Altfest Answers is a video series that uses hypothetical scenarios to take a look at the impact comprehensive wealth management can make on the real lives of clients and their families.

In this episode, “The Upper East Side Endocrinologist with an Estate Plan Problem,” President Andrew Altfest, CFP®, MBA, joins Financial Advisor and Estate Attorney Keith Feinberg, JD, CFP®, for a discussion about how overlooking the value of your business or practice in an estate plan could result in a significant tax burden for your loved ones when you’re gone.

If you are interested in a complimentary consultation with Altfest, schedule a meeting with us at this link.

 

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Andrew Altfest, MBA, CFP®: I’m Andrew Altfest, president of Altfest Personal Wealth Management. I’m very fortunate to be joined today by Keith Feinberg, who is a financial advisor and also an estate attorney. Please note that all cases that we review are hypothetical in nature – the one that we’ll be reviewing today is Dr. Prince. Dr. Prince is an endocrinologist who has a lucrative private practice on the Upper East Side of Manhattan. She has over three million dollars in investment accounts and a home that’s worth two million dollars. Dr. Prince has two children and three grandchildren. So Keith, tell us about the financial challenge that Dr. Prince brought to the table.

Keith Feinberg, JD, CFP®: When Dr. Prince came into Altfest, we took a comprehensive look at her entire wealth plan. We quickly realized that her will never accounted for the value of her practice. When her practice was valued it came in at 2.3 million dollars, which put her far above the New York State tax exemption.

AA: Wow, so she had an issue that she wasn’t even realizing that she had – a big tax bill.

KF: Absolutely, her estate would be incredibly taxable under New York State law. So we took some proactive steps to mitigate this risk. For instance, we utilized the unlimited marital exemption to re-title some of her assets, including her brokerage accounts, to take advantage of this unlimited exemption. We also pre-loaded 529 plans for each of her grandchildren’s college education, a tax-free wealth transfer opportunity.

AA: What was the bottom line impact that this had on Dr. Prince’s finances?

KF: By taking these steps to be proactive, when Dr. Prince is no longer with us, her husband, children, and grandchildren won’t have to worry about an estate tax liability of half a million dollars or more.

AA: Wow, saving over half a million dollars in potential tax. Great job, Keith. So, Dr. Prince is not so different from a lot of our clients. Perhaps their finances are different, but when it comes to estate planning, a lot of our clients need additional help. Perhaps they had an estate plan done a while ago and they have taxes that they planned for that are no longer here, or taxes that they are subject to that they are not even aware of, or the estate plan is no longer aligned with their financial goals as they are today. That is why we make it a priority to go over estate planning with our clients. We go well beyond just the investment portfolio to talk about the financial planning issues that our clients have on their minds or even those that they might not be aware of, as was Dr. Prince. Whatever the financial planning issue that you’d like to talk about, we’d be happy to discuss it with you. Please feel free to contact us for a complimentary consultation.

 

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Illustration is strictly hypothetical and is not representative of actual client experience. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. Altfest does not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions.

Investment advisory services provided by Altfest Personal Wealth Management (“APWM”). All written content on this site is for information purposes only. Opinions expressed herein are solely those of APWM, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.