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2017

Estate & Financial Services YOUR NORTHERN MICHIGAN GUIDE TO A SECURE FINANCIAL FUTURE

Are alternative

Investments for you?

Evolving laws for Airbnb Rentals The new fiduciary rules and your retirement fund

WHAT YOU NEED TO KNOW ABOUT SOCIALLY CONSCIOUS INVESTING IS IT TIME TO CONSIDER A PROFESSIONAL TRUST MANAGER?

A supplement to

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For those who think extraordinary client service is a thing of the past, we have two words: Regina Jaeger. Personable and bright, Regina Jaeger, CTFA, is the ideal trust relationship officer to bring extraordinary client service back to Northern Michigan. But how? For clients of Greenleaf Trust, you see, extraordinary client service never went away. So Regina will set her sights on raising a high bar even higher by advising, serving, and meeting the needs of our wealth management clients. Given the alignment of her core values and ours— fiduciary excellence, integrity, continuous improvement, putting client interests first—it’s a perfect fit. In Regina’s experience, the best trust relationship officers provide timely and consistently reliable service regardless of client circumstances. Whether they created wealth or inherited it, have or need a trust, or are acquiring assets or paring down, all need a trusted advisor who puts their interests first. And because Regina’s natural instinct is precisely that, her decision to join our firm is exceedingly good news. Give Regina a call and put her to work on your behalf. You’ll find that trust is in our name—and Regina is on our team— for good reason.

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TRENDS:

ALTERNATIVE INVESTMENTS After the financial crash of 2008, many individual investors soured on the stock market and, after all these years, are still not jumping back in. But investors are also uninspired by the bond market, because interest rates are so low. “We have record amounts of cash sitting on the sidelines,” says Brian Ursu, president of Intentional Wealth Advisors, LLC. “But if you just put your money in the bank you are getting less than 0.5 percent interest, and that doesn’t seem like a workable solution either.” In response, some people are looking to investments that fall under the broad term “alternative investments,” Ursu explains. One of the most common types of alternative investments is real estate investment trusts (REITs), in which investors combine money in a large

pool and hire a manager to purchase large commercial real estate, like office buildings, shopping centers and apartment complexes. Once the real estate is purchased, the fund generates consistent rental income. “Typically after about seven years, the fund would sell the real estate and move on to the next one,” says Ursu. Adding a measure of stability to the fund, some REITs specialize in properties that are essential to the operations of a specific business, for example, purchasing the headquarters of The New York Times and leasing it back to the company. Another type of alternative investment is direct loan participation. Imagine a medium-sized business that needs to borrow $50 million. If the company isn’t public, it can’t issue stock, and maybe the company leaders don’t want to go to

the bank. “They can join in with other companies in a loan package that people can invest in,” Ursu says. The firm selling the investment would be responsible for doing appropriate credit checks, due diligence, and so forth. While these types of investments have gained a measure of credibility— about half of large endowment funds are comprised of some type of alternative investment—investors still need to be extremely cautious when heading into this investment realm, Ursu explains. “It can be risky. These types of investments are illiquid and not suitable for everyone. There are a lot of financial advisors who dabble in this area and not all alternative investments are created equal.” Work with somebody who is reputable, has a proven track record and does due diligence of his or her own. —J.S. 2017 | Estate & Financial Services

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You know where you want to go. Let’s talk about how we can help you get there.

Your financial advisor should be someone who understands you and your family, your priorities, and what matters most to you. The Simonton-Hanosek-Mangum Wealth Management Group of Traverse City believes that kind of careful, consistent attention is the best way to help you stay on track for your goals now and over time. Years ago, we committed to working with a select group of clients so we could provide a more thoughtful, proactive level of service. With that kind of focus, we hope clients will want to be with us for life — and make us their first contact whenever they’re faced with major decisions. Having more than 140 years of collective experience, our team combines the responsiveness of a small firm with access to the vast global resources of one of the world’s largest financial services companies. We consider it a privilege to help you find a strategy that’s right for the life you envision.

Rick Simonton, CFP®, CIMA®, CPWA® Senior Vice President Wealth Management Advisor Portfolio Manager

The Simonton-Hanosek-Mangum Wealth Management Group 333 West Grandview Parkway, Suite 300 Traverse City, Michigan 49684 231.922.6825 877.296.3152 toll free 614.441.4187 fax richard_simonton@ml.com fa.ml.com/theshmgroup

Call us today so we can talk about you and your family’s hopes, goals and dreams.

Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation. Investment products:

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The Bull Symbol and Merrill Lynch are trademarks of Bank of America Corporation. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® in the U.S. CIMA® is a registered certification mark of Investment Management Consultants Association, Inc. CPWA® is a registered certification mark of Investment Management Consultants Association, Inc. © 2017 Bank of America Corporation. All rights reserved. ARG7S3RL | AD-07-17-0092 | 07/2017


REGULATION:

There’s been a lot of talk about the new federal Fiduciary Rule. We check in with Kathy Dixon, vice president and trust officer with Chemical Wealth Management, to help put the change in perspective.

WHAT THE NEW FEDERAL FIDUCIARY RULE MEANS TO YOU

The name Fiduciary Rule sounds pretty vague and broad and, yes, boring. Can you give us a little thumbnail description of what it does and why it’s important? Basically, what it means is anybody who provides investment advice on retirement accounts—like 401Ks and IRAs—for a fee must shift the standard of advice from being “suitable” for the client to being in the “best interest” of the client. “Best interest” is the standard that trust officers have long had to adhere to, but people who sell financial products, like brokers and insurance people, have not had to meet the fiduciary standard until now. Where is the impact of this going to be seen? Financial professionals will have to demonstrate that they are giving advice that’s in the best interest of the client. And that will involve a certain amount of paperwork. You have to show you evaluated the client’s risk tolerance, save-ability, their ability to recover from market downturns. And you have to show that your advice fits that profile. Also, the transaction has to be much more transparent. The financial professional must disclose in dollar amounts all of the fees going to the broker. A lot of times investors have no idea what their costs are. You’ll also see the business move to a fee-based business and away from a commissionbased business. We’ve heard that some financial services firms claim that the paperwork is so much that it will force them to stop

serving smaller customers, say, those with less than a million dollars under management. Any thoughts on that? Yes, the brokerage firms are saying that, and they say it’s unfair to small investors because they won’t have access to better investment opportunities. But we are seeing online services—called robo investing—coming in to fill the gap. These services have you fill out a questionnaire and process the information through computer algorithms and make investment decisions based on that. It’s a lower-cost way of investing and the results are comparable, and it’s very transparent. It sounds like the transparency aspect of this is important to you. I feel transparency is always good. As I said above, I’ve seen so many cases

where the investor has no idea what fees and commissions are being paid. When I see a situation where a tax deferred investment is in an account that is already tax protected ... that doesn’t make sense and it makes you wonder why would an advisor make that suggestion other than because of a sales commission. Where do things stand now? The new regulation went into effect June 9, and it’s in a transitional period. It will be fully in effect January 1, the caveat being that the Trump administration delayed implementation once already, so there’s a possibility we might see some attempts to modify the rule before then. There is more in-depth information on this, available on the web for those who want to research more. —J.S. 2017 | Estate & Financial Services

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Let our expertise drive your portfolio We can help determine whether your investments are working well together to help you reach your long-term goals. Call today for a complimentary portfolio review. Jeffrey Watts Managing Director - Investment Officer Financial Advisor Trina Schueller Senior Client Associate Officer Kitera Hamilton Senior Registered Client Associate Investment Investmentand andInsurance InsuranceProducts: Products: Officer NOT FDIC Insured NOT FDIC Insured NO NOBank BankGuarantee Guarantee Wells WellsFargo FargoAdvisors, Advisors,LLC, LLC,Member MemberSIPC, SIPC,isisaaregistered registeredbroker-dealer broker-dealerand andaaseparate separate 0516-00349

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TRUST MANAGEMENT:

IS YOUR BROTHER REALLY READY TO BE A TRUST MANAGER? One of the most important decisions in establishing a trust is deciding who will manage the trust if the trust holder becomes incapacitated or dies. Often a family member is chosen to perform trust management, a position that is viewed as having a sense of honor attached to it. But professional trust officers caution that few family members understand the complexity of trust management and generally do not have the time or skill set to fully execute their duties, to cross all t’s, dot all i’s. “In the trust industry, there’s a saying: ‘People will agree to manage a trust once, but they will not do it twice,’ ” says Christopher Lamb, trust officer and principal of The Old Mission Investment and Trust Companies. Often, when people set up a trust and sign all of the documents, they understandably have a sense of accomplishment and a peace of mind that they have taken care of something important. But, Lamb says, that feeling can be misleading. “Really, when the documents are signed, that is the beginning of the work, not the end of it.” For individuals that have complex financial situations, with brokerage accounts, insurance policies, bank accounts, real estate holdings and more, the trust work involves poring over all accounts to make sure things like beneficiary information is all up to date and accounted for appropriately in the trust. “For example, is there an ex-husband who is still the beneficiary on a life insurance policy?” Lamb says. If assets are not brought into the trust appropriately, they can end up in probate court, and, of course, avoiding probate is one of the primary goals of a trust. Professional trust managers can also temper situations when family members do not agree on a course of action. “They can turn to corporate policies and accepted procedures. They are not sitting at the Thanksgiving table in a test of wills arguing about what to do. They can say, ‘no,’ and sometimes ‘no’ is a term of affection,” adds Lamb. Trust officers are most effective when they are also endowed with power of attorney, so they can readily gain access to all legal and financial documents and inspect them to the depth required. But Lamb says there is another option to consider: using a “trust protector.” In this situation, a family member is still actively involved in managing the trust, but they are not required to do the heavy lifting of trust management. When needed, the trustee will take on duties of tax coordination, bill payment, investment management, and more. “When a loved one is unable to manage their own affairs, or has passed, a trust protector, however, can provide the trustee with a certain amount of guidance over personal family matters—management of a family business, terminations and distributions to trust beneficiaries, and the distribution of personal effects—in efforts to aid the trustee in certain decisions,” Lamb says. —J.S.

