Martin J. Lombrano

Martin J. Lombrano

Martin J. Lombrano, AIF®, is a LPL Financial Advisor and PERSONAL FINANCIAL PLANNER™ (PFP) with over 20 years of experience in the financial planning field. Martin has served as the owner and president of his own financial planning firm in Irvine. In 2007, he joined Pence Wealth Management and LPL Financial. Martin has extensive experience in insurance, charitable giving, asset management, retirement planning, as well as growth and preservation of retirement assets. Martin has been honored numerous times as a top advisor within the independent brokerage and advisory community. He believes listening, trust, persistency and service are the foundation of lasting relationships and success. He can be reached by calling (949) 660-8777 or email martinj.lombrano@lpl.com. CA Insurance License # 0828215.

In the following estate planning Q & A, Martin J. Lombrano, AIF®, LPL Financial Advisor, addresses some of the frequently asked questions facing a surviving spouse or family member upon the death of their loved one.

Question: Upon the passing of a loved one, whom do I need to notify?

Answer: Every situation is unique, however notifying the following agencies and individuals is a key step after a loved one has passed and each is very important: Social Security Administration, deceased person’s employer or former employers, insurance companies, credit bureaus, credit card companies, mortgage companies, post office, utility providers, creditors.

Question: Do I have to file anything with the court?

Answer: After you have contacted the loved one’s attorney (if there is one) or at least spoken with an attorney or advisor experienced in estate or death administration, you should know which documents will be needed to be provided to the court if it is necessary for the decedent’s estate to go through probate court. Probate is a legal document and the legal process of administering the estate of a deceased person, resolving all claims and distributing the deceased person’s property under a will.

Question: Do I have to find the will right away?

Answer: Typically one of the first documents to find is the Will or Trust. The Trust in particular is a detailed legal document that specifies every detail of the deceased loved one’s estate and how it should be handled, who should be in charge of handling the Trust, and how and to whom the Trust assets should be distributed.

Question: What should I do with the Will or Trust when I find it?

Answer: Ideally, you will want to take the Will or Trust to the attorney who originally drew up the documents. But if that isn’t possible, then finding an attorney or advisor that specializes in estate administration is the best avenue to pursue. You will want a professional on your side that can help make this process as cost effective and timely as possible.

Question: Do I have to probate the Will? How long do I have to probate the Will?

Answer: Probate isn’t always necessary. If the deceased person owned assets in joint tenancy with someone else, or as community property with his or her spouse, or held their property in a Living Trust, those assets won’t need to go through probate. The same is true for assets held in a Revocable Living Trust and accounts for which a payable- on-death beneficiary has been named.
If probate is necessary, then it must be initiated by the executor of the Will. It’s typically a time consuming process which can last 12-24 months or more and can be very costly in executor’s, court’s and attorney’s fees. In general, it is best to plan ahead and avoid probate.

Question: What important documents will the attorney want to see?

Answer: In general, you, your attorney or advisor will need: death certificates, Wills and Trusts, insurance policies, credit card statements, investment accounts, bank accounts, mortgage statements, last two years of tax returns, marriage and birth certificates, an up to date credit report of the deceased and family member’s contact information.

Question: What if my loved one did not have a will? What do I do to settle his/her estate?

Answer: You can settle the loved one’s estate without having to go to probate court depending on the total value of their estate, and their ownership and beneficiary designations. If a probate is needed and there is a Will, then the named executor will typically initiate the probate court proceedings.

Question: How long does it take to settle an estate?

Answer: With a Trust, the typical estate can often be settled within a few months. With a Will, it generally takes 12-24 months, and often longer. Typically in California, if you own a home, are married, or have children, then you and your loved ones can benefit from having a Revocable Living Trust. Some of the benefits of a Trust are the avoidance of probate, your estate remains non-public information, and a Trust may substantially reduce costs and time to settle the estate.

Question: What actions can a person take now to make this entire process simpler and easier for those family or friends who will be guiding the estate administration?

Answer: Either on your own or with an advisor, begin by making a balance sheet, a list of all your assets (what you own) and all your liabilities (what you owe). Be as detailed as possible with names, accounts numbers, phone numbers etc. - for each entry. Make sure to review your beneficiaries on each account or asset you own including bank, retirement, pension, investment, insurance policies, and real estate to name a few. Most of all, have an up to date estate plan to help make this process simpler. If you have an estate plan in place, it should be reviewed every 3 years or with every major life event like birth, divorce, death, etc.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

1.Independence

When giving advice, your fiduciary works solely for you.

