Homrich Berg Crosses $6 Billion AUM Mark And Will Add Sandy Springs Office Via Planned Merger With Cedar Rowe Partners

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ATLANTA – November 20, 2019 – Homrich Berg is pleased to announce that Cedar Rowe Partners has signed an agreement to join Homrich Berg, giving HB a Sandy Springs office location and an addition of talent and clients. Under the terms of the agreement, Sean Cook will join HB as a Principal along with three other client service professionals.  The deal is expected to close on December 31 of this year.

This event is part of the continuing growth story at HB, which will soon have twenty-four principals and four offices in metro Atlanta including Buckhead, Alpharetta, Cobb, and now Sandy Springs.  Recent firm growth has resulted in Homrich Berg now managing assets of over $6 billion for clients in 45 states even before this merger event. HB continues to build a regional presence, with the scale and expertise of a large firm combined with the high touch client service of a boutique firm.

“We are very pleased to have Sean and his fine firm join HB,” stated Andy Berg, co-founder and CEO of Homrich Berg. “We feel comfortable knowing that we share common core values with a clear focus on serving our clients. We are highly confident that this merger will be additive for clients and employees.”

“Homrich Berg has a reputation as a leading firm in the Southeast, and we felt joining HB was the best fit for our team to allow us to continue to grow while serving our clients,” said Sean Cook. “Through this partnership, we look forward to leveraging the expertise of Homrich Berg to offer our clients enhanced services while continuing to guide them to their financial goals.”

About Homrich Berg

Founded in 1989, Atlanta-based Homrich Berg is a national independent wealth management firm that provides fiduciary, fee-only investment management and financial planning services, serving as the leader of the financial team for our clients including high-net-worth individuals, families, and not-for-profits. Homrich Berg manages over $6 billion for over 1800 family relationships nationwide. For more information, please visit www.HomrichBerg.com.

Homrich Berg Welcomes Jimmy Trimble, CFP® As A Director

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Atlanta – November 1, 2019 – Homrich Berg is pleased to announce the appointment of Jimmy Trimble, CFP® as a Director. He brings over 26 years of experience in the fields of Wealth Management and Financial Services where he has enjoyed helping many individuals, families, and businesses with their planning needs.

Prior to joining the firm, Jimmy served as an Advisor with the firm of Nease, Lagana, Eden & Culley. He also founded and led the Private Banking Group of Fidelity Bank from 2007-2014 and prior to that served in various banking roles including Private Banking and Commercial Lending.

Jimmy is a graduate of the Scheller College of Business at Georgia Tech and earned an MBA with a concentration in Finance from Georgia State University. He has also held the Certified Financial PlannerTM designation since 2002 and is a graduate of the Stonier Graduate School of Banking.

Jimmy serves the community in various roles including as a Board Member of the Atlanta Estate Planning Council, Treasurer of Northside United Methodist Church, Chair of Boy Scout Troop 298, and member of the Pace Academy Annual Fund Committee. He is also active in the men’s ministry at Northside Methodist Church.  Previously, he served as a Georgia Tech Alumni Trustee, including three years on the Executive Committee. He was a member of the Advisory Committees of the Georgia Tech Scheller College of Business and the Georgia Tech College of Interactive Computing. Jimmy has also chaired several non-profits and civic organizations including the Academy of Medicine, Camp Evergreen, and Proactive Ministries.

Jimmy and his wife Laura live in Buckhead and have a daughter at UGA and a son at Pace Academy.

Annual Open Enrollment Tips to Save on 2020 Taxes

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by David Kochamba

10/31/19

2019 is flying by, temperatures are cooling down (finally), college football is in full swing and the holidays are rapidly approaching. This also means that the annual open enrollment benefit period will commence soon for those who are currently working.  Many workers dread receiving the annual enrollment email from their human resources team with multiple attachments detailing their benefit options for the upcoming year.  However, a little short-term pain in reviewing your options and determining the benefits appropriate for you and your family can yield tax savings in 2020.

Many employers offer employees a high deductible health care plan (HDHP) and a health maintenance organization (HMO) or preferred provider organization (PPO) plan.  Two benefit accounts that can help pay for medical expenses depending on the medical plan you choose are a Health Savings Account (HSA) and a Flexible Savings Account (FSA).  Those choosing a high deductible health care plan have the option to contribute to a HSA. This is an account that lets you save for future medical costs. Money put in the account is not subject to federal income tax when deposited. Funds can accrue and be used in the year saved or in future years when medical expenses occur.  HSAs must be paired with the High Deductible Health Plan only.  In 2020, an individual with self-only coverage under a HDHP plan can contribute a maximum of $ 3,550 and those will family coverage can contribute a maximum of $ 7,100 to a HSA.

