With a blind trust, the trustees have full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust.

A blind trust is a trust established by the owner (or trustor) giving another party (the trustee) full control of the trust. A blind trust can be a revocable trust, meaning the trustor can make any changes to the trust, trustee, and terminate the trust. A blind trust is a trust established by the owner (or trustor) giving another party (the trustee) full control of the trust. A blind trust is a trust established by the owner (or trustor) giving another party (the trustee) full control of the trust. The trustor can terminate the trust, but otherwise exercises no control over the actions taken within the trust and receives no reports from the trustees while the blind trust is in force.

Defining a Blind Trust

A bullet GIC is type of guaranteed investment contract where both the principal and interest are returned to the payor at some date in the future.

Internal Revenue Code, Title 26. § 1.148-6 General Allocation and Accounting Rules

A Bullet GIC is a type of guaranteed investment contract in which the principal and interest owed is paid in one lump sum. A bullet guaranteed investment contract acts much like a zero-coupon bond for accounting purposes, though bonds are typically issued by companies to fund operations, while guaranteed investment contracts are issued by insurance companies to fund their obligations. A bullet GIC, or bullet guaranteed investment contract (BGIC), provides investors with a typically low-risk means of achieving a guaranteed principal repayment, plus interest. A bullet GIC is a guaranteed investment contract that is paid out as a lump sum as opposed to a series of cash flows, as is typical in a regular GIC. This makes municipal guaranteed investment contracts popular with investors looking to lower their tax bills, but also makes these investments susceptible to being involved with so-called yield burning schemes, which defraud the federal government of its rightful tax proceeds.

Bullet GIC

Common law property is a system that most states use to determine ownership of property acquired during marriage, which is in contrast to community property.

How Lenders Can Avoid Potential Pitfalls in Community Property States

Common law property is a system that most states use to determine ownership of property acquired during marriage. In contrast to the community property system, which treats assets acquired during a marriage as belonging to both partners, the common law property system states that property that one member of a married couple acquires belongs solely to that person unless the property is specifically put in the names of both spouses. Common law property contrasts with a community property system, which treats assets acquired during a marriage as belonging to both partners. Whether a state has a common law or community property system, the division of assets in a divorce also may be determined by a prenuptial agreement or a postnuptial agreement if the divorcing couple has one. Common law property is a system that most states use to determine ownership of property acquired during marriage.

Common Law Property

Early withdrawal is either removal of funds from a fixed-term investment before the maturity date, or the removal of funds from a tax-deferred investment account or retirement savings account before a prescribed time.

Early withdrawal refers to the removal of funds from a fixed-term investment, such as from an annuity, certificate of deposit (CD), or qualified retirement account, before the maturity date. In a traditional individual retirement account (IRA), for example, if an account holder takes a withdrawal before the age of 59½, the amount is subject to an early-withdrawal penalty of 10%, and they must pay any deferred taxes due at that time. Early withdrawal refers to the removal of funds from a fixed-term investment, such as from an annuity, certificate of deposit (CD), or qualified retirement account, before the maturity date. In a traditional individual retirement account (IRA), individuals direct pre-tax income toward investments that can grow tax-deferred; no capital gains or dividend income is taxed until it is withdrawn. In contrast, with early withdrawal penalties, on the other end, an account holder can be penalized if they do not withdraw funds by a certain point.

Early Withdrawal

Family offices are private wealth management advisory firms that serve ultra-high-net-worth individuals. 

Family offices are private wealth management advisory firms that serve ultra-high-net-worth individuals (HNWI). Given this complexity, a comprehensive wealth transfer plan must take into account all facets of the family’s wealth, including the transfer or management of business interests, the disposition of the estate, management of family trusts, philanthropic desires, and continuity of family governance. Combining asset management, cash management, risk management, financial planning, lifestyle management, and other services, family offices help clients navigate the complex world of wealth management. Along with this, family education is an important aspect of a family office; including educating family members on financial matters and instilling the family values to minimize intergenerational conflicts. Single-family offices serve one individual and their family, while multi-family offices serve a few families benefiting from economies of scale.

