Should You Convert Retirement Accounts for Tax Planning Purposes?

Do you have a goal of keeping current family money in the family when you pass away? There are several different steps to accomplish in this, each of which can be discussed with an estate planning attorney. 

A person who has a current 401(k) or IRA account could accidentally leave behind not just the assets inside the account but a significant tax bill. There’s an income tax liability, for example, that comes with children inheriting that IRA.

This is because regular income tax has to be paid on distributions from all traditional retirement accounts in the United States. In the past, your heirs had the opportunity to stretch distributions received from this fund over the course of several years to reduce their overall tax burden.

However, the account now must be liquidated within ten years after the death of the primary owner of the account. You might need to think about whether or not converting traditional accounts to Roth accounts, which have tax free distributions, makes the most sense for your family.

For more information about this and to decide what other assets need to be involved in your comprehensive estate plan, it is best to sit down with an estate planning attorney and to create a comprehensive inventory of all of the assets and debt associated with your name. This can help you begin to answer some of the most important and difficult questions around the estate planning process.      

What Happens If Your College Age Child Gets Sick?

This is a question you might not have contemplated until the pandemic raised concerns about health all over the United States. It’s come front and center for those parents who have a child who has either gone off to college for the first time or returned to campus for the first time since the pandemic started. No matter which of these applies to you, have you done estate palnning with this adult child before they left?

Given that it’s unknown what campus life next semester will be like, it’s a good idea to do everything you can to plan ahead and prepare. Getting the call that the school has a big spread of COVID or that your child is sick and needs to return home are real possibilities for parents in the next year, and estate planning can help to answer some very important questions during this time of uncertainty.

If you have a college age child, it may be important to create estate planning documents specifically for this purpose. If your child is away at college, you do not necessarily have the authority to make medical decisions on their behalf unless you have been specifically granted this legal authority in a power of attorney document.

A durable power of attorney document can be used when signed by your adult child stating that you are able to make care decisions on their behalf if they become incapacitated as a result of covid or any other medical condition. Without these documents you do not have the authority to act even if your child just turned age 18 yesterday.

During this period of transition when your newly legal adult might still have strong ties to home and rely on you for support in these important decisions, it’s critical to think about how these documents could help you avoid difficult situations.       

   

Do You Know These Three Trust Parties?

The establishment of a trust is usually a more advanced form of an estate plan and it requires at least three parties, some of who may be served by the same person. The first party to a trust is the person who creates it known as the creator, settlor or grantor. The second party to the agreement is the trustee. This is a person who has legal title to the property and the trust and manages the property according to the terms inside the trust agreement as well as applicable state laws.

In many cases, when the title to the property must be recorded, it is listed as in the trustee’s name not as an individual person but rather as the person trustee of the X family trust. The third party to a trust document and strategy is the beneficiary. This is the person who benefits from the trust and multiple beneficiaries can be on a trust at the same time.

There can also be different beneficiaries over time. Sometimes an individual might be known as an income beneficiary, meaning that they earn interest and dividends in income on the trust. Other beneficiaries can be remainder beneficiaries, which means they will get what is inside the trust after previous beneficiaries pass away or those rights expire.   

Creating a trust can be a key aspect of your estate planning, but it only makes sense when you have worked directly with an estate planning lawyer to select the right kind of trust. Given that you can accomplish many different goals with a trust, you want to choose the right one and fund it properly to get all the benefits.

What Makes Elder Law Distinct from Estate Planning?

What happens to your assets as you get older is of chief concern not just for estate planning purposes but also for your own elder law planning. The key differentiating point between estate planning and elder law is that elder law professionals look at the holistic process and consider how your key documents and assets can be used to support you throughout your life as well as your chosen beneficiaries after you pass away.

An elder law attorney will sit down with you to look at all of your unique circumstances and can assist you with the creation of estate planning documents, such as trusts or wills, but can also help you answer key questions around what your needs might be with regard to medical costs or long term care needs down the road. Experts in elder law will be familiar with many different concerns associated with aging and will have worked with many other clients in similar situations to help you avoid common blind spots.

