Comprehensive financial planning strategies for estate management and wealth protection

¶ … financial planning is something that they do not take seriously until later on life. Evidence of this can be seen with a survey conducted by Lawyers.com. They found that only 35% of Americans have a will and 21% have a trust established. This is problematic, as the lack of planning can hurt the trustee's ability to reduce taxes and other liabilities for beneficiaries. (Sarji, 2011)

To avoid these challenges, requires establishing a financial plan which is taking into account a number of scenarios. This will be accomplished by looking at: the current / future income needs, debt acquisition / retirement preparation, the purchasing / disposal of personal assets, emergency funds and investment / retirement / estate planning. Together, these different elements will show how to create a financial strategy that is prepared for a host of events. (Sarji, 2011)

Current and future needs

Any kind of planning should take into account current and future needs. This is because there will be inevitable changes to individual lifestyle choices over the course of many years. As this is taking place, there will be greater demands for access to specific services and products. This will provide the individual with the resources they need to feel happy and comfortable. The way that this should be achieved is to offer continuous cost of living increases. This can start at predetermined points in the future and it could be used to help enhance the needs of the individual. (Harrington, 2007)

Debt acquisition and retirement

The acquisition of debt is when there will be an emphasis on reducing all long-term liabilities and controlling expenses. This will be achieved by establishing a strategy where any loans, bills and other liabilities is directly paid. Over the course time, this decreases the outstanding debt and it enhances the free cash flow that is being generated. (Harrington, 2007)

At the same time, the individual needs to build their retirement account over the long-term. This will be achieved through establishing different areas that will accumulate funds to include: 401ks, IRAs and Keoghs. These areas will provide a way of reducing taxes and protecting against probate. This will offer contingency allowances by continuously building this aspect of the estate. When this happens, there will be greater amounts of stability and growth. (Harrington, 2007)

Emergency cash funds

To account for emergencies a special fund will be established with 10% of the family's annual income. This will be placed into financial instruments which are liquid and safe (i.e. money market accounts). In the future, this will make it easier to adjust with the changing lifestyle choices and issues impacting the various individual family members. (Harrington, 2007)

Investment plan

The investment plan is to focus on a number of asset classes which can provide growth, income and stability. This will be accomplished by purchasing: stocks, bonds, fixed annuities, life insurance, certificates of deposit and precious metal coins. These areas will give the portfolio added diversification. This will help to provide consistent growth over the long-term. Moreover, this is taking into account life expectancy planning by establishing time frames for retirement and income sources. (Harrington, 2007)

Retirement plan

The retirement plan will work in conjunction with the investment strategy. This will have the individual becoming more conservative with select assets when they reach a certain age. It is at this point when they can receive more income from alternative sources such as: annuities, bonds and certificates of deposit. This will be based off of the average life expectancy rate and it will focus on improving individual self-reliance by providing additional assistance at select times. (Harrington, 2007)

Estate Planning

The estate plan is covering the final disposal of assets. This will occur with the family trust selling and retaining access to these funds. When this happens, the tax and probate liabilities are reduced through using this as a shelter. This makes it easier for future generations to have access to these resources without having to deal with the legal and regulatory challenges in the process. (Harrington, 2007)