Family Offices

A financial power of attorney is a legal document that grants a trusted agent the authority to act on behalf of the principal in financial matters.

A financial power of attorney (POA) is a legal document that grants a trusted agent the authority to act on behalf of the principal-agent in financial matters. A financial power of attorney (POA) is a legal document that grants a trusted agent the authority to act on behalf of the principal-agent in financial matters. A financial power of attorney is a legal document that grants a trusted agent the power to make and execute financial decisions for a principal-agent. A financial power of attorney document is also referred to as a general power of attorney or a power of attorney of property. Sam prepares a financial power of attorney and assigns POA to their father, who will remain in the city and execute relevant financial dealings.

Financial Power of Attorney

Being fully vested means a person has rights to the full amount of a benefit, most commonly stock options, profit sharing or retirement benefits. 

Being fully vested means a person has rights to the full amount of some benefit, most commonly employee benefits such as stock options, profit sharing, or retirement benefits. While employee-contributed funds to an investment vehicle, such as a 401(k), remain the property of the employee, even if that employee leaves the business, company-contributed funds may not become the employee’s property until a certain amount of time has lapsed. The most commonly used vesting schedule is graded or graduated vesting, which requires an employee to have worked for a certain number of years in order to be 100% vested in the employer-funded benefits. This schedule of vesting differs from cliff vesting, in which employees become immediately 100 percent vested following an initial period of service; and immediate vesting, in which contributions are owned by the employee as soon as they start the job. Benefits that must be fully vested benefits often accrue to employees each year, but they only become the employee's property according to a vesting schedule.

Fully Vested

Goal-based investing is a relatively new approach to wealth management that emphasizes investing with the objective of attaining specific life goals.

Goal-based investing is a relatively new approach to wealth management that emphasizes investing with the objective of attaining specific life goals. The advantages of goal-based investing include:
1.  Clients’ increased commitment to their life goals by allowing them to observe and participate in tangible progress
2.  A reduction in impulsive decision-making and overreaction, based on market fluctuations
Goal-based investing has grown in popularity in the years after the Great Recession of 2008–09 as investors realized the extent to which chasing high returns could negatively impact long-term wealth accumulation. Goal-based investing (GBI) involves a wealth manager or investment firm’s clients measuring their progress towards specific life goals, such as saving for children’s education or building a retirement nest-egg, rather than focusing on generating the highest possible portfolio return or beating the market. Goal-based investing differs from traditional investing, in that its yardstick for success is how well the investor is able to meet his or her personal life goals, rather than how well his or her investments perform against the market average in a given period. Goal-based investing is a relatively new approach to wealth management that emphasizes investing with the objective of attaining specific life goals.

Goal-Based Investing

Idle funds refers to money that is not invested or deposited into interest-bearing accounts, and, therefore, earns no interest or investment income.

Idle funds refer to money that has not been invested and is, therefore, not earning interest or investment income. One option individuals have to earn income on funds while maintaining liquidity of those funds is to invest in money market or short-term interest accounts that will provide the depositor with a short-term rate of interest. In instances where there is a positive inflation rate in a domestic nation, idle funds will actually decrease in value from a purchasing power perspective, as the funds fail to keep up with the rate of inflation. If a business issued callable preferred stock, it can use the idle funds to redeem the outstanding shares and channel the dividend payouts to common stock investors. Idle funds are simply funds that are not deposited in an interest-bearing or investment tracking vehicle, that is, are not participating in the economic markets.

Idle Funds

Management risk is the potential for ineffective, destructive or underperforming management to negatively affect an investor's holdings. 

Management risk is the risk—financial, ethical, or otherwise—associated with ineffective, destructive, or underperforming management. Management risk also applies to investment managers, whose decisions and actions may divert from the legal authority they have in the management of investor funds. Management risk is the risk—financial, ethical, or otherwise—associated with ineffective, destructive, or underperforming management. Management risk is the risk—financial, ethical, or otherwise—associated with ineffective, destructive, or underperforming management. Management risk can also refer to the risks associated with the management of an investment fund.

Management Risk

A non-accredited investor is anyone who fails to meet the SEC income or net worth requirements for accredited investors. 

