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When Fair Doesn’t Mean Equal

From President and Advisor Matt Kane

“Fairness cannot always be calculated with a calculator.”

If your estate was one large pile of cash, this might not apply to you. For most families, though, your estate is made up of various assets, from businesses to real estate to heirlooms. You must plan around assets that cannot be divided easily. How do you find a shared definition of fair?

My grandfather–one of my heroes–left an incredible legacy of generosity through his family business. Over the years, he employed nearly every member of his family across three generations.

That said, he never initiated thoughtful conversations around any estate planning for his assets. Decades later, our family still hears the echoes of the conflict his estate process generated.

When your estate cannot be equally divided with a calculator, that wealth can unify or undermine your family’s relationships. If Gen-2 alignment is a priority, you must open the dialogue. You need to discover what expectations are framing the outcome. Ask questions like:

  1. Does the next generation even know what our estate looks like?
  2. What are the next generation’s expectations (if any) for how the estate will be distributed?
  3. Are there any conflicting expectations that need a creative resolution?
  4. Are there any boundaries that need to be set for unhealthy expectations?

Conversations like these give you the best opportunity to create alignment in your family. We’ve had the honor of helping facilitate these conversations many times, and we welcome the opportunity to help you do the same.

Recent Inflation Report: The latest consumer price index (CPI) inflation data for February came in slightly ahead of expectations:

  • Headline CPI rose 0.4% in February, which was higher than the 0.3% increase in January.
  • This was mostly thanks to a 3.6% increase in gas prices.
  • CPI inflation is currently up 3.2% since February 2023.

The big picture is that inflation has eased a lot since January 2022, when it hit 9%. Currently, however, it appears to have stalled at just over 3%. The chart below shows shelter (dark green) has been the largest driver for inflation. No other category is contributing as much, and despite the February increase, the contribution from energy prices is nothing compared to 2022.

If you exclude shelter, headline inflation is running at a 1.8% annualized pace over the past six months, similar to its year-over-year increase.

We know that predicting the next moves of the Federal Reserve is impossible. It would seem as though they are headed in the direction of cutting rates by 0.75-1% in 2024, assuming economic growth maintains its trend. That’s still a positive for markets.

Boomers and Therapy: We recently read an article about the increase in therapy appointments among the Boomer generation. While there was a boost in appointments during the pandemic, numbers have continued to steadily increase, with life transitions as the main topic of conversation.

We talk with clients regularly about this area because life transitions typically result in money changes. Life transitions describe a new season—retirement, pregnancy, children getting married, a new job, etc. These transitions are typically accompanied by a measure of grief, reflection, change, and figuring out who you are in light of the new season.

The article noted the particular difficulty of adjusting to retirement. Boomers feel strongly tied to their jobs as a defining characteristic of their identity.

We aren’t therapists, but we can help talk through your financial planning through each of these stages. If you are approaching retirement and need to transfer a retirement account, or if you are introducing a new family member or experiencing loss, we can work through adjustments to your financial plans to help you reach your goals.

Statistic of the Day: Spotify reported paying out $9 billion in royalties to artists in 2023. This marks the highest annual payment ever from a retailer to the music industry. More than 1,200 artists generated $1 million in royalties, 11,600 generated $100,000, and 66,000 generated more than $10,000.