Maximizing Your Legacy: A Guide to Wealth and Legacy Planning

When it comes to building and preserving wealth, many of us focus on the accumulation of assets and investment strategies. But one key aspect that often goes overlooked is legacy planning. How do you want your wealth to be distributed? What impact do you want to leave behind? What steps should you take to ensure that your assets are passed on in the most efficient and meaningful way? These questions are vital to ensuring your legacy lives on for future generations and support the causes you care about.

In this guide, we’ll explore essential areas of legacy planning, including charitable giving, communicating with your children about finances, and maximizing tax efficiency to help preserve and transfer your wealth for generations to come.

Take time to reflect on your priorities and what you hope to achieve through your legacy plan. Consider the following questions:

  • Passing Wealth: Is your primary goal to pass money to the next generation, or would you prefer to skip a generation and give directly to your grandchildren?
  • Charitable Giving: How important is philanthropy to you? Is it a secondary goal after providing for your heirs, or does it hold equal importance? Do you have specific organizations or causes you are passionate about?
  • Timing of Gifts: Are you able to give during your lifetime, or do you prefer to distribute your wealth after your passing?
  • Tax Efficiency: How important is minimizing taxes in achieving your overall goals?

As you reflect on these questions and gain clarity on your objectives, we can help design a legacy plan tailored to your unique needs and priorities.

  • Tools for Planning for Wealth Transfer: Ensure Your Legacy is Protected

Properly structured estate plans ensure that your wealth is passed on as you intended in the most efficient manner. Here are key elements to include in your plan:

Wills: This foundational document can outline how assets (without direct beneficiaries such as an IRA or 401k), are distributed to heirs.  It is often used to bequeath artwork, jewelry and other hard assets

Trusts: Trusts can provide more specific guidelines on how and when assets are distributed, and they are generally designed to avoid probate and provide privacyThere are many different types of trusts that can be used for your specific needs including minimizing estate taxes, providing for a charity or creating an income stream for heirs.

Life Insurance: Consider a life insurance policy as part of your strategy to provide liquidity to cover estate taxes and other expenses.

Beneficiary Designations: Review your beneficiary designations on retirement accounts and life insurance policies to ensure they align with your current estate plan. Also, consider adding continent beneficiaries to ensure that no matter who passes away first, your wishes are carried out.

One of the most rewarding aspects of wealth is the ability to make a difference. Charitable giving is an excellent way to create a legacy that reflects your values and supports the causes that matter to you. There are a variety of ways to integrate philanthropy into your legacy plan:

Donor-Advised Funds (DAFs): DAFs allow you to make a charitable donation now while maintaining the flexibility to distribute funds to your chosen organizations over time.

Charitable Trusts: A charitable remainder trust (CRT) or charitable lead trust (CLT) can provide income benefits for you or your family while ensuring that a portion of your estate is directed to charity.

Bequests in a Will: A straightforward way to leave money or assets to your favorite charities upon your passing.

Giving While Living: Consider making gifts during your lifetime to witness the impact your generosity has on causes you care about

Incorporating charitable giving into your estate plan doesn’t just benefit others—it can also provide potential tax advantages and help reduce your taxable estate.

One of the most important aspects of legacy planning is ensuring your children understand the wealth they will inherit and the responsibilities that come with it. A well-structured family meeting provides an opportunity to align your family’s values and prepare the next generation for the future. These discussions can foster understanding, create a shared vision for the future, and avoid misunderstandings that could arise when wealth is passed down.

Tips on how to approach a successful family meeting:

Set the Right Tone: Approach the conversation with openness and transparency. Emphasize that this is a collaborative discussion, not a lecture. Your goal is to create a shared understanding of family values and financial goals.

Discuss Family Values: Start by sharing the values that guide your financial decisions. Talk about why you’ve made certain choices and how your wealth reflects the things you care about, such as philanthropy, education, or entrepreneurship.

Create a Family Mission Statement: Outline the vision and goals for how family wealth should be managed, ensuring that it aligns with the values you want to instill.

Clarify Expectations: Let your children know what to expect in terms of inheritance. Be clear about any conditions or expectations attached to their inheritance, such as involvement in charitable activities or financial responsibility.

Encourage Questions: Give your children the space to ask questions and express their thoughts. Encourage them to discuss their individual financial goals and concerns, as this can open up valuable conversations about planning for the future.

Introduce Them to Professionals: Including your children in meetings with your wealth advisor, accountant, and attorney can help them feel more prepared and confident about managing the legacy you leave behind.

Create a Plan for the Future: Discuss the next steps for the family, including future meetings, financial education opportunities, and any steps needed to implement the wealth and legacy plan you’ve developed together.

These family discussions are crucial in helping your children understand not just the wealth they’ll inherit, but also how they can continue to build on the foundation you’ve laid. Starting these conversations early and revisiting them regularly can help ensure that your wealth and legacy are in good hands for generations to come.

One of the key components of legacy planning is minimizing the tax burden on your estate and heirs. With proper planning, you can reduce estate taxes, capital gains taxes, and income taxes—allowing more of your wealth to stay within the family or go toward charitable endeavors.

