The Art of Advanced Planning

by: Dominic Garcia

Over the years, financial planning has become increasingly complex.  In the past, people viewed their financial advisor as a stockbroker or simply their investment person.  Nowadays, it starts to become a disservice to our clients if all we were to focus on is achieving the best investment return.  There is no question that some of us can manage money better than others; that said, no one has a crystal ball.  One of my favorite quotes is, “There are only two types of advisors in this world, advisors that can’t predict the market and advisors that don’t know that they can’t predict the market.”  The truth is that the stock market is a fairly easy thing to understand; the problem is that everyone tries to overcomplicate it.  If you take a step back, you will realize that the simple solutions tend to create the most wealth over time.

So how can we, as advisors, add value beyond the investments?  Everyone wants to ensure that they make smart decisions with their money.  They want to mitigate taxes as much as possible; see that their heirs are taken care of; and protect their assets from being unjustly taken by litigation, divorce, or death.  And some individuals want to build a life of significance by maximizing their charitable gifts.  It is our job to remain educated on the topics surrounding advanced planning: wealth preservation, wealth enhancement, wealth transfer, wealth protection, and charitable giving. 

For business owners, it is imperative to establish a succession plan regardless of your stage in the business.  We can run a business valuation that will help to assess the future, analyze tax strategies, and plan out income in retirement.  Along the way, we will review the opportunities within defined benefit plans and look to boost your tax-deferred contributions.  And when you are ready, we can discuss how to properly exit the business which may incorporate the use of a Deferred Sales Trust.  

For real estate entrepreneurs, perhaps the conversation will revolve around capital gains planning, depreciation, 1031 exchanges, opportunity zones, Delaware Statutory Trusts, and cost segregation.  

For those who volunteer or would like to learn more about charitable giving, we will have discussions and lay out an action plan regarding the application of donor advised funds, qualified charitable distributions, and charitable trusts.  

And for many successful families, we will share the common benefits of Roth conversions, credit shelter trusts, health savings accounts, proper titling of assets and insurance, gifting, social security and pension optimization, backdoor Roth strategies, asset protection, and tax loss harvesting.

All in all, it is important to remember that our job goes beyond investments.  An advisor is there to help simplify your life, enhance your overall net worth, create more tax-efficiency, incorporate proper legacy planning, and allow for more comprehensive planning as a means to optimize your retirement.  And although no advisor is an expert in every field, we must know what to look for, understand what makes sense at what time, and coordinate with, if not build, your team of professionals.  

Rochester Wealth Strategies, LLC is an Independent Registered Investment Adviser located in Downtown Rochester. RWS is a Fiduciary and Fee-Only financial advisory firm (248-434-6550). This article is provided for informational purposes only. Please consult with your trusted advisor before engaging in any transaction.