Financial Planning and Cash Flow Management are an essential key to our Total Wealth Management Program, and combined make up the first stepping stones to an advisory relationship with us as we get to know your financial needs and goals.
To read more about this specific part of the process, please see our page dedicated to financial planning here.
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.
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.
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.
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.
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.
Robert started his business in his 20s and now he is in his 80s. Robert has a substantial net worth. In fact, as part of our on-boarding process with new clients, we determined that if there were no changes in his estate plan, Robert’s family would need to pay roughly $4 million on estate tax upon his death. When asked, Robert’s CPA and attorney told us that they had talked to Robert about this, but he wasn’t interested in doing anything. DWM felt that the adoption of a few key advanced estate planning techniques could save millions and put together a customized presentation for Robert, including plastic bins and index cards, to show Robert how these strategies would work to save taxes, while still allowing him to retain control. After Robert said yes, we worked with his estate planning attorney and his CPA to get these strategies documented and implemented. And, we continue to monitor these strategies and the various programs to make sure they are operating in the appropriate manner.
The advanced estate planning strategies identified by DWM saved Robert and his family roughly $3 million.
We want you to pay the least amount of estate tax possible, to make sure that your estate will be distributed in the manner you wish and that estate administration is inexpensive and hassle-free. We are not attorneys, but we do provide a recap of your estate planning documents in a simple format, the titling and beneficiary designations of your assets and our recommendations for your consideration and that of your estate planning attorneys. We act as the catalysts, collaborating with your attorneys and CPA's to put your estate plan in order.