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2017 | Estate & Financial Services

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COLLEGE SAVINGS:

FUNDING THOSE UNIVERSITY DAYS AHEAD

With the average student loan borrower graduating with $34,000 in debt— up 70 percent from just a decade ago, and student loan delinquency at the highest rate of all types of household debt, it’s no wonder this issue appears regularly in the headlines these days. Making things worse is the runaway cost of college, which, even adjusted for inflation, has risen 350 percent since 1973, while median family income has remained unchanged. More than ever before, parents and grandparents are looking at ways they can help future college students by starting a fund early in the child’s life. We asked Regina Jaeger, vice president and trust officer with Greenleaf Trust, to map out some basic advice for those considering forming a college fund. 1. I know every advisor says this, but it’s true and is actually the most important of all: start as early as you can. You have more time to make even modest contributions accumulate and the power of interest and growth increase the value of your savings. It’s never too early to begin, but know that to create an official

college fund, you will need a social security number for the child, so you may want to consider other savings options (like a Roth IRA) if the child is not yet born. 2. Consider a 529 plan. Named after section 529 of the Internal Revenue Code, the plan allows investments to grow free of federal and state income tax when used for qualifying higher education expenses at withdrawal. The contributions are not federaltax deductible but some states offer tax deductions for contributions and there may be certain gift and estate tax planning benefits. With a 529 plan, keep in mind that you may not have to live in the state that offers the plan you want to participate in and that many states allow you to spend the money for qualifying education expenses in other states. So, for example, the Michigan 529 plan allows you to live in, say, Tennessee and the funds can be used for a school in, say, Vermont. For more information, about 529 plans, visit MiSaves.org. 3. As a general rule automate your contributions to the college fund. If you can automate, say, $50 a week,

it will help you stay on track with meeting your college savings goals without the temptation to spend the money in other ways. 4. Understanding the future cost of college is also important, so you know how much to potentially budget for. Take into consideration tuition, additional fees, room and board. The website collegeboard.org publishes annual costs of college education and does a decent job of estimating the cost of college in the future. But be aware: don’t let the numbers overwhelm you and drive you down the dangerous road of letting saving for college trump saving for your own retirement. Work hard to find an appropriate balance with saving for college and saving for retirement given your financial goals. 5. Finally, encourage the student to apply for as many scholarships and grants as possible. Surprisingly, many scholarships go unused each year. Do the research; fill out the forms. It can seem like drudgery, but the effort often pays off in surprising ways. —J.S.

2017 | Estate & Financial Services

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Trusts Are For the

5 ToolsAre of For the Trusts Living, Too. Cottage 5 Tools Too. ofProtection Living, Trusts, while an important mechanism Cottage Protection At LJPR, we know that the Family

