WhereDoesAllMyMoneyGo.com

RSS Feed Homepage

Articles: 1, 2, 3, 4, 5, 6, 7

How Mutual Fund Sales Are Compensated In Canada
2008-05-11 07:28:00
In Canada , most mutual funds pay what are known as 'trailers' to firms and advisors. It is a cost that can be embedded in the MER (Management Expense Ratio) of a fund through the 'service fee'. While there are a handful of mutual funds that do not charge a service fee (and resulting trailers), most of them do. (Note that F-Class funds represent versions of mutual funds that have the trailers stripped out of them so that they can be held in special 'fee-based' accounts where the service fees are charged separately.)For the funds that do have service fees, there may be five different versions of the same fund: Front-End Load, Back-End Load, No-Load, the newer Low Load (sometimes referred to as Level Load as well), and finally the F-Class versions. Let's examine the differences by seeing how a representative sample fund can be sold under each option.The Representative Sample Fund Our sample fund is a Canadian Equity mutual fund that has a management fee of 1.25% and 'other fees ...
More About: Sales , Mutual fund , Mutual

The Ferengi Rules of Acquisition
2008-05-10 01:01:00
Don't forget to enter the draw for the 2008 KPMG Tax Planning book. Click here to enter. In highschool and university I was a trekkie. Not a defcon-5 kinda trekkie who actually made it out to a convention, but I was a fan. One of the fictional races in the Star Trek universe was the Ferengi who were known as being mega-capitalists more than anything else - their government and religion was based around "profit", and they all lived and died by "The Ferengi Rules Of Acquisition ". I thought I would share some of the 285 rules with you. The ones here are pretty good and might be transferable to the real world:#8. Small print leads to large risk.#9. Opportunity plus instinct equals profit.#34. War is good for business.#35. Peace is good for business.#48. The bigger the smile, the sharper the knife.#59. Free advice is seldom cheap.#125. You can't make a deal if you're dead.#141. Only fools pay retail.#194. It's always good business to know about your customers...
More About: General

A Lap Of The Blogs
2008-05-08 19:18:00
Don't forget that I'm giving away a free copy of KPMG's Tax Planning For You and Your Family 2008 - entry deadline is this Sunday at midnight - you can enter by clicking here for details. I'm enjoying my pseudo time off in Vancouver where I've realized that I'm very much sleep deprived. It's amazing how a 'Control-Alt-Delete' on life re-energizes you. :) Without further adieu...A Lap Of The Blogs Investizmo is new to the blogosphere so I thought I would point to his entry on how Microsoft has switched its sights from Yahoo! to Facebook. The blog's author is a trader for a big Bay Street firm and so far his blog is focused more on market news and musings in a very readable tone. Good luck with the blog!The Canadian Capitalist asserts that currency hedging has its costs and might not be worth it in the long run. Personally, I believe that since the recent past has shown that hedging might have been nice with the run-up of the loonie, that's exactly why you might not want to ...
More About: General

Portfolio Insurance
2008-05-07 22:47:00
Don't forget to enter the draw for the free KPMG: Tax Planning For You and Your Family 2008 book by clicking here. Many people are surprised to learn that it is possible to purchase insurance on your investment portfolio. For long term, buy-and-hold investors it's probably not worth it, since with any insurance you have to pay for that protection. The costs ultimately create a drag on the portfolio's long term return (since over very long periods of time markets are expected to go up and so will your basic, simply-diversified portfolio if you can just sit on your hands and ride out the tough times). Nonetheless, there may be situations where it does makes sense... and come to think of it, if holding the insurance means you are less likely to sell off your portfolio at inopportune times then it can indeed be a great investment in and of itself. So What Is It?Portfolio Insurance is actually provided in many different forms, but the one I'm going to focus in on is the Purchasi...

Book Giveaway: KPMG Tax Planning For You and Your Family 2008 Edition
2008-05-07 05:30:00
Win a Free Copy of KPMG's Tax Planning For You and Your Family 2008! Just arrived in sunny Vancouver today for two weeks of visiting with my parents and with my BC clients, so I needed a quick post to whip up! As luck would have it, someone sent me an extra copy of KPMG's Tax Planning For You and Your Family 2008, so I thought I would give it away through a contest on the blog. Every year I keep the updated copy with me almost at all times (home or work), and to be honest, I do even read it at night for fun on occasion. The book is not daunting at all, it's actually set up mostly in a point-form format with very quick and succinct information that is surprisingly easy to read. Anyone who has an interest in personal finance should consider buying a copy. I think most people would find a few tips that will save enough taxes to cover the purchase.However, you might want to wait a few days before running off to make that purchase because you'll want to see if you won this givea...
More About: General , Book , Edition