Tax-Advantaged Accounts: Utilize retirement accounts such as IRAs, Roth IRAs, and 401(k)s to pass wealth while potentially reducing taxable income.

Gift Tax Exclusions: Take advantage of annual gift exclusions (currently $19,000 per recipient) to transfer wealth tax-free while you’re still alive.

Using Lifetime Exclusion: In addition to the annual gift exclusion, the lifetime gift exclusion currently is 13.99 million for 2025.  This is the total amount of assets an individual can transfer to heirs during their lifetime or at death without incurring federal estate or gift taxes.

Step-Up in Basis: When heirs inherit assets, the cost basis is typically “stepped up” to the value at the time of inheritance, reducing capital gains taxes when the assets are eventually sold.

Estate Freeze Strategies: Strategies like family limited partnerships (FLPs) or grantor retained annuity trusts (GRATs) can help minimize estate taxes by locking in the value of assets for tax purposes so that future appreciation of those assets pass to heirs without being subject to additional estate taxes.

Wealth management is more than just growing assets, it’s about ensuring your wealth works for you, your family, and your community in the long run. Legacy planning offers a powerful opportunity to ensure that your values are passed on, your wealth is managed efficiently, and your impact is felt long after you’re gone.

The earlier you begin planning, the more you can maximize your legacy and create lasting financial security for your family, your community, and the causes you care about most.

Take the Next Step: Meet with an Advisor to Plan Your Legacy

Legacy planning is a journey that involves thoughtful consideration and collaboration. Whether you’re planning to pass on your wealth to the next generation, support charitable causes, or simply ensure tax efficiency, working with a professional wealth advisor is the key to ensuring your wishes are met.

Now is the time to start building or refining your legacy plan. Take the first step by meeting with an experienced wealth advisor who can guide you through the complexities of charitable giving, tax strategies, and family discussions. Together, we’ll craft a plan that maximizes the impact of your wealth and ensures your legacy endures for generations.

Contact us today to schedule a consultation and start securing your financial legacy. Let’s build a lasting future that reflects your values and ensures that your wealth continues to benefit those who matter most.

Start 2025 Financially Strong

As we step into 2025, there’s an undeniable energy that comes with a new year—a fresh start, a clean slate, and an opportunity to redefine your path. If there’s one resolution worth prioritizing this year, let it be this: Take charge of your wealth and gain the clarity you deserve.

Financial clarity isn’t just about understanding your portfolio or tracking expenses—it’s about creating a strategic roadmap that ensures your wealth works for you, aligns with your values, and secures your legacy. When you have a clear and comprehensive plan, you gain the confidence to navigate complex financial landscapes and seize opportunities with precision.

Imagine:

  • Having a clear strategy for optimizing your investments and minimizing taxes.
  • Knowing you’re on track to achieve your short-term goals, like buying a second home or taking a dream vacation and long-term goals, such as retirement, philanthropic endeavors or legacy wealth.
  • Feeling secure in your financial future while still enjoying the lifestyle you’ve worked so hard to achieve.

This is the year to elevate your financial strategy and make those visions a reality.

  1. Evaluate 2024’s Performance: Before you set new financial objectives, take a detailed look at the past year. Were there missed opportunities or areas for improvement?
  2. Define Your 2025 Wealth Goals: Be specific and strategic. Whether it’s diversifying your investments, optimizing tax efficiency, or setting aside a fund for grandchildren, clarity begins with identifying actionable priorities.
  3. Refine Your Plan: Your goals require a tailored strategy. This could involve revisiting your asset allocation, enhancing estate planning, or leveraging advanced financial tools to preserve and grow your wealth.
  4. Partner with a Trusted Advisor: Everyone has unique challenges and opportunities. A dedicated financial advisor brings expertise, insights, and a bespoke approach to ensure your wealth is managed with precision and purpose.

We are passionate about helping clients achieve financial clarity and peace. Our approach is rooted in understanding your unique goals and crafting a personalized roadmap for today and all the tomorrows.

Together, we’ll unlock the full potential of your wealth and create a plan tailored to your vision. Let’s make this your most empowered year yet.

Ready to get started? Schedule a consultation today, and let’s create a bespoke financial strategy that sets you up for success.

From Savings to Retirement: The Life Cycle of Financial Planning 

Financial planning is a multifaceted process that involves everything from budgeting, saving and investing to mitigating taxes, preparing for retirement, and settling your estate. 

A comprehensive financial plan is not static—it evolves with changes in your life situation, needs, and goals.  

Here’s a look at the ins and outs of financial planning, including how financial priorities and strategies can shift at different phases of the life cycle. 

Financial planning involves evaluating your current circumstances, determining your goals, and implementing strategies to meet them.  

It encompasses every aspect of your financial life, including accumulating and protecting your wealth, while preparing for potential costs and challenges along the way. 

Here are the different facets of a well-executed financial plan: 

Budgeting: Managing your income and expenses to align with your priorities and goals—and avoiding unnecessary debt. 

Tax planning: Implementing strategies to help minimize your tax liability and maximize tax refunds. 