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Revocable Living Trust: avoids provide an efficient mechanism, consider allowsIncontrol, Very Trust Funding. order forprivacy. a trust to • probate, ‘funding’ a revocable trust during 1. Revocable Living Trust: avoidsyour simple flexible while the grantors provide and an efficient mechanism, consider lifetime. allows control, privacy. Very probate, are alive.aRequires taxyour return ‘funding’ revocableseparate trust during simple and flexible while the grantors lifetime. and accounting after death of the Trustee Trustees should be • are alive.Selection. Requires separate tax return grantors. Currently allows step-up selected based onafter their willingness and and accounting death of the Trustee Selection. Trustees should be basis. Will create prospective • in ability to serve in this allows capacity. Do they grantors. Currently step-up selected based on their willingness and property tax reset. truly understand their role and the level of in basis. Will create prospective ability to serve in this capacity. Do they commitment taxinvolved? reset. 2. property Limited Liability Company (LLC): truly understand their role and the level of avoids probate if structured with a commitment involved? 2. Company (LLC): Now andLiability Later. Serving as a trustee • Limited buy-sell and or trust. Allows control avoids probate structured encompasses theif of ability to paywith bills, a and governance cottage. Requires Now andand Later. Serving as a trustee • buy-sell or trust.and Allows control manage investments, the separate tax return. Property tax encompasses the ability to pay Requires bills, and governance cottage. coordination of taxofreturns and related reset is prospectively avoidable. manage investments, and the separate tax return. Property matters. Upon passing, this roletax shifts coordination of tax returns and related is estate prospectively 3. reset Operating Agreement: contract for toward and trust avoidable. settlement. matters. Upon passing, this role shifts operation of family cottage. 3. Operating Agreement: contract for toward estate and trust settlement. • Corporate Trustee. Under many of family cottage. simple 4. operation Lady Bird Deed: Extremely circumstances, working with a Corporate Trustee.forUnder many that allows probate-free • deed professional trusteeExtremely can alleviate the 4. Lady Bird Deed: circumstances, working with a simple transfer to residual beneficiaries. Does stressthat involved withfor anprobate-free ailing parent or deed allows professional trustee can alleviate the not provide control. spouse concerning household financial transfer to residual beneficiaries. Does stress involved with an ailing parent or arrangements. provide control. 5. not Dynasty Trust: Anhousehold irrevocable life spouse concerning financial insurance trust that ‘endows’ the arrangements. 5. Trust: An irrevocable Build Trust. closely withlife an • Dynasty operations ofWorking the family cottage. insurance trust thatorganization ‘endows’ the investmentan and trust now Provides income-tax and estateBuild Trust.ofWorking closely with an • operations the family cottage. will provide significant benefits your tax free pool for funding thetocottage investment and trust organization now Provides an income-tax andneeded. estatefamily at a time when it’s truly operations after the death of the will provide significant benefits to your tax free pool for funding the cottage Grantors. family at a time when truly of needed. operations after theit’s death the Grantors.

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Protecting theis personal. Private trust Protecting the Private trust is personal. Having trust in your wealth management firm Family Cottage: should be a personal investment. Having trust in your wealth management firm Family Cottage: should be a personal investment. A DIFFERENT KIND OF ASSET

