DWM in action:
Laura was recommended to DWM from a local CPA after she had sold a large rental property and came in with a seemingly simple question: “How should I invest the proceeds?” Of course, we were happy to review her risk tolerance and talk about DWM’s investment philosophy of protecting and growing her net worth and how we can do that for her. But, knowing that investment management is about both asset allocation and asset location, we first asked her and her CPA a very important question: “What are the tax consequences of the sale and what will Laura’s overall tax status be for the current year?” The CPA informed us that the property was sold at a loss and that suspended rental losses were now available to be used to offset income. We suggested to Laura and her CPA that Laura convert part of her IRA holdings to her Roth IRA acount. The conversion could be done virtually tax-free in this circumstance and the Roth IRAs would provide Laura and her family with an asset that would grow tax-free for her lifetime, not require minimum distributions as Laura's IRA does and ultimately could be passed on to her heirs, who could continue to stretch out the tax-free benefits of the Roth IRAs over their lifetimes. The CPA and Laura agreed. DWM also suggested that, based on her tax bracket, Laura convert $35,000 per year from her IRA to the new Roth IRA, so that over time more of the assets in her estate would be Roth IRAs, the best form of asset ownership for an heir to receive. That program is in place right now.
Value-Added:
Tax efficient conversion of hundreds of thousands of dollars from a traditional IRA to a Roth IRA which provides tax-free growth for Laura and her family for generations to come.
Overall approach:
Your investment management and financial planning strategies and operations need to be tax efficient. DWM keeps your tax consequences in mind in everything we do. While DWM does not prepare tax returns, Les Detterbeck has prepared and reviewed thousands of tax returns. We have a regular process of obtaining copies of client tax returns, reviewing them and helping clients with projections of income taxes for the current year. As part of that process, we often make recommendations to clients and their CPAs of ideas that could reduce income taxes and increase family legacies.
Risk Management:
DWM in action:
Tom and Brittany were paying $14,000 for home, auto and umbrella insurance coverage with a large, well-known carrier. As part of our regular review of client’s coverage, we asked for their permission to get quotes from agents we know and trust. Ultimately, we found that a new, well-financed insurance company focused on high-net worth homeowners, could deliver identical coverage for $9,000. The new agent also worked with them to inventory Tom and Brittany’s personal property to provide backup in case of a future claim and to better categorize the items to save even more on premiums.
Value-Added:
Tom and Brittany reduced their annual property and casualty insurance bill by more than 35% by changing to a new financially strong carrier. They also have now inventoried their assets and better categorized them for proper coverage and even lower premiums.
DWM overall approach:
We don’t sell insurance, but we know insurance. DWM collaborates with competent, trustworthy agents in every category, property and casualty, life, disability and long-term care. Our objective is to make sure your coverage is appropriate, not too much or not too little, and the premiums are as low as possible.