A non-accredited investor is any investor who does not meet the income or net worth requirements set out by the Securities and Exchange Commission (SEC). Basically, this term covers everyone that holds less than $1 million in assets, aside from the value they may have in their house, and earns under $200,000, i.e., the vast majority of Americans.
A non-accredited investor is any investor who does not meet the income or net worth requirements from the Securities and Exchange Commission (SEC). A non-accredited investor is any investor who does not meet the income or net worth requirements set out by the Securities and Exchange Commission (SEC). The concept of a non-accredited investor comes from the various SEC acts and regulations that refer to accredited investors. Among other categories, the SEC now defines accredited investors to include the following: individuals who have certain professional certifications, designations or credentials; individuals who are “knowledgeable employees” of a private fund; and SEC- and state-registered investment advisers.

Non-Accredited Investor

Private banking consists of personalized financial services and products offered to the high net worth individual (HNWI) clients of a bank or other financial institution.

Private banking consists of personalized financial services and products offered to the high-net-worth individual (HNWI) clients of a retail bank or other financial institution. Pros
One-stop shopping for financial affairs
Concierge services and dedicated employees
Favorable rates, discounted charges
Perks and privileges
Less institutional expertise
Options limited to proprietary products
High staff turnover
Possible conflict-of-interest for employees
Although there are many advantages to private banking, drawbacks do exist to this exclusivity.
Employee turnover rates at banks tend to be high, even in the elite private banking divisions. Private banking consists of personalized financial services and products offered to the high-net-worth individual (HNWI) clients of a retail bank or other financial institution. Private banking clients received enhanced services from their private banker that acts as a liaison with all of the other departments within the bank to ensure that the client receives the best possible product offerings and service. While an individual may be able to conduct some private banking with $50,000 or less in investable assets, most financial institutions set a benchmark of six figures' worth of assets, and some exclusive entities only accept clients with at least $1 million to invest.

Private Banking

A receiver is someone appointed as a custodian of a person or entity's property, finances, general assets, or business operations.

A receiver is a person appointed as custodian of a person or entity's property, finances, general assets, or business operations. A court-appointed receiver is a neutral third-party entity who works on behalf of the company and its creditors to secure mutually beneficial agreements. A receiver is a person appointed by a court, government regulator, or private entity to manage debt consolidation for a company. Court-appointed receivers are officers of the appointing court; they do not act as fiduciaries for creditors (that is, protect the interest of those who are owed money) as debtors and trustees do in bankruptcy cases. The receiver closely monitors administration and submits a monthly progress and status report to the company, its creditors, and the court.

Receiver

Regulation M, also known as Subchapter M, is an Internal Revenue Service (IRS) regulation that allows regulated investment companies to pass taxes from capital gains, dividends, and interest distributions onto individual investors.

Regulation M, also known as Subchapter M, is an Internal Revenue Service (IRS) regulation that allows regulated investment companies to pass taxes from capital gains, dividends, and interest distributions onto individual investors. Regulation M conforms to the conduit theory, which states that investment firms should pass capital gains, interest, and dividends to shareholders in order to avoid double taxation by the company and the individual investors.
Regulation M is an IRS regulation that allows regulated investment companies to pass taxes from capital gains, dividends, and interest distributions onto individual investors.
Most regulated investment companies utilize this regulation to pass through distributions to shareholders for the purpose of avoiding double taxation. Regulation M, also known as Subchapter M, is an Internal Revenue Service (IRS) regulation that allows regulated investment companies to pass taxes from capital gains, dividends, and interest distributions onto individual investors. As defined by the act legislation, these companies can take numerous forms and offer all kinds of investment vehicles including mutual funds, exchange-traded funds (ETFs), real estate investment trusts (REITs), and unit investment trusts (UITs). Most regulated investment companies utilize this regulation to pass through distributions to shareholders for the purpose of avoiding double taxation since they are not the end recipient of these extra dollars.

Regulation M

The term risk-averse describes the investor who prioritizes the preservation of capital over the potential for a high return.