Education planning: Estimating expenses for your child’s future education and contributing to a 529 plan or other tax-advantaged accounts in preparation.  

Insurance planning: Evaluating your risk and investing in insurance policies to protect your family, assets, home, business, and yourself from unexpected financial burdens. 

Investment planning: Assessing your risk tolerance, establishing timely goals, selecting investment types and asset classes, and adjusting your strategy as needed. 

Retirement planning: Creating a strategy for long-term savings, investing, and income to achieve your ideal lifestyle in retirement. 

Estate planning: Outlining your intentions for the management and distribution of your assets if you die or become incapacitated—via wills, trusts, powers of attorney, and other legal documents. 

Philanthropic planning: Developing a plan for charitable giving that aligns with your goals for your legacy while employing strategies to reduce income and estate taxes.  

The financial planning life cycle refers to unique needs, challenges, and solutions corresponding to different stages, starting in young adulthood and ending in retirement. For example, a 25-year-old’s financial focus (and strategies) will be vastly different from those of a 55-year-old. 

Here’s a brief summary of these different stages: 

Early Adulthood 

In their early 20s, young adults may be graduating college and entering the workforce. Typically, the focus is on learning how to budget and manage money effectively, paying off student loans or other debt, and building an emergency fund.  

Starting a Family 

By their 30s, many adults may be preparing to get married, have children, and advance in their careers. At this point, financial goals typically shift towards saving and investing for major purchases (such as a home), future tuition expenses, and retirement. 

Accumulation Years 

People in their 40s tend to be in their peak earning years, which can provide more financial resources to commit to building wealth, maximizing retirement contributions, and taking on a more aggressive investment strategy.  

Pre-Retirement 

For those in their 50s, priorities generally shift to choosing the right age to exit the workforce, deciding when to take Social Security benefits, embracing a more conservative asset allocation, and planning for income and long-term care needs in retirement.  

Retirement 

According to a recent study, the average retirement age for Americans is 62.1. Accordingly, at this stage, people tend to focus on taking retirement distributions in a tax-efficient manner, preserving and passing their wealth on to their loved ones, and leaving a charitable legacy. 

Enjoy the Journey 

You’ve worked hard to build wealth. Now, it’s time to achieve peace of mind by having a comprehensive financial plan in place to protect it for future generations.  

Crescent Harbor can help by providing objective advice, tailored planning, and comprehensive wealth services to ease stress and allow you to focus on what matters most.  

Let’s get started together

Sources 

1 https://money.usnews.com/money/retirement/aging/articles/what-is-the-average-retirement-age 

This material is for informational purposes only and should not be construed as tax or legal advice.  

 Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.  

Women and Wealth Management 

Today, women are not only significant consumers but also vital decision-makers in the financial landscape. The upcoming ‘Great Wealth Transfer’ is set to shift $30 trillion1 from Baby Boomers predominantly into the hands of women. This monumental shift underscores the importance of understanding the challenges women face and the role of financial planning in growing and preserving lasting wealth. 

Despite significant advancements, women often encounter gender inequities and various obligations that can impact their long-term wealth accumulation. For example, caregiving responsibilities2—whether for children or elderly parents—often fall disproportionately on women, resulting in unpaid labor that can reduce working hours, affect career trajectories, and disrupt participation in retirement plans like 401(k)s. Over a 40-year career, the gender and racial wage gap can result in a loss of up to $1 million for women.3 

Moreover, the gender wealth gap , which highlights the difference in the value of owned assets between women and men, provides a broader perspective on inequality. This gap considers critical factors like emergency savings, debt, real estate, and investments—key elements essential for achieving long-term financial stability. Here are a few important considerations: 

Women tend to adopt a more conservative approach to investing than men, which may lead to missed opportunities for significant returns over their lifetimes. 4 

With 72% of financial advisors being men5, many women may feel less inclined to engage with financial advisors, as the industry has not always focused on their unique needs. 

Although women generally have longer life expectancies, only 53% feel confident in their ability to retire at their desired age, compared to 66% of men. 6 

These factors highlight the importance of self-advocacy, solid financial planning, and taking control of one’s financial future. 

Approaching financial planning with intention is essential. Instead of viewing money solely in practical terms, consider how it can support your personal goals, family, and legacy. Reflect on questions such as: 

  • What are my core values? 
  • How can I foster my financial independence? 
  • How do I wish to support my loved ones? 
  • What does my ideal retirement look like? 
  • What causes are important to me? 

Once you’ve identified your core values, develop actionable short-term objectives, such as: 

  • Putting aside an emergency fund (three to six months’ worth of living expenses). 
  • Paying down high-interest debt. 
  • Setting up a tax-advantaged 529 plan for your child. 

Long-term goals may include: 

  • Securing investors to launch a women-led business. 
  • Purchasing a second home for retirement. 
  • Creating a Trust to transfer wealth to future generations. 

Your goals will evolve over time, but outlining them is a vital first step in crafting a comprehensive financial plan. 

With clearly defined goals, the next step is to analyze your net worth by subtracting liabilities (like loans and mortgages) from assets (such as cash, investments, and real estate). If you share financial responsibilities with a partner, it’s essential to consider joint assets and liabilities. 