A DIFFERENT KIND OF ASSET

Leon LaBrecque, JD, CPA, CFP®, CFA, is sitting on his dock at his cottage on Torch The selection of a trustee is personal, very personal. A trustee is a fiduciary entrusted Lake. wearing JD, swim trunks and shades, is doing what lots ofcottage professionals do: LeonHe’s LaBrecque, CPA, CFP®, CFA, isand sitting on hisand dock at his Torch with care ofof your assets, your financial livelihood, above all, youron peace of Thethe selection a little trustee is personal, verywhat personal. A trustee is call a fiduciary entrusted trying to squeeze in a work while having most of us would “playtime” at the Lake. He’s wearing swim trunks and shades, and is doing what lots of professionals do: mind. with the care of your assets, your financial and above all, your peace of family cottage. LaBrecque is making onwhat a livelihood, pad,most “I’mofworking oncall a succession plan for trying to squeeze in a little work whilenotes having us would “playtime” at Funding your trust is an incredibly important taskLaBrecque, to ensure that your trustee is the able mind. a cottage not far from mine, right here on Torch,” says who’s been a practicing family cottage. LaBrecque is making notes on a pad, “I’m working on a succession plan for toFunding manage your assets and effectively lifetime. Additionally, trust isefficiently an“Great incredibly important toyour ensure that your iswhen able over 30 years. grandpa boughtduring ittask inLaBrecque, 1910, and it’s been in trustee the family for aattorney cottage for notyour far from mine, right here on Torch,” says who’s been a practicing called upon, your trustee should not have to search, sort, and wade through a myriad of three generations. I’m working on a plan to keep it in the family for three more generations.” to manage your assets efficiently and effectively during your lifetime. Additionally, when attorney for over 30 years. “Great grandpa bought it in 1910, and it’s been in the family for accounts and documents to come to the task at hand. At the time a family member Northern Michigan is filled with vacation homes, including those of LaBrecque and calledgenerations. upon, your I’m trustee should have to search, andfor wade a myriad of three working on anot plan to keep it in thesort, family threethrough more generations.” his clients. LaBrecque heads wealth management LJPR, LLC. “We atand all steps intoand anMichigan acting trustee role, there istask already a firm, substantial amount of look stress and accounts documents to the come tovacation the at hand. At thethose time family member Northern is filled with homes, including ofa LaBrecque aspects of our client’s wealth, everything from investments to estate planning and taxes. But anxiety involved withtrustee the illness orthere death a loveda firm, one. Can a LLC. corporate his clients. LaBrecque heads the wealth management LJPR, “We look alla steps into an acting role, isofalready substantial amount of trustee stressatbe and one thing stands out, both for many of my clients and myself: we consider the cottage like better solution? Can a corporate trustee significantly reduce the concerns involved with aspects of our client’s wealth, everything from investments to estate planning and taxes. But anxiety involved with the illness or death of a loved one. Can a corporate trustee be a athis family heirloom. We want to pass to stay the family,consider and to be affordable for process? In out, short, one thing stands both foritmany of easily, mysignificantly clients andinmyself: cottage with like better solution? Can a absolutely. corporate trustee reduce we the concernstheinvolved generations.” afuture family heirloom. We want it to pass easily, to stay in the family, and to be affordable for trustees can play an important part in this process. They satisfy an thisCorporate process? In short, absolutely. With more than just estate planning skills in the toolkit, LJPR looks at multiple aspects future generations.” unemotional but personal within your family’s financial structure. They Getting the job trusteesEfficient can role playtransfer an important part this process. satisfy an of Corporate cottage protection: on death of theinprimary owners, toaspects taxes, With more than just estate planning skills ineffort the toolkit, LJPR lookspart atattention multiple done safely, expeditiously and with minimal on your family’s is the expected unemotional but personal role within your family’s financial structure. Getting the job and an issue that LaBrecque sees frequently ignored, funding. “I’ve had attention many cases of cottage protection: Efficient transfer on of the primary owners, to where taxes, result. This position encompasses billdeath payment, coordination and preparation, done safely, expeditiously and with minimal effort ontax your family’s part is the the expected the family takes adequate preparation to legally transfer the cottage, but leave kids sadand an issue that LaBrecque sees frequently ignored, funding. “I’ve had many cases where investment management, property working withpreparation, individual result. This position encompasses billmanagement payment, taxand coordination and dled with mortgages and operating expenses. Many times, the next generation can’t afford the family takes adequate preparation to legally transfer the cottage, but leave the kids sadbeneficiaries as family well. members It’s notproperty an insignificant task forand families to manage, let alone at investment management, management working with can’t individual the upkeep, and areexpenses. forced toMany sell.” dled with mortgages and operating times, the next generation afford times when life is far more stressful than expected. As a corporate trustee, we can help.at To coverand the expenses, uses an ‘endowment model’. “When we manage funds beneficiaries as family well. It’s LJPR not an insignificant task for families to manage, let alone the upkeep, members are forced to sell.” At Old and Trust, we believe in“When a value that for a foundation, we create an endowment, or afirmly continuous stream of income support times when life farInvestment moreLJPR stressful expected. Asmodel’. a corporate trustee, wetocan help. To coverMission the isexpenses, usesthan an ‘endowment weproposition manage funds involves your entire family, both now and in the future. As a combined organization the endowment’s purpose. The same principle applies to a cottage: have enough money Old Mission and Trust, we believestream in a value proposition that forAt a foundation, weInvestment create an endowment, or afirmly continuous of income to support set aside to keepentire the cottage operating and to in alleviate the costs.” a fee-only uniquely positioned as both an now investment management firm and enough a As private trust involves your family, both and the future. As from a combined organization the endowment’s purpose. The same principle applies to heirs a cottage: have money advisor, endowment takes the of quality, low riskfrom and costs.” low cost investments. company, we serve as the center of our clients’ financial lives. trusted set asidethis topositioned keep the cottage operating andform to alleviate the heirs a afee-only uniquely asusually both an investment management firm andHaving a As private trust Another common issue is governance. “I’m working on another cottage right now, where the counselor with a working relationship with you and your family allows consistency advisor, this endowment usually takes the form of quality, low risk and low cost investments. company, we serve as the center of our clients’ financial lives. Having a trusted first generation died,ofleaving itwhen to the consistency three children. problem isvalued. the oldest childwhere suddenly Another common issue is governance. “I’m working on another right now, the during a period time is The desired andcottage Family wealth counselor with a working relationship with you and your family allows consistency thinks it’s hers, and she, by virtue of seniority, can have it whenever she wants. To prevent that, first generation died, leaving it to the three children. The problem is the oldest child suddenly stewardship is about integrating the complexities of tax management, financial and during period of timegovernance when consistency is LaBrecque desired and valued. Family we useit’s anahers, LLC to provide and control.” said that a typical plan wealth might thinks and she, by virtue of seniority, can have it whenever she wants. To prevent that, estate planning, and investment management. Allowofus tax the opportunity to financial serve as your stewardship isorabout integrating the complexities management, and include a trust lady-bird deed, an LLC hold theLaBrecque cottage, and some of endowment. we use an LLC tonow provide governance andto control.” said thatform a typical plan might counselor both and for your family in the future. estate planning, and investment management. Allow us the opportunity to to serve your Torch Lake beautiful despite the heat wave. down theas south, include trust orislady-bird deed, LLC to hold theLaBrecque cottage,in andgestures somewith form endowment. Can ayou imagine having a Ian longstanding relationship place aofcompany that counselor both now and for your family in the future. “I worked hard to get this, and want my kids and their kids to enjoy it like I have. I figTorch Lake is beautiful despite the heat wave. LaBrecque gestures down to the south, knows you,reduce your uncertainty spouse and your atrelationship a the timecottage, when wasitasomething your Can you imagine in to place with company that ure if I can theirfamily lives about I‘change’ can keep for a “I worked hard to get having this, andainIlongstanding want my kids and their kids enjoy it like I what have. itIis: figfamily didn’t need? We certainly can. family knows you,reduce your uncertainty spouse andinyour at a the timecottage, when I‘change’ wasit something your ure if I heirloom.” can theirfamily lives about can keep for what it is: a Advertorial family heirloom.” didn’t need? We certainly can. family


