Business Succession: Strategies for Leaving a Business to Family
Transferring a business to family members is more than just a financial decision, it’s a deeply personal one. Your business represents years, if not decades, of hard work, sacrifice, and dedication. It’s a legacy that you want to see thrive for generations to come. However, without proper planning, a transition can create unnecessary tax burdens, financial strain, and even family disputes. Understanding the available strategies ensures that your business remains a source of security, not stress, for your loved ones.
Transferring a business to family members is more than just a financial decision, it’s a deeply personal one. Your business represents years, if not decades, of hard work, sacrifice, and dedication. It’s a legacy that you want to see thrive for generations to come. However, without proper planning, a transition can create unnecessary tax burdens, financial strain, and even family disputes. Understanding the available strategies ensures that your business remains a source of security, not stress, for your loved ones.
Successfully passing down a business requires a plan that aligns with your financial goals, tax considerations, and family dynamics. Some strategies allow you to retain control and income for years, while others enable an immediate transition. Additionally, post-mortem planning can safeguard your family’s financial future if the unexpected happens. Below are some key strategies for business succession, including their tax implications, income opportunities, and control dynamics, helping you choose the best path forward.
Family Limited Partnership (FLP)
A Family Limited Partnership (FLP) allows a business owner to transfer ownership gradually while maintaining control. The owner retains decision-making authority as the general partner, while family members receive limited partnership interests over time. This structure not only protects the business from mismanagement but also creates an efficient method for reducing estate tax liability.
FLPs provide valuation discounts on transferred shares, lowering estate and gift tax exposure. However, income taxes depend on profit distributions and the entity’s structure. Beneficiaries inherit the owner’s original cost basis, which may result in capital gains taxes if they later sell the business. The owner can continue receiving income through management fees or partnership distributions, ensuring financial security while slowly transitioning ownership. While control remains intact initially, it gradually diminishes as more shares are transferred. This method works best when started 5–10 years before a full transition to maximize tax advantages.
Selling the Business to Family
Selling a business to family members provides liquidity for the owner while ensuring the company remains within the family. The sale can be structured through an installment plan, a promissory note, or a self-canceling installment note, which cancels any remaining payments if the seller passes away before full repayment.
This strategy spreads capital gains taxes over the life of the installment payments, easing the tax burden. Buyers may deduct interest payments on financed purchases, while SCINs can reduce estate tax liability when properly structured. However, IRS scrutiny requires careful compliance. The owner benefits from continued income through installment payments or an advisory role while stepping away from daily operations. Control is gradually transferred, allowing the next generation to gain experience under the seller’s guidance. Ideally, this strategy should be implemented 3–7 years before retirement for maximum flexibility.
Grantor Retained Annuity Trust (GRAT)
A Grantor Retained Annuity Trust (GRAT) allows the business owner to transfer ownership while receiving annuity payments for a predetermined period. Once the trust term ends, remaining assets pass to the beneficiaries with reduced tax liability, making this an effective wealth transfer tool.
GRATs minimize estate tax exposure when structured correctly. If the business appreciates in value, the excess growth transfers to beneficiaries tax-free. However, if the owner passes before the trust term ends, assets revert to the estate, negating tax benefits. This strategy provides an income stream during the annuity period, ensuring financial stability. Control diminishes over time, as the owner must fully relinquish business ownership at the end of the trust term. Best results are achieved when implemented at least five years before the intended transition.
Equipment Leaseback: a Passive Income Strategy
Instead of retaining key business assets, the owner transfers ownership of business equipment to the next generation and then leases those assets back from them. This allows the family member to receive passive rental income while the owner maintains operational use of critical resources.
Lease payments offer a predictable and taxable income stream to the beneficiary while helping reduce the overall estate value for the original owner, reducing estate and gift tax exposure. For the business, the lease payments are deductible, increasing tax efficiency. The owner creates a passive income stream for the next generation while maintaining business continuity. Control over asset use remains functionally with the original owner through lease terms, but legal ownership, and thus long-term strategic control, shifts to the heir. This strategy can be set up at any time but is most beneficial when coordinated well in advance of retirement or sale.
Post-Mortem Planning Strategies
Even with a solid succession plan, post-mortem strategies ensure heirs can manage taxes and business operations effectively after the owner’s passing. Without proper planning, heirs may be forced to sell the business to cover estate taxes, disrupting the legacy you worked so hard to build.
Section 6166 estate tax deferral allows heirs to defer estate taxes on a closely held business for up to 14 years, preserving liquidity. A Qualified Terminable Interest Property (QTIP) Trust ensures a surviving spouse receives income while ultimately passing business ownership to designated heirs. Buy-sell agreements establish clear terms for ownership transfers, reducing potential disputes. Additionally, a stepped-up basis adjustment allows heirs to inherit business interests at fair market value, minimizing capital gains taxes upon sale. These strategies help prevent forced sales and ensure continuity, keeping the business intact for future generations.
Choosing the Right Strategy
Each business succession strategy offers unique benefits depending on the owner’s goals for control, income, and tax efficiency. Whether transitioning gradually through an FLP, structuring an installment sale, leveraging a GRAT, or ensuring post-mortem tax efficiency, proper planning is essential. With expertise in tax and legacy planning, I help business owners craft a succession plan that protects both their business and their family’s financial future.
Business succession is one of the most complex areas of financial planning, and these strategies are just a handful of possibilities. Every business owner’s situation is unique, and the right solution depends on personal financial goals, family dynamics, and tax considerations. To ensure a seamless transition that protects both your wealth and your legacy, schedule a time with me to create a tailored succession plan that works best for you and your family.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Enduring a Bear Market: How to Stay Steady When the Markets Drop
If you've been watching your investment accounts lately and feeling a little anxious — you're not alone. Bear markets, while a normal part of investing, can test even the most seasoned investor's patience and nerves.
But here's the truth: markets fall, and markets rise. The investors who come out stronger are the ones who stay steady, stay thoughtful, and stick to their long-term plan.
Let's talk about what a bear market really means, and how you can weather it with confidence.
📉 What Is a Bear Market?
A bear market is typically defined as a decline of 20% or more in a major stock market index, like the S&P 500, from its recent peak. While they can feel alarming in the moment, they're a natural part of market cycles. While the most recent dip into bear market territory was quick, and we are not ‘in a bear market’ currently, let’s dive into a few specifics to get a better understanding. Whether it’s this current market volatility or the next, we will most definitely experience more bear markets in the future.
Historically, bear markets have occurred about once every 6 years on average. They tend to be shorter than bull markets, with the average bear market lasting approximately 1-2 years.
That means even though downturns feel intense while you're in them, they tend to be temporary chapters in a much longer investing story.
The chart below puts bear markets into perspective when thinking about the long-term history of the stock market. While painful to endure, they are blips on the radar if you stay invested.
How to Endure a Bear Market Without Losing Your Mind (or Your Money)
Zoom Out and Look at the Big Picture
It's easy to get caught up in day-to-day market swings, but real wealth is built over decades, not days. In the chart above, take note of how every downturn is eventually followed by a recovery and new highs. While past performance is not a predictor of future performance, the stock markets have continued to reach new highs.
Stick to Your Financial Plan
If your portfolio was built with your time horizon, goals, and risk tolerance as cornerstones in your financial plan, it's likely designed to withstand market downturns. Are your goals still the same? Is your timeline intact? If so — stay the course. If you are a client of mine, we prepared for a downturn and have a plan in place for what to do - now is the time to act on that plan.
Focus on What You Can Control
You can't control interest rates, inflation, or the markets. But you can control how you react.
Keep your emergency fund intact. Spend wisely.
Continue regular contributions to retirement accounts and savings plans if at all possible. Remember, there are buying opportunities now that weren’t there a few months ago!
Stay disciplined…even when it hurts.
Use Market Declines as an Opportunity
Bear markets often create chances to buy high-quality investments at lower prices. It's like a sale for long-term investors.
If you have extra cash or have been waiting to invest, now is the time to intentionally deploy that cash into your investment strategy.
Don't Go It Alone
Money decisions get emotional in volatile markets. Having a trusted financial planner by your side can help you make thoughtful, objective choices when emotions run high.
If you're feeling anxious about your investments or future plans, let’s chat. A 20-minute conversation might be all you need to feel grounded again.
Final Thought
Bear markets aren't fun, but they aren't forever. History has shown that patient, disciplined investors tend to be rewarded over time. The key is to endure the tough seasons and take advantage of the opportunity at hand so you're positioned to enjoy the growth that follows.
If you need a listening ear, a portfolio review, or a fresh perspective on your financial strategy, I'm here for you.
Let's schedule a conversation.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Feeling Anxious About the Market? Focus on What You Can Control
Market volatility can feel nerve-wracking, and it's completely normal to feel uneasy during downturns. But remember this: market fluctuations are a normal part of the economic cycle. Instead of feeling helpless, let's focus on actionable strategies you can control to weather the storm, manage your emotions effectively, and avoid panic decisions driven by fear or uncertainty.
