Are Your Finances "Good Enough," or Just Better Than the Neighbors? (Spoiler: There's a Difference)

We all know that feeling. You glance over the proverbial fence (or these days, the carefully curated social media feed) and think, "Alright, I'm doing okay. Probably better than that guy." And maybe you are. But when it comes to your financial future; the one that supports your family, builds your legacy, and lets you sleep at night: is "better than the neighbors" the gold standard we're aiming for?

Read Andrew’s Story

Feel free to watch and/or listen to my narration of this article.

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Let's be honest, many are navigating the complex world of investments, tax strategies, estate planning, and even their monthly budget with what amounts to a well-meaning but somewhat outdated map. A recent survey highlighted that the average U.S. adult could only answer about 48% of basic financial literacy questions correctly.¹ Scary thought, right? Especially when another survey from early 2024 found that 36% of American adults reported finding it somewhat or very difficult to pay for usual household expenses in the prior week.² Clearly, "winging it" isn't a wealth strategy.

The real issue isn't always a lack of information; it's often a misplaced sense of "good enough." We see ourselves as generally competent individuals (and you are!), and by extension, assume our financial acumen is equally sharp. Even worse, we fall into the trap of comparing our situation to those around us. If we're treading water at the same pace as everyone else, then at least we’re not falling behind, right?

Well, no. Not if "everyone else" is also quietly wondering if they're missing something. The "keeping up with the Joneses" mentality is a race to mediocrity, not financial freedom. True financial empowerment comes from looking inward, not sideways. It’s about being brutally honest with yourself about what you know, what you don't know, and where you truly want to go; irrespective of Mr. & Mrs. Jones and their new boat.

For business owners and successful professionals like you, "good enough" in your career or company simply isn't. You strive for optimization, efficiency, and growth. Why should your personal finances be any different? The journey to financial success isn't accidental; it's intentional, and it starts with a clear, unvarnished understanding of your starting point.

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So, where do you really stand?

This isn't about assigning blame or inducing panic. It's about recognizing that financial landscapes shift, tax codes evolve, and opportunities (and pitfalls) are constantly emerging. What was a brilliant strategy five years ago might be a leaky bucket today.

Here’s a thought: Even if you’re fairly confident in your financial trajectory, wouldn’t a professional second opinion be valuable? Think of it as a specialist consultation. You're the CEO of your life; even the best CEOs have a board of trusted advisors.

Perhaps you’re already on the perfect path. Fantastic! Once we confirm that, you’ll be able to sleep even better. But what if there's an opportunity you've overlooked, a tax optimization strategy that wasn't on your radar, or a more effective way to structure your legacy?

Instead of wondering if you're just "doing okay," let's find out how you can do exceptionally.

Ready to swap "good enough" for "right for you?" Let's talk. Reach out today, and let's ensure your financial reality aligns with your ambitions.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

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How to Choose Your Business Structure: A Guide to Minimizing Taxes & Liability

When you're building a business, the structure you choose isn't just paperwork: it has real consequences for how you're taxed, how much risk you take on personally, and how your business can grow. Whether you're just starting out or thinking about restructuring, it's worth understanding the core differences between the main types of business entities.

This guide will walk you through the most common business entity types: Sole Proprietorships, General Partnerships, LLCs, S-Corps, and C-Corps, explaining their key differences in liability, taxation, complexity, and suitability for various business stages. Our aim is to provide clear, actionable information to help you make an informed decision.

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Sole Proprietorship

The sole proprietorship is the simplest and most common way to operate a business. If you’re running things solo and haven’t formally registered a business entity with your state, chances are you're already a sole proprietor by default.

Best for: Freelancers, individual consultants, or entrepreneurs testing a new, low-risk business idea who prioritize simplicity and minimal administrative burden.

The main upside here is simplicity in setup and taxes. There’s no need for formal registration beyond local licenses, and profits or losses are reported directly on your personal tax return, making tax filing relatively straightforward.

However, this simplicity has a significant drawback: unlimited personal liability. Because there's no legal separation between you and the business, your personal assets (savings, car, home…) are at risk if the business incurs debt or is sued. On the tax side, you’ll also pay self-employment tax (Social Security and Medicare) on the totality of your net income. There’s no legal way to split your income to reduce your payroll tax burden.

In short, sole proprietorships are fine for testing an idea or running a low-risk side hustle, but they can become a liability, literally, as soon as you grow.

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General Partnership

If you’re going into business with someone else and don’t form an LLC or corporation, you’re likely operating as a general partnership by default. Like sole proprietorships, partnerships are pass-through entities, meaning the business doesn’t pay its own taxes. Instead, profits and losses flow through to the partners’ individual returns.

Best for: Two or more individuals starting a business together who prefer a simple operational structure and have a high degree of trust, while understanding the implications of shared and personal liability.

A partnership is easy to form, often just a handshake and an agreement will suffice, but that lack of formality can be dangerous. A critical vulnerability is operating without a clear, written partnership agreement. This document should explicitly detail ownership percentages, profit/loss distribution, responsibilities, and crucial procedures for dispute resolution, partner departure, or dissolution. Without it, disagreements over finances or business direction can quickly escalate into costly legal battles."

The biggest concern? Liability. In a general partnership, each partner is personally liable for the actions of the business, and for the actions of the other partners. One bad decision by your partner could financially wreck you. On the tax side, you’re also on the hook for self-employment taxes on your share of the profits.

Partnerships can work well when trust is strong and risk is low, but without a formal structure and legal safeguards, you may have unnecessary exposure.

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Single-Member LLC (Disregarded Entity)

For solo business owners who want simplicity and liability protection, the single-member LLC is a powerful option. Legally, an LLC (Limited Liability Company) is a separate entity from you as an individual, meaning your personal assets are protected if the business faces a lawsuit or debt collection as long as you follow basic corporate formalities. This includes keeping business and personal finances separate (e.g., separate bank accounts), and, depending on your state, may involve things like holding regular meetings or filing annual reports.

Best for: Solo entrepreneurs seeking robust personal asset protection combined with the simplicity of pass-through taxation and greater operational flexibility than a sole proprietorship.

From a tax perspective, the IRS treats a single-member LLC as a "disregarded entity" by default. That means the business doesn’t pay its own taxes; all profits flow through to your personal return just like a sole proprietorship. You still pay income tax and self-employment tax on all profits, but you gain legal protection, which is a major upgrade.

One of the best features of an LLC is its flexibility. As your business grows, you can choose to have the LLC taxed as an S Corporation or even a C Corporation, giving you more options for managing taxes. And since LLCs are recognized in all 50 states, they offer a good balance of legal protection and ease of use.

If you're serious about your business but not yet ready to take on the complexity of a corporation, a single-member LLC is often the smart move.

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S Corporation (S-Corp)

Once your business is generating consistent profits, it might make sense to elect S-Corp status. The S Corporation (S-Corp) is not a distinct business entity itself, but rather a special tax election that an eligible LLC or C-Corp can make. Its primary attraction for profitable businesses is the potential for significant savings on self-employment taxes. As an S-Corp owner actively working in the business, you must pay yourself a 'reasonable salary,' which is subject to payroll taxes (Social Security and Medicare). However, any remaining profits can be taken as distributions, which are generally not subject to self-employment taxes.

Best for: Profitable LLCs whose owners wish to reduce their self-employment tax burden... and eligible C-Corporations seeking to switch to pass-through taxation to avoid double taxation on profits, provided they meet S-Corp ownership and operational requirements.

In an S-Corp, you pay yourself a reasonable salary, which is subject to payroll tax, and take the rest of the profits as distributions, which are not subject to self-employment tax. That can lead to significant tax savings once your profits justify the extra paperwork. Determining and documenting a 'reasonable salary' is crucial and should reflect what similar businesses would pay for comparable services. The IRS scrutinizes this, so it’s wise to research industry benchmarks or consult a tax professional.

You also get liability protection as long as you keep your business and personal finances separate and follow corporate formalities. But S-Corps come with rules: you're limited to a maximum of100 shareholders, all of whom must be U.S. citizens or residents, and you can only issue one class of stock. You’ll need to run payroll, file quarterly reports, and submit a separate tax return for the business.

If you’re earning more than you’d reasonably pay yourself in salary, and you want to protect your assets while legally reducing your tax bill, the S-Corp structure can be a great fit.

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C Corporation (C-Corp)

Best for: Startups and larger businesses aiming to raise significant capital from external investors (like venture capitalists), offer stock options to employees, or plan for an eventual public offering, and that require maximum flexibility in ownership structure.

C-Corps are the go-to structure for startups that plan to raise money, issue stock, or scale aggressively. They offer the most robust liability protection, the most flexibility in ownership (no limits on the number or type of shareholders), and can retain earnings within the business for future investment.

The primary tradeoff for this flexibility and protection is potential double taxation. First, the C-Corp pays corporate income tax on its profits (currently a flat 21% federal rate). Then, if those profits are distributed to shareholders as dividends, the shareholders pay personal income tax on those dividends. While strategies exist to mitigate this, it’s a key consideration.

