Money Matters MALLARD Financial Partners INC

MALLARD

Financial Partners INC

Change in Leadership, by Pam Baumbach, CFP® IACCP® President, COO, CCO

We have recently made leadership changes at Mallard. Our Board of Directors remains the same, but our roles have changed. I am the new President and Chief Operating Officer, Jacqie is the new Vice President, Susan has become the Treasurer, and Paul takes over as Secretary.

Functionally, our business roles have not changed: Paul remains Director of Investments, Susan remains Director of Financial Planning, Jacqie remains Investment Operations Manager, and I am responsible for the consolidated corporate functions (Marketing, Human Resources, Compliance, Administra-tion) plus I am the Director of the Nonprofit Division.

As Mallard continues to grow, it made sense to consolidate the corporate functions under one person.

With dedicated leadership and a focused vision, we can continue to be a firm that serves both long term and new clients.

L-R, Jacqie Thompson, Susan Lehnerd, Paul Baumbach, Pam Baumbach

I’m excited to usher Mallard into the next phase of its evolution.

If you are not yet a Mallard client, now might be a good time to get to know us.

You might want to have a trusted advisor on your side, especially in times of volatile markets or changes in your personal circumstances.

Please contact us to schedule your free, no obligation 60 minute meeting. You will learn more about what we do and we will learn more about your needs. We can then work together to build your financial security.

We’re Ready, Are You?

Mallard Money Matters April 2019 Page 2

Would you like to help someone pay for educational expenses? You might want to use a 529 Plan.

A 529 Plan is a savings-type account that can be used for qualified educational expenses for K-12 grade education (up to $10,000 per year) or college. 529 Plans, also called Qualified Tuition Programs, get their name from Section 529 of the Internal Revenue Code. Who owns the 529 Plan? Parents, grandparents, or family and friends can open a 529 Plan (as owners) and name the child/grandchild as the beneficiary. A 529 Plan can only have one beneficiary. But, you can name a different beneficiary at any time. This adds valuable flexibility - if one child completes college and the 529 Plan has money remaining, another child can be named as the new beneficiary of that 529 Plan.

Benefits to the 529 Plan owner: Residents of PA and MD get a tax-deduction on their state taxes (DE residents do not). Contributions grow tax-deferred Contributions are considered a completed gift (for estate taxes). You can contribute up to $15,000 (in

2019) per beneficiary per contributor.

Benefits to the beneficiary (recipient of the money): Distributions used to pay for qualified education expenses are tax free. These include tuition, books,

required supplies, fees, computers, and room & board (for students enrolled at least half-time). Anyone can contribute to the 529 Plan (relatives, friends, etc.). So it makes a great gift for a birthday,

baby shower, or even kindergarten graduation.

College costs are increasing at about 6% per year. Starting a 529 Plan at birth is great. But if educational expenses are in your near future, you can still benefit from starting a 529 Plan now. But - if the money in the 529 Plan is used for anything other than qualified education expenses, ordinary income tax and a 10% tax penalty will be owed on the earnings. If the 529 Plan beneficiary receives a scholar-ship, it’s possible to withdraw money from the 529 Plan up to the scholarship amount without incurring the 10% penalty. However, you’ll still pay ordinary income tax on the earnings. Also beware - who owns the 529 Plan will impact financial aid. 529 Plans owned by the dependent student or parent are considered parental assets, and only 5.64% of the parent’s assets are counted on the FAFSA (Free Application for Federal Student Aid). If grandparents, or anyone else, are the owners, the funds are not counted on the FAFSA. However, unlike distributions from student- or parent- owned 529 Plans, distribu-tions from a grandparent-owned 529 Plan are considered student income, which is assessed at 50%. So, a $5,000 withdrawal from a 529 Plan by a grandparent would reduce the student’s aid eligibility by $2,500. You can avoid the grandparent’s payment counting as student income by waiting until the student’s junior and/or senior year of college to use the funds. The FAFSA uses a two-year look back period. So payments in 3rd and 4th years won’t be reportable on the FAFSA until the 5th year of college (should that be required).

