Navigating the complexities of tax planning and asset allocation can significantly impact your wealth preservation and growth strategies. Tru West Financial embraces the Tax Control Triangle, a powerful tool in financial planning, to help clients optimize their tax situations and enhance their wealth.

1. Customized Tax Planning: At Tru West Financial, we understand that one size does not fit all. We use the Tax Control Triangle to develop personalized tax planning strategies that fit your unique financial landscape. By considering your current assets, future goals, and tax implications, we craft a plan that seeks to reduce tax liability and maximize wealth.

2. Strategic Asset Location: Effective asset location is crucial for financial success. By leveraging the Tax Control Triangle, we guide clients on where to place their investments—whether in tax-deferred accounts like 401(k)s, tax-exempt accounts like Roth IRAs, or taxable accounts—to balance growth potential and tax efficiency.

3. Navigating Retirement: For retirees or those nearing retirement, understanding the implications of withdrawals from different account types can be a game-changer. Tru West Financial assists in planning these withdrawals in the context of social security, Medicare premiums, required minimum distributions, etc. To strategically to minimize taxes and ensure a steady income stream.

4. Estate and Legacy Planning: The Tax Control Triangle also plays a vital role in estate planning. By understanding the tax characteristics of your assets, we help you plan your legacy in a way that minimizes the tax burden on your heirs, ensuring that your wealth serves your family for generations.

At Tru West Financial, our mission is to guide you through the financial maze with expertise and personalized care. Utilizing the Tax Control Triangle is just one of the ways we help our clients preserve and grow their wealth, ensuring a secure and prosperous future. Ready to take control of your financial destiny? Let’s explore the benefits of tax-efficient investing together.

The post The Power of the Tax Control Triangle in Preserving and Growing Wealth appeared first on Tru West Financial.

The Economy in 2025: A Mixed Landscape

1. Steady but Slower Growth
Analysts project the U.S. economy may grow at 2.1% in 2025, reflecting moderation as consumer spending stabilizes and fiscal challenges mount. Globally, GDP is expected to grow by 3.2%, supported by resilient economies and easing inflation trends. However, risks from trade tensions and evolving fiscal policies remain a concern​​.

2. Inflation and Policy Effects
Persistent inflation pressures, driven by wage growth and potential tariff increases, could upend the disinflation trend that has dominated recent months. Proposed tariffs under the new administration may push prices higher while geopolitical disruptions continue to impact supply chains​.

3. Interest Rates and Market Dynamics
The Federal Reserve is expected to maintain its easing cycle, but longer-term interest rates could remain elevated, driven by fiscal imbalances and inflation expectations. This presents risks for fixed-income and opportunities for equity markets​.

What Affluent Investors Should Consider

1. Tax Policy and Estate Planning

• Even though it appears likely the 2017 tax cuts will remain in effect, most investors should consider Roth conversions, especially if you have cash available to pay the taxes outside of your IRA.
• Gifting, and using trusts (like Spousal Lifetime Access Trusts or SLATs) may help mitigate potential tax burdens​​.

2. Investment Portfolio – it’s time to reallocate

• Maintaining a diversified portfolio across asset classes and geographies is essential and there are extremely attractive opportunities exist in sectors like artificial intelligence.
• Additionally, the new administration’s policies are likely to favor small caps and potentially large cap value.

3. Retirement and Income Planning

• The outlook for flat to falling interest rates
• Planning for Medicare surcharges (IRMAA MAGI formula) and required minimum distributions (RMDs) is crucial, especially for those with substantial tax-deferred accounts​. This is a widely misunderstood topic with abundant misinformation online. We encourage you to get in touch now to help calculate next year’s Medicare modified adjusted gross income and strategize to avoid higher premiums.

4. Navigating Trade and Regulatory Changes – consider buying tech, real estate, and finance

• The incoming administration’s proposed tariffs and deregulation efforts could reshape manufacturing, real estate, and technology industries – and now is the time to consider buying.

Preparing for 2025 and Beyond

At Tru West Financial, we recommend a proactive approach to navigate the challenges and opportunities of 2025. Consider these strategies:

Regular Financial Reviews: Reassess your portfolio, estate plan, and tax strategies annually to ensure alignment with your goals.
Scenario Planning: Prepare for potential policy changes by modeling different outcomes and adjusting as needed.
Legacy and Philanthropy: Optimize tax benefits while fulfilling charitable goals through donor-advised funds and other vehicles​​.

As a fee-only fiduciary advisory firm, Tru West Financial prioritizes your interests in all aspects of financial planning. Whether addressing immediate challenges or preparing for generational wealth transfer, we’re here to provide expert guidance every step of the way.

