What Estate Planning Documents Do I Need?

Estate planning is often pushed to the bottom of the to-do list. If you are in your thirties or even twenties, focusing on your career or starting a family is often your primary focus.  The idea of building and passing along a legacy sounds like an abstract, far-off idea.

Regardless of where you are in life, there are steps you can take today that will protect you and your loved ones.

As a financial advisor and a former teacher, I work with a wide range of clients, many of them younger professionals. One of the most common misunderstandings I see is the belief that estate planning is only for people with significant wealth or those nearing retirement. But the fact of the matter is, if you’re an adult, you need some essential documents.

It’s important to note that financial advisors do not draft these documents ourselves. That is the estate attorney’s job. Our job is to educate and help you start thinking about the decisions that need to be made.   We take all the time needed to collaborate to make sure your estate planning strategy accurately reflects your family relationships, what you value most, and what you wish to leave behind.

Start with the Basics

In an ideal world, virtually everyone over 18 should have a last will and testament.

This is the foundation of most estate plans. A will is a legal document that lays out your instructions for what should happen to your assets when you die. It names the people or organizations you want to receive your property and appoints someone to carry out your wishes.

Your will can name guardians for your minor children, outline how debts and taxes should be handled, and even leave specific instructions for sentimental items or charitable gifts. But it doesn’t govern everything you own. Certain types of accounts and assets, like retirement plans, life insurance policies, or jointly owned property, pass automatically to the people listed as beneficiaries or co-owners, regardless of what your will says. That’s why it’s so important to make sure your beneficiary designations match your intentions and are kept up to date.

Without a will, the state decides who gets what according to its default rules. Writing a clear, legally valid will gives your loved ones a roadmap.

In addition, your estate plan should include the following documents:

Advance Directive or Living Will. This outlines your preferences for medical treatment if you’re in a terminal or irreversible condition and can’t communicate your wishes. It tells your healthcare providers and loved ones whether you would want life-sustaining treatment to continue or be withdrawn, and whether you want comfort care instead. This document supports your medical power of attorney by removing guesswork from deeply personal decisions.

Medical Power of Attorney. This appoints someone to make healthcare decisions for you when you’re unable to make them yourself. That includes choosing between treatment options, approving surgeries, or making end-of-life care decisions with your medical team. Like financial powers of attorney, you can name co-agents or successors if your first choice is unavailable. This is one of the most important documents for young adults. Parents are often surprised to learn they can’t legally make medical decisions for their college-aged children without one.

Durable Financial Power of Attorney. This document lets you appoint an agent to manage your financial affairs if you can’t. That could mean paying bills, handling taxes, managing investment accounts, or buying or selling property on your behalf. You can name more than one person to serve together or separately. Some documents are written to take effect immediately, while others become active only if you’re declared incapacitated. You can also limit what your agent is allowed to do or give them wide authority, depending on your situation and level of trust.

HIPAA Authorization. This gives the people you name the ability to access your private medical information and communicate with your doctors. Unlike the medical power of attorney, which gives decision-making authority, this is about sharing information. You can choose what types of information to release and who can receive it. It’s helpful if you want a family member or friend to be informed but not necessarily in charge of your care.

Guardianship Designation. If you have minor children or dependents with special needs, this document lets you name who should care for them if something happens to you and your co-parent. You can also specify how those children will be financially supported, whether through a trust, a designated account, or other resources. Without this document, the courts will decide who steps in, which may not align with your wishes.

Without these important “living documents”, your loved ones could run into legal and logistical roadblocks during the kind of medical emergencies that can happen at any age.

If you don’t have these documents at hand, don’t panic. I or another advisor on the Tanglewood team would be happy to talk you through what to consider. And don’t worry if you don’t yet own a lot of property or have a fairly straightforward financial life. Anyone will benefit from having a plan set ahead of time.

Even those who have these documents still need to keep them up to date. When I talk to new clients who have already created estate documents, they are often years or decades old. Estate planning isn’t a one-and-done activity. Life changes. Families grow. You might get married, have kids, change jobs, or accumulate new types of assets. Each of these moments is a good opportunity to check in on your estate plan.

The Best Time To Start Is Today

I try to encourage my clients to think of estate planning as a conversation that remains open and that we can return to at any time. You are making your wishes known and easing the burden on your loved ones. You may not think you have much to sort out right now, but your family still needs direction. Your estate plan is as much for them as it is for you.

Estate planning is a living process that changes with your life. If you have questions about how to get started, my door is always open.