Yes, 529 Plans have their intricacies! Working with a financial planner can help you maximize and under-stand the benefits of a 529 Plan. Please contact me to learn more. If you are not yet a Mallard client, we can work with you on an hourly or project contract to further explore the benefits of having a 529 Plan.

Is a 529 Plan Right for You? by Susan Lehnerd, CFP®, Director of Financial Planning

Mallard Money Matters April 2019 Page 3

Mallard clients often meet our Financial Planning and Investments Team members at meetings or community events. Nonprofit leaders often meet with our Nonprofit Team at outreach events.

Most clients, however, probably haven’t met my team, Investment Operations. Team members Brin Hutch- inson, Jordan Jones, Liz Salt, Aaron Snyder, and myself have 27 combined years of experience at Mallard. While we may not be the most well-known team at Mallard, we work tirelessly behind-the-scenes to ensure the proper handling of your portfolio.

Many large firms outsource their back office tasks, but we handle these all in-house. We manage client portfo-lio records in our portfolio management software, we draft our investment clients’ quarterly or semi-annual reports, we execute all trades, and we develop and maintain templates used throughout Mallard.

Although clients may never directly interact with members of the Investment Operations Team, know that we’re always here, working diligently behind the scenes. Our work helps Mallard provide the best services possible to every one of our clients.

Tax filing requires you to give personal information to the IRS. That information is valuable to you, the IRS, … and scammers.

The IRS has 3 tips to help you avoid losing your information: Only provide your private information to known and reputable tax preparers. Remember, all subsequent

data security decisions are in their hands. Don’t take the bait! Scammers will offer tax transcripts to lure users to open infected files. They will also

threaten targets with IRS and legal action. Phone contact from the IRS “out of the blue” is almost always a scam, even if the caller ID number dis-

played is the IRS phone number.

In general, the IRS will make contact with you via US mail. The mail will make clear it is a “NOTICE” and will provide an address and phone number for you to contact the IRS. Remember, younger people tend to be careless online, older people tend to be unfamiliar with the latest tech online, and the largest losses happen to those in the middle. We are all vulnerable, and must remain vigilant – particularly at tax time.

To hear what a scam phone call sounds like, visit the FTC website via this shortened link: http://bit.ly/2019_SSA_Scam. The FTC is working with the AARP to produce a series of consumer protection videos. The link is http://bit.ly/FTC_Videos . Medicare has scammers too. To hear what they sound like, use this shortened link: http://bit.ly/2019_Medicare_Scam

Our Back Office, by Jacqie Thompson, AAMS®, Investment Operations Manager

Don’t Get Scammed, by Alan Coffey, Cybersecurity Officer

750 Barksdale Road, Suite 3

Newark, DE 19711-3245

Working together, building your financial security

We are currently accepting new clients.

If you know someone who is looking for financial advice, please think of us!

We offer a free 60 minute meeting — as a nice way to get to know each other without making a firm commitment.

We work with individuals, small businesses, family trusts, estates, and nonprofits. Our clients’ portfolios range from $20,000 to over $10 million. We can offer financial advice on specific topics, such as retirement, tax planning, education planning, estate planning, financial planning, etc. We also offer full-service Fee-

Only investment management.

Your questions and comments are always welcome.

Contact us at 302-737-4546 or info@mallardfinancial.com

At Mallard Financial Partners, we are fiduciaries.

That means we always put our clients’ interests first. Our business is about relationships,

not transactions.

Join us in welcoming Aaron Snyder, our new Trading Specialist. Aaron is a recent University of Delaware graduate, with a double major in Finance and Sport Management. He’ll be work-ing with our Investment Team as an analyst for special projects and with our Operations Team managing trade execution and reconciliations.

We’re looking for one more person to join our Financial Planning team! Did you or someone you know recently pass the CFP® exam? If you want to grow with us, send your resume to info@mallardfinancial.com.

Referrals Welcome ! Fee-Only Advisors

www.mallardfinancial.com

Staffing Additions