It's understandable that market volatility causes anxiety. Whether it's driven by economic news, geopolitical events, or trade tensions, the market's ups and downs can feel unpredictable and unsettling. However, history provides a valuable perspective: market downturns aren't anomalies; they are a recurring feature of the economic landscape. We've seen this play out in the past with significant events like the COVID-19 downturn in 2020, the Global Financial Crisis in 2008, and the Dot-com bubble in 2000.
Here's a crucial point to consider: missing just a few of the market's best days can significantly reduce your long-term returns. This is why letting emotions dictate your investment decisions can be so detrimental. The chart below illustrates the potential impact on your growth if you missed some of the best trading days.
Mastering Your Emotions
One of the biggest challenges during volatile periods is managing our own emotions. Fear can lead to panic selling at market lows, while greed might tempt us to chase fleeting gains. Often, controlling these emotional responses is the most significant factor within our control and can have a profound impact on our investment outcomes.
It's helpful to be aware of common behavioral biases. Loss aversion, the tendency to feel the pain of losses more strongly than the pleasure of gains, can drive poor decisions. Similarly, herd mentality, following the crowd without considering your own individual circumstances, can lead to buying high and selling low.
Here are some practical tips to help manage your emotions during market volatility:
Focus on your long-term investment plan. Remember the goals you set and the reasons behind your investment strategy.
Limit how frequently you check your investment accounts. Constant monitoring can amplify short-term market noise and trigger emotional reactions.
Educate yourself about market cycles. Understanding that downturns are a normal part of the process can help reduce anxiety.
Consider seeking advice from a financial advisor. Advisors play a crucial role in providing emotional support and guiding you through challenging times. They can act as an "emotional circuit breaker" to help you avoid impulsive decisions that could harm your long-term financial health.
Controllable Investment Strategies
While market movements are outside our direct control, there are several investment strategies you can utilize to navigate volatility.
Dollar-Cost Averaging: This strategy involves investing a fixed amount of money at regular intervals, regardless of the market price. When prices are low, your fixed investment buys more shares, and when prices are high, it buys fewer. Over time, this can help reduce the risk of buying high and potentially lower your average cost per share, especially during downturns. Consistency is key to the effectiveness of dollar-cost averaging.
Account Rebalancing: Maintaining your target asset allocation (the mix of assets like stocks and bonds based on your risk tolerance and time horizon) is crucial. Market downturns can cause your portfolio to become skewed, with some asset classes potentially becoming overweighted or underweighted. Rebalancing involves selling some assets that have performed well and buying those that have underperformed to bring your portfolio back to its target allocation. This strategy can help you buy low and sell high over time and stay aligned with your intended risk level.
Roth Conversions: A Roth conversion involves moving funds from a traditional IRA or 401(k) to a Roth account. While you'll pay taxes on the converted amount in the current year, future withdrawals in retirement can be tax-free. A market downturn, when asset values are lower, can be a potentially opportune time for a Roth conversion, as the tax bill on the conversion may be lower. However, it's essential to carefully consider the tax implications and your future tax rates before making this decision.
Tax-Loss Harvesting: Tax-loss harvesting is a strategy of selling investments that have lost value to offset capital gains taxes you may owe on other investments. The proceeds from the sale can then be reinvested in a substantially different security to maintain your desired asset allocation, being mindful of the wash-sale rule, which prohibits repurchasing the same or substantially identical security 30 days before and 30 days after. This strategy can potentially reduce your current tax burden.
Staying Invested and Reviewing Your Long-Term Plan: It's crucial to remember that historically, the market has recovered from previous downturns. Selling out of your investments during a downturn can lead to missing out on potential rebounds. Downturns can also be a good time to revisit your overall financial goals and ensure your investment strategy still aligns with them.
“The four most dangerous words in investing are: This time it’s different.”
Historical Perspective
Looking back at historical events like the COVID downturn in 2020, the 2008 Global Financial Crisis, and the 2000 Dot-com bubble, we can see a common pattern. While these periods were marked by significant market declines and uncertainty, the market eventually recovered and continued its long-term growth trajectory. This historical context reinforces the importance of a long-term investment perspective. Here is what the positive and negative years have looked like since 1926.
Staying the Course for Long-Term Success
Market volatility is an inherent part of investing, but by focusing on controllable strategies and maintaining a long-term perspective, you can navigate these periods effectively. Stay disciplined, stick to your long-term financial plan, and avoid making impulsive decisions based on short-term market fluctuations.
If you don’t have a long-term financial plan, then now is the time to create one. If you would like help, feel free to reach out and connect.
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Making the Most of Cash Balance Plans: A Simple Guide for Business Owners
A cash balance plan helps business owners save more for retirement while lowering taxes. With higher contribution limits than a 401(k) and tax-deferred growth, these plans offer major financial advantages. Employers fund the plan, providing stable benefits for employees. While they require annual contributions and administration, the tax savings and wealth-building potential make them a smart choice for high-income professionals.
If you own a business and want to save more for retirement while paying less in taxes, a cash balance plan might be a great option. These plans may allow you to save more money than a regular 401(k) and offer major tax benefits.
What is a Cash Balance Plan?
A cash balance plan is a type of employer-sponsored retirement plan where the business makes annual contributions on behalf of employees. These contributions grow at a predetermined rate and are designed to provide a stable retirement benefit. Unlike traditional 401(k) plans, where employees contribute and take on investment risk, a cash balance plan ensures the employer funds the account and assumes the investment risk.
Key Benefits of Cash Balance Plans
1. Higher Contribution Limits
A 401(k) has limits on how much you can put in; $70,000 per year ($77,500 if you're 50 or older) for 2025. A cash balance plan lets you save significantly more, sometimes exceeding $300,000 per year, depending on age and income. This is especially helpful for business owners who want to accelerate their retirement savings and take advantage of tax-deferred growth.
Source: Joe Nichols, DWC - The 401(k) Experts.
2. Substantial Tax Savings
Source: Joe Nichols, DWC - The 401(k) Experts.
Contributions to a cash balance plan are tax-deductible, directly reducing taxable income. This is particularly valuable for high-income business owners looking to lower their annual tax bill. Additionally, the plan's assets grow tax-deferred, allowing for compounding benefits over time.
This video is an audible version of this article. Feel free to listen while reading, or watch it independently.
3. Enhanced Employee Retention and Satisfaction
Offering a strong retirement plan helps businesses attract and retain skilled employees. A cash balance plan provides a predictable benefit, making it an appealing option for employees seeking long-term financial security. Business owners who offer these plans often find that they increase employee loyalty and job satisfaction.
4. Flexibility in Plan Design
Cash balance plans can be customized to meet the needs of the business. Contributions can vary based on employee roles, tenure, or salary levels, allowing business owners to structure the plan in a way that best serves their financial and workforce goals. Additionally, these plans can be paired with a 401(k) for even greater retirement savings potential.
Challenges of Cash Balance Plans
1. Required Annual Contributions
Unlike profit-sharing contributions in a 401(k), which can be discretionary, cash balance plans require mandatory annual contributions. This means businesses need a consistent and predictable cash flow to maintain the plan over time.
2. Administrative Complexity
Cash balance plans involve more administrative work than traditional 401(k)s. Business owners must comply with government regulations, complete annual actuarial evaluations, and file IRS reports. Engaging a third-party administrator (TPA) is necessary to ensure compliance and smooth plan operation.
3. Funding Requirements
Since the employer is responsible for funding the plan and ensuring returns meet the guaranteed rate, market downturns could lead to additional funding obligations. For example; a plan with $1 million of accumulated benefits could experience an investment shortfall of 5% based on market performance. This would require an additional $50,000 of employer contributions on top of the annual contribution requirements. It should be noted that any losses may be amortized over a 15-year period.
Source: Joe Nichols, DWC - The 401(k) Experts.
4. Higher Setup and Maintenance Costs
Compared to 401(k) plans, cash balance plans typically have higher setup and maintenance costs. Employers must factor in administrative fees, actuarial costs, and investment management expenses when determining if the plan is a viable option.
Is a Cash Balance Plan Right for Your Business?
A cash balance plan is a powerful tool for business owners who want to accelerate retirement savings and take advantage of significant tax breaks. While these plans require mandatory contributions, careful planning can ensure long-term benefits that often outweigh the administrative and funding challenges. For high-earning business owners with a steady cash flow, a cash balance plan can provide a strategic way to maximize retirement savings while significantly reducing taxable income.
These plans are particularly beneficial for professionals such as doctors, lawyers, and consultants who have stable profits and seek to invest heavily in their future. By assessing your financial stability and working with experts, you can determine if a cash balance plan aligns with your long-term business and retirement goals while also offering valuable benefits to your employees.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Tax-Smart Retirement Withdrawals: How Discipline today results in freedom tomorrow.
One of the most overlooked aspects of retirement planning is your withdrawal strategy—how you take money from your accounts. Without a plan, you could end up paying more taxes than necessary, reducing the longevity of your investments. By strategically withdrawing from your accounts, you can optimize your tax bill and potentially extend the life of your portfolio.
Do not be fooled into thinking that this is something you don’t have to think about until you near retirement age - that could not be further from the truth! The flexibility of your retirement withdrawal strategy is directly tied to the cash flow planning, tax planning, and savings strategy you implement in your working years.
