Tax Cut & Jobs Act – Estate Planning Issues

The Tax Cut & Jobs Act now provides each taxpayer an $11.2 million estate tax exemption {very unlike the MA $1 million threshold exemption applicable to Massachusetts residents} – doubling the exemption established by the Obama Administration.  Now is a good time for all clients to review their existing plans with their advisor team to ensure they have accomplished their goals, including:

  1. Probate Avoidance,
  2. Maximize Asset Protection,
  3. Minimizing income tax,
  4. Enhance retirement income,
  5. Accomplish incapacity/disability planning,
  6. Ensure your desired estate disposition,
  7. Protect against spendthrift or imprudent heirs,
  8. Provide for Special Needs heirs,
  9. Accomplish any charitable goals, and
  10. Complete or update your business succession plans.

For those ultra-high net worth folks who have the ability and desire to make substantial gifts to their heirs now, such a plan has the advantage of:

  1. Using some/all of their exemption now, avoiding the possibility of a Democratic Congress’s likely reduction of the exemption in the future, and
  2. Avoiding MA estate tax on the gifted assets and ensuing growth outside your taxable estate.

Such a gift(s) can be asset protected within a spendthrift irrevocable trust, as opposed to going outright to your heirs, and be subject to their divorce, bankruptcy, premature demise, incapacity and other factors that can arise, threatening the integrity of your planning. In fact, leverage gifting techniques exist for situations where folks wish to make enhanced use of the new gift/estate tax FED exemptions. Give Cleary Insurance a call to follow up on any of these ideas, so that you can make the most of this current change, and ensure your personal goals are indeed met in the most efficient manner.

Wellness programs are out. Wellbeing strategies are in.

Something isn’t right. As a country, we are getting sicker every day. Productivity is on the decline, and most employees report not being engaged while on the clock. Relentless increases in healthcare costs are crippling organizations, and the future promises more of the same. We are quickly reaching a crossroads where the cost of healthcare and the impact of lost productivity will cause irreparable damage to organizations of all sizes.

Part of the problem is that traditional approaches to wellness have not delivered on the promise of reduced cost and improved productivity. Many of these wellness programs were poorly constructed and inconsistently delivered. As more vendors poured into the space, the quality of services offered began to vary widely and choosing an effective partner became more and more challenging for employers. Even the higher quality programs available were limited in their impact because they focused only on physical health problems instead of fueling the whole person.

The bottom line is this: It’s time to set aside wellness “programs” in favor of wellbeing strategies. It’s time for a new approach that goes beyond wellness to true potential.

True potential occurs when individuals are exceling in every facet of their lives: physically, emotionally, socially, and financially. It occurs when an organization is experiencing higher performance, organizational trustworthiness and employee engagement.

Reaching true potential is marked by:

  • Individuals who are thriving, contributing, connecting and learning.
  • Lower healthcare costs and improved productivity.
  • A culture built on trust where people do their best work.

True potential isn’t about managing someone’s health or changing behaviors. It’s about creating opportunities for individuals to live their best lives and do their best work. It’s about establishing a fresh perspective, shaping a trustworthy culture and nurturing healthy habits. This approach requires us to reevaluate everything we have come to accept with the status quo and to move beyond it.

Applying this new mindset starts with re-evaluating what success looks like. It requires us to specifically identify what we are trying to accomplish and how to meaningfully measure it.

Too often, vendors create their own metrics for demonstrating ROI, based on their specific strengths or self-generated formulas that don’t hold up to intense scrutiny. This has created a lot of noise and eroded the credibility of outcomes generated by traditional wellness programs. Measuring ROI has been a huge debate and an enormous distraction for decades. In the new model, we must set our sights on a meaningful method to measure progress toward true potential, one that can be an accurate and credible barometer of value.

Where do we find such a standard? Thanks to foundational research by the University of Michigan, which spans 40 years and 4 million healthcare claims, we have the answer. Through this research, the University identified 15 benchmark risks in physical, emotional, social and financial wellbeing that most directly impact healthcare costs and productivity.

This set of benchmark wellbeing risks is the gold standard when gauging the effectiveness of wellbeing strategies aimed at fueling true potential. These benchmark wellbeing risks are the set of factors that most directly affect the bottom line and the wellbeing of a population, the factors that make the difference between reaching true potential and falling short of it. By using this scientifically-valid standard to measure and evaluate your efforts, you can hold vendors and partners accountable for delivering and demonstrating results and have confidence that you are receiving a return on your investment of time and money. This is a necessary first step in taking a fresh approach to improving the wellbeing of your population.

Want to learn more about the roadmap for reaching true potential? Contact us today for a consultation and also receive a free whitepaper from our partner CHC Wellbeing. We can help you transform your wellness programs into wellbeing strategies that get results.




Why Pipe Freezing is a Problem

Water has a unique property in that it expands as it freezes. This expansion puts tremendous pressure on whatever is containing it, including metal or plastic pipes. No matter the strength of a container, expanding water can cause pipes to break.

Pipes that freeze most frequently are:

  • Pipes that are exposed to severe cold, like outdoor hose bibs, swimming pool supply lines, and water sprinkler lines.
  • Water supply pipes in unheated interior areas like basements and crawl spaces, attics, garages, or kitchen cabinets.
  • Pipes that run against exterior walls that have little or no insulation.

How to Protect Pipes From Freezing

Before the onset of cold weather, protect your pipes from freezing by following these recommendations:

  • Drain water from swimming pool and water sprinkler supply lines following manufacturer’s or installer’s directions. Do not put antifreeze in these lines unless directed. Antifreeze is environmentally harmful, and is dangerous to humans, pets, wildlife, and landscaping.
  • Remove, drain, and store hoses used outdoors. Close inside valves supplying outdoor hose bibs. Open the outside hose bibs to allow water to drain. Keep the outside valve open so that any water remaining in the pipe can expand without causing the pipe to break.
  • Add insulation to attics, basements and crawl spaces. Insulation will maintain higher temperatures in these areas.
  • Check around the home for other areas where water supply lines are located in unheated areas. Look in the garage, and under kitchen and bathroom cabinets. Both hot and cold water pipes in these areas should be insulated.
  • Consider installing specific products made to insulate water pipes like a “pipe sleeve” or installing UL-listed “heat tape,” “heat cable,” or similar materials on exposed water pipes. Newspaper can provide some degree of insulation and protection to exposed pipes – even ¼” of newspaper can provide significant protection in areas that usually do not have frequent or prolonged temperatures below freezing.
  • Consider relocating exposed pipes to provide increased protection from freezing.

How to Prevent Frozen Pipes

  •  Keep garage doors closed if there are water supply lines in the garage.
  • Open kitchen and bathroom cabinet doors to allow warmer air to circulate around the plumbing. Be sure to move any harmful cleaners and household chemicals up out of the reach of children.
  • When the weather is very cold outside, let the cold water drip from the faucet served by exposed pipes. Running water through the pipe – even at a trickle – helps prevent pipes from freezing.
  • Keep the thermostat set to the same temperature both during the day and at night. By temporarily suspending the use of lower nighttime temperatures, you may incur a higher heating bill, but you can prevent a much more costly repair job if pipes freeze and burst.
  • If you will be going away during cold weather, leave the heat on in your home, set to a temperature no lower than 55° F.

 How to Thaw Frozen Pipes

If you turn on a faucet and only a trickle comes out, suspect a frozen pipe. Likely places for frozen pipes include against exterior walls or where your water service enters your home through the foundation.

  • Keep the faucet open. As you treat the frozen pipe and the frozen area begins to melt, water will begin to flow through the frozen area. Running water through the pipe will help melt ice in the pipe.
  • Apply heat to the section of pipe using an electric heating pad wrapped around the pipe, an electric hair dryer, a portable space heater (kept away from flammable materials), or by wrapping pipes with towels soaked in hot water. Do not use a blowtorch, kerosene or propane heater, charcoal stove, or other open flame device.
  • Apply heat until full water pressure is restored. If you are unable to locate the frozen area, if the frozen area is not accessible, or if you can not thaw the pipe, call a licensed plumber.

