Resources

Business Owners

Along with the independence of entrepreneurship comes responsibility and, for many business owners, that means paying self-employment tax (SE tax) in addition to regular tax. You are considered self-employed if you run your business either by yourself or with a partner. SE tax covers both Social Security and Medicare taxes, which wage earners also pay. Their taxes are deducted from their pay, and then matched by their employers, who handle payment to the IRS. Entrepreneurs like yourself are on your own.

Who Has to Pay?

If your business is structured as a C corporation, you will not owe SE tax, but you will be subject to corporate tax. SE tax may apply to other business entities, such as sole proprietorships, partnerships, and limited liability companies (LLCs).

For tax purposes, you will still be considered self-employed even if you only have a part-time business or consider yourself an independent contractor. The key determining factors are business structure and income, not time. If you earn $400 or more on your own, you must file Schedule SE along with your tax return. Also bear in mind that if you are considered self-employed and you have employees, you must pay employment taxes, including federal income, Social Security, and Medicare taxes.

In 2010, the SE rate is 15.3% on self-employment income up to $106,800. This umbrella tax has two parts: a 12.4% Social Security tax, covering old-age, survivors, and disability insurance; and a 2.9% tax for Medicare.

There is a deduction to help soothe the SE tax sting. You may lower your income tax by deducting half of your SE tax when calculating your adjusted gross income (AGI).

For SE tax purposes, your net earnings represent your gross business earnings minus permissible business deductions and depreciation. The following types of income generally will not count toward your net earnings, unless such income stems from your business operations:

stock dividends
bond interest
loan interest
real estate rental income
limited partnership income

Estimated Tax Payments

The IRS describes the federal income tax as a “pay-as-you-go” tax, which requires business owners like yourself to plan ahead. If you anticipate owing tax of $1,000 or more, you’ll need to estimate the amount and pay it throughout the tax year, typically in quarterly installments. So, if you are self-employed and do not have income tax withheld, you’ll need to pay estimated tax equal to 90% of your current-year tax liability or 100% of what you paid the previous year. If your AGI on last year’s return was more than $150,000, the percentage requirement increases to the lesser of 110% of last year’s tax or 90% of this year’s tax. Please bear in mind that failure to pay estimated taxes may result in penalties.

For more information on the self-employment tax, visit the IRS online at www.irs.gov and consult our Publication 533. To help ensure you are in compliance, consult your tax professional for specific advice.

A Growing Trend - Women Entrepreneurs

The business landscape is always changing—technological advances, corporate downsizing, restructuring, and telecommuting have reshaped the marketplace. Although these improvements have a great impact on our working environment, perhaps the most notable trend has been the rapid growth in the number of women-owned businesses. According to the most recent findings from the Center for Women’s Business Research, three quarters of women-owned businesses are those wherein women own a majority share (51% or more), and each year, these women-owned businesses generate $1.1 trillion in sales.

In fact, additional statistics from the Center for Women’s Business Research reveal impressive gains for women in the marketplace:

An estimated 10.1 million companies are owned by women.
Women-owned businesses employ 13 million workers.

The “Push” Behind the Numbers

What’s driving these significant numbers? Women have made remarkable progress in the workplace, but they still face a variety of obstacles in terms of opportunities for career advancement. Thus, entrepreneurship has become a very viable option for women.

One out of eleven women owns her own business and is responsible for employing one out of seven workers. It appears that much of the push behind the increase in women-owned businesses is the desire for independence—in large numbers, women have chosen entrepreneurism as their route to financial freedom. As the figures indicate, many women have been able to channel their drive for success into starting and running their own businesses.

The “Pull” Exerted by This Trend

Women entrepreneurs are bringing a fresh perspective to the business world, which creates a new generation of inspirational role models. The ideas generated by this dynamic force translate into innovations in the marketplace that benefit both other businesses and individual consumers.

From a market perspective, women-owned businesses expand the field of opportunity. From insurance and other financial services to communications and office products, businesses will need to address women business owners as business customers. This will require a change from the long-standing view of the women’s market as a singular consumer market at the retail level.

In many ways, we are a society in which “money talks.” As women gain more economic power through the success of their own business ventures, they will exert greater influences on the financial, social, and political institutions that will shape the future for all of us.