The Three Main Buckets of Tax Diversification
Understanding how different types of retirement accounts are taxed is crucial to a well-structured withdrawal strategy. There are three main tax buckets to consider:
1. Ordinary Income Bucket
These funds are taxed at ordinary income rates, which currently range from 10% to 37%, depending on your marginal tax bracket.
Examples include:
W-2/1099 wages
Business income
Rental income
Ordinary dividends and interest from a taxable brokerage account
High-yield savings interest
Short-term capital gains from a brokerage account or sale of other assets
Withdrawals from traditional IRAs, 401(k)s, and similar tax-deferred accounts
2. Long-Term Capital Gains Bucket
Long-term capital gains are taxed at preferential rates of 0%, 15%, or 20%, depending on your taxable income.
Examples include:
Sales of long-term securities in a brokerage account
Profits from the sale of long-term assets (i.e. rental home, business assets, etc.)
3. Tax-Free Income Bucket
These funds are entirely tax-free when withdrawn under the right conditions.
Examples include:
Roth IRA and Roth 401(k) withdrawals (if qualified)
Principal from savings accounts or after-tax contributions to brokerage accounts
Having a proper ratio of your portfolio in these different tax buckets will not only save you in taxes over your entire lifetime, but it also can add flexibility to other aspects of your financial plan as you near retirement, such as healthcare.
Consider Healthcare Challenges
Be Aware of Health Care Opportunities - Managing taxable income wisely may allow you to qualify for subsidies on the Health Insurance Marketplace by minimizing withdrawals from tax-deferred accounts.
Mind the Medicare IRMAA Surcharges – Medicare premiums are subject to an income-related monthly adjustment amount (IRMAA), based on a two-year look-back period. Large withdrawals from tax-deferred accounts could push you into a higher Medicare premium bracket, unnecessarily increasing healthcare costs.
Focus on What You Can Control
Financial headlines often focus on what’s beyond your control—market fluctuations, Federal Reserve interest rate decisions, or potential tax law changes. Worrying about these external factors can lead to anxiety and inaction. Instead, shift your focus to what you can control: how you save, where/how you invest, and how you structure your future withdrawals.
By diversifying your retirement savings across different tax buckets, you gain more flexibility in deciding how to draw income in retirement. This strategy can help minimize taxes, stay within favorable tax brackets, and strategically pass wealth to heirs.
A Balanced Approach
The best withdrawal strategy depends on your tax bracket, investment returns, and most importantly, your future financial needs. Your specific goals should be the drivers of your financial plan. By taking a thoughtful, tax-aware approach, we can do our best to control what we can, regardless of the noise around us.
It’s never too early to start thinking about tax diversification within your investment portfolio. The discipline you apply during your working years translates to flexibility and freedom in retirement. If you’d like to explore how a tax-efficient savings strategy can impact your financial future, let’s connect!
Recent Articles Written by Kristiana:
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Fiscal Fitness: The Behavioral Connection Between Consistent Exercise and Retirement Savings
What if I told you that the time you spend in the gym can help you maximize the amount you save for retirement? Consistently exercising and saving for retirement share underlying behavioral traits, including goal-setting, delayed gratification, and self-discipline. Exploring these parallels can offer insights into building better habits for physical and financial well-being.
Shared Behavioral Foundations
Physical fitness and financial planning are parallel journeys, both requiring long-term goal setting and consistent effort. For example, whether you aim to shed a few pounds before a vacation or save for a larger home as your family grows, success depends on creating a broad plan and adjusting the details as you progress. The most challenging step is often getting started, but once you do, the benefits compound. Practicing delayed gratification strengthens your ability to prioritize future rewards, making it easier to develop lasting habits. Over time, these small, incremental changes lead to significant outcomes—such as increased metabolic rate in fitness or the growth of wealth through compound interest. These benefits come together beautifully, enabling us to maximize energy and health as we age. This not only reduces medical expenses but also extends the freedom to travel and engage in activities during retirement, enhancing overall quality of life.
Psychological Benefits of Consistency
Consistency in exercise and financial saving offers psychological benefits that extend across both domains. Regular exercise helps build resilience by fostering mental toughness, a quality that directly translates to the discipline needed for financial planning and saving. Additionally, studies show that exercise reduces cortisol levels and improves cognitive function, leading to lower stress and more rational decision-making—critical factors in managing finances effectively. Furthermore, success in one area, such as achieving fitness goals, creates a positive feedback loop, boosting confidence and reinforcing habits that can be applied to other areas, like saving for the future. These interconnected benefits illustrate how consistency in one domain can enhance overall well-being and success in life. I’m excited to have partnered with Justin Merriman on this article, owner of FitLyfe Training. As a Physical Trainer with a Bachelors in Clinical Exercise Science from Grand Valley State University, he brings a unique perspective to the changes he sees in his clients’ healthy habits. If you’ve been thinking about working with a Physical Trainer feel free to schedule a meeting with him or follow him on Instagram @jman_merriman. Here’s his take on the matter.
Trainer’s Perspective
For most people, acquiring discipline can be quite the tall task. This typically comes when facing a goal we are not quite sure how to even begin working towards. With all the information out there in today’s world, some of which is very conflicting, it can be very hard to determine the “perfect route” to take. That is the thing though, trying to create a flawless routine is going to lead to trying many different extreme strategies that may not ‘fit’ into our lives, thus making it very hard to establish discipline. The key to creating a solid foundation of discipline is to make small changes in our lifestyle that we know will be sustainable. If it takes roughly 21-days for something to become a habit, all we need to do is act consistently on a very simple task for the course of that duration, and we can begin to build something very valuable. This is basically the brick & mortar process to set that foundation for building discipline. An example of a small task that can lead to a healthier lifestyle is finding a mode of exercise that you enjoy. This can be as simple as going for a walk through your neighborhood, swimming with your kids at the local pool, or going for a bike-ride. It doesn’t always have to be hitting a high-intensity workout at the gym. Once you find that mode of physical activity that you enjoy, then you build it into your routine on a regular basis. The more you do, the more you begin to enjoy the “doing.” This is where the discipline really solidifies. Eventually, you may start dabbling in other forms of exercise (weightlifting, group classes, yoga, etc), because of all the positive returns that you see and feel from that initial step you made. It’s a beautiful cycle.
Lessons From Research
Baumeister’s Strength Model of Self-Control gives us a great way to understand the connection between staying consistent with exercise and being disciplined with money. His research shows that self-control works like a muscle—the more you use it, the stronger it gets. When you stick to a workout routine, you’re not just building physical strength, you’re training your ability to delay gratification and stay committed to long-term goals. That same discipline makes it easier to make smart financial decisions, like saving for retirement. The cool part? Building willpower in one area of life naturally spills over into others, proving that self-control isn’t just something you’re born with—it’s a skill you can develop and use to create lasting success.
Practical Tips to Cultivate Habits in both Domains
Just like tracking your finances, monitoring your body’s progress is key. Big goals are great, but success often comes from setting manageable benchmarks. For example, rather than jumping straight to 10,000 steps a day, start by adding 2,000–3,000 steps daily—about a 30-minute walk. Over a few weeks, gradually increase your activity. Small choices, like taking the stairs or parking farther away, add up and make movement a natural part of your lifestyle. A step-counter is just one way to track progress. Many apps can help monitor food intake, strength training, running, and more. Find a metric that works for you—it will keep you motivated and push you toward greater achievements. Like gradually increasing your step count, building financial stability starts with small, manageable steps—like creating a basic budget and contributing to your employer-sponsored retirement plan. As you progress and push your limits, consider fine-tuning your approach by analyzing your diet and seeking expert guidance. Whether in fitness or finance, a professional’s perspective can help you optimize your strategy, avoid costly mistakes, and accelerate your progress. Tracking and refining both your physical and financial habits will keep you on a sustainable path toward long-term success.
References:
https://www.researchgate.net/publication/228079571_The_Strength_Model_ of_Self-Control
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Estate Planning: Advanced Strategies for Wealth Management
Estate planning goes beyond preserving wealth; it’s a strategic approach to financial security, tax efficiency, and legacy building. This guide explores advanced estate planning techniques, including trusts, business succession strategies, and philanthropic giving, to help you safeguard assets and optimize wealth transfer. Whether managing a business or planning for future generations, these insights ensure a comprehensive and tax-efficient estate plan.
Estate planning encompasses more than the preservation of wealth; it is a sophisticated exercise in financial security, tax minimization, and the cultivation of an enduring legacy. For individuals with complex asset portfolios or professional obligations, a nuanced estate plan is essential to address multifaceted personal and professional objectives while protecting assets for succeeding generations. Below, we examine advanced estate planning techniques and their strategic applications.
Foundational Strategies in Estate Planning
Revocable Living Trusts
A Revocable Living Trust represents a cornerstone of estate planning, offering unparalleled flexibility and control over assets. It is particularly advantageous for individuals managing diverse holdings, as it consolidates ownership of business interests, real estate, and liquid assets into a unified structure. By avoiding probate, this mechanism ensures the expeditious distribution of assets, maintains confidentiality, and obviates the complexities associated with ancillary probate in jurisdictions beyond one’s domicile.