One Big Beautiful Bill

The One Big Beautiful Bill (OBBB) was signed into law by the president on July 4th after making its way through congress. There are many new provisions regarding income taxes and some important updates to the estate tax laws that will impact many Tanglewood clients. Below is a summary of that we think are some of the most impactful.

  • The current seven tax brackets (10%, 12%, 22%, 24%, 33%, 35%, 37%) that were introduced by the Tax Cuts and Jobs Act of 2017 and set to expire in 2026 are made permanent. There’s also a small extra inflation adjustment for only the lowest three brackets.

Now of course it goes without saying that NOTHING is “permanent” when it comes to tax law. In this context permanent means there is no sunset or future expiration until some future Congress votes to change it.

  • On the deduction front, the standard deduction is slightly enhanced. Starting this year, it will be $31,500 for joint filers, $23,625 for head of household, and $15,750 for all other filers, inflation adjusted thereafter. An increase of $1,500 / $1,125 / $750 respectively.

  • The Pease Limit which took a 3% “haircut” on total itemized deductions for high income earners cancelled by the TCJA is now permanently repealed.

  • The use of Miscellaneous itemized deductions (primarily unreimbursed employee expenses, tax prep fees, investment-related expenses) is permanently repealed.

  • Mortgage interest deduction cap remains at $750,000 of principal.

  • The OBBB raises the controversial State And Local Tax (SALT) deduction cap to $40,000 for tax years 2025 through 2029. The cap gets only a 1% annual inflation adjustment each year over that period. However, the SALT deduction gets reduced back toward $10,000 as Adjusted Gross Income (AGI) exceeds $500,000. It is fully phased out at $600,000 of AGI. For those in that $500k to $600k AGI range, this becomes a very important planning threshold. The additional $100k of income can effectively raise taxable income by $130K.

  • There is a new 0.5% floor on itemized charitable contributions. This is like the phaseout for deductible medical expenses where you have to be above the floor to start taking a deduction.

Regardless of whether a taxpayer is taking the standard deduction or itemizing, there are several new “above-the-line” deductions.

  • A new $1,000 per taxpayer above-the-line deduction for charitable contributions ($2,000 for joint filers). We had a similar provision for a $500 deduction in 2020 to spur giving during COVID era.

  • Starting in 2025 and continuing through 2028, seniors age 65 and older will be allowed to deduct $6,000 per person ($12,000 for married filing joint). This too starts to get phased out when income exceeds $75,000 single / $150,000 joint filers and becomes fully phased out at $175,000 individual and $250,000 joint. Essentially the backdoor way of alleviating the tax on Social Security income. Essentially the backdoor way of alleviating the tax on Social Security income.

  • A maximum deduction of $25,000 applicable to “Qualified Tips”.  The IRS plans to publish eligible occupations within 90 days. This tip income however is still subject to employment taxes. The deduction is phased out at $300,000 AGI for married filers and $150,000 for others It’s fully phased out at $550,000 for married, $400,000 for others.

  • A tax deduction against overtime pay is also included. “Qualified Overtime,” is defined straightforwardly as pay in excess of a worker’s regular rate. The deduction is to $25,000 for joint filers and $12,500 for all others. This too gets phased out at $300,000 AGI for MFJ, $150,000 for others, fully phased out at $550,000 for MFJ, $275,000 for others.

Both the deduction applicable to Tips and Overtime is effective for 2025 and expires at the end of 2028.

Other notable changes include.

  • The increase in the Alternative Minimum Tax exemption amounts were made permanent, however exemption phaseout thresholds were reset back to what they were in 2018 – $500,000 for singles and $1,000,000 for married filing joint. It also doubled the rate of phase out from 25% to 50% steepening the claw back for higher income earners.

  • The OBBB allows a deduction up to $10,000 of interest paid on new car loans for US-assembled vehicles purchases made in 2025 through 2028.

  • The bill expands qualified 529 expenses doubling the K-12 withdrawal limit from $10,000 to $20,000. It also adds new categories of qualified expenses including online resources, tutoring, high school dual-credit fees, educational therapies for students with disabilities, and exam costs, such as SAT fees. Also, workforce training, on-the-job training, apprenticeships supporting students pursuing vocational or alternative educational paths.

  • A new tax-preferred savings account dubbed “MAGA Program” allows for the creation of a new account for qualifying children born between January 1, 2025 and January 1, 2029.  Up to $5,000 per year is allowed by a parent or guardian for children until 8 years old. The government will add $1,000 to see the account. There are specific qualifications for investing in broad market US Index stock funds.