Charitable Giving

Complexity Reigns When Claiming a Charitable Deduction

When contemplating making a significant gift, the charitably inclined are well advised to exercise some foresight. Similar gifts made in different ways will yield remarkably different results. The treatment of your gift for federal tax purposes will vary depending on the type of asset donated, the type of charitable organization receiving the gift, and your individual circumstances and overall tax status.

Asset Classification

Gifts to charity funded with different types of assets are subject to different restrictions on deductibility. The Internal Revenue Code (IRC) generally classifies different types of property according to a four-tier system: 1) ordinary income property; 2) short-term capital gain property; 3) long-term capital gain property; and 4) tax-free property. Property is also classified as either intangible property or tangible personal property.

Types of Charities

There are also deductibility limitations imposed on donations depending on the structure of the recipient charities, which fall into two general categories:

Public Charities. So-called public charities include organizations such as the Red Cross, most religious organizations, schools, and hospitals. This category also includes operating private foundations that actually directly engage in charitable activities (as opposed to simply making grants) and “pass-through” foundations that distribute their gifts and income promptly.
Private Foundations. These are non-governmental, not-for-profit organizations that typically operate as trusts or corporations with funds often provided by a single source, such as an individual or family. Managed by trustees or boards of directors, private foundations cover a wide variety of interests and are well known for contributing to community service. This category is far more restricted because of concerns relating to the potential for abuse by donors or foundation officials.

Valuation and Eligibility

Donors must categorize donations in accordance with the above classifications in order to determine the valuation of their gift for the purpose of claiming a charitable deduction. Consider the following:

Gifts of cash (including by check) are simply equal to the amount of the gift.
Gifts of tangible personal property that can be directly used to advance the recipient charity’s tax-exempt purpose or gifts of long-term appreciated intangible property allow the donor to claim a tax deduction based upon the fair market value (FMV) of the donated asset.
Gifts of tangible personal property not for exempt use (“physical” property subject to personal property taxes), short-term appreciated intangible property, or ordinary income property allow the donor to claim a tax deduction based on the original cost (less depreciation) or fair market value of the donated asset, whichever is less.

Any single contribution exceeding $5,000 (except one funded with cash or publicly-traded stock) requires a qualified appraisal within 60 days of the date of gift. The donor must submit the appraisal when filing his or her taxes. All gifts of $250 or more require written acknowledgment from the recipient charity in order to claim a deduction, though it is undoubtedly prudent to obtain a receipt for gifts of any size.

Income Limitations

The final factor affecting your ability to claim a charitable deduction pertains to limitations associated with the size of your adjusted gross income (AGI). Your deduction for gifts of cash to a public charity may not exceed 50% of AGI in any one year, while your deduction for cash gifts to a private foundation may not exceed 30% of AGI.

For gifts of both long- and short-term appreciated property, your deduction is limited to 30% of AGI for gifts to public charities and 20% of AGI for gifts to private foundations. The limitations on both cash and appreciated property work in tandem, capping total charitable deductions for any one year at 50% of AGI. Deductible amounts above these limits may be carried forward for up to five additional, consecutive tax years. Higher income donors must also be wary of restrictions on total itemized deductions, which are gradually phased out above certain levels of AGI.

Seek Counsel

There is only one conclusion that can be drawn with certainty: If you intend to make a charitable gift that youconsider to be significant, the assistance and counsel of a qualified tax professional is vital to successfully navigating the murky waters of charitable tax law.

Documenting Your Charitable Gifts

Charitable donations allow you to give and take—you give money or property to a qualified charity and then take an income tax deduction. By supporting an organization or cause, you may be able to lessen your tax bill. As you plan your giving, remember it’s important to keep accurate records in the event that you need to substantiate such gifts. Receipts for your charitable donations can confirm your charitable contributions should the Internal Revenue Service (IRS) require documentation.

If you make a donation to a charity of cash or property, you need to obtain a bank record or written acknowledgment from the recipient charity that specifies the amount and date of contribution, as well as the name of the charity. A canceled check for a donation of cash no longer suffices as a receipt in the eyes of the IRS. For property, the acknowledgment must describe the gift and indicate an estimated valuation; it is important to note that donations of clothing and household items must be in “good condition” in order to qualify for a tax deduction. Bear in mind that non-cash contributions exceeding $5,000 require a qualified, written appraisal within 60 days of the date of gift, and you must submit the appraisal when filing your taxes.