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1020 Hastings, Suite 105 Traverse City, MI 49686 231-935-4646

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120 S. Elm Gaylord, MI 49753 800-395-4347

R. Todd Balkema

218 Maple Street, Suite A Big Rapids, MI 49307 231-796-4012

Guaranteed Excellence in Workmanship

Mara Raven Spence

DEDICATED TO SERVING SENIORS & FAMILIES

www.swensenmemorials.com

Business Mobility Is Here!

Business Banking Where You Need It.* • Deposit checks • Pay bills • Transfer funds between Traverse City State Bank accounts • View check images • View and approve wires, transfers and ACH

We’re in a good place. *Requires Business Online Banking

Member FDIC

231.995.5500 tcsb.com 2017 | Estate & Financial Services

EFS 9


LOOKING BACK 25 YEARS

GIVING FORWARD FOREVER 25 years

of impact

YEAR 50 GIVE TODAY. GROW TOMORROW.

START PLANNING TODAY TO LEAVE A LASTING IMPRESSION FOREVER.

YEAR 25 ASSETS = $53.7 million 886 GRANTS = $2.5 million

YEAR 1 ASSETS = $101,444 6 GRANTS = $12,030

GTRCF.ORG

•

ANTRIM . BENZIE . GRAND TRAVERSE . KALKASKA . LEELANAU

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231.935.4066


SOCIALLY CONSCIOUS INVESTING:

ALIGNING YOUR VALUES WITH YOUR FINANCIAL RESOURCES Let’s say you’ve made an ethics-based change in your personal life or in your organization, for example, deciding to shrink your carbon footprint. You installed solar panels, bought low-energy equipment, purchased electric hybrid cars. But then, in an annual review of your investments, you realize your mutual funds are invested in several coal and oil companies—major cogs in the CO2-production machine. You want to divest and put your money to work supporting the values you are working hard to live out personally or organizationally. But how? Good news: managing your investments to be in sync with your personal values or your organization’s values is easier than ever, says Kristi Avery, of FOR Investment Partners, a Traverse City–based firm focused on socially conscious investing for the last 25 years. The roots of socially responsible

investing go back to opposition to the Vietnam War, and later to pressuring South Africa to end apartheid, when the Interfaith Center for Social Responsibility organized a massive movement to divest from companies there. Apartheid ended in 1991, but the realization that investments could be a powerful tool in bringing social change kept expanding and maturing. Today, an entire industry has grown up to support socially conscious investing, Avery explains, with several analytics firms devoted to assessing the performance of companies on a host of criteria that are important to the values of investors. “Human rights, executive compensation, climate change, conflict risk ... those are some of the hot topics now,” she says. The industry has also evolved from being focused on divesting from “bad” companies to investing in “good” companies—actively helping to propel proactive companies

to the forefront of their industries. The biggest misunderstanding about socially conscious investing is that the strategy delivers lower returns. “There are many academic studies showing that there is no performance penalty associated with sustainable investing, and that this type of investing can perform as well or better than traditional investing,” Avery says. Companies with positive sustainability practices tend to do better over the long term because they have less exposure to things like environmental enforcement, class action lawsuits, sexual harassment lawsuits, public boycotts from bad publicity, and the myriad of other issues that can come back to punish unethical businesses. For people who are curious about socially conscious investing but aren’t ready to go all in, Avery suggests allocating a portion of a portfolio, like 25 percent, to try it. —J.S. 2017 | Estate & Financial Services

