Estate Planning for Executives

By Bryan Cooper – Vice President & Wealth Management Advisor

Executives face many unique challenges when managing their personal financial and estate plan. The demand of their occupation often renders them unable to dedicate the necessary time and focus to achieve, and sometimes even establish and define, their personal financial goals. It is imperative that successful executives review their financial situation to ensure the integration of benefits and compensation with strategies for estate planning, investment planning, income tax preparation and planning, risk management, long-term cash flow, and retirement planning.

Executives are often concerned with:

• Liquidity issues
• Concentrated stock positions
• Transfer of vested stock options
• Giving to charity in a tax-efficient manner
• Executing and funding Buy-Sell agreements
• Whom to name as beneficiary of Qualified Plan Assets
• Lifetime gifts
• Estate tax
• Compensation planning and income in respect of a decedent
• When to retire (forecasting of complex benefits)
• Investment Planning (considering income tax and estate tax issues and lastly)
• How much liability insurance is truly enough

Too many times, executives receive advice targeted to handle one piece of their very complex financial picture. It is important to find a team of advisors that act in the executive’s best interest, always. It is also critically important to have a team of advisors that are communicating.

A CPA, an estate planning attorney, and an investment professional should be working together and discussing the executive’s:

• Income tax bracket
• Impact of Medicare surtax
• Estate tax rates
• Investment options and many other considerations

Each professional has a different area of expertise and a different relationship with the executive. By sharing information and working together, these professionals enhance the overall planning experience for the busy executive. Without understanding the complete financial picture, goals, and objectives, it is impossible to make recommendations that result in the best solution. A business executive needs an integrated, comprehensive plan that addresses estate planning, asset protection planning, income tax planning, and retirement planning. This plan should be revisited at least annually and when there are major changes in any area.

The advisor team must also help the executive define personal philosophies and objectives. In today’s busy world, we often don’t place enough importance on the legacy that the executive wants to leave. Generally, they want the wealth that’s been accumulated to impact their family and friends. Many people define themselves by their profession and career accomplishments. A large part of self-worth, our long-term relationships, and our daily life structure comes from our careers.

When it comes to retirement, some people embrace this new beginning, spending more time with family and friends pursuing hobbies or volunteering. Others, even the most financially secure, often worry about no longer having a regular paycheck, and they struggle with transitioning from the accumulation phase of their financial life to the distribution phase. Working with the right advisors in formulating a comprehensive plan provides for a smoother transition into retirement, and helps relieve some of the stresses associated with making that transition.