A FSA is a way for employees to set aside pre-tax dollars directly from their paycheck to pay for medical expenses (Medical FSA).  With a HMO or PPO health care plan, individuals were able to contribute a maximum of $ 2,700 to a flexible savings account (FSA) in 2019.  2020 FSA contribution limits have not been announced yet.   It’s important to remember that contributions into a HSA account are not required to be spent in the calendar year made unlike a FSA, where if the funds aren’t spent, you could potentially lose whatever is left in the account at year-end.  If an employer’s health FSA plan has a carryover feature, participants can roll over up to $500 of unused FSA dollars to the next year but will forfeit any excess over $500 at year-end. An optional grace period gives employees an additional two-and-a-half months to incur new expenses using prior-year FSA funds. At the end of the grace period, all unspent funds must be forfeited.  Plans can offer either the carryover feature or a grace period, but not both.  As a result, it’s important to carefully estimate your out of pocket medical expenses before submitting your contribution amount.   Both HSA and FSA contributions are funded with pre-tax dollars and are exempt from the 7.65% Social Security and Medicare tax, reducing your taxable income.

Many employers will also offer their employees a dependent care FSA.  This is a pre-tax benefit account used to pay for dependent care services while you are working.  For 2019, the maximum contribution amount is $ 5,000. To be eligible for a dependent care FSA, you and your spouse (if applicable) must be employed, or your spouse must be a full-time student or looking for employment.  Funds can be used to pay for care of children under age 13 when they’re claimed as qualifying dependents.  A dependent care account covers a number of services, such as preschool, summer day camp, before- and after-school programs, and childcare.  It’s important to note that like a flexible savings account for healthcare, any balance remaining in the dependent care account at year-end will be lost if not spent.

It’s not too early to start thinking about what benefits are most suitable for you and your family.  Planning now will enable you to be a little less stressed when you are given your deadline to make your final benefit decisions for 2020. Knowing you will be saving money on your 2020 taxes may just change your mindset on receiving your annual open enrollment e-mail in future years.  Below, please find a summary chart of HSA and FSA plans.  Here’s to you saving money in 2020.

 

Health Savings Account (HSA) Flexible Spending Account (FSA)
Who owns? Employee Employer
Who contributes? Employee and/or employer Employee and/or employer
Contributions Via payroll deduction, check, or transfer Via payroll deduction only
Must be enrolled in a HDHP? Yes No
Can funds rollover from year over year? Yes Up to $500 can be rolled over depending on the plan
Are funds portable if you change jobs? Yes No
Do funds accrue interest? Yes, depending on the plan No
Can funds be invested? Yes No
Do I have to submit receipts or documentation? No, but the account holder should keep receipts in the event of an audit Yes, receipts are typically needed for reimbursement
Contribution limit For 2019 – Self-only: $ 3,500; Family: $ 7,000; Catch-up contributions $ 1,000 (age 55 and older) For 2019 – Health FSA: $ 2,700; Dependent Care FSA: $ 2,500 or  $ 5,000 depending on tax filing status

Listen To Tana Gildea Share Her Journey Into The Financial World

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Tana Gildea CFP®, CPA, CCFS, a Principal at Homrich Berg, had a candid and inspiring conversation with Corey Rieck about her journey from Montana to Atlanta, her start in the financial world and how she eventually ended up at HB. Tana shares how she managed her many roles and the career steps she’s taken. She’s an accomplished business leader, author and blogger. Take a listen now to hear the full episode.

Homrich Berg Celebrates 30 Years!

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ATLANTA – October 10, 2019 – 30 years ago today, Homrich Berg was founded based on a belief in fiduciary, fee-only wealth management built on core values of objectivity, teamwork, excellence, innovation, diligence, and trust.  We still believe in those values today and are proud to celebrate this anniversary with our clients and employees!

Learn more about HB history and our mission we built on a foundation of core values.

Trekking Travel Tools – Documents

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By: Kevin Kraus

10/04/2019

Remember the good ole days when security at the airports was virtually non-existent and a passport was not even necessary to travel to some countries. Well, times have sure changed, and traveling outside the country has become more complicated and even more dangerous.