C-Corps also come with more complexity. You’ll need a board of directors, formal bylaws, annual meetings, and detailed records. You’re also more likely to need legal and accounting help on an ongoing basis.

For many small business owners, the C-Corp structure is overkill. But if you’re aiming to raise venture capital, issue employee stock options, or eventually go public, it’s the right vehicle.

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There’s no one-size-fits-all answer when it comes to business structures. What works for a freelancer just starting out is very different from what makes sense for a tech startup looking to raise capital. For many solo entrepreneurs, starting as a single-member LLC and later electing S-Corp status provides a good balance of simplicity, protection, and tax savings. Partnerships need strong agreements and careful planning, and C-Corps should be reserved for businesses with big growth ambitions and complex funding plans.

The key is to choose a structure that aligns with your business's current stage, financial situation, and future ambitions. As your business evolves, your needs may change, and restructuring might become beneficial. I recommend reviewing your business structure periodically with legal and financial professionals to ensure it continues to serve your best interests.

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Frequently Asked Questions (FAQ)

What is the cheapest business structure to set up? 

Generally, a sole proprietorship is the cheapest and simplest, often requiring no formal state filing beyond local business licenses. LLCs typically have state filing fees but offer liability protection.

Can I change my business structure later? 

Yes, you can change your business structure as your business grows or your needs change (e.g., converting an LLC to an S-Corp for tax purposes, or a sole proprietorship to an LLC for liability protection). This usually involves specific legal and tax procedures, and certain changes may have specific IRS rules or waiting periods before further changes can be made.

Do I need an EIN for my business structure? 

You'll likely need an Employer Identification Number (EIN) if you operate as a partnership, LLC (in most cases), corporation, or if you plan to hire employees or open a business bank account, regardless of structure. But regardless on requirement, it is always advisable to operate your business with an EIN. 

Which business structure offers the best tax benefits? 

It depends on your profits and specific situation. Pass-through entities like sole proprietorships, partnerships, and standard LLCs avoid corporate-level tax. S-Corps can offer self-employment tax savings for profitable businesses but can be more expensive to file taxes and keep up with accounting. C-Corps have different tax implications and benefits, especially if reinvesting profits heavily.

How does liability protection work with an LLC or Corporation? 

An LLC or corporation creates a separate legal entity from its owners. This means that, generally, the personal assets of the owners are protected from business debts and lawsuits, provided corporate formalities (like separate finances) are maintained. This is often referred to as the 'corporate veil.’

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

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Business Succession: Strategies for Leaving a Business to Family

Transferring a business to family members is more than just a financial decision, it’s a deeply personal one. Your business represents years, if not decades, of hard work, sacrifice, and dedication. It’s a legacy that you want to see thrive for generations to come. However, without proper planning, a transition can create unnecessary tax burdens, financial strain, and even family disputes. Understanding the available strategies ensures that your business remains a source of security, not stress, for your loved ones.

Successfully passing down a business requires a plan that aligns with your financial goals, tax considerations, and family dynamics. Some strategies allow you to retain control and income for years, while others enable an immediate transition. Additionally, post-mortem planning can safeguard your family’s financial future if the unexpected happens. Below are some key strategies for business succession, including their tax implications, income opportunities, and control dynamics, helping you choose the best path forward.

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Family Limited Partnership (FLP)

A Family Limited Partnership (FLP) allows a business owner to transfer ownership gradually while maintaining control. The owner retains decision-making authority as the general partner, while family members receive limited partnership interests over time. This structure not only protects the business from mismanagement but also creates an efficient method for reducing estate tax liability.

FLPs provide valuation discounts on transferred shares, lowering estate and gift tax exposure. However, income taxes depend on profit distributions and the entity’s structure. Beneficiaries inherit the owner’s original cost basis, which may result in capital gains taxes if they later sell the business. The owner can continue receiving income through management fees or partnership distributions, ensuring financial security while slowly transitioning ownership. While control remains intact initially, it gradually diminishes as more shares are transferred. This method works best when started 5–10 years before a full transition to maximize tax advantages.

Selling the Business to Family

Selling a business to family members provides liquidity for the owner while ensuring the company remains within the family. The sale can be structured through an installment plan, a promissory note, or a self-canceling installment note, which cancels any remaining payments if the seller passes away before full repayment.

This strategy spreads capital gains taxes over the life of the installment payments, easing the tax burden. Buyers may deduct interest payments on financed purchases, while SCINs can reduce estate tax liability when properly structured. However, IRS scrutiny requires careful compliance. The owner benefits from continued income through installment payments or an advisory role while stepping away from daily operations. Control is gradually transferred, allowing the next generation to gain experience under the seller’s guidance. Ideally, this strategy should be implemented 3–7 years before retirement for maximum flexibility.

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Grantor Retained Annuity Trust (GRAT)

A Grantor Retained Annuity Trust (GRAT) allows the business owner to transfer ownership while receiving annuity payments for a predetermined period. Once the trust term ends, remaining assets pass to the beneficiaries with reduced tax liability, making this an effective wealth transfer tool.

GRATs minimize estate tax exposure when structured correctly. If the business appreciates in value, the excess growth transfers to beneficiaries tax-free. However, if the owner passes before the trust term ends, assets revert to the estate, negating tax benefits. This strategy provides an income stream during the annuity period, ensuring financial stability. Control diminishes over time, as the owner must fully relinquish business ownership at the end of the trust term. Best results are achieved when implemented at least five years before the intended transition.

Equipment Leaseback: a Passive Income Strategy

Instead of retaining key business assets, the owner transfers ownership of business equipment to the next generation and then leases those assets back from them. This allows the family member to receive passive rental income while the owner maintains operational use of critical resources.

Lease payments offer a predictable and taxable income stream to the beneficiary while helping reduce the overall estate value for the original owner, reducing estate and gift tax exposure. For the business, the lease payments are deductible, increasing tax efficiency. The owner creates a passive income stream for the next generation while maintaining business continuity. Control over asset use remains functionally with the original owner through lease terms, but legal ownership, and thus long-term strategic control, shifts to the heir. This strategy can be set up at any time but is most beneficial when coordinated well in advance of retirement or sale.

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Post-Mortem Planning Strategies

Even with a solid succession plan, post-mortem strategies ensure heirs can manage taxes and business operations effectively after the owner’s passing. Without proper planning, heirs may be forced to sell the business to cover estate taxes, disrupting the legacy you worked so hard to build.

Section 6166 estate tax deferral allows heirs to defer estate taxes on a closely held business for up to 14 years, preserving liquidity. A Qualified Terminable Interest Property (QTIP) Trust ensures a surviving spouse receives income while ultimately passing business ownership to designated heirs. Buy-sell agreements establish clear terms for ownership transfers, reducing potential disputes. Additionally, a stepped-up basis adjustment allows heirs to inherit business interests at fair market value, minimizing capital gains taxes upon sale. These strategies help prevent forced sales and ensure continuity, keeping the business intact for future generations.

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Choosing the Right Strategy

Each business succession strategy offers unique benefits depending on the owner’s goals for control, income, and tax efficiency. Whether transitioning gradually through an FLP, structuring an installment sale, leveraging a GRAT, or ensuring post-mortem tax efficiency, proper planning is essential. With expertise in tax and legacy planning, I help business owners craft a succession plan that protects both their business and their family’s financial future.

Business succession is one of the most complex areas of financial planning, and these strategies are just a handful of possibilities. Every business owner’s situation is unique, and the right solution depends on personal financial goals, family dynamics, and tax considerations. To ensure a seamless transition that protects both your wealth and your legacy, schedule a time with me to create a tailored succession plan that works best for you and your family.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

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Making the Most of Cash Balance Plans: A Simple Guide for Business Owners

If you own a business and want to save more for retirement while paying less in taxes, a cash balance plan might be a great option. These plans may allow you to save more money than a regular 401(k) and offer major tax benefits.

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What is a Cash Balance Plan?

A cash balance plan is a type of employer-sponsored retirement plan where the business makes annual contributions on behalf of employees. These contributions grow at a predetermined rate and are designed to provide a stable retirement benefit. Unlike traditional 401(k) plans, where employees contribute and take on investment risk, a cash balance plan ensures the employer funds the account and assumes the investment risk.

Key Benefits of Cash Balance Plans

1. Higher Contribution Limits

A 401(k) has limits on how much you can put in; $70,000 per year ($77,500 if you're 50 or older) for 2025. A cash balance plan lets you save significantly more, sometimes exceeding $300,000 per year, depending on age and income. This is especially helpful for business owners who want to accelerate their retirement savings and take advantage of tax-deferred growth.

Source: Joe Nichols, DWC - The 401(k) Experts.

2. Substantial Tax Savings

Source: Joe Nichols, DWC - The 401(k) Experts.

Contributions to a cash balance plan are tax-deductible, directly reducing taxable income. This is particularly valuable for high-income business owners looking to lower their annual tax bill. Additionally, the plan's assets grow tax-deferred, allowing for compounding benefits over time.

This video is an audible version of this article. Feel free to listen while reading, or watch it independently.

3. Enhanced Employee Retention and Satisfaction

Offering a strong retirement plan helps businesses attract and retain skilled employees. A cash balance plan provides a predictable benefit, making it an appealing option for employees seeking long-term financial security. Business owners who offer these plans often find that they increase employee loyalty and job satisfaction.

4. Flexibility in Plan Design

Cash balance plans can be customized to meet the needs of the business. Contributions can vary based on employee roles, tenure, or salary levels, allowing business owners to structure the plan in a way that best serves their financial and workforce goals. Additionally, these plans can be paired with a 401(k) for even greater retirement savings potential.

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Challenges of Cash Balance Plans

1. Required Annual Contributions

Unlike profit-sharing contributions in a 401(k), which can be discretionary, cash balance plans require mandatory annual contributions. This means businesses need a consistent and predictable cash flow to maintain the plan over time.

2. Administrative Complexity

Cash balance plans involve more administrative work than traditional 401(k)s. Business owners must comply with government regulations, complete annual actuarial evaluations, and file IRS reports. Engaging a third-party administrator (TPA) is necessary to ensure compliance and smooth plan operation.

3. Funding Requirements

Since the employer is responsible for funding the plan and ensuring returns meet the guaranteed rate, market downturns could lead to additional funding obligations. For example; a plan with $1 million of accumulated benefits could experience an investment shortfall of 5% based on market performance. This would require an additional $50,000 of employer contributions on top of the annual contribution requirements. It should be noted that any losses may be amortized over a 15-year period. 

Source: Joe Nichols, DWC - The 401(k) Experts.

4. Higher Setup and Maintenance Costs

Compared to 401(k) plans, cash balance plans typically have higher setup and maintenance costs. Employers must factor in administrative fees, actuarial costs, and investment management expenses when determining if the plan is a viable option.

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Is a Cash Balance Plan Right for Your Business?

A cash balance plan is a powerful tool for business owners who want to accelerate retirement savings and take advantage of significant tax breaks. While these plans require mandatory contributions, careful planning can ensure long-term benefits that often outweigh the administrative and funding challenges. For high-earning business owners with a steady cash flow, a cash balance plan can provide a strategic way to maximize retirement savings while significantly reducing taxable income.

These plans are particularly beneficial for professionals such as doctors, lawyers, and consultants who have stable profits and seek to invest heavily in their future. By assessing your financial stability and working with experts, you can determine if a cash balance plan aligns with your long-term business and retirement goals while also offering valuable benefits to your employees.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

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Estate Planning: Advanced Strategies for Wealth Management

Estate planning encompasses more than the preservation of wealth; it is a sophisticated exercise in financial security, tax minimization, and the cultivation of an enduring legacy. For individuals with complex asset portfolios or professional obligations, a nuanced estate plan is essential to address multifaceted personal and professional objectives while protecting assets for succeeding generations. Below, we examine advanced estate planning techniques and their strategic applications.

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Foundational Strategies in Estate Planning

Revocable Living Trusts

A Revocable Living Trust represents a cornerstone of estate planning, offering unparalleled flexibility and control over assets. It is particularly advantageous for individuals managing diverse holdings, as it consolidates ownership of business interests, real estate, and liquid assets into a unified structure. By avoiding probate, this mechanism ensures the expeditious distribution of assets, maintains confidentiality, and obviates the complexities associated with ancillary probate in jurisdictions beyond one’s domicile.

Irrevocable Life Insurance Trusts (ILITs)

An ILIT is a sophisticated instrument designed to exclude life insurance proceeds from the taxable estate. When coupled with Crummey provisions, it permits annual tax-free contributions to beneficiaries within the parameters of the federal gift tax exclusion. The trust subsequently utilizes these contributions to maintain the life insurance policy.

For instance, consider an individual anticipating a substantial estate tax liability. By employing an ILIT, the resulting liquidity can offset estate taxes or fund a buy-sell agreement without diminishing other estate assets. This ensures the preservation of wealth while securing operational continuity for closely held enterprises.

Testamentary Trusts

A Testamentary Trust, activated through provisions within a will, offers an easily executed yet robust framework for structured inheritance. This trust is invaluable for managing distributions to minors or dependents and shielding assets from creditors’ claims or imprudent financial decisions by beneficiaries.

As an illustrative scenario, a professional seeking to ensure incremental wealth transfers to their children might establish a Testamentary Trust stipulating disbursements at defined life milestones, such as ages 25, 35, and 45. Concurrently, the trust could provide for a surviving spouse, ensuring both immediate support and the long-term financial stewardship of future generations.

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Sophisticated Business Transfer Mechanisms

Business succession planning demands precision and foresight to mitigate tax exposure while ensuring operational stability and intergenerational continuity.

Buy-Sell Agreements

Buy-Sell Agreements are indispensable in delineating ownership transitions in the event of death, disability, or retirement. Funded through life insurance, these agreements provide liquidity to facilitate the acquisition of the deceased owner’s share by surviving stakeholders.

For example, a small enterprise with two co-owners might implement a Cross-Purchase Agreement. Should one owner predecease the other, the agreement enables the survivor to acquire the decedent’s stake at a predetermined valuation, thereby safeguarding the business and providing equitable compensation to the deceased’s heirs.

Qualified Interest Trusts

Instruments such as Grantor Retained Annuity Trusts (GRATs) or Qualified Personal Residence Trusts (QPRTs) are pivotal in transferring appreciating assets while minimizing taxable estate values. These trusts effectively "freeze" the asset’s value for estate tax purposes, allowing beneficiaries to inherit appreciation free of tax liability.

A family business owner might, for instance, transfer shares into a GRAT. During the trust’s term, the grantor receives an annuity, while the appreciating residual interest transfers to heirs upon expiration of the trust, all within a highly tax-efficient structure.

Valuation Discounts for Business Gifting

Strategic gifting of minority interests in a closely held business capitalizes on valuation discounts for lack of marketability and minority control, thereby reducing the taxable value of transferred assets.

Over time, an owner could utilize annual gift tax exclusions to transfer minority shares to heirs or trusts, systematically diminishing the taxable estate while preserving family control over the enterprise.

Family Limited Partnerships (FLPs)

FLPs embody the "family bank" philosophy, serving as a vehicle for intergenerational wealth transfer while retaining centralized control. By transferring limited partnership interests to heirs, significant valuation discounts may be realized for estate and gift tax purposes.

Consider a family enterprise structured as an FLP. The general partner retains decision-making authority, while limited partnership interests are distributed to heirs, fostering shared ownership and financial stewardship across generations. This approach not only reduces estate tax exposure but also instills a legacy of collaborative asset management.

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Advanced Philanthropic Strategies

Charitable giving serves dual objectives: it aligns with personal values while achieving meaningful tax optimization. High-net-worth individuals often integrate philanthropic endeavors into their estate plans to magnify their impact and minimize liabilities.

Charitable Remainder Trusts (CRTs)

CRTs facilitate the transfer of highly appreciated assets, enabling donors to sidestep immediate capital gains taxes while deriving a steady income stream. Upon termination of the trust, the remaining assets pass to designated charitable organizations.

For instance, transferring appreciated stock to a CRT eliminates capital gains taxes, generates lifetime income for the donor, and secures a legacy contribution to a favored nonprofit institution.

Donor-Advised Funds (DAFs)

DAFs provide a streamlined platform for strategic philanthropy. Contributions yield immediate tax deductions, while donors retain advisory privileges over grant disbursements to qualified charities.

Envision a scenario where a family consolidates their annual charitable contributions into a DAF. This structure simplifies administration, engages younger generations in philanthropy, and perpetuates a tradition of giving.

Private Foundations

Private foundations afford unparalleled control over charitable endeavors, albeit with heightened administrative complexity. They are well-suited for individuals seeking to establish a lasting institutional legacy.

A private foundation might, for example, fund educational scholarships or community initiatives aligned with the founder’s values. Beyond tax benefits, such entities foster active family participation in governance and amplify philanthropic impact over generations.

Avoiding Strategic Pitfalls

Even meticulously constructed estate plans are susceptible to errors that can compromise their efficacy. Common pitfalls include:

• Improperly Funded ILITs: Failure to fund this trust appropriately jeopardizes the tax-exempt treatment of contributions.

• Liquidity Deficiencies: Inadequate planning for estate tax liabilities or business buyouts may necessitate a premature liquidation of assets. Life insurance and carefully calibrated gifting strategies work to mitigate this risk.

• Outdated Valuations: Periodic appraisals ensure that asset values remain accurate, particularly for closely held businesses.

• Underutilized Philanthropic Opportunities: Neglecting charitable mechanisms can result in unnecessary tax exposure and diminished legacy impact.

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Estate planning transcends mere financial management; it is a deliberate exercise in legacy cultivation, tax strategy, and familial continuity. By employing tools such as ILITs, FLPs, GRATs, and philanthropic vehicles, individuals can craft plans that are both comprehensive and tailored to their unique circumstances.

