WH Cornerstone Investments Newsletter
Turning your paycheck into a playcheck TM August 2004

in this issue

Business Succession Planning

Dividend Payouts Take Center Stage

Important Birthdays to Remember

What's Ahead for the Second Half

What You Know About One-Year Performance Can Hurt You

It's Never Too Early to Consider a Fixed Annuity

7th Annual Women's Leadership Conference at Babson College


Business Succession Planning

More than 40 percent of family businesses expect a change in top leadership in the next five years, but 42 percent have not chosen a successor or lack a succession plan. As a small-business owner, you've likely spent some time thinking about your own succession plan. In order to develop a transfer strategy that meets your wishes and fulfills the needs of your loved ones, consider three key steps: (1) choose a successor, (2) reduce your exposure to estate taxes, and (3) find a way to fund the transition.

1. Choose a successor - Though it's tempting to leave everything to a family member, there may be a better choice. Carefully weigh the individual's ability to keep the business running...to move it forward. It may be a better choice to put an agreement in place to sell the business to a partner and let your heirs use the money from the sale to pursue other interests.

2. Reduce exposure to estate taxes - In 2004, estate taxes could claim up to 48 percent of the gross value of your estate, including your share of the business. In most cases, these taxes are due nine months after your death. This could make it necessary to dissolve or sell your business simply to cover the tax bill. There are ways to reduce this exposure using trusts, family limited partnerships, and other arrangements.

3. Find a way to fund the transition - If you set up an agreement to sell your share of your business to a partner, you need a strategy to fund that agreement. Otherwise, your passing could put undue strain on the business's finances. Many people find that a company-owned life insurance policy is an ideal way to fund a buyout.

Like most entrepreneurs, you have probably spent a major portion of your life building your business. With proper succession planning, your business can provide a financial springboard for your loved ones even after you are gone.

Creating a Smart Succession Plan


Lazy, hazy days of summer have finally appeared. We hope that each of you are enjoying all the best that summer has to offer from barbecue's with friends and families to quietly reading a good book while swaying in the hammock. Thanks to all of you who have taken the time to share with us how much you appreciate our newsletter. If you know someone who you think would benefit from receiving it, please feel free to forward it to them. Or contact us and we will be happy to add them to the distribution list.

Time to Share. Create a Buzz. ACCESSAIL is a program that offers recreational sailing and private lessons for the disabled of all ages. Last year a young lady who is blind won the ACCESSAIL racing regatta. She used the wind on her check to steer the boat to victory. The school is even equipped with two Martin 16 sailboats, which are designed to be accessible to all sailors with mobility impairments- without specialized adaptation. Experienced instructors accompany all sailors. ACCESSAIL is offered through the Duxbury Bay Maritime School. To learn more about the ACCESSAIL program click here to visit their website or call Matt Glauber, Program Director at 781.934.7555.

  • Dividend Payouts Take Center Stage
  • Thanks to the 2003 tax-law changes, many companies are changing the way they operate and paying more of their profits to their shareholders in the form of dividends.

    Early in 2004, 370 companies in the Standard & Poor's 500 index were paying dividends to their shareholders - 19 more than in 2002. And the size of those dividends was increasing, too. The average dividend yield for dividend-paying S&P 500 stocks was up to 2.02 percent.

    Read on...
  • Important Birthdays to Remember
  • Certain ages represent turning points in life: driving at 16, voting at 18, less-expensive auto insurance at 25. On the road to retirement, there are important birthdays, too. Your tax situation, retirement benefits, and health-care benefits are closely tied to specific ages. If you are not aware of them, you could miss out on potential opportunities and deadlines.

    You may want to mark these noteworthy ages on your long-term calendar.

    Read on...
  • What's Ahead for the Second Half
  • The consensus of U.S. economists is for strong economic growth during the rest of 2004. Wall Street, on the other hand, appears worried about the direction of interest rates, inflation, and the upcoming election.

    The Wall Street Journal's ongoing survey of more than 50 economists revealed a mostly encouraging outlook at the 2004 midpoint. Economic growth is expected to continue; higher inflation rates due to short-term factors may soon abate; unemployment is expected to fall. Wall Street apparently sees things differently. The S&P 500 was down 2% for the year as of July 23, 2004.

    Read on...
  • What You Know About One-Year Performance Can Hurt You
  • Pick up a magazine aimed at do-it-yourself investors and you are likely to see headlines like this: "Top 10 Mutual Fund Picks This Year" or "Add Last Year's Top Mutual Funds to Your Portfolio."

    Of course, when you add a new mutual fund to your portfolio, you want one that has a top-notch record - but performance is only one facet to consider because past results are not indicative of future performance. Ideally, your personal goals and situation should be critical in the decision-making process. To understand why, take this little pop quiz.

    Read on...
  • It's Never Too Early to Consider a Fixed Annuity
  • Only 13 percent of workers expect Social Security to be their primary source of income in retirement. Instead, most people are planning to fund retirement through a combination of employer-sponsored plans and personal savings and investments.

    Increasingly, annuities are playing a critical role in retirement planning. In fact, 44 percent of annuity owners purchased their first annuity before reaching 50 years of age.

    Read on...
  • 7th Annual Women's Leadership Conference at Babson College
  • Scoping Out the Present. Mapping Out the Future. It's about learning. About sharing. About connecting. About moving forward.

    Friday, October 15, 2004

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