Wealth and Financial Management
Our Wealth and Financial Management practice has evolved from the close relationships we have with our clients. These relationships evolve from serving as our clients’ legal advisor, tax return preparer, counselor on estate and tax planning, and health care advocate. Through these relationships, our experience and expertise allow us to confront problems and to identify needs or risk exposures. Inappropriate investment returns or investment risk characteristics, unsuitable investments, dysfunctional family dynamics, and unnecessary liability risk exposures are all appropriately assessed when confronting wealth and financial management. Our Wealth Management Department pools the professional disciplines of attorneys, accountants, and financial professionals to evaluate and confront these issues.
Financial Planning and Investment Process
Most clients come to us with a level of wealth, which is comprised of one or more portfolios of investible assets, real estate, retirement plans, sometimes ownership in partnerships or family businesses, and other miscellaneous assets. Some are satisfied with their investment relations, and others are not and are seeking assistance with and alternatives to how their wealth is managed. Many are concerned with how their wealth is correlated with their financial security and the risk associated with their investments. Some are concerned with management as they age or after the death of a spouse. Substantial conflicts of interest exist in the money management and investment world, and our role as attorney positions us as a legal advocate whose sole purpose is to represent our clients in their relationships with money managers and investment advisers free conflicts of interest. Aligning interests is a very important component to effective wealth management and the implementation of investment strategies, and lawyers are likely best suited through their training to uncover misaligned interests.
Establishing an understanding of financial goals and desires is at the heart of the financial planning process. Time horizon is a very important component to understanding how risk inherent in any existing or proposed investment policy affects goals and desires. We always tell prospective clients that they have an existing investment policy, but they may not be able to articulate it and often find that it is far riskier than they understood. Our process begins with an understanding of financial means and fixed and variable expenses. A budget is established based upon a client’s standard of living, goals, and desires. The budget is then contrasted with the current investment climate and timeframe constraints, with asset categories and their risk extrapolated in an effort to formulate a general framework for establishing an appropriate but proposed investment policy. Active and passive investment solutions are considered and requests for proposals are submitted to investment advisers and money managers selected by our clients with our assistance. Our role then shifts to assisting with the development of the investment policy and negotiating a fair fee for management. As numerous studies and experts pronounce, the investment policy with asset allocation targets is the heart of investment performance. Historically, over 90% of investment performance is a result of allocations to particular assets classes rather than security selection. Asset allocation is also fundamental to coping with investment risk.
Investment policy is constrained in numerous ways. Tax status and tax characteristics, legal constraints associated with fiduciary relationships, such as exists with trusts, and the level of investible assets all contribute to limitations on the investment policy that may be chosen. Once the investment policy is established and a money manager or investment advisor is chosen, our role again shifts to monitoring and contrasting a client’s investment performance against established benchmarks rather than relying on the managers suggestion of their own performance. We also help our clients confront strategic and tactical recommendations that are made from time to time by money managers and investment advisers, which may result in a suggested change to the established investment policy. Our role as monitor avoids investment management complacency, helps to question whether a herding mentality or behavioral reaction to events is at the core of any proposed change, and has proven to sharpen attentiveness to our clients investment management and corresponding investment returns.
Our role is to assist our clients as their lawyer through the myriad of issues that confront the financial planning and investment process. We do so based upon an understood fee arrangement. The benefit to our clients is representation by their lawyer throughout the process. We independently assess and help in establishing the financial plan and investment policy. We negotiate a fee for money management or investment advice, which fee is often lower than otherwise offered by money managers and investment advisers because of our involvement. We independently monitor performance and adherence to the established investment policy. We help our clients assess proposals for strategic and tactical changes to the investment policy. Our goal is to help our clients understand and make informed decisions, free of conflicts of interest and based upon a competitive fee basis for both our representation and the services of professional money managers.
Wealth and Families
Family estate planning involves the creation of a plan supported by legal documents, which avoids loss of family assets through taxation, government bureaucracy, and undesirable legal processes. A child or grandchild's divorce, an unintended inheritance by non-family members, a suit by a creditor, and an egregious tax system greatly inhibit the accumulation and preservation of family wealth. A proper and well monitored estate plan can protect against these threats. Furthermore, values concerning money, work ethic, and other matters of tradition can be instilled with a proper and well structured estate plan.