Engaging with seasoned legal and financial advisors ensures the realization of these strategies in alignment with overarching objectives. The earlier these measures are implemented, the greater the flexibility and efficacy of the resulting plan.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

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Equity Compensation: Strategies for Business Owners and Executives

Equity compensation: whether it’s stock options, restricted stock units, deferred compensation plans, or other incentives can be powerful for both wealth-building and as a tool to retain and grow top talent. For business owners and executives, it offers an opportunity to align your financial success with the growth of your company. But without a strategy, these rewards can quickly become a source of unnecessary complexity and risk.

Here we’ll explore key considerations for managing equity compensation effectively while highlighting strategies to minimize tax burdens and maximize long-term benefits.

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Understanding Equity Compensation: A Quick Overview

Equity-based compensation comes in several forms, and each has its own rules and opportunities. Here are the most common:

Incentive Stock Options (ISOs)

• Offer favorable tax treatment if you meet holding period requirements.

• If sold too early, gains are taxed as ordinary income instead of capital gains.

Nonqualified Stock Options (NSOs)

• Taxed as ordinary income at exercise, based on the difference between the exercise price and market value.

• Any subsequent growth is subject to capital gains tax when sold.

Restricted Stock Units (RSUs)

• Taxable as income upon vesting, with the stock’s market value determining the tax hit.

• Holding shares after vesting exposes future gains to capital gains taxes.

Deferred Compensation Plans

• Allow you to defer taxable income to a future date, ideally when your income—and tax rate—are lower.

• Planning payout timing is critical to avoid high tax bills.

Net Unrealized Appreciation (NUA)

• This is a strategy for 401(k) holders with company stock, where you can reduce taxes on the growth of your stock by shifting it from ordinary income to long-term capital gains.

Each of these compensation forms has the potential to have a lasting, positive effect on your wealth; but only if you navigate the accompanying tax and financial complexities strategically.

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The Tax Factor: What You Need to Know

Taxes are the single biggest factor to consider when managing equity compensation. Poor timing can mean losing a significant portion of your rewards to tax liabilities. Here’s a simplified breakdown:

• ISOs and AMT

  Incentive Stock Options are a tax-friendly tool, but exercising too many in one year can trigger the Alternative Minimum Tax (AMT). Proper planning, like spreading exercises across multiple years, can help mitigate this.

• RSU Vesting and Taxes

  When RSUs vest, you’re hit with ordinary income tax on their full value. Depending on how frequently you’re issued RSUs and if your company stock is performing well, you may be tempted to hold onto those shares. But this could leave you overexposed to a single stock.

• Deferred Compensation Risks

  Deferred compensation allows you to kick taxes down the road, but you’ll need to carefully coordinate distributions with your broader income to avoid bumping into higher tax brackets. Additionally, depending on how the agreement is written, there may be additional risks such as if the company goes bankrupt, is sold, or employment separation isn’t in alignment with the terms of the agreement.

• NUA Benefits

  If you hold company stock in a 401(k), rolling it into a brokerage account under NUA rules lets you pay long-term capital gains rates on its growth instead of ordinary income tax rates often cutting your tax liability nearly in half.

Giving thoughtful consideration to your tax strategy ensures you’re making the most of what you’ve earned while keeping more in your pocket.

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Strategies to Maximize Equity Compensation

Managing equity compensation isn’t just about taxes—it’s about using these assets to meet your broader financial goals. Here are three strategies to get you started:

Diversify to Manage Risk

As passionate as you may be about the outlook of your company, holding too much company stock ties your financial future to one asset, leaving you vulnerable even if the only risk couldn’t have otherwise been planned for. As soon as RSUs vest or you exercise stock options, consider selling to diversify your portfolio into other investments. This spreads risk while still allowing you to benefit from your company’s success.

Plan the Timing of Exercises and Sales

For ISOs and NSOs, timing is everything. Aim to exercise stock options in years when your taxable income is lower to minimize the impact. Similarly, holding shares long enough to qualify for long-term capital gains can significantly reduce the taxes you pay on appreciation.

Leverage Tax-Advantaged Strategies

Tools like deferred compensation and NUA are underutilized opportunities to save on taxes. Deferred comp payouts scheduled during retirement years, when your income is typically lower, can make a huge difference. Likewise, using NUA rules for company stock in your 401(k) can transform a steep tax bill into manageable long-term capital gains.

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The Bigger Picture

Equity compensation is about more than just growing wealth. It’s about aligning your decisions with your long-term financial goals. Whether you’re a business owner structuring a succession plan or an executive navigating your compensation package, the right strategy can help you turn potential into reality.

That said, equity compensation is rarely one-size-fits-all. Your strategy should account for your risk tolerance, income level, and long-term goals. A financial advisor can be a valuable partner in navigating these complexities, helping you optimize your decisions at every step.

If you’re ready to take the next step in managing your equity compensation, start by evaluating your current position and identifying opportunities to optimize. And remember thoughtful planning today lays the foundation for tomorrow’s success.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

House Rich, Cash Poor: Managing Wealth When Your Largest Asset is Real Estate

For many Americans, homeownership is their most significant financial asset. However, real estate investments can leave much of your wealth tied up in real estate, and limited liquidity for a more balanced investment strategy.

Fortunately, several strategies exist to manage real estate wealth tax-efficiently, turning equity into liquidity while preserving long-term value. Below, we explore tools like 1031 exchanges, Delaware Statutory Trusts (DSTs), and 721 exchanges (UPREITs) to help you make informed decisions about your financial future.

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Strategies for Real Estate Wealth Management

1031 Exchange

The 1031 exchange is one of the most commonly used tools for managing real estate capital gains. This IRS-approved strategy allows you to defer taxes when you sell an investment property and reinvest proceeds into another “like-kind” property.

Pros

• Capital Gains Tax Deferral: By deferring taxes, you keep more capital available for reinvestment, enhancing the potential for your wealth to grow over time. This strategy can be applied multiple times as your portfolio evolves, enabling you to align your investments with changing goals or market opportunities.

• Estate Planning Benefits: Upon inheritance, heirs receive a stepped-up cost basis, eliminating the deferred capital gains taxes that have been accumulating by using this approach.

Cons

• Stringent Timelines: You must identify a replacement property within 45 days of selling your current one and complete the purchase within 180 days.

• Active Management Required: You remain responsible for property upkeep and operations unless you combine this strategy with a passive structure like a DST. More on that to come.

• Strict Property Rules: Only real property, such as land or buildings, qualifies under 1031 exchange rules, excluding personal property, stocks, or other asset types. This limitation narrows flexibility for investors who may wish to diversify beyond real estate.

When to Use It: Ideal for active investors aiming to upgrade properties, defer taxes, or diversify their portfolios while staying involved in management.

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Delaware Statutory Trust (DST)

DSTs provide a way to own fractional shares of large, professionally managed properties while retaining eligibility for 1031 exchanges.

Pros

• Passive Investment: Investors enjoy hands-off property ownership with management handled by professionals. This is perfect for those seeking income without operational headaches.

• Access to High-Quality Assets: DSTs often include institutional-grade properties like office buildings, multifamily units, or industrial spaces. They offer diversification across geography, tenant types, and sectors.

• Ongoing 1031 Eligibility: You can defer taxes on the eventual sale of DST shares by reinvesting through another 1031 exchange.

Cons

• Limited Liquidity: DST shares are illiquid, with investors needing to wait for the property’s eventual sale to access funds.

• Lack of Control: Investors have no say in operational or sales decisions, which could impact returns.

When to Use It: Best for investors looking for passive income while still leveraging the tax benefits of 1031 exchanges.

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721 Exchange (UPREIT)

The 721 exchange allows property owners to convert real estate into operating partnership (OP) units in a Real Estate Investment Trust (REIT), offering exposure to a diversified real estate portfolio.

Pros

• Tax Deferral: Immediate deferral of capital gains taxes during the exchange process.

• Diversification: Instead of holding a single property, you gain fractional ownership in a REIT, which may include residential, commercial, and industrial properties across markets.

• Improved Liquidity: REIT shares are easier to sell compared to physical real estate, offering greater flexibility if you need cash.

• Simplified Estate Planning: REIT shares can be divided among heirs more easily than physical properties.

Cons

• No Re-Entry to 1031: Once in a REIT, you cannot use 1031 exchanges for future tax deferrals.

• Market Volatility: The value of REIT shares can fluctuate, introducing new risks compared to holding a single property.

When to Use It: Ideal for investors ready to exit property management entirely, seeking diversification and either a more liquid portfolio or access to cash.

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Choosing the Right Path

Deciding on the right strategy for managing real estate wealth requires careful consideration of your financial goals, risk tolerance, and long-term priorities. Each option—whether a 1031 exchange, DST, or UPREIT—offers specific benefits that cater to different needs, but also comes with trade-offs that must be weighed.

For those seeking to maximize growth, strategies like the 1031 exchange allow for tax-deferred reinvestment, enabling properties to evolve alongside your financial objectives. If diversification and passive management are priorities, transitioning into structures such as DSTs or UPREITs can provide exposure to a broader range of assets without the burdens of direct property management. When planning for future generations, these tools also facilitate tax-efficient wealth transfer, simplifying estate planning and easing the complexities of distribution.

