Last week’s Fed meeting
QUOTE OF THE WEEK “The only person you are destined to become is the person you decide to be.” TECH CORNER Last week the equity markets were pretty much flat with the S&P 500 -0.20%, the Dow up+ 0.02%, and the Nasdaq up +0.63%. What was telling was that the markets started the week up, and then on Thursday and Friday the markets started a deep dive and have continued down again today (Tuesday). I think the reality of the Consumer Price Index Report from last week showed that the Fed has a lot more work to do to get to their target of 2% inflation. In last week’s letter I quoted a lot of statistics from the report so I won’t go into them today. But it doesn’t look like the recent interest rate increases from the Fed are having the desired effect to lower inflation. The Fed has said that more increases are on the way and they will probably keep interest rates high through the rest of 2023. The big event this week is the release of the minutes from last week’s Fed meeting. That will tell us a lot about what the Fed is planning for interest rates. If they come out “hawkish”, meaning they plan to keep raising rates and keeping them high, the equity markets won’t like it. Right now the equity markets are hoping for the elusive “soft landing”. If the Fed is “hawkish”, the chance of a “soft landing” will fade quickly. TOM’S THOUGHTS What Is Probate? Probate is one of those terms that is frequently used without people understanding what it is. The following article from Broadridge provides a short explanation. Enjoy. When you die, you leave behind your estate. Your estate consists of your assets — all of your money, real estate, and worldly belongings. Your estate also includes your debts, expenses, and unpaid taxes. After you die, somebody must take charge of your estate and settle your affairs. This person will take your estate through probate, a court-supervised process that winds up your financial affairs after your death. The proceedings take place in the state where you were living at the time of your death. Owning property in more than one state can result in multiple probate proceedings. This is known as ancillary probate. How does probate start? If your estate is subject to probate, someone (usually a family member) begins the process by filing an application for the probate of your will. The application is known as a petition. The petitioner brings it to the probate court along with your will. Usually, the petitioner will file an application for the appointment of an executor at the same time. The court first rules on the validity of the will. Assuming that the will meets all of your state’s legal requirements, the court will then rule on the application for an executor. If the executor meets your state’s requirements and is otherwise fit to serve, the court generally approves the application. What’s an executor? The executor is the person whom you choose to handle the settlement of your estate. Typically, the executor is a spouse or a close family member, but you may want to name a professional executor, such as a bank or attorney. You’ll want to choose someone whom you trust will be able to carry out your wishes as stated in the will. The executor has a fiduciary duty — that is, a heightened responsibility to be honest, impartial, and financially responsible. Now, this doesn’t mean that your executor has to be an attorney or tax wizard, but merely has the common sense to know when to ask for specialized advice. Your executor’s duties may include: The probate court supervises and oversees the entire process. Some states allow a less formal process if the estate is small and there are no complicated issues to resolve. In those states allowing informal probate, the court may be involved only indirectly. This may speed up the probate process, which can take years. What if you don’t name an executor? If you don’t name an executor in your will, or if the executor can’t serve for some reason, the court will appoint an administrator to settle your estate according to the terms of your will. If you die without a will, the court will also appoint an administrator to settle your estate. This administrator will follow a special set of laws, known as intestacy laws, that are made for such situations. Is all of your property subject to probate? Although most assets in your estate may pass through the probate process, other assets may not. It often depends on the type of asset or how an asset is titled. For example, many married couples own their residence jointly with rights of survivorship. Property owned in this manner bypasses probate entirely and passes by “operation of law.” That is, at death, the property passes directly to the joint owner regardless of the terms of the will and without going through probate. Other assets that may bypass probate include:
