See It. Plan It. Live It.®

Judy L. Redpath, CFP®, AIF®FounderVISTA Wealth Strategies LLC12020 Sunrise Valley Drive • Suite 180 • Reston • VA • 20191703-295-9322 • Fax: (703) 552-3030jredpath@vistaws.com • www.vistaws.com

State Population: Winners and Losers

Spring 2020See disclaimer on final page

2020 has turned into a most unusual year. We have learned to work from home, our travel plans have been postponed or canceled (although wecan visit far off places through online portals), our old routines have been replaced with new ones to accommodate our new circumstances.

The CARES Act that Congress passed and was signed into law on March 27, 2020, gives us more time to file 2019 Federal tax returns (but notnecessarily state tax returns), the opportunity to waive taking of Required Minimum Distributions from employer-sponsored retirement plans andIRAs in 2020, created loan programs for small businesses, and suspended principal and interest payments for Federal student loan holdersthrough September 30, 2020, without penalty.

If you would like to review your situation, please contact me.

The U.S. population was 328,239,523 in 2019, an increase of 0.5% over 2018. This was the fourth consecutiveyear of slowing population growth due to fewer births, more deaths, and lower immigration from other countries.Forty states and the District of Columbia gained population, while 10 states lost population. Here are the winnersand losers based on percentage increase or decrease in population.

Source: U.S. Census Bureau, 2019

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Five Key Benefits of the CARES Act for Individuals and Businesses

By now you know that Congress has passed a $2trillion relief bill to help keep individuals andbusinesses afloat during these difficult times. TheCoronavirus Aid, Relief, and Economic Security(CARES) Act contains many provisions. Here are fivethat may benefit you or your business.

1. Recovery RebatesMany Americans will receive a one-time cash paymentof $1,200. Each U.S. resident or citizen with anadjusted gross income (AGI) under $75,000 ($112,500for heads of household and $150,000 for marriedcouples filing a joint return) who is not the dependentof another taxpayer and has a work-eligible SocialSecurity number, may receive the full rebate. Parentsmay also receive an additional $500 per dependentchild under the age of 17.

The $1,200 rebate amount will decrease by $5 forevery $100 in excess of the AGI thresholds until itcompletely phases out. For example, the $1,200rebate completely phases out at an AGI of $99,000 foran individual taxpayer and the $2,400 rebate phasesout at $198,000 for a married couple filing a jointreturn.

Rebate payments will be based on 2019 income taxreturns (2018 if no 2019 return was filed) and will besent by the IRS via direct deposit or mail. Eligibleindividuals who receive Social Security benefits butdon't file tax returns will also receive these payments,based on information provided by the Social SecurityAdministration.

The rebate is not taxable. Because the rebate isactually an advance on a refundable tax credit against2020 taxes, someone who didn't qualify for the rebatebased on 2018 or 2019 income might still receive a fullor partial rebate when filing a 2020 tax return.

2. Extra Unemployment BenefitsThe federal government will provide $600 per week tothose who are eligible for unemployment benefits as aresult of COVID-19, on top of any state unemploymentbenefits an individual receives. Unemployedindividuals may qualify for this additional benefit for upto four months (through July 31.) The federalgovernment will also fund up to an additional 13 weeksof unemployment benefits for those who haveexhausted their state benefits (up to 39 weeks ofbenefits) through the end of 2020.

The CARES Act also provides assistance to workerswho have been affected by the COVID-19 pandemicbut who normally wouldn't be eligible forunemployment benefits, including self-employedindividuals, part-time workers, freelancers,independent contractors, and gig workers. Individualswho have to leave work for coronavirus-relatedreasons are also potentially eligible for benefits.

3. Federal Student Loan DeferralsFor all borrowers of federal student loans, payments ofprincipal and interest will be automatically suspendedfor six months, through September 30, without penaltyto the borrower. Federal student loans include DirectLoans (which includes PLUS Loans), as well asFederal Perkins Loans and Federal Family EducationLoan (FFEL) Program loans held by the Department ofEducation. Private student loans are not eligible.

4. IRA and Retirement Plan DistributionsRequired minimum distributions from IRAs andemployer-sponsored retirement plans will not apply forthe 2020 calendar year. In addition, the 10%premature distribution penalty tax that would normallyapply for distributions made prior to age 59½ (unlessan exception applied) is waived for coronavirus-relatedretirement plan distributions of up to $100,000. The taxobligation may be spread over three years, with up tothree years to reinvest the money.

5. Help for BusinessesThe CARES Act includes several provisions designedto help self-employed individuals and small businessesweather the financial impact of the COVID-19 crisis.

Self-employed individuals and small businesses withfewer than 500 employees may apply for a PaycheckProtection Loan through a Small Business Association(SBA) lender. Businesses may borrow up to 2.5 timestheir average monthly payroll costs, up to $10 million.This loan may be forgiven if an employer continuespaying employees during the eight weeks following theorigination of the loan and uses the money for payrollcosts (including health benefits), rent or mortgageinterest, and utility costs.