Working as your fiduciary, your advisor is obligated not to engage in any self-dealing or other conflicts of interest. In fulfilling his or her obligations and duties to you, your fiduciary should perform required due diligence prior to making recommendations. Thus, acting in a proactive manner on your behalf.

2. Education

Your fiduciary follows a duty of care.

Your fiduciary works for you, educating you on the different aspects of your financial plan and ensuring your understanding of how all the pieces fit together to create a sound plan. Your fiduciary promotes additional confidence in your financial future.

By keeping you informed of new recommendations, the impact of those recommendations, as well as disclosing all important information associated with those recommendations, a fiduciary helps remove unwanted surprises.

3. Competence

Fiduciaries are held to high standards when making recommendations for products and services.

In addition, prudent fiduciaries will often leverage subject matter experts by tapping an entire industry of knowledge, not just the offerings of one company. This seeks to ensure you receive advice and recommendations.

4. Integrity

Your fiduciary should place your needs and objectives at the forefront of all planning decisions.

The financial services industry is plagued with high- commission products, company incentives and production contests. Your fiduciary is obligated to provide honest advice, based solely on your situation, and not to be swayed by outside pressures.

Even the most ethical advisors are faced with the dilemma of balancing recommendations that meet your needs, while also being paid appropriately. If your advisor works for another company, he or she may not have the option of recommending the most appropriate product for your situation. Instead, advisors may only be able to offer the products of the company they work for.

5. Communication

Your fiduciary keeps you informed.

Keeping you informed, as well as disclosing all important information associated with recommendations, helps minimize unwanted surprises, and helps to create the foundation for a healthy collaborative relationship.

6. Confidence

Competent fiduciaries can impart greater confidence!

However, imparting confidence is not enough to establish the fiduciary role. Only when that confidence is accepted by the client, is the fiduciary relationship established, causing dependence by the client and influence by the advisor.
Knowing that you have a fiduciary working for you should help provide confidence.

7. Trust

Your fiduciary’s duty to you is a highly scrutinized relationship in this industry.

Trust, once earned, is one of the highest honor any advisor can receive from a client. One of an advisor’s biggest challenges is telling his or her client what they need to hear... especially when the client does not want to hear it. Your fiduciary is committed to a code of ethics and has an obligation to give you straight answers, providing a strong foundation upon which to build trust.

Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.

Whatever “retirement” means to you, you’ll need to design a financial plan suited to your specific vision of the future.

Retirement used to conjure up images of lazy days spent in a rocking chair. Today’s retirement is very different. You might plan to open a business of your own. Or perhaps you’ll return to school for that degree you never had the chance to complete. So what does this redefined retirement mean to you? There is no one answer. In the coming decades, “retirement” will mean something different to each of us. Regardless of your decision, you’ll need to design a financial plan suited to your specific vision of the future.

Income Is Key

A good starting point might be to examine your sources of retirement income. If you pay attention to the financial press, you’ve probably come across at least a few commentators who speak in gloom-and-doom terms about the future for American retirees, decrying a lack of savings and warning of the imminent growth of the elderly population.

True, there is widespread concern about at least one traditional source of income for retirees -- Social Security. Under current conditions, Social Security funds could fall short of needs by 2033.1

This shift makes it even more important for individuals to understand their goals and have a well-thought-out financial plan that focuses on the key source of retirement income: personal savings and investments. Given the potential duration and changing nature of retirement, you may want to seek the assistance of a professional financial planner who can help you assess your needs and develop appropriate investment strategies.

To ensure that retirement lives up to your expectations, begin establishing your plan as early as possible and consider consulting with a professional.

As you move through the various stages of the new retirement, perhaps working at times and resting at others, your plan may require adjustments along the way. A professional advisor can help you monitor your plan and make changes when necessary. Among the factors you’ll need to consider:

TIME

You can project periods of retirement, reeducation, and full employment. Then concentrate on a plan to fund each of the separate periods. The number of years until you retire will influence the types of investments you include in your portfolio. If retirement is a short-term goal, investments that provide liquidity and help preserve your principal may be most suitable. On the other hand, if retirement is many years away, you may be able to include more aggressive investments in your portfolio.

INFLATION

While lower-risk fixed-income and money market investments may play an important role in your investment portfolio, if used alone they may leave you susceptible to the erosive effects of inflation. To help your portfolio keep pace with inflation, you may need to maintain some growth-oriented investments. Over the long-term, stocks have provided returns superior to other asset classes.2 But also keep in mind that stocks generally involve greater short-term volatility.

TAXES

Even after you retire, taxes will remain an important factor in your overall financial plan. If you return to work or open a business, for example, your tax bracket could change. In addition, should you move from one state to another, state or local taxes could affect your bottom line. Tax-advantaged investments, such as annuities and tax-free mutual funds, may be effective tools for meeting your retirement goals. Tax deferral offered by workplace plans -- such as 401(k) and 403(b) plans -- and IRAs may also help your retirement savings grow.