Active Funds Protect In A Down Market... Debunked
2008-05-06 02:54:00
With all the attention given to to the exploding passive indexation movement, be it through Exchange Traded Funds (ETFs) or Index Mutual Funds, much praise has been given to the low fees and full market participation during bull runs. There have been countless studies that extol the virtues of investing in indexed products over long periods of time for the average investor, but the last bastion of hope for the active management proponents has been the claim that "active managers can protect in a down market". There has never been any supporting evidence that has really backed up these claims (other than the odd cherry-picking comparison), yet this remains a firm battle-cry for active-management nonetheless.Well, as Allan Roth points out, we're in a down market so let's ante up. The blinds are in and though we might be waiting for the river card to be turned over yet (we might not be through the down market is what I'm getting at), it looks like index funds have managed ...
More About: Market , Active

How Do You Benchmark a 130/30 Mutual Fund?
2008-05-05 00:04:00
Back in December I wrote about a type of mutual fund known as the 130/30 fund which I believe will be coming to Canada in the next few years. In a nutshell a 130/30 mutual fund allows a fund manager to not only go long the stocks he/she thinks will go up, but to also short the stocks that he/she thinks are over-priced. Every dollar invested goes into the long stocks and then the manager will short some stocks (equivalent to 30% of the money invested). When you short a stock (selling a stock you don't own), you still receive the sale proceeds. So now the manager has another 30 cents to play with, which he/she uses to go long more stocks. Hence the name 130/30. You can read my original post from back in December by clicking here.There has been some debate as to the best way to benchmark these funds' performance. Standard and Poor's indicated that they were going to launch coverage of the US 130/30 index by creating a screen for what stocks to be shorted by using the lowest 30 rated...
More About: Benchmark , Mutual fund , Fund , Mutual

A Lap Of The Blogs
2008-05-01 18:56:00
Sick as a dog the last few days, but hopefully I'll be back in tip top shape for the weekend. My father is in town for a meeting this weekend so Fiona and I will be taking him for a nice Indian buffet, then I start my coast-to-coast adventure spending two weeks in BC (where my parents live and where I also have a few clients), back for a few days then off to Newfoundland for a weekend for a pub crawl with Jeremy Siegel, author of Stocks for the Long Run and other great investing books (...if I can convince him to join me and FrugalTrader, that is - I'm just supposed to be seeing him speak at a work conference, I don't actually know him!).A Lap Of The Blogs Michael James On Money did an informal survey about what people are paying for interest rates on lines of credit and then followed that up with some questions about why someone would go to one of the big banks for a mortgage when their posted rates seem so much higher than the competition. Read the comments section and you will ...
More About: General

Want to Start Your Own Blog?
2008-05-01 17:44:00
Note: This is a paid review for www.thoughts.com. Compensation received for reviews in part goes towards the Money Movie Giveaways this year, and as the income from that grows, so will the promotions. :)I'm really glad I started blogging back in July as I have met so many great members of the personal finance community and have learned and shared so much. I signed up with a paid blogging engine platform because I didn't know anything about blogs or blogging - I just threw myself in and managed to float so far. :) In retrospect, I think I might have been better off using a free blogging software engine and just worry about paying for hosting (since I own a unique domain name).Even better still, would be to not pay for the software, and not pay for the domain name and just use someone else's resources for free! If you have been thinking about blogging, then perhaps you would want to check out www.thoughts.com as you can have your own Free Blog , with no start-up or ongoing co...
More About: General , Start

Where Does All Your Tax Money Go?
2008-05-01 02:01:00
Do you hear that sound? Another deadline passing us by. When you owe money, you can actually here it whistle as it approaches... :) I found a presentation from the CRA that explains where all the revenues and expenses of the Government comes from and goes to. Some highlights for the fiscal year ending March 31st, 2007:(Note these won't add up since I'm only presenting some highlights, see link below for more info) Revenues ($236 Billion Total)$110.5 Billion - Income Tax$37.7 Billion - Corporate Tax$31.1 Billion - GSTExpenses$33.9 Billion - Interest on National Debt$30.3 Billion - Elderly Benefits (OAS, GIS, etc.)$63.3 Billion - Operating Expenses of Government       $6.8 Billion - Canada Revenue Agency       $1.7 Billion - CBC (!)Surplus - $13.8 BillionYou can view the CRA's presentation yourself by clicking here.  Subscribe to the free Email Updates to learn more about personal finance.If you use a feed reader, yo...
More About: Money