Countries around the world are changing their document requirements for entry because of heightened security issues and child trafficking concerns. If you don’t check for the latest regulations to the countries you plan on visiting, you could find your trip significantly delayed or cancelled. For example, we found out a parent taking a child into Canada without the other parent needs a letter from the non-traveling parent giving their consent and acknowledgement of the trip. Other countries, such as South Africa and Botswana, may ask for raised-seal birth certificates for minor children before entering their countries even though they may not be technically required to do so any longer.

Thus, it is no longer safe to assume that if a country does not require a visa then all you need is a passport. Actually, they may require birth certificates, immunization records or documentation of when you will be leaving the country, such as a return plane reservation. It is even recommended that you keep your prescription drugs segregated in each of their own bottles with the prescription information easily readable. Phillip Thompson, senior director at G3 Global Services, recommends parents traveling with children always have copies of birth certificates even if they are not required since passports of minors do not list the parents’ names.

Within the past couple of years the requirements have been constantly changing between countries as the U.S. has begun tightening their entry requirements. In a tit-for-tat, countries are tending to retaliate when it comes to entry requirements. When the U.S. tightened requirements on Chinese tourists, China retaliated by making it more difficult for U.S. residents to obtain a visa to travel to China. Additionally, in 2021 the European Union will begin requiring U.S. citizens to obtain “travel authorization” permits (a scaled down version of a visa) at least three days prior to a trip which will then be good for three years. As you plan your next trip abroad, the best place to start is the U.S. State department – but do not stop there as entry requirements can often be incomplete or not yet updated for recent changes made by a foreign country to their entry requirements.

Here are some additional tips for traveling internationally:

  • Make sure your passport is valid for at least six months from the end of your trip.
  • Carry extra passport photos and $50-$100 of cash in case a country requires a visa on the spot even if it is just considered an entry fee.
  • Consider registering with the State Department’s Smart Traveler Enrollment Program “STEP”. It is a free program providing safety updates and puts you in contact with local embassies and consulates in case of an emergency.
  • Have access to copies of passports, birth certificates, medical prescriptions, and credit cards in case you lose your originals. I always keep an on-line copy of these on my iPad and a copy back at work to facilitate replacement if these are lost or stolen.

It’s an unexplained phenomenon, but it often seems as we set out on vacation, we assume we are shielded from harm by an invisible bubble. That couldn’t be further from the truth as dangers lurk around every corner and nook in the world. Risks can range from stolen documents, medical emergencies, to kidnappings as recently experienced by a U.S. tourist in Uganda. While much can be done ahead of time to prepare and minimize for the risks you may encounter, it may also be worth considering travel insurance and not just the basic kind that will reimburse you for cancelled travel plans.

Most travelers don’t fully understand travel insurance, rescue and medical evacuation services, or how to best prepare themselves for a dire emergency away from home. Christophe Noel, an adventure travel expert, uncovered a number of reoccurring themes: “The majority of the travelers I interviewed not only didn’t know what type of emergency resources were available where they were traveling, they didn’t know if they were financially obligated to pay for those services if rendered. Even more unsettling was the number of people who had purchased some form of travel protection not realizing what it covered—and what it did not. The most common misconception was that active health, home, and auto insurance would fully cover a policyholder in the event of an emergency in another country. While some coverage may overlap, most of it will not. Lastly, an alarming number of travelers just assumed if tragedy intersected with their trip, emergency response resources would be available. That is never a given. In some cases, your rescue is fully in your hands. Are you prepared for that outcome?”

Our team at Homrich Berg has done some basic research on travel insurance and suggest clients wanting trip insurance should consider using Global Rescue or Ripcord Rescue. Global Rescue can also provide a detailed “Destination Report” on each country you are visiting describing the risks you may encounter during your visit. Both companies offer a menu of services to choose from and the pricing works on an a-la-carte basis.

Some examples of services include:

  • Real time information and alerts while traveling.
  • Field rescue services with transportation to the hospital of your choice with generous expense caps between $500k to $750k.
  • Extensive global network of medical and security advisory services.
  • Legal and document assistance.
  • Security evacuation for unexpected natural disasters, civil unrest, terrorism, geo-political events, war or other dangerous or chaotic events often staffed by former military expert veterans.
  • Translators and communication services to family members to keep them apprised of the situation.

In working with numerous services companies over the years, we have reached one inescapable conclusion: No plan is perfect. Some users of every program or service have been disappointed with a particular service or been faced with unexpected expenses while others have had experiences that far exceed their expectations and quite literally saved the day. This is not to say it’s a crapshoot, but like everything in life, there are no guarantees. However, one thing is certain, some protection is far better than none.