Prepare Today for the Retirement of Tomorrow

To ensure that retirement lives up to your expectations, begin establishing your plan as early as possible and consider consulting with a professional. With proper planning, you may be able to make your retirement whatever you want it to be.


© 2015 Wealth Management Systems Inc. All rights reserved.
1 Source: Social Security Administration, The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, July 2014.
2 Past performance is no guarantee of future results. Stock investing involves risk including loss of principal.
Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.

In the following estate planning Q & A, Martin J. Lombrano, AIF®, LPL Financial Advisor, addresses some of the frequently asked questions facing a surviving spouse or family member upon the death of their loved one.

Question: Upon the passing of a loved one, whom do I need to notify?

Answer: Every situation is unique, however notifying the following agencies and individuals is a key step after a loved one has passed and each is very important: Social Security Administration, deceased person’s employer or former employers, insurance companies, credit bureaus, credit card companies, mortgage companies, post office, utility providers, creditors.

Question: Do I have to file anything with the court?

Answer: After you have contacted the loved one’s attorney (if there is one) or at least spoken with an attorney or advisor experienced in estate or death administration, you should know which documents will be needed to be provided to the court if it is necessary for the decedent’s estate to go through probate court. Probate is a legal document and the legal process of administering the estate of a deceased person, resolving all claims and distributing the deceased person’s property under a will.

Question: Do I have to find the will right away?

Answer: Typically one of the first documents to find is the Will or Trust. The Trust in particular is a detailed legal document that specifies every detail of the deceased loved one’s estate and how it should be handled, who should be in charge of handling the Trust, and how and to whom the Trust assets should be distributed.

Question: What should I do with the Will or Trust when I find it?

Answer: Ideally, you will want to take the Will or Trust to the attorney who originally drew up the documents. But if that isn’t possible, then finding an attorney or advisor that specializes in estate administration is the best avenue to pursue. You will want a professional on your side that can help make this process as cost effective and timely as possible.

Question: Do I have to probate the Will? How long do I have to probate the Will?

Answer: Probate isn’t always necessary. If the deceased person owned assets in joint tenancy with someone else, or as community property with his or her spouse, or held their property in a Living Trust, those assets won’t need to go through probate. The same is true for assets held in a Revocable Living Trust and accounts for which a payable- on-death beneficiary has been named.
If probate is necessary, then it must be initiated by the executor of the Will. It’s typically a time consuming process which can last 12-24 months or more and can be very costly in executor’s, court’s and attorney’s fees. In general, it is best to plan ahead and avoid probate.

Question: What important documents will the attorney want to see?

Answer: In general, you, your attorney or advisor will need: death certificates, Wills and Trusts, insurance policies, credit card statements, investment accounts, bank accounts, mortgage statements, last two years of tax returns, marriage and birth certificates, an up to date credit report of the deceased and family member’s contact information.

Question: What if my loved one did not have a will? What do I do to settle his/her estate?

Answer: You can settle the loved one’s estate without having to go to probate court depending on the total value of their estate, and their ownership and beneficiary designations. If a probate is needed and there is a Will, then the named executor will typically initiate the probate court proceedings.

Question: How long does it take to settle an estate?

Answer: With a Trust, the typical estate can often be settled within a few months. With a Will, it generally takes 12-24 months, and often longer. Typically in California, if you own a home, are married, or have children, then you and your loved ones can benefit from having a Revocable Living Trust. Some of the benefits of a Trust are the avoidance of probate, your estate remains non-public information, and a Trust may substantially reduce costs and time to settle the estate.

Question: What actions can a person take now to make this entire process simpler and easier for those family or friends who will be guiding the estate administration?

Answer: Either on your own or with an advisor, begin by making a balance sheet, a list of all your assets (what you own) and all your liabilities (what you owe). Be as detailed as possible with names, accounts numbers, phone numbers etc. - for each entry. Make sure to review your beneficiaries on each account or asset you own including bank, retirement, pension, investment, insurance policies, and real estate to name a few. Most of all, have an up to date estate plan to help make this process simpler. If you have an estate plan in place, it should be reviewed every 3 years or with every major life event like birth, divorce, death, etc.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

A Q & A with Martin J. Lombrano, AIF®, LPL Financial Advisor

What are you going to do with the money you have saved for retirement? One option is an annuity - a long-term retirement contract that can give you regular income over the course of your retirement rather than forcing you to manage a large lump sum.