Collaborating with a team of skilled professionals, including financial advisors, estate planning attorneys, and tax specialists, can help you create a personalized financial roadmap that includes: 

Investment Management and Asset Allocation Planning: Develop a diversified investment portfolio that aligns with your long-term financial goals while managing risk. 

Tax Planning Strategies: Implement strategies to minimize your tax liability and maximize your wealth, such as contributing to retirement accounts or engaging in charitable giving. 

Insurance Planning: Consider various insurance options—life, liability, long-term care, and disability—to secure your financial future, as well as legal structures like trusts to protect your assets. 

Retirement Planning: Evaluate your retirement needs and embrace strategies to maximize contributions to retirement accounts and manage withdrawals. 

Estate Planning: Create a plan that ensures your assets are distributed according to your wishes while minimizing taxes and supporting charities that matter to you. 

Regularly reviewing your financial plan is crucial to adapt to changes in your financial situation, life circumstances, or economic landscape. 

By developing a well-rounded financial plan, you can navigate the complexities of wealth management with confidence, laying the foundation for a legacy for yourself and your loved ones. 

Crescent Harbor understands that your financial journey is unique and we’re here to support you at every step of the way. We’ll discuss your needs and vision, give objective advice, and provide customized planning and strategies to help you meet your goals. 

Let’s connect on what matters most to you. 

This material is for informational purposes only and should not be construed as tax or legal advice. 

Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC. 

Sources 

1https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management 

2 https://www.transamericainstitute.org/docs/library/research/women-retirement-security-report.pdf?sfvrsn=70355e9b_8 

3 https://nwlc.org/resource/the-wage-gap-robs-women-working-full-time-year-round-of-hundreds-of-thousands-of-dollars-over-a-lifetime/ 

4 https://www.ellevest.com/magazine/disrupt-money/closing-the-gender-wealth-gap 

5 https://www.zippia.com/finance-advisor-jobs/demographics/ 

https://www.prnewswire.com/news-releases/bmo-survey-finds-american-women-significantly-less-confident-in-retiring-compared-to-men-301764524.html 

Financial Planning for Major Life Events  

Life is unpredictable. Financial planning is integral to preparing for significant celebrations—such as marriage and children—and challenges such as job loss or long-term illness. 

However, according to Schwab’s recent Modern Wealth Survey, only 35% of Americans have outlined their goals and created a financial plan.1 

This article offers tips on planning for significant life milestones to help you navigate them with ease when the time comes.

Saving is critical to any financial plan. By starting early, you can take advantage of compounding, create a robust emergency fund, and better prepare to meet your short and long-term goals. Below are five life-changing events that may inform your planning. 

Marriage 

Although it can be tempting to put them off, it is important to have honest conversations about your finances before you and your partner walk down the aisle. Failing to do so can impact your financial future (and can also potentially hurt your marriage). To get started, you and your fiancé can: 

  • Disclose any debt (including student loans), earnings, savings, credit scores, and assets. Although it’s a sensitive topic, it’s important to discuss whether a prenuptial agreement makes sense for your unique situation. 
  • Discuss how you want to merge your finances, file for taxes, address insurance coverage, and budget for significant expenses. 
  • Agree on joint long-term financial goals, such as purchasing a first or second home, investing money, and planning for retirement and long-term care.  

Children 

Children can add joy and meaning to your life. However, according to a 2022 Brooking Institute study, parents can expect to spend over $310,605 to raise children through age 17.2 It’s also important to budget for the medical costs of having a child, including out-of-pocket prenatal and maternity care expenses. You may want to: 

  • Purchase 20 to 30-year life insurance policies for you and your spouse to provide resources when you cannot. 
  • Set up a tax-advantaged 529 plan to start saving for your child’s higher education costs. 
  • Update your estate plan to include your children as beneficiaries (and name guardians) in your Last Will and Testament. Consider setting up trusts to help manage, protect, and transfer your wealth to future generations. 

Career Changes 

Your career will likely go through ebbs and flows throughout your lifetime, and it’s important to adjust your financial plan accordingly. For example, if you earn a promotion, you can earmark these funds for retirement or to save for other goals, such as starting your own company or purchasing a vacation home. If you or your partner is considering making a major career shift, it can be beneficial to:  

  • Negotiate for perks (in addition to salary), such as retirement or insurance benefits, remote or flexible work schedules, or additional paid time off. 
  • Adapt your investment strategy to align with changes to risk tolerance and financial goals. 
  • Decide what to do with funds in your previous employer’s 401(k)—such as rolling it over into a new plan or an IRA—and ensure you avoid a lapse in healthcare coverage. 