A consultation with an elder law attorney can be extremely beneficial if you do not yet have an estate plan and have questions around what your estate plan should include. Given that many Americans are living longer than anticipated, you need to have more than a retirement plan to guide you into older years. Set aside time to speak with an elder law attorney about your distinct needs and how you can accomplish your goals.

Merging Two Families? Don’t Forget Your Finances

Becoming a blended family presents unique opportunities and some challenges with regard to your financial and estate planning. In 40% of all new marriages in the United States, at least one of the spouses was previously married. There are unique financial and estate planning dynamics that can come from merging families, especially as it relates to financial values, existing documents, money philosophies and even your spending habits.

There’s a good chance that the way you talk to your individual children about finances is different too. From savings plans to allowances, it’s important for you and your new spouse to get on the same page. In these circumstances, it’s a good idea to look at existing documents that both of you are bringing into the marriage.

Estate planning must be tackled together with your new family in order to ensure that your estate planning documents and strategies accomplish your goals. Once you’re married, your blended family should quickly reevaluate existing estate planning processes.

It’s important to think about how you will care for your children from your previous marriage and ensure that they are not accidentally excluded from your estate planning that you update across the board to reflect your new family arrangements. In addition to making sure that your new spouse is taken care of, you’ll want to talk with an estate planning lawyer to verify whether or not your existing estate planning documents protect your children from a previous marriage the way that you intended.

For further information about this process, schedule a time to talk with a dedicated estate planning lawyer.

Since blended families have so much to think about, you need dedicated advocates in your corner to help you.

A Plan for an Intentional Retirement

Those approaching retirement today and looking forward to it in the next couple of years have likely navigated their entire life with a sense of purpose, and exiting the work market full time doesn’t mean you give up this purpose. A recent survey of retirees found that 55% of them said that retirement was viewed by them as a new chapter in their life.

That same study identified that over 95% of retirees felt that it was important to continue growing and learning at every age. In order to accomplish retirement goals and continue driving forward with a sense of purpose you need to be financially prepared.

Asking yourself some of the tough questions and engaging the right team of professionals can help you navigate this new process. This includes asking yourself questions, such as:

  • Will I still be able to retire at the age that I intended to?
  • How will retiring at different ages impact my Social Security benefits?
  • Will I need to prioritize some of my goals because I don’t have the security that I anticipated as I get closer to retirement?
  • How will I incorporate estate planning intentions into my existing financial strategy and retirement options?
  • What role, if any, does philanthropy and charity play in my overall financial strategy?

It can be very rewarding to approach and live through your retirement purposefully but it is hard to do it alone. Having the support of a dedicated team of estate planning professionals and financial experts can help provide important questions and insight as you navigate this process.

Our NJ estate planning law office is here to help you no matter what questions you have on the process.

 

Untangling Intangibles

Many companies use intangible assets such as patents, licenses, computer software, branding, and reputation to earn revenues. These intangible assets have always been part of the economic landscape. We study the impact of intangibles on our ability to identify differences in expected stock returns and find no tangible performance benefit from adjusting for intangibles.

It is important to begin by distinguishing between two types of intangible assets. Under US generally accepted accounting principles (GAAP), externally acquired intangibles are reported on the balance sheet. They currently represent about a quarter of the reported value of assets for the average US company. These assets are accounted for when computing book equity. Internally developed intangibles, on the other hand, are generally not capitalized on the balance sheet. Instead, they are expensed and thus reflected on the income statement. The difference in accounting treatment is primarily due to the higher uncertainty around the potential of internally developed intangibles to provide future benefits and the difficulty to identify and objectively measure such benefits.1 After all, internally developed intangibles do not go through a market assessment, while externally acquired intangibles get evaluated in the competitive market for mergers and acquisitions, and at that time, they might already be generating tangible benefits for the company that developed them. For example, Disney bought the Star Wars franchise, an externally acquired intangible, in 2012, many years after the franchise began generating economic benefits for Lucasfilm.

