What You Need to Know About Money Market Reform



Money Market Reform went into effect on October 14, 2016. Do you know if your plan or your investments are affected?



Money market funds are open-ended mutual funds that invest in short-term debt securities such as US Treasury bills and commercial paper. They are widely accepted as a “safe investment” and are highly liquid investments. Money market funds seek a stable net asset value (NAV) of $1.00.

Money Market Reform, formally known as Rule 2a-7, is a law created by The Securities and Exchange Commission (SEC). These changes were enacted to protect money market funds from a “run” if there’s another crisis like we saw in 2008.



The SEC’s amendments address three major topics:

  1. Categorizing money market funds
  2. Requiring a floating Net Asset Value (NAV) for institutional money market funds
  3. Allowing the imposition of liquidity fees and redemption gates in certain circumstances



 The SEC broke down money market funds into three categories.


Retail money market funds:

 These are funds with policies reasonably designed to limit its investors solely to “natural persons” or individuals.


Institutional money market funds:

 These are funds designed for beneficial owners who are not “natural persons” or individuals, but entities such as corporations, partnerships, governments, or fiduciaries. These funds require high minimum investments.


Government money market funds:

 These are funds with 99.5% of its assets invested in cash, US government securities, and/or repurchase agreements that are “collateralized fully” by cash or US government securities.



Retail and government money market funds can use the amortized cost method or penny-rounding method when calculating the money market fund NAV.

Non-retail money market funds are now required to use a four-decimal NAV. The non-retail funds will float based on the four decimal NAV.



Money market funds are now required to maintain 30% of their total assets in weekly liquid assets. This means that 30% of the assets must be in investments that can be converted into cash within five business days.

Liquidity fees are an additional expense when taking money out of the money market fund. There are two reasons why a liquidity fee can be imposed.

  1. If the fund does not meet the 30% mark, the mutual fund board can impose a liquidity fee of up to 2% if it’s in the best interest for the fund.
  2. If weekly liquid assets are less than 10% of the fund’s total assets, an automatic liquidity fee of 1% is imposed, though it can be up to 2% max. The board can lift this at any time and will automatically stop when the fund reaches the mandated 30% mark.

Redemption gates are temporary suspensions on redemptions from the fund. A redemption gate can be triggered if the fund does not meet the 30% mark. There are two limitations to redemption gates:

  1. This gate can only be imposed for the shorter of 10 days or until the weekly liquid asset level returns to at least 30%
  2. Can only be used for up to 10 days during any rolling 90 day period

Redemption gates can be lifted by the mutual fund board at any time.



If you have not reviewed your plan or your investments for money market funds yet, now is the time to do it. Be aware of the investments on your plan or your portfolio. If you have any questions, be sure to contact the advisor on your retirement plan. If you want to know more about money market reform, contact us!

Digital Archiving Enters New Realms

Purchasing life insurance policies, drafting a will or an estate plan and securing your family’s financial well-being in the event you pass are some of the smartest things you can do. Nobody likes confronting the harsh truth that we won’t always be around to provide for our loved ones, but it is a fate you can protect against with proper planning and guidance. But what about everything else? Account numbers and passwords to pay bills, the deed to the house, keys to the safe deposit box, or the actual will itself, if these items cannot be located it makes life for your loved ones a little more challenging after you’re gone.

Everplans, a start-up company co-founded by Abby Schneiderman, has developed a digital archiving system to safeguard against these overlooked details. Everything from contact information for the gardener, to directions on how to care for pets, to treasured family recipes passed down for generations, all this “mundane” information, that seems to slip through the cracks when planning for life-after-death of a loved one, is gathered and stored in an online archive. Not to forget about all of the important materials, which are stored in the archives as well, such as copies of your will, health derivatives, beneficiaries and power of attorney. The client decides the amount and type of date collected so it can be as abundant or scarce as they wish.

The whole idea behind this product is making pertinent information readily accessible to the client, advisor and eventually deputy – the person you designate access to your archive – once you pass. It puts everything in one organized place, eliminating the stress and run around.


For a more comprehensive understanding of the product and the need for it, visit CNBC.

Financial Impacts of Same-Sex Marriage

In light of the recent Supreme Court decision, Obergefell v. Hodges, ruling that same-sex marriages be granted and recognized at the federal and all state levels, big implications can be taking effect on financial and life insurance services.

Previously, in 2013, the Court ruled same-sex marriages be recognized federally, however, each state was still sovereign in granting whether same-sex marriage be legal in said state. This new ruling, now giving all same-sex couples nationwide the opportunity to marry, is a huge progress for those who were denied certain financial and work place benefits. Same-sex couples who are not yet legally married will receive all the same benefits as hetero-sex couples but they will also incur all the not so glamourous consequences as well. Financial services professionals are encouraged to advise these couples of the pros and cons of marriage from a legal and financial standpoint. Intentions are not to discourage same-sex couple from marriage, but rather to exercise due diligence by presenting both sides of the coin. Below is a list of rights same-sex married couples will be granted.

