Broker Check

13 Wealth Management Issues

1. Asset and Investment Management 

It is important to have an advisor who can help guide your expectations of income, risk tolerance, time horizons, feelings about income and capital gains taxes, and constraints and liquidity needs. If not adequately addressed, these issues could be detrimental to you and your family. 

  • Incentivizes saving and growing funds for retirement 
  • Time value of money and compound interest 
  • Tax-deferred growth 
  • Qualified plans avoid probate 

Who it's for: Individuals investing for a number of reasons and objectives, as well as those looking to harness the power of compound interest and the time value of money. 

2. Insurance and Protection Strategies 

Insurance can protect assets from loss and be used to solve personal and business issues. It can also be utilized to provide liquidity for taxes, generate funds to transfer a business, act as a replacement for a charitable gift, and serve to reduce debt or equalize inheritances. 

Provides assets needed to replace income and fund specific goals Provides tax-deferred build-up of cash value Liquidity to pay estate taxes and meet other liabilities Provides cash flow required to maintain lifestyle 

Who it's for: Individuals seeking to mitigate and transfer risk, replace an income stream/asset, provide liquidity at death, fund a purchase of a business, fund a deferred compensation plan, etc. 

3. Liabilities and Debts 

The strategic borrowing of money may allow you to accelerate the rate of wealth creation and can help protect and preserve establish wealth. 

  • Allows for flexibility in cash flow for debt, investment or protection purposes 
  • Maximizes wealth creation 
  • Interest may be tax-deductible 

Who it's for: Individuals looking to purchase a home or car, or to start a business. Business owners looking to increase returns. 

4. Qualified Retirement Plans / IRA Distributions 

It is important to examine the consequences of taking distributions from your qualified retirement plan or IRA during life, versus planning for the distributions to go to descendants at death. There are issues that can impact the worth of your plan such as timing of distributions, income taxation, estate taxation and amount of control.

  • Can help you avoid the 10% early withdrawal penalty 
  • Can help you plan to take required minimum distributions (RMDs) by age 70 1/2 to avoid additional taxation 
  • Utilizes net unrealized appreciation to lower income tax 
  • You can utilize an IRA max strategy if RMD is not needed 
  • Reduces or eliminates taxes via charitable gifts 

Who it's for: Individuals looking to contribute to or withdraw from one of the many types of qualified or non-qualified retirement plans and IRAs available. Those looking to minimize taxes and avoid penalties. 

5. Corporate Executive Stock Option Planning 

Many companies do not clearly explain their stock option program or restricted stock program and rules. Therefore, often there is no clear plan for triggering an exercise of vested options or for funding the exercise of vested options or for funding the exercise of vested options. 

  • Can help achieve long-term capital gains tax treatment 
  • Can help you delay recognition of gain on exercised shares 
  • Can help you do a cashless exercise to generate cash and diversify positions 

Who it's for: Individuals who have received incentive stock options and would like to review the options agreements, verify incentive stock options or nonqualified stock options, verify vesting and restrictions, and develop an option exercise plan. 

6. Business Succession Planning 

Transferring the ownership of a business is time-consuming, complex, and often emotional for the party that is exiting the business. The timing of the transfer or sale, and the resulting transfer tax or income tax issues, could be substantial and should be addressed as part of a business owner's wealth management plan. 

  • Allows you to maintain transferrable value and cash in on a lifetime of hard work 
  • Provides continuity to your existing customer base
  • Allows you to retain some control over the future of your business 
  • Allows you to plan for a smooth exit 

Who it's for: Individuals owning a closely held business looking to transition the business, create a succession plan, determine a successor, preserve the company's value, minimize taxes, and protect family wealth from economic downturns. 

7. Durable Power of Attorney 

Planning for incapacity is a crucial component of any wealth management plan. It's important for you to choose someone to act on your behalf, rather than have someone appointed by a court. 

  • Allows you to choose another party to act on your behalf 
  • Allows another person to transact business for you in the event of your incapacity 
  • Gives you comfort in knowing plans are in place and will protect you 

Who it's for: Individuals looking to designate a substitute to handle their financial affairs should they become incapacitated. 

8. Gifting Strategies to Children & Descendents 

Gift planning can provide for an education, create a pool of funds to control the assets, and reduce your taxable estate. You can determine which vehicle can help you attain goals in a tax-efficient manner. 

  • Reduces taxable estate 
  • Helps avoid gift taxes 
  • Provides education funds in a tax-efficient manner 
  • Allows you to see your beneficiaries enjoy and learn from the receipt of assets 

Who it's for: individuals motivated to gift for the following reasons: education, planning, tax efficiency, personal enjoyment or grooming of heirs. 

9. Charitable Gifting During Life 

It's important to address tax efficiency and control issues. Highly appreciated assets, donor advised funds, or private family foundations can be utilized to make distributions to charities. 

  • Help you fulfill philanthropic desires 
  • Charitable deductions can help you avoid capital gains on the appreciation of gifted property 
  • Can help you retain flexibility in directing gifts in the future 

Who it's for: Individuals with gifting aspirations who wish to make a gift to a charitable organization while maximizing their gift and tax efficiency and leaving a legacy. 

10. Titling of Assets / Estate Management 

Incorrect titling of assets could prevent the use of trusts that could provide significant tax benefits. As such, an inventory of account titles matched against transfer plans both during life and at death is important. 

  • Becoming aware of how you currently own your property helps determine its distribution when you die, or its use if you become disabled 
  • Ensures your assets go to intended heirs 
  • Helps you avoid probate 

Who it's for: Individuals who would like to ensure that the transfer of their property interests (both real and personal property) are in line with their wishes for distribution. 

11. Executor / Successor Trustee Issues 

It is important to name an executor under your will, or a successor trustee under a revocable living trust, to help ensure continuity in the investment process. 

  • Provides you choice and control over who settles your estate 
  • Minimizes potential conflicts 
  • Ensures a smooth transition for your family 

Who it's for: Individuals who are concerned with and have a desire to ensure that they are making wise choices for the distribution of their estate. 

12. Distribution Plan to Spouse / Beneficiaries at Death 

It's important to maximize after-tax benefits for your heirs. Planning based on your desires to distribute wealth to your spouse, children, or a charity allows you and your descendents to maintain control and minimize estate taxes. 

  • Allows you to provide for future generations 
  • Helps you avoid the loss of transitioned wealth 
  • Helps protect estates from the cost of litigation, divorce, or poor spending habits of descendents 

Who it's for: Individuals looks to distribute assets to their heirs, maintain control or influence after death, and provide for philanthropic inclinations in a tax-efficent way. 

13. Charitable Inclinations at Death 

When making charitable donations at death, it's important to determine the most tax-efficient asset to make the transfer to a charity. To do so, you must decide whether you would like to make direct contributions or establish a pool of funds to be kept intact. 

  • Allows you to fulfill charitable aspirations 
  • Provides greater control and flexibility of gifts 
  • Helps you take advantage of various tax benefits and income tax deductions for charitable gifts 
  • Helps you establish a guaranteed income stream 
  • Reduces the gross taxable portions of an estate 
Who it's for: Individuals with gifting aspirations after death who wish to make a gift to a charitable organization while maximizing their gift and tax efficiency and leaving a legacy.

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