Hilarious Interview About How The Markets REALLY Work
2008-04-30 02:44:00
You would have to have been living under a rock not to have heard about the sub-prime mortgage meltdown. However, I think many people don't actually know what machinations were behind the debacle. Luckily a friend forwarded me this video which is intended to be a satirical take on the situation, but is scarily poignant. The video is about 8 minutes long and is absolutely brilliant! :)If you are subscribed to the email updates and cannot see the embedded video, click here.  Subscribe to the free Email Updates to learn more about personal finance.If you use a feed reader, you can click here to add my RSS feed.If you like this blog, you might like my book:  RRSPs: The Definitive Book on Registered Retirement Savings Plans
More About: General , Markets , Hilarious , Work , Interview

Video Interviews Between Jonathan Chevreau And Myself
2008-04-29 00:52:00
I had the privilege of being interviewed with Jonathan Chevreau of the National Post recently and the two videos are embedded below (just click to play, but note that there is a short commercial that plays before the interviews start). For those who don't know, Jonathan Chevreau is one of Canada's premier financial journalists and I would suggest subscribing to his Wealthy Boomer Blog - you can click here to visit The Wealthy Boomer, and you can click here to add his feed to your reader.No making fun of my oddly-placed dimples please.   Subscribe to the free Email Updates to learn more about personal finance.If you use a feed reader, you can click here to add my RSS feed.If you like this blog, you might like my book:  RRSPs: The Definitive Book on Registered Retirement Savings Plans
More About: Video , Interviews , General

CTV W-5 Investigates Broker and Lack of Investor Protection
2008-04-27 12:33:00
Here is a terrible story of a man who's account went from $217,000 to $0 in the matter of years. What's even worse is that his previous broker (who went on maternity leave) had him predominantly in more conservative investments (Government of Canada bonds and the like), but the replacement broker racked up 74 stock trades in one year (and it looked like mostly high-tech stock positions).The two-part video also highlights the fact that while the IDA (Investment Dealers Association) can fine brokers, they cannot 'compel' payment if the broker just decides to leave the industry. Meanwhile the investor almost never sees a single penny of that fine as restitution - according to the spokesperson from the IDA, he knew of only ONE case that an investor received restitution.The two-parts are each about 10 minutes long and you can start watching by clicking here.  Subscribe to the free Email Updates to learn more about personal finance.If you use a feed reader, you can click here...
More About: General , Investor , Broker , Lack

Graphic Mortgage Calculator
2008-04-26 16:44:00
For a user-friendly mortgage calculator, enter in your data below and hit calculate - a very nice graphical representation of the rest of your mortgage is provided. It's nice to see a mortgage calculator with a little artistic flare! :) For a more in-depth explanation and for slightly more detailed reporting, you can visit the website of this calculator provider, MLCALC.com.  Subscribe to the free Email Updates to learn more about personal finance.If you use a feed reader, you can click here to add my RSS feed.If you like this blog, you might like my book:  RRSPs: The Definitive Book on Registered Retirement Savings Plans
More About: Calculator , General , Mortgage , Graphic

A Lap Of The Blogs
2008-04-25 05:43:00
It's Friday again which means it is time for another lap of the blogosphere! I just got home from the Raptors game (first home playoff game) and they actually played a decent game, although I really wish they would drive the boards more (or even at all) on offense. I remember my basketball coach in school yelling at us that when we shot the ball, to keep driving to the basket in case you miss (which was often!). It seems the NBA norm is to throw up a shot, freeze your arms in the air, extend the pinky and hop backwards while you wait and see if you hit the bucket. Very artistic. Anyways...A Lap Of The Blogs  The Million Dollar Journey hosted a guest post by yours truly on Equity Collars which is a strategy that uses the premiums from written call options to offset the cost of portfolio insurance (long puts). I thought it was pretty good. :PThicken My Wallet never ceases to amaze me with his constant quality content and this week he explains some strategies to employ if you are ...
More About: General