In addition, the donation statement from the recipient charity must specify whether any considerations (e.g., meals, clothing, concert tickets, trips, or books) were given in exchange for the contribution (honoring contributors with a symbolic gift of appreciation is a common practice, especially with fund-raising on television). Your tax deduction is reduced by the amount of the consideration.

While receipts and other acknowledgments are not filed with your annual federal income tax return (Form 1040), these should be carefully stored with other tax documents for the year in which the donations were made. As a general rule of thumb, you should hold onto tax records for at least six years. These records include all tax forms, investment statements, bank statements, proof of deductions, or any receipts associated with a particular return. Being prepared and staying organized can help ensure you have the records you need, when you need them.

Economics

Understanding Interest Rates and Your Financial Situation

When discussing bank accounts, investments, loans, and mortgages, interest is an important concept to understand. In financial terms, interest is the price paid for the temporary use of someone else’s funds, and an interest rate is the percentage of a sum borrowed that is attributable to interest. Whether you are a lender, a borrower, or both, it is important to consider how changing interest rates may affect your financial decision making.

The Purpose of Interest

Borrowing money can help you accomplish a variety of financial goals, and the cost of borrowing is interest. When you take out a loan, you receive a lump sum of money up front and are obligated to pay it back over time, generally with interest. Because of the interest expense, you end up owing more than you initially borrowed. The tradeoff, however, is that you receive funds to accomplish your goals, such as buying a house, funding a college education, or starting a business. Given the cost of interest, which can add up significantly over time, it is important to make sure that any debt you assume is affordable and worth the cost over the long term.

To a lender, interest represents the compensation for the service and risk of lending money. In addition to giving up the ability to spend the money at the present, a lender assumes certain risks. One obvious risk is that the borrower will not pay back the loan in a timely manner, if ever. Inflation creates another risk. In general, prices tend to rise over time; therefore, goods and services will likely cost more by the time a lender is paid back money borrowed. Effectively, the future spending power of the money is reduced by inflation because more dollars are needed to purchase the same amount of goods and services. Interest paid on a loan helps to cushion the effects of inflation for the lender.

Supply and Demand

Interest rates often fluctuate, according to the supply and demand of credit, which is money available to be lent and borrowed. In general, one individual’s financing habits, such as carrying a loan or saving in fixed-interest accounts, will not affect the amount of credit available to the economy enough to change interest rates. However, a general trend in consumer banking, investing, and debt can have an effect on interest rates. Businesses, governments, and foreign entities also affect the supply and demand of credit according to their lending and borrowing patterns. An increase in the supply of credit, often associated with a decrease in demand for it, tends to lower rates. Conversely, a decrease in supply of credit, often coupled with an increase in demand for it, tends to raise rates.

The Role of the Fed

As a part of the U.S. government’s monetary policy, the Federal Reserve Board (the Fed) manipulates interest rates in an effort to control money and credit conditions in the economy. Because of this, lenders and borrowers can look to the Fed for an indication of how interest rates may change in the future.

In order to influence the economy, the Fed buys or sells previously issued government securities, which affects the Federal funds rate. This is the interest rate that institutions charge each other for very short-term loans, and it determines the interest rates banks use for commercial lending. For example, when the Fed sells securities, money from banks is used for these transactions; this lowers the amount available for lending, which then leads to a rise in interest rates. In contrast, when the Fed buys government securities, banks are left with more money than is needed for lending; this increase in supply of credit, in turn, lowers interest rates.

Lower interest rates tend to make it easier for individuals to borrow. Since less money is spent on interest, more funds may be available to spend on other goods and services. Higher interest rates are often an incentive for individuals to save and invest, in order to take advantage of the greater amount of interest to be earned. As a lender and a borrower, it is important to understand how changing interest rates may affect your saving and borrowing habits. This knowledge can help you make wise decisions in pursuit of your financial goals.

Understanding the Consumer Price Index

The highs and lows of the economy affect people and markets in a variety of different ways. While some sectors of the economy are thriving, others may be sluggish. One economic indicator used to gauge the state of the American economy is the Consumer Price Index (CPI), which measures the rate of inflation in the U.S.

Inflation, which is defined as the rise in the average price level of all goods and services, can have a significant impact on the American economy and your financial affairs. Understanding the CPI, and the ways it measures inflation, can provide a strong foundation for understanding not only market and economic swings, but also the ways in which fiscal and monetary policies affect America’s finances, and your own. To begin, let’s take a look at the information used by the U.S. Bureau of Labor Statistics (BLS) to compile CPI data.