Restructuring Sovereign Bonds: Holdouts, Haircuts, and the Effectiveness of CACs [Working Paper, No. 2366]

The risk-averse investor will pass up the opportunity for a large gain in favor of safety.
Risk-averse investors typically invest their money in savings accounts, certificates of deposit (CDs), municipal and corporate bonds, and dividend growth stocks. Nonetheless, offered two investment opportunities, the risk-neutral investor looks only at the potential gains of each investment and ignores the potential downside risk. Now that they are using it, or planning on using it soon, they are unwilling to risk losses.
High-yield savings account from a bank or credit union provides a stable return with virtually no investment risk. Dividend growth stocks appeal to risk-averse investors because their predictable dividend payments help offset losses even during a downturn in the stock's price.

Risk Averse

Sotheby's is one of the world's largest auction houses and brokers of art, collectibles, jewelry, and real estate.

Update Regarding Sotheby's Buyer's Premium

Sotheby's Celebrates Its 275th Year With Ringing of the Opening Bell at the New York Stock Exchange

Sotheby's Announces Definitive Agreement to Be Acquired by Patrick Drahi

Sotheby's is one of the world's largest auction houses and brokers of art, collectibles, jewelry, and real estate. It became a U.K. public company in 1977, before going private in the early 1980s and then public again in 1988 in the U.S. as Sotheby's Holdings, Inc. After Patrick Drahi's takeover in 2019, the company has once again gone private.
Sotheby's shareholders approved a company sale that valued it at $3.7 billion to Patrick Drahi, a European billionaire investor and telecom executive, in 2019. Other divisions include Sotheby's Corporate Art Services, which helps corporations build and value their own art collections, iCollect, a cloud-based collection management system, Museum Services, Sotheby's Picture Library, Sotheby's Cafe, Fine Art Storage, and Valuations. Sotheby's also assists on tax and legal aspects of items it handles, as well as help beneficiaries, executors, and other fiduciaries with handling estate and trust issues related to collections.
Sotheby's, named after its co-founder John Sotheby, has been in operation since 1744. In 2020, the auction house charged 25% of the hammer price for assets worth up to $400,000; 20% for assets priced between $400,000 and $4 million, and 13.9% for assets priced above $4 million.﻿﻿ Sotheby’s standard seller’s commission, meanwhile, is 10% of the hammer price.

Sotheby's

The subjective theory of value states that the worth of an object can change based on its context and appeal. 

The subjective theory of value maintains that the value of an object is not fixed by the amount of resources and the hours of labor that went into creating it but is variable according to its context and the perspective of its users. Following the subjective theory of value, it may be possible to create or increase the value of an object by transferring ownership of it to an owner who regards the object at a higher value. The subjective theory of value maintains that the value of an object is not fixed by the amount of resources and the hours of labor that went into creating it but is variable according to its context and the perspective of its users. The subjective theory of value was a dramatic departure from the assumption of earlier economists, including Karl Marx, that an object's value was the sum of the costs of the labor and resources it took to produce it. In effect, the value of the coat is based on your desire and need for it, as is the value you placed on it, not any inherent value of the coat.

Subjective Theory of Value

Sudden wealth syndrome is a type of distress that afflicts individuals who suddenly come into large sums of money, causing them stress, guilt, fear and confusion.

Sudden wealth syndrome (SWS) is a type of distress that afflicts individuals who suddenly come into large sums of money. Many people afflicted with Sudden Wealth Syndrome deal with an identity crisis because they transition from surviving on a meager weekly, fortnightly, or monthly salary to becoming a wealthy and privileged individual.
Sudden Wealth Syndrome (SDS) refers to a psychological condition or an identity crisis in individuals who have become suddenly wealthy.
Sudden Wealth Syndrome is characterized by isolation from former friends, guilt over their change in circumstances, and extreme fear of losing their money.
Individuals can avoid Sudden Wealth Syndrome by planning ahead to ensure that their wealth is spent wisely, avoiding making quick decisions about how to spend their money, and maintaining discretion about their sudden influx of money. Sudden wealth syndrome symptoms include feeling isolated from former friends, feeling guilty about their good fortune, and extreme fear of losing their money.
Sudden wealth syndrome is not an actual psychological diagnosis. Individuals with Sudden Wealth Syndrome may have acquired their wealth through a lottery win, become rich trading cryptocurrency like bitcoin, or received a large inheritance. Sudden wealth syndrome (SWS) is a type of distress that afflicts individuals who suddenly come into large sums of money.