Retirement  

According to the Employee Benefits Security Administration (ABSA), the average American spends 20 years in retirement, yet only around 50% have calculated how much they need to save.3  The key is to start saving and investing early so your money has the chance to grow exponentially over the decades. Speak with your advisor about: 

  • Determining how much you need to save for the age and lifestyle you want to have in retirement. Recommendations vary, but Fidelity suggests aiming to save 1x your salary by age 30, 6x by 50, and 10x by 67.4 
  • Considering evolving tax laws, diversifying your investments, and contributing to tax-deferred accounts (like 401(k)plans and traditional IRAs) and after-tax accounts (such as Roth IRAs). Consider converting a traditional IRA into a Roth account if your income level prevents you from directly contributing to a Roth IRA. 
  • Taking advantage of annual catch-up contributions (once you’re 50 or older) to boost your retirement savings. 

Long-Term Illness, Disability & Health Care 

If you or your spouse are diagnosed with a long-term illness or disability, it can have a devastating financial impact. Additionally, it’s essential to plan for how you will fund healthcare expenses in retirement that are not covered by Medicare. We recommend that you: 

  • Purchase disability insurance to safeguard your family’s finances if injury or illness prevents you from working. Be sure to consider the policy’s waiting and benefit periods. 
  • Invest in long-term care insurance to bridge the gap and cover nursing, social, and rehabilitative services (including assistance with daily living needs as you age) that are not covered by regular health insurance.  
  • Contribute annually to a tax-advantaged Health Savings Account (HSA), which allows you to accumulate significant savings to pay for future medical expenses in retirement and beyond. 

By working with a qualified financial advisor to create a comprehensive plan, you and your loved ones will be ready to confidently face life’s changes and challenges. 

Crescent Harbor can partner with you in every aspect of your financial life to help you solidify your vision, solve complex problems, and achieve peace of mind.  

We’ll consider your wealth outlook, short and long-term objectives, and desired family legacy and create a personalized financial plan to help you achieve your goals. 

 Let’s start today

Sources 

1 https://pressroom.aboutschwab.com/press-releases/press-release/2023/Schwabs-Modern-Wealth-Survey-Reveals-Nearly-Half-of-Americans-Feel-WealthyBut-With-a-Twist-They-Dont-Measure-It-in-Dollars–Cents/default.aspx 

2 https://www.brookings.edu/wp-content/uploads/2022/08/Brookings_Cost-to-raise-a-child_inflation-adjusted-2.pdf 

3 https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/top-10-ways-to-prepare-for-retirement.pdf 

4 https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire 

This material is for informational purposes only and should not be construed as tax or legal advice. 

 Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC. 

The Importance of Planning for Long-Term Care

Although most people understand the importance of saving for retirement, this is not always the case when planning for long-term care. When you’re young and healthy, it can be challenging to envision a time when you or your spouse may need help with basic functions. But, according to the Administration for Community Living (ACL), someone turning 65 today has almost a 70% chance of requiring long-term support to care for themselves.1

Proactive planning can help ensure your wishes are fulfilled and lessen the emotional and financial burden on your loved ones in your golden years.

Long-term care can include everything from assistance with day-to-day activities such as bathing, eating, dressing, getting around, and using the bathroom—to more intensive therapy or medical assistance from skilled healthcare personnel.

Although thinking about losing your independence can be uncomfortable, delaying your planning can result in higher insurance premiums, reduced coverage, and limited care options.

By initiating these conversations with your partner, children, or family members, you can devise a plan to meet your future needs, ensure you’re prepared financially, and reduce stress for everyone involved.

Some questions to jumpstart these conversations include: 

  • Who do you want to oversee your care? This may be a partner, family member, friend, or professional care provider. Taking on sensitive duties can change the dynamics of close personal relationships, so that’s something to consider. 
  • If you choose someone close to you, are they emotionally, physically, and financially equipped for this role? Caregiving generally requires 24 hours per week—and uncompensated expenses can add up to more than $7,000 annually, according to a report by Penn Nursing.2  
  • Where do you want the care to be provided? Although most people prefer home care, this may change with your healthcare needs as you age. Alternatives include assisted care facilities and nursing homes.  

Not everyone has a partner or family to help support their long-term care needs. In these circumstances, we recommend purchasing long-term care insurance earlier rather than later and researching local community resources such as meal delivery, transportation, home doctor visits, and other services to provide aid when the time comes. 

Healthcare is among the most significant costs in retirement, and many people will need to pay at least some long-term care expenses out of pocket. According to the ACL, women typically need care for 3.7 years, while men require 2.2 years on average.3 

If you’ve decided to rely on professional long-term care rather than a loved one, you must be prepared for some significant costs. According to the 2023 Genworth Cost of Care Survey, national annual median costs include $64,200 for an assisted living facility, $104,000 for a semi-private room in a skilled nursing facility, $116,800 for a private room in a nursing home, and $75,500 for a home health aide.4 

With these estimates in mind, it’s important to determine how you will fund your extended care needs. Common methods include:  

Self-funding: Paying your way typically involves earmarking funds from your savings, Social Security benefits, pension, or a retirement account such as a traditional IRA, Roth IRA, or Health Savings Account (HSA). When deciding where to hold your assets, it’s important to consider tax implications such as deductions for qualified LTC expenses or liabilities for withdrawals. 