 

Andy Berg Named Barron’s 2019 Hall Of Fame Advisor And Top 100 Independent Wealth Advisor

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ATLANTA – September 26, 2019 – Homrich Berg is pleased to announce that CEO Andy Berg has earned a spot on the 2019 Hall of Fame Advisors list and Barron’s Top 100 Independent Wealth Advisors list. Barron’s Hall of Fame Advisors have been ranked for 10 or more years on the Top 100 list based on assets under management, revenue produced for the firm, years of experience and regulatory and compliance records.

Andy is co-founder and chief executive officer of Homrich Berg. He founded the firm with the belief that high-net-worth individuals needed access to conflict-free financial planning and investment advice. He developed HB’s model for serving clients’ wealth management needs on a fiduciary, fee-only basis.  Andy offers his diverse clientele hands-on counsel and oversees the management and operations of the firm. Andy’s expertise spans the wealth management profession and includes financial and estate planning, taxation, and investment strategy.

Investing In College Grads – Literally

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By: Tana Gildea

9/20/2019

Tired of the same old investment stock and bond options? How about investing in a future teacher, engineer, or doctor and getting a percentage of their future income as your return? That’s what some institutional investors are doing via Income Share Arrangements (ISAs). While it sounds like a new idea, Milton Friedman actually proposed such an arrangement back in the 1950’s with Yale University implementing it. They had the requirement that all funded graduates pay a percentage of their income until the entire pool was paid off. Sounds great if you are a low-salary earner who pays less over the term than the higher-earning counterparts! Of course, there were defaults and Yale ended up bailing out the program. Regardless, the interest has been building since 2009 when Lumni, one of the pioneering companies, entered the ISA space.

With the rising cost of college and student loan debt at over $1.5 trillion, schools as well as students are looking for better options. Purdue University has been a leader in developing and implementing ISA programs. “Purdue has arranged more than 700 contracts worth $9.5 million and closed two investment funds totaling $17 million.”1 They have had various iterations and modifications to their agreements including putting a cap of 2.5 times what the student borrowed to keep the most successful from over-paying on the defined “share of income” over the required term.

From the students’ standpoint, there are mixed reviews. Consider that English majors will pay 4.5% of their income for almost 10 years versus computer science majors who will pay 2.6% of their income for just over 7 years. That is an agreement to cover one year of college. If a student has multiple agreements or also took out student loans, the burden is still heavy. According to Julie Margetta Morgan, a fellow who studies higher education, “It’s pretty darn near impossible to say whether an ISA is better or worse for an individual.”1 That means that students have to read the fine print and do the math to compare options. Whether a student commits future income or repays debt, it is still a drain on resources post-graduation.

For investors, there are only a few schools using outside investment firms to provide capital for the ISA program. Some schools do solicit individual donors, usually wealthy alumni who are already generous in their support of the school. For those offering ISA investment funds, such as Purdue, those investments “may make the most sense for socially conscious investing.”1 The return history is just not sufficient to quote the type of returns that investors focused on maximizing return may be likely to see.

For now, it’s unlikely that we will offer you any opportunities to invest in engineers or scientists, but one never knows how this will play out in the future. You can certainly give this a try with your own budding professional!

Chuck Trafton of Flowpoint Capital Partners says he can “envision a whole new equity market for higher education in the next five years where today there is only debt.”1. May it be for the benefit of the students as well as the investors!

 1 “Investing in College Grads—Literally,” Clair Boston, Bloomberg Business, April 15, 2019

Tax And Legal Issues When Moving To A New State

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9/16/2019

When moving from one state to another, it is important to keep in mind a couple key concepts that can have significant tax and legal implications.

State of Domicile

A person’s domicile is generally defined as a person’s fixed, permanent and principal home that they reside in and that they intend to return to and/or remain in. Your state of domicile impacts everything from income taxes, to creditor protection (e.g. which state’s asset protection rules can be relied upon), to matters of family law (e.g. guardianship over children and the rights of a spouse in a divorce). A person can only have one state of domicile. Your state of domicile has the right to tax your worldwide income.

State of Residency

A person can be considered a resident for tax purposes in multiple states at once. Several states have statutes that spell out the facts and circumstances that would make someone a “statutory resident,” and some of the statutes are rather vague.