The Rule of 72 Doesn't Always Work
2008-04-24 02:21:00
I'm sure many people have heard of the 'Rule of 72' which posits that if you divide 72 by your annual investment return, you will get the number of years required to double your money. Some oft quoted examples:You are earning 7.2% on your investments. 72 divided by 7.2 = 10, therefore it will take 10 years to double your investment.You are earning 10% on your investments. 72 divided by 10 = 7.2, therefore it will take 7.2 years to double your investment.If you remember your basic math, it should work the other way in that if you want to double your money in 5 years, you just need to divide 5 into 72 to figure out your required rate of return, which in this case is 14.4%.However, just as Newtonian physics falls apart at extreme values, so to does the Rule of 72. Best example: Your portfolio returned 72% last year. If you divide 72 by 72, apparently it will take your investment 1 year to double. However, 72% does not make a portfolio double. You would need 100% for that.Here is a t...
More About: Work

How Easy Is It To Become A Financial Advisor?
2008-04-23 01:09:00
First off, I have to say that there are many fully capable financial advisors out there who spend countless hours studying, learning and otherwise educating themselves to be competent and knowledgeable professionals. However, given the 60,000+ financial advisors in Canada, not all are created equal and I think many investor advocates would argue that most advisors are just salespeople as opposed to fiduciaries.Perhaps part of the problem is that while professionals in other lines of work require a significant investment not only of their time, but also of their money in the pursuit of the credentials required for their particular vocation, to become a mutual fund salesperson in Canada requires little of either.As a comparison, if you want to become a lawyer or a doctor requires undergraduate schooling and graduate studies. It can take perhaps 8 to 10 years of education and tuition and ancillary expenses of $100,000 and more are not unheard of. On the other end of the spectrum, if yo...
More About: General , Financial , Easy , Advisor

Hummers Have A Smaller Eco-Footprint Than Hybrids?
2008-04-22 02:15:00
A few years ago a report titled the 'Dust to Dust' report claimed that the total environmental footprint of a Hummer SUV was less than that of a Toyota Prius. If you want to read the entire 458 page report you can download the PDF here, but the synopsis of the report basically puts forth that once you take into the account the full costs associated with research, development, mining, operation and maintenance and finally the recycling of the hybrid car the total amount of energy consumed is greater than that of a Hummer over each vehicle's usable lifetime.Needless to say, the report was widely quoted in the media. However, a rebuttal has since been published by Dr. Peter Gleick of the Pacific Institute which points out some questionable methods. Two of the highlights in the Dust to Dust Report:A Hummer is expected to last 35 years, whereas a Prius is expected to last less than 12A Hummer is expected to run for almost 400,000 miles versus a Prius' 109,000 milesI only briefly skim...
More About: Hybrids , General

Kidnap And Ransom Insurance
2008-04-21 01:55:00
Russell Crowe and Meg Ryan starred in a movie titled "Proof Of Life" back in 2000 in which Ryan's husband is kidnapped by a group of guerillas who demand a ransom in exchange for his safe return. The husband's company have a "K&R" policy (Kidnap and Ransom insurance policy) and cue Russell Crowe, the K&R ransom consultant who's job is to advise Meg Ryan on the routine and process of dealing with kidnappers.You may have seen the movie thinking that there is some seriously creative writers in Hollywood to come up with such a plot. Well, there are great writers in Hollywood, but Kidnap and Ransom insurance is not a Hollywood invention - it is readily available through many insurance provides around the world.K&R insurance covers the entire family of anyone named (or included) in a K&R policy for losses due to ransom payment, and a few other claims:Loss of ransom in transit (in case someone tries to steal the ransom money before it is delivered to ...
More About: Insurance

A Lap Of The Blogs
2008-04-18 00:54:00
First some good news: The RRSP Book is now available through Amazon.ca. Note that it sells for quite a bit more than the $25 I'm selling it for through my own secure website: www.TheRRSPBook.com. Nonetheless, it's one step closer to being available in physical bookstores as well.A Lap Of The Blogs ...Thicken My Wallet gives his perspective on what a boss might look for in a good employee. The Million Dollar Journey explains how to calculate your adjusted cost base. I helped contribute to a post on The Quest For Four Pillars about RRSPs for Younger Investors. The Canadian Capitalist offers some insight into Efficient Market Theory. And finally, Michael James on Money puts the higher nominal fixed income returns of the 1980's into perspective. This Week's Racing VideoThis is one of my all time favourite videos. It is actually a short film that won some awards. Specifically this is what is known as a hill climb car and the driver is a very famous Group B Ral...
More About: General

