Add it Up

Congratulations if you’ve already filed your 2017 tax returns. Better buckle up; your 2018 return could be full of surprises. As you’ve probably heard by now, the new federal tax law features different tax brackets, deductions, calculations, exemptions and more.

“The rules have all changed,” says Peter LaForte, CPA, the owner of LaForte Financial Services in Stamford and Fairfield. “For people with high state and local taxes, it’s not going to be pretty. We’re going to get clobbered.” Now is the time, he says, to step back and crunch some numbers for 2018. Ask yourself, “Is what I’ve done the best way forward?”

You don’t have to do this alone. That’s what your trusty accountant is for. If you have one, that is. Many financially savvy Fairfield County residents pride themselves in DIY money management, serving as their own financial planners or tax-filers. Others rely on that same family friend who’s been filing their taxes for years. But these might not be the smartest paths to prudent post-tax-reform planning. It’s time for a reckoning.

Ask LaForte what makes a good accountant and he’ll set you straight. “The question is, what makes a good accountant for you? The answer depends on your needs.”

Accounting is a wide-ranging field, with experts in estate planning, small business, audits, corporate work and more. “Hopefully, the CPA knows what he can and can’t do. It’s like choosing the right doctor.”

Start with a recommendation. Ask your friends, family members, financial adviser, banker, attorney or colleagues. Then check the provider’s credentials. “Are they a CPA? Do they maintain their license? You can do this easily online through the Connecticut Board of Accountancy’s e-license lookup. If not, it doesn’t mean they’re bad. But you want to know.”

Don’t cold-call these folks just yet; give them a few weeks to recover after the April 15 filing deadline. Come May, call a few and see who gets back to you. LaForte says his new clients commonly complain that their former accountant went MIA after tax season and didn’t reemerge until fall. “Or they say, ‘I’m not important enough for him. I’m not big enough for him. He doesn’t answer my phone calls.’”

Ask to visit. “Accounting is very personal. Meet him or her in person. Get a feeling of the vibe of the office—some places are complete chaos with huge piles of stuff everywhere!”

Bring your tax returns from the previous two or three years, and ask questions that relate to your situation. If you’re self-employed or have a small business, if you have a lot of capital gains and losses, if you have rental property—all of these factors can tax the wrong accountant. The right one, though, will be eager to help you improve your bottom line. “If you don’t feel comfortable that this person understands you and your needs, keep looking,” LaForte says.

Understand how much the service will cost you, and what you’ll get in return.

Whatever you do, don’t assume tax reform won’t affect you. “The first person I did a projection for…went from itemized deductions in the $70,000-ish range to $24,000, the new standard deduction,” LaForte says. “We have multiple moving parts here. You have to piece it together.”


“Did you get the service, time and advice you needed? Did someone help educate you? Did they seem happy to work with you? Did they make themselves available? Were they competent?”“Did you get the service, time and advice you needed? Did someone help educate you? Did they seem happy to work with you? Did they make themselves available? Were they competent?”



The total deduction for state and local taxes (property, income, sales, etc.) is now capped at $10,000 annually.

The standard deduction increases to $12,000 for singles and $24,000 for married couples filing jointly, up from $6,350 and $12,700.


Mortgage interest deduction is capped at $750,000, versus $1 million in 2017.


529 Savings Plans
These plans can be used to pay for kindergarten through high school, in addition to college and grad school.



Steady On

Going down? As you step into the elevator, CNBC’s market report greets you over the speakers. There’s another crisis in Washington and stocks are tumbling. This is not what you need to hear. Work is unpredictable, your kids’ tuition is rising, your home renovation is over budget…Sell, sell! your inner broker commands.

Or maybe it’s happy hour, and you just bought your buddy another bourbon. He’s telling you about his investment portfolio. His Amazon stock rose $200 per share from January through May. “Dude, you should buy some,” he says. “Don’t you buy, like, everything from them?” You do! You do! Buy, buy! your inner broker orders.

The emotional push and pull of the market makes you feel like you’re doing everything right, until it seems like you’re doing everything wrong. What should you do? Probably nothing.

“Market news seems to create an emotion —I need to sell everything or I need to buy a lot—but that’s when it tends not to be the right time,” says Eric Meerman, a certified financial planner and the vice president of Palisades Hudson Financial Group in Stamford. “If you’ve attempted to avoid the downturn, when do you get back in? You may delay and miss the upside.”

Meerman has witnessed the burst of the dot-com bubble, the mortgage crisis, the recession—only to see the market rebound with gusto within five to seven years. While many brokers respond to major movements with a flurry of activity, Meerman says that this costs money in the long term, perhaps two to three percent each year in returns. His advice is to stay the course over time.