Determining the Market Basket

Each month, the BLS surveys prices for a “market basket” of goods and services in order to create an economic “snapshot” of the average consumer’s spending, which is quantified as the CPI. Actual expenditures are classified into more than 200 categories and eight major groups. These include the following, defined below by a sampling of items included within each group:

Food and Beverages—common groceries, alcoholic beverages, and full-service meals
Housing—rent, furniture, and utilities
Apparel—clothing, shoes, and jewelry
Transportation—vehicle lease and purchase costs, gasoline, auto insurance, and airfare costs
Medical Care—doctor’s visits, hospital care, and prescriptions
Recreation—cable television, pets, events, and sporting equipment
Education and Communication—school tuition, postage, telephone service, and computer equipment
Other Goods and Services—tobacco, haircuts, personal services, and funeral expenses.

Because the CPI looks at expenditures in these fixed categories, this index is a valuable tool for comparing the current prices of goods and services to costs last month or one year ago.

Interpreting and Using the CPI

As a measure of inflation, the CPI has three main uses. First, the CPI often serves as an indication of the health of the economy and the effectiveness of government policy. To a certain extent, some inflation is the sign of a healthy economy; however, too much inflation, or no inflation at all, can be a sign of troubling economic times. In fact, one of the primary U.S. economic policy goals is to maintain an inflation rate ranging from 1% to 3% each year.

Constant fluctuations in the CPI will cause Congress and the Federal Reserve Board (the Fed) to take measures to control the amount of inflation and stimulate economic growth. As a result, business executives, labor leaders, and other private citizens may change their spending and saving patterns. For example, the Fed may attempt to curb rising inflation by raising short-term interest rates; this increase in the cost of borrowing money is likely to slow personal and business spending. Conversely, if the economy is not growing, the Fed may attempt to stimulate inflation by lowering short-term interest rates; in this case, lowering the cost of borrowing may trigger increased spending among businesses and individuals.

As a second use, the CPI helps determine the “real” value of a dollar over time by removing the effects of inflation. As prices increase, the purchasing power of a dollar decreases; in other words, more dollars are needed to purchase the same amount of goods and services. Comparing inflation-free wages and prices also allows economists to determine the actual earning and spending patterns of the American consumer, what percentages of money are being saved or spent in certain areas.

Lastly, the CPI is used as a means of adjusting salaries and government benefits to account for price changes. For example, as a result of collective bargaining agreements, wages of over 2 million workers increase according to the amount of change in the CPI. The CPI is also used to determine the benefits of almost 80 million people covered under government programs, including Social Security beneficiaries, military and Federal Civil Service retirees and survivors, and food stamp recipients. In addition, changes in CPI can be seen in the price of school lunches, as well as through rents, royalties, alimony payments, and child support payments as determined by private firms and individuals. Finally, the CPI has been used to adjust the Federal income tax structure to prevent increases in taxes caused solely by inflation.

For More Information

Inflation can have a serious impact on the American economy as it affects both government policy and the spending and saving patterns of businesses and individuals. Understanding and following changes in the CPI can help you know how the value of the dollar changes and estimate how inflation may affect your future plans. The U.S. Department of Labor (DOL) publishes current information on the CPI each month through the BLS. For more information, visit their website at www.bls.gov/cpi.

Education Planning

A Savings Plan That Pays for More Than Just College

If you’re thinking about ways to fund your child’s education, the Federal government has provided an incentive—the Coverdell Education Savings Account (Coverdell ESA), formerly known as the Education IRA. Contributions are not deductible, but tax-free withdrawals can be made when used to pay for eligible education expenses.

There are, however, income eligibility limits for parents who wish to open Coverdell ESAs for their children. The ability to make contributions phases out for single taxpayers with adjusted gross incomes (AGIs) between $95,000 and $110,000, and for married couples filing joint returns with AGIs between $190,000 and $220,000.

You may contribute up to a maximum of $2,000 annually per child before the designated student reaches age 18. For gift tax purposes, contributions fall under the annual gift tax exclusion limits for singles and married couples ($14,000 and $28,000, respectively, in 2016). Be sure to keep in mind that, if you also contribute to a 529 plan for the same child during the same year, you will need to add these gifts together to determine your gift tax filings.

