest in small cosmetic companies, you 
should consider moving on, unless of course 
your long term plan involves cosmetics.

 

 The toughest fund-specific issue is 
performance. It’s easy to say that if a fund 
consistently under-performs, you should move 
on. The trick is defining “consistently”. Almost 
every single long-term, successful mutual fund 
has had a two, or even three, year period of 
lagging its category. So, you may need to use some 
outside resources to determine whether a fund is 
really under-performing or is just temporarily 
out of step with its category.

 As tough as the decision may be – both factually 
and emotionally – deciding when to hold ‘em 
and when to fold ‘em is a critically important 
component of successful investing.

 About the author: Gregory J. Welborn is the 
Managing Partner of First Financial Consulting, 
a fee-only advisory firm. He has worked with 
The Today Show, Kiplinger’s Magazine, and USA 
Today to provide objective financial advice to their 
readers and listeners. He has 3 grown children and 
is honored to be married to his wife of 25 years. He 
can be reached at gwelborn@ffconsult.net

 
* thecreative entrepreneurby Lori Koop, Business Coach
Life is a linear journey. We walk it out, one day 
after another. And with that, we create history. 
Our experiences are recorded. Within us. In 
our words. As stories. And we use them to make 
decisions in today. 

 It is our default. Our brain relies on the past 
to predict the future. If you were unsuccessful 
the first time, your mind warns you you’ll be 
unsuccessful the second time. It’s scared. It doesn’t 
want to lose money, to waste time, or look like a 
fool. That amygdala brain we were born with sends 
regular messages of fear and doubt, and it uses the 
past as evidence.

 But the past has absolutely nothing to do with 
today. This morning, you woke with a brand new, 
blank canvas. Not a thing painted on it. Not until 
you began making decisions, taking action and 
creating. 

 Every day, all possibilities exist. Just because that 
business you tried years ago didn’t mature, doesn’t 
mean an entrepreneurial venture will not work 
today. You’ve practiced. You know more. Your gifts 
and passions are clearer. And you know how to ask 
for help. 

 Choose afresh. Create what is in your heart. Use 
colors that excite you! Today can be that “someday.”

. . . . .

LORI KOOP, helping creative entrepreneurs 
prosper. Schedule a complimentary session: www.
LORIKOOP.com or call 626-836-1667. (Location: 
49 S. Baldwin Avenue, Suite L, Sierra Madre 91024) 
I write every other week.

 
Has work taken over?
Restore balance + peace of mind.
www.LORiKOOP.com