Some argue that to more effectively infer differences in expected returns across firms sourcing most of their intangibles externally and firms sourcing them mostly internally, we should capitalize internally developed intangibles. Several academic studies do that by accumulating the historical spending on research and development (to capture the development of “knowledge capital”) and selling, general, and administrative (SG&A) expenses (to capture the development of “organizational capital”). In the present study, we follow the approach suggested by Peters and Taylor (2017)2 and find that while intangible assets comprise more of companies’ assets over time, this stems mainly from growth in externally acquired intangibles. Estimated internally developed intangibles have not meaningfully increased as a proportion of total assets (see Exhibit 1).

Moreover, the estimation approach for internally developed intangibles has several important caveats in addition to the lack of market valuations. First, the estimation of internally developed intangibles assumes that the development of intangible capital can be captured fully through spending reported on the income statement. Second, the approach is critically dependent upon the availability of reliable and comprehensive R&D and SG&A data. However, we observe R&D data for about half of the US market even today. As a result, the estimated knowledge capital is zero for about half of the US market. Thus, we would adjust the value and profitability metrics of half of the market for knowledge capital and leave the rest unadjusted, potentially making firms in the adjusted and unadjusted groups less comparable, not more, after the adjustments. Further, while SG&A data are available for most US companies since the 1960s, the breakdown of operating expenses into cost of goods sold and SG&A varies often across companies and data sources, which might add noise to the estimation of organizational capital. The estimation approach can also produce noisy results because it applies constant amortization rates through time and does not allow for impairments. As a result, a company can be approaching bankruptcy and still appear to have billions of dollars’ worth of internally developed intangibles.

Because of all those different sources of noise, capitalizing estimated internally developed intangibles might not be helpful in identifying differences in expected stock returns. Our empirical research lends support to this expectation. Estimated internally developed intangibles contain little additional information about future firm cash flows beyond what is contained in current firm cash flows. Moreover, we do not find compelling evidence that capitalizing estimated internally developed intangibles yields consistently higher value and profitability premiums.

Given the large challenges with estimating internally developed intangibles, an alternative approach to infer more effectively differences in expected returns among
firms with different sources of intangibles might be to strip out externally acquired intangibles from the balance sheet. Our empirical analysis shows no compelling performance benefit of excluding externally acquired intangibles from fundamentals. Historically, the exclusion of externally acquired intangibles would not have generated higher value or profitability premiums. Therefore, we believe investors are better off continuing to incorporate externally acquired intangibles reported on the balance sheet and not adding noisy estimates of internally developed intangibles to value and profitability metrics.

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Advanced Estate Plan Strategies Aligned with Low Interest Rates

The current environment of your state and the federal economy and relevant laws can help you to determine whether or not your estate plan meets your goals or needs to be adapted. The Federal Reserve’s decision to keep interest rates very low has made a good environment for you to leverage advanced estate planning tools such as a grantor retained annuity trust or a charitable need annuity trust.

These are two techniques that allow for the transfer of wealth to occur at a reduced gift tax expense and provide that the future appreciation of any individual assets inside of them move on to the new beneficiary without exposure to the estate tax of the individual. A CLAT pays a fixed sum to a determined charity for a certain number of years after which point the remainder will pass to the creator of the trust’s family.

The GRAT pays a set sum back to the creator of the trust for a fixed number of years, then allowing the remainder to pass on to the family. Both of these advanced estate planning strategies can be most effective when you move an asset that has significant appreciation potential, such as a closely held business that you anticipate a successful sale of in the future. Given volatile capital markets currently and low interest rates, this is a good opportunity to evaluate these advanced strategies with your lawyer.

 

Investing in FAANG Stocks: Should You Expect Unexpected Returns?

Investment returns have two parts: the expected return and the unexpected return. The expected return is the best guess of what will happen based on all the information currently available. The unexpected return is the surprise, the difference between what does happen and what was expected. Investors should base their portfolio decisions on expected future returns, not recent realized returns, and the two can differ by a lot.

Look at the returns on the so-called FAANG stocks–Facebook, Amazon, Apple, Netflix, and Google’s parent company, Alphabet. Over the 10 years from September 2010 to August 2020, a portfolio of the five stocks held in proportion to their market caps would have delivered an average annual return of 34.25% per year. That means on average, the value of the portfolio doubled about every 2.5 years.