Contact us today to discuss how we can tailor strategies to secure your financial future.

The post Financial Planning for 2025: Four Critical Steps for Affluent Investors appeared first on Tru West Financial.

You and your spouse have done everything right financially. Except you didn’t consider the impact when one of you dies first.

Preparing for the financial aftermath of a spouse’s death is crucial. Even with diligent retirement planning, the financial landscape can drastically change when one partner passes away. Here’s how you can prepare for such an eventuality.

Understanding the Financial Impact

Losing a spouse can severely affect the surviving partner’s financial situation. Social Security benefits will be reduced as the smaller of the two checks disappears. If a pension without survivorship rights exists, that income stream will also cease.

Despite the drop in income, the surviving spouse may face higher taxes due to filing as a single person. Higher tax brackets apply at lower income levels for singles, compounding the financial strain.

When the plan is disrupted by the tragic death of a spouse, there isn’t much you can do besides cut expenses or return to work.

Proactive Financial Steps

There are several steps you can take to mitigate financial hardships after a spouse’s death:

1. Maximize Social Security Benefits: Delay Social Security for one spouse to increase the survivor’s benefits.
2. Roth Conversions: Convert tax-deferred accounts to Roth IRAs to reduce required minimum distributions (RMDs) and avoid higher tax brackets for the survivor.
3. Survivorship Benefits: Opt for pension plans with survivorship benefits, even if it means a lower payout initially.

Longevity Considerations

Women generally outlive men by two to three years, but the gap can be much more significant for couples. Economists’ research found that 62% of wives will outlive their husbands by 12 to 14 years on average, while 38% of husbands who outlive their wives do so by nine to 11 years. Planning based on projected life expectancy can lead to financial shortfalls.

Managing Wealth and Taxes

Some surviving spouses face the opposite problem: too much money. We recently helped a 64-year-old widow with a $4 million tax-deferred account avoid high tax brackets by doing laddered annual Roth conversions for the next six years, then shifting to qualified charitable distributions.

Timing and Tax Strategies

Grief can make it feel like time is standing still, but we can’t overstate the importance of timing in financial maneuvers. For instance, surviving spouses can use their partner’s capital losses to offset gains, but this must be done within the same calendar year of the spouse’s death.

Long-Term Financial Implications

The financial impact of a spouse’s death can extend for years. Medicare premiums, based on modified income from two years prior, can increase significantly for singles. For example, in 2024, a couple can have up to $196,000 in income and still pay the minimum premium, but for singles, the threshold is $98,000.

Conclusion

Preparing for the financial impact of the death of a spouse is difficult, but essential. At Tru West Financial, we go beyond standard planning to create a tailored approach that protects your financial future in times of transition. Our advisors help you address single-taxation burdens, optimize Social Security, and set up strategies like Roth conversions and pension adjustments to keep you secure.

Let us help you build a resilient plan that honors your legacy—contact Tru West Financial today.

The post How to Prepare Financially for the Death of a Spouse appeared first on Tru West Financial.

Immediate Steps After a Spouse’s Death

1. Follow any organ or body donation instructions provided by your spouse: Respecting your spouse’s final wishes is a priority. Ensure that any instructions regarding organ or body donation are carried out promptly.
2. Select/contact a funeral home: Meet with the funeral director to discuss costs, special arrangements regarding burial or cremation, ceremonies, and the next steps. You will likely need 10 or more death certificates to claim survivor benefits, insurance, and close accounts.
3. Notify immediate family, important friends, and your partner’s former employer: Initially, keep the contact list short and allow those around you to help spread the word and support during this challenging period.
4. Prepare an obituary and distribute It: Share the obituary with local newspapers and social media as deemed appropriate to inform the wider community.
5. Set up a system to track inbound connections: Acknowledge the support from friends and family by tracking connections and later sending thank-you cards or other means of appreciation.

For more detailed personal reflections and shared experiences, you can visit Option B which offers resources, inspiration, and community.

Taking Time to Grieve and Address Immediate Needs

In the weeks following the loss, it’s essential to take time for private grieving and seeking comfort from close friends and family. Avoid rushing into major decisions and begin to address some crucial administrative tasks.

