Posts Tagged: Estate Planning

“Five Financial Blind Spots That Burden Grieving Spouses – Surprise Debt, Locked Out of Accounts, Invisible Credit Records, New Budgets, Higher Tax Brackets.”

Forget the silly number-crunching.  Forget the extra point or two of return if we recommend putting the money elsewhere.  Forget estate taxes.  Forget all of the sophisticated planning machinations and tell me why a significant income tax-free cash infusion to a surviving spouse isn’t a good idea.  Whether it is $1 Million or $10 Million (the size of the estate is relative), I’ve never seen an estate in which a significant cash infusion didn’t make a difference.  Cash buys time, provides liquidity, and comforts at a most uncomfortable time.  Yet, throughout the entirety of my career, I’ve seen very few instances where advisors have considered the benefits.  A personally owned life insurance policy’s death benefit is one of the cleanest and most cost-effective ways to provide cash when needed (or wanted).

A Question – If we were sitting here today and the client had died last night what would we be discussing?  I suspect having enough sustaining cash would be near the top of the list.

The WSJ article can be found by clicking here.

“Surprise! You have a $100 million trust fund.  That is the message at “trust reveal” meetings hosted by wealthy families and advisers around the country. These days, business is booming.  Wealthy families are increasingly holding “trust reveal” meetings to inform heirs of substantial inheritances.”

The WSJ article can be found by clicking here.

I had a luncheon conversation in Toronto with one of Canada’s top tax attorneys. I asked, “What’s more important the hard, math side of estate planning or the soft, emotional side of estate planning?” Quickly and unequivocally, he answered that it was the soft, emotional side of estate planning that was more important and that one can always hire a “calculator” to crunch numbers. What’s it all about? Number crunching should only support what clients are truly trying to achieve. Are we leading planning conversations by asking the right questions and helping clients understand what is really important? I hope you find this “challenging” WSJ article thought-provoking.

The WSJ article can be found by clicking here.

From the article: “As a personal finance expert, I give advice on how to maximize wealth. At the end of my mother’s life, I realized there’s a more important question: What is our money for?  I have spent much of my career as a personal finance expert preaching how to save more, spend less and minimize taxes. It made me realize that I had book knowledge in a situation that demanded street smarts. Not much discussion of financial planning is geared toward how to take care of other people and how to make it possible for them to care for you. The people who reach out to me for advice want to talk about optimizing rates of return and navigating market risks, about Roth conversions and when to claim Social Security. I had always been right there for these discussions, but now this sort of strictly financial maneuvering seems to miss the most important question: What’s it all for?”

“The Rowland case has lawyers and accountants who prepare estate-tax returns on edge. The Tax Court sided with the IRS last month, disallowing the estate from using the common planning technique known as portability.”

The WSJ article can be found by clicking here.

The Washington Report: – Wealth Transfer Edition

“A family vacation home often holds sentimental value; however, sustaining that home within the family over multiple generations presents unique challenges and requires a realistic assessment about the family’s current and future commitment to maintaining the home and a plan for managing and funding that maintenance and potential development over the long term. In addition, owning a second home at death can augment the owner’s taxable estate, especially given rapidly appreciating real estate values in recent years.”

Click here to read the full report.

The Washington Report – Business Uses Edition

Given the potential for significant adverse tax results, compensatory split-dollar programs should be reviewed by a 409A tax expert for compliance. That review should occur not only when the program is first designed, but also any time the program is modified.

To read the full report, click here.

The Washington Report: – Wealth Transfer Edition

“The purpose of this article is to remind clients that “in the midst of chaos, there is also opportunity.” Below are five estate planning opportunities, which if implemented now, can yield significant and lasting benefits.”

To read the full report, click here.

The Washington Report: – Wealth Transfer Edition

“Although high net worth clients under the $50 million threshold (HNW clients) may continue to implement planning, we’re seeing some hesitancy now, since they have less total gifting capacity than UHNW clients and greater concerns about giving away too much. Many HNW clients prioritize control and flexibility, often viewed by them as the ability to “undo” planning if circumstances or laws change.”

To read the full report, click here.

A basic, very good article by Lawrence D. Sprung.  Might it be a nice piece to forward and share with some of your clients?

• Estate planning isn’t about focusing on your demise; it’s about taking control and making decisions that ensure your loved ones are cared for.
• It’s a way to share your wishes and protect the people you care about most, leaving them a roadmap instead of unanswered questions.
• Without a will and a plan, state intestacy laws determine what happens to your hard-earned assets.

The full article can be found by clicking here.

From an excellent WSJ article by Ben Cohen interviewing Ron Shaich, billionaire entrepreneur; 

• “What can I do in the next three to five years that I will respect looking back from my deathbed?”
• “I imagine my body old and fragile, my breathing shallow, my life energy almost extinguished, he wrote in Know What Matters, his 2023 book.  I try to evoke the feeling I want to have in that moment – a sense of peace, completion and, most importantly, self-respect.  Then I ask myself:  What am I going to do now to ensure that when I reach that ultimate destination, I’ve done what I need to do?” 
• “I realized that the time to be having that review was not in the ninth inning with two outs.  It was in the seventh inning, the fifth inning and third inning.”

The most important question estate planners can ask their clients; If we (client, spouse, collaborative advisors) were gathered here today and you had died last night what would we be discussing?  The follow-up questions are situation and client specific.  The answers to the questions will help the advisors and the client to determine whether or not there are problems/issues that should be addressed today.  The degree to which the client is dissatisfied/unhappy with his/her current situation and the potential outcomes if premature death were to occur will determine how smoothly, quickly, and successfully the rest of the planning and implementation process moves forward.

I believe this is the most important question that we estate planners should ask every client now, not in the ninth inning with two outs.  It is the essence of what we do and, perhaps, the most productive thing we can do this year.

The WSJ article can be found by clicking here.