Irrevocable Life Insurance Trusts (ILITs)
An ILIT is a sophisticated instrument designed to exclude life insurance proceeds from the taxable estate. When coupled with Crummey provisions, it permits annual tax-free contributions to beneficiaries within the parameters of the federal gift tax exclusion. The trust subsequently utilizes these contributions to maintain the life insurance policy.
For instance, consider an individual anticipating a substantial estate tax liability. By employing an ILIT, the resulting liquidity can offset estate taxes or fund a buy-sell agreement without diminishing other estate assets. This ensures the preservation of wealth while securing operational continuity for closely held enterprises.
Testamentary Trusts
A Testamentary Trust, activated through provisions within a will, offers an easily executed yet robust framework for structured inheritance. This trust is invaluable for managing distributions to minors or dependents and shielding assets from creditors’ claims or imprudent financial decisions by beneficiaries.
As an illustrative scenario, a professional seeking to ensure incremental wealth transfers to their children might establish a Testamentary Trust stipulating disbursements at defined life milestones, such as ages 25, 35, and 45. Concurrently, the trust could provide for a surviving spouse, ensuring both immediate support and the long-term financial stewardship of future generations.
Sophisticated Business Transfer Mechanisms
Business succession planning demands precision and foresight to mitigate tax exposure while ensuring operational stability and intergenerational continuity.
Buy-Sell Agreements
Buy-Sell Agreements are indispensable in delineating ownership transitions in the event of death, disability, or retirement. Funded through life insurance, these agreements provide liquidity to facilitate the acquisition of the deceased owner’s share by surviving stakeholders.
For example, a small enterprise with two co-owners might implement a Cross-Purchase Agreement. Should one owner predecease the other, the agreement enables the survivor to acquire the decedent’s stake at a predetermined valuation, thereby safeguarding the business and providing equitable compensation to the deceased’s heirs.
Qualified Interest Trusts
Instruments such as Grantor Retained Annuity Trusts (GRATs) or Qualified Personal Residence Trusts (QPRTs) are pivotal in transferring appreciating assets while minimizing taxable estate values. These trusts effectively "freeze" the asset’s value for estate tax purposes, allowing beneficiaries to inherit appreciation free of tax liability.
A family business owner might, for instance, transfer shares into a GRAT. During the trust’s term, the grantor receives an annuity, while the appreciating residual interest transfers to heirs upon expiration of the trust, all within a highly tax-efficient structure.
Valuation Discounts for Business Gifting
Strategic gifting of minority interests in a closely held business capitalizes on valuation discounts for lack of marketability and minority control, thereby reducing the taxable value of transferred assets.
Over time, an owner could utilize annual gift tax exclusions to transfer minority shares to heirs or trusts, systematically diminishing the taxable estate while preserving family control over the enterprise.
Family Limited Partnerships (FLPs)
FLPs embody the "family bank" philosophy, serving as a vehicle for intergenerational wealth transfer while retaining centralized control. By transferring limited partnership interests to heirs, significant valuation discounts may be realized for estate and gift tax purposes.
Consider a family enterprise structured as an FLP. The general partner retains decision-making authority, while limited partnership interests are distributed to heirs, fostering shared ownership and financial stewardship across generations. This approach not only reduces estate tax exposure but also instills a legacy of collaborative asset management.
Advanced Philanthropic Strategies
Charitable giving serves dual objectives: it aligns with personal values while achieving meaningful tax optimization. High-net-worth individuals often integrate philanthropic endeavors into their estate plans to magnify their impact and minimize liabilities.
Charitable Remainder Trusts (CRTs)
CRTs facilitate the transfer of highly appreciated assets, enabling donors to sidestep immediate capital gains taxes while deriving a steady income stream. Upon termination of the trust, the remaining assets pass to designated charitable organizations.
For instance, transferring appreciated stock to a CRT eliminates capital gains taxes, generates lifetime income for the donor, and secures a legacy contribution to a favored nonprofit institution.
Donor-Advised Funds (DAFs)
DAFs provide a streamlined platform for strategic philanthropy. Contributions yield immediate tax deductions, while donors retain advisory privileges over grant disbursements to qualified charities.
Envision a scenario where a family consolidates their annual charitable contributions into a DAF. This structure simplifies administration, engages younger generations in philanthropy, and perpetuates a tradition of giving.
Private Foundations
Private foundations afford unparalleled control over charitable endeavors, albeit with heightened administrative complexity. They are well-suited for individuals seeking to establish a lasting institutional legacy.
A private foundation might, for example, fund educational scholarships or community initiatives aligned with the founder’s values. Beyond tax benefits, such entities foster active family participation in governance and amplify philanthropic impact over generations.
Avoiding Strategic Pitfalls
Even meticulously constructed estate plans are susceptible to errors that can compromise their efficacy. Common pitfalls include:
Improperly Funded ILITs: Failure to fund this trust appropriately jeopardizes the tax-exempt treatment of contributions.
Liquidity Deficiencies: Inadequate planning for estate tax liabilities or business buyouts may necessitate a premature liquidation of assets. Life insurance and carefully calibrated gifting strategies work to mitigate this risk.
Outdated Valuations: Periodic appraisals ensure that asset values remain accurate, particularly for closely held businesses.
Underutilized Philanthropic Opportunities: Neglecting charitable mechanisms can result in unnecessary tax exposure and diminished legacy impact.
Estate planning transcends mere financial management; it is a deliberate exercise in legacy cultivation, tax strategy, and familial continuity. By employing tools such as ILITs, FLPs, GRATs, and philanthropic vehicles, individuals can craft plans that are both comprehensive and tailored to their unique circumstances.
Engaging with seasoned legal and financial advisors ensures the realization of these strategies in alignment with overarching objectives. The earlier these measures are implemented, the greater the flexibility and efficacy of the resulting plan.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Financial Love Languages: A Couple’s Guide to Building Wealth Together
For many couples, financial conversations can be a source of tension. Working with clients, I’ve noticed that often this tension stems from a misunderstanding of each other's natural tendencies and values. Sometimes it's difficult to understand and identify our own deep-seeded values - doesn’t everyone just think like I do?!
Understanding each other’s "financial love language" can transform these discussions into opportunities to strengthen your relationship and work toward shared goals. Clarity is kindness!
What Are Financial Love Languages?
The concept of financial love languages adapts the idea of love languages—how people give and receive love—to the world of money. Everyone has a unique relationship with money shaped by their upbringing, experiences, and values. Recognizing your partner’s financial love language can help you navigate differences in spending, saving, investing, and planning habits.
Here are five common financial love languages:
1. The Saver
Core Traits: Loves building a financial safety net and prioritizes long-term security over immediate gratification.
How They Operate: Savers often prefer maintaining a robust emergency fund (at least six months of living expenses) and shy away from unnecessary risks.
How to Support Them: Celebrate their commitment to stability and work together to define clear savings goals, such as retirement planning or purchasing a home.
2. The Spender
Core Traits: Enjoys treating themselves and others, valuing experiences, travel, or material comforts.
How They Operate: Spenders might allocate a specific portion of their budget for indulgences, such as a travel fund or a splurge account.
How to Support Them: Encourage their zest for life by creating a financial plan that accommodates flexible spending while ensuring long-term goals are still prioritized. A bucket strategy can work wonders here!
3. The Investor
Core Traits: Focuses on growing wealth through calculated risks and strategic decisions.
How They Operate: Investors thrive on understanding the details of holdings and might allocate a small portion of their portfolio to speculative opportunities.
How to Support Them: Engage with their enthusiasm by discussing investment strategies and aligning their goals with the broader financial plan. Having a hobby/play account for speculative investments can be a great solution to keep the financial plan on track.
4. The Planner
Core Traits: Thrives on structure, setting budgets, and meticulously tracking financial goals.
How They Operate: Planners love detailed financial plans and tracking progress through spreadsheets or planning software.
How to Support Them: Provide the nitty gritty details of the cashflow plan and retirement projections. Collaborate with your advisor on creating a detailed financial roadmap and schedule regular check-ins to review progress and pivot as needed.
5. The Giver
Core Traits: Finds joy in sharing resources through gifting or charitable contributions.
How They Operate: Givers prioritize supporting loved ones or charitable causes. Working with a great advisor allows for maximum tax-efficiency, making your dollar as generous as possible.
How to Support Them: Work together to incorporate charitable giving into the financial plan, ensuring it aligns with other priorities like savings and investments. Charitable planning is a proactive process that should be woven into the financial plan all year long.
Building a Financial Partnership
Identifying your financial love languages can give you a great starting point to understand deeply held values within one another. Pinpointing your money motivators helps align your approaches and build a stronger financial foundation together.
Having different financial motivations doesn’t mean you can’t create a cohesive plan. With proactive planning and open communication building and sticking to a financial plan can bring a lot of joy to your life!
Money doesn’t have to be a source of stress in your relationship. Instead, it can become a way to deepen your connection and work toward shared dreams. This Valentine’s Day enjoy a heartfelt conversation about your financial future. After all, what’s more romantic than building a life and accomplishing goals together?