6. Review/obtain your own health care coverage: Ensure your health care coverage is intact, especially if it was previously through your spouse’s employer. You may be eligible for COBRA benefits. Visit your doctor to ensure your health is managed during this stressful time, and seek additional counseling if needed.
7. Obtain and review important financial and legal documents: Collect and review documents such as bank and retirement accounts, insurance policies, wills, and trusts with your financial advisor or legal counsel. This can provide clarity and direction.
8. strong data-renderer-mark=”true”>File a Social Security Benefits Claim: Visit the local Social Security office or go online to file a claim. Request Publication No. 05-10084: Social Security Survivor Benefits. Both you and your children under 18 may be eligible for benefits.
9. Contact insurance companies: File and collect life insurance benefits and adjust policyholders on auto, homeowners, or other insurance policies.
10. Collect other survivor benefits: Ensure you collect all available benefits, such as veteran or pension, through your spouse’s former employer.

For help dealing with the unknown terrain of grief, visit David Kessler’s website, Grief.com.

Managing Financial and Legal Affairs

In the months following your spouse’s death, you can begin to address financial and legal tasks more thoroughly.

11. Close bank and credit card accounts: Close any accounts solely in your spouse’s name.
12. Remove your spouse’s name from joint accounts and assets: To avoid future complications, ensure that joint accounts and property reflect your name solely.
13. Roll over your spouse’s IRA(s) into your own: Consult with your financial advisor to properly roll over any IRAs, which can help manage your retirement planning.
14. Review and Reevaluate Investments: Work with your financial advisor to reassess your investment strategy and risk tolerance, ensuring it aligns with your new financial situation.
15. Follow up on estate settlement: Regularly check with your estate attorney and/or tax professional to ensure the estate settlement progresses as planned.
16. File an estate tax return: If required, file an estate tax return within nine months of your spouse’s death.
17. Update or create a new will and estate plan: It is essential to reflect your new circumstances in your will and estate plans to ensure your wishes are honored.

Navigating the complexities of widowhood is challenging, but with the proper support and resources, it is possible to find stability and direction. We are here to help with your support network during this difficult time.

The post Navigating Widowhood: 17 Essential Steps and Resources for Financial Stability appeared first on Tru West Financial.

How the Alternative Minimum Tax Works

In simple terms, the AMT is a parallel tax system. You first calculate your taxes under the regular system using IRS Form 1040. Then, using Form 6251, you adjust this calculation by adding back certain deductions and exemptions that aren’t allowed under AMT rules. You must pay the AMT amount if the result exceeds your standard tax liability.

Wealthy individuals are more likely to be affected by AMT due to larger income streams, itemized deductions, and capital gains. For instance, AMT kicks in if you have significant deductions for state and local taxes, exercise incentive stock options (ISOs), or realize considerable capital gains. Therefore, high-income earners must plan around this tax.

AMT Triggers for High-Income Earners

Here are some common factors that can trigger the AMT:

• High household income: If your income exceeds $1,156,300 (for married couples filing jointly) or $578,150 (for single filers), your AMT exemption will start phasing out​.
• Realizing large capital gains: Selling a home or investments for significant long-term gains can push you into AMT territory​.
• Incentive stock options (ISOs): Exercising ISOs can trigger a “paper profit” taxed under AMT even before selling the stock​.

Tax Planning Strategies to Minimize AMT Impact

1. Timing of Income and Deductions: If you’re nearing the AMT threshold, consider strategies like deferring income to future years or accelerating deductions. This can help you stay under the AMT phase-out limits.
2. ISOs and Capital Gains Management: For those holding ISOs, strategically exercising them in years where your income is lower or when the spread between the exercise price and market value is minimal can reduce the AMT hit​. Selling stocks after exercising ISOs can also help cover the tax burden. Furthermore, high-income earners can manage capital gains by selling over several years rather than realizing large gains simultaneously.
3. Invest in AMT-Exempt Bonds: Municipal bonds can be tax-free under the regular system, but some private activity bonds are subject to AMT. Consider switching to bonds that are exempt from AMT​.
4. Contribute to Tax-Deferred Accounts: Maximize contributions to tax-deferred accounts like IRAs and 401(k)s. These can help lower your adjusted gross income, reducing AMT exposure​.
5. Charitable Giving Strategies: Donor-advised funds or structured charitable giving can help reduce taxable income, lowering the risk of triggering the AMT​.

Financial Planning Strategies for AMT Mitigation

While tax planning is critical to navigating the Alternative Minimum Tax, broader financial planning can also help minimize its impact:

• Estate Planning: Utilizing trusts can help shield income from AMT or pass assets in a tax-efficient manner. This is particularly relevant for families aiming to leave a legacy without incurring excessive taxes​.
• Cash Flow Management: Preparing for a potential AMT bill involves maintaining liquidity, especially if you’re exercising stock options. Having cash set aside ensures you’re not forced to sell assets at a disadvantageous time​.
• Multiyear Tax Projections: If you’re on the borderline of AMT, you can work with Tru West Financial to create multiyear tax projections. This approach allows you to plan the timing of large transactions or stock option exercises to minimize taxes over several years​.

