One of the many intangible benefits of having a good financial advisor or planner in your life is they can deliver on the promise of collaborating with your other professional advisors such as your tax professional, mortgage broker or estate planning attorney.
Many individuals rarely think about their tax preparer and their financial advisor communicating with each other. They often receive advice from each advisor separately, without any coordination or communication between them. Finding professional advisors that devote the additional effort to communicate, strategize and collaborate with each other for your benefit is a substantial value-add in terms of reducing duplication, creating efficiency, and hopefully finding you ways to save on income taxes, premiums, as well as eventual estate costs.
Tax laws, retirement distribution rules, inheritance and estate planning rules are consistently changing. Collaboration between your financial advisor, your tax preparer as well as your estate planning attorney can lead to better understanding and a more thoroughly crafted financial plan for you from year to year.
With a financial advisor and tax preparer partnering on your behalf, a strategic plan can be created for your pre- and post-retirement income streams. This helps ensure your needs are met while taking advantage of lower tax brackets or minimizing taxable income in the highest tax brackets. It can also result in tax efficiency after you’ve passed on your remaining assets to your survivors or philanthropic causes.
When your professional advisor team works together, they can help with many of the following more advanced planning concepts:
- Company Stock Strategies: Implementing a Net Unrealized Appreciation strategy for your employer stock within your retirement plan can potentially result in lowering your income tax liability.
- Roth Conversions: Your advisors can discuss the benefits of triggering additional income through Roth conversions or IRA distributions to take advantage of lower tax brackets, particularly during retirement years before Required Minimum Distributions begin.
- Medicare Premiums: Your financial planner and tax professional can help mitigate Medicare Income Related Monthly Adjustment Amounts (IRMAA), or help you understand whether you may qualify for an appeal due to change in life circumstances such as work stoppage.
- Trusts and Wills: Your financial planner working with your estate planning attorney can guide you through the pros and cons between a revocable trust driven estate plan and a will driven estate plan. Your advisor can also help guide you through all the necessary steps of ownership and beneficiary changes after documents have been executed.
When professional advisors proactively collaborate and adapt to your changing circumstances, they can design, implement, and communicate financial plans that are optimized for your needs and goals.
Kimberly Hillyard CFP® is the Managing Director with Choreo in Eastern Iowa, an independent firm focused on redefining the RIA’s place in the wealth advisory industry. She helps clients navigate all areas of their financial lives and actively collaborates with all your professional advisors. www.choreoadvisors.com
Choreo, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration as an investment adviser does not imply a certain level of skill or training of the adviser or its representatives.