Recent Articles Written by Kristiana:
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Featured In: ApartmentGuide
Kristiana Daniels, CFP®, EA, BFA™ was named an expert in an ApartmentGuide article, a subsidiary of Redfin. Check out the featured article: Tips for Couples Cohabitating for the First Time | ApartmentGuide.com
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
Recent Articles Written by Kristiana:
Equity Compensation: Strategies for Business Owners and Executives
Discover strategies to maximize owner compensation, attract and retain key employees, and foster long-term business success with tailored incentives, equity-based rewards, and retention-focused programs.
Equity compensation: whether it’s stock options, restricted stock units, deferred compensation plans, or other incentives can be powerful for both wealth-building and as a tool to retain and grow top talent. For business owners and executives, it offers an opportunity to align your financial success with the growth of your company. But without a strategy, these rewards can quickly become a source of unnecessary complexity and risk.
Here we’ll explore key considerations for managing equity compensation effectively while highlighting strategies to minimize tax burdens and maximize long-term benefits.
Understanding Equity Compensation: A Quick Overview
Equity-based compensation comes in several forms, and each has its own rules and opportunities. Here are the most common:
Incentive Stock Options (ISOs)
Offer favorable tax treatment if you meet holding period requirements.
If sold too early, gains are taxed as ordinary income instead of capital gains.
Nonqualified Stock Options (NSOs)
Taxed as ordinary income at exercise, based on the difference between the exercise price and market value.
Any subsequent growth is subject to capital gains tax when sold.
Restricted Stock Units (RSUs)
Taxable as income upon vesting, with the stock’s market value determining the tax hit.
Holding shares after vesting exposes future gains to capital gains taxes.
Deferred Compensation Plans
Allow you to defer taxable income to a future date, ideally when your income—and tax rate—are lower.
Planning payout timing is critical to avoid high tax bills.
Net Unrealized Appreciation (NUA)
This is a strategy for 401(k) holders with company stock, where you can reduce taxes on the growth of your stock by shifting it from ordinary income to long-term capital gains.
Each of these compensation forms has the potential to have a lasting, positive effect on your wealth; but only if you navigate the accompanying tax and financial complexities strategically.
The Tax Factor: What You Need to Know
Taxes are the single biggest factor to consider when managing equity compensation. Poor timing can mean losing a significant portion of your rewards to tax liabilities. Here’s a simplified breakdown:
ISOs and AMT
Incentive Stock Options are a tax-friendly tool, but exercising too many in one year can trigger the Alternative Minimum Tax (AMT). Proper planning, like spreading exercises across multiple years, can help mitigate this.
RSU Vesting and Taxes
When RSUs vest, you’re hit with ordinary income tax on their full value. Depending on how frequently you’re issued RSUs and if your company stock is performing well, you may be tempted to hold onto those shares. But this could leave you overexposed to a single stock.
Deferred Compensation Risks
Deferred compensation allows you to kick taxes down the road, but you’ll need to carefully coordinate distributions with your broader income to avoid bumping into higher tax brackets. Additionally, depending on how the agreement is written, there may be additional risks such as if the company goes bankrupt, is sold, or employment separation isn’t in alignment with the terms of the agreement.
NUA Benefits
If you hold company stock in a 401(k), rolling it into a brokerage account under NUA rules lets you pay long-term capital gains rates on its growth instead of ordinary income tax rates often cutting your tax liability nearly in half.
Giving thoughtful consideration to your tax strategy ensures you’re making the most of what you’ve earned while keeping more in your pocket.
Strategies to Maximize Equity Compensation
Managing equity compensation isn’t just about taxes—it’s about using these assets to meet your broader financial goals. Here are three strategies to get you started:
Diversify to Manage Risk
As passionate as you may be about the outlook of your company, holding too much company stock ties your financial future to one asset, leaving you vulnerable even if the only risk couldn’t have otherwise been planned for. As soon as RSUs vest or you exercise stock options, consider selling to diversify your portfolio into other investments. This spreads risk while still allowing you to benefit from your company’s success.
Plan the Timing of Exercises and Sales
For ISOs and NSOs, timing is everything. Aim to exercise stock options in years when your taxable income is lower to minimize the impact. Similarly, holding shares long enough to qualify for long-term capital gains can significantly reduce the taxes you pay on appreciation.
Leverage Tax-Advantaged Strategies
Tools like deferred compensation and NUA are underutilized opportunities to save on taxes. Deferred comp payouts scheduled during retirement years, when your income is typically lower, can make a huge difference. Likewise, using NUA rules for company stock in your 401(k) can transform a steep tax bill into manageable long-term capital gains.
The Bigger Picture
Equity compensation is about more than just growing wealth. It’s about aligning your decisions with your long-term financial goals. Whether you’re a business owner structuring a succession plan or an executive navigating your compensation package, the right strategy can help you turn potential into reality.
That said, equity compensation is rarely one-size-fits-all. Your strategy should account for your risk tolerance, income level, and long-term goals. A financial advisor can be a valuable partner in navigating these complexities, helping you optimize your decisions at every step.
If you’re ready to take the next step in managing your equity compensation, start by evaluating your current position and identifying opportunities to optimize. And remember thoughtful planning today lays the foundation for tomorrow’s success.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Financial Planning Feature: Wealth Think Wisdom, vision, wealth: How parents can instill enduring financial habits
Kristiana Daniels, CFP®, EA, BFA™ had the privilege of being featured in Financial Planning, where she shares insights on the importance of instilling enduring financial habits in the next generation.
Kristiana emphasizes the need for proactive and intentional thought behind how we incorporate our children and our client’s children in building solid foundations and generational wealth.
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
Recent Articles Written by Kristiana:
2025 Financial Wellness Checklist: 7 Steps to a Healthier Future
It’s that time of year when everywhere you look, you’re encouraged to reflect on the previous year and set new goals for the one ahead. Don’t forget to take the temperature of your financial health.
Here we sit in 2025! It’s that time of year when everywhere you look, you’re encouraged to reflect on the previous year and set new goals for the one ahead. Physical and mental health goals, career moves, and personal bucket list items often take center stage. But amid all the dreaming, don’t forget to take the temperature of your financial health.
To improve your overall financial well-being this year, here are a few steps to get you started and position yourself for long-term success.
1. Eliminate Unnecessary Expenses
Start by taking inventory of your subscription services. Remember when you signed up for that free trial of Apple Music or HelloFresh six months ago and forgot to cancel it? Oops! Comb through your credit card statements to identify recurring charges for services you no longer use and cancel them.
Go one step further: For services that have increased their prices—like your internet or cable provider—call and ask if there’s a better offer available. You might be surprised at the deals you can secure simply by asking.
2. Review Your Insurance Coverage
If you own a home, chances are its value has increased in recent years. Now is a great time to review your homeowner’s insurance policy to ensure adequate coverage. Did you know an insurance company will only fully cover damage to your home if your policy covers at least 80% of the home’s total replacement value? Keeping your coverage up to date can save you from financial headaches down the line.
Also, review your life insurance. Is the coverage amount still appropriate given your current expenses, income, and anticipated needs? Regular reviews help ensure your family’s financial security remains intact.
3. Automate Your Savings
One of the easiest ways to build your savings is to automate the process. Set up monthly direct deposits or automatic transfers from your checking account to a brokerage account, high-yield savings account, or IRA. Once it’s set up, you’re less likely to miss the money, and your savings will grow without additional effort.
4. Increase Retirement Plan Contributions
Contributing to your employer-provided retirement plan is a relatively painless way to save for the future. Instead of contributing a flat dollar amount, set a percentage of your salary to defer. This way, your contributions automatically increase as your pay grows.
Consider going one step further by increasing your contribution rate by 1-2% this year. A small adjustment like this can have a significant impact over the course of your career.
Additionally, depending on your financial situation, explore deferring income to the Roth feature of your employer’s retirement plan. This option can provide more flexibility in retirement and potential tax savings over your lifetime.
5. Review Estate Planning Documents
Life changes, and so should your estate plan. Ask yourself:
Are the people you’ve named in your will or trust still the right choices?
Is your medical durable power of attorney assigned to the best person to advocate for you in an emergency?
Have your children reached adulthood, and are you now comfortable naming them as successor trustees instead of your sibling?
These details are easy to overlook but crucial to keeping your estate plan aligned with your wishes.
6. Reevaluate Your Financial Goals
Take time to reassess your financial goals. Are they still aligned with what you hope to achieve in the future? Have your priorities shifted? Organize your list of goals and determine what’s most important to you right now.
Also, consider whether you’re making forward progress. If not, identify the roadblocks that might be holding you back. Evaluating your financial health requires reflecting on where you started, understanding where you want to go, and objectively tracking your progress.
7. Explore Tax-Saving Opportunities
Proactive tax planning can save clients significant money over the course of the entire lifetime. Take advantage of tax-advantaged accounts like HSAs and IRAs. Review your withholdings to ensure you’re not giving the government an interest-free loan or facing a big tax bill come April.