Why Talk to Tru West Financial?

At Tru West Financial, we specialize in crafting personalized, long-term financial strategies that address the unique needs of affluent clients. Our advisors are experienced in navigating complex tax situations like the AMT. We can offer guidance tailored to your specific circumstances. By partnering with us, you’ll receive expert tax planning advice and access to a broad range of wealth management strategies—from estate planning to custom investment portfolios designed to minimize tax liabilities.

Remember, managing the AMT is about more than taxes—it’s about securing your financial future in the most efficient way possible. With our fiduciary, fee-only approach, you can trust that we always act in your best interest, ensuring you keep more of what you earn.

The post Understanding the Alternative Minimum Tax: Strategies for Wealthy Individuals appeared first on Tru West Financial.

What is a Charitable Remainder Trust?

A Charitable Remainder Trust is an irrevocable trust designed to convert your assets into a lifetime income stream, provide a tax benefit, and ultimately benefit a charity or charities of your choosing. When you transfer assets into a CRT, the trust pays you or designated beneficiaries a fixed income for years or for life. After the trust term ends, the remaining assets are donated to the charity or charities you’ve selected.

How Does It Differ from Other Irrevocable Trusts?

While there are many types of irrevocable trusts, each designed for specific estate planning objectives, Charitable Remainder Trusts are unique in their charitable component and the financial benefits they offer. Unlike other trusts that may focus solely on asset protection, tax efficiency, or passing wealth to heirs, CRTs provide a means to support charitable causes as part of your legacy. Additionally, Charitable Remainder Trusts offer income to the donors or their beneficiaries, which is not a feature of all irrevocable trusts.

Benefits from a Financial Planning Perspective

Tax Benefits: One of the primary advantages of a CRT is the immediate tax deduction you receive upon funding the trust. The deduction is based on the current value of the remainder interest that will eventually go to charity, calculated using IRS guidelines.

Income Stream: Charitable Remainder Trusts provide you or your designated beneficiaries with an income stream, which can be particularly beneficial in retirement planning. This income can be a fixed amount (annuity trust) or a percentage of the trust’s assets, recalculated annually (unitrust).

Capital Gains Tax Avoidance: When you fund a CRT with appreciated assets and the trust sells these assets, there is no immediate capital gains tax. This allows the total value of the assets to work for you, generating income, part of which will ultimately benefit your chosen charity.

Estate Tax Reduction: Assets placed in a Charitable Remainder Trust are removed from your estate, potentially reducing estate taxes and increasing the inheritance for your heirs, especially when paired with other planning tools like an irrevocable life insurance trust.

Philanthropic Goals: Beyond the financial benefits, a CRT allows you to make a significant charitable gift that can be fulfilling and create a lasting legacy.

But how would this work in a real-world scenario?

Imagine that Jane, a 65-year-old retired entrepreneur, has accumulated significant wealth through her business ventures and holds appreciated assets like real estate and stocks. She is passionate about supporting her favorite charities, for which she has volunteered for years. Still, Jane is also concerned about maintaining a reliable income. She’s worried about tax liabilities as some of her friends didn’t seek a financial advisor and ended up paying for it. Jane established a Charitable Remainder Trust (CRT) by transferring some of her appreciated assets (an investment property she has owned for years, but would like to sell as she wants less responsibilities in retirement) into the trust. This move allows her to avoid immediate capital gains taxes, receive an immediate charitable income tax deduction, and secure a steady income stream throughout her retirement.

By structuring the Charitable Remainder Trust as a unitrust, Jane ensures that she will receive annual payments based on a fixed percentage of the trust’s assets, recalculated each year, providing financial security. Additionally, the assets in the CRT are removed from her taxable estate, potentially reducing estate taxes. After her death, the remaining assets in the trust will be donated to her chosen charities, creating a lasting legacy that supports the causes she cares about. This strategy enables Jane to integrate her philanthropic goals with her financial planning, achieving tax efficiency, income security, and a meaningful charitable impact.

Key Takeaways

Philanthropy Meets Financial Planning: Charitable Remainder Trusts uniquely blend charitable giving with income generation and tax planning, offering a comprehensive approach to managing your wealth.

Tax Efficiency: The immediate tax deduction and potential capital gains tax avoidance are significant financial planning benefits.

