Your Annual Wealth Planning Tune-Up

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Fall 2013

As the fourth quarter kicks off and the year begins to wind down, it might be the ideal time to assess where you’ve been and where you’re headed in regards to your financial plan.


The good news: Unlike last year when we patiently — or impatiently — waited for Congress to take action on expiring tax laws, the waters seem calmer this year. “That makes it a great time to take stock and make sure all of your affairs are in order — that you’ve done all the things you planned to do as far as your finances are concerned — and to determine if there’s anything else you might want to do before the end of the year, particularly to take advantage of possible tax benefits,” says Patricia Peacock, Financial Planner for The Private Client Reserve.


Your year-end checkup should include touching base with your financial planner, tax professional, trust officer and legal counsel. Peacock offers suggestions on what to discuss with these advisors and how to help ensure your plan is still working to help you achieve your goals.


While U.S. Bank cannot provide tax or legal advice, or draft legal documents, Peacock shares considerations for you to discuss with your advisors during an annual wealth management checkup.


What might a client’s year-end discussion with his or her financial planner include?


Patricia Peacock; photo by Rebecca Stumpf


The end of the year is a good time to look at whether your current financial plan still is in line with your long-term goals and needs. As part of that, identify any life events that might have occurred in the past year that could require your plan to be updated — for example, the birth of a child or grandchild, a marriage, a divorce, a death in the family, a change in fortune or retirement.


Additionally, determine whether you’ve properly implemented the plan itself:


  • Have you taken the steps needed to keep your plan in line?
  • Are your assets properly allocated?
  • Are you comfortable with the spending plan that you and your planner set up?
  • Are all of your risks covered properly?
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Fall 2013

What issues should clients discuss with their tax professional?


As a result of the law passed the first week of January this year, several expiring credits were extended for one more year and now are set to expire at the end of 2013. You might want to take advantage of any credits, such as energy credits, that may not be around in the future.


If you’re over 70½ years old, have charitable intent and have an IRA, you might consider the IRA charitable rollover that expires at the end of 2013. This provision allows you to transfer up to $100,000 from your IRA to a charity in addition to, or instead of, taking the required minimum distribution from your IRA. By doing so, you might be able to exclude that IRA income from your gross income and still reach your goal of making your charitable contribution. 


Another issue to discuss with your tax advisor is the 3.8 percent Medicare tax, which affects gross incomes over $200,000 for single filers and $250,000 for married couples filing jointly. This tax is levied against investment income, including capital gains, so talk to your advisor sooner rather than later to plan ahead and minimize it as much as possible.

Year-End Checkup Checklist


The 3.8 percent Medicare tax also applies to trusts with income over $12,000. While you don’t want to make a decision based primarily on taxes, you do want to be aware of them. Because this new tax could have quite an impact, it’s a good time to look, especially at complex trusts, to see if income can be distributed to beneficiaries in a lower tax bracket — if the document allows it and it’s otherwise appropriate. 


What unique issues/questions should be brought up with your legal counsel and trust officer?


You should review your estate planning documents every five years no matter what. But if you’ve had a life-changing event this year, or if you didn’t review your documents at the end of last year, you should definitely do it now. All the changes that happened in January might make some estate plans obsolete, so you’ll want to walk through the documents with your legal counsel to make sure they’re still doing what you want.

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Fall 2013

You’ll also want to make sure your assets are properly titled and your beneficiary designations are in place — your trust officer can help with this. For example:


  • If you put an asset in joint tenancy with right of survivorship, it passes to the survivor.
  • If it’s in tenants in common, it passes through your will.
  • If it’s titled in a revocable trust, it passes based on what your trust document says.
  • If it’s an asset that has a beneficiary designation, like an IRA or an insurance policy, it passes per the beneficiary designation; if you don’t have a beneficiary designation, it might automatically revert to your probate estate.

Your trust officer can help with many of the same things as your financial planner. That’s because, often, the trust officer is involved in the implementation of your financial plan.

“We can facilitate bringing together these professionals to help work out the best solution for your unique situation.”

—Patricia Peacock


Why is it worthwhile to gather together all four of these professionals?


It’s extremely valuable for clients to see all their professionals working together. When you can work with them together, things are less likely to be overlooked.


Also, each professional brings a different perspective because each has a different specialty. For example, your tax professional’s advice will be based on what’s best for the tax situation, but your legal counsel might point out other costs of that advice. We can facilitate bringing together these professionals to help work out the best solution for your unique situation. 


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Financial Planning