If you’re a small business owner or self-employed, consider strategies like maximizing retirement contributions or claiming proper deductions. Tax planning is a year-round activity that will enhance your financial health.
If your financial plan needs a wellness check, let’s connect.
It’s a privilege to walk alongside you on your journey to optimal financial health. By tackling these steps, you can set yourself up for a brighter financial future in 2025 and beyond.
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
2024 End of Year Financial Checklist
Completing an end-of-year financial checklist is essential for setting yourself up for success in 2025. This process will allow you to review your progress and goals from 2024 while also helping you refresh and enhance your financial plan as you head into the new year.
Cash Flow Review
Whether you like to budget or not, assessing your spending habits is the essential first step. All financial progress stems from spending less than you make. If you consistently budget, this is the time to figure out what worked well and what needs to be changed. Think about these questions as you forecast for next year.
How will household income change in 2025?
What significant expenses am I anticipating in the coming year that I can plan for?
Am I saving and investing enough of my income?
Prepare for Tax Season
Much of your tax planning will have to wait until next year, but getting a few items in order can be helpful before tax season. You can collect business expenses, charitable giving receipts, childcare expenses, and other tax-deductible items.
The final piece of preparation for tax season would be to decide how you plan to prepare your taxes. You could do it yourself or hire it out. There is no wrong way to go about it, but now is the time to reach out and find a good CPA that you can work with to optimize your tax situation.
Max Out Your Contributions
The end of the year is the perfect time to review your annual contributions to your retirement accounts. In 2024, employer-sponsored plans such as 401(k), 403(b), or 457 allow you to contribute up to $23,000. It's important to note that this amount does not include any employer match. If you are 50 years old or older, you are eligible for a "catch-up" contribution, allowing for an extra $7,500 of contributions. This raises your total maximum contribution to $30,500 for the year.
The contribution limit for individual retirement accounts (IRAs) in 2024 is $7,000, with a $1,000 catch-up contribution available for those 50 or older.
Review Your Investments
If you have a financial advisor, they should have scheduled a year-end planning meeting by now.
If you manage your investments independently, this is an excellent time to review your strategy, assess your performance, and rebalance your portfolio. If you feel it's time to seek professional help, consider finding a fiduciary advisor who prioritizes your best interests.
Consider a Roth Conversion
Roth conversions involve transferring pre-tax dollars into a Roth account, which will then grow tax-free. This approach can be great for someone nearing retirement with much of their wealth in pre-tax accounts. It can also benefit young professionals with plenty of time for the investment to grow. However, this only makes sense for some, so consult a financial professional to weigh the pros and cons of this option.
Open Enrollment
Open enrollment occurs at different times of the year and is dictated by your employer. It is most commonly presented around early November and allows you to review or change employee benefits options.
This is an excellent time to ensure you get the best insurance plan value. You and your spouse may even qualify for additional plans, such as term life insurance or disability coverage, at little to no cost.
Confirm Beneficiaries
While this does not change often, it is necessary to ensure that it is up to date. Here are some accounts that should have a beneficiary associated with them.
Retirement/Investment Accounts (401k, 403b, 457, and IRAs)
Bank Accounts
Life Insurance Policies
Properly assigning beneficiaries can help you have peace of mind that your loved ones will be cared for.
This checklist can help you clearly assess your financial situation and prepare for success in 2025.
References
https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Financial Goal Setting: 5 Simple Steps for Success
I want to make my case for why goal setting matters for your financial picture. A study by Gail Matthews at Dominican University showed the benefits of goal setting, specifically the advantages of having written goals with accountability. Feel free to check out the study yourself, but she found that having written goals gave people a 33% higher chance of success compared to those with unwritten goals. Here are 5 steps to help guide you through your financial goal-setting and give you more confidence in your financial plan.
Step 1: Define Specific Goals
I got my bachelor’s degree in exercise science, and in my program, every class emphasized goal setting. Whether discussing exercise and nutrition or personal finance, achieving a goal must be done with strategy in mind. The strategy I find the most effective in goal setting is called SMART goals. SMART stands for specific, measurable, attainable, relevant, and time-bound. By being specific, you can track progress and know when you’ve achieved your goals. For example, “I am going to invest 5% of my monthly income into a Roth IRA for the next year”.
Specific: Investing into a Roth IRA
Measurable: 5% of monthly income
Attainable: 5% is a manageable contribution
Relevant: Relevant for someone starting to invest
Time-bound: The next year
Step 2: Prioritize Your Goals
The reality is we can’t focus on a bunch of goals at one time. When we try to accomplish too many goals at once, they all suffer, hurting our chance of accomplishing the most important ones. I recommend prioritizing your list of SMART goals down to your top 3. This could be due to urgency or importance. Examples include creating a budget or maxing out your IRA contribution for the year. Jot down all the goals, but don’t set the expectation that you can do them all at once.
If your goal seems too big, break it down into a few smaller goals that will help you see the progress quicker. For example, break down a goal to pay off all debt into paying off credit card debt first, then student loans, and then car loans. This way, you break down a goal that would take 3 years, allowing you to check off one goal each year, making it more manageable.
Step 3: Create A Plan and Track Progress
Now that you’ve established your SMART goals and broken them down by priority, the rubber can hit the road. There are multiple ways in which this can be done well, so find what works for you and stick with it. Research shows that written goals with accountability give you the highest chance for success. Whether you write your goals in a journal, your phone notes, or an app, the important part is that you do it.
Step 4: Use Goals to Cultivate Consistency
This point could be summed up if you read the book “Atomic Habits” by James Clear. If you’re interested, I can’t recommend that book enough. Clear makes the point that small habits that are successfully implemented over time lead to major changes. Essentially, it is easier to make three small changes than to make one major change. This is where accountability comes into play.
If you’re married, you have a built-in accountability partner. One that will likely share the same goals as you. If you’re single, find a trusted friend or family member who can help keep you on track with your goals over time. The beauty of financial goals is that these individual goals often turn into habits that can be automated. In my earlier example of putting 5% of your monthly income into a Roth IRA, by doing this, you build a habit that can be repeated year on year with minimal effort.
Step 5: Learn from Setbacks and Adjust
News Flash: Setbacks will happen for everyone. Nobody is perfectly consistent, and a lack of consistency will lead to setbacks. I don’t say this to discourage you, but hopefully to encourage you. A setback does not equal failure when it comes to goal setting. By readjusting instead of giving up, you give yourself a chance to still be successful. Your financial life is a constantly changing picture, and your goals should be no different. Having goals in place, even after adjusting for unforeseen circumstances, will still put you in a better position than if you had never set the goals to begin with.
Goal setting is an incredibly important way to implement changes to your financial picture. It is how you intentionally go from getting out of debt to saving for retirement and having a bulletproof retirement plan. The beauty of goal setting is that it benefits everyone from the 18-year-old college student to the 72-year-old retiree and everyone in between. Use these steps to sit down and see the benefits for yourself.
References
https://www.dominican.edu/sites/default/files/2020-02/gailmatthews-harvard-goals-researchsummary.pdf
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Nourishing Your Body and Bank Account: Recipes for Busy Healthcare Professionals
As healthcare professionals, you know that staying healthy is more than just the occasional workout or salad—it’s about consistent habits that lead to long-term well-being. The same is true for managing your finances. Whether investing for retirement or planning your meals for the week, both areas require thoughtful strategies that can compound into significant benefits and savings over time.
Just like a balanced diet, a well-rounded financial plan helps you build resilience and stability. Think of budgeting as meal planning: you wouldn’t eat junk food every day and expect to feel great and wouldn’t spend impulsively without considering how it affects your financial future. Both require discipline and foresight.
In both finances and health, consistency is key. Saving a portion of your income each month may seem small at first, but over time, those savings can grow through compound interest. Similarly, making healthier food choices daily—like adding more vegetables or reducing processed foods— can compound into a healthier you. The smarter choices you make today, the more you set yourself up for success tomorrow.
I’m excited to have partnered with Bre Bock on this blog post. She has provided 10 simple suggestions on how to easily add additional nutritional value to recipes you may already be making for you and your family.
She is a Registered Dietitian and owner of Revived Nutrition Counseling. Her focuses are gut health, heart health, and general health management for her clients. She is also an HAES aligned dietitian and approaches sessions with her clients within an intuitive eating framework.
If you have been thinking about meeting with a Registered Dietitian feel free to schedule a meeting with her or follow her on Instagram @revivednutritionrd.
Let me know what your favorite recipe tip is, I know I plan on trying all of them.
1. Cowboy Caviar
A nutritional vegetarian powerhouse with legumes, bell peppers, cilantro, canned corn, and red onion - add a few seasonings like cumin, smoked paprika, chili powder, and lime juice for a very quick, and inexpensive meal.
I like to pair mine with a whole grain tortilla chip for some crunch and usually will serve with diced avocado, and a side of fresh fruit.
2. Mac & Cheese 3 Ways
What kid (us big kids too) doesn't love cheesy mac? This easy staple can be improved upon with several quick and easy add-ons.
-Tuna & peas (canned tuna in water and frozen peas work great here!) I usually steam the peas separately. You can also boil them with the noodles to save time. Stir in the tuna after the mac is made.