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Ultimately, the best approach depends on how you balance factors like liquidity, diversification, and tax efficiency against your personal and financial goals. Thoughtful planning and a clear understanding of your options are essential to ensuring that your strategy aligns with both current needs and future aspirations.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

Connelly v. United States: What it May Mean For Your Business

Last month I spoke to the importance of a buy/sell agreement amongst business owners. To continue that conversation, the recent Supreme Court decision in Connelly v. United States has given even more for small business owners to consider. The case has significant implications that extend well into the owner’s estate planning, and it should prompt them to reconsider how they handle succession plans and ownership structures, especially when buyout agreements are involved. In this article, we’ll break down the key lessons from this case and how they could affect your business.

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A Quick Look at the Connelly Case

In Connelly v. United States, the Supreme Court addressed the valuation of life insurance proceeds used in business buyouts, specifically for estate tax purposes. The case involved two brothers, Thomas and Michael Connelly, who co-owned Crown C Supply, a closely held C corporation. They had a buyout agreement in place that allowed the company to redeem the deceased brother’s shares using life insurance proceeds. The crux of the legal dispute was whether those life insurance proceeds should be included in the company’s value for estate tax purposes.

The IRS contended—and the Court agreed—that life insurance proceeds used for this kind of buyout must be counted as a corporate asset when determining the value of the business. This decision increases the taxable value of estates in similar situations and has several important consequences for business owners, especially those relying on life insurance-funded buyouts.

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What This Ruling Means for Small Business Owners

If you’re a small business owner or operate a closely held company, Connelly raises serious questions about how buyout agreements are structured and the role of life insurance in those agreements. For many, this decision should serve as a wake-up call to reassess existing plans. Here are some key areas that deserve your immediate attention:

1. Reevaluate Your Buy-Sell Agreement

   Buy-sell agreements are designed to ensure business continuity when an owner passes away or exits the business. In many instances, life insurance policies fund these agreements, with the company using the proceeds to buy out the deceased owner's shares. Prior to Connelly, many business owners believed that the obligation to redeem shares would offset the life insurance value when calculating the company's estate tax valuation. That’s no longer the case.

   What you should consider: If your current buy-sell agreement is structured as a redemption agreement (where the business purchases the shares), you could face a higher estate tax bill than anticipated. Now might be the time to explore restructuring your agreement into a cross-purchase plan. In this structure, surviving owners directly purchase the deceased owner's shares, with life insurance proceeds going to them, not the company—thus avoiding an increase in the company’s valuation for tax purposes.

2. Review Your Estate Plan

   The Court’s decision underscores that life insurance proceeds—even when earmarked for business continuity—are considered part of the business’s taxable value. This could dramatically alter the estate planning outcomes for business owners who have carefully crafted their plans to minimize tax burdens.

   The estate tax exemption is set to decrease significantly in 2026 as the Tax Cuts and Jobs Act (TCJA) sunsets, and many states have even lower thresholds than the federal government. This ruling could make the difference between owing estate taxes or avoiding them altogether.

   What you should consider: Now is a great time to work with your estate attorney to reassess your plan. If life insurance is part of your business’s buy-sell structure, consider whether a cross-purchase arrangement or a trusteed buyout might offer better protection from the kind of tax exposure highlighted in Connelly.

3. Prepare for Broader Financial Implications

   The valuation changes resulting from Connelly aren’t limited to estate tax—they could affect your business’s financial health as well. Increasing the company’s value due to life insurance proceeds could put unexpected pressure on liquidity and cash flow. If your heirs are forced to sell assets or take on debt to cover an unanticipated tax bill, the future stability of your business—and your intended legacy—could be at risk.

   What you should consider: You may want to consider purchasing additional personal life insurance to cover potential estate taxes resulting from a redemption agreement. Alternatively, you might explore restructuring the business to protect its value through trusts or family-owned LLCs, which are designed to limit estate tax exposure.

4. Cross-Purchase Arrangements: A Smarter Option?

   One of the biggest lessons from Connelly is that cross-purchase arrangements, where individual owners hold life insurance policies on each other, may offer better protection against valuation complications. With a cross-purchase arrangement, the business’s value remains insulated from life insurance proceeds, and surviving owners receive a stepped-up basis in the shares they purchase.

   What you should consider: If your business has multiple owners, a cross-purchase agreement may be a more attractive option than a redemption agreement. While cross-purchase plans can be more complex to manage—especially as the number of owners increases—they can offer significant tax advantages over time. Just keep in mind that each owner will need to hold policies on the others, which can complicate the arrangement.

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The Bottom Line

The Connelly decision is a reminder of how critical it is to keep a close eye on the structure of your business succession plans. For closely held businesses that rely on life insurance to fund buyouts, the landscape has shifted in ways that could have serious financial repercussions.

Now is the time to review your buyout or succession planning agreements. Determine whether a redemption or cross-purchase arrangement is the best fit for your business, and make sure your estate planning documents reflect the current legal and tax environment. While Connelly may not be the final word on these matters, it’s a clear call for business owners to be proactive and thoughtful about how they plan for the future.

Smart planning today will go a long way in protecting your business and ensuring your legacy.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

2024 End of Year Financial Checklist

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Completing an end-of-year financial checklist is essential for setting yourself up for success in 2025. This process will allow you to review your progress and goals from 2024 while also helping you refresh and enhance your financial plan as you head into the new year.

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Cash Flow Review

Whether you like to budget or not, assessing your spending habits is the essential first step. All financial progress stems from spending less than you make. If you consistently budget, this is the time to figure out what worked well and what needs to be changed. Think about these questions as you forecast for next year.

• How will household income change in 2025?

• What significant expenses am I anticipating in the coming year that I can plan for?

• Am I saving and investing enough of my income?

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Prepare for Tax Season

Much of your tax planning will have to wait until next year, but getting a few items in order can be helpful before tax season. You can collect business expenses, charitable giving receipts, childcare expenses, and other tax-deductible items.

The final piece of preparation for tax season would be to decide how you plan to prepare your taxes. You could do it yourself or hire it out. There is no wrong way to go about it, but now is the time to reach out and find a good CPA that you can work with to optimize your tax situation.

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Max Out Your Contributions

The end of the year is the perfect time to review your annual contributions to your retirement accounts. In 2024, employer-sponsored plans such as 401(k), 403(b), or 457 allow you to contribute up to $23,000. It's important to note that this amount does not include any employer match. If you are 50 years old or older, you are eligible for a "catch-up" contribution, allowing for an extra $7,500 of contributions. This raises your total maximum contribution to $30,500 for the year.

The contribution limit for individual retirement accounts (IRAs) in 2024 is $7,000, with a $1,000 catch-up contribution available for those 50 or older.

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Review Your Investments

If you have a financial advisor, they should have scheduled a year-end planning meeting by now. 

If you manage your investments independently, this is an excellent time to review your strategy, assess your performance, and rebalance your portfolio. If you feel it's time to seek professional help, consider finding a fiduciary advisor who prioritizes your best interests.

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Consider a Roth Conversion

Roth conversions involve transferring pre-tax dollars into a Roth account, which will then grow tax-free. This approach can be great for someone nearing retirement with much of their wealth in pre-tax accounts. It can also benefit young professionals with plenty of time for the investment to grow. However, this only makes sense for some, so consult a financial professional to weigh the pros and cons of this option.

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Open Enrollment

Open enrollment occurs at different times of the year and is dictated by your employer. It is most commonly presented around early November and allows you to review or change employee benefits options. 

This is an excellent time to ensure you get the best insurance plan value. You and your spouse may even qualify for additional plans, such as term life insurance or disability coverage, at little to no cost.

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Confirm Beneficiaries

While this does not change often, it is necessary to ensure that it is up to date. Here are some accounts that should have a beneficiary associated with them. 

• Retirement/Investment Accounts (401k, 403b, 457, and IRAs)

• Bank Accounts

• Life Insurance Policies

Properly assigning beneficiaries can help you have peace of mind that your loved ones will be cared for. 

This checklist can help you clearly assess your financial situation and prepare for success in 2025.

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References

https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000

Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Protecting Your Business’s Future: The Critical Role of Buy/Sell Agreements

Business owners should strongly consider buy-sell agreements to safeguard the interests of both the business and its owners. These agreements are invaluable in setting clear guidelines for ownership transitions in various situations, from unforeseen events to changes in business dynamics. They typically cover:

• Regulation of the owners' relationships

• Management of the business

• Transfer of ownership interests

• Privileges and protections for owners

Buy/sell agreements help mitigate risk by preparing for unexpected events, ensuring business continuity, and avoiding costly disputes that can arise without proper planning. Let’s dive into the key components of buy-sell agreements, triggering events, and methods for determining a purchase price.

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Triggering Events in Buy/Sell Agreements

Buy/sell agreements are activated by specific "triggering events" that require the sale or transfer of an ownership interest. These events typically fall into three categories, each representing a potential risk to the business:

1. Third-Party Sale Triggers

   Business owners are often concerned about a potential sale to outsiders, as a new owner could disrupt the company’s decision-making process. To prevent unwanted transfers, such as shares falling into the hands of an ex-spouse following a divorce or creditors following bankruptcy, buy/sell agreements often include protections against third-party sales.