EFS 11


SHORT TERM RENTALS:

BE AWARE OF AIRBNB PUSHBACK

7 Day Processing*, Upfront Underwriting and first-rate service are the hallmarks of our fresh

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approach. And now with just a few taps on your phone or clicks on your computer, you can approach. And now with just a few taps your phone clicks your computer, you can approach. And now with just a few taps onon your phone oror clicks onon your computer, you can begin the home loan process using our Easy App. Meet with us today and discover what a swift

7 the Day Processing*, Upfront Underwriting and first-rate service are the hallmarks ofwhat our begin the home loan process using our Easy App. Meet with us today and discover what a swift begin the home loan process using our Easy App. Meet with today and discover a swift begin home loan process using our Easy App. Meet with usus today and discover what a fresh swift and seamless loan or refinancing process could be like for you.

approach. And now with just a few taps on your phone or clicks on your computer, you can and seamless loan or refinancing process could be like for you. and seamless loan refinancing process could like for you. and seamless loan oror refinancing process could bebe like for you. begin the home loan process using our Easy App. Meet with us today and discover what a swift FHA | VA | CONVENTIONAL | JUMBO | REVERSE | REFINANCE and seamless loan refinancing process |could be like |for you. FHA |VA VA |CONVENTIONAL CONVENTIONAL |JUMBO JUMBO |REVERSE REVERSE |REFINANCE REFINANCE FHA |CONVENTIONAL |JUMBO |REVERSE FHA | |VA | or | |REFINANCE

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Debbie Woodbeck B R A N C H M A N AG E R

Debbie Woodbeck Debbie Debbie Woodbeck NM LWoodbeck S# : 131385

RC CA H M|AG AAG NE248.212.9196 AG RBN A NAHCNH MN A N B RBA M RE RE R direct: 231.715.9790 cell: NSLM #1 :3 183518358 5 NLM NDebbie M #SL : #S 1:3Woodbeck debbie.woodbeck@movement.com

direct: |248.212.9196 248.212.9196 direct: 231.715.9790 |M cell: 248.212.9196 movement.com/debbie.woodbeck direct: 231.715.9790 cell: B231.715.9790 R A N C| H Acell: N AG ER debbie.woodbeck@movement.com debbie.woodbeck@movement.com debbie.woodbeck@movement.com NMLS#: 131385 www.move m e nt.com

movement.com/debbie.woodbeck movement.com/debbie.woodbeck movement.com/debbie.woodbeck direct: 231.715.9790 | cell: 248.212.9196

Todd Jarrold

LOA N O F F I C E R

Todd Jarrold Todd N Todd M LJarrold S# : Jarrold 30415

LOA N LOA OFFO CRIECRE R LOA NN O231.237.2236 F IF CFIEF direct:

NSLM NTodd 515 NM LM #SL : #S 3: # 03:403 14 501 4 todd.jarrold@movement.com Jarrold direct: direct: movement.com/todd.jarrold direct: 231.237.2236 LOA N231.237.2236 O231.237.2236 FFICER

todd.jarrold@movement.com todd.jarrold@movement.com todd.jarrold@movement.com NMLS#: 30415 movement.com/todd.jarrold movement.com/todd.jarrold movement.com/todd.jarrold direct: 231.237.2236

Pete Torrey

MARKET LEADER NPete MPete L SPete #Torrey : 1Torrey 1 2Torrey 8704

MKRA TAEL MR A AEEDA A EKR TEKT L EL D REDRE R direct: M 231.620.4412 |Efax: 989.546.4234 NSLM S 10 274 80740 4 NPete NM LM #SL : #Torrey 1:1#21 :182178 pete.torrey@movement.com

direct: fax: direct: 231.620.4412 | fax: 989.546.4234 movement.com/pete.torrey direct: 231.620.4412 M A231.620.4412 R K E T | Lfax: E A|989.546.4234 D E R989.546.4234 pete.torrey@movement.com pete.torrey@movement.com Npete.torrey@movement.com MLS#: 1128704 movement.com/pete.torrey movement.com/pete.torrey movement.com/pete.torrey direct: 231.620.4412 | fax: 989.546.4234