-Add in a steamable bag of broccoli or California blend.
-Switch it up with a box of white cheddar mac and add in pre-shelled frozen edamame. You can throw the edamame in about halfway through boiling the noodles as they only need about 4 min to cook from frozen. Edamame is a great way to amp up your fiber and protein intake!
3. Red Beans & Rice
This is a meal that makes great leftovers and there is always plenty to share! This is my own version below.
Directions
1. Start by steaming brown rice on stove top or rice cooker according to directions on packaging.
2. In a large skillet, start by heating oil over medium heat.
3. Add in onion and cook until translucent, then add garlic and cook for another 1 minute.
4. Add in bell peppers and saute until peppers start to soften.
5. Add in the kidney beans and stir together, cook for about 5 minutes.
5. add in the seasonings (chili powder, smoked paprika, and cumin) and mix to incorporate.
6. Add in the brown rice once cooked and stir in the salsa and lime juice.
7. Turn off the heat and mix in the cheese.
8. Serve with diced avocado and/or sour cream if desired.
Ingredients
1 cup brown rice
1 can red kidney beans (rinsed and drained)
1 Tbsp avocado oil
1/2 large onion, diced
1/2 cup yellow bell pepper, diced
1/2 cup green bell pepper diced
2 Tbsp minced garlic
1/2 cup jarred salsa
1 cup cheddar or monterey jack cheese
1 tsp chili powder
1 tsp smoked paprika
1/2 tsp cumin
2 Tbsp lime juice
1 avocado, diced
4. Salmon Patties with Sweet Potato and Cauliflower Rice
This is a great option if you're short on time and are willing to use your microwave. You can use a frozen steam bag of cauliflower rice which cooks in about 4.5 minutes. You can also cook a sweet potato/regular potato (or multiple) in the microwave in a bowl for about 8 minutes with a few inches of water, just pierce the potato with a fork a few times. The salmon patties go in the skillet cooking for about 10-12 minutes while the potato and cauliflower cook in the microwave - so you've got the whole meal done in about 15 minutes.
If you want to make your salmon patties from scratch vs picking up frozen ones, that does take a bit longer, but if you're OK with using a frozen option (the ones from Aldi (Fremont Wild Caught Salmon Burgers) are $1.32 a patty - which feels pretty reasonable to me).
5. Protein Pancakes
The Kodiak pancake mix is a great choice as it's whole grain (high fiber) and high protein. You can increase the protein count by adding an egg and/or swapping milk for water. I like to add in a little cinnamon and applesauce to increase the nutrient factor. Adding in blueberries or peaches are also favorites, for a fruity pancake. Serve with turkey or chicken breakfast sausage.
6. Egg Bites with Veggies
This is an easy recipe to bulk prep. It also allows you to make several varieties at a time. The basics are 6 eggs, a little black pepper, and 3/4 cup of cottage cheese - put it in a blender and blend until smooth.
To boost nutrient value, add whatever vegetables (spinach, peppers, onion, mushroom, etc) you'd like. Saute the veggies and add a little on the bottom of 12 muffin cups, pour your egg evenly over the cups. Finish by adding a little more of the veggies on top. Feel free to sprinkle with a little cheese as well! Bake for 18-22 minutes.
7. One-Pan Zucchini Skillet
This is an oldie but a goodie (a childhood favorite!) Very easy and quick! :)
Directions
1. Place avocado oil in a skillet and heat over medium.
2. Add onion and cook for 1-2 minutes.
3. Add ground turkey.
4. Add steak seasoning and cook meat until brown.
4. Drain any excess fat if needed.
5. Add zucchini and cook until softened.
6. Mix in cheese and serve with whole grain bread or over brown rice/quinoa (bonus points if you’ve cooked extra rice or quinoa from another meal!)
Ingredients
1 Tbsp avocado oil
1/2 onion, diced
1 lb ground turkey
1 Tbsp Steak Seasoning (low sodium steak seasoning)
1 large zucchini, sliced into 1" pieces
1 cup part-skim mozzarella cheese
8. Warm Salad Kits
This next one may sound weird, but hear me out! Take a salad kit, perhaps a Thai or Asian-inspired option, saute with a little olive oil, and add some diced chicken breast/ground turkey/or shrimp. You can use the salad dressing as a sauce. Consider adding extras like cashews, slivered almonds, or canned (in their own juice) mandarin oranges. Serve it over a carb like brown rice, quinoa, or a brown rice noodle.
9. Sausage and Veggie One-Pan Meal
This is a great way to clean out your fridge, no one likes to waste money throwing produce away! Whatever leftover vegetables you may have lurking around (onion, sweet potato, broccoli, cherry tomatoes, carrots), toss with 1-2 Tbsp avocado oil. Slice and add a package of chicken sausage (I love the apple chicken sausage from Aldi or Costco).
Roast at 400 for 20-30 minutes depending on what vegetables you end up using - you'll need more time for things like carrots/potatoes and less time for things like onions, cherry tomatoes, and broccoli.
10. Marinara Chicken Bake
Take a few fresh chicken breasts and spread some marinara or pesto sauce over top, add a slice of mozzarella cheese and sliced tomato on top, and bake at 350 for 20-30 minutes or until internal temp reaches 165 degrees. Broil for 2 minutes so the cheese is nice and bubbly/golden. If you’re short on time, serve with a steamable bag of green beans/red potatoes (Birds Eye has a good option).
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Avoid These Common Financial Pitfalls: A Guide for Doctors, APPs, and Nurses
Navigating the financial landscape can be challenging, especially for medical professionals who have spent years focused on their education and training. Whether you're a doctor, advanced practice provider (APP), or nurse, understanding common money mistakes and how to avoid them is crucial for building a secure financial future. In this blog post, we'll explore some of the most frequent financial pitfalls encountered by healthcare professionals and offer practical tips to help you steer clear of them.
Common Financial Mistakes
Overlooking Student Loan Management
Student loans can be a significant burden for medical professionals. Review all your loans to understand which are public vs. private, the interest rates, and the repayment terms. This knowledge could save you tens of thousands of dollars in the future.
If your loans are public, evaluate which loan repayment option is best for you. Many healthcare employees work for non-profit hospitals. If you plan to work for a qualified non-profit for ten years, Public Service Loan Forgiveness (PSLF) will likely be the best option. You will want to make sure your student loans are direct federal student loans and not Federal Family Education Loans if you plan to pursue PSLF.
If you do not work for a qualified non-profit or have private student loans, evaluate which repayment option suits you best and determine how quickly you want to pay off the loans. I have had good experience with GradFin which offers free initial consults to help review your loan repayment options.
Increasing Lifestyle Expenses Too Quickly
Transitioning from a student budget to a professional income can be tricky. Many healthcare professionals fall into the trap of increasing their living expenses too quickly once they start earning a full-time salary.
The White Coat Investor encourages doctors to “continue to live like a resident” for a few more years before increasing their lifestyle. This advice applies to APPs and nurses as well. Doing so can free up money to pay down debt, jump-start retirement savings, and allow more thoughtful financial decisions about your lifestyle.
Delaying Retirement Savings
It might be tempting to delay retirement savings, especially if you're still paying off student loans or adjusting to a new salary. However, the benefits of early and consistent retirement contributions are tremendous.
Take advantage of employer 403(b) or 401(k) matches, HSA contributions, and backdoor Roth IRA contributions if possible. Starting now can be a significant step toward financial independence. Most people do not regret saving sooner for retirement, but many regret waiting too long.
Ignoring Insurance Needs
Insurance is a critical component of financial planning that often gets overlooked. Disability insurance, life insurance, and malpractice insurance are essential for protecting yourself and your family against unforeseen events. Understand the types of coverage available and choose policies that fit your specific needs and circumstances. Proper insurance coverage provides peace of mind and financial security.
I recommend avoiding whole life/permanent life insurance for most healthcare providers due to high expenses and fees limiting potential upside. If someone tries to sell you permanent life insurance, fully understand how it would be beneficial to you and what the costs will be. Consider getting a second opinion and exploring term life insurance instead, investing the difference.
Actionable Financial Tips
Building an Emergency Fund
One of the most important steps in financial planning is establishing an emergency fund. Aim to set aside 3-6 months of living expenses in a high-interest savings account or money market fund. This fund acts as a safety net in case of unexpected expenses or income loss.
Start small if needed, and gradually build up your fund over time. The peace of mind an emergency fund provides is invaluable. If you are single with no kids, 3 months may be enough. If you have kids and/or are married, consider aiming closer to the 6-month mark.
Investing Wisely
Investing is a powerful tool for growing your wealth, but it's essential to approach it wisely. Educate yourself on the basics of investing in the stock market and consider low-cost mutual funds and index funds. Diversifying your investment portfolio can help manage risk and improve your chances of long-term success. Learning about expense ratios and the fees associated with investing is also critical.
Evaluate your risk tolerance and risk capacity when investing. Everyone is happy during the years when the market goes up, but some people let their anxiety get the best of them during the years when the market drops. Having your investments set up based on your individual risk level is crucial to avoid making emotional decisions during periods of market volatility.