There is no limit to the number of accounts that may be held in the child’s name or the number of people who may make contributions to a Coverdell ESA—as long as total contributions remain within the $2,000 annual limit per child. If multiple accounts are established and more than $2,000 is contributed in total, the excess is subject to a 6% excise tax penalty. You can, however, eliminate the penalty by withdrawing the excess contributions (and any earnings) before the due date for the beneficiary’s tax return for that year. The withdrawal would be considered income, and it would be subject to taxation.

Coverdell ESAs can be used to pay for more than just college expenses. Funds can also be used to pay for elementary and secondary school expenses, including the purchase of computer systems, educational software, and Internet access for the child.

A Few Holds Barred

The beneficiary must spend a Coverdell ESA by his or her 30^th birthday. If the designated child does not use the funds for educational purposes by that age, the account may be rolled over for use by another member of the family who is under age 30. Withdrawals from a Coverdell ESA that are not used for qualified education expenses may be subject to both income taxes and a 10% penalty.

Finally, if you’re hoping your child qualifies for financial aid in college, you may want to think twice about setting up a Coverdell ESA. It’s important to note that a Coverdell ESA must be set up in the child’s name. Financial aid formulas, in determining how much a family can afford to contribute to the cost of college, count assets held in a child’s name much more heavily than those held in the parents’ names.

Applying for Federal Aid for College

When thinking about sources of funding for your children’s college education, you may assume your family earns too much to qualify for Federal grants, loans, and work-study assistance. In fact, even families with higher incomes are frequently eligible to receive some form of financial aid from the government.

The U.S. Department of Education uses a formula for calculating financial aid eligibility that takes into account a range of factors in addition to income and assets, including family size and other financial obligations. When assessing a family’s ability to pay for college, the federal government treats only a small percentage of parents’ assets as potential contributions, while certain types of assets, including home equity and savings in IRAs and 401(k) plans, do not figure at all in the qualification formula.

Filing FAFSA

Even if you expect to cover your child’s college costs through sources other than federal aid, it is usually worthwhile to complete the Free Application for Federal Student Aid (FAFSA). In addition to determining your family’s eligibility for federal assistance, the FAFSA is the primary qualifying form used by many college, state, local, and private financial assistance programs.

The first step in applying for financial aid is filling out the FAFSA, which is distributed and processed by Federal Student Aid, an office of the Department of Education. Hard copies of the FAFSA are often available at high school guidance offices, libraries, or post offices, or by calling the Federal Student Aid office. The simplest way to complete the FAFSA is by going to the office’s website, www.fafsa.ed.gov. Filling out the form online will alert you to mistakes or omissions; it can also can speed up the processing time by one to two weeks.

Assuming you are a parent requesting aid for your dependent child’s education, the documents you will need to complete the FAFSA include your federal income tax return and W-2 forms from the previous year, current bank statements, records of untaxed income such as Social Security or veterans benefits, current business and investment mortgage information, and investment records. If you are divorced and are the child’s custodial parent, only information about your own household’s income and assets, including any child support and alimony, are required by the FAFSA. While some colleges take into account the financial resources of the non-custodial parent in determining the student’s need, the federal government does not.

The Student Aid Report

When filling out the FAFSA, you may request that your financial information be sent to up to six colleges. If your child intends to start college in the fall, it is usually advisable to file the FAFSA as soon as possible after January 1 of that year, as deadlines for submitting FAFSA information may be early in the year for some colleges and state awards programs.

Within a few days to a month after it is filed, you should receive by post or e-mail a form known as the Student Aid Report (SAR). On the SAR, you will find the Expected Family Contribution (EFC), an estimate of the amount your family should be able to contribute toward the student’s college expenses for the year. The colleges you listed on the FAFSA will use this figure as a basis for determining the size and composition of any financial aid awards.

If need is demonstrated, the schools that admit your child as a student will prepare a financial aid package covering all or part of the difference between your family’s EFC and the cost of attending the college. Depending upon your family’s income and the resources of the institution, some colleges will offer more or less aid than the gap between the EFC and the actual cost of attending.

The type of federal aid your child receives is largely based on family income. Lower-income students may be awarded grants that do not need to be repaid, such as the Pell Grant or the Federal Supplemental Educational Opportunity Grant (FSEOG), and assistance may be available in the form of a federal work-study job.

