This last article in our series Is It Time to Hire a Financial Advisor? explores two scenarios that occur more than you might think. It is important to realize how a financial advisor can be a benefit if you’ve recently received a large sum of money or are looking to give it away.
Cash Windfall
One of the most important times to seek the help of a financial advisor is when you receive an unexpected sum of money. If the funds are from an inheritance, it is possible there are tax ramifications for taking distributions from certain accounts. If you are receiving a large settlement, it is typically supposed to provide throughout your lifetime. Without careful planning on how to invest and to spend a cash windfall, many beneficiaries are left with little to show for it years later. A financial advisor can help you align your new wealth with your goals and priorities.
Charitable Intent
For those who are philanthropic, a financial advisor can help advise on any number of tax-saving strategies that go beyond your typical one-time or monthly donation. While living, in-kind donations of highly appreciated assets (stocks, land, etc.) can avoid long term capital gains and provide a tax deduction. Upon death, IRA assets and annuities with large, deferred gains are best given to charities to avoid taxation, while life insurance proceeds (which aren’t taxable) and taxable investment accounts (which receive a step-up in basis) are best left to family. While these are just two strategies, having an advisor who can work with you, your estate attorney, and your accountant can result in more money going to your family and the organizations you care about.
If you have received an inheritance, settlement, or want to learn more about tax-efficient charitable giving strategies, we would be happy to help. Please contact us here.
