What Is Wealth Planning?
Wealth planning looks at financial decisions across the different stages of a person's or family's financial life.
Wealth planning Tennessee households use can include investments, retirement, taxes, estate planning, business ownership, charitable giving, and wealth transfer.
The purpose is to coordinate these areas around financial goals.
Who May Need Wealth Planning?
Wealth planning can become more important as financial complexity increases.
Common situations include:
Business ownership
Retirement
Inheritance
Significant investment assets
Multigenerational wealth
Charitable giving
Business succession
Estate planning
Connecting Investments With Goals
Investment decisions should reflect the purpose of the assets.
Money needed for near-term spending may require different considerations from assets intended for long-term growth or legacy planning.
A wealth planning process can help place investment decisions within the broader financial picture.
Business Owners Have Additional Considerations
Business owners may have much of their wealth tied to a single company. Preparing for a sale or succession event can create questions about valuation, taxes, investments, retirement income, and estate planning.
ProffittGoodson identifies business owners as a client group and describes coordinating business transitions with investment planning, tax strategies, and estate considerations.
Families May Need Multigenerational Planning
Family wealth planning can involve more than transferring assets.
Families may need to consider trusts, charitable giving, education, governance, beneficiary designations, and communication among generations.
ProffittGoodson describes working with multigenerational families on stewardship, education, investment decisions, trusts, estates, philanthropy, and governance.
How to Choose a Wealth Planner
Ask potential advisors:
What areas do you cover?
Are you a fiduciary?
How are you compensated?
Do you manage investments?
How do you coordinate with attorneys and tax professionals?
Do you work with business owners and families?
How frequently do you review plans?
Wealth Planning Changes Over Time
A financial plan is based on current information and assumptions. Those assumptions can change.
Retirement dates move. Businesses transition. Family circumstances evolve. Tax rules change. Investment portfolios change.
Ongoing reviews can help identify when planning decisions need to be reconsidered.
Conclusion
Wealth planning Tennessee households undertake can coordinate investments, retirement, taxes, estate planning, business succession, and family wealth decisions. The appropriate approach depends on the household's financial complexity and long-term objectives.
FAQ
What is wealth planning?
Wealth planning coordinates financial decisions involving investments, retirement, taxes, estate matters, business interests, and wealth transfer.
Is wealth planning only for high-net-worth families?
Wealth planning can be useful for anyone whose financial decisions have become interconnected, although the scope of services may vary.
Can wealth planning include estate planning?
It can include estate planning coordination, while legal estate documents should be prepared with an appropriate attorney.
Does wealth planning include investment management?
Some wealth management firms provide investment management as part of their services. Ask what is included in the engagement.
This material is for informational purposes only and does not constitute legal, tax, or investment advice. Please consult appropriate professionals before making decisions.
DISCLOSURES: The information provided in this letter is for general informational purposes only and should not be considered an individualized recommendation of any particular security, strategy, or investment product, and should not be construed as investment, legal, or tax advice. Proffitt & Goodson, Inc. makes no warranties with regard to the information or results obtained by third parties and its use and disclaims any liability arising out of, or reliance on the information. The information is subject to change and, although based on information that Proffitt & Goodson, Inc. considers reliable, it is not guaranteed as to accuracy or completeness. Source information is obtained from independent financial data suppliers (Interactive Data Corporation, Morningstar, etc.). The Market Categories illustrated in this Financial Market Summary are indexes of specific equity, fixed income, or other categories. An index reflects the underlying securities in a particular selection of securities picked due to a particular type of investment. These indexes account for the reinvestment of dividends and other income but do not account for any transaction, custody, tax, or management fees encountered in real life. To that extent, these index numbers are artificial and cannot be duplicated in real life due to the necessity of paying those transaction, custody, tax, and management fees. Industry and specific sector returns (technology, utilities, etc.) do not account for the reinvestment of dividends or other income. Future events will cause these historical rates of return to be different in the future with the potential for loss as well as profit. Specific indexes may change their definition of particular security types included over time. These indexes reflect investments for a limited period of time and do not reflect performance in different economic or market cycles and are not intended to reflect the actual outcomes of any client of Proffitt & Goodson, Inc. Past performance does not guarantee future results.