LTC insurance: An insurance policy can help pay for LTC needs, including nursing home or home care services. You become eligible for benefits when you can no longer perform daily living activities such as bathing, eating, and dressing or become cognitively incapacitated. Coverage is generally capped at specific amounts daily or monthly up to a lifetime maximum or a set number of years. 

Hybrid Life Insurance and LTC: Newer hybrid policies combine long-term care coverage with life insurance that will go to your heirs if you never use the LTC benefits. If you do file a claim, this payout is reduced or eliminated. This flexibility allows you to use LTC coverage as needed, as a death benefit if you pass away without using it, or potentially cash in your policy if your needs change. However, hybrid insurance is typically more expensive than traditional plans.5 

Thoughtful long-term care planning can provide peace of mind, knowing that you and your loved ones are prepared if (and when) you need assistance. 

Crescent Harbor can facilitate conversations with your family, provide objective advice, and help you develop a long-term care plan tailored to your unique needs and wishes. 

Let’s plan today for your care needs tomorrow. 

Sources 

1 https://acl.gov/ltc/basic-needs/how-much-care-will-you-need 

2 https://penntoday.upenn.edu/news/penn-nursing-people-live-longer-family-caregivers-face-financial-challenges 

3 https://acl.gov/ltc/basic-needs/how-much-care-will-you-need 

4 https://investor.genworth.com/news-events/press-releases/detail/972/genworth-releases-cost-of-care-survey-results-for-2023 

https://www.aarp.org/caregiving/financial-legal/info-2021/understanding-long-term-care-insurance.html 

This material is for informational purposes only and should not be construed as tax or legal advice. 

 Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC. 

529 Plans: Educational Savings & Estate Planning

Investing in education and preserving wealth for future generations are two essential goals for many families – and they do not have to be mutually exclusive.

529 plans can be used as an effective strategy to fund your child’s education expenses while also reducing the value of your taxable estate.

Learn about the intricacies of 529 accounts and why you may want to consider them as part of your estate plan.

Also known as qualified tuition programs, 529 plans are tax-advantaged savings accounts that can be used to pay educational expenses from kindergarten through graduate school. A parent or grandparent can create a 529 account as part of their estate plan to support their loved ones’ education while also enjoying certain tax benefits.

Funds in a 529 plan grow tax-free until they are taken out. If the funds are used for qualified education expenses such as tuition fees, books, and other supplies, they typically aren’t subject to federal and estate taxes. Beneficiaries typically don’t have to include their plan earnings as income. However, if the distribution exceeds your beneficiary’s expenses, a portion of the profits is taxable.1

Contributions to 529 plans are considered complete gifts, which means the funds and future earnings are excluded from your taxable estate.2 But unlike other estate planning tools like irrevocable trusts, you maintain ownership over the assets in your account. This means you can choose investments, change account beneficiaries, and control withdrawals.

You can establish 529 accounts in 50 states and the District of Columbia and contribute funds to help decrease the overall value of your taxable estate. However, additional tax benefits can vary significantly depending on where you live, your contribution level, and your income.

For example, Indiana, Minnesota, Oregon, Utah, and Vermont currently provide state income tax credits for contributions to 529 plans, while 30 states and the District of Columbia allow you to deduct 529 contributions from your taxable income.

Arizona, Arkansas, Kansas, Maine, Minnesota, Missouri, Montana, Ohio, and Pennsylvania offer state tax parity, which means you can deduct your taxable income on contributions to 529 accounts in any state.2  This is important because most states only allow tax deductions for their state-sponsored plans.

Contributions to 529 plans can also qualify for the annual gift tax exclusion (up to $18,000 for individuals or $36,000 for married couples filing jointly).3

A unique benefit of investing in a 529 account is the option to “super-fund” it with a lump sum of up to 5 years’ worth of contributions ($90,000 for 2024) at once.4  As long as you don’t make additional contributions to the same beneficiary during this period, this lump sum will not be included against your lifetime gift exemption.

If you are a parent or grandparent living in one of the above states that offer additional tax benefits—or you’re concerned about exceeding your federal gift exclusion—consider embracing 529 accounts in your estate plan.

Another advantage of using 529 accounts as an estate planning tool is their flexibility. If you want to set up plans for multiple children or grandchildren, you can do so—and anyone who contributes to them can potentially qualify for the gift tax exclusion.

Additionally, you are not required to change 529 plans to change beneficiaries—and you can transfer a plan to a child, sibling, parent, first cousin, and certain relatives by marriage.5

Starting in 2024, the Secure 2.0 Act allows people to transfer unused funds from a 529 plan into a Roth IRA without incurring additional taxes or penalties – turning education savings into retirement funds. This can be beneficial if your child no longer needs money for their education or if there are leftover funds in your account that you’d like to reinvest in a tax-advantaged account. However, there are some caveats6:

  • The 529 account must have been active for at least 15 years
  • The Roth IRA account beneficiary must be the same as the 529 account
  • The money transferred into the Roth IRA must have been in the 529 account for at least five years
  • There is a lifetime rollover cap of $35,000 for each beneficiary
  • Roth IRA contributions are subject to annual limits

A 529 plan may be a good fit if you want to invest in a loved one’s education, boost future retirement savings, and reduce the value of your taxable estate to benefit future generations.

