Wealth Management: Holiday Planning

Time spent together during the holidays a great time to discuss finances with family

By Beth Langefels

As the holiday season approaches most people get some breathing room in their normal busy lives.

According to Robert Lampe, vice president of investments with Raymond James & Associates Inc., it’s the perfect time for people to work with a financial adviser on tax-advantaged investments, tax-deferred growth opportunities and family financial planning.

“Every individual is different,” Lampe says. “We try to tailor financial planning to meet goals and objectives of the individual client.”

Lampe recommends everyone perform a portfolio review and consider retirement plan options, including IRS contribution limits. College savings plans should also be discussed.

“There has been a shift with parents from 20 years ago,” Lampe says. “Previously they wanted to pay for everything. But now they say they want their kids to have ‘skin in the game’ as this helps foster a better work ethic.”

Most advisers recommend parents keep their retirement goals on target, whether paying for college or not. Lampe agrees, saying parents could cause more damage to their kids if they haven’t planned for retirement.

“If parents plan their retirement well they won’t have to worry about burdening their kids,” Lampe says. “Some want to leave a financial legacy for their kids, but most agree it’s important to first get their own house in order.”

For those desirous of helping pay for college, Lampe says the sooner they start saving the better. Ohio’s 529 college advantage plan has changed significantly since it was introduced in 1996 and the upgrades give parents more flexibility.

“Parents can put money into the 529 plan and continue to control it even after the child becomes an adult,” Lampe says. “And if your child doesn’t go to college you can switch it to another child or use it for something else entirely.”

Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. Before investing individuals should consider whether the investor’s or the designated beneficiary’s home state offers any of these.

Estate planning involves far more than just creating a will. Lampe says there are eight documents people may need to go over with their adviser, including durable and medical powers of attorney, living wills and medical directives, revocable or living trusts, beneficiary forms, written instructions for family members and a list of contacts.

“It’s astounding how many people have not gone through estate planning,” Lampe says. “I recommend all my clients work with an attorney to get basic legal documents in order and assets titled to prevent potential headaches later.”

Death, disability or illness can happen suddenly, making these documents vital to helping family members. Lampe says it not only prevents unexpected expenses but also helps reduce stress. He recommends families take advantage of time spent together during the holidays to have these planning discussions.

“I encourage clients to tell their children that though nothing may happen for another 20 years they want them to know they love them and that they have things in place for the time when something does happen,” Lampe says.

Between now and the end of the year people should work with their adviser to determine ways to make their investments more efficient.

“I don’t want to have my clients surprised by taxes that they weren’t expecting,” Lampe says. “It’s not how much you make, but ultimately how much you keep.”