  • Unlimited marital deduction for Federal (and possibly state) estate tax planning
  • Spousal and survivor benefits for Social Security
  • Married filing jointly status for Federal (and possibly state) income tax planning
  • State spousal property rights during lifetime (e.g. – community property) or after death (e.g. – election of spousal share
  • Spilt joint gift election for Federal gift tax purposes
  • ERISA protection as a spouse under pension plans
  • Other spousal rights under employer-sponsored benefit plans (e.g. – health insurance)
  • Survivorship insurance


One advantage of marrying is the ability to file jointly on income taxes. However, this could be disguised as a benefit because combining incomes can put you into a higher tax bracket. Additionally, if there are children involved, taxes will not be as forgiving filing jointly as it be would filing single and head of household. On the upside, same-sex couples will enjoy the unlimited gift tax between each other, tax free property via survivorship, rollover IRA’s, social security benefits, as well as health insurance and even visitation and information rights in a hospital setting. Many of these new tax benefits will impact life insurance policies, estate planning, and retirement planning. Your advisor will be able to breakdown the logistics for you.

Same-sex couples should education themselves on the implications of marriage and decide if it fits into their financial plan. It is important to note that these are the same implications for hetero-sex couples as well; therefore it is good practice for all couples to review and align their financials before marriage.

Have you reviewed your policy beneficiary recently?

On March 15, 2015, a New Jersey higher court ruled on a life insurance beneficiary case, Evanisa S. Fox v. Lincoln Financial Group and Mary Ellen Scarphone, in favor of the defendant based on lack of compliance to properly change the beneficiary of the insurer’s policy.

Evanisa, a Brazilian native, married Michael in July 2012 and shortly after he filed for both an I-30 petition for US citizen sponsorship and I-864 Affidavit for support agreeing to support her 125% above the poverty level. What Michael ignorantly neglected to do was change his life insurance beneficiary from his sister, Mary Ellen Scarphone, to his wife. As any drama would unfold, Michael unexpectedly died in a work-related accident a few months after he married Evanisa but just shy of her receiving US citizenship. Prior to Michael’s death, he failed to submit a change of beneficiary form to Lincoln Financial (his provider) or take any sufficient action to name Evanisa as his new beneficiary.

Both Evanisa and Mary Ellen applied for Michael’s life insurance proceeds and since he never changed the beneficiary, his sister, Mary Ellen, was rightfully awarded the policy claim. Evanisa filed a case against Mary Ellen and Lincoln Financial, stating she had rights to his life insurance policy urging courts to adopt a “bright-line” rule. She claimed that her marriage to Michael created a presumptive right to his life insurance benefits, just as a divorce would revoke those rights. Evanisa was ignoring the fact that life insurance policies are not as easily shared as they are discontinued. Only under very limited circumstances would a designated beneficiary, in this case his sister, be denied proceeds and granted to another. There are some states that do allow a “substantial compliance” in changing beneficiaries, meaning even though the insurer did not complete the process to change beneficiaries, they made every reasonable effort to do so.

Two criteria must be met to be considered substantially compliant:

  1. a clear expression of the insured’s intention to change beneficiaries
  2. a concrete attempt by the insured to carry out his intention as far as was reasonably in his power, i.e., undertaking positive action which is for all practical purposes similar to the action required by the change of beneficiary provisions of the policy.
    1. a. Verbal intent to change is NOT valid!

In this case, Michael did not meet either of those criteria; therefore, Mary Ellen was the lawful recipient of his life insurance policy.

In her final attempt, Evanisa tried to defend her case by using the I-30 and I-864 Forms as evidence to Michael supporting her and justifying the life insurance inheritance. This also did not hold up in court because the I-864 Affidavit for Support explicitly states at the time of application that the support is terminated if death occurs. Therefore, when Michael died, his estate was no longer responsible for supporting Evanisa.

This case is a reminder to continuously review and update your policies in compliance to your insurance company’s specified procedures. Marriage and divorce are two major events in a client’s life that unquestionably facilitate a policy review. Not to forget about the annual reviews that should occur at your policy anniversary date. Accordingly, agents have a due care obligation to inform and remind clients about beneficiary rules and other policy requirements. It is imperative to not become lazy with your policies, always telling yourself you’ll get around to it. If changes in your policy are desired, act now! Be sure to follow all procedures and compliance, first and foremost, putting it in writing. Contact your agent and get the ball rolling before it’s too late.

If you have a policy with us and are unsure about who your beneficiary is or just have questions regarding the process, give us a call. 301-656-0660.

Estate Planning of the Rich and Famous

Have you ever wondered what happens to the estates of the wealthy when they pass? Most would believe that they would protect their assets, in the form of a will, so their families and loved ones could benefit in the future. But it is not always that easy to do and requires meticulous language and perfectly drawn out instructions.