The big difference between the old-time corporate pension plan and an annuity is that the amount you receive is entirely dependent upon how much you put into the annuity.

Understanding how these tax-deferred investment choices work - and the differences between a fixed and variable annuity - can be a complicated proposition for the lay investor. In the following article, we asked Martin J. Lombrano, AIF (CA Lic. #0828215) to address commonly asked questions to help our readership navigate the available options in deciding if an annuity is the right investment vehicle for their individual retirement needs:

Q: What is an annuity?

Martin J. Lombrano: An annuity is a tax deferred investment contract issued by and insurance company. In general, an annuity will have an owner of the contract, an annuitant or person on whose life the annuity will be paid and lastly a beneficiary or the person who will receive funds at death.

Q: What does an annuity do?

MJL: “When you purchase an annuity contract, your annuity assets will accumulate tax deferred until you start taking withdrawals in retirement. Distributions of earnings are taxed as ordinary income. Withdrawals taken prior to age 59 may be subject to a 10% federal income tax penalty.

Q: What kinds of annuities are there?

MJL: Annuities come in a few different varieties. The two main categories are fixed annuity and variable annuity. A fixed annuity may pay a fixed interest rate for a certain period of time and often times the interest rate is set at the beginning of the annuity contract period.

Q: Is it a good idea to buy annuities for my IRA or qualified plan?

MJL: Annuities for IRA or qualified accounts can be a good planning tool depending on the clients risk tolerance, time horizon and need for income. Since an annuity is already a tax deferred investment contract, IRA money inside of an annuity gains no tax advantages. However the annuity contract may have other investment and/or income benefits.

Q: Are there fees associated with a fixed annuity?

MJL: Yes. Most fees and expenses of a fixed annuity are factored into the stated annual percentage rate. Some fixed annuities may assess an annual contract fee. Be sure to read the contract carefully prior to making any financial decision.

Q: How long will I be able to receive income from an annuity?

MJL: Income from an annuity can be guaranteed by the insurance company for your entire life or for different periods of time the owner may pick when setting up income from the annuity as set forth in the contract. Guarantees are based on the claims paying ability of the issuing company.

Q: What is the primary difference between a qualified and a non-qualified annuity?

MJL: A qualified annuity is a contract funded with qualified or pre-tax money which has been deducted from current income. A non-qualified annuity is funded with after-tax money meaning no tax deduction has been taken on the money put into the contract

Q: Why are annuities issued by life insurance companies?

MJL: Annuities are issued by life insurance companies because of the fact they may offer a death benefit to a beneficiary of a contract or guarantee a lifetime income to the owner of an annuity contract.

Q: What is the primary difference between annuities and life insurance?

MJL: An annuity will generally payout at death the account value, a stepped-up death benefit value or the original principal deposited less any withdrawals prior to death of an annuitant. Life insurance pays the value of the policy at the time of your death.

Q: What primary factors influence annuity income?

MJL: Depending upon the clients need for income, how long they may want income to be paid out and the type of annuity they own all influence annuity income. Furthermore, annuities are generally considered income producing investments.

Q: Is an annuity appropriate if I plan to leave the money to my heirs?

MJL: Annuities are generally best used for income generating purposes and may not be ideal to leave to heirs or for legacy purposes. In my experience when the annuity owner does not use the contract for income and leaves it to the heirs it may create tax problem for the heirs. There may be ways to avoid this after death in the case of a non-qualified annuity but each situation is different and requires an specific expertise in annuity contracts.

Q: What tax must my beneficiaries or heirs pay if my annuity continues after my death?

MJL: In general, annuities adhere to the LIFO or Last In First Out method of accounting which generally means any gains in the annuity contract will come out first and be taxed as ordinary income as opposed to capital gain tax. There may be an opportunity to get partial tax advantaged income or death benefits if the right annuity planning is done. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

This material contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, contract your insurance agent. This article is intended to assist in educating you about insurance generally and not to provide personal service. They may not take into account your personal characteristics such as budget, assets, risk tolerance, family situation or activities which may affect the type of insurance that would be right for you. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information. Please also ensure your biographical and broker/dealer information is here. Example: Martin Lombrano is a registered representative with, and securities offered through LPL Financial, Member FINRA/SIPC. or, from your website... Martin Lombrano is a Registered Representatives with, and securities and Advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA & SIPC. Financial Planning offered through Pence Wealth Management, a Registered Investment Advisor and separate entity from LPL Financial.

Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor. Member.

Fixed annuities are long-term investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply.
Variable Annuities are suitable for long-term investing, such as retirement investing. Withdrawals prior to age 59 ½ may be subject to tax penalties and surrender charges may apply. Variable annuities are subject to market risk and may lose value.