Given their great returns over the last 10 years, what is our best guess of how the FAANG stocks will do over the next decade? Should we expect an average annual return of almost 35% again? Absolutely not. Who wouldn’t buy these stocks if their expected returns were 35%? But buyers need sellers. The demand driven by such high expected returns would simply push prices up and drive expected returns down to a more
reasonable level. For the same reason, I’m confident that if we could go back to August 2010, we would find few investors predicting the FAANG stocks would do as well as they did from 2010 to 2020.

So what does explain the FAANG stocks’ high realized returns? Their unexpected returns. Things turned out much better for them than investors expected. The companies’ cash flows over the last 10 years were much higher than investors expected 10 years ago, and their prospects looking forward from today are almost certainly better than investors expected they would be 10 years ago.

All this unexpected good news produced high unexpected stock returns over the last decade. It would be wrong, however, to expect high unexpected returns to persist. After all, it doesn’t make sense to count on good luck. The expected value of the unexpected returns must be zero.

In short, the past decade of extraordinary realized returns tells us little about the FAANG stocks’ future expected returns. And unfortunately, this is a general result. For most investments and most investment horizons—a month, a year, five years, even ten years—the realized return is driven far more by the unexpected return than the expected return.

–  Kenneth French, PhD
Director and Consultant

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Checking Out of a Relationship or Home? Time for a Checkup!

In normal times and especially in a pandemic, many people use natural pause points to take stock of their lives and determine their next moves. For you, this might look like moving out of a home that was big enough to raise your kids in but too big to justify alone or with a spouse. It could include leaving a first or second marriage or trying to relocate to a new state where the conditions are more favorable to you financially.

No matter what moves you’re making in your life or you have on your horizon in the near future, it’s time for a checkup on your financial and estate plans. Your current plans might work for the conditions you’re in now, but making big changes means you need a step back to determine how your new life fits into the fold.

From thinking about your long term care plan to physically updating your will or beneficiary forms, there are a few tasks on this to-do list to consider when you’re “checking out” of your current conditions. It’s easy to miss some of these details, but they are important aspects of your life and plan. It’s best to partner with a dedicated estate planning lawyer to work through all the details and get the confidence that comes from having a comprehensive estate plan in place.

Are you concerned about how you move forward with your life in a way that protects your personal interests and your loved ones? You’re not alone. Estate planning lawyers in NJ can assist you with reviewing your current plan and making the necessary updates so that you have a future that’s bright for yourself and enables your loved ones to have an easier time moving your estate through the administration phase when it comes time to do that.

How Much Impact Does the President Have on Stocks?

The anticipation building up to elections often brings with it questions about how financial markets will respond. But the outcome of an election is only one of many inputs to the market. Our interactive exhibit examines market and economic data for nearly 100 years of US presidential terms and shows a consistent upward march for US equities regardless of the administration in place. This is an important lesson on the benefits of a long-term investment approach.

NOTES AND DATA SOURCES

• This material is in relation to the US market and contains analysis specific to the US.

• In US dollars. Stock returns represented by Fama/French Total US Market Research Index, provided by Ken French and available at http://mba.tuck.dartmouth.edu/ pages/
faculty/ken.french/data_library.html. This value-weighed US market index is constructed every month, using all issues listed on the NYSE, AMEX, or Nasdaq with available
outstanding shares and valid prices for that month and the month before. Exclusions: American depositary receipts. Sources: CRSP for value-weighted US market return.
Rebalancing: Monthly. Dividends: Reinvested in the paying company until the portfolio is rebalanced.

• Growth of wealth shows the growth of a hypothetical investment of $100 in the securities in the Fama/French US Total Market Research Index. Growth of wealth for the full
sample from March 4, 1929, through June 30, 2020. Growth of wealth for each presidential term starts on the election day of each president up to but not including the
election day of a successor. For presidents who are not initially elected, the growth of wealth period starts from the day of inauguration up to but not including the successor’s
election day.

• Federal surplus or deficit as a percentage of gross domestic product, inflation, and unemployment data from Federal Reserve Bank of St. Louis (FRED). GDP Growth is annual
real GDP Growth, using constant 2012 dollars, as provided by the US Bureau of Economic Analysis. Unemployment data not reported prior to April 1929. Federal surplus or
deficit as a percentage of gross domestic product data is cumulative.

