A believer in continuing professional development, Eric Dostal obtained the CERTIFIED FINANCIAL PLANNER™ Professional (CFP®) designation, and graduated with a JD from St. John’s University School of Law. Eric recognizes the challenges investors face when planning their retirement and therefore he helps clients retire when and how they would like. Eric focuses primarily on providing affluent and high net worth individuals with expert, comprehensive and impartial financial planning advice to help those individuals achieve their unique life goals.
After joining Sontag Advisory in 2013, Eric has worked extensively with clients over the past 4+ years to create and implement their unique financial plans. Eric has demonstrated a high degree of skill developing and overseeing the investment, insurance, retirement, tax and estate planning strategies of his clients.
Eric currently lives in Merrick, New York with his wife Jamie and daughter Madeline. When not in the office, you can often find him spending time with family and friends. He also recharges by sitting down with a good book and honing his culinary skills.
JD, St. John's University School of Law
B.A. - History, SUNY Geneseo
You are typically allowed to refuse a gift or inheritance through a valid “disclaimer”. After disclaiming the property, it would pass on to the next beneficiary as if you had pre-deceased the person who you are inheriting the property from. In order for the disclaimer to be valid and legally binding, you typically need to: 1) have the disclaimer in writing; 2) give that written disclaimer to the person who is controlling the administration of the estate, typically called an executor; 3) complete steps 1 & 2 within 9 months of the date of death of the decedent; and 4) refuse to accept any benefit from the property you are attempting to disclaim. Would recommend you review the above with local counsel licensed to practice in your State.
My advice would be to try to obtain a credit card with a $500 line of credit and then use it as if it is was debit card. Meaning only use the card to buy things you already have the money for and pay your balance in full each month. The bank where you have your checking account may have a card that will work for you.
One thing to keep in mind, there are some robust restrictions around extending credit to students under the age of 21 unless the applicant can demonstrate the independent ability to repay or has an adult co-signer who agrees to accept joint liability for the account. This may make getting a card difficult depending on your individual circumstances.
Starting to build your credit history at 18 is a great goal and will help you out immensely later in life. Just remember to be careful and not spend more than what you can repay by the end of the month.
Taxes will be owed to the extent that the proceeds from the sale of the home exceed the cost basis of the home. Who will pay the tax will depend on a variety of factors.
If your parents had placed their home in a Qualified Personal Residence Trust (QPRT) prior to their deaths, the cost basis of the home is likely whatever their cost basis was prior to the gift.
Alternatively, if your parent’s owned the home via a Revocable Trust, then the home may have received a cost basis step up as of their respective dates of death.
If you are planning on distributing the proceeds of the sale of the home out of the trust to the trust’s beneficiaries then they will likely pick up the tax impact on their personal tax return. This is a concept known as distributable net income and the trust will likely need to generate a K-1 for each beneficiary receiving a distribution.
Alternatively, if assets are not being distributed because of the term of the trust, the trust itself will likely need to file a tax return.
The mechanics of all of this can get complicated quickly, would recommend working with an accountant/attorney to make sure it is administered properly.
I will give you three pieces of advice. First, pay yourself first. Before you spend any money on food, clothing, housing, entertainment, vacations, whatever you can think of, be sure you have put aside something for yourself. It is best if you set up an automatic transfer that corresponds to your paycheck deposit. Even if the amount is small, get into the habit of saving regularly and consistently at the beginning of your career. This habit will reap huge dividends for you in the future.
Second, invest your savings prudently. As your savings balance grows, many individuals will come to you with ideas of how to invest your money for the future. Be sure to take a critical eye to all of these proposals. Ask as many questions as you can. Decipher how the person you are speaking with is paid. Ask them to explain their underlying assumptions, go beyond the materials presented to you and dig into the details. Ask if they invest their own money in this way, and if the answer is no, ask why. Many individuals are highly experienced in personal finance and have the tools and the knowledge to guide you on the right path. It is your responsibility make sure that the person you are working with is one of these individuals.
Third, appreciate your greatest asset, time. Right now, the most powerful force you have going for you is time. The dollars you invest today will work and grow for you for the rest of your life. Those dollars will earn more dollars, which will, in turn, earn more and more. This phenomenon, known as compound growth, is extremely powerful, but it takes time. Know that this is a lengthy process, do not get discouraged, and enjoy the ride.
It is easy to get caught up in the daily media coverage about rising interest rates and bond returns and forget why you own bonds to begin with. Fixed income serves two equally important roles in a portfolio: 1) to provide return, and 2) to manage portfolio risk. With rates as low as they are, the expectations for short term future total-returns from fixed income are quite low. However, this is not a good reason to shift assets away from bonds and into riskier assets because it ignores the risk management and diversification benefits of bonds.
A portfolio holding a mix of high quality and diversified bonds plays a critical role in managing portfolio risk, regardless of the prospects of future returns. Predictions of interest rate movements are no better than stock market predictions. Investor's should implement a consistent, diversified, long-term allocation that can weather different types of interest rate environments and conforms to your ability and willingness to take on investment risk. If interest rates rise quickly, the value of a high quality bond portfolio will decline. However, monies are continually reinvested at the new, higher rates as coupons are paid and short-dated bonds mature. As a result of this, history has had very few multi-year holding periods of high quality bonds with negative total returns. Even during a historical period of skyrocketing rates, high quality bonds have still been far less risky than stocks.
The allocation of your portfolio will depend on your investment time horizon, financial goals, ability to take on risk, and willingness to take on risk. There is no one size fits all portfolio allocation. However, all but the most aggressively allocated portfolios have a place for a bond allocation.