Check all other faucets in your home to find out if you have additional frozen pipes. If one pipe freezes, others may freeze, too.


Why Risk Transfer?

Presented by Christopher F. Hawthorne, CPCU, CIC

Insurance premiums fluctuate annually due to sales and payroll activity of a contractor and also due to loss history.  The insurance policy provides money to rebuild damaged property, to defend in a liability suit, to pay settlements as well as take care of employees when they are injured on the job.  These combined costs are labeled as losses.

An insurance loss has the potential of driving insurance premiums up for four or five years as well as limiting which carriers will wish to work with a contractor. When an insurance carrier is determining what it will offer in term of premiums, it will incorporate the prior four years of losses as part of the pricing mechanism.  The fewer and smaller the losses, the more carriers will be interested and the carriers can justify offering lower premiums.

An available risk management technique to lower the size of a contractors losses arising from working with a sub-contractor is Risk Transfer.  Risk Transfer can protect one party’s insurance program and future premiums by transferring the cost of a loss to another party. Conversely, it can increase the future costs of the other party’s insurance program.

The major types of protection in risk transfer agreements are as follows:

Hold Harmless-Party A holds Party B harmless for a loss when Party A has caused part or all of a loss.

Indemnify– Party A agrees to reimburse Party B for damages (settlements and judgments).

Defend– Party A agrees to pay the cost to defend Party B after a loss if Party B is named in a claim or suit.

Additional Insured Status– Party A provides coverage for Party B under Party A’s insurance program for Operations and Completed Operations.

Primary Coverage-Party A states that it’s coverage is primary should Party B be brought into the suit.

Non-Contributory– Coverage-Party A states it’s policy disallows Party B’s policies from sharing in the loss.

Waiver of Subrogation-Party A disallows its insurance company from pursuing Party B’s insurance carrier for any amount due to Party B’s negligence that may have contributed to the loss.

In short Party A is highly protected by Party B.

When is it appropriate for one to agree to these terms? While this question is to be answered on a case by case basis, in general if accepting work from a General Contractor (GC), it is the norm that the GC will expect the terms to be agreed to, to some degree. The economic value of the relationship should be considered before agreeing to adding this exposure to one’s liability.

When is it appropriate to ask for these terms? Whenever possible, as it greatly enhances the protection for an operation.

Not all agreements are the same and not all insurance policies can back them up. It is critical both parties involve their attorneys as well as their agents before signing. As always, a team approach and communication will put everyone is a better position to succeed and survive a loss.

New Healthcare Assessment for Massachusetts Employers

We want to make you aware of an important law that will impact Massachusetts-based employers beginning January 1, 2018. Under a law signed recently by Governor Baker, employers with six or more employees will begin paying a new health care assessment to support the Commonwealth’s Medicaid program, MassHealth.

Highlights of the new law

  • It increases the existing Employer Medical Assistance Contribution (EMAC) from $51 per employee to $76.50 per employee.
  • It establishes a new assessment on employers for any employee who enrolls in MassHealth or subsidized insurance coverage offered through the Massachusetts Health Connector. The assessment is $750 per employee, per year.
  • Employers will most likely pay the assessment on a quarterly basis–just like they do for unemployment insurance.
  • Employers who hire any worker for at least one day during any 13 weeks in a calendar year, and who pay at least $1,500 in wages per quarter, will be required to contribute.

The Massachusetts Department of Unemployment Assistance and the Health Connector are still finalizing regulations to implement the assessment. The regulations are expected to be completed before the end of the year. The assessment is expected to generate $200 million annually; it is scheduled to end on December 31, 2019.