2. Owner Viability Triggers

   An owner's physical or mental incapacity can impact the smooth operation of a business. Buy/sell agreements ensure that the company has a plan in place to manage ownership transitions in the case of death or disability. In many cases, the agreement may also outline the use of life or disability insurance as funding mechanisms for the buyout.

3. Relationship Severance Triggers

   When an owner leaves the company, whether through resignation, retirement, or termination, it can create complications for the remaining owners. A buy/sell agreement mitigates this risk by defining the terms for how shares will be handled, preventing a former owner from joining a competitor or disrupting the company's future.

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Key Provisions in Buy/Sell Agreements

A well-structured buy/sell agreement should include provisions that address potential challenges and outline clear solutions. These provisions help ensure a smooth ownership transition:

• Purchase Price Determination

  Methods for determining the purchase price can vary. Common approaches include:

• Fixed price (e.g., book value)

• Agreed-upon formula (e.g., multiple of earnings)

• Agreed-upon methodology (e.g., market-based)

• Third-party appraisal by a qualified business appraiser

• Restrictions on Transferability & Rights of First Refusal

  To protect existing owners' interests, buy/sell agreements may restrict the transferability of shares. This provision ensures that owners cannot sell their shares to outsiders without first offering them to other owners or the business itself.

• Employment & Non-Compete Clauses

  These provisions help protect the business from former owners who may attempt to start a competing company after leaving. The agreement can restrict such actions, safeguarding the company's market position.

• Call & Put Options

  Call and put options allow owners to buy or sell shares at a predetermined price, giving them control over the timing and terms of ownership changes.

• Funding & Terms of Purchase

  Buy/sell agreements often specify how the buyout will be funded, such as through insurance proceeds, company profits, or loans. This ensures the transaction is financially manageable for all parties involved.

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Types of Buy/Sell Agreements

There are several types of buy/sell agreements, each with its own advantages depending on the business structure and ownership:

1. Cross-Purchase Agreements

   In a cross-purchase agreement, individual owners purchase life insurance policies on each other. Upon a triggering event, the remaining owners buy out the departing owner’s shares.

• Pros: Owners maintain control over their shares; favorable tax treatment for surviving owners.

• Cons: Becomes complicated with multiple owners due to the number of policies required.

2. Entity-Purchase Agreements (Stock Redemption)

   In this arrangement, the business itself buys the departing owner’s shares, using a single insurance policy on each owner.

• I’ll be discussing this in greater detail next month as the Supreme Court has just issued a ruling that affects how entity purchases are taxed moving forward.

3. Combination of Third-Party & Business Purchase Arrangements

   This hybrid address both cross-purchase and redemption arrangements and may provide right of first refusal provisions for the remaining owners and the business.

• Pros: Offers flexibility to decide at the time of the event; suitable for changing business circumstances.

• Cons: More complex to structure and manage due to the number of options available.

More on Methods to Determine the Purchase Price

Valuing a business for a buy/sell agreement is essential and can be approached in several ways:

• Fixed Price

  A simple approach where the owners agree on a fixed price for the shares. However, this method may become outdated quickly if not regularly updated to reflect changes in business value.

• Agreed-Upon Formula (e.g., Book Value or Multiple of Earnings)

  Formulas offer a straightforward method of valuation, such as using a multiple of the company's earnings. This method is low-cost but can oversimplify the valuation process, potentially leading to inaccuracies.

• Agreed-Upon Methodology (Market-Derived)

  This method employs an agreed-upon market-based valuation approach to calculate the price. It provides more accurate results than formulas, particularly for businesses that undergo rapid changes in value.

• Appraisal by a Qualified Business Appraiser

  An appraisal performed by a third-party expert can ensure an accurate and fair valuation. While this is often the most reliable method, it can be time-consuming and expensive.

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A well-crafted buy/sell agreement is crucial for any business with multiple owners. It provides a clear plan for ownership transitions, helps protect against unexpected events, and ensures fairness for all parties. Whether you opt for a cross-purchase, entity-purchase, or a combination of both, having a buy/sell agreement in place will help secure the future of your business and avoid costly disputes.

It’s essential for business owners to work closely with legal and financial professionals to tailor the agreement to their specific needs, ensuring it is regularly updated as the business grows and changes.

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.

The Order of Operations for Retirement Savings

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One of the most common questions people ask me is how to determine the best way to save for retirement. It’s a fair question because there is no one-size-fits-all retirement saving and investing approach. Each person’s unique financial situation can impact how they save for retirement. So, before we jump into a general recommendation for the order of operations in retirement savings, consult a financial advisor-–like myself-–to discuss your individual financial considerations that can influence your retirement outlook.

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Step 1: Work-Based Retirement Plan

Employer retirement plans, such as 401k, 403b, or 457, are often the best and simplest way to begin retirement savings. Not all plans are created equal, depending on your employer, but these plans contain some significant benefits worth taking advantage of.

Minimal Barrier to Entry

Employer-sponsored retirement plans typically have low to no barriers to entry. In most cases, employees are auto-enrolled in the company plan, with some employers requiring a small contribution from each employee. If not automatically enrolled, opting into the plan is often as simple as filling out a few forms. 

Matching Incentive

One widely recognized benefit of employer plans is the associated company match. While not mandatory for all employers, a company match is becoming a common addition to benefits packages. I like to call this “free money”. By contributing a percentage of your paycheck, your employer agrees to match your contribution up to a specified limit. For example, “Employer agrees to match 50% of employee’s contribution up to 6%”. This means that if you contribute 6% of your paycheck, your employer will add an additional 3% to your contribution. This is a key reason why work-based retirement plans are so effective.

Automatic Deduction

The final distinction of these employer plans is that your contributions come directly from your paycheck before you receive it. This makes the process of saving for retirement very simple and automated. Automatic deduction enables you to save for retirement before recognizing that money as income.

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Step 2: Emergency Fund

I know what you’re thinking—having an emergency fund has nothing to do with retirement savings. While it doesn’t directly count as retirement savings, it’s a necessary step in the equation. To fund your retirement, you need to ensure that your current financial situation is under control. The control starts with having a safety net in place. An emergency fund allows you to manage your current financial picture before addressing your future financial picture. By establishing an emergency fund, you can stay on track with your retirement goals when unexpected expenses arise rather than halting retirement contributions to cover unforeseen costs. Once you’re contributing to your work-based retirement plan and have an emergency fund established, we can move on to other retirement savings accounts.

Step 3: Individual Retirement Accounts

Individual Retirement Accounts (IRAs) are often the next step in retirement savings. These accounts are separate from employer plans but still hold numerous benefits. There are two main types of IRAs, each effective depending on individual financial considerations. While this won’t be a deep dive into these accounts, here is a quick overview of their function and benefits.

Traditional IRA

A traditional IRA is a pre-tax retirement account. Contributions are made pre-tax, resulting in a current-year tax deduction. The money invested in the account grows and is taxed at an ordinary income rate when withdrawn. This is often referred to as tax-deferred, meaning that you defer your taxes until withdrawal.

Roth IRA

A Roth IRA is considered a post-tax retirement account. Contributions happen after taxes are taken out of your income. Since you pay taxes upfront, that money grows tax-free. Regardless of your tax bracket at withdrawal, you won’t have to pay taxes on the money in your account, assuming you follow proper withdrawal guidelines.

Which One?

This is where a professional comes in handy. Many individuals benefit from utilizing both IRAs at different points in their careers, often dictated by their current income. In most cases, ask yourself, “What is my current tax bracket compared to my retirement tax bracket?” If your current tax bracket is higher than your projected retirement bracket, it might make sense to contribute to a traditional IRA over a Roth. But a Roth could be the most efficient option if your current tax bracket is lower than your projected retirement tax bracket. The maximum contribution for an individual in 2024 is $7,000 for those under 50 years of age and $8,000 for those 50 and above.

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Step 4: Health Savings Account

Health Savings Accounts (HSAs) are great financial tools for some individuals. An HSA is primarily a form of health insurance an employer could offer. It’s a high-deductible plan that allows you to put money into an account for qualified medical expenses. HSAs often have an employer contribution attached. Due to the high deductible, these plans are great for healthy individuals with lower medical needs.

There’s a point where an HSA can secondarily be used as a retirement savings account in addition to its primary use as a health insurance plan. This is when you have unused money in the plan to be invested. This allows you to utilize the “triple-tax advantage” of using an HSA as an investment vehicle. Contributions are tax-deductible, while the earnings and withdrawals are tax-free when used for medical expenses. After the age of 65, withdrawals can be taken from your HSA account for non-medical expenses and taxed like a traditional IRA. For many individuals, the HSA functions as a great tool for wealth accumulation after maxing out your IRA.

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Step 5: Taxable Account

The final piece of the puzzle for retirement savings is a taxable account or brokerage account. This account does not offer the same tax benefits as the previously mentioned accounts, which is why it is last on the list. Contributions to these accounts occur after taxes, and the growth or income produced each year counts towards your taxable income for the year. With that being said, the benefit of this account is that you can contribute and withdraw as you please. Because the money is likely invested, it may take a few days to sell and withdraw, but there is no age limit to take the money out. What you lose in tax benefit, you gain in liquidity.

