When we first put together our editorial calendar for 2023, I put in a placeholder for an October PRISM Wealth-Building Process article tied to Financial Planning Month and National Estate Planning Week. The estate planning awareness event runs from October 17 through October 23. (Wolf Awareness Week overlaps it, but we won’t howl about that.)

PRISM is a framework for aligning your investing decisions with your goals. It can also be used to start conversations about estate plans and transferring control of your finances. From its inception, I worked ties to estate planning into the PRISM Process.

Consider the first step of PRISM: Prioritizing Your Goals. Your goals reflect why money is important to you and what you hope to do with your wealth. Sharing these goals with your loved ones gives you the opportunity to discuss what’s important to you as well as any wishes you have regarding the inheritance you intend to leave them and what it might be used for. If your estate plans call for leaving money to a charity, congregation or some other organization, you can use this discussion to share your reasons for doing so.

As part of the final step of PRISM—Monitoring Your Allocation, Progress and Life Stages—we created a worksheet that includes a template for listing beneficiaries, contact information for key professionals, the location of your wills and trust documents and related items. The idea for it was based on my personal experience with stepping in after my father-in-law died. It proved very valuable to already have this information from him. Even if you don’t want your heirs to know how much you have saved, providing them with a list of where your accounts are located and who to contact will make a big and positive difference at the time the information is needed.

While estate planning may connotate the passing of assets to heirs, there could be a period during your life when you are no longer able to manage your financial affairs. Even at early stages of Alzheimer’s disease and dementia, financial problems start. (For instance, see “Financial Problems May Precede Alzheimer’s Diagnosis” in the Dispatches section of the June 2021 AAII Journal.) This is why sharing such information before you need to is important.

Another reason to hold such conversations is to prevent conflicts from occurring in the future. In writing the article, I went back online to several estate planning articles we previously published, such as “18 Recommendations for Minimizing Inheritance Conflict” (April 2012 AAII Journal). One common underlying theme was the importance of communication. Explaining the rationale behind your intentions while you are alive can prevent conflict between heirs after your death. Read my article in this issue.

Staying on the subject of financial planning, Anine Sus offers suggestions for how to open a brokerage account as part of the newly relaunched Beginning Investor column. She covers key considerations regarding which brokerage is best for you. Even if you are an experienced investor, you may find helpful suggestions for determining whether to stay with your current broker.

Taxes are another key part of financial planning for many AAII members. Cynthia McLaughlin looks at the tax-cost ratios for large-cap mutual funds and exchange-traded funds (ETFs) with above-average yields. The tax-cost ratio measures how much a fund’s return is reduced by taxes for an investor in the top tax bracket. While one might suspect high-yielding funds to have high tax-cost ratios, this wasn’t the case. Rather, tax-cost ratios vary by the individual mutual fund and ETF, as you will see in the article.

Switching to stocks, we have three value-oriented articles in this month’s AAII Journal. Contributing editor Paul Merriman makes the case for why small-cap value stocks work well for achieving effective equity diversification.

John Bajkowski revisits the Graham Enterprising Investor Revised screen. Though this screen has been one of AAII’s highest-performing screens, it also has been very restrictive. He suggests revisions that result in a reasonable number of stocks passing without significantly harming performance.

Bajkowski also provides his latest Model Shadow Stock Portfolio update. Three stocks were recently deleted during the quarterly review for reporting earnings losses. Those of you who follow the portfolio will be interested in how the replacement stocks were chosen.

Wishing you prosperity and good health,