Bernstein Research Reports
For questions or comments about the Bernstein Research Reports, please email Greg Singer at
SingerGD@bernstein.com.
Bring It On Home-Transferring Wealth to US Beneficiaries NEW
A significant new research project for international T&E practitioners, looking at US and Foreign trusts and their relative merits for global families with US beneficiaries.
-Should a foreign trust with US beneficiaries be established onshore or offshore, and why?
-What’s the optimal distribution strategy from a preexisting offshore trust with US beneficiaries?
-What impact do asset allocation and currency have on meeting wealth transfer objectives?
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Investment Opportunity amid Tax Uncertainty NEW
Considerations for individuals looking to manage the increase in tax rates coming in 2011. One rule of thumb in investing says that you should pay no tax before it is due. But the coming shift in tax rates, along with the uncertainty surrounding evolving tax law, may suggest that at least this year, the rule should be revisited. As painful as it may be, prepaying taxes in 2010 could potentially enhance the long-term wealth of many investors.
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Transfer Opportunities in Advance of Legislative Change NEW
One of the most effective wealth transfer strategies using marketable stock, “rolling” two-year GRATs will no longer be possible if legislation currently before the Senate is passed into law. In this article we examine several GRAT (and other) planning opportunities donors could pursue now, in advance of the possible legislative change. A number of factors should be weighed in the decision, including different strategies’ exposure to interest rate and market risk, their scalability, and perhaps most important of all, the donor’s expected longevity.
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Striking the Right Balance
Cash Balance Plans for Professional Practices and Closely Held Firms
How cash balance plans can secure better retirement outcomes for professionals
Why a plan’s asset allocation, crediting rate, and shortfall terms are so important
Why an allocation tilted toward bonds provides the best risk/reward trade-off
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Roth to Riches?
Determining Whether a Roth Conversion Makes Sense
The Roth IRA is arguably the most powerful retirement and estate planning tool not available to wealthier investors—until now. Those who have enough wealth in their personal accounts to pay the taxes on the conversion and still have sufficient assets to delay drawing from their IRA until late in retirement will clearly benefit from converting. In particular, future generations will be far better off inheriting a tax-free Roth than either taxable assets or a traditional IRA. » Download Now
Inflation Fixation - Where Will It End?
Economists’ views on the likelihood and severity of inflation have rarely diverged as widely as today. In this paper, we present a conceptual framework for anticipating inflation. Our findings suggest that sharply rising inflation is extremely unlikely in the near term, and if it does materialize it will do so only after the economy fully recovers. » Download Now
How Safe Are Municipal Bonds Today?
Reports about the poor financial condition of state and local governments make the headlines every day, but municipalities continue to take prudent action, including cutting expenses and raising taxes, to balance their budgets
State governments are facing particularly difficult situations because of their dependence on economically sensitive tax revenues for the bulk of their budgets; revenues are likely to stabilize and begin to grow when recovery takes hold
Our analysis points to selective credit rating downgrades rather than a meaningful increase in defaults, particularly for the larger issuers that Bernstein typically invests in
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Entering the Market
All At Once or In Stages: Quantifying the Trade-Offs
The cost and benefit of "dollar cost averaging"
What happens when you extend the time period of entry
Why the simplest dollar cost averaging strategy works best
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Tangible Transfers: Leveraging Liquid Wealth to Transfer Illiquid Assets
The planning required to transfer a family's illiquid assets need not to be dauntingly complex
In some cases, families can use liquid wealth to help transfer illiquid property
Our research can help quantify the benefits of such a strategy - in tax savings and wealth transferred
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Looking Beyond Perpetuity: Customizing a Private Foundation
A foundation represents a powerful commitment to do charitable good. Our research provides guidance -
For potential donors on:
- Comparing the benefits of a foundation with those of other charitable alternatives
- Establishing a family philanthropic legacy without compromising personal lifestyle
For directors and trustees on:
- Identifying asset-allocation and gifting policies that best match charitable objectives
- Determining whether "perpetuity" is a realistic goal
- Managing the trade-offs among asset growth and the amount and stability of distributions
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The Enviable Dilemma - Concentrated Stock: Hold, Sell, or Hedge?
Investors holding concentrated stock positions must grapple with a number of complex questions. A comprehensive analysis of the key issues:
- The tax cost of selling versus the benefit of diversification
- How much to divest
- Immediate versus staged selling
- Alternatives to sale, including hedging with options
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The Art Before the Deal: Maximizing Personal Wealth When Selling a Business
Selling a privately held business may be the most important financial event in an owner’s life. Identifying personal goals in advance can help maximize the deal’s value. Critical issues include:
- The impact of key deal terms on the owner’s wealth; the highest offer may not be the best
- How estate planning prior to the sale can enhance the value created
- Quantifying spending needs so that plans can be implemented to meet other financial goals
- The financial-planning implications of liquidity strategies other than a full sale
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Can Early Tax Harvesting Reap Greater Gains?
Capital gains taxes are scheduled to rise from 15% to 20% in 2011, but many think that the increase could be greater and could come two years sooner, when the next president takes office and a new Congress convenes. Should a prospective change in tax policy influence your investment strategy?
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Multigenerational Wealth Management: Getting a Legacy Up Time and taxes will erode even the greatest fortunes without the right investment and inheritance plans in place. But the planning required can be complex and the choices intensely personal: How much should the senior generation keep in their estate? How much can they transfer to their descendants, or to charity? And when? In our new research study, Multigenerational Wealth Management: Getting a Legacy Up, we use quantitative analysis to take some of the financial guesswork out of the equation. The potential benefits, in peace of mind as well as in dollars and cents, can be substantial. » Download Now
Retirement: Plan Early and Often With longevity increasing, many investors can look forward to decades of retirement—a double-edged sword, given the unpredictability of the markets, inflation, taxes, traditional mainstays (like Social Security), and changes in each retiree’s circumstances. But research-driven planning based on conservative assumptions and revisited regularly provides investors with a good chance of maintaining their lifestyle for decades—and realizing extra opportunities as well—when earned income is no longer in the picture. » Download Now
Wealth Transfer Strategies: The Timely and the Timeless
At least one silver lining has emerged from the recent dark clouds over financial markets: Low interest rates and depressed asset valuations make it easier to escape gift and estate taxes. But be careful not to rush into long-term plans based on short-term economic trends. Seemingly attractive market opportunities can be misleading, although any opportunity that triggers a review of your estate plan is useful. » Download Now