The Financial Planning Blog
Your go-to financial planning and wealth management resource, whether you're just getting started or well on your way to a financially secure future.
Today's culture tells us we need a lot of money to live a happy and successful life. Sure, having enough money to meet our basic needs increases happiness, but more money won’t turn an unhappy life into a happy one. Consider that the United States is nearly three times as rich today as it was in 1970, but according to most surveys, Americans were just as happy then as they are now.
When you think of succession in family companies, legacy assets may not immediately come to mind. Many financial advisors, lawyers and accountants focus on advising their clients on their ownership in the family business because it generates the income that provides the client with their chosen standard of living, gives them the ability to invest, and enables them to pay the advisor’s fees.
Use this free workbook to gather a comprehensive list of all information pertaining to your family’s current financial picture!
When planning for tax-qualified plans such as IRAs, 401(k)s and qualified retirement plans, you should carefully examine the potential taxes that impact these assets. Unlike most other assets that receive a "basis step-up" to current fair market value upon the owner's death, IRAs, 401(k)s and other qualified retirement plans do not step-up to the date-of-death value.
Let’s examine some uses for life insurance, the only asset class that can ensure the completion of proper funding for a myriad of unique planning needs - regardless of the state of the federal estate tax. Income Replacement ("How will my family eat if I die?")
In his book “Drive,” Daniel Pink summarizes three primary motivators of human behavior – and none of them is money. The first one is autonomy. We want to be able to have the freedom to do as we wish, the way we wish, and independence from needing anything from anybody. The second motivator is mastery. Golfers know there’s only one reason to play the game: to get better. Otherwise, you would have to admit, it is a pretty strange game of hitting and chasing a ball. We all are driven to get better and better – and that includes becoming better human beings. We want to care more about others than ourselves.
In our practice, regular folks- the “millionaires next door” [www.thomasjstanley.com/pub-books/1/The_Millionaire_Next_Door.html] often do not relate, at first, to the possibilities of philanthropy – until they see that they can do it voluntarily so the government doesn’t make them do it involuntarily. That realization appeals to those innate human drives for autonomy, mastery and purpose. – excerpt from chapter 4 “What’s philanpoppy?” one client asked. He quickly learned – not only how to pronounce the word but also its many benefits. And today, he is quite active in his giving to his church, as well as several community charitable organizations he cares about. He also restated his trust, zeroing out federal estate taxes in favor of his family’s chosen causes and organizations. Truth is, once the average affluent come to understand how philanthropy can work for them and their families, and that it is not just for the realm of the ultra-wealthy, they want to do more.