The earlier you start contributing, the more time you have to take advantage of compound interest and potential growth.

Crescent Harbor can provide objective advice and work with your family’s attorney and tax specialist to determine whether 529 accounts align with your unique situation and estate planning goals.  

Let’s connect today.

Sources

1 https://www.irs.gov/taxtopics/tc313

2 https://www.collegeaccess529.com/college-savings/529-benefits/estate-planning-and-gifting-benefits-of-529-plans

3https://www.morningstar.com/personal-finance/how-do-your-states-529-tax-benefits-stack-up

4https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024

5 https://www.savingforcollege.com/article/how-much-can-you-contribute-to-a-529-plan

6 https://www.investopedia.com/terms/1/529plan.asp

7 https://www.savingforcollege.com/article/roll-over-529-plan-funds-to-a-roth-ira

This material is for informational purposes only and should not be construed as tax or legal advice.

Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.

Retirement Planning: Secure Your Financial Future

Most people look forward to enjoying the rewards of their hard work in retirement.

Unfortunately, too many families are unprepared with studies showing that almost half of American households have no retirement savings1 and 39% of American households are at risk of being unable to maintain their pre-retirement standard of living in retirement2.

Even the top 5% of income workers3 who are currently positioned to meet their retirement spending requirements will need a plan, as greater wealth can lead to greater complexity, including the need to integrate your financial, retirement and estate planning for future generations.

Whatever your level of wealth and retirement readiness, the key is to take control and have a plan. If you are in the early stages of your career, starting now will empower retirement readiness later. If you’ve fallen behind, it’s never too late to get back on track.

We’ve outlined answers to common questions about retirement so you can take action to secure your financial future.

A retirement plan is the process of accumulating enough money to live comfortably once you stop working. It includes defining your goals, risk tolerance and desired lifestyle, estimating your future expenses and income requirements, and establishing a long-term savings and investing strategy to ensure financial security during your retirement years.

Your plan will evolve with your age and life circumstances and must cover everything from how you will pay for essentials (home, food, healthcare, etc.) to family needs and emergencies to personal and social interests (travel, golf, favorite charities, etc.).

While there is no magic formula, different organizations offer various rules of thumb. For example, the Employee Benefits Security Administration suggests that people save 70 to 90 percent of their pre-retirement annual income to maintain their current standard of living4. Fidelity guides people to save at least 15% of their income annually for retirement5.

The reality is your retirement plan – and number – will be personal to you, based on your goals, age, lifestyle, location, health, and more. The objective is to develop a reasonable estimate of how much money you will need to save to achieve your desired lifestyle.

For example, younger investors can take more risks with investments and capitalize on decades of compounding by investing early—or earning returns on both your original investment and previous returns. Pre-retirees who are underprepared will likely need to adjust their strategy to save more and get on track. Successful retirees who have accumulated more than they will spend in their lifetime can consider more aggressive estate planning, gifting, and investment approaches to create generational wealth.

Regardless of your situation, we recommend you start early and get professional advice to help design a plan specific to your needs so you can enjoy a comfortable retirement.

Most retirees will need to plan beyond their bank accounts and expected social security benefits if they want to secure their desired standard of living in retirement.

There are many ways to accumulate retirement savings, including tax-advantaged employer-sponsored plans, Traditional and Roth IRAs, and Health Savings Accounts (HSAs); some retirees may also have pension plans, profit-sharing plans and more.

401k: tax-deferred employer-sponsored plans; they are easy to set up and maintain, especially with automatic payroll deductions; contributions are typically with pre-tax dollars unless it is a Roth 401(k); if they come with an employer match, it is advantageous to take advantage; catch-up contributions are allowed for employees over the age of 50.

403(b): similar to a 401(k) but designed for employees of public schools, tax-exempt organizations, and churches, e.g., teachers, school administrators, professors, and government employees; catch-up contributions are allowed for employees over the age of 50; “special catch-up” provisions also allow an additional $15,000 lifetime contribution for employees who have worked with a qualifying organization for 15 years

Traditional IRA: tax-deferred individual retirement account; contributions can be made with pre-tax dollars and may be fully or partially tax-deductible depending on your filing status; money grows tax-free and is not taxed until you start to take distributions.

Roth IRAs: contributions are made with after-tax dollars; money grows tax free and can be withdrawn tax-free in retirement if the account has been open for at least five years and you are over the age of 59½.

HSAs: savings accounts for people with high-deductible health plans used for medical expenses – a big cost for many retirees; contributions are made with pre-tax dollars, money invested grows tax-free, and withdrawals are tax-free if used for qualified expenses.

If you are a small business owner or self-employed, you may want to consider solo 401(k), SEP IRAs, and SIMPLE IRAs as part of your planning. Depending on your circumstances, a retirement trust or other estate planning strategies to help shield your family and estate from against creditors, lawsuits, divorce, and other challenges.

Planning for retirement today can provide you with financial preparedness and peace of mind tomorrow. Crescent Harbor can help you create a personalized plan to achieve your goals for your financial future – guiding you to accumulate and compound wealth, manage retirement income and spending, and ensure the most tax-effective tax strategies to optimize your assets throughout your retirement years and beyond.