“People think there’s a way to play the market or that you can outsmart it and get in and get out. But the secret is to have a plan and stick to it, not change it based on your emotions or the relative level of the market. Rebalance depending on your asset allocation,” he says. “A lot of people, left to their own financial devices, don’t do well.”

He suggests a realistic investment approach created to meet your goals over time, then maintain it—a nudge here, a rebalance there—to stay on track. The only reason the approach should change is because of a lifestyle change, for example, if you get divorced, have a child or lose a job. Volatility should be built into the plan.

“We like to coach people to be rational and unemotional in times of great stress, and to calm them down and not take too much risk in times of euphoria. Over the long term, the market is going to continue to trend upwards as generations go by.”

Similarly, he doesn’t believe that investors should chase returns outside of the market unless they are familiar with the territory. Take investment real estate. “If you’re a busy person who doesn’t have any real hands-on skill with house maintenance,” he says, “it’s probably not a good idea, unless you’re a contractor or have an aptitude and desire to be a landlord.”

Same goes for hedge funds. While it may sound hip to tell your pals that your money is in a hedge fund, “make sure you understand the cost. The fees associated with them can be very high, so the net return can be suboptimal. The vast majority of hedge funds don’t perform in line with the market. If you’re looking at a single-digit return with outsized risks, what’s the point?”



Take Cover

Photograph: ©

Ah, summertime. The perfect time of year for frolicking in the neighbor’s pool, zipping around Long Island Sound in your boat, traveling with the family near and far—and all the mishaps, accidents and lawsuits that follow. This year, when you uncover the patio furniture or spiff up the grill, it might be time to dig out and examine your insurance policy as well.

Don’t expect a beach read. “They’re not fun,” says insurance expert Barbara Stevens. “First off, there’s the policy. Then there’s exclusions, and there’s exclusions to the exclusions.”
That fine print, though, can hold the key to your financial peace of mind.

Stevens, who is the president of Rand Insurance in Greenwich and a self-described “belt and suspenders” kind of gal, preaches the power of protection from experience. Her clients’ claims have included everything from a $10 million home lost to a fire, to a flooded and frozen pool house complete with “stalactites and stalagmites,” to a horse that ate a precious stone out of the ring on someone’s finger. (Crisis—and claim—averted: The stone was digested and, er, expelled.)

Homeowners with a pool have the largest exposure in summertime, Stevens says. A close second: dog bites. “The exposure of having a dog, any dog, is enormous.” Nipping at a toddler’s pacifier, for example, can spell l-a-w-s-u-i-t. One bite, Stevens says, “can be a $400,000 problem. Everyone assumes that because they have an umbrella policy, they’re covered for everything. They’re not.”

Whether you go jet-skiing in the Caribbean or Junior heads to Ecuador for a service trip, chances are you’ll have to sign a form that says you won’t sue if there’s a problem. It doesn’t say somebody won’t sue you, though. And what if you need to be airlifted out after an accident? Who will pay?

Even summer activities that seem laudable deserve a second or third look, insurance-wise: To earn spending money, Junior delivers pizzas with the family’s station car or drives your Lexus for Uber. Who pays if there’s an accident? Junior serves as the designated driver and an underinsured or uninsured driver hits the car and people need long-term care. Who’s responsible? You loan your kayak to the neighbor’s kid, and there’s an accident with a motor boat; or you go on vacation, rent out your house on Airbnb and someone trips on Junior’s skateboard. Where does the liability lay? A trampoline, a tree house, a Rottweiler, a Jet Ski, a nanny falls, a son or daughter gets in a brawl at school, a weekend bike ride, a drone crashes into a child on the playground, the carpool to camp, even your service on the board of directors…can all leave you vulnerable.

“The biggest exposure a person has is a lawsuit. This can be the most financially damaging,” Stevens says. You know your exposure if you total your car or lose a piece of jewelry, but your assets can evaporate with one suit. “Anyone has the right to sue whomever they choose. They can sue the board, the venue, the person who was involved or not involved. I can be sitting home and my name shows up in a suit,” Stevens says. “You have no control over whether an organization or a neighbor pays their insurance, and you have no control over their limits. It’s really important for us to tell people what they are covered for, but, more important, what they’re not covered for.”

Rained-out weekend? Here’s a worthwhile activity for bright days ahead.

1  Take your smartphone and walk around your house with the video camera running.

2  Note everything of value, including items in the attic, basement and garage. Include items like the china you bought in Italy, the treadmill, your TiVo box and tools.

3  After you finish, play back the video and write down a list and add estimated values or replacement costs.

4  Share it with your insurance agent to make sure that what you care about is covered. Be sure to tell your agent about home additions, renovations and landscaping.