Law also reduces unemployment contribution rates
To help offset the impact of the new assessment on employers, the law also reduces Massachusetts unemployment contribution rates for two years. For more information on the employer contribution schedule, visit  the link below:

5 Questions to Ask Clients Who Are Considering a 401(k) Loan

Presented by Douglas W. Greene CFP® CLU®

Advisors may suggest to their clients that they never take a loan from their 401(k) plan, but things happen, and happen more often than you might think.  According to Morningstar, at the end of 2012, 21% of 401(k) plan participates who were eligible had loans outstanding against their 401(k).  50% of people who borrow against their 401(k) will do so more than once.

Here are five key questions to ask clients:

  1. Does your intended use of funds promise a higher rate of return than leaving the money be?
    – Steering borrowed funds to an investment with an uncertain payoff is much less compelling than paying off high interest debt.
  2. Is your job secure?
    – If you leave your employer with a loan outstanding, you will usually be forced to pay back the loan soon, usually within 90 days.
  3. Can you realistically pay this back?
    – Because there is no credit check, the client is the one responsible to deciding if the loan is financially viable.  Make sure household budget is considered as interest will increase the payments.
  4. Are you prepared to lose the benefit of your tax deductions?
    – A 401k provides an employee federal and state income tax deductions on contributions.  If a loan is taken, it must be paid with after-tax dollars thus offsetting the benefit of the deductions.
  5. Do you feel like you can afford to delay your retirement saving?
    – Their budget may not be able to support the loan repayment and current 401(k) savings.  Also, the money withdrawn does not have the opportunity to grow with the market.

Is Your Business Prepared for a Natural Disaster?

While all businesses should have a plan in place to protect their employees and their bottom line when a natural disaster hits, they should also consider their location and the insurance that is necessary to keep their doors open after a catastrophic event.

For a detailed disaster plan you can visit  the link:

Reviewing the insurance plan:

Businesses should review their insurance plan to reduce out of pocket expenses.  Make sure you have significant coverage to pay for the indirect costs of the disaster, disruption to your business and the cost to repair or rebuild your premises.  Most policies do not cover flood or earthquake damage and you may need to buy separate insurance for these perils. Be sure you understand your policy deductibles and limits.  New additions or improvements should also be reflected in your policy. This includes construction improvement to a property and the addition of new equipment.

For a business, the costs of a disaster can extend beyond the physical damage to the premises, equipment, furniture and other business property. There’s the potential loss of income while the premises are unusable. Your policy should include business interruption insurance and extra expense insurance. Even if your basic policy covers expenses and loss of net business income, it may not cover income interruptions due to damage that occurs away from your premises, such as to your key customer or supplier or to your utility company. You can generally buy this additional coverage and add it to your existing policy.

Basic commercial insurance to consider:

  • Building coverage provides coverage up to the insured value of the building if it is destroyed or damaged by wind/hail, or another covered cause of loss. This policy does not cover damage caused by a flood or storm surge nor does it cover losses due to earth movement, such as a landslide or earthquake, unless added by endorsement.
  • Business personal property provides coverage for contents and business inventory damaged or destroyed by wind/hail, or another covered cause of loss.
  • Tenants improvements and betterments provides coverage for fixtures, alterations, installations, or additions made as part of the building that the insured occupies but does not own, which are acquired and made at the insured’s expense.
  • Additional property coverage provides for items such as fences, pools or awnings at the insured location. Coverage limits vary by type of additional property.
  • Business income provides coverage for lost revenue and normal operating expenses if the place of business becomes uninhabitable after a loss during the time repairs are being made.
  • Extra expense provides coverage for the extra expenses incurred, such as temporary relocation or leasing of business equipment, to avoid or minimize the suspension of operations during the time that repairs are being completed to the normal place of business.
  • Ordinance or law provides coverage to rebuild or repair the building in compliance with the most recent local building codes.

Best Agency to Work For

Cleary Insurance Believes in Embracing Risk

by Elizabeth Blosfield


When William J. Cleary III and his father, William J. Cleary Jr., decided to take a risk 25 years ago, Cleary Insurance, a Boston, Mass., based insurance agency, was born with just four other employees.