Let’s get started together.

Footnotes

1 ASAFacts (November 9, 2023; referencing 2022 Survey of Consumer Finances (SCF); https://usafacts.org/data-projects/retirement-savings)

2 The National Retirement Risk Index – Center for Retirement research at Boston College (https://crr.bc.edu/the-national-retirement-risk-index-an-update-from-the-2022-scf/)

3 Vanguard – The Vanguard Retirement Outlook: A national perspective on retirement readiness (https://institutional.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2023/the-vanguard-retirement-outlook.pdf)

4 Employee Benefits Security Administration – Top 10 Ways to Prepare for Retirement( https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/top-10-ways-to-prepare-for-retirement.pdf

5 Fidelity – How much should I save for retirement? (https://www.fidelity.com/viewpoints/retirement/how-much-money-should-I-save)

This material is for informational purposes only and should not be construed as tax or legal advice.

Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.

Estate Planning Essentials: Protecting Your Wealth and Loved Ones

Estate planning is essential to protecting your loved ones, preserving family wealth, and directing how your assets should be managed and distributed when you pass away or become incapacitated.

However, the topic can be complex and emotional, causing too many families to procrastinate rather than be proactive. To help ease the stress, we’ve simplified estate planning into a few fundamental components to help you and your family get started.

Estate planning is also about creating a legacy on your own terms. That means your plan should reflect what matters most to you—whether that’s setting up your children and grandchildren for financial wellness, helping your business thrive in your absence, or supporting a cause you’re passionate about.

Effective planning encompasses:

  • Performing a comprehensive review of your assets, including bank accounts, investments, real estate, cars, insurance, etc.
  • Compiling critical documents that outline decisions involving how your assets will be distributed, who will care for dependents, and instructions for your medical care.
  • Employing strategies to mitigate estate taxes, such as setting up trusts or gifting throughout the year.

Creating a complete set of documents is one of the most important parts of estate planning. It is essential to review and revise your plan regularly to reflect any changes in laws or your life circumstances. Key components include:

A will is a simple legal document that defines your wishes for the distribution of your assets and guardianship of your minor children, dependents, or pets after your death. It does not take effect until you pass away.  

Wills typically go through probate, a costly and time-consuming process that becomes a part of the public record. If you die without a will in place—called “intestate”—the state court system will decide the transfer of your property.

A trust is a more sophisticated legal agreement that allows you to direct the management and distribution of your assets during your lifetime and after your death. A trust takes effect as soon as it is signed and funded.

Trusts can give you greater control over your estate, ease your tax burden, help you avoid probate, and provide more privacy than a will. Crescent Harbor can guide you through the nuances of different trusts—including revocable, irrevocable, special needs, and assets protection trusts—and align with estate attorneys to choose the option that best suits your goals.

A durable power of attorney (POA) gives a trusted individual (known as an agent) legal authority to act on your behalf should you become physically or mentally incapacitated.

You can choose to give your agent as much or as little power as you wish, including making decisions involved with:

  • Buying, selling, and maintaining real estate and other property
  • Using your assets to pay for you and your family’s regular expenses
  • Filing taxes and collecting government benefits
  • Investing money in bonds, stocks, and mutual funds
  • Transferring property to existing trusts

A crucial part of your estate plan involves providing instructions for your medical care if you become seriously sick, injured, or unable to communicate your intentions.

Typically called an advance medical directive, this may include the following:

  • Durable POA for health care that designates a medical proxy to make decisions if you are unable to do so.
  • HIPPA authorization form that names who can access your medical records and discuss your care.
  • Living will that details guidelines for life-saving treatments such as CPR, ventilators, or feeding tubes in the case of a medical emergency.

You’ve worked hard and made sacrifices to build wealth for yourself and your family.

Embracing tax planning strategies, such as setting up trusts or donating to philanthropic causes, is important to reduce the value of your taxable estate and preserve your family’s wealth.

Three taxes to consider as a part of your estate plan include:

  • Estate tax: This federal tax is currently levied on assets over the cap of $13.61 million per individual, which will be reduced by close to 50% at the end of 2025.  Twelve states currently impose their own estate taxes.
  • Inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania currently impose this tax, which is paid by estate beneficiaries (above specific thresholds).
  • Gift tax: The donor is responsible for paying this tax on gifts that exceed the annual exclusion for the calendar year. Qualifying charitable donations, political contributions, gifts to a spouse, and funds used for another person’s tuition or medical expenses are generally excluded from this tax.

It requires a dedicated estate planning partner who takes the time to understand your vision, wishes, and unique family circumstances.

Crescent Harbor can help you crystalize your vision, provide objective and tailored advice, and collaborate with your estate planning attorneys to achieve your goals. Let’s discuss your goals and create a clear road map to achieving them.

This material is for informational purposes only and should not be construed as tax or legal advice.

Registered Representatives of Sanctuary Securities Inc. and Investment Advisor Representatives of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Crescent Harbor Private Wealth is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.

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