SPEAK UP! Have a question for a local financial expert to address in this column? Send an email to



Money Matters

What’s your money story? From the time you were a tyke, the ways in which you and your loved ones dealt with money—who controlled it, who earned it, who spent it, who saved it, whether there was too much or too little—have shaped your money narrative. This storyline, says financial adviser Laurie Stefanowicz, serves as the backdrop for your relationship with money today. And if you’re a woman, Stefanowicz contends, the familiar plot can be holding you back from making new and improved money decisions.

“Women have a more personal relationship with money” than do men, who are “more in the moment,” says Stefanowicz, who is the senior vice president and managing partner at Catamount Wealth Management in Westport. Women want to anticipate the twists and turns of their financial life, to understand the specifics and details and, most important, to be able to predict how the story will turn out. They want to know whether they will be okay down the road.

Stefanowicz hears women’s money stories frequently during Catamount’s financial empowerment workshops for women. She says that many attendees come feeling powerless, perhaps on the heels of divorce, the death of a spouse, the loss of a job. They’re disappointed with their savings or investments; they feel they haven’t saved enough to pay college tuition or to fare well in retirement. Even a sudden windfall, like a bonus or an inheritance, may be causing anxiety.

To help women plot their outcome, Stefanowicz advises a little written reflection exercise. First, they should spell out what is motivating them to seek financial advice at the moment. Then, they should “define their relationship” with money. Catamount literature asks, “If your money were a person, would you be on friendly terms with him or her? Would the relationship be volatile? Is it a secure connection or an insecure one?”

Volatility in any story leads to exploring
risk-tolerance and goals, the antagonists in many money stories. How comfortable are you with exposing yourself to the risks that lurk in your quest to accumulate some magical amount of money before you retire? And what, exactly, is that number?

The ability to write your ending comes only with a thorough understanding of four critical elements: what you own, owe, earn and spend. “Usually people can figure out ‘the earn’ and ‘the own,’” Stefanowicz says. “Figuring out their assets and the spending takes awhile,” particularly for singles who used to be part of a couple in which one partner managed the money while the other assumed different responsibilities. “I had a situation with a younger couple where [all the money management was] electronic, and she didn’t know any of the passwords. He was diagnosed with cancer and died within a month. She didn’t know the accounts or what they had.”

Once you wrangle all of these subplots, crafting the ending of your new money narrative becomes easier. Take note: And they lived happily ever after (financially, anyway) does not stem from earning more money. “There are people who are millionaires who will not be okay,” Stefanowicz says. The happy ending occurs once ‘the own’ and ‘the earn,’ triumph over ‘the owe’ and ‘the spend.’

Financial Fitness for Couples

The average couple in Fairfield County with half a million dollars in assets meets with a financial adviser once or twice a year. What happens in between? Not much—and that’s when problems arise.

Talk. Devote thirty minutes weekly or monthly to a money conversation. On track to meet your goals? Anything nudge you off course? Lost a job or encountered the unexpected? Need to take action?

Will. Ensure that you have a current will, especially if you have children or if your marital status changes.

Ask. Each should keep learning and asking questions. There are a lot of resources. Educate yourself. Show up at a seminar. When you’re having a conversation with your financial
planner, go together and ask questions.

Double-check. You get second opinions for everything else. Why not for your finances as well?

SPEAK UP! Have a question for a local financial expert to address in this column? Send an email to

Paying for Keeps

An annual reckoning with the tax man can trigger a meeting with the financial planner and the estate attorney. But the insurance agent? Alas, for many people that doesn’t happen until it’s too late, when accumulated wealth and assets can already be lost or damaged.

Stephen Schram wants to change that. An insurance specialist in Darien with Gowrie Group, he knows from experience that many homeowners believe their property and nest egg are adequately protected, only to learn when disaster strikes that they’re not.

According to Gowrie’s findings, seven out of ten luxury homes are not insured to value, 86 percent of valuables such as jewels and artwork are underinsured, and up to 70 percent of cyber-security threats go unprotected. The problems tend to occur because when you start out, life is simple, insurance-wise, but gets more complicated as your income grows and you acquire more expensive assets, such as second homes or boats. In the meantime, your exposure to liability grows, because of teen drivers, domestic help and the like.

“I absolutely believe that many people in Fairfield County are underinsured or poorly insured,” Schram says. “The more you have, the more susceptible you are to risks.”

He explains what he calls a circle of risk management: “The personal banker handles the portfolio. There’s tax help. And legal help. Together they provide eight-tenths of it. Without the other two tenths, without the right risk management, the circle isn’t connected.” In a nutshell, risk management in property and casualty insurance means knowing the value of how much you have, understanding how much you stand to lose and being aware of your deductible and replacement variables.

Today’s potential disasters go far beyond a simple car accident, house burglary or flooded basement. Now family-risk management includes protection from cyber crime, data hacking, social media exposure, domestic employee lawsuits, nonprofit board protection, global travel and kidnappings.