More and more often estate plans are extending over several generations to achieve optimum use of available exemptions and planning opportunities. We pay taxes all of our lives and accumulate wealth, which we often characterize as our principal. Federal and state income, excise, sales, property, and other taxes directly impact our ability to accumulate this principal. At death, an unexpected tax on this accumulated principal is imposed by federal and state governments to prevent us from giving this principal to our heirs. When combined, these taxes can result in a total tax exceeding 69% of the income we earn over our lifetimes. This occurs, however, not only in ours, but our children's, grandchildren's, etc., generations. Sadly, few people use exemptions that are available to avoid some, if not all, of these taxes.
"Money can do more damage than good".... "You really never know someone until you share an inheritance with them".... "The vast majority of estate and tax plans of people today waste various tax exemptions and expose wealth to reach by non-family members"....
These common quotes clearly describe the experiences of some, and how deficient estate plans can adversely impact the preservation of our traditional wealth and values.
Trusts are often the heart of a family's estate plan. Other vehicles and techniques, however, also exist. A trust can preserve tax exemptions, foster the preservation of family values, and achieve an umbrella of asset protection over several generations of accumulated wealth. Other entities and techniques, however, may be used in conjunction with trusts to promote both income and estate tax savings, management, and organizations of a family's estate plan - a plan that can completely and comprehensively serve the long-term legal and tax reduction objectives of a family, while promoting the preservation of family wealth and values.
asset protection
Proper planning often involves consideration of methods to protect your wealth from the reach of unfriendly hands. Whether wealth is exposed to dissipation through divorce, elective share rights of a spouse at death, creditors, or government taxation, there is generally an ability to obtain protection. This protection can also be extended to children, grandchildren, and others who may inherit from you.
Common methods to achieve a level of asset protection incorporate the use of corporations, trusts, or family limited partnerships. Other methods may be unique to particular federal or state law, where retirement plans, annuities, jointly owned property with a spouse, or homestead property may offer a degree of asset protection if appropriate in your circumstances.
Asset protection considerations, however, need to be viewed in the context of an overall plan. Title to assets will generally determine the level of protection that exists, but the title will commonly also determine who inherits the property, how the property will be managed in the event of death or incapacity, and the level of tax exposure that will exist. Therefore, careful thought and consideration of many issues must be undertaken when implementing an asset protection plan.
Oversight & Integration
The perfect plan will fail its intended purpose if not properly implemented. The impact of this failure can be quite substantial with the consequences generally being hundreds of thousands if not millions of dollars of potential loss.
We have found that some clients are able to properly implement plans and make decisions, while others are not. Some estate planning can involve complex analysis and understanding to achieve its intended purpose. Other planning may involve an evaluation of risk versus reward, much like many businesspersons make on a periodic basis. After all, the government does not make it easy to save millions of dollars of tax.
Decisions have to be made. Once made, action needs to be taken. Once taken, the consequences may need to be monitored.
Our firm has married the disciplines of attorneys, accountants, and legal assistants to create, implement, and terminate estate, financial, and business plans for our clients. We have learned the needs of our clients over many years of service and we have grown our firm to meet these needs. We are able to tailor our services to meet most client needs.
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Contact Our Offices at: |
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Jupiter, FL: 561-747-7300 Stuart, FL: 772-223-0700 Toll Free: 800-747-3113 |
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Jupiter :: Palm Beach Gardens :: Stuart :: Tequesta :: Hobe Sound :: Vero Beach |
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The content of this site is general and should not be relied upon without review of your specific circumstances by competent legal counsel. Reliance on the information herein is at your own risk, as it expresses no opinion by the firm on your specific circumstances or legal needs. An attorney client relationship is not created through the information provided herein. This site and its content is meant to alert you to legal services, issues, and planning measures that may be appropriate for you, and is not a substitute for an attorney client relationship where specific advice is provided. Calculations and exemption amounts illustrated are changing and should be considered inaccurate and only examples of results that may be achieved. |
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