• US Government Presidential and Congressional data obtained from the History, Art & Archives of the United States House of Representatives. US Senate data is from the
Art & History records of the United States Senate.

• For Herbert Hoover, the federal budget is calculated from 1929 to 1932. Annual real GDP growth is calculated from 1930 to 1932; GDP data not available prior to 1930.

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

What History Tells Us About US Presidential Elections and the Market

It’s natural for investors to look for a connection between who
wins the White House and which way stocks will go. But as
nearly a century of returns shows, stocks have trended upward
across administrations from both parties.

• Shareholders are investing in companies, not a political
party. And companies focus on serving their customers
and growing their businesses, regardless of who is in the
White House.

• US presidents may have an impact on market returns,
but so do hundreds, if not thousands, of other factors—the
actions of foreign leaders, a global pandemic, interest rate
changes, rising and falling oil prices, and technological
advances, just to name a few.

Stocks have rewarded disciplined investors for decades,
through Democratic and Republican presidencies.
It’s an important lesson on the benefits of a long-term
investment approach.

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

How Much Does an Agent Get Paid for Power of Attorney Services?

If you intend to appoint another person to serve as your attorney in fact or agent for health care, it can be confusing to determine what they should be paid. In most cases the people who are appointed in these roles are family members or friends and serve as your health care power of attorney without being expected to be paid for their services. NJ-power-of-attorney

This is true of legal and financial matters handled under durable powers of attorney as well. In certain situations, however, you might appoint a different person in the role of power of attorney, such as an accountant or a lawyer, in which case those professionals would charge for their time.

This is because these professionals would be hesitant to take on the time consuming responsibilities of a personal nature so you might be able to agree on an hourly rate or even something that seems less like employment, such as making a donation to their favorite charity if your friend or family member is interested in serving as your POA agent.

If you are serving as a power of attorney for someone else, make sure you have a conversation first about whether you will be paid for this role or not. It’s critical to understand this especially if the person that is creating the POA has a long list of tasks you’ll need to manage in the event they become incapacitated.

For more questions about who should be considered as an ideal attorney in fact or power of attorney agent, sit down with your estate planning lawyer to discuss your current documentation and to ensure it aligns with your needs.  At our NJ power of attorney client meetings, we help our clients understand what is involved in crafting this document and in choosing someone to serve as your attorney in fact.

Why Investors Might Think Twice About Chasing the Biggest Stocks

Average Annualized Outperformance of Companies Before and After The First Year They Became One Of The 10 Largest In The US
Compared to Fama/French Total US Market Research Index ,1927–2019

As companies grow to become some of the largest firms trading on
the US stock market, the returns that push them there can be impressive.
But not long after joining the Top 10 largest by market cap, these
stocks, on average, lagged the market.

• From 1927 to 2019, the average annualized return for these
stocks over the three years prior to joining the Top 10 was nearly
25% higher than the market. In the three years after, the edge was
less than 1%.

• Five years after joining the Top 10, these stocks were, on average,
underperforming the market—a stark turnaround from their earlier
advantage. The gap was even wider 10 years out.

• Intel is an illustrative example. The technology giant posted average
annualized excess returns of 29% in the 10 years before the year
it ascended to the Top 10 but, in the next decade, underperformed
the broad market by nearly 6% per year. Similarly, the annualized
excess return of Google five years before it hit the Top 10 droppedby about half in the five years after it joined the list.

Expectations about a firm’s prospects are reflected in its
current stock price. Positive news might lead to additional
price appreciation, but those unexpected changes are
not predictable.

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

How Does Undue Influence Impact an Estate Plan?

Undue influence happens when an outside party exerts pressure on an individual causing that individual to adjust their estate plans to the benefit of the influencer. In simple terms, this can often refer to one person taking advantage of another. A live in care provider to your elderly loved one, for example, might exert undue influence on a loved one, convincing that elderly family member to update their estate plan so that it significantly benefits the care provider.

