Wealth Planning Insights

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The objective of our Total Wealth Management® is to make a positive and lasting impact on the financial wellbeing and outcomes of our clients. This is more than just a one-time exercise but a long-term partnership that aligns the firm and its wealth advisory team with our clients. We aim to know all the specific details of both our client’s financial situation as well as their personal goals and objectives, which puts us in a very unique position not held by other professional advisors.

While investment management has been a core expertise at Tanglewood since inception, our wealth planning capabilities truly stand out in our field. Tanglewood has and will continue to enhance our wealth planning resources adding to the depth and breadth of our services, our people and expertise as we grow.

We consider the following to be the four pillars of planning that are at the heart of every wealth management relationship. While these pillars are the foundation of our wealth planning, individual circumstances, needs, and goals often lead us into areas of importance to specific clients such as: business capitalization, ownership structures, and succession; special needs of children; corporate trusts; charitable foundations; and more.

Balance Sheet Creation and Maintenance

Creating a comprehensive and current balance sheet or personal net worth statement is the first planning pillar of our wealth management process. It is critical to establish this foundation for nearly all areas of planning with our clients.

The Balance Sheet offers a snapshot of a client’s financial resources and overall financial health. In order to establish a current financial position, all assets including, bank, investment and retirement accounts, real estate, and other illiquid assets should be included along side all liabilities including mortgages. This is a valuable report for both wealth accumulators and those in retirement looking to grow and preserve their assets.

We offer clients several ways to keep up with this information via PDF or excel templates (manual entry and updates) to digital balance sheet aggregators which will securely link financial account websites to provide updated values. We prefer the latter as once this “living” balance sheet is set up it automatically updates most "liquid" holdings.

Annual Tax Return Review and Analysis

The second planning pillar, tax return analysis, is a combination of annual tax planning within the context of a client’s lifetime potential tax exposure. It is an ongoing and recurring added value for clients in an ever-changing tax environment.

Understanding a client’s entire tax situation beyond what is attributable to their managed investments is critical to lifetime tax planning. This requires a detailed analysis and preview in tax years with material changes or opportunities. Every client’s tax situation is unique, there is no one size fits all approach.

Roth conversions, capital gain/loss management, deferring/accelerating income, estimated tax payments, IRA distributions, and deductions are just a few of the areas that offer opportunities.

As you complete and file your 2022 return, please send Tanglewood a copy. This can be uploaded to your document vault or you can request a secure upload link from your Wealth Advisor. Due to the sensitive information within a tax return, please do not send an unprotected return via regular email.

Upon receipt and review of your tax return, we will prepare and send a detailed Tax Report, which provides a comprehensive analysis and summary of your recently filed return. This report helps us understand the various components of your tax return, including an overview of your income, deductions, and credits. Among its many benefits are where you stand in terms of tax brackets and phase outs, along with some observations and strategies to consider going forward.

Capital Sufficiency Analysis

The third planning pillar, running a capital sufficiency analysis, takes time and effort up front to gather all the details needed to fully build out a projection. The balance sheet and tax review add valuable insights in the preparation of this analysis.

During client planning meetings, we are often asked questions, such as, "when can I retire", "how much do I spend without the fear of running out too soon", "how much do I need for my children's education", or "what are the most advantageous ways of making large gifts to family or charity". These are just few of the goals and objectives that provide an important context to our wealth planning and investment decisions.

A well thought out plan helps answer these questions and greatly improves the chances of a successful outcome. Having a plan in place acts as a financial road map. When situations and goals change, as they often do, the plan serves as a baseline for comparison. New inputs such as an earlier retirement of increased spending can be quickly evaluated.

In times of market volatility, this big picture context helps many clients focus on their long term objectives rather than the short-term noise.

Estate / Legacy Plan

Having an appropriate and well thought out estate plan is the fourth planning pillar of Tanglewood’s wealth management process. For clients who do not have a plan, or cannot locate the documents, or it has not been looked at in 10 years, this should be a priority!

Our role is to define our client’s overall objectives and propose possible solutions that fit the composition of their estate. The balance sheet once again is a prerequisite to understanding the size and complexity of the estate.

Often unique family circumstances are as important as financial details. Personal conversations of any potential challenges should be thoroughly explored. While Tanglewood does not draft legal documents, we facilitate the process by spending as much time as needed to introduce and explore various planning strategies.

Another important aspect to the estate planning process is the coordination of beneficiary designations for life insurance and retirement accounts. The designations themselves if not aligned with the documents can work against an otherwise well thought out plan.

With the plan in place, Tanglewood will prepare a flowchart illustrating the overall disposition of the plan which includes the important provisions and people involved.

At Tanglewood we believe these four pillars of our planning provide a sound foundation on which to build a long-term partnership with each of our wealth management clients. Once in place, special planning needs or opportunities can be better evaluated. The collective experience and knowledge of all our wealth advisors supports our Total Wealth Management® mission.

It is the firm’s intent to engage with each wealth management client to maintain these pillars as a core responsibility of our partnership.

Disclosures