Finally on the estate planning side of things the big news here is the lifetime estate and gift tax exemptions which were facing a significant reduction at the end of 2025 was permanently increased to $15,000,000 per person indexed to inflation beginning in 2026. That’s a combined $30,000,000 for spouses putting the threat of estate tax exposure for many clients further out on the horizon.

These new rules present new and meaningful planning opportunities for nearly all clients. At Tanglewood we are prepared to help – using advanced modeling tools and an experienced team of Wealth Advisors. Together we can develop a personal, multi -year plan to not only look year by year, but over a lifetime.

Disclosures

What To Do with Excess 529 Plan Funds

529 education savings plans are one of the most effective tools for funding future education expenses. But what happens when there’s money left over?

Maybe your child received a scholarship, chose a less expensive school, or simply didn’t use the full balance.  Whatever the reason, we often hear from clients who are wondering what to do with those unused 529 plan funds.

Thanks to evolving legislation and flexibility in 529 rules, there are several ways to repurpose these dollars—without triggering excessive taxes or penalties.

Here are some of the most practical options:

Change the Beneficiary

One of the built-in advantages of a 529 plan is the ability to change the beneficiary to another qualifying family member—income tax and penalty free. This can include:

  • Siblings

  • Cousins

  • Parents or grandparents

  • Even yourself (the account “owner”)

This is often the simplest solution if you have more than one child or want to help a relative with their education expenses. Note that there are gifting implications if the new beneficiary is in a lower generational level.

Use for Graduate School or Future Learning

Just because undergraduate studies are done doesn’t mean their education is. 529 funds can be used for graduate or professional degrees, trade schools, certain certifications, and even some continuing education.

Some families hold on to remaining balances for future learning opportunities, especially if the beneficiary is still early in their career.

Pay-Down Student Loans

The Secure Act of 2019 approved the use of up to $10,000 per beneficiary (and another $10,000 per sibling) to repay student loans. This lifetime cap was introduced to provide families with a tax-free way to reduce debt, even if traditional education expenses are complete.

Rollover to a Roth IRA

This is a really interesting new possibility. Thanks to the SECURE Act 2.0, beginning in 2024, 529 balances can be rolled into a Roth IRA for the 529 beneficiary, subject to a few important rules:

  • The 529 must have been open for at least 15 years.

  • Any contributions made in the last five years are ineligible for rollover.

  • The beneficiary must have earned income in the year of the rollover.

  • Rollovers are subject to the annual Roth IRA contribution limit ($7,000 in 2025).

  • There is a lifetime rollover limit of $35,000 per beneficiary.

While $35,000 may not seem like a lot, if invested early and allowed to grow tax-free over decades, it can grow to a meaningful number. In many ways, this option turns unused education dollars into a powerful jumpstart for retirement.

Use the Funds Yourself

If you (the account owner) are contemplating a return to school—whether for career growth or personal enrichment—you can change the beneficiary to yourself. It’s a creative but completely allowable use of the funds. An art collection course in Paris might be in your future.

Withdraw the Excess (Last Resort)

If none of the above options make sense, you (or the beneficiary) can always simply withdraw the unused money. Only the earnings portion of a non-qualified withdrawal is subject to income tax and a 10% penalty. The original contributions are never taxed or penalized.

The income tax responsibility falls with whoever receives the funds – either the account owner or beneficiary. If early in their working career, a non-qualified distribution to the beneficiary may be taxed in a very low tax bracket.  

Note however, if the funds are being withdrawn because the beneficiary received a scholarship, the 10% penalty is waived (though taxes still apply to earnings).

Many clients are unaware of the flexibility they have with leftover 529 balances. Whether it’s helping other children in the family, supporting financial independence, or maximizing long-term wealth opportunities there are several options to consider.

As always, your Tanglewood advisor is here to help evaluate those options and create a plan that fits your unique situation.

New Geopolitical Realities Require Change

The geopolitical backdrop has radically changed from the one dominated by America and the other Western powers after WWII. Fukuyama’s End of History (1992), after the fall of the Berlin Wall and the U.S.S.R, declared that communism/mercantilism had forever been “defeated” by democracy/capitalism. That celebratory mood left us overconfident and unprepared for a highly competitive future.

The return of the communist/mercantilist ideologies by today’s triumvirate of authoritarian rulers (Xi Jinping in China, Vladimir Putin in Russia, and Kim Jong Un in North Korea) along with their combined military might and economic power has forced a reevaluation of our relationship with the world as well as our most basic expectations from our government, our educational institutions, and corporate America.

Such changed expectations are not new. In fact, we have lived through several periods of major change over the last century.

