September 7, 2017
Hurricane Harvey had a tremendous impact on Houston and the surrounding areas and, just like you, we’ve watched as the aftereffects shake the lives of our friends, loved ones, and even our own families.
Our team, for the most part, stayed high and dry, though Willis’ house was affected by the Addicks Reservoir release. While we are all safe and taken care of, there are many who lost everything, or lost enough to put their finances and their future in jeopardy. Our thoughts are with those suffering from such losses.
In the midst of the chaos, we know it can be a source of stability to have someone else handle your finances, which is why we had staff working off-site in Houston and Austin to continue monitoring the market and client accounts.
There will be much to rebuild in the months ahead, and we’re here to help our clients navigate this recovery in the most cost-effective and strategic manner possible.
Do you find yourself faced with unexpected repairs and other hurricane-related expenses?
Willis Johnson and Associates can provide our clients with guidance as to how to fund these surprise costs, as well as how to adjust their current cash flow situation and retirement savings strategy due to this major loss. Our wealth managers can help clients decide which assets to use for funding repairs, as well as assess the pros and cons of refinancing, loans, 401(k) withdrawals, etc.
For example, we know the IRS has made an effort to help flood victims by making it easier to take hardship withdrawals from 401(k)s. However, we would caution this, as it is generally not the best fit for most of our clients.
It’s also important to know that the IRS extended tax-filing deadlines for people and businesses affected by the flood. Our wealth managers can help you make a financial decision that will support both your disaster recovery efforts and your financial future.
Not everyone has flood insurance, but if you do, it’s imperative to know what type and how much coverage you have. Most people have building property insurance that covers up to $250K, or personal property insurance that covers up to $100K. Your mortgage company may have required that you purchase a certain amount of flood insurance, but the National Flood Insurance Program (NFIP) encourages people to purchase both personal and property insurance.
When handling flood insurance claims and processing, be sure to:
1. File your claim as early as possible!
2. Document damages before you begin mucking your home.
Mucking Your Home
Once you can safely access your home, it is important to prevent mold from spreading. It may not be possible, but try to schedule a contractor ASAP. If you’re unable to find a contractor in a reasonable amount of time, there are some steps you can take to prevent the damage from worsening. The resources below can help guide you through basic home recovery and repair processes.
When the Waters Recede: A Field Manual for Early Response
When the Waters Recede: A Field Manual for Early Response (House Parts/Wall Coverings)
Hiring a Contractor
The last thing you want is to end up with another mess you have to clean, which is why it’s vital to be confident in the skills and professionalism of the contractor you decide to hire. Research the contractor and avoid compromising competency for time and money. Follow the steps below outlined by the Haley Garcia Group to begin your selection process:
1. Research the contractor’s business reputation, history, and location.
2. Work with your local Better Business Bureau to check if any complaints have been filed against the contractor.
3. Inquire if builders are required to be registered and bonded via your city’s building permit department.
4. Obtain and verify references.
5. Ensure your builder/re-modeler contract is clearly written and agreed upon.
6. Do not pay the expense for the entire job upfront.
7. Avoid contractors with prices that are “too good to be true.”
Many of us, like my wife Abby and me, were fortunate enough to remain unaffected by the flood. However, we still wanted to help and decided to donate to charities supporting the Harvey recovery. It can be difficult to choose where to donate your money, especially in the midst of scammers looking to take advantage of a person’s good will.
This NPR article provides a useful list of Hurricane Harvey charity efforts from which you can select.
Charity donations can go a long way in helping our city recover, but they can also contribute to reducing your tax base. Willis Johnson and Associates is able to assist in recommending charitable giving strategies that provide the best tax advantages. We can help you decide which accounts and assets you should donate from to receive the greatest amount of tax reductions.
For our clients who are taking required minimum distributions, it is important to understand that Qualified Charitable Donations are an option. With the running market, many clients may want to consider gifting highly appreciated stock to both receive a tax deduction and to avoid capital gains taxes.
At Willis Johnson and Associates, we understand the complications you may be facing as a result of Hurricane Harvey. Our wealth managers want to help you make the best financial choices during this trying time. We wish you and your family the best and we want you to know we are here to help. If you have any questions or concerns, please feel free to contact us.
Willis Johnson & Associates is a registered investment advisor. This material is intended for informational purposes only and should only be relied upon when coordinated with individual professional advice. Please speak to an investment professional before implementing any advice here. Willis Johnson & Associates does not provide tax or legal advice.
Nick Johnson, CFA®, CFP®
Nick Johnson believes that financial planning is more than numbers on a balance sheet and a standardized process. People are unique and should be treated as such.
As Vice President and Wealth Manager at Willis Johnson & Associates, his goal is to really get to know his clients, all the while providing a proactive approach to comprehensive wealth management.