When moving from state to state, in order to avoid owing taxes in both states, you will want to establish strong ties to the new state, and sever as many ties to the old state as you can. Because the rules vary from state to state (and some are somewhat subjective) there is no definitive set of actions to take that will work every time. The best you can do is to demonstrate, with as many facts and circumstances as possible, both of the following:

  1. You intend to make the new state your primary home, and
  2. You are no longer a resident of your old home state.

To accomplish these goals, here are some action items to consider:

Action Items to Establish Ties With NEW Home State

  • Purchase a new home
  • Move your family and send children to new schools
  • Register to vote
  • Vote in the soonest possible election (in person, not absentee)
  • Obtain a new driver’s license
  • Register your automobiles
  • Change your car insurance to cover the car(s) registered in the new state
  • Open a bank account at a local bank
  • Get a safe deposit box at a local bank
  • Sign new wills and/or revocable trusts (and ancillary documents such as a power of attorney and health care directive)
  • Select a burial site in your new state
  • Update the situs on any trusts
  • Update any other legal and personal business documents to indicate your new home address
  • Change your mailing address on all insurance policies
  • Change your address with the Social Security Administration
  • File a “Declaration of Domicile” or similar document if the state has such a procedure
  • Become a patient of a local primary care doctor, and have records sent from your old doctor’s office
  • Become a patient of a local dentist
  • Purchase internet and cable for your new home
  • Claim residency status when filing your taxes
  • Join local organizations such as a gym, a local house of worship, or professional associations
  • Get a library card from the local library
  • Subscribe to local newspapers
  • Forward mail from other locations to your new home address
  • Gather for family holidays and other events
  • Seek some level of employment
  • Give to and get involved with local charitable organizations
  • Update any public profiles you have about yourself that mention where you are located (e.g. LinkedIn)

 Action Items to Sever Ties With OLD Home State

  • Sell all real estate
  • Spend as few days as possible in your old home state. This is particularly important if you maintain a home there. Some states have statutory rules that automatically make you a resident for tax purposes if you spend a certain number of days there.
  • Document the days you spend in each state. Consider an app for your phone such as Monaeo to help keep track of days spent in each state.
  • Cancel memberships (e.g. gym, house of worship, library)
  • Remove your name from voter registration rolls
  • Close bank accounts in local banks
  • Cancel any safe deposit boxes in local banks

Wise Moves: QCD’s

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By: John Bochniak

9/6/2019

As one reaches past age 70, a lifetime of wise moves has been lived. We write today to explain another wise move for our senior clients —that of addressing your annual giving intentions by donating from your Individual Retirement Account through what is known as a Qualified Charitable Distribution, or “QCD” for short.

Exercising a QCD not only allows you to address your giving desires but doing so can also create a very nice tax benefit. The tax benefit arises from the fact that the IRA distribution used to fund the QCD gift is totally excluded from your income. This income exclusion is a lot better than the tax treatment of a normal IRA distribution. A normal distribution is recognized as ordinary income and taxed federally at 10 – 37% depending on your income.

This tax benefit is especially nice now that we live in the age of the high standard deduction as many seniors find themselves no longer itemizing their charitable donations on schedule A. So, in essence, a QCD is a way to realize tax savings from a gift you can’t itemize on Schedule A – a wise move indeed!

It gets better as a QCD can count as part of your required minimum distribution (“RMD”) for the year. In fact, for many, the QCD can cover the full RMD keeping you in compliance with the annual distributive rules, yet completely avoiding the tax impact of the distribution requirement.

There are some important rules governing this strategy. Be aware of the following:

  • You must be age 70.5 or older at the time of the distribution.
  • The distribution must come from a traditional (or rollover) IRA. Distributions from SEP and SIMPLE IRA’s do not qualify.
  • You may only give up to $100,000 each year this way.
  • The gift must go straight from your IRA to the qualified charity
  • A qualified charity DOES NOT include private foundations nor donor advised funds.

Aside from the rules, it is key to understand how to report the QCD on your tax return. As is customary, the distribution from the IRA will be reported to you on a 1099-R from the custodian of the IRA. It then becomes your responsibility to properly disclose the QCD on the tax return to bring about the tax benefit (or, even simpler, just let your tax preparer know one was made during the year). As a helpful reporting hint, and as alluded to earlier, a QCD is not to be itemized as a charitable gift on Schedule A.

If you are age 70 or older, or approaching that age, and would like to understand the mechanics of this wise move and see if it plays well with your financial plan, please let us know. We look forward to discussing the strategy with you.