President Calvin Coolidge (1923-1929) once said, “The business of America is business.” This was consistent with how America saw itself into the early 1960s. In 1953, President Dwight Eisenhower’s Vice President, Charles Wilson (former CEO of GM), famously said, “What is good for GM, is good for America”.

During that period, America’s industrial might was seen as a benefit to all Americans – employees, communities, and shareholders…and supported American’s pride in the country. The 1960s brought on many changes. Social issues rose to center stage including racial tensions, women’s rights, unease with the war in Vietnam, air and water quality, and the “war on poverty”. America began to question itself and its values, including the roles played by business, government and education.

Our federal government focused at home on the “Great Society Programs” that greatly expanded benefits for those considered in need. As time went by, most of these programs expanded well into the middle class and even the upper class.

At the same time, American businesses began to change in other ways. The new interstate highway system allowed business the freedom to move to more desirable locations – mainly away from the unionized states in the north to the “right to work” states in the south. The northern industrial base became the so-called “rust belt” as manufacturing relocated.

As the industrial base was leaving, the focus in northern states shifted to white collar jobs. This in turn led educators (mostly from universities in the northeast) to develop a new educational curriculum referred to as the “college preparatory track”. Under this curriculum, every child would be prepared to go to college.

As unrealistic as this was, it was adopted country wide. It led to a new societal attitude that white collar careers were superior to blue collar ones. Traditional trade jobs lost educational support for the decades that followed which eventually depleted the supply of skilled trades. (This bias continues even though many trade jobs pay 2 times to 3 times that of the average college graduate and without the corresponding cost/debt.)

America’s businesses became less and less associated with specific communities. Corporations were no longer “the local employer”. Instead, businesses became a means to an end. Communities started competing for new businesses while shareholders began evaluating companies by how well they navigated this new landscape through their earnings growth.

The late 1960s became known as the “go-go era” with companies forming conglomerates in a race for profit growth. Stock investors turned away from the industrial powerhouses of the past generation toward the most successful at delivering profits. The most successful became known as the “Nifty Fifty”.

Nobel prize winning economist and market observer Milton Friedman codified this new approach to shareholding with his famous dictum on free market capitalism, “the sole purpose of a public company is to benefit its shareholders” (the owners). From that time forward, stocks have been evaluated primarily on the growth of their earnings and dividends.

The 1970s and 1980s were characterized by the rapid growth of Japan and the Asian tigers (South Korea, Taiwan, Hong Kong, and Singapore). They had a low-cost labor force that benefitted from another innovation in transportation (like the interstate highway system earlier) – the packaged ocean carrier. This innovation allowed a product to be packed once (in a pod container) and travel by ocean, train, and truck to be opened only at the end of its journey by its final user. This dramatically reduced international shipping costs.

American corporations, with only the mandate to increase earnings growth, jumped on the opportunities that globalization offered.

Once China joined the Asian tigers, the possibilities from their massive population seemed limitless. This time, American businesses hollowed out much of the southern manufacturing base as they invested abroad…particularly in China.

(Our government took a laissez faire attitude that it was best for the economy. However, Ross Perot received 10% of the vote for president in the 1992 election – the most ever for an independent candidate – on the grounds that such moves would hollow out our entire economy.)

For its part, China did not play fairly. They forced technology transfers from their American “partners”, put an array of restrictions on our ability to penetrate their local market, and heavily subsidized their state-owned enterprises (SOEs) in industries they wanted to dominate.

This was made clear in 2015 with the introduction of their “Made in China 2025 Policy”. This was a state led industrial policy whose goals were to have their domestic companies dominate ten key industries including high tech manufacturing, aerospace, energy equipment, and critical materials by this year. This program has been highly effective in those areas.

American consumers did benefit from the lower costs available from Asian manufacturers. However, the former American employees that lost their jobs were forced to find new ones. In many cases, the only replacement jobs available were in service industries such as finance, health care, leisure and travel, technology, engineering, etc. Many who lost their jobs had no background, training, or desire to enter such fields.

Discontent with this changing job and social environment has grown in the twenty-first century. Many displaced workers that did not find jobs fell out of the U.S. workforce. The percentage of men in the prime ages of 25-54 not working jumped from 2.0% in 1954 to about 11% in 2024 (approximately 12 million men). See Chart.

Source: Bureau of Labor Statistics, Current Population Survey; CEA calculations

In addition, we discovered during the pandemic that many of the health care supplies, car parts, and computer chips we depend on were no longer available when China shut down as there were few U.S. manufacturers still in those businesses.

This was a wakeup call which drew overdue attention to basic questions of national security. If global supplies were cut off because of a confrontation with China, how well and for how long could we defend ourselves or our allies? Would we have the needed access to all the components that make our economy run?

