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4 Often Inadequately Addressed Areas of Planning

Why is working with a financial professional important? What can you offer that I can’t do myself? These are some of the questions we get asked as financial professionals on a regular basis. Let’s start by acknowledging that in today’s economy, with all the ongoing changes in administration & regulations, it can be extremely difficult to stay on top of the ever-changing legal & financial landscape. Additionally, each given individual’s personal/business situation is in a constant state of flux that may necessitate continual changes to what were once considered sound strategies. With all the instability and uncertainty of today’s economy, individuals can find some peace of mind by working closely and proactively with a financial professional that can put them on an efficient path to maximizing their financial potential.

Unfortunately, in our experience, most people equate wealth management with financial planning. While wealth management is an integral and important area of planning, there is so much more that goes into creating a comprehensive and holistic strategy than simply how one invests their assets.


Today we will review the other main areas that each and every individual must address as part of a sound financial plan. Making sure all these areas of planning, in conjunction with your overall wealth management strategy, are working in harmony, is essential for optimal outcomes. Our premise is that having a proactive and holistic “financial quarterback” that can keep the financial team working in harmony is essential for the best interest of the client.


1) Legal Planning

The first, and perhaps most critical, area of importance in someone’s financial plan is legal planning. We firmly believe that just as the foundation of a home is the most critical aspect of the construction since it supports the rest of the structure, your legal planning is the foundation of any sound financial plan. How will my assets be allocated in the event something was to happen to me prematurely? Will those assets be safe from the creditors of my heirs? Who will make decisions on my behalf if I am no longer capable of making them on my own? Will my life insurance and retirement assets flow through my plan as I intend them to do so? Will my heirs be subject to any inheritance tax and if so, have I provided for a plan to mitigate that from happening? If my children are minors, who will be legally appointed to raise and care for them? Who will be responsible to oversee the transfer of my wealth to my heirs? This legal guidance can come in the form of Wills, Trusts, Living Wills or Powers of Attorney. Coordinating your legal planning can have a major impact on the disposition of your assets when providing for children or dependent.


For business owners, additional legal planning is warranted, especially when more than one owner is involved. Is my business structured for optimal tax benefits? If something were to happen to me prematurely, what happens to my share of the business? How does my family get the value of my business if I were to die or become disabled? Who would run my business in the event I become incapacitated? These and many more potential hazards need to be planned for with proper business structure as well as sound Operating and Buy-Sell Agreements.


2) Risk Management/Protection Planning

When we plan for a successful financial future, it is imperative to properly protect your self and your assets. All the planning in the world can crumble before us in the event of a premature death or unexpected sickness, injury, or accident. Few people fully understand the impact a premature death or disability will have on the family or the business. Working with a savvy professional, you can devise a plan to mitigate the many risks that can imperil or “derail” even the soundest of financial plans. Determining the right amount and type of life and disability insurance is critical but you also need to make sure you have sufficient and efficient health, property and casualty, and liability coverage. Sadly, most people do not have adequate risk management coverage and many, who have not reviewed their coverages for years, are woefully mis-insured.


3) Tax Planning

With the debt our country is incurring and the need to raise revenues to pay for the proposed programs, most individuals and small business owners are facing the real possibility that they are going to lose more of their wealth to taxes than they ever witnessed in the past; and this doesn’t apply solely to the wealthy. The pending legislation could increase marginal tax rates and corporate tax brackets, increase the tax on capital gains, add additional surcharges for certain households, increase social security tax, cap itemized deductions, levy gains tax on inheritances, reduce the amount of assets you can pass to your heirs without hefty taxation and a laundry list of additional taxes that could erode your wealth. As such, there has never been a more critical time for expert tax advice. Here at Strategic Lifelines, we specialize in helping individuals and small business owners re-capture money that would normally be lost to taxes and leverage it into additional multigenerational wealth; this is our forte. Working closely with your CPA and tax attorney, we can devise a plan to avoid unnecessary taxation and preserve more of your hard-earned money to grow future wealth


4) Business Planning

Business owners have been met with a plethora of challenges as a result of the ongoing pandemic. “Business as usual” has become a thing of the past. Proactive planning to protect your business from unexpected future disasters has never been more important than it is today. Hopefully the pandemic has taught us the importance of adequate reserves and functional contingency plans which will be the hallmark of successful businesses moving forward. That aside, each and every business owner needs to fully understand the value of their business and the role it will play, in conjunction with their other assets, in providing for a comfortable retirement. Finally, when the time is right, the business owner needs to understand how to exit the business in a manner that minimizes the loss of value to taxation at sale. Knowing the correct strategies to do so will allow the business owner to retain a greater percentage of the value of their business to use as future wealth as opposed to losing the same to taxes.

Strategic Lifelines is a proactive financial service provider that focuses on truly getting to know our clients and designing a holistic customized plan for each-and-every client. Reach out to anyone on our team for your complimentary financial consultation and allow us to help you to achieve your financial goals. Regardless of the confidence you have in your existing financial plan, can you think of any reason that it wouldn’t make sense to at least review what you are doing to make sure there is not either a risk or planning opportunity that has been overlooked!



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