• The KillerFrogs

CPA - Tax & Financial Planning

R

ross

KMA
Estate planing is simple

Everything you own when you die is subject to tax at its value with 3 exceptions
1 what goes to spouse ( marital deduction)
2 what goes to charity ( charitable exemption)
3 the unified credit amount ( currently 5.4 mil per person and 10.8 for a married couple)

All the estate planning ever done was to change one of the variables listed above
For example what you own at death ie gifting programs and Insurance trusts etc
Or whats its value
ie Discounts for minority ownership intetest
In family partnerships etc

The good news is Trump plans to repeal the estate tax and then necessity of estate planning goes away
 
ScottPatrick

ScottPatrick

Active Member
ross said:
Estate planing is simple

Everything you own when you die is subject to tax at its value with 3 exceptions
1 what goes to spouse ( marital deduction)
2 what goes to charity ( charitable exemption)
3 the unified credit amount ( currently 5.4 mil per person and 10.8 for a married couple)

All the estate planning ever done was to change one of the variables listed above
For example what you own at death ie gifting programs and Insurance trusts etc
Or whats its value
ie Discounts for minority ownership intetest
In family partnerships etc

The good news is Trump plans to repeal the estate tax and then necessity of estate planning goes away
Click to expand...


Biggest misconception regarding estate planning is that it is related only to tax issues.
 
ScottPatrick

ScottPatrick

Active Member
tcumaniac said:
Figured this would be a good thread to ask this on... do any of y'all have life insurance advice? I'm typically pretty financially savvy, but life I'll admit life insurance is a little over my head, and is something that is hard to be motivated to study and research about at 25.

But now that I'm married and have a mortgage, I'm guessing it's something I need. (i have no benefits through my employer).
Click to expand...

Get yourself a decent term-life policy, not necessarily the cheapest as you want to stick with a quality company. If you belong to a professional association you generally have a quality term-life plan available with your membership.

There are some decent uses for a whole-life plan if you have a large estate but generally the cost does not justify the benefits even after tax.
 
cdsfrog

cdsfrog

Active Member
I sell whole life. There is just no point with the rates insurance companies are paying to get whole life. For anyone. Its horrible. Guaranteed rate is under 1%. You can make that right now in a money market like fund.

As for term, I would suggest getting someone with a solid rating but dont overpay. Return of premium, waiver of premium, child rider, or any other rider is usually unnecessary for a 25 year old. But you should get term if your firm doesnt offer it. Tons of options for under $20 a month for 250k coverage, under $30 for 500k.
 
Spike

Spike

Full Member
ScottPatrick said:
Biggest misconception regarding estate planning is that it is related only to tax issues.
Click to expand...

No but when you take the tax considerations out you can get a simple non taxed plan will for a much more reasonable chunk of change.

A basic estate planning packet should also include a Power Of Attorney, Medical Power of Attorney/HIPPA release, Declaration of Adult Guardianship, and a Physicians Directive aka Living Will.

The physicians directive causes people the most heartburn. The next headache is when I start asking them what they want to do when things don't according to the little plan they have in their head (IE people don't die in the order you expect).

There are also some more specialized docs out there like an in home DNR and Declaration of agent for disposition of remains (IE you want to be cremated.

Something else to ponder is how are you going to pay for the funeral. Most of your assets are tied up so that a probate type proceeding must be initiated or atleast a death certificate can be produced. The death certificate is usually generated by the funeral home. You have to find a way to pay them to get the rest started.
 
ScottPatrick

ScottPatrick

Active Member
Spike said:
No but when you take the tax considerations out you can get a simple non taxed plan will for a much more reasonable chunk of change.

A basic estate planning packet should also include a Power Of Attorney, Medical Power of Attorney/HIPPA release, Declaration of Adult Guardianship, and a Physicians Directive aka Living Will.

The physicians directive causes people the most heartburn. The next headache is when I start asking them what they want to do when things don't according to the little plan they have in their head (IE people don't die in the order you expect).

There are also some more specialized docs out there like an in home DNR and Declaration of agent for disposition of remains (IE you want to be cremated.

Something else to ponder is how are you going to pay for the funeral. Most of your assets are tied up so that a probate type proceeding must be initiated or atleast a death certificate can be produced. The death certificate is usually generated by the funeral home. You have to find a way to pay them to get the rest started.
Click to expand...


No?
 
Froglaw

Froglaw

Full Member
I am both a CPA and an attorney.
I worked for a Big 8 firm in the tax department after I finished school.
It would be malpractice for me to fill out anything other than a 1040EZ and that is the truth. My practice is limited to civil litigation. This is not a humble brag but a cautionary warning that just because a "tax professional" offers a service it does not mean they are good at it.

I suggest, as others have in this thread, that you do divide the tax service and financial planning. I would further suggest that you divide the financial planning into three sub-catagories (life insurance, IRA/401k, and equities).

Don't rely on any one "financial.advisor.

Never give all of your money to anyone or any one institution.

I have had bad advise and great advise through the years.

My CPA is a former Big 8 guy. Yes I'm dating myself.
My life insurance is through an account with a classmate who set it up just before I graduated. Don't ignore whole life insurance as a part of your planning. In 2008 and 2009 my life policies made 6% guaranteed while my institutional investments tanked despite following advise of my big investment house portfolio manager.

Think in terms of "baskets" when setting up accounts. Long term, intermediate, and short term/liquid with life insurance covering the unpredictable.