Corporate America’s almost sole focus on the consumer benefits, lower costs, and higher profits from globalization had done wonders for our overall economy, high income earners, and stock market but left us exposed to the growing risks from the authoritarian triumvirate.

America needs the workforce and basic manufacturing capabilities within our shores or those of our closest allies to maintain our basic needs for self-reliance and national defense. These must be priorities of our government, educational institutions, and corporate leaders.

Government. Federal tax, regulatory, and spending policies must focus on the specific goals of self-sufficiency and national security. The litmus test for any legislation should be… does it enhance our security? Those needs include cyber security, a secure electric grid, a technologically advanced military, stable finances, and secure access to all the parts and materials that keep our economy running.

Educational Institutions. It will be impossible to achieve these national goals without the workforce necessary to perform the necessary functions. Many of the jobs require highly specialized technical training within specific trades. Our K-12 public education system needs a much broader brush than the college preparatory track. The recent initiatives within some school districts to develop or expand trade training programs should be accelerated.

Business. The business of America is still business, but the goalposts have moved. No longer can focus on consumers, the lowest cost, and highest profit growth be the sole determinants of success. Securing America, and our way of life, must be the highest priority. Corporate leaders across all sectors should have this at the top of their mission statements. Business leaders must not allow the Vladimir Lenin quote to come true, “The Capitalists will sell us the rope with which we hang them.”

These changes needed in our government policies, education institutions, and business priorities rivals that of the 1960s. The changes from that period forward have focused on expanding our social programs, becoming much more inclusive, and growing profits and national wealth. We have had unquestionable success in each of these.

However, in various ways, government, educators, and business have gone too far.

  • The extent of our social programs on their current trajectories will overwhelm everything else our government provides.

  • Many university educators have fought harder for various inclusion metrics than for teaching the value and importance of western philosophy and institutions.

  • Both the higher incomes and the wealth created in our current economic structure have skewed disproportionately to the top 10% or even 1%.

The geopolitical backdrop has changed dramatically in the twenty-first century. China, Russia, and North Korea have eschewed working cooperatively within the post WWII economic system, particularly in the past decade.

They do not recognize, desire, or respect the democratic freedoms we enjoy: the rule of law, independent judiciary, freedom of the press and speech, assembly, and the separation of church and state. Instead, they agitate for their authoritarian, communist form of governing across the world. America, along with the rest of the free world, must act on the changes necessary to be self-reliant and secure in the face of this reality.

No one wants a hot war with China, the likely consequences of which would be a staggering change in everyday life, both here and there. Yet our intelligence agencies tell us that China is preparing the capabilities for war with the goal of being able to “win” (if there is such a thing) by 2027.

The best way to prevent a war is for your opponent to know you have the capability to “win”. In today’s world, we cannot just look at our military for that comfort. War in the twenty first century could take place on many fronts and we need to be prepared for all. Artificial Intelligence adds a whole new dimension to this challenge.

(The recent back and forth on tariffs is in part inspired by this adversarial competition with China. However, after 40 years the integration, our economies are so deeply connected that a complete decoupling today poses an existential threat to many American businesses. The moderation of tariffs is more a nod to the economic necessities of our current relationship than a change in the long-term needs for our national security.)

As investors, we also need to be prepared for a wide range of outcomes. Well diversified portfolios, like those we have at Tanglewood, are essential when changes and outcomes are unknown. Key ingredients include:

  • Technology stocks (and other productivity enhancers) – as they will lead into the future

  • U.S. Treasury bills and bonds – as they provide stability during economic setbacks

  • Infrastructure – as upgrades become a new means of competition

  • International stocks (outside of China) – as defense, technology, and utilities get much more funding than in the past

  • Real Estate – residential, REITs, and rental property as they offer non correlated benefits

  • Gold – as the ultimate disaster hedge as well as a growing reserve currency not issued by a single government

When the goals are well understood, American democracy and capitalism can meet any recognized challenge. Our entrepreneurs are the best in the world. The vast research potential of our higher education institutions is second to none. Our financial markets are by far the deepest in the world. Our economy is larger and more resilient than any other. We have all the building blocks necessary to accomplish the needed changes.

Empowering Women Through Private Wealth Management

Financial freedom means having the clarity and confidence to make decisions that reflect your life, not just your balance sheet. Private wealth management can help women navigate life’s transitions and shape their future on their terms.  

When I sit across the table from a woman stepping into full control of her finances for the first time, I see someone who wants to know if she will be okay.

