Helping Make Financial Planning Less Taxing

Ann Marie Elpers.

Ann Marie Elpers.

Ann Marie Elpers is an administrative principal with Glenview Trust and works with the locally-owned and operated wealth management firm’s clients to navigate the complex and ever-changing world of finance.

Her job is to help clients by applying her knowledge of investment strategies, tax laws and financial trends to help them make decisions that will enrich their lives. Here, she shares some of her thoughts about wealth management as it applies to her clients, as well as those who are currently working to build wealth.

LORI KOMMOR: Can you provide a recent example of how your clients benefit from your knowledge and expertise?
ANN MARIE ELPERS: At Glenview Trust we provide a broad range of solutions for our clients, customizing our approach to their personal wealth management needs and preferences. We educate our clients about various transfer tax laws and how the laws may impact their families. Savings in the form of gift, estate and income tax can make a substantial difference in the growth and performance of an investment portfolio through the generations.

For example, last month, at the end of 2012, estate and gift tax exemptions were expected to decrease from $5 million to $1 million. Many families were going through last-minute gift planning discussions in an effort to transfer wealth to the next generation. While this tax planning was timely at the end of 2012, it was also important to make sure the strategies were appropriate for each family and their circumstances. The anticipated tax law change was just one of many considerations. We also reviewed family goals and objectives to make sure the strategies were appropriate.

The end of 2012 was a great opportunity to engage family members in serious estate and gift planning conversations and help them arrive at the best conclusions for their families. The estate and gift tax law approved by Congress on Jan. 1, 2013 was identical to the 2012 law, except the tax rate was increased from 35 percent to 40 percent. This was certainly not the doom and gloom many had expected, but we still think the planning and conversations that took place at year end were needed and positive for most all families.

KOMMOR: What are some examples of tax measures approved on Jan. 1?
ELPERS: It’s worth noting that while these changes may apply to those with considerable wealth, for those who are in the process of building wealth or hope to achieve it one day, it’s critical to understand how these laws change and the impact they can have on finances.

Significant tax measures approved on Jan. 1 include:
• Reinstatement of the 39.6 percent individual income tax rate and 20 percent capital gains tax rate for taxable income over $450,000 for joint filers and $400,000 for single filers.
• Return of the phase-out of personal exemptions and itemized deductions, but with higher thresholds for itemized deductions.
• Restoration of the IRA charitable rollover for 2012 and 2013 for individuals over 70, with special rules for IRA distributions made in December 2012 and for charitable rollovers made in January 2013.

KOMMOR: At the start of 2013, is there any particular general piece of advice you have for those who are working to manage wealth, as well as those in the process of building personal wealth?
ELPERS: I work with a great team of experts here at Glenview, and one of our team members, Ray Scholtz, an investment officer, often advises against abandoning a carefully-considered investment strategy because of current uncertainty. Uncertainty is a normal part of market investing. A successful investment strategy helps reduce the anxiety of uncertainty by providing both liquidity to meet short-term obligations and growth to meet long term capital needs.

Diversification is a fundamental investing principle; and Glenview Trust considers the long-term ownership of high quality stocks to be especially relevant for most investors in today’s environment. Many companies have solid balance sheets, sell their product/service into a global market, generate profits and pay dividends. Stocks also are traditionally very effective at protecting both income and capital from inflation.