Picture your retirement. When, where, and what you want to do after 55, 60, 65?

Good luck!

Go Frogs!
 
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cdsfrog

cdsfrog

Active Member
Froglaw said:
I am both a CPA and an attorney.
I worked for a Big 8 firm in the tax department after I finished school.
It would be malpractice for me to fill out anything other than a 1040EZ and that is the truth. My practice is limited to civil litigation. This is not a humble brag but a cautionary warning that just because a "tax professional" offers a service it does not mean they are good at it.

I suggest, as others have in this thread, that you do divide the tax service and financial planning. I would further suggest that you divide the financial planning into three sub-catagories (life insurance, IRA/401k, and equities).

Don't rely on any one "financial.advisor.

Never give all of your money to anyone or any one institution.

I have had bad advise and great advise through the years.

My CPA is a former Big 8 guy. Yes I'm dating myself.
My life insurance is through an account with a classmate who set it up just before I graduated. Don't ignore whole life insurance as a part of your planning. In 2008 and 2009 my life policies made 6% guaranteed while my institutional investments tanked despite following advise of my big investment house portfolio manager.

Think in terms of "baskets" when setting up accounts. Long term, intermediate, and short term/liquid with life insurance covering the unpredictable.

Picture your retirement. When, where, and what you want to do after 55, 60, 65?

Good luck!

Go Frogs!
Click to expand...

Just FYI most new insurance plans have horrible rates.
In 2008 you could get a yield of 7.2% on a single life annuity for a 65 year old. Right now the rate is atrocious (5.1) it's better to just put it in super conservative investments and withdraw 5% per year. You can get over 3% easily on long-term guaranteed investments making the income about 40 years, I think 105 is plenty good.

As for whole life I bought a policy but I caution everyone before buying it now what you're getting. For every positive story there is 100 bad ones. The ones I can offer don't have good enough dividends like Mass mutual, northwestern and guardian.

Only time I used s tax attorney was when I lived in UK for 6 months and us for the latter. Well worth the money. I will use one again for UK tax relief and when I get back during a tax year for both countries.

Awesome advice overall except I disagree on separating ira and equities. 401k is subject to your company.
 
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Young and Horned

Young and Horned

Active Member
Froglaw said:
I am both a CPA and an attorney.
I worked for a Big 8 firm in the tax department after I finished school.
It would be malpractice for me to fill out anything other than a 1040EZ and that is the truth. My practice is limited to civil litigation. This is not a humble brag but a cautionary warning that just because a "tax professional" offers a service it does not mean they are good at it.

I suggest, as others have in this thread, that you do divide the tax service and financial planning. I would further suggest that you divide the financial planning into three sub-catagories (life insurance, IRA/401k, and equities).

Don't rely on any one "financial.advisor.

Never give all of your money to anyone or any one institution.

I have had bad advise and great advise through the years.

My CPA is a former Big 8 guy. Yes I'm dating myself.
My life insurance is through an account with a classmate who set it up just before I graduated. Don't ignore whole life insurance as a part of your planning. In 2008 and 2009 my life policies made 6% guaranteed while my institutional investments tanked despite following advise of my big investment house portfolio manager.

Think in terms of "baskets" when setting up accounts. Long term, intermediate, and short term/liquid with life insurance covering the unpredictable.

Picture your retirement. When, where, and what you want to do after 55, 60, 65?

Good luck!

Go Frogs!
Click to expand...
Thanks and thank you to everyone else as well. I will be sure to split it up.

I have a former audit partner I worked for who starter his own firm and is a Horned Frog, so will probably do taxes with his firm (given it is reasonable fees). Then will research others for will prep and financial planning, separately.
 
cdsfrog

cdsfrog

Active Member
Let me know if I can help you find someone to help you. Ive used Schwab and Fidelity. Family uses LLP and UBS but they charge too much IMO. Granted they are completely hands off. Always use Brokercheck to make sure the person use choose if an advisor is reputable.

If you go with a major firm, work with someone you like. They can always help reassign you to someone else. Its important that you and your advisor are on the same page.
 
berryfrog95

berryfrog95

Active Member
Froglaw said:
I am both a CPA and an attorney.
I worked for a Big 8 firm in the tax department after I finished school.
It would be malpractice for me to fill out anything other than a 1040EZ and that is the truth. My practice is limited to civil litigation. This is not a humble brag but a cautionary warning that just because a "tax professional" offers a service it does not mean they are good at it.

I suggest, as others have in this thread, that you do divide the tax service and financial planning. I would further suggest that you divide the financial planning into three sub-catagories (life insurance, IRA/401k, and equities).

Don't rely on any one "financial.advisor.

Never give all of your money to anyone or any one institution.

I have had bad advise and great advise through the years.

My CPA is a former Big 8 guy. Yes I'm dating myself.
My life insurance is through an account with a classmate who set it up just before I graduated. Don't ignore whole life insurance as a part of your planning. In 2008 and 2009 my life policies made 6% guaranteed while my institutional investments tanked despite following advise of my big investment house portfolio manager.

Think in terms of "baskets" when setting up accounts. Long term, intermediate, and short term/liquid with life insurance covering the unpredictable.

Picture your retirement. When, where, and what you want to do after 55, 60, 65?

Good luck!

Go Frogs!
Click to expand...
Don't invest through your friends, I'd add that to the do's & don'ts.....
 
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