Through years of helping women with life’s big transitions, whether divorce, widowhood, or retirement, I have seen that true financial freedom goes well beyond a specific dollar amount in an investing account. Freedom means knowing you have options, knowing you have support, and most importantly, knowing you do not have to face the future alone.

Financial freedom is having enough to choose your future, not just survive. Women navigate financial challenges that are fundamentally different from those that men face. Mothers must balance raising children against their careers. They are also disproportionately called on to care for aging parents. Every woman makes their own choices about these realities. I work with women who strategically plan for longer careers to ensure they can support the retirement lifestyles they envision, as well as those who are committed to maintaining their financial independence should they outlive their partners.

There are no wrong choices. But well-managed private wealth empowers these women to shape their lives on their terms instead of being pushed down paths they would not have chosen.

Our job is to listen to those choices and share whatever guidance or resources women need to make their goals a reality. And part of that is building trust and making room for questions. I never want one of my clients to feel embarrassed about asking a question. Whether it is about a type of investment, required minimum distributions, margin loans, or just how to read or understand a statement, every question deserves respect.

Women are savvy, financially disciplined investors. But until recently, we were not always prioritized in financial education and family discussions around money. My female clients often come to me unsure of what they do not know. Empowering them is creating an environment where they feel secure enough to ask the important questions they have and gain the clarity they need.

Women influence financial outcomes more than they realize. Women’s opinions and instincts matter even in couples where the husband leads the conversations. I always make a point of paying attention to the wife in meetings, even when she is quiet. Women are often the ones guiding family decisions behind the scenes. Understanding that unspoken influence and ensuring women feel equally heard and respected is a key part of good and effective advising.

Over the last few years, more of my work is with women – highly successful professionals facing the complex demands that come with growing wealth, and some who are navigating the complexities of inherited wealth after losing a spouse. By helping them understand what they have, what steps to take, and the decisions ahead – at a pace that feels right for them – I provide them the clarity and confidence to move forward with peace of mind.

Is a Family Loan the Right Wealth Transfer Strategy for You?

The Great Wealth Transfer is already underway. Sometimes it takes the form of carefully structured estate plans and inheritances. More often, it is through the Bank of Mom and Dad.

Parents are choosing to pass down wealth during their lifetime, actively supporting their children’s financial journeys. Many are stepping in as lenders, providing assistance when it’s needed most. They arrange intrafamily loans to help their children buy homes, start businesses, and invest in their future. This quiet shift is reshaping how wealth moves between generations, and it comes with both opportunities and risks.

More families are choosing to transfer wealth during their lifetime, often in the form of low-interest or no-interest loans. It allows them to:

  • Provide financial help when their children actually need it.

  • Avoid some of the red tape, underwriting headaches, and high interest rates that come with traditional lenders.

  • Retain some control over the money while still supporting their kids’ financial independence.

We often work with parents to define the structure and terms for  these loans. There are agreed-upon interest rates and repayment periods, just like any other structured financial agreement. But unlike a loan with a financial institution, a family loan can pull double duty as a lower-stakes gauge of a child’s financial health, or a gift that is forgiven over time.

A Loan Today, a Gift Tomorrow

Many parents approach these loans as a way to start wealth transfer while still maintaining flexibility. They lend money at a low IRS-determined  interest rate. If the loans are below that threshold they are potentially looked at as gifts. Children benefit from market growth in excess of the loan rates, keeping the wealth transfer tax-efficient.

For example, a parent might loan a sum of money to their child at a low fixed interest rate. The child reinvests that money and the long term growth stays with the child, outside of the parent’s estate. Over time, the parents may further forgive portions of the loan, effectively turning it into a tax-advantaged gift.

That said, parents need to be financially secure themselves before making these kinds of arrangements. The first priority in any wealth transfer discussion is ensuring that parents won’t jeopardize their own retirement by being too generous too soon.

The “Training Wheels” Strategy for Heirs

Another common reason families choose to lend first, rather than gift outright, is to test financial responsibility. Some parents worry about how their children will handle a sudden influx of money, especially if they haven’t managed large sums before.

Many of our clients use gifts or loans to fund investment accounts to introduce their heirs to wealth management. If a child mismanages the money, it gives parents time to reassess before passing down more significant assets.

We have found this approach also helps to introduce your children to the idea of working with a financial advisor. The hands-on guidance of an advisor creates an extra layer of support to guide your heirs toward better financial choices and outcomes.

Not every family should rush into intra-family loans. The best strategies depend on your financial situation, tax planning considerations, and family dynamics. But if you’re thinking about supporting your children while you’re still alive, it’s worth having a structured conversation about the best way to do it.

