Mattson Financial Services - January 2022

F I N A N C I A L S E R V I C E S , L L C

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JANUARY 2022

WHAT HAPPENS NOW? Handling Assets After Death

This time of year is generally associated with new beginnings, but life doesn’t always abide by our schedule. In December, my mother-in-law passed away. My own mother is approaching her 90th birthday in February, and each day, she faces a new opportunity. But us children know that one day, she will pass too. All of us are mortal and only have so much time on this planet. So, aside from grief and existential questions, what happens after you’re gone? You should know what your beneficiaries — the people you love — can expect and how your assets will be handled. When you have a will, matters are relatively simple. A judge is in charge of your assets and will distribute them based on the law and what you’ve written in your document. It’s a bit more complicated if you’ve opted to use a trust. When your assets are held in a trust, your power of attorney and any other documents become null and void, and the trust will take precedence. A beneficiary you selected will become the successor trustee and run the estate until all of the money has been distributed. They will need to notify your financial advisor and banks and provide the death certificate and a copy of the trust to prove that they have authority over your assets. Once they do, the assets are frozen and liquidated, and they can only be deposited into the trust account. The person in charge of your trust has legal fiduciary duties. They must follow your written instructions to the letter. If there’s any ambiguity in the trust, it not only creates

difficulty but also puts your successor trustee at risk — someone else can use the uncertainty to litigate. It’s also important to note that your fiduciary needs to fulfill the obligations of your trust to the wording, not your intention. If, for example, you allocated $50,000 to a favorite charity, but the estate has been reduced to $40,000 by the time of your passing, the charity will receive the entire estate and leave nothing for your other beneficiaries. Since your assets change, we recommend you use percentages rather than dollar amounts when creating your trust. It’s much cleaner and allows your true intentions to be upheld. Sometimes, parents may make decisions with their assets that their children won’t understand. Often, a parent will leave more money to one child — not to punish any other children, but because they’ve received less financial support throughout the parent’s lifetime. Even if they did receive assets earlier, a child might still be surprised when they receive little or nothing out of the estate. It creates an unwinnable situation for the person running the trust. Other family members will frequently inundate them with requests to distribute the estate more “fairly.” These matters often result in hurt feelings and create a wedge between family members. They also can create legal issues for the successor trustee. If that’s not your intention, you should take the opportunity to write a note to each of your children. Include how much you love them,

how proud you are of them, and the good times you remember with them. Then, include an explanation for why you’ve allocated your assets as you did. In many cases, that heartfelt letter and a description of how you’ve tried to be fair to everyone will mean much more than money ever could. Handling a person’s assets after they’re gone is not an easy task — there’s much more than I’ve been able to include in this article. Whoever is in charge of running your estate when you leave this earth or become incapacitated needs to understand their legal obligations. I strongly suggest they attend a workshop for this purpose. Educational opportunities are available in person and online; either way, they should know what to expect. You probably recently gathered for the holidays and had an opportunity to spend time with the people you love most. In passing on your assets, you don’t want to hurt them — financially or emotionally. None of this is legal advice. Instead, while you still can, I’m urging you to tell the people you love how much they mean to you. It’s a gift that far exceeds any other.

–Gary Mattson

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SKILLS THAT ENRICH US

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January is National Hobby Month, and since it falls at the beginning of the year, it’s the perfect time to try something new! Hobbies add variety to your life and ensure you aren’t just living to work, so to speak. The best way to find a hobby you enjoy is to be open to new things. Whether it’s gardening, reading, drawing, running, fishing, crafting, or even beekeeping, finding an activity you enjoy is important. Here’s why! Hobbies are stress relievers. Hobbies offer a healthy escape from your busy lifestyle by keeping you engaged in something you find pleasure in. Instead of just relaxing on the couch and turning off your mind for a bit (which is totally acceptable sometimes), hobbies allow you to remain mentally productive while winding down at the same time. Hobbies also provide eustress. Believe it or not, one type of stress is deemed beneficial: eustress. If you aren’t overly stressed and are feeling a little under-stimulated, a hobby can provide activity for both your mind and body to keep you feeling excited about life and ready to take on new challenges and adventures.

A CRASH COURSE ON OFFSHORE FINANCE

Like the Panama Papers released in 2016, the Pandora Papers published in October 2021 expose the financial secrets of some of the world’s wealthiest people. In particular, they detail how the very rich use offshore finance to hide the extent of their wealth.