These accounts have multiple purposes but are commonly used to create a “bridge account” for retirement. Because work-based retirement plans, IRAs, and HSAs all require you to be a certain age before making withdrawals, you can use a taxable account to save and invest money if you decide you want to retire early. This account functions as the “bridge” to fund your life from when you retire until you start collecting Social Security or retirement account distributions.

As I mentioned at the start, this is not a blanket approach to retirement savings for everyone. While the structure may work for some, it is important to talk with an investment professional to consider how your income, retirement plan, and goals will impact your strategy. What’s universal about this information is that everyone can contribute to retirement savings in multiple ways to ensure their financial picture is on track.

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References

https://www.bogleheads.org/wiki/Prioritizing_investments

https://www.bogleheads.org/wiki/Health_savings_account

https://thecollegeinvestor.com/1493/order-operations-funding-retirement/

Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

Protect Your Financial Life

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Protection can have various meanings in the financial industry, and there are several ways to safeguard your income, family, and financial future. While this isn’t an exhaustive list of strategies, it outlines some crucial topics to help you establish proper protection across all facets of your life.

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Protect Your Income

Money Management

Knowing your monthly cash flow is one of the most important aspects of protecting your income. This knowledge allows you to be intentional with your spending. Additionally, having an emergency fund will enable you to be proactive when unexpected expenses arise, keeping you on track instead of starting over.

Life Insurance

I typically recommend that most people have a term life insurance policy. Those who are married and, even more importantly, have kids can leverage an inexpensive term life policy as protection against unforeseen events. These policies range from 10 to 30 years and help bridge the gap while dependents are in the house, giving you added peace of mind.

Disability Insurance

Disability insurance isn't for everyone, but it is worth considering. Many employers offer it for free or at a low cost. This can be a great way to protect your income in case of bodily injury. You will first need to assess your ability to find work in the event of disability. From there, you need to weigh the cost of disability insurance against your confidence in finding other work.

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Protect Your Family

Health Insurance

Health insurance is essential, but choosing the proper plan is where the cost savings come into play. It is crucial to analyze all plans that you qualify for and understand which plan will offer the most significant value based on your family's needs. When open enrollment or a qualifying life event comes around, analyze your coverage and select the right plan for the following year.

Estate Planning

Estate planning primarily refers to having a will or trust in place. This helps to protect your accumulated assets for your family. While estate planning can be complicated for some, working with a good estate planning attorney can help you figure out the best path forward. For those with children, the estate plan becomes increasingly more critical.

Lifestyle Creep

Establishing family priorities can be an essential way to protect from income loss due to lifestyle creep. Lifestyle creep means that your lifestyle costs increase along with your income. Once established, this is more challenging to reverse. It often presents as a higher mortgage or a more expensive car payment. Establishing family priorities can be the key to preventing lost income due to lifestyle creep.

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Protect Your Future

Calculated Risk

Protecting your financial picture involves not only your current financial situation but also your future. Investing is a crucial piece of your financial puzzle, but it must be calculated and intentional. I elaborate on this topic in my article, “A Beginner’s Guide to Investing.” If you are unsure how to be intentional about your investing, reach out to a fiduciary financial advisor, like myself, for assistance.

Don’t Leave Money On the Table

This can present in two primary ways. The first was already discussed and is your company's free or extremely low-cost insurance options. These are great programs, so take advantage of them when you can. The other way I see this often happening is by not getting the employer match on a retirement plan. Most employers will offer a match of 3% or more, which is essentially free money. Don’t miss out on these great employee benefits.

Tax Planning

Tax planning should be encompassed in multiple areas of your financial plan. You should optimize your tax efficiency through your withholdings, deductions, and investments. To do this, connect with your financial advisor and CPA to achieve the best outcome in all aspects of tax planning.

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References

https://www.guardianlife.com/insurance/income-protection-strategies

https://www.investopedia.com/articles/younginvestors/08/generation-y.asp

https://www.usbank.com/wealth-management/financial-perspectives/financial-planning/wealth-preservation.html

Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

MoneyGeek Feature: How to Find the Best Car Insurance for Women

Leanne Rahn had the privilege to be featured in MoneyGeek to talk to readers about “How to Find the Best Car Insurance for Women”.

Leanne discusses her recommended insurance professionals and why gender is used for calculating premiums.

Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.

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3 Steps to Turbo Charge Your Health Savings Account (HSA)

One of my favorite tax strategies for college professors and others is to take full advantage of your Health Savings Account (HSA) offered through your workplace. These accounts are WAY BETTER at saving taxes than 401k and 403b retirement accounts. You probably know that contributions from your paycheck are tax deductible just like contributions to retirement accounts. However, unlike retirement accounts, withdrawals are tax free for qualified medical expenses. Another unique advantage of HSA contributions is that they are exempt from social security taxes. Here are three steps to increase the value of your HSA.

Step 1: Make Maximum Contributions. Many people set their annual contributions to match their annual insurance deductible. For example, your annual medical deductible might be $3,000 so you decide to contribute this amount to your HSA each year. After all, this is what you expect to pay out of pocket for healthcare. If you are lucky and healthy, you might even pay less during the year. So why save more each year? Answer, to build a healthy surplus. No pun intended 😊

Consider this example: Suppose you are married with a family income of $130,000. You choose to make the maximum contribution of $7,300 to your HSA (for 2023). The contribution is not subject to federal income tax (24%), state income tax (4%), social security tax (6.2%) or Medicare tax (1.45%). Your $7,300 contribution saves you $2,600 in taxes this year. But the story gets better!

Step 2: Invest in Stocks and Bonds. You may not realize that you can invest your HSA funds in stocks, bonds, and other investments. Your money does not have to stay in a boring savings account earning less than 1%. These investments will likely provide a better return over many years. Granted, you are restricted to the specific investment options available through your workplace, but it is worthwhile knowing your options.

Step 3: Delay HSA Withdrawals. The final step to really take advantage of tax-free growth is to keep these funds invested for as long as possible. Pay healthcare expenses out of pocket each year, if possible, and let your HSA account continue to grow. Think of your HSA to be a retirement account for healthcare that you let grow until age 65.

Consider the example of a married couple in their 40s who contribute $7,300 each year and invest the account in a conservative portfolio of index funds and exchange traded funds (ETF) that could earn 7% per year. The account would grow to almost $300,000 after 20 years. These funds are then withdrawn completely tax free to pay qualified healthcare expenses during your retirement years. Yes, this is a best-case scenario that will be difficult to achieve but the approach yields benefits even with less rosy assumptions. For example, you may still have a tidy $150,000 for healthcare during retirement by saving half of the maximum contribution each year.

Your Homework: As a college professor, my natural inclination is to assign homework to ensure students take positive actions. So here is your homework! Review your HSA investment options and consider increasing your annual contribution to the maximum.  When possible, pay for healthcare out of pocket and let the HSA account continue to grow tax free. Consider your HSA as a retirement account for healthcare. You will have plenty of healthcare expenses later in life so why not start saving now?

I have been a college professor for almost 30 years and now I teach other professors how to graduate from academic freedom to financial freedom. Sure, investments are important. But it is just as important to minimize taxes, moderate personal debt, live below your means and use insurance wisely to prepare for the unexpected. Review my approach to financial advising and schedule a no obligation introductory call by clicking here. We will discuss your financial worries, answer questions, and then you can decide if working together makes sense.

The Stealth Retirement Account That Most Americans Don't Use

Are you trying to find more ways to save for retirement so you will be able to retire early? Let me explain how you can use a Health Savings Account (HSA) as a stealth retirement account by investing inside of it. Currently, only 4% of Americans who have HSAs unlock this powerful potential. (Source: Devenir 2019 study; link below)

First, you have to be covered under a High-Deductible Health Plan (HDHP) before you are allowed to contribute to an HSA. If you are covered under an HDHP, the maximum you are allowed to contribute in 2025 is $4,300/single or $8,550/family (an additional $1,000 if you are over 55 years old). You do not pay taxes on money contributed to your HSA, and if the money is withdrawn for eligible healthcare expenses, the funds are not subject to any penalty or taxes. Most people use their HSAs this way. The money goes in…then it comes right back out to pay for medical expenses. This is a great way to save money on taxes for eligible healthcare expenses, but it is not utilizing the full potential of your HSA.

With a few simple adjustments, you could turn your HSA into a stealth retirement account.

Pay Out-of-pocket for Medical Expenses

This allows you to accumulate more money inside your HSA every year instead of depleting the account every time you have an eligible medical expense. The longer you are able to keep the money in your HSA, the more time you are able to let it grow and compound.

Save your Eligible Healthcare Receipts

If you choose to use your HSA as a stealth retirement account, make sure you save your eligible healthcare receipts. This would then allow you to withdraw money from your HSA to reimburse yourself for the past eligible medical expenses that you paid out-of-pocket earlier. Currently, the IRS doesn't have a time frame for when you are allowed to reimburse yourself. This means you could spend $500 out-of-pocket today and submit it for reimbursement years later. The medical expenses have to have occurred while you were covered under an HDHP though!