Also available are emergency grants of up to $10,000(that do not need to be repaid if certain conditions aremet), SBA disaster loans, and relief for businessowners with existing SBA loans.

Businesses of all sizes may qualify for a refundablepayroll tax credit of 50% of wages paid to employeesduring the crisis, up to $10,000 per employee. Thecredit is applied against the employer's share of SocialSecurity payroll taxes.

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Will vs. Trust: Know the DifferenceWills and trusts are common documents used in estateplanning. While each can help in the distribution ofassets at death, there are important differencesbetween the two.

What Is a Will? A last will and testament is a legaldocument that lets you direct how your property will bedispersed (among other things) when you die. Itbecomes effective only after your death. It also allowsyou to name a personal representative (executor) asthe legal representative who will carry out your wishes.

What Is a Trust? A trust is a legal relationship inwhich you, the grantor or trustor, set up a trust, whichholds property managed by a trustee for the benefit ofanother, the beneficiary. A revocable living trust is thetype of trust used most often as part of a basic estateplan. "Revocable" means you can make changes tothe trust or even revoke it at any time.

A living trust is created while you're living and takeseffect immediately. You may transfer title or ownershipof assets, such as a house, boat, automobile, jewelry,or investments, to the trust. You can add assets to thetrust and remove assets thereafter.

How Do They Compare? While both a will and arevocable living trust enable you to direct thedistribution of your assets and property to yourbeneficiaries at your death, there are severaldifferences between these documents. Here are someimportant ones.

1. A will generally requires probate, which is a publicprocess that may be time-consuming and expensive. Atrust may avoid the probate process.

2. A will can only control the disposition of assets thatyou own at your death, including property you held astenancy in common.

Different Documents, Different FeaturesEven if you have a revocable living trust, you should have a will to control assets not captured in the trust.

*Depends on applicable state laws.

It cannot govern the distribution of assets that passdirectly to a beneficiary by contract (such as lifeinsurance, annuities, and employer retirement plans)or by law (such as property held in joint tenancy).

3. Your revocable trust can only control the distributionof assets held by the trust. This means you musttransfer assets to your revocable trust while you'reliving, which may be a costly, complicated, and tediousprocess.

4. Unlike a will, a trust may be used to manage yourfinancial affairs if you become incapacitated.

5. If you own real estate or hold property in more thanone state, your will would have to be filed for probatein each state where you own property or assets.Generally, this is not necessary with a revocable livingtrust.

6. A trust can be used to manage and administerassets you leave to minor children or dependents afteryour death.

7. In a will, you can name a guardian for minor childrenor dependents, which you cannot do with a trust.

Generally, most estate plans that use a revocable trustalso include a will to handle the distribution of assetsnot included in the trust and to name a guardian forminor children. In any case, there are costs andexpenses associated with the creation and ongoingmaintenance of these documents. Keep in mind thatwills and trusts are legal documents generallygoverned by state law, which may differ from one stateto the next. You should consider the counsel of anexperienced estate planning professional and yourlegal and tax advisers before implementing a truststrategy.

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Why You Might Need Disability Income Insurance

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020

The accompanying pages have been developed by an independent third party. Commonwealth Financial Network is not responsible fortheir content and does not guarantee their accuracy or completeness, and they should not be relied upon as such. These materials aregeneral in nature and do not address your specific situation. For your specific investment needs, please discuss your individualcircumstances with your representative. Commonwealth does not provide tax or legal advice, and nothing in the accompanying pagesshould be construed as specific tax or legal advice. Advisory services offered through Commonwealth Financial Network®, a RegisteredInvestment Adviser.

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Your ability to earn an income may be your mostvaluable asset. It might be difficult to make ends meetif you are unable to work due to illness or injury.

According to one report, only 34% of men and 20% ofwomen said they felt extremely confident in supportingtheir households during a period of income loss.1 It'simportant to assess your own situation and determinewhether you have appropriate financial backup in theevent that you cannot work due to a disability.

Your employer may offer long-term disability coverage,but you could lose your subsidized coverage if youchange jobs. Even if you remain covered through yourjob, group plans typically don't replace as large apercentage of income as an individual plan could, anddisability benefits from employer-paid plans aretaxable if the premiums were paid by the employer.

An individual disability income policy could helpreplace a percentage of your income (up to the policylimits) if you're unable to work as a result of an illnessor injury. Depending on the policy, benefits may bepaid for a specified number of years or until you reachretirement age. Some policies pay benefits if you

cannot work in your current occupation; others mightpay only if you cannot work in any type of job. If youpay the premiums yourself, disability benefits areusually free of income tax. And the policy will stay inforce regardless of your employment situation as longas the premiums are paid.

Social Security offers some disability protection, butqualifying is difficult. And the monthly benefit you mightreceive ($1,258, on average) will probably not beenough to replace your lost income.2

Having an individual disability income insurance policycould make the difference between being comfortableand living on the edge.

A complete statement of coverage, includingexclusions, exceptions, and limitations, is found only inthe policy. It should be noted that carriers have thediscretion to raise their rates and remove theirproducts from the marketplace.1) Council for Disability Awareness, 2019

2) Social Security Administration, 2020

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