debbie.woodbeck@movement.com

todd.jarrold@movement.com

pete.torrey@movement.com

movement.com/debbie.woodbeck

movement.com/todd.jarrold

movement.com/pete.torrey

www.movement.com www.m ovement.com www.movem ent.com

www.move m e n t.com

*While it is Movement Mortgage’s goal to provide underwriting results within six hours of receiving an application, process loans in seven days, and close in one day, extenuating circumstances may cause delays outside of this window. | 125 Park Street, Suite 315, Traverse City, MI 49684 | Debbie Woodbeck - MI-131385 | Todd Jarrold - MI-30415 | Pete Torrey - MI-112870 | Movement Mortgage, LLC supports Equal Housing Opportunity. NMLS ID# 39179 (www.nmlsconsumeraccess.org) | 877-314-1499. Movement Mortgage, LLC is licensed by MI # FR0018717 & SR0020189. Interest rates and products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at closing for all benefits. “Movement Mortgage” is a registered trademark of the Movement Mortgage, LLC, a Delaware limited liability company. 8024 Calvin Hall Rd, Indian Land, SC 29707. | CPID 4543 | Exp. 12/2017

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Among members of lake associations, condo associations and local zoning boards, setting limits and operating rules for short-term rentals has long been part of the conversation—sometimes contentiously so. But online booking services like the longtime player Vacation Rental by Owner and the surging Airbnb have poured kerosene on a smoldering fire, explains cottage law attorney Dan Penning. By making the marketing and booking of short-term rentals so easy, the services have lured thousands upon thousands of home and cottage owners into the business. In many cases, rental income becomes a necessary financial pillar of cottage ownership, paying upkeep and high non-homestead taxes—especially those levied on lakefront property. In other cases, short-term rental income is what makes a cottage purchase financially possible in the first place. Lakefront properties, in particular, are proving challenging because they attract people on vacation, many looking to live it up for a week or two and not worry a lot about the consequences. “Typically, cottages are close together, and if you have a neighbor renting all the time, you have a new neighbor every week, and some of them will invite their relatives, and friends of their relatives and suddenly you have 30 people staying next door,” Penning says. Throw in multiple powerboats, music into the night and lots of beer, and you have a ruined neighborhood, or at least seriously damaged neighborly relations. “I’ve even heard of people subletting rooms in the cottages they are renting for the week,” Penning says. In many cases, the non-renting neighbors are pushing back, advocating for tighter rules within their associations and zoning boards. This means people who need short-term rental fees to afford a cottage need to proceed with eyes wide open to the possibility that the practice could be curtailed, or they need to be ready to advocate for their own interest if they see local zoning boards taking up the issue. Meanwhile, courts have taken up the issue, too, says Penning. “Courts in Michigan have often taken the side of those trying to stop the rentals, saying that if zoning or association rules say there is no commercial use allowed, the rental is commercial use and should be stopped,” he says. But some courts are siding with the rental owner, saying the property is simply being used as a residence, so it qualifies as residential. “There is currently a case before the Michigan Supreme Court that could shed more light on how this will proceed,” Penning says. His best guess: “I suspect the court will come down in favor of limiting the short-term rentals.” Stay tuned. —J.S.


John A. Scott, P.C. John A. Scott & Gregory R. Kish

At John A. Scott, P.C. we focus on trusts and estates, elder law, probate litigation, and special needs planning. John is a Fellow of the American College of Trust & Estate Counsel and Greg is a certified Elder Law Attorney with the National Elder Law Foundation. Our staff members, Carrie A. Hahn and Julie A. Houdek, have a wealth of experience in dealing with our client’s problems. Each client presents a unique challenge. We bring tried and true techniques along with creative thinking to achieve our client’s goals.

John A. Scott, P.C.

812 S. Garfield Ave., Ste #7, Traverse City, MI Phone: 231-933-5322 • scottlawtc.com

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No two of us are alike. a memorial service should reflect that. When someone you love passes away, all of the tasks can feel overwhelming:

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Thank You Northern Michigan for 25 Years

Living the Up North Dream I grew up in a family of small business owners. My husband grew up on a local dairy and cherry farm. Hard work, family, and faith were values instilled in us long ago. When I started my career 25 years ago, I thought I’d be moving to a big city. Instead, we have been blessed with a life up north and reside on a 100 acre farm across the road from where I was born. Thank you northern Michigan for your business and your trust through the years.

Accepting new clients whom we genuinely feel we can help. Minimum Investable Assets Required. $500,000. HOLLY GALLAGHER, CFP® 231-941-6669 HorizonFinancialTC.com hollyg@cfnmail.com

12935 S. West Bayshore Dr. • Suite 220 • Traverse City Securities and Advisory Services offered through Commonwealth Financial Network. Member FINRA, SIPC. A registered Investment Advisor.

Estate & Finacial Services 2017  

Your Northern Michigan Guide to a Secure Financial Future