Income for Life: A CRT can provide you or your beneficiaries with a steady income stream, adding a layer of financial security.

Legacy Building: By establishing a CRT, you create a lasting impact, supporting the causes you care about while managing your financial future.

At Tru West Financial, we are dedicated to helping you explore charitable giving strategies that align with your financial goals and ensure your philanthropic intentions are carried out seamlessly until the end. Our personalized approach to wealth management ensures we understand your aspirations and work diligently to achieve them.

The post Maximizing Wealth and Giving Back: Understanding Charitable Remainder Trusts appeared first on Tru West Financial.

Let’s face it, choosing a wealth advisor isn’t fun. Unless you’re one of those beautiful minds who finds joy in untangling the web of financial instruments and tax codes, you’d probably prefer watching paint dry. How many times have you started the process of finding a financial planner only to get bored, distracted, or overwhelmed?

And then there is the question of trust. How do you determine who is trustworthy and capable? And how can you possibly distinguish one advisor from another when it seems they are all reading from the same script (and believe us, they probably are)? We get it. It’s about as fun as a melted ice cream cone. But allow us to think about it a bit differently.

All those financial terms that immediately put you to sleep actually excite us. We love it. Some call us financial nerds; we call it deep expertise in our field. Whereas you might drink coffee to get yourself going in the morning, we caffeinate on Roth IRAs and irrevocable trusts. We do it so you don’t have to, and we’re good at it.

But this only matters if we have trust. And trust takes time. We’re committed to earning your trust. And it’s certainly not built by reading a single blog post.

So allow us to present a simple three-phase approach that we think will help you determine whether we are the financial nerds for you:

Our Three-Phase Approach

Phase 1: Getting to Know Each Other

We start with an initial face-to-face (or screen-to-screen) meeting. Not only is this a nice icebreaker to get to know each other, we start laying the foundation for our future relationship. We’ll introduce you to our financial planning approach, our commitment to your financial well-being, and how we can guide you toward achieving your financial aspirations. This meeting is not just about sharing our philosophy; it’s equally about listening, and understanding what you envision for your future.

Phase 2: Goal-Setting and Data Gathering

We’ll explore your financial situation more deeply during the goal-setting and data-gathering phase. This includes meeting once or twice to engage in shared goal setting, which requires collaboration and open communication. You provide as much detail about your financial landscape and long-term goals as possible. At the same time, we use our years of expertise to start developing a custom plan.

Data gathering is where we add significant value to our partnership. We meticulously collect and organize all aspects of your financial life – from insurance policies and estate plans to tax information, budgets, bills, credit cards, real estate investments, and more. This comprehensive approach ensures that every piece of your financial puzzle is considered when developing your strategy.

Phase 3: Plan Presentation and Implementation

The plan presentation and implementation meeting is where we turn talk into action. This stage is a breath of fresh air for many of our clients, as it addresses most people’s thoughts before engaging in the process; “I always knew I should be doing more.” The abstract goals and scattered information discussed in the first two phases are assembled into a coherent, actionable financial plan.

In addition to your dedicated financial planner, you will be paired with a licensed, experienced client service manager to bring your plan to life. This dedicated professional will walk alongside you, ensuring the implementation of your financial strategy. Whether switching banks, shopping for car insurance, managing real estate deeds, rolling over old or orphaned accounts, or maximizing employee benefits, your client service manager can navigate the complexities on your behalf.

Some of these tasks seem trivial, but ask yourself honestly: Do you have “orphaned” accounts scattered everywhere? Even worse, do you know you have money squirreled away but do not remember exactly where it is or how much is in the account? Believe us, you are not alone!

Beyond Onboarding: Ongoing Engagement and Growth with Your Financial Planner

After the initial onboarding process, you can expect several touchpoints throughout the year. These interactions are designed to keep us in sync, ensuring we proactively address any changes or opportunities in your financial landscape. Additionally, we value the importance of collaborative investment management and financial planning, which is why we organize one to two summits annually. These summits serve as a strategic forum to review goals, discuss progress, and refine our approach as needed. Furthermore, to enhance our service and ensure personalized attention, our dedicated team members will contact you, providing direct support and guidance. This approach to client engagement is part of our commitment to meet and exceed your financial aspirations, fostering a relationship based on trust, transparency, and mutual success.

If this resonates, let’s schedule a quick call to start the process. We don’t have pushy call centers, and we aren’t hunting sales quotas. We’re here to listen to your goals, give sound advice, and build a mutually beneficial relationship for the long term.

Drop some time on the calendar, and give us a chance to show you how smoothly and pain-free this process can be.

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