A financial advisor can help you evaluate:

  • Whether lending money aligns with your long-term financial security.

  • How to structure loans for maximum flexibility and tax efficiency.

  • What protections (like trusts or loan agreements) can help safeguard both parties.

If you’re considering helping your children now rather than waiting to pass down an inheritance later, we are always available to guide you through the options. Let’s make sure the next chapter of your family’s wealth story is built on a solid foundation.

The Power of a Personal Letter in Your Estate Plan

The passing of a beloved family member is often an emotional and stressful time. By adding a personal letter to your estate plan, it can offer your loved ones valuable insight, comfort, and clarity when carrying out your wishes. It is an opportunity to convey both practical instructions and your personal sentiments in a meaningful way. Here are some key items to consider:

Personal Message or Reflections

This is often the most heartfelt section, where you express your love, pride, and gratitude toward your family and loved ones. This can also include a reflection of your life, lessons you want to impart, and shared memories that you cherish.

Purpose of the Estate Plan

Explain how your estate plan was designed and why certain decisions were made. Reassure your family that these were made with careful consideration. For example, if a Corporate or Co-Trustee was incorporated to act with a child until they reach a certain age, your intentions could be to help build guardrails so that they learn how to manage their inheritance wisely before they become Sole Trustee of their own Trust.

Family and Relationship Guidance

Some people state their intentions and ask families to support one another, resolve any conflicts peacefully, or remind them to honor longstanding traditions and family values. For example, one client specifically expressed his desire for his children to consider investing a portion of their inheritance on experiences that will allow them to spend time together and invest in physical property that will routinely bring the family together. For another, instructions were made to ensure that a disabled child is included in family events and regular visitation in the facility where they reside.

Philanthropic Wishes

This is where you can express what charities or organizations had a special significance or positive impact on your life, if named in your Will or through an existing Donor Advised Fund or Family Foundation.

Funeral and Burial Instructions

You can provide guidance on how you would like your funeral or memorial to be handled, whether you prefer to be buried in a cemetery, or cremated and have your ashes scattered, as well as include music or service preferences.

Executor and Trustee Notes

You can provide a list of appointed individuals and financial professionals who can assist your family in properly settling your estate per your plan and wishes.

Disclosures

Financial Freedom: Beyond the Hashtags

True financial freedom isn’t about following the latest online trend. It’s about building a strong foundation that supports your ability to make meaningful financial choices. For some, that may mean taking a break from their career to raise children or care for aging parents. For others, it could involve a career change, travel, or charitable work.

Increasingly, young people are relying on social media for quick answers –frequently at the cost of in-depth, accurate, and thoughtful consideration of whether the information applies to their unique circumstances. A few swipes on TikTok or Instagram might introduce you to the idea of retiring by 35, investing heavily in cryptocurrency, or eliminating all forms of debt. While these messages can be compelling, they often oversimplify complex financial topics and overlook the importance of long-term, strategic planning.

At its heart, financial freedom is about alignment – ensuring your financial life supports your values, priorities, and evolving goals. It comes through disciplined saving, thoughtful planning, and proactive decision-making across areas such as taxes, investments, insurance, and estate planning.

Questions That Bring Clarity

Many clients in their 30s and 40s come to us not because something is wrong, but because they want more confidence in their path forward. Here are a few questions we often explore together:

If you took a 6- to 12-month break from work, could your plan support it without derailing your long-term goals?

Does your current spending reflect your personal values – or is it shaped by habit or external pressure?

Are the decisions you are making today creating flexibility for your future – or limiting your options?

These initial conversations often lead to greater clarity – not just about finances, but about purpose, priorities, and the life clients truly want to build.

Looking Ahead

As financial lives become more complex, the need for personalized, holistic planning becomes more important. Whether you are accumulating wealth, navigating a major life transition, or simply seeking to better align your money with your values, the earlier you create a plan and lay a solid foundation, the greater your potential for long-term financial freedom.

Disclosures

Understanding Your Philanthropy: A Conversation with Your Wealth Advisor

As Wealth Advisors, our goal is to ensure that a client’s financial strategies align with their broader goals and objectives. For many clients, philanthropy is not just a way to give back but also a personal expression of their values and priorities.

To help us guide those charitable conversations in a meaningful and impactful way, the following are some ways for us to kickstart the discussion, serving as a springboard to explore how a client’s giving aligns with their values, family dynamics, and long-term plans.

Starting the Conversation

Philanthropy is as unique as each individual or family, and the first step is understanding your passions and current involvement. Here are some questions to start the conversation:

  • Are there causes or charitable organizations you currently support? This helps us establish whether philanthropy is already part of your life and provides a starting point for our discussion.