Simply having an offshore bank account or shell company is not illegal or even necessarily a sign of nefarious activity. Lawyers and accountants who deal in offshore finance often know exactly how to use the law to their clients’ advantage. They can also propose solutions that are technically legal. But concerns arise since the countries chosen to hold wealth offshore tend to prevent foreign governments from inspecting their accounts; this makes legal vetting next to impossible. A lack of transparency is the main point of contention, and it’s the reason why many people look at offshore finance negatively. Because the U.S. government cannot determine which assets are being held offshore, it cannot impose any taxes on them. Some parties also view hiding wealth offshore as a way of protecting a person’s assets from civil lawsuits, creditors, or investigations in the owner’s home country. It’s estimated that over $1 trillion is held in offshore accounts, and studies indicate that the bulk of this money is owned by the ultra-wealthy. Further, experts believe that the tax revenue lost to offshore finance equals about $800 billion per year worldwide. As to whether or not the Pandora Papers will inspire changes to the law, we’ll just have to wait and see.

But what exactly is offshore finance? Why do people use it? Is it even legal to use?

Offshore finance gets its name from the island and coastal locations where the practice of creating foreign tax havens originated. Today, offshore finance refers to any financial instruments or assets kept in countries that are not the owner’s country of residence. When an offshore account is created, it follows the financial regulations of the nation in which it is held. Countries commonly used for offshore finance often have stricter privacy laws and allow the creation of shell companies. Shell companies are organizations that exist on paper only, without employees or offices, but act as a legal “shield” against taxation and creditors. (At least 19,000 shell companies exist in the Cayman Islands alone.)

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Upcoming Events Stay tuned for the return of our First Friday events in 2022 and many other opportunities to see your Mattson team! Visit MattsonFinancial.com/events/ index.html to stay up to date! TAKE A BREAK!

The Importance of Having a Hobby

Hobbies offer a social outlet . Some hobbies involve group activities, such as bowling, sports teams, book clubs, and even wine tasting. Connecting with others offers the social support humans depend on to lead a healthy and fruitful life. Who knows? Maybe you’ll find some great friends who share the same passions as you! Hobbies develop patience. When you take on a new hobby, you are tasked with learning something new. Whether you’re practicing a new instrument, learning a different language, or figuring out how to make jewelry, a learning curve is involved. Building new skills takes patience, a very important attribute for success. Finding a hobby that suits you may take some exploration and trial and error, but it is all in good fun! Make it your goal to try something new or learn a new skill each month until you find something that sticks. Once you do, you’re sure to find that hobbies are both enjoyable and enriching!

ALLY’S

BLACK BEAN, MANGO, AND AVOCADO SALAD

Inspired by BBCGoodFood.com

Ingredients

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1 small mango, skinned and chopped

• • • •

1 medium red onion, chopped 2 cans black beans, drained Cilantro, chopped and to taste 1 lime, for zest and juicing

• •

1 avocado, chopped

3/4 cup cherry tomatoes, halved 1 red chile, seeded and chopped

•

Solution

Directions

In a large bowl, mix the ingredients together. Serve and enjoy!

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F I N A N C I A L S E R V I C E S , L L C

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INSIDE THIS ISSUE

What Happens to Your Assets When You’re Gone?

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Why Hobbies Are Important Offshore Finance 101

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Black Bean, Mango, and Avocado Salad Mark Your Calendar!

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Why Do Your Ears Pop on Flights?

**Reminder: If you have any changes to your financial situation, please notify us as soon as possible.

Investment advisory services offered through Mattson Financial Services, LLC, an SEC-Registered Investment Advisor. Insurance and annuities offered through Lakeview Financial Group, LLC. Mattson Financial Services, LLC and Lakeview Financial Group, LLC are affiliated companies.

Airplane Ears The Science Behind Your Ears Popping on Flights

When it comes to flying on an airplane, you can avoid cramped legs by upgrading to first class or catch a view by picking the window seat. However, there’s no getting around your ears popping during takeoff and landing. Believe it or not, there is a scientific explanation behind this common annoyance. As you read this, you’re likely not on an airplane, and the air pressure on either side of your eardrums is equal. Air is currently passing right on through your eustachian tube, a narrow passage that leads from your middle ear cavity to your pharynx and allows for pressure to be equalized on each side of your eardrums. When you’re in flight on an airplane, air pressure is not equal. During both ascent and descent, your eardrums stretch to try to adapt to the

changes. In order to equalize the pressure, your eustachian tube needs to open and close. When it does, your ears pop! Usually, the ear popping is irritating but nothing more. However, in rare cases, the pressure can lead to ear pain and even loss in hearing, especially if your ears don’t pop. In this case, you may need to make an effort to get your eustachian tube to open by yawning, talking, or swallowing. Sucking on a piece of candy, swallowing some water, or chewing gum may also help! One of the best things you can do is make sure you are not sleeping as the airplane takes off or lands because your eustachian tube isn’t able to open and close normally. If you commonly struggle with

congestion or sore ears on flights, taking a nasal decongestant before you board may ensure that your eustachian tube is not blocked. If your hearing and ears do not return to normal shortly after the flight, be sure to schedule an appointment to see your health care professional as soon as possible.

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