Seeking Professional Financial Advice
Working with a financial advisor can provide significant benefits, especially if you're navigating complex financial decisions. A good financial advisor can help you create a comprehensive financial plan tailored to your goals, manage your investments, and provide guidance on tax strategies and retirement planning.
If you decide to work with a financial advisor, I recommend:
Looking for one who is a fiduciary, meaning they must look out for your best interest.
Finding one that is fee-only, which means they do not get commissions.
Clearly understanding what fees they are charging and what services they provide.
Don’t Wait, Start Today
Avoiding common financial mistakes and implementing smart money strategies is crucial for medical professionals aiming for long-term financial health. By managing your student loans, budgeting wisely, prioritizing retirement savings, securing appropriate insurance, building an emergency fund, investing prudently, and seeking professional advice, you can set yourself up for a secure and prosperous future. Remember, taking proactive steps today can make a significant difference in your financial well-being tomorrow.
If you need more personalized advice or have specific financial questions, don't hesitate to reach out. Your financial health is just as important as your physical health, and taking care of it now will pay off in the years to come.
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Creating an Impactful Transfer of Wealth: Leaving Blessings, Not Burdens with Simple Strategies
Passing on wealth to the next generation is more than just managing financial assets—it's about ensuring your values, wisdom, and legacy endure. This article explores simple strategies to transfer both financial and qualitative capital, helping you create a lasting legacy for your family.
Passing on wealth to the next generation is a crucial aspect of financial planning, and doing so in a way that minimizes tax implications is a priority for many families. The key lies in finding the balance between effective and straightforward while avoiding unnecessary complexity. There are practical methods available that can simplify the process for your family, regardless of your net worth. In this article, we’ll explore a range of strategies, including the family bank philosophy which is suitable for various net worth levels if you look beyond the financial impact. To that point, we’ll discuss the importance of passing on lasting philosophies and memories to your heirs, ensuring that the wealth transfer is not just about financial capital but also about the qualitative capital such as the values and wisdom that have guided your journey. By integrating these approaches, you can create a meaningful legacy that extends beyond mere monetary value.
Understanding the Lifetime Gift Tax Exclusion
The lifetime gift tax exemption can be a crucial element in estate planning. As of 2024, the exclusion allows individuals to gift up to $13.61 million over their lifetime without incurring federal gift taxes. For those with a net worth below this threshold, complex legal structures usually prove unnecessary without additional extenuating circumstances. Simpler strategies can effectively transfer wealth while minimizing tax implications. However, even for those exceeding this limit, the preference should still lean towards simplicity. Overly complex legal structures can create additional burdens and complexities for both the givers and the recipients. Understanding the implications of the lifetime gift tax exclusion can help guide more straightforward, yet effective, wealth transfer strategies.
Simple Wealth Transfer Strategies
Several simple strategies can facilitate the transfer of wealth while minimizing tax burdens:
Annual Gift Exclusion
The annual gift exclusion allows individuals to gift up to $18,000 as of 2024 per recipient per year without affecting the lifetime exclusion. This strategy effectively distributes wealth gradually over time and can be particularly beneficial for families looking to support multiple heirs.
529 Education Savings Plans
Another popular option is 529 education savings plans, which offer tax-free growth and withdrawals for qualified education expenses. You can contribute up to the annual exclusion amount each year or, contribute up to five years worth ($90,000 in 2024), and then account for it on tax form 709 over the following five years without triggering the need for the lifetime exemption. An added benefit after the passing of Secure Act 2.0 is up to $35,000 can be converted to a Roth IRA if not used for education expenses.
Direct Payments for Medical and Educational Expenses
Making direct payments for someone’s medical and educational expenses is another simple and tax-efficient strategy to transfer wealth. Payments made directly to the service providers are not considered taxable gifts, allowing you to provide substantial financial support without affecting your gift tax exclusion amounts. While this doesn’t directly contribute to an immediate accumulation of wealth, by eliminating debt, you are essentially removing the single largest barrier for Americans to build wealth of their own.
Donor-Advised Funds (DAFs)
A donor-advised fund is a charitable giving vehicle that allows you to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. While this strategy primarily focuses on charitable giving, it can also help reduce your taxable estate and involve your family in philanthropic activities.
Roth IRA Conversions
Converting a traditional IRA to a Roth IRA can be an effective strategy for wealth transfer. Although taxes are paid at the time of conversion, the Roth IRA grows tax-free, and withdrawals are tax-free for the beneficiaries. This strategy can be particularly advantageous if you expect your heirs to be in a higher tax bracket in the future.
The Family Bank
The family bank concept is a versatile tool for wealth transfer that can be adapted to various net worth brackets. Essentially, a family bank is an informal arrangement where family members can borrow funds at low or no interest rates, providing a flexible way to transfer wealth within the family.
How the Family Bank Works
The family bank can facilitate smaller loans for education, business startups, or home purchases, all while maintaining control and oversight within the family unit. Higher net-worth families can use the family bank for more significant ventures, such as funding larger business investments or real estate acquisitions. This system allows wealth to stay within the family and be used to support each other’s financial growth.
The key to a successful family bank is implementing it with the right intentions. Clear communication and documented agreements are essential to ensure all family members understand the terms and expectations. This system fosters financial responsibility and cooperation within the family, making it a valuable tool for wealth transfer.
Passing on Qualitative Capital
While financial capital management is important, it should be looked at as merely a tool. Passing on other forms of capital creates a lasting legacy that will allow your family to retain its prosperity longer than the statistical average of three generations. Heirs who understand the values and principles that guide your wealth accumulation are better equipped to manage and grow that wealth responsibly.
There are five forms of capital in addition to financial forms your family should work to build:
Social – a dedication to positively shaping the community which they are a part of.
Structural – having a deep understanding of all the family’s doings and the ability to navigate it effectively.
Family Relationship - the ability to engage and support members of the family across generations.
Legacy – the family brand, what makes the family unique and gives all members a sense of pride.
Human - individual family members’ physical and emotional health, as well as their ability to learn, grow, and adapt.
Family traditions, stories, and personal experiences should be shared through regular family meetings, written memoirs, or video recordings. These practices help instill a sense of history and continuity, reinforcing the family's core values and philosophies.
Creating a family mission statement can also be a powerful tool. This statement outlines the family's shared values, goals, and vision for the future, providing a guiding framework for decision-making and wealth management.
Ultimately, the goal is to ensure that heirs understand the intent behind the wealth transfer. When they see that it comes from a place of love and care, they are more likely to appreciate and responsibly manage the assets they receive. This holistic approach to wealth transfer ensures that both financial and non-financial legacies are preserved.
The true essence of passing on wealth is to create a blessing, not a burden for loved ones to enjoy. By prioritizing simplicity and intentionality, you ensure your heirs receive not just financial assets but also the values, wisdom, and love that guided your journey. Whether through the family bank concept or starting off more simply by sharing cherished traditions and philosophies, the goal is to foster a legacy of care and responsibility. When wealth transfer is instilled with these emotional aspects, it becomes a source of inspiration and support, helping your heirs thrive and carry forward the family’s principles and memories.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Couples Synergy Podcast: Money Matters for Couples
Andrew Van Alstyne had the privilege to be featured on the
Couples Synergy Podcast with Dr. Ray & Jean Kadkhodaian.
Andrew recently joined Dr. Ray and Jean Kadkhodaian on the Couples Synergy Podcast for episode 321, "Money Matters for Couples." In this conversation, they explore the complexities couples face when managing finances together, highlighting the significance of open communication and mutual understanding. The episode offers practical advice on aligning financial goals and emphasizes the importance of collaboration in building a secure financial future together. Discover how adopting these strategies can strengthen relationships and set the stage for long-term financial stability.
Click the Links Below to Watch or Listen to the Full Episode:
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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Beyond The Paycheck Podcast with Paula Christine: Transforming Life Through Financial Literacy
Andrew Van Alstyne had the privilege to be featured on the
Beyond The Paycheck Podcast with Paula Christine.
Andrew recently had the opportunity to join Paula Christine on the Beyond The Paycheck Podcast. In this episode, they discuss the everyday challenges many face when stepping into adulthood and the common hesitation parents experience in teaching financial principles to their children. Discover the importance of early financial education and how instilling good money habits in children can pave the way toward a financially secure and fulfilling future
Click the Links Below to Watch or Listen to the Full Episode:
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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Financial Freedom Podcast with Dr. Christopher Loo: Mastering Generational Wealth
Andrew Van Alstyne had the privilege to be featured on the
Financial Freedom Podcast with Dr. Christopher Loo.
Andrew recently had the opportunity to join Dr. Christopher Loo on the Financial Freedom Podcast. In this episode, they explore the crucial topic of generational wealth and how to effectively manage and transfer wealth across generations.
Click the Links Below to Watch or Listen to the Full Episode:
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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A cash balance plan helps business owners save more for retirement while lowering taxes. With higher contribution limits than a 401(k) and tax-deferred growth, these plans offer major financial advantages. Employers fund the plan, providing stable benefits for employees. While they require annual contributions and administration, the tax savings and wealth-building potential make them a smart choice for high-income professionals.