  • What issues are you (and your family) passionate about? Why? Knowing what matters most enables us to focus the conversation on areas that truly resonate with your values.

  • Is philanthropy important right now? Understanding how immediate your philanthropic goals are can help prioritize your giving.

Exploring Your Motivations and Decision-Making

Understanding why one chooses to give can provide valuable insights into their philanthropic vision. Here are some key questions we might explore together:

  • How do you decide who to give to? This can help identify the criteria or processes that guide your decisions.

  • What donations have given you the most satisfaction? Reflecting on those gifts that were most gratifying helps us understand what matters most to you and where you feel your impact has been greatest.

  • Are there any donations you have regretted? Why? Identifying lessons learned can guide more strategic decisions in the future.

Family Dynamics and Philanthropy

For many clients, philanthropy is closely tied to family values and collaboration with other family members. These dynamics can play an important role in shaping the client’s giving. Here are some questions we might explore:

  • Tell me about your family’s values. This provides a foundation for understanding how your philanthropy aligns with shared principles.

  • What values do you want to pass along to your family? Thinking about legacy can help us incorporate these ideals into your plan.

  • Do family members advise your giving decisions? If philanthropy is a collaborative effort, we can help ensure the strategy reflects everyone’s input and priorities.

Identity and Legacy

Philanthropy often reflects identity and the desire to leave a lasting legacy. Exploring these themes can help develop a plan that is authentic and impactful:

  • What aspects of your identity are important to you? Understanding how your personal history or cultural background influences your giving can influence your plan.

  • Have you thought about what kind of legacy you want to leave? Let’s discuss how your charitable efforts can align with the broader legacy you wish to create.

  • How might your values inform your wealth planning or charitable giving? Connecting your personal “moral compass” can make your giving even more meaningful.

  • Tell me about some important life experiences that have affected you. Personal milestones or challenges can often shape philanthropic motivations and priorities.

  • How might these experiences inform your wealth planning and/or charitable giving? We can discuss how these may impact your giving strategies.

Practical Considerations and Next Steps

To ensure that a client’s philanthropic goals are achievable and sustainable, we will also discuss the logistics of giving. Here are some areas to review:

  • What assets do you usually give? Whether it’s cash, stocks, or other assets, understanding this may help us structure your giving more efficiently.

  • Do you make recurring donations? Regular contributions indicate a commitment to certain causes.

  • Would you like to give more? If expanding your impact is a goal, we can explore ways to achieve that within your financial plan.

Let’s Explore This Together

Working through these questions, we can help our wealth management clients create a giving strategy that reflects their values, leaving a lasting legacy.

Your Personal Relationship with Your Advisor Matters More Than You Think

Family financial planning demands a lot of technical expertise from your advisor—coordinating overlapping goals, implementing long-term investment and tax strategies, and facilitating estate planning and charitable giving activities. But to me, there is an equally important piece of the equation I think is sometimes overlooked:

Does your advisor really know you? I am being completely serious.

The personal side of the client-advisor relationship matters just as much as the technical side. Your advisor could give you every kind of investment performance report or Monte Carlo simulation that they can devise, but if your advisor does not really know you, none of that information will truly resonate with you.

One of the most important things your advisor can do, for your financial success, is show you that they understand what matters to you, and how you relate to the people and causes that are important to you.

What does money mean to you? What are you excited about? What keeps you awake at night? How do you want to be remembered?

I could hand these questions to you in an impersonal questionnaire. Or I could get to know you and what makes you tick, and build a genuine relationship to earn your trust so that you feel comfortable to open up. In my experience, getting to know you and building a relationship has a much better success rate than reducing your financial life down to a one-size-fits-all, standardized financial planning process.

The next time you meet with your advisor, pay attention to how they interact with you. Do they ask thoughtful questions about your life, your priorities, and the same about your family? Do they actively listen and respond in a way that makes you feel understood? These small but important cues can indicate whether your advisor is a good fit for you and your family.

An advisor who really knows you and your family can become your trusted sounding board for when you have something on your mind and want candid and unbiased feedback. They can help you think through issues where the solution recognizes equal treatment and fair treatment are not always the same thing. They can facilitate discussion between generations who have different objectives. And they can even help you recognize and understand when it is the right time to push a particular topic and when it is not.

This is all to say that, if you’re looking for financial guidance, your personal relationship with your advisor has a tangible influence on your family’s ability to achieve its goals. Work with an advisor who listens, asks good questions, earns your trust and has your back, because everything you achieve together will stand on that foundation.