The following case studies are representative of clients Lattice Wealth Management works with and not actual circumstances.
Tax Sensitivity
Tax impact is often a vital key to investment decisions. This is dynamic and changes regularly. We try very hard to stay on top of the tax impact.
I would estimate that well over half of my daily conversations discuss tax factors related to investments. While I am not a tax professional, I try to keep up with the dynamics of taxation, as they frequently change. After the last tax package was passed, I spent two hours reviewing a CPA Continuing Education program on the bill and continue to review courses discussing the bill.
Flexible Investment Process
We work to blend your investment beliefs with our process, both explaining how we operate as well as striving to make sure your interests are met.
Steve came to me with 10 accounts to put under one person. Uniquely, the first thing he asked me was my net worth, because he was given the really solid advice to never do business with someone who is worth less than you. He had his own opinion of how accounts should be managed, which is about 80% of how I usually manage accounts. He also needed a security-based loan to finance a house purchase and remodel. We were able to accommodate this.
Steve and I have a range of topics to discuss. We aspire to talk at a scheduled time every week. While we don’t always get to talk, it is something on both of our schedules, and he uses me as a sounding board on a wide range of topics.
Sticking To Required Asset Allocations
We review and understand your rules and seek to achieve them at the minimum cost.
Valley Forge has an 8-figure portfolio for a large non-profit. There is a set of requirements we must always comply with. The account is held by a firm where I cannot act on my own; I must tell their representative what to do with one of the non-profit’s executives on the phone. We both manage the asset allocation and the price of the securities we buy.
I have worked with two sets of executives at the non-profit and have handled the investments from when it was a small 7-figure account to now, which is a large 8-figure portfolio. I understand what the funds are earmarked for and am aware of the timeline in which they will be spent. I meet with the executives at least every three months. We charge a flat fee quarterly, unrelated to the size of the fund.
Fixed Fee Relationships
There are occasions when the best thing we can do is NOT manage clients’ money. Instead, we maintain regular consultations on real and business assets. We provide another input when you need a devil‘s advocate.
Michael was referred to me by another client when it was discovered that Michael wasn’t getting much in the way of tax suggestions from CPAs. Rhonda was referred to me by another client when she kept talking anxiously to this client—her friend—about how she was handling her money. In both cases, I set up a modest quarterly fixed fee and began my engagement. With Michael, about once a quarter, and with Rhonda, a quick call weekly. Using a flat fee is a reasonable way for clients who do not want help managing their portfolios, but do want advice on other things.
Flat fees solve many problems. First, it can be agreed upon based on an estimate of the amount of time we spend working for you. Second, when we do set a flat fee, we also agree on a goal. After the goal is accomplished, I will raise the issue of the fee level. Third, when compared to the industry standard, asset-based fees are a great deal for most clients.
Introductions To Other Professional Advisors
We maintain active contact with many tax and legal professionals. We regularly make introductions to other professionals when our clients need their skills.
Almost every day, I have conversations with tax professionals and attorneys. When a client needs one of these professionals, I will typically conduct a series of video calls with several tax or legal specialists and the client. Other times, I will simply connect the client with the person who I think best suits their needs.
Charitable Giving
There are multiple ways to give sums of money (or investments) to causes important to you. Several of these carry tax benefits. We maintain an active knowledge of many giving techniques.
Mindy writes a check to her church every week, which comes out of her bank account’s cash reserves. Mindy also has money stranded in an annuity that will generate taxable income if distributed. We instead set up a donor-advised fund and put enough low-basis stock (meaning highly taxable if sold) into a charitable account so she could get a tax deduction. We could then distribute money out of the annuity, meaningfully reducing the tax hit on this transfer.
June has a very large IRA. Her estate beneficiaries are all non-profit organizations. Rather than being taxed every year on Required Minimum Distributions, June chose to make Qualified Charitable Distributions from her IRA, thereby reducing the taxation of the annual RMDs.
Multi-Generational Families
Very often, we are introduced to and maintain active interactions with kids and grandkids. This connection helps when life becomes fragile.
Many of our clients have wealth beyond what they will ever spend. I am a big advocate of having clients gift money or securities to their kids and grandkids. The first reason is to help the next generations while everyone is still alive. The second reason is to see what the kids do and don’t do with that money, so we can adapt how it’s given to help them without overwhelming them.
Suddenly Single
In many cases, handling the investments is a completely new experience, requiring patience and empathy. We work to make sure you understand what you can afford to spend and that your immediate heirs and successor trustees know us and understand what we are doing.
Candace was referred to me by the mortgage broker of her real estate agent. She had never handled her family’s investments, and she was trying to sell a house and buy a condo in San Francisco. She needed three things: assurances that she could afford the new purchase, some structure for her investments, and someone she could call to discuss financial topics, as her husband was gone.
My first action was to see her in person. In person is always better than a phone call or a video chat, although we have also done both of those. I also insisted that her local son be in the conversation, so I could explain how we work to him as well. Throughout the transaction and to this day, Candace feels free to call me to ask financial questions. I visit her in her new City condo once a month.
Business Owners
While our primary work is with individuals and families, often those clients own businesses. We have a working knowledge of how to optimize investments using multiple entities.
Marie has a taxable account, as well as a Trust and Roth IRA accounts. She also owns a Subchapter S company and two LLCs. These provide tax benefits should we ever choose to sell stocks from her trust account at a profit.
Cynthia has personal money as well as a C Corp. The C Corp has meaningful cash. Instead of taxing a taxable distribution from the C Corp, we set up several accounts inside the C Corp to manage stock and bond portfolios.