Beyond these awards, students may be eligible for subsidized federal loans, such as the Perkins Loan or the Stafford Loan. These loans must be repaid by the student, but the government pays the interest while the student is in school and during grace and deferment periods.

In addition, your family may be offered an unsubsidized Stafford Loan, which must be repaid by the student, or a PLUS Loan, which is in the name of the parents. Interest accrues on these unsubsidized loans from the time the funds are disbursed, though payments may be deferred until after graduation.

When loans offered by federal programs prove insufficient to cover the actual costs of your student’s education, you can apply for a private education loan. These loans tend to have higher interest rates than government loans, but they are often less expensive than other debt sources.

Social Security Benefits

When Should You begin Your Social Security Benefits?

There are many things to consider when deciding the appropriate time to begin social security. Every situation is different and the decision should not be taken lightly. It was revealed that 2010 is the crossover year where the amount paid out in social security benefits is greater than the amount paid in by current workers.

Reasons to Delay Social Security

In 1983 the credit rate was increased from 3% to 8% annually. In today’s low yielding environment, an 8% annual benefit increase is tough to pass up.
If your family has a history of longevity
If you are concerned with leaving enough income for your surviving spouse
- Many times the surviving spouse will receive the deceased spouse’s social security benefit. So, delaying receipt should result in an increase to the widow’s income.

Reasons to Take Social Security Early

You or your family has a poor health history
If a substantial portion of your assets are in IRA’s, taking your social security early allows the tax-deferral of your IRA to work longer.
If you question the sustainability of social security at current levels in the future
- Do you believe COLA increases may be eliminated?
- Do you believe payouts could be reduced and/or eliminated?

A hypothetical 66 year old client who gives up the 2010 maximum benefit of $28,152 for four years starts out more than $112,000 in the hole at age 70. Further, this number does not include any interest that could have been earned on that income by investing the payout. By delaying, the client receives an additional $1000 annually. Without earning anything on the early payout it would take 12 years (age 82) to break even. Earning a reasonable rate of return on that money could push the break even back 3-5 years to the mid/late 80s.

In conclusion, an average individual would need to live into their late 80s to begin monetary rewards if social security laws stay as they are currently written.

Family Protection

Dividing the Family Pie—Are Equal Slices Best?

When planning the division of your assets, you may believe in a policy of “share and share alike.” This is perhaps the easiest method, and often the way to avoid conflicts and complaints of favoritism. But does equality necessarily equate to fairness? After all, fairness is only relative, especially when one considers factors such as age, talents/skills, interests, needs, and degrees of material success. A more practical approach to the division of assets may be one in which you recognize and compensate fordifferences in the abilities and needs of your children, even at the risk of producing some conflict. Through your estate plan, you have a chance to provide a measure of fairness that your children may not otherwise have found in their own lives.

To emphasize the point, consider the following scenarios:

1. Disparity in Age: Assume you have two children, ages 22 and 14. Should you split your estate in half, even though the 22-year-old has been through years of private school education and college and the 14-year-old has just started high school?

2. Income and Net Worth: Assume your daughter becomes a partner in an investment banking firm and quickly builds up $3 million in assets, while your son becomes a sales manager who earns $30,000 per year. Should you leave your estate in equal parts to your son and daughter?

3. Previous Giving: Assume you have given your 24-year-old son $100,000 worth of stock in your business as an inducement for him to work with you. You have not, however, given your 18-year-old son a similar gift. Should you divide the assets in your estate on an equal basis?

4. Investments Given to Children: Assume you have given one child stock in Company XYZ that has risen in value to $300,000. You have given another child stock in Company BCD, which has gone bankrupt. How should you then allocate the balance of your assets?

In all of the above examples, an equal division of property has the potential to create or perpetuate unequal results. This is not to say you cannot choose an unequal result, but it does point out the need for financial and estate planning that leads to reasoned decisions about how you leave your property.

Listen First

Fortunately, there are ways for you to achieve fairer results. Your first step should be to speak with your children. You may choose to speak with each child individually or hold a family conference. (Obviously, you will have to serve as proxy for your very young children.) Help them to verbalize their hopes, dreams, and expectations, as well as their worries, concerns, and frustrations. By listening first, you may gain valuable insights into how you can divide your estate constructively without causing jealousy and resentment. The decisions may be difficult to make, but in the long run, your family will appreciate your goal of trying to reach an agreement that addresses each child’s individuality.