Sudden Wealth Syndrome (SWS)

A unified managed account (UMA) is a diversified investment account that includes many types of investments; it's often a choice for high net worth individuals.

A unified managed account (UMA) is a professionally managed private investment account that can include multiple types of investments all in a single account. A unified managed account (UMA) is a professionally managed private investment account that can include multiple types of investments all in a single account. A unified managed account (UMA) is a privately-managed investment account that can include a variety of investments, such as mutual funds, stock, and bonds. The unified managed account is an evolution of the separately managed account, which is similar in that it is a professionally managed account that is rebalanced often. A unified managed account provider has a much greater overall fiduciary responsibility since they serve as the overseer for a multitude of investments, which can include stock positions, employee stock option plans, third party separate account management, and more.

Unified Managed Account (UMA)

A unified managed household account (UMHA) is privately managed and grants immediate family access to combined unaffiliated products.

A unified managed household account (UMHA) is a privately managed account that consolidates multiple unaffiliated products including mutual funds, ETFs, and individual securities. A unified managed household account (UMHA) is a privately managed account that consolidates multiple unaffiliated products including mutual funds, ETFs, and individual securities. Unified managed household accounts (UMHAs) operate on a single, integrated system, which allows a financial advisor to view various assets and product types to create performance reports. Unified managed household accounts (UMHAs) can streamline paperwork, simplify fees and allow for more sophisticated tax management. As with mutual-fund advisory programs, the investor selects a model based on risk tolerance and goals, and the firm takes care of rebalancing or even changing asset allocations altogether, depending on the degree of discretion inherent in a particular program.

Unified Managed Household Account (UMHA)

A widely held fixed investment trust (WHFIT) is a unit investment trust that features at least one third-party interest holder.

Important 2020 Tax Information Widely Held Fixed Income Trust (WHFIT)

26 CFR § 1.671-5 - Reporting for Widely Held Fixed Investment Trusts

A widely held fixed investment trust (WHFIT) is a type of unit investment trust (UIT) with at least one interest held by a third party. Related to this is a real estate mortgage investment conduit (REMIC), which is a special purpose vehicle that is used to pool mortgage loans and issue mortgage-backed securities (MBS).Real estate mortgage investment conduits hold commercial and residential mortgages in trust and issue interests in these mortgages to investors.
Mutual funds are open-ended funds, meaning that the portfolio manager can buy and sell securities in the portfolio. The parties involved in the creation and maintenance of a WHFIT include:
**Grantors**: Investors that pool their money to purchase the assets placed in the trust.
**Trustee**: Typically a broker or financial institution that manages the trust's assets.
**Middleman**: Usually a broker that holds the unit shares in the trust on behalf of their client / beneficiary.
**Trust Interest Holder**: This is the investor that owns unit shares in the WHFIT and is entitled to income generated by the trust. A widely held fixed investment trust (WHFIT) is a type of unit investment trust (UIT) with at least one interest held by a third party. Because the investors who fund the initial purchase of the assets in the portfolio typically participate as trust interest holders, widely held fixed investment trusts fall under the category of grantor’s trusts.

Widely Held Fixed Investment Trust (WHFIT)

A window guaranteed investment contract is a type of investment plan that guarantees specified a rate of return on a series of principal payments. 

Window guaranteed investment (WGIC) contracts are a type of investment plan in which the investor makes a series of payments to an insurance company and is guaranteed a return on investment. Window guaranteed investment (WGIC) contracts are a type of investment plan in which the investor makes a series of payments to an insurance company and is guaranteed a return on investment. A window guaranteed investment contract (WGIC) promises guaranteed returns from a series of installment payments paid in during the contribution window. This type of guaranteed investment contract (GIC) differs from other GICs in that the investor makes principal payments in installments over time, rather than in one lump sum up front. Once the window has closed and the investor may no longer make payments toward the GIC, the invested funds remain in the contract for a period of time during which the contract matures.

Wealth Management

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