Many homeowners in the area are aware of this, yet fail to revisit their coverage beyond homeowner’s insurance, car insurance and that $1 million umbrella policy they bought, just in case, when they first obtained insurance. Today their net worth may well exceed $10 million—money that can go to a claimant without proper coverage in place. They may also fail to possess replacement insurance, only to learn too late that their totaled $60,000 car will only net $45,000 in claims paid, for example.

Schram says people these days should seek out an insurance agent who serves as a proactive consultant willing and able to manage your family’s exposure to risk. That agent should interview your family to determine your lifestyle, risks and needs, then obtain quotes from different insurance companies to cover those needs, then advise you on price, service and coverage under each policy. When it comes time to make a claim, that agent should shepherd the process.

“For a high-net-worth individual who’s got a lot of stuff, you can imagine how complex that can get. If somebody’s not on top of it, you could be exposed,” he says.


Many affluent customers mistakenly opt for a lower deductible on their homeowners’ policy, Schram says. What they may not realize is that allowing for a higher deductible can save thousands of dollars in the long run.

$5 Million House
Raise a $2K deductible to $10K

You are exposed for that $8,000 in potential losses each year

Savings: $3,000/yr. in premium costs.

In three years, you have essentially self-insured your deductible. From then on, you’re saving $3,000 per year (or $30,000 in ten years)




Above: Photo by

You’ve finally reached the stock and bond levels and asset mix you’ve been aiming for in your investment accounts. What a wonderful situation to find yourself in. Or is it? “Once you get past your traditional stock and bond and cash portfolio and you have enough of that, or you figure the market maybe is rich after a six-year bull run, you ask, ‘OK, what do I do now?’ ” says Michael J. Freeburg, founding member of Greenwich Wealth Management. What, indeed? Many high-net-worth investors in Fairfield County turn to hedge funds as the next step. But there are a host of other alternative investments that should not be overlooked—and, indeed, could be considered, instead of hedge funds, Freeburg and others argue.

Alternatives include most anything outside of stocks, bonds or cash—think real estate, precious metals, private equity, venture capital, commodities, even coins, cars, wine or artwork, in addition to hedge funds, which can invest in these areas as well. They don’t often come up in the conversation with big-bank brokers and their ilk because most of these investments don’t reward brokers with a commission, nor do their firms make money on the transactions.

Freeburg and his colleague Robert Emerson report that as their clients become more sophisticated and successful, so, too, do their interests in alternative investments. For example, at the request of one high-net-worth client, Freeburg visited Ukraine last year to investigate investment opportunities as the country’s stability was in flux. For other clients he has explored farm and ranchland ownership and management. Emerson devised an income-generating strategy full of volatile-stock buys, call spreads, sells and options for a client who was concerned about volatility in Greece. He helped another client set up a defined benefit plan that helped her salt away an extra $200,000 in retirement funds each year, saving her $70,000 in taxes annually. Emerson and Freeburg have connected art-collector clients with appraisers and dealers; same for wine and metals.

The goal is to help clients advance their financial literacy, play devil’s advocate when necessary and conduct research to help clients vet investments, where help may not exist otherwise. While many advisers don’t involve themselves in alternative investments because they don’t typically make money off of them, Freeburg and Emerson say clients should look for a more holistic relationship with advisers to reach their wide-ranging goals. For example, since the JOBS Act of 2012, which eased restrictions governing investments in small businesses, private lending and crowd-funding have been of interest to high-net-worth clientele in Fairfield County. The result is an almost Wild West–like environment in which lenders or brokers online boast of double-digit rewards to “accredited investors” (net worth exceeds $1 million, excluding residence, and earn at least $200,000 a year, or $300,000 with their spouse). Freeburg warns that many of these sites are plagued with “lax or uneven” underwriting, so his firm is putting together a fund that will invest in a basket of about fifty of these private loans.

As long as investors are accredited, consider putting some investments into alternatives, he says, adding, “Try to do it in as diversified a way as possible, so if there is an upset in one area, it is not going to be systemic.”


“I’m not even sure what a hedge fund is,” says Freeburg. “What’s the strategy? Is it
a bond hedge fund? Equity long? Equity short? I have found very few that actually hedge.” Emerson adds that hedge funds are lagging the S&P 500 in both down markets and up. Still, with more than $2 trillion in management, they must be doing something right.


  1. They can gain when the stock market tanks.
  2. Access to a range of alternative investments, thus improving diversification
  3. Possible big gains


  1. Possible big losses
  2. Expense. The typical fund charges a management fee of 1–2% of assets under management and 20% of profits.
  3. Largely unregulated and tend not to be transparent about investments.
  4. Not freely traded, so liquidity can be restricted.

Understand what role you want alternative investments, including hedge funds, to play in your portfolio—and do your homework before investing.