• Eric Walter, CFP®

Second Set of Eyes

For our analysis work, we have at least one other team member review the methodology, results, and conclusions to minimize errors and take full advantage of planning opportunities for clients. When we receive your financial planning documents (i.e. estate plans, insurance policies, and tax returns), we thoroughly review them before giving advice. The impact of these additional checks is often hard to quantify but usually there are “big dollars” involved. Let me give you some recent examples.

Tax Returns have many moving parts and just one mistake can be costly. One of the common errors is with Qualified Charitable Distributions (QCDs), which are tax-free IRA distributions paid directly to a qualified charity. The issue stems from the provided tax form, the 1099-R, not distinguishing/differentiating the QCD amount. You must let your tax preparer know AND provide copies of the checks written to the nonprofits. If filed improperly, this can lead to a substantial tax overpayment. Just this year we have identified errors leading to nearly $3,000 in additional tax refunds for our clients.

Many of us have purchased an Insurance Policy, set up automatic payments, and never looked at it again.  After discussions of specific coverage needs with several clients, some discovered they were actually over-insured.  We reviewed the pros & cons of reducing the benefit or canceling the policies.  Several clients chose to keep their long-term care policies but reduce potential premium increases by changing the mix of benefits.  Another cancelled the life insurance policy they no longer needed.  These risk planning sessions will save thousands in premium payments over their lifetimes.

Estate Planning is meant to ensure your wishes are followed during incapacity and after death. The biggest gaps we usually find are no named successor trustees, guardians, or contingent beneficiaries (2nd and 3rd person(s) in line). It can be a tough decision, which often leads to no decision. Then, a difficult estate settlement can loom during already stressful times.  We have assisted several clients this year with their options and helped them reach a final decision so the attorneys and custodians could complete the estate plans. By setting specific directives and designating beneficiaries for ALL assets, the onus is taken off loved ones and unnecessary costly expenses are avoided.

By providing us with your Financial Planning documents, we are able to discuss issues and provide perspectives you may not have considered. Our second set of eyes may even find some extra money for you, too!

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