WHEN YOU DON’T REALIZE YOU’RE PAYING UNDERLYING FUND FEES
What we accomplished: Helped the client understand the fee structure they were paying in their 401k.
How we did it: We recently reviewed the allocation of the assets held in our client’s employer sponsored 401k plan. Upon review, we discovered that the client was paying an annual fee to the 401k provider for investment management and the investment choices implemented were relatively higher cost options within the plan. The client wasn’t even aware he was paying the 401k provider for investment management!
WHEN YOU OWN A CONCENTRATED POSITION OF A SECURITY WITH LOW DEMAND
What we accomplished: Helped the client sell a concentrated position without causing significant change in the trading price of the stock.
How we did it: The client came to us with a large position in a small growth company. After further research on this individual stock, Tobias Financial Advisors realized it didn’t have significant daily trading volume. If the client wanted to dispose of his entire position, it would have caused a significant change in the trading price due to his concentrated position and the limited amount of buyers in the market. Over a period of a few weeks, we slowly sold the position in order to have a small effect on the price received.
WHEN YOUR RENTAL REAL ESTATE PROPERTY IS SOLD AT A LOSS
What we accomplished: Helped the client convert a portion of their Traditional IRA to a Roth IRA at a very low tax rate.
How we did it: While working on tax planning to determine our client’s upcoming cash needs for taxes, we discovered that a rental real estate property had been sold for a significant loss, which presented a unique opportunity to convert a portion of their Traditional IRA to a Roth IRA at a very low tax rate. Our Roth conversion strategy was implemented with multiple Roth IRA accounts so that we could monitor the success of each asset class and ensure that the client only keeps the “winners” even though the conversion was at a very low tax rate.
WHEN YOU’RE CHARITABLY INCLINED AND HAVE SIGNIFICANT APPRECIATION IN YOUR PORTFOLIO
What we accomplished: Helped the client and their CPA plan for upcoming charitable donations using the client’s long-term appreciated securities in lieu of cash.
How we did it: During a meeting with a new wealth management client we learned that he lacked the oversight from a comprehensive advisory team. This was made clear to Tobias Financial Advisors when we reviewed the tax returns and noticed that over the three most recent prior tax years, the client paid tax on about $100K of capital gains while also having made cash charitable contributions of an amount equal to the capital gains. What the client (and his CPA) didn’t realize was that there was an opportunity to transfer the securities that created those capital gains to the organizations to which he had made cash donations. Transferring the appreciated securities “in-kind” to the charity instead of selling would have saved the client the tax on the capital gains while still getting the benefit of the charitable deduction.
WHEN YOU HAVE A SPECIAL NEEDS CHILD AND YOUR ESTATE DOCUMENTS ARE NOT APPROPRIATE
What we accomplished: Helped the client protect the special needs child’s share of the IRA inheritance and increased flexibility in their estate plan.
How we did it: During an estate planning review, our client came to us with draft documents that had yet to be signed. We knew of two key things from our initial meeting with the client: one being that their son was special needs, and the other being that the daughter was pretty well off. We pointed out the ability to protect the son’s share of the IRA inheritance via a retirement plan trust. Tobias Financial Advisors also introduced the idea of building in the flexibility for the daughter to “bypass” her share of the inheritance and leave it to her children, if she so desired.
WHEN YOU’RE WORRIED YOU HAVEN’T SAVED ENOUGH FOR YOUR CHILD’S COLLEGE EDUCATION
What we accomplished: Helped the client assess their college saving needs and determined how close they were to providing for their children’s education.
How we did it: During our initial meeting with a new client, the client appeared to be very anxious about how “prepared” he was to fund his three children’s college educations, one of whom was just a few months shy from attending his first semester of college. To put the client’s mind at ease, we helped the client consolidate accounts from a number of custodians. Not only did this increase the ease of tracking and managing their accounts, but it also helped to visualize the great job they had done of saving for college. After reviewing their son’s top three school choices, Tobias Financial Advisors created an analysis to show the estimated cost to attend each college over those four years and the sources of funding that cost.