Unfortunately, for these familiar faces, their poor planning led to hardships and long disputes for their families to deal with long after their passing. Some of their stories seem bazaar, others are classic mistakes many people make when drafting a will and for one, there was never any will constructed in the first place. It is important to learn from these mistakes and make sure you have a full proof concise plan in place. Please take the time to read each of their stories below to ensure your legacy is protected for your loved ones in the future.


  • Chris KyleAmerican Sniper
  • Robin WilliamsComedian/actor
  • Mickey RooneyActor
  • Casey KasemRadio personality
  • Ernie BanksProfessional baseball player
  • Tom ClancyAuthor
  • Jim MorrisonRockstar
  • Ravi KumraSilicon Valley venture capitalist
  • Richard Mellon ScaifeOwner of Pittsburgh Tribune Review

Read here.

Passion-based Marketing

The Wealth Channel Magazine recently published an article by Scott Greenberg titled Passion-based Marketing. In the article, Scott explains how you can turn your passion for something into a lucrative business opportunity. For example, Scott used his love for wine and hockey to connect with people on a personal level, building long lasting friendships with these individuals. With time, these well-established personal relationships grew into successful trusting business relationships, and vice versa.

In a business where your success is based on your clients, Scott realized he needed to find a better way to grow his clientele. That’s when he decided to drop the old school way of cold calling and try something more innovative and enjoyable – sharing his interests with others and finding that common ground to foster a relationship. Scott emphasizes that when you possess a passion for something, sharing that love and knowledge for it makes the marketing side of business relatively fun and effortless. Marketing becomes more of an engaging conversation rather than a pushy sales call. He credits the majority of his success to using this technique, stating that for him it has become a profession of turning friends into clients, clients into friends, and helping those friends solve problems. In the end it’s a win-win.

To get a deeper understanding of Scott’s “cutting edge” passion-based marketing technique, click here to read the full article.

Rob Lowe and Maria Shriver Talk About LTC

In the newest “Conversations Matter” video, Rob Lowe and Maria Shriver sit down and discuss long-term care. Maria Shriver talks about her personal experiences with her aging parents and how her generation is the one igniting this important conversation. Rob Lowe sides with Maria Shriver by promoting the need to take ownership instead of waiting to react to an event.

In the video, Maria Shriver asks, “What is the answer to the talk that we all need to have?” and she answers herself, “Information, inspriation, ignite, action. And that’s how you make an impact.”

They echo reasons why we believe long-term care is so important.

To discuss whether or not long-term care is right for you, contact Keith Eig.

Life Insurance After A Divorce

Friend of Greenberg, Wexler & Eig, Maurice Offit of Offit Kurman, recently wrote a blog post outlining ways to make sure that people who have divorced and remarried ensure that their new spouse and the children from their first marriage each receive a proper inheritance.

We are thrilled to see him point out that life insurance is often the cleanest and easiest way to accomplish this is using life insurance.  It is the viewpoint of GWE that life insurance is something that is often overlooked or not complete thought through in divorce planning and planning for mixed families.

If you or someone you know is going through a divorce or getting remarried, please give us a call.

In the meantime, we hope you enjoy Maurice’s excellent post.

Presidential Estate Planning

Earlier this week, on June 18, the Washington Post published an article on an estate planning technique used by Bill and Hillary Clinton. The article described the use of a Qualified Personal Residence Trust (QPRT), which is an “estate reduction and freeze” technique. Local estate planning attorney (and our friend) Alban Salaman was quoted in the article and helped explain this planning technique, which is used to reduce estate taxes.

In summary, this strategy allows the donors to give away the home at its current value, but they still get to live there for a fixed number of years. If the donors survive the fixed number of years, the home will pass free of estate and gift taxes to the beneficiaries of the trust. If the donors die during the term, the value of the residence the day of their death reverts back to the estate.

To minimize the tax consequences in the event of a reversion, it makes sense to purchase term life insurance within the QPRT on the donors as a hedging strategy. Should they die during the term, the QPRT would have assets to purchase the property from the estate and inject the estate with liquidity.

For questions about this technique, please contact us at GWE.

MD Update: Governor O’Malley Approves MD Trust Act and MD Estate Tax Exemption Increase

News went out earlier this week regarding Maryland’s Uniform Trust Code and Increase in Estate Tax Exemption. We previously mentioned the bill passing in both the House and Senate and would go to Governor O’Mally to be signed to law.

On May 15, 2014, Governor O’Malley signed the two bills to increase the Uniform Trust Code and the Maryland Estate Tax Exemption.

You can find the text for Maryland’s Uniform Trust Code, also referred to as Maryland Trust Act on LegiScan. The text for the Maryland Estate Tax Exemption can be found on General Assembly of Maryland. This article from Venable, LLP briefly highlights the changes in the estate tax law on Lexology.

Contact David Wexler for more information about estate planning.