Its team of employees has grown nearly six times its original size and represents 42 different insurance companies today. Now, the firm strives to encourage its clients to embrace risk as well.

“I see Cleary Insurance continuing to grow within our current model, encouraging our clients to embrace risk, to live their lives knowing that we are providing them with the best advice and coverage options available,” President William J. Cleary III said. “We want to protect our clients and manage their risks so that they will grow and go forward with us.”

An appetite for risk and a collaborative culture help to set Cleary Insurance apart from its competition and earned it this year’s Best Agency to Work For – East Gold award. More than half of its 25 employees nominated the firm through an online survey, emphasizing the agency’s client-focused approach as one reason it stands out above the rest. By doing the right thing for clients, the needs of the agency are naturally met, one employee wrote in the survey.

“I’m continually impressed at management’s and the owner’s natural reactions to step back and focus on doing the right thing,” the employee wrote. “The conversation from the top is always about what’s right for the customer, what’s right for our role as agents, and that often seamlessly falls into line with what’s right for our agency.”

In addition to serving clients individually, the firm seeks to give back to its community as a whole through volunteering, employees stated in the survey. Each year, the agency selects a charity to volunteer with for a day. This year, the agency volunteered with Cradles to Crayons, a non-profit organization that provides children living in homeless or low-income situations with needed items. “It really feels like a change is being made in the community,” one employee wrote about the volunteer work.

The secret to Cleary Insurance’s success in serving clients, however, are its employees, Cleary said. It may seem as though independence and teamwork are opposites, but the firm strives to make the two work hand-in-hand by building a strong team to serve clients and the community on the outside while encouraging a culture of independence within the agency.

“We ask our folks to think for themselves, act independently and create the culture here at Cleary Insurance,” Cleary said. “I think the structure, or lack thereof, is what truly sets us apart. We try to hire the best possible people, keep them highly educated within the insurance world and then just get out of their way so that they can do their jobs as they see fit.”

This strategy seems to be working, as one of the original four employees at the agency’s onset is still with the firm today, while two others remained until retirement, Cleary said. Through a business model that allows its staff to develop professionally without micromanagement, the firm aims to encourage each employee to grow independently while remaining part of a team, he added.

“I want to work hard for this organization because it feels like family,” one employee said.

Indeed, the motto that appears on the front page of the Cleary Insurance website says that “life is worth the risk” — a statement that appears to reflect the spirit of the family that started it all 25 years ago.

“Like many of my insurance colleagues, I entered into the insurance world due to a family connection, but I have stayed in the industry because I love what I do,” Cleary said. “The fact that the staff here nominated our firm for this award is a tremendous source of personal pride, but mostly it is a reflection on the people that work here.”Click here to download article.

Insurance for Your College Student

Renters Insurance
So you’ve kicked off your kid’s college career with a new laptop and some other expensive high-tech gadgets. Now it’s time to follow up to ensure his or her property is safe in the event of theft, fire or other mishap.

In general, protecting a student’s personal property boils down to a simple rule: If your child is living on campus and going to school full time, your homeowners, renters or condo insurance policy (including liability protection) will cover his or her gear. But if he or she moves off campus, your policy most likely won’t protect his or her assets. Ditto if your students starts taking fewer classes.

Kids who change their permanent home addresses on such legal documents as driver’s licenses or tax returns (say, to qualify for in-state tuition at a public university) are no longer considered official parts of your household. They’ll need their own renters insurance.  Students who rent a shared apartment will need insurance, too, but be aware that they might have a tough time getting it. That’s because insurers might not sell a policy to a student unless everyone in the household has his or her own policy, too.

Auto coverage
Congratulations if your college student left the car at home. You might have some savings coming to you. But to get it, your student’s school needs to be at least 100 miles away. If you meet this criterion, give your insurer a call. You’ll generally receive about 10 percent off your premium.

Did your child leave with the car?   It is important to call your insurance broker and discuss your options.  The insurance carrier could conceivably raise your rates if the vehicle’s moved to a different location.