Is alimony tax deductible?A typical question from a divorcing taxpayer is whether or not alimony paid to an ex-spouse or separated spouse can be claimed as a tax deduction when filing income taxes.
When dealing with a divorce, not much is deductible, but alimony and spousal support certainly is.
You have to be aware of the particular rules that apply in order to deduct alimony or spousal support payments on your income taxes. Continue reading
Let’s assume Dr. Smith is a very competent doctor, but he has no bedside manner. You and your family have relied on his specialized knowledge and advice for years. Based on this information how important is his bedside manner?
In my opinion, it has no importance. Choosing between competence and bedside manner is easy. You are looking for competence, not a friend, when you select a doctor. A doctor’s bedside manner may make you feel good, but his knowledge will help you live a longer, healthier, life.
The same is true for financial advisors. You want a competent, ethical professional advising you on the investment of your assets. However, millions of investors select the advisors they like the best versus the advisors with the best credentials, ethics, and business practices.
Like doctors, many of the best financial advisors are quantitative, intellectual, and analytical. This makes them experts in their respective fields, but their personalities do not produce great bedside manners.
I believe personalities should not matter when you select a professional: Medical, financial, tax, legal, etc. You want the best professional, not the friendliest one. Plus, strong personalities are usually a characteristic of sales people, not professionals who spend most of the day analyzing trends, investment alternatives, and forecasts.
Financial planners, financial advisors, investment advisors, and money managers are financial fiduciaries. That’s because they are Registered Investment Advisors (RIAs) or Investment Advisor Representatives (IARs) who work for RIAs. What does this mean to you, the investor?
Fiduciaries are held to the highest ethical standards in the financial services industry. They are required to put their clients’ financial interests ahead of their own. In other words, your financial interests come first.
Non-fiduciaries are held to a lower ethical standard called suitability. In a nutshell, a suitable investment means that an investment is appropriate for an investor’s willingness and ability to take on some level of risk. Here’s a good article that explains suitability in more detail.
If you’re looking for a new financial advisor or your first financial advisor, make sure you select an RIA or IAR and require them to acknowledge their fiduciary responsibilities in writing. Remember: it’s your money so the financial professional you hire should have the highest level of accountability back to you, the client!