Tax & Estate Planning at ABC Financial, LLC

 

At ABC Financial, LLC, we recognize that tax and estate planning are cornerstones of a secure financial future, particularly as you approach retirement or plan for your legacy.

 

Led by Susan Morrison, our team partners with clients to navigate the intricate landscape of tax and estate planning, delivering tailored strategies that align with your unique goals.

 

Our process begins with a comprehensive review of your existing tax and estate plans to ensure they accurately reflect your current financial situation, aspirations, and any relevant regulatory changes. From there, we either refine these plans or design new, customized strategies to optimize your financial well-being and protect your wealth for future generations.

 

Our approach is rooted in collaboration and education. We work closely with clients to demystify complex tax rules and estate planning concepts, empowering you to make informed decisions. Whether it’s minimizing tax liabilities in retirement or structuring your estate to maximize wealth transfer, ABC Financial is committed to providing proactive, strategic guidance every step of the way.

 

Navigating Taxes in Retirement

Taxes in retirement can significantly impact your financial security, as various income sources, including Social Security, pensions, investment accounts, and retirement plan withdrawals, are subject to different tax treatments.

 

At ABC Financial, LLC, we specialize in helping clients understand and manage these complexities to preserve their wealth.

 

For example, withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income, which can push you into a higher tax bracket, especially when Required Minimum Distributions (RMDs) begin at age 73. RMDs, calculated based on your account balance and life expectancy, can create unexpected tax burdens if not carefully planned for. Our team employs proactive strategies to mitigate these impacts, such as:

• Roth Conversions: We analyze the potential benefits of converting traditional IRA or 401(k) funds to a Roth IRA, where qualified withdrawals are tax-free. By strategically timing conversions during lower-income years, we can help reduce your long-term tax liability.

• Tax-Efficient Withdrawal Strategies: We develop personalized withdrawal plans that balance distributions from taxable, tax-deferred, and tax-free accounts to help minimize your tax burden while meeting your income needs.

• Charitable Giving: For clients interested in philanthropy, we explore options such as Qualified Charitable Distributions (QCDs), which enable you to donate Required Minimum Distributions (RMDs) directly to charities, thereby reducing taxable income while supporting causes you care about.

• Tax Diversification: We help you diversify your retirement savings across accounts with different tax treatments (e.g., taxable, tax-deferred, and tax-free) to help provide flexibility in managing future tax obligations.

 

Beyond RMDs, we consider other retirement income sources, such as Social Security benefits, which may be partially taxable depending on your combined income, and investment income, which may trigger capital gains taxes or the Net Investment Income Tax (NIIT).

 

Our team collaborates with tax professionals to help ensure your financial plan accounts for these variables, incorporating tax-loss harvesting, municipal bond investments, or other tax-advantaged strategies as appropriate.

 

By taking a holistic view of your retirement income, we create a tax-efficient roadmap that aligns with your lifestyle and long-term goals, helping you keep more of your hard-earned wealth.

 

Mastering Estate Taxes and Wealth Transfer

Estate taxes can significantly erode the value of the wealth you wish to pass on to your heirs, making strategic estate planning essential.

 

The federal estate tax applies to estates exceeding $13.99 million in 2025, with rates ranging from 18% to 40% based on the fair market value of all assets at the time of death, including cash, securities, real estate, business interests, and even certain trusts. For high-net-worth individuals, this tax can reduce the legacy intended for loved ones or charitable causes.

 

At ABC Financial, LLC, we design customized estate plans to minimize tax liabilities and help ensure a seamless transfer of assets. Our process begins with a thorough analysis of your estate, including a detailed inventory of assets, liabilities, and family dynamics. We then collaborate with estate planning attorneys and tax professionals to implement strategies tailored to your objectives. Key strategies include:

• Irrevocable Life Insurance Trusts (ILITs): We leverage life insurance as a powerful tool to offset estate taxes. By establishing an ILIT, the death benefit from a life insurance policy is excluded from your taxable estate, providing liquidity to cover estate taxes without diminishing the value of assets passed to heirs. We guide clients in selecting appropriate policies and structuring ILITs to align with their estate goals.

• Gifting Strategies: We help clients reduce their taxable estate through strategic gifting during their lifetime. This may include annual exclusion gifts (up to $18,000 per recipient in 2025) or larger gifts that utilize your lifetime gift tax exemption. For clients with significant wealth, we explore advanced gifting techniques, such as grantor-retained annuity trusts (GRATs) or family limited partnerships (FLPs), to transfer assets efficiently.

• Trust Planning: Beyond ILITs, we recommend other trust structures, such as revocable living trusts to avoid probate, or irrevocable trusts like qualified personal residence trusts (QPRTs) to transfer real estate at a reduced tax cost. These tools help protect assets, maintain privacy, and ensure your wishes are carried out.

• Charitable Trusts: For clients with philanthropic goals, we design charitable remainder trusts (CRTs) or charitable lead trusts (CLTs) that provide income during your lifetime, reduce estate taxes, and support charitable organizations.

• Business Succession Planning: For business owners, we develop succession plans that minimize estate taxes while ensuring a smooth transition of ownership, whether to family members, key employees, or third parties. This may involve valuation discounts, buy-sell agreements, or other tax-advantaged structures.

 

Our estate planning services extend beyond tax mitigation. We facilitate family discussions to align your plan with your values, ensuring clarity and harmony among beneficiaries. We also review and update beneficiary designations, powers of attorney, and healthcare directives to create a comprehensive plan that addresses both financial and personal considerations.

 

Why Choose ABC Financial, LLC?

Under Susan Morrison’s leadership, ABC Financial, LLC combines deep expertise with a client-centric approach to deliver exceptional tax and estate planning services. Our process is designed to provide clarity, confidence, and control:

• Personalized Guidance: We take the time to understand your financial situation, family dynamics, and long-term objectives, crafting plans that reflect your unique needs.

• Collaborative Expertise: We work alongside your existing advisors—CPAs, attorneys, and other professionals—to ensure seamless integration of tax, estate, and financial strategies.

• Proactive Planning: Tax laws and estate regulations are subject to frequent changes. We stay ahead of changes, such as adjustments to estate tax exemptions or RMD rules, to keep your plan optimized.

• Education and Empowerment: We break down complex concepts into clear, actionable insights, empowering you to make informed decisions about your financial future.

 

By addressing the intricacies of retirement taxes and estate planning, we help you preserve your wealth, minimize tax burdens, and create a legacy for your loved ones. Whether you’re planning for a comfortable retirement or ensuring your estate is transferred efficiently, ABC Financial, LLC is your partner in achieving financial peace of mind.