Invest the Money

Investing your HSA money could allow it to grow into a significant amount, depending on what the time frame is and what return percentage you are able to achieve. Below are examples of someone investing their HSA money for 30 years with an annual return of 7%. Your numbers will be different depending on the length of investment and returns. (Source: Calculator.net; link below)

“Because of the effects of inflation, a 50-year-old couple in 2019 planning to retire at age 65 can expect to spend about $405,000 on health care in retirement. A 40-year-old couple faces $455,000 in expenses...” (Source: Annuity.org; link below)

These three things would allow someone to take full advantage of using their HSA as a stealth retirement account. HSAs allow investing in a triple tax advantage account. The money contributed reduces your taxable income while the qualified withdrawals and investment growth are tax-free. If the withdrawals are not qualified, this becomes tax-deferred growth.

Other Things to Consider

If you withdraw money from your HSA for non-medical expenses, you have to pay taxes and a 20% penalty. After you turn 65, the 20% penalty goes away. This allows you to optimize your tax efficiency by choosing which accounts to withdraw money from instead of having to fully depend on Social Security and Medicare. Additionally, most investors are in a lower tax bracket in retirement since they are no longer working, so there may even be another benefit to delaying the tax until later in life.

Not all HSAs are equal. Some charge high fees, some limit the amount of money you can invest, some limit your investment options, and others don’t allow investing at all. Your employer usually chooses which institution they use for HSA contributions, but once the money is in the account, you have full control of what happens with the money. Check to make sure it is a good one. If not, you may be able to move your HSA money to a better institution. If you would like assistance in moving over your HSA, deciding what investment options to invest in inside your HSA, or any other HSA-related questions, contact me and I would be happy to help.

Sources:

https://www.devenir.com/research/2019-midyear-devenir-hsa-research-report/

https://www.calculator.net/future-value-calculator.html

https://www.annuity.org/retirement/health-care-costs/

https://www.fidelity.com/go/hsa/why-hsa

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

How to Save $$$ on Insurance as a Newlywed

This month, I had the opportunity to sit down, interview-style, with insurance agent, Emily Romeyn, and get all the secrets on how to save money on insurance as newlyweds. I mean, who wouldn’t want to pay less in insurance and use those savings to maybe buy a little more Qdoba? (Sorry, Chipotle). Keep reading to be in on the insurance-saving, Qdoba-funding, dare I say, magical ways to have some more jingle in your newlywed pocket.

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L: So, Emily, tell us - what kind of insurance do newlyweds have the opportunity to save money on?

E: Newlyweds can utilize their rental, home, and auto policies to take advantage of these savings. The best way they can do this is by combining their two individual policies into one. 

One thing to note is most companies I work with actually only run the credit score of the first applicant. That’s a huge benefit if one spouse doesn’t have the best credit. We simply put the spouse with the better credit as the first applicant. There is room for strategy in that specific scenario. 

I would tell newlyweds that if they keep their individual policies, still check in with their insurance agent because they could have the opportunity to be rated differently. Insurance companies often think of you as a lower risk if you are married versus not. 

L: What’s an estimated savings amount that they could expect to be available?

E: This really just depends on the individuals and the situation. A lot of factors go into this like what their credit scores are, what they are combining, their associated risk through the insurance company’s eyes, and so on. The best route to find out a realistic savings amount is to check in with me and we can dive into those specific factors a little more.

L: Is there an expiration date on these saving opportunities that they should be aware of?

E: Nope! Obviously, the sooner you take advantage of the savings the better for your wallet. But, in reality, the potential savings are always at their fingertips. 

L: Okay, this sounds like SUCH a good opportunity for newlyweds. What steps need to happen to take advantage of the potential savings?

E: I would say the first step is to combine your health insurance policies to be on one policy together. When we work together, we can actually coordinate your auto and health insurance policies to save you some dollars down the road. Part of auto insurance is medical coverage. Typically, I like to see this as unlimited coverage. Plus, it covers you lifelong. However, as you can probably guess, unlimited lifelong medical coverage can be expensive. When we coordinate your health insurance and auto insurance, we actually can get a letter from your health insurance stating if medical coverage were needed, the auto insurance company can bill the health insurance company first. This is a great benefit that allows you to have amazing coverage at a potentially lower cost. 

The second step would be to call your insurance agent to notify them of the changes. It’s really as simple as that.

The other thing I would add is if they are changing their last name, it is usually helpful to have this completed before changing and combining policies first. It really saves you the headache of having to notify us again later down the road. Of course, you can still do this at a later date but it’s often just easier to have it complete before.

L: How do you personally help your customers shop for the best insurance deals? What can they expect?

E: Great question! First step is getting to know them. This is important not only to build that foundational relationship but also we need to get a better understanding of what is important to them and what we need to insure. 

From there, I use a comparative rater which compares about a dozen of our top insurance companies. I evaluate not only the pricing each insurance company is offering but also what I know about the company in general. For example, one of our top companies offers a 24/7 call center. If I have a customer who works an odd shift and the 9-5 schedule just doesn’t work for them, this might be a good company for this specific customer. 

After I determine the best of both worlds between the pricing and any special circumstances, I present the quotes to my customers. I always send a video proposal going over the quote that walks them through everything they need to know. I find the video proposal to be super helpful for my customers. 

The last step is for the customers to decide on a company that will be best for them and we proceed with getting the new policy in good order. That’s it!

L: Emily, I understand you are an Independent Agent. What does that mean in the insurance world and why should newlyweds work with you? 

E: As an Independent Agent, I have access to - literally - hundreds of companies. We don’t have our own insurance products that we are trying to sell. Our goal is to get the best price possible for our customers. 

On the other hand, an insurance agent who is not an Independent Agent is tied to that company. They only have their company’s products that they are looking at. Often, in order to be competitive in terms of pricing, they will sometimes cut coverage in not the best ways mainly because they can’t just shop the next company. Where I, as an Independent Agent, just keep shopping with other companies if the price isn’t what the customer is looking for. 

The other thing is let’s say a customer renews their policy and comes to find out their price has increased. If you are working with me, we can continue working together but we simply find a new company with a different policy. Someone who is not an Independent Agent is tied to that company so more than likely, the customer is left trying to find a new agent. Not ideal.

Also, who else hates the 1-800 numbers? Plenty of us. When working with me, I act as your middle man in case of a crash or something happens. You don’t just have to call that annoying 1-800 number and wait on hold. I’m here to help. 

L: Wow. Seriously such good info, Emily! Is there anything else you would say to newlyweds that may be beneficial?

E: I would say getting married is a great time, in general, to review and make sure everything is covered properly as you are starting to build a life together. 

Something to note is that when you move in together, the belongings of the other person are not just automatically covered - even when you get married. Notifying me of your changes is going to be the best route to take so we can make sure all is in good order. 

I also recommend newlyweds do a simple video walkthrough of everything you own. In case of an emergency, you don’t need to try and remember everything you owned in an already stressful situation. I would encourage them to make this a priority to start their new life well prepared. 

L: Thank you, Emily, so much for your words of wisdom! How can newlyweds get in touch with you if they want to act on these insurance savings?

E: Absolutely! They can shoot me an email at emily@westmichgianins.com or call my office at 616-866-3180. Can’t wait to connect!

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I wasn’t joking when I said Emily would fill you in on some amaaazing and simple ways to save some cha-ching. But really though - what are you waiting for? Emily is here to assist you and answer all your questions along the way. Insurance savings (and Qdoba) are right around the corner!

About Emily…

Emily Romeyn Is an Independent Insurance agent In Grand Rapids Michigan. Pairing families and individuals with insurance that fits their unique life and needs is her specialty. She is a certified personal insurance specialist. 

When she is not working you can find her spending time with her husband and two sons, taking photos, or attempting to re-create something she saw on Instagram. She is Michigan born and raised and loves this beautiful state (when it's not freezing). 

W: www.westmichiganins.com

E: emily@westmichgianins.com

P: 616-866-3180

About Leanne…

Leanne Rahn is a Fiduciary Financial Advisor working with clients all over the US. If you don’t know what a Fiduciary is, Leanne encourages you to look it up (or even better - check out her website!). She swears you won’t regret it. Women entrepreneurs, newlyweds & engaged couples, and families who have special needs children are Leanne's specialties. 

She loves a good glass of merlot, spending time with her hubs and mini Goldendoodle, and all things Lake Michigan. She could listen to the band Elevation Worship all day long and is a sucker for live music.

W: https://forfiduciary.com/meet-leanne

E: leanne@ffadvisor.com

Here, at Fiduciary Financial Advisors, we take our fiduciary oath seriously. We hold these five principles:

1. I will always put your best interests first

2. I will avoid conflicts of interest

3. I will act with prudence; that is, with the skill, care, diligence, and good judgment of a professional

4. I will not mislead you, and I will provide conspicuous, full, and fair disclosure of all important facts.

5. I will fully disclose, and fairly manage, in your favor, any unavoidable conflicts

Do You Need Life Insurance as a Newlywed?

Does Your Business Need Key Employee Life Insurance?