Asset Classes and Asset Class Categories
2008-04-16 21:17:00
Cash, Fixed Income and Equities are the 3 main asset classes. However, when it comes to asset class categories there are many more. For example if we start with Fixed Income we could break this down further to Foreign Fixed Income and Domestic Fixed Income. Further still, Domestic Fixed Income could be broken down to Domestic Government Fixed Income and Domestic Corporate Fixed Income. Domestic Government Fixed Income could also be further broken down to Federal, Provincial and Municipal categories which could then be further broken down to Short, Medium and Long Term, etc. As you can imagine, it would be possible to perform this exercise on all three of the asset classes, and you could easily end up with 100 different asset class categories - clearly overkill. Broad asset classes are expected to behave differently in different market conditions (that's why they play such a ubiquitous part of portfolio construction), but as you go down the asset class category chain, you will ...
More About: Classes , Categories , Class , Asset

Relative Benchmarks and Absolute Benchmarks
2008-04-16 02:54:00
Zahid Jafry of Onus Consulting Group made a great comment on one of yesterday's posts (Picking a Meaningful Benchmark). For those that didn't read Zahid's comment, he brought up the point that a relative benchmark allows you to compare your portfolio against a meaningful benchmark whereas an absolute benchmark allows you to monitor your progress towards a certain goal.If you like, it might be better conceptually to think of an absolute benchmark as a desired rate of return. For example, if you (or you in tandem with your advisor) determine that you need to earn an annualized average of 8% in order to retire at 65 then this is your absolute benchmark (for this goal).While it is possible to do a great job in picking your individual investments such that your portfolio meets or exceeds your relative benchmark, it might not be good enough if your portfolio performs below your absolute benchmark long term. This could occur if your overall asset allocation is too conservative for your ...
More About: Benchmarks , Absolute

Distance Learning With Kaplan
2008-04-15 03:50:00
Note: This is a paid review.Kaplan Distance Learning asked for a review on their UK Distance Learning product. You may have heard the name Kaplan before as they are a very popular preparatory course offerer for graduate school admissions tests and the like. The company itself is quite large and is in fact owned by the Washington Post.The particular website they asked me to review was for their online foundation degree courses:1. Business and Management Foundations Degree2. Entrepreneurship Foundation Degree3. Marketing and Sales Management Foundation Degree4. Internet Marketing Foundation DegreeThese degrees are aimed at those who are already in the workforce who are looking for an educational program that can accomodate today's hectic schedules. For those who feel like they are stuck in a rut and cannot afford to stop working to enrol in a traditional bricks and mortar classroom environment, this is a viable option for career enhancement although I imagine it won't have nearly th...
More About: General

Picking A Meaningful Benchmark
2008-04-15 01:07:00
Every now and then I'll run across someone comparing the performance of their portfolio against the incorrect benchmark. For example, if your portfolio was only blue-chip Canadian stocks and you surmised that your investing prowess is superior because your portfolio's returns were better than the S&P 500 over the last decade your reference is almost meaningless. In this case your benchmark should be the S&P/TSX 60 Index.But what about those who have a portfolio consisting of some US stocks, Canadian stocks, some international stocks and a smattering of domestic bonds? How do you know if your portfolio measures up? In this case you must create your own weighted-average benchmark.For example let's assume that our investor has 35% of his stocks in blue-chip Canadian stocks, 25% in a broad selection of US equities, and 40% of his portfolio invested in individual Canadian bonds of various maturities, credit ratings and issuers (Government and Corporate bonds). If his overall p...
More About: Benchmark , Meaningful , Picking

Scaramouche, Scaramouche - Will You Do The Contango?
2008-04-13 23:17:00
Yes, "contango" as opposed to the Bohemian Rhapsody's "fandango". My girlfriend treated us to tickets to the musical 'We Will Rock You' over the weekend to celebrate our one year anniversary and if you've heard of the legendary band Queen, you'll understand the reference in the title of this blog post.Contango is a word used in the futures market. Before I define contango, it would be best to get a basic feel for how a futures contract is priced. At the very basic level a futures price should be equal to the spot price (current price) plus an amount equal to the cost of storing, holding and insuring the underlying asset until time of delivery. So in other words, let's say that gold is currently $900/oz. A December 2008 futures contract on gold might be priced at $920/oz. Not because it's expected that gold will rise $20/oz, but rather the cost of storage (and insurance) for one ounce of gold from now until December 2008 would be $20/oz. In theory, for a he...

Refinancing Homes in The United States
2008-04-11 15:28:00
Note: This is a paid reviewWith real estate prices melting down in the United States , I've seen fewer and fewer commercials for the mortgage refinance companies on TV. But so long as you have equity in your house and your mortgage interest rate is substantially lower than your credit card interest rate - you should look into consolidating all your debt into one tidy payment if you never seem to make head-way on your credit card debts. This is also known as a home refinance.Here is the basic concept:Let's suppose we have someone with a $300,000 home and an outstanding mortgage of $200,000. If you are paying 6% with 25 years remaining on the mortgage your monthly payment is about $1,169. Let's also assume that you have $30,000 in credit card debt that you pay 19% interest on. So far you have only managed to pay the minimum monthly payments, but you are no longer adding to your debts as you have finally established a budget that you stick to so that you don't keep getting yourself ...
More About: General , Homes

A Lap Of The Blogs
2008-04-11 04:16:00
Well it's Friday again, and that means its time for the weekly edition of Lap Of The Blogs . I hope everyone has been enjoying the weekly racing videos. I'll get right to it as I forgot my battery charger at the office and the battery in my laptop is on it's last legs! :)From Around The BlogosphereIn case you missed it, Part 1 of the conversation between Thicken My Wallet and myself on Investing in Bear Markets is here. The Canadian Capitalist had a very valuable post on a website (a free website) that allows you to opt out of a whole slate of telemarketing lists that will NOT be covered by the new Do Not Call Registry which is supposed to come in to effect later this year. Check out CC's post on iOptOut.ca.Frugal Trader from the Million Dollar Journey has some great back to basics advice on how to get started down the road on your own million dollar journey. Michael James On Money has a great post on efficient market theory and his interpretation of it's validity.&nbs...
More About: General

Investing In Bear Markets - A Conversation
2008-04-10 03:16:00
The author of one of my favourite blogs (Thicken My Wallet) and I had another conversation - this time about "investing in bear markets, high-dividend yield stocks and all matters investing in these uncertain times." Instead of both parts appearing on his blog, this time we are splitting the hosting duties and he has published Part 1 on his blog (to be published at 5:00am on April 10th) and this is Part 2. As before, his comments appear in italics...PPNs and ETF’s Let’s talk about two popular investing products: principal protected notes (PPN’s) and exchange traded funds (ETF). We seem to have creeping fees in both products which is pretty mind-boggling for PPN’s given how high fees are already. Even ETF MER’s are creeping up to above 0.50%. Is the market getting its grubby little hands on these products and making a bad product worse and a good product mediocre? I think PPN sales are increasing even though the industry (and investors) are st...
More About: General , Markets , Investing , Conversation , Bear

Double Exposure Exchange Traded Funds
2008-04-09 00:40:00
If you ever watch BNN you're bound to see Howard Atkinson promoting Horizons BetaPro ETFs which allow you to "profit or protect" in an up or down market. Their lineup of ETFs are more than just index tracking exchange traded funds - they also return 200% of the daily performance of the indices in question. Not only that, they offer a Bull and Bear version of each "double exposure" ETF. The Bull version gives you 200% of the daily performance of the underlying index while the Bear version gives you 200% of the INVERSE daily performance. (Horizons BetaPro are not the only company offering double and double inverse exposure ETFs.)What does this mean? Let's say your index goes up 1% today. The Bull version of the ETF should be up 2%. The Bear version should be DOWN 2%.If the underlying index is down 2%, then the Bull version is down 4% and the Bear version is UP 4%.There is a reason they always stress 200% of the DAILY performance. You cannot just take the 1 year, ...
More About: Double , Exchange , Exposure , Funds , Exchange Traded Funds

If You Are An Executor Of An Estate, It Might Be Better Not To Take An Exec
2008-04-08 03:30:00
If you have been named the executor (or personal representative or administrator) for an estate for someone who has died you may know that you may be entitled to an executor's fee. The fee can be specified in the will, or it may not be explicitly addressed in which case the executor can charge a percentage of the value of the estate (up to certain limits).In either case, there are certain things to consider when you are also a beneficiary of the estate. If you receive money from the deceased's estate as directed in the will, you do not pay tax on this amount. If you claim an executor's fee, you must include this on your tax return as taxable income and pay tax on it.So you can see that if you were the only beneficiary of the estate, it might not make much sense to claim a fee at all since you would have tax to pay on that fee. If you waived the fee altogether, then more money would pass to you on a tax-free basis.For example, let's assume for simplicity's sake that there is $10...
More About: Estate