In many cases the influencer could be involved in separating the family member from his or her loved ones to create a direct sense of connection and dependency. Those individuals suffering from a form of dementia, people with disabilities and elderly people are most susceptible to the impact of undue influence. It’s important to note that the influencer could be a person outside or inside the family.

If you suspect that your loved one was a victim of undue influence that caused significant changes to an existing estate plan, you can contest the trust or will that was updated at the influencer’s request once the estate has been admitted to probate. There are a few different factors that the court will explore when determining whether or not undue influence was at play.

These primary indicators can include unexpected gifts, whether or not the testator was isolated, the testator’s mental and physical state at the time of the updated estate plan, and scrutinizing any special relationships that the testator had with the influencer. For more information about avoiding undue influence in your own estate plan and protecting your interests now, set up a time to sit down and discuss your estate plan with a lawyer.  Need more support or have specific questions about your NJ estate plan? Set up a time to speak with our trusted estate planning lawyers in NJ. 

Get an Attorney to Review Your POA Document

Has someone you know asked you to execute a power of attorney that names you as their agent? Never sign a power of attorney document without having your own estate planning lawyer view it first.

There are many different mistakes that could be made in a power of attorney document and all of them can be avoided by consulting with a trusted estate planning lawyer in your area.

Making a mistake in your POA document could be very expensive and problematic, particularly if you unintentionally give authority over you or your assets to someone who can’t be trusted. Many of the most common POA mistakes can be avoided but having a relationship with an estate planning attorney who can help spot these errors in your existing POA document or can advise you about the proper language to include in a new one.

Some of the most common POA mistakes include:

  • Using a general POA when a limited power of attorney would have been more appropriate.
  • Naming a person that you can’t truly trust as your agent.
  • Giving an agent who cannot be trusted with too much power.
  • Executing a power of attorney to someone who cannot serve in that role, such as a treating physician.

For more advice on how to minimize the possibility of a poorly executed POA or a POA that exerts unintended authority on untrustworthy people, set aside a time to consult with a knowledgeable estate planning lawyer about the documents.

Can a Person Still Sign a Power of Attorney If They are Legally Incompetent?

A person cannot sign any legal document including one that would appoint a power of attorney if they are incapacitated. This is one of the most common misconceptions about the power of attorney document. Only a mentally competent individual is able to appoint a power of attorney for themselves.

Once a person lacks legal capacity such as that they have experienced significant cognitive decline as a result of dementia or another circumstance, they are no longer eligible to execute a power of attorney document that would be classified as legally valid. These documents need to be created well in advance of a person being classified as incompetent.

It can be helpful for someone who is of older age and wishes to prevent problems surrounding their POA document to schedule a consultation with an estate planning attorney to walk through the process of creating a POA and deciding whether it should be general or specific in nature. It is also helpful for a person who is currently legally competent and wishes to document this to have a physician prepared to write a letter about the person’s state of mind at the time that the power of attorney is executed.

This can be very helpful in the event that another person is challenging the legality of the power of attorney or any other challenges arise in the agent’s attempt to carry out their duties. Schedule a consultation with an estate planning attorney in your area to learn more.   Since you need to sign a POA before you’re incapacitated, now is the right to make this decision to install the right person in this all-important role.    

What Happens When a House That Is Split Multiple Ways Is Rented, Passed or Sold at Death?

If you have a loved one who is elderly and owns a house that no longer has a mortgage on it, it is important to look carefully at the deed to determine who has the rights to this home.

If, for example, an elderly loved one took money to pay taxes on the home from somebody else and added those parties to the deed, the proceeds should be divided equally among the parties who contributed towards the taxes as well as the homeowner. A key question is whether or not the people who have been added to the deed are tenants in common or own the property as joint tenants.

Upon the loved one’s death, the deceased individual’s interest will automatically disappear if the property was owned as joint tenants. If it was owned as tenants in common, the one-third interest for the primary owner will pass to the estate and will be distributed according to the will.

Real estate is one of the most challenging kinds of assets to move through probate. It’s imperative that you discuss your options directly with an attorney who is familiar with how to include these in your estate plan so that you know your next steps.

