by Timothy McNeely | Apr 1, 2024 | Family, Smart Ways, Success, True Wealth Report
Affluenza. It’s become an all-too-common term used to describe the extreme bad attitudes and actions—sometimes horrific actions—of some children of affluent families.
While it’s not an official medical diagnosis, the label accurately fits some kids today growing up surrounded by sizable family wealth.
If you’ve got one or more such children living under your roof—or if you worry that a child or grandchild may be headed down the affluenza path—it may be time to take action. There are many ways to fight affluenza—from trying to correct negative behaviors and prevent them from recurring to positioning your assets in ways that don’t add even more fuel to the “affluenza fire.”
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by Timothy McNeely | Oct 1, 2023 | True Wealth Report
Estate planning—the process for how you transfer your wealth to heirs and others—can be very important for anyone who wants to be certain that their loved ones are adequately provided for and taken care of. When done well, estate planning aims both to allow you to pass on your assets as you see fit, and to minimize the state and federal tax bite that often accompanies the transfer of significant wealth.
Even if you are not subject to estate taxes or don’t have family, estate planning can potentially enable you to decide which people and charitable organizations will receive your wealth at your death. Failing to plan can mean that you will let the government make those decisions—and we find that few people are fond of that choice!
But if you think that your current estate plan is up to those tasks, you might want to think again. Here’s why your estate plan may need to be refreshed.
Most estate plans are old—and potentially outdated
First, some good news: Eight out of ten affluent individuals (those with investable assets of $500,000 or more) in one survey by AES Nation had some sort of estate plan in place.
Here’s the less sanguine news: Even if you have an estate plan, you may not be nearly as well prepared as you think you are for transferring wealth according to your wishes. That’s because more than half of the estate plans these affluent individuals have in place are more than three years old (see Exhibit 1).
Here’s why that’s a big deal—one that should raise a red flag that your plan could be outdated:
- Continual changes in tax laws mean that older estate plans may not take full advantage of current opportunities to transfer assets optimally.*
- Tax law changes also could mean that some aspects of an older estate plan are no longer effective.*
- Changes in your wealth status mean that your estate plan may no longer accurately reflect your financial situation—and your future needs and goals.
- Changes in your personal and family situation may make your estate plan ineffective in accomplishing what you actually want it to do given those changes.
* A tax professional should be consulted on all tax-related issues.
ESTATE PLANNING UNCERTAINTY ABOUNDS FOR MANY
In order to attain the greatest benefits from estate planning, it’s a good idea to stay on top of your plan and revise it when appropriate—especially when new events occur that potentially affect your wealth.
Having an old estate plan can potentially create uncertainty in a key area of managing your wealth. Example: The vast majority of individuals—71.4 percent—with estate plans that were three or more years old said they did not know whether their plan would deliver the results they wanted, according to AES Nation (see Exhibit 2). Just 17 percent of this group said they were confident their plan would deliver the results they wanted. And a little more than 10 percent said it would not perform as desired.
In contrast, an updated plan can potentially provide a sense of confidence. Consider the individuals with plans that were less than three years old: Nearly half said they knew their plan would deliver the results they want (see Exhibit 3). About 15 percent said that their plan needs to be revised because it would not deliver the desired results. Fewer than 40 percent did not know or were unsure about how their plan would perform.
Those results are much better than the results of the group with the older plans—but the AES Nation data shows that a large percentage of people from both groups are uncertain about the effectiveness of their plan.
Next steps to consider
The messages from these findings that should be considered are:
- Have an estate plan in place if you want a say in where your wealth goes after you’re gone.
- Don’t let your plan gather dust in a binder, folder or drawer (or in the cloud, for that matter).
Your next step: If you already have an estate plan set up, you might want to stress test it to see if it is still positioned to achieve your specific wealth transfer goals (especially given some of the tax law changes in recent years). By stress testing the plan, you can assess the outcomes it would likely deliver under various scenarios that could potentially occur. Many families regularly use stress testing to evaluate their existing strategies as well as strategies they are considering implementing.*
*A tax professional should be consulted on all tax-related issues.
by Timothy McNeely | Sep 6, 2023 | Dental Wealth Nation, True Wealth Report
Key Takeaways:
- Stress testing is not just a financial tool; it’s a wealth optimization strategy that aligns with your entrepreneurial vision.
- As the dental industry evolves and your practice grows, stress testing ensures your wealth strategies adapt accordingly.
- Partner with professionals who understand not just your financial goals but also your entrepreneurial spirit and vision for true wealth.
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by Timothy McNeely | Aug 1, 2023 | Dental Wealth Nation, Family, Motivation, Smart Ways, Success, True Wealth Report
Chances are, planning for retirement is one of the most important steps—a series of steps, really—that you’ll undertake in your life. Unfortunately, we don’t always put enough focus on making thoughtful decisions during our retirement.
Maybe we overlook something important. Perhaps we veer off course from one or more of our strategies. As a result, much of our hard work and planning during the pre-retirement period of our life can unravel once we enter our golden years—which, in turn, may put our retirement dreams and even our fundamental financial security in danger.
Whether you’re retired or still on the path there, it’s a good idea to learn some moves you can make to avoid big in-retirement financial errors. Here’s a closer look at some of those key mistakes—and how to sidestep them.
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by Timothy McNeely | Jun 1, 2023 | True Wealth Report
If you have substantial assets, you may be a target for frivolous lawsuits. That’s why it’s so important to consider asset protection strategies that can create barriers to protect your wealth. Asset protection planning employs legally accepted concepts and strategies, as well as specific financial products, to ensure a person’s wealth is not unjustly taken from him or her.
But asset protection can be a tricky business. Make the wrong move—knowingly or accidentally—and you can easily blow up the legal wall you’re trying to build around your wealth. Here are five major mistakes that we see commonly made when the affluent engage in asset protection efforts—and how to avoid them.
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by Timothy McNeely | May 1, 2023 | True Wealth Report
Bill and Melinda Gates weren’t a typical couple. But they are part of an increasingly common trend: divorce among people over the age of 50.
“Gray divorces” among older and (usually) long-married couples have been on the rise for some time. While the divorce rate is falling among younger Americans, the rate for those aged 50 and older has doubled since the 1990s.
The upshot: There’s a decent chance that many people age 50 or older will experience a gray divorce themselves, or have friends or family members who go through one. So it can be helpful to recognize some of the key issues that older couples getting divorced are likely to face.
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