Avoiding Family Strife

5 minutes to read.

Perhaps the most overlooked aspect of estate planning is what happens to family heirlooms and other personal property. Disputes can grow so heated that children stop speaking to each. With simple, advance planning, conflict can be avoided.

Before we get into this, let’s look at the job market.

Job Market

The number of unemployed people per job opening, seasonally adjusted, didn’t change from May 2023, remaining at 0.6 for June 2023. This ratio has been at 0.5 or 0.6 since October 2021. For 26 months, it has been under 1.0, meaning there were more jobs openings than people actively look for work.

During the last 15 years, the only other time the rate dropped below 1.0 was for the 24 months from March 2018 to the start of the pandemic.

The labor force participation rate (LFPR) for July 2023 was 62.6%, unchanged since March 2023. This is almost 1% below the pre-pandemic February 2020 rate of 63.3%, and almost 5% below the high for the last 70 years of 67.3%.

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The overall LFPR has been trending downward for over 20 years. Factors include an aging population, prime age men’s participation rate declining since 1960, and younger people delaying entering the work force by staying in school longer. While these have been partially offset by women 25 to 64 remaining in the workforce longer, this is not enough to reverse the overall downward trend.

In the absence of higher immigration or productivity gains, we could be seeing a structural shift in employment in the United States.

State-by-State Unemployment Rates

Employment rates for the states, territory and district range from a low of 1.8% in New Hampshire and South Dakota to a high of 6.1% in Puerto Rico. Seventy-five percent have unemployment rates between 2% and 4%. The median unemployment rate is 3%.

The five states, cities, and territory with the highest unemployment were unchanged from last month though the rates in New York City and California ticked 0.1% higher:

Source illustration not reproduced.

Those with the five lowest also remained the same as last month with each dropping by 0.1%:

Source illustration not reproduced.

It’s interesting to note that all five of the lowest dropped even lower while those with the highest remained the same or went higher.

What Should You Do?

The spread between the Federal Discount rate of 5.5% and the annual CPI of 3.0% is 2.5%. The general rule of thumb is the gap needs to be 2.0% to tame inflation so as inflation and employment growth moderate, it becomes less certain the Federal Reserve will raise interest rates. Once markets adjust to Fitch’s downgrade of U.S debt, it’s likely we’ll see optimism return.

It appears we are going to avoid a recession. Of course, with an election next year, how both sides talk about economic news may not reflect reality. So, it’s crucial that you stay informed about economic trends by looking at the source data, carefully considering the analysis you’re reading, and applying your common sense.

Should you consider switching jobs or rejoining the workforce? With unions pushing for significantly higher wages, such as the United Auto Workers demanding a 40% increase over four years, and the WFPR unlikely to increase significantly, employers will have to continue raising salaries to attract employees. This puts you in a strong bargaining position.

Dealing with Personal Property

When it comes to who gets your personal property after you shuffle off this mortal coil (pardon the Shakespearian term for pass away), leave nothing to chance. These steps can make for a smooth process:

Choose your executor, trustee, or representative carefully. This person can keep matters under control or inflame the situation. Who do you know who will carry out your instructions while keeping a cool head if disputes arise?

List who gets what. Don’t count on your heirs abiding by your verbal wishes. Make a detailed list of which heirlooms and other items go to which person. Describe each item in detail especially if there are several that could be confused. If possible, make the list a part of your will or trust. Otherwise, brief your representative on the list so he will abide by it.

Spell out how disputes will be resolved. In her July 30, 2023 article in The Wall Street Journal, Ashlea Eberling suggests drawing cards as a way to decide who gets a particular piece. She also mentions rolling dice and drawing straws.

The last thing you want is people descending into conflict after you’re gone. Take the time to make a plan and set a schedule for updating it periodically.

Where are you on this journey? Have you set your financial goals?

How can I help you? Call, text, or email me.

Kevin

P.S. Don’t miss this week’s episodes of The WAY to WOW Shows:

Monday, August 7, 10:00 a.m. PT / 1:00 p.m. ET – Trusts & Estate Weekly on a Will vs. Trust: Choosing the Right Estate Planning Tool for You

Join us live https://www.eventbrite.com/e/633479282587?aff=oddtdtcreator.

Watch the replay https://youtube.com/playlist?list=PLCEw2fI1wAPIQbJD0tdcS8kzFEcpZ0DXz.

Tuesday, August 8, 11:00 a.m. PT / 2:00 p.m. ET – Military Business Lessons from the Military continues our discussion of Marine Corps Warfighting doctrine with the Conduct of War Applied to Business: Main effort.

Join us live https://www.eventbrite.com/e/633485641607?aff=oddtdtcreator.

Watch the replay https://youtube.com/playlist?list=PLCEw2fI1wAPKJNrThFkrivOdTnYZFYNir.

Wednesday, August 9, 12:30 p.m. PT / 3:30 p.m. ET – People Making Money on a sensible plan for eliminating debt.

Join us live https://www.eventbrite.com/e/633498048717?aff=oddtdtcreator.

Watch the replay https://youtube.com/playlist?list=PLCEw2fI1wAPJjhfe-kkJd0sVsGuTfjWWo.

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