There are many complex issues involved in determining whether or not someone has an interest and a proper plan for what happens to their real estate property after they pass away. Schedule a consultation with a trusted estate planning lawyer to learn more. Our NJ estate planning law office can help with your real estate planning for probate and beyond.

 

What’s Included in an Elder Law Agreement?

It is very common to sign an agreement or a contract with an attorney that you intend to work with and an elder law attorney is no different. Based on your initial consultation with this elder law attorney you will have a better sense of the services that would be provided and the process with which you expect to work with this person.

Each law firm’s engagement agreement is different and it’s a good idea to read through the specifics of your elder law agreement so that you understand the exact terms of the working arrangement. This includes planning options discussed and the next steps for moving forward.

This can also involve a fee quote for implementing the plan and the terms of payment arrangement, such as asking for half of the fee at the time this person is hired and the balance when the client returns. It can be very difficult to determine the scope of work for all elder law work agreements. This means that your elder law attorney might instead choose to charge by the hour and request a retainer. This can be different in litigation and probate matters as well, so you’ll want to be clear about the exact type of services for which you intend to retain an experienced attorney.

A knowledgeable lawyer will be able to use the information gleaned in the initial consultation to draft up a work agreement. You also have the right to read through this entire agreement and determine whether or not to sign it. Make sure that you ask all of your questions upfront before signing the agreement because it will be assumed that you have read this document and have made your decision to move forward based on it.

Market Returns Through a Century of Recessions

What does a century of economic cycles teach investors about investing? Our interactive exhibit examines how stocks have behaved during US economic downturns. Markets around the world have often rewarded investors even when economic activity has slowed. This is an important lesson on the forward-looking nature of markets, highlighting how current market prices reflect market participants’ collective expectations for the future.

1926—1927
A few years before the Depression, the US experienced a mild, yearlong recession accompanied by a minor bout of deflation. The stock market slipped 2.9% in the first month of the downturn.

Great Depression
The Depression decimated the US economy—unemployment climbed to 25.2%, and industrial production plunged 48.6%. Before the collapse ended, stocks collectively lost 83.6% in a 33-month market downturn.

1937—1938
A sharp, 13-month recession—marked by high unemployment and a big dip in industrial production—occurred in the midst of the nation’s recovery from the Depression. Stock market investors suffered a 49.2% loss.

World War II Recession
Industrial production plunged 26% during the eight-month recession near the end of World War II. But the stock market dipped only 3.9% early in the recession before rebounding.

1948—1949
A modest stock market slide (—11.0%) began five months before this relatively small economic

1953—1954
The Korean Armistice was signed in the summer of 1953. A stock market slump that had begun in March was over by August, but the recession continued until early 1954.

1957—1958
A huge drop in industrial production (–11.3%) and a contraction in GDP (–3%) interrupted the 1950s boom. Stocks retrenched 14.9% in the midst of a decade-long climb.

1960—1961
This four-month pause followed the previous decade’s bull market. In the election year of 1960, unemployment rose to 6.6%, and the stock market dropped 7.9%.

1969—1970
High inflation and a big jump in unemployment punctuated the 11-month recession that began in December 1969. A volatile

Oil Crisis
Inflation hit double digits during the 1973–75 recession. The stock market lost nearly half its value in the first 11 months of the 16-month economic downturn.

1980
A 12% stock market decline occurred early in 1980’s six-month recession, during which unemployment hit 7.6%. But the market finished the year with an impressive gain of 33.4%.

1981–1982
Historically high interest rates preceded a harsh recession that dragged on for 16 months and saw unemployment peak at 10.4%. The stock market experienced a 15.9% slide before beginning a long rally.

Gulf War
Stocks reacted negatively to the onset of the Gulf War in August 1990, dropping 17% over five months as the price of oil doubled. When the market regained its footing, stocks were set to start a nine-year bull market that peaked in the dot-com era.

Tech Boom and Bust
Many investors may not realize that the stock market had started a deep decline before the relatively mild

Global Financial Crisis
During the Global Financial Crisis, the worst of the 50.4% stock market dive happened in the latter half of an 18-month recession that saw unemployment hit 9.4% and industrial production tumble 17%. But after falling for 16 months, the market started a nearly 11-year bull run.

Sources: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.