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VOLUME 26 | EDITION 03

WO48_Cover_DS_THIS ONE_mk.indd 1 8/9/17 6:19 PM LEADING WEALTH ADVISOR | AUSTIN, TX

What’s the best thing to do when you receive a large inheritance?

BY AMY KOTHMANN

Left to right: Bob Tabor, Amy Kothmann, Brooks Slaughter, Darby Armont

RICHARD . SLAUGHTER ASSOCIATES INC. 13809 Research Boulevard, Suite 905, Austin, TX 78750 512.918.0000

EATURED ADVISOR MINIMUM ASSET REUIREMENT ASSOCIATION MEMBERSHIS A , CFP®, Financial Advisor $500,000 (investment services) Financial Planning Association, Society of Financial Services Professionals, ASSETS UNDER MANAGEMENT COMENSATION METHOD The National Association of Personal $400 million (as of 5/15) Asset-based and hourly fees Financial Advisors, CFA Society of Austin, CFA Institute LARGEST CLIENT NET WORTH ROESSIONAL SERVICES ROVIDED Confidential Planning, investment advisory and money EMAIL management services; 3(38) fiduciary advisor [email protected] MINIMUM EE OR INITIAL MEETING None required RIMAR CUSTODIANS OR WEBSITE INVESTOR ASSETS www.slaughterinvest.com Charles Schwab & Co. and TD Ameritrade

ILLUSTRATION BY KEVIN SPROULS

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2. SEEK PROFESSIONAL ADVICE. essential to ensure you are maximizing both A large inheritance changes your overall your current and long-term trajectory. This is wealth picture, affecting your household particularly true when the bulk of an inheri- budget, investment tactics, tax implications tance is in retirement accounts from a non- and risk-management needs. Find an advi- spouse. In this case, you will be required sor who has the credentials and expertise to take minimum withdrawals from the ac- in serving these needs, to help map the counts that are taxable as ordinary income. appropriate strategies for your new wealth This could cause unintended tax conse- level. This should include coordination quences, especially if you are still working across your team of professionals: your and earning wages; those consequences, CPA, attorney, insurance specialist and, of however, can be mitigated by using other course, your wealth-management advisor. income-deferral strategies. rillions of dollars are now changing hands as older parents transfer theirT significant wealth to baby boomer children. Ideally, that older The decisions you make following an inheritance generation’s estate planning has protected assets and ensured a will directly impact how that wealth is preserved smooth handover. for you and future generations. Now, however, as a beneficiary, it is your responsibility to ensure this familial wealth is maintained. The decisions you make following an inheritance will di- 3. PROPERLY TITLE ASSETS. Conversely, beneficiaries already in retire- rectly impact how that wealth is pre- Be wary of consolidating inherited assets ment may benefit from realizing more than served for you and future generations. into existing accounts merely for the sake of the minimum of the inherited monies now, Here are five issues to consider to ensure simplicity. Draining a trust or commingling either through withdrawals or Roth conver- the desired outcome: inherited funds into jointly titled accounts sions. This could smooth out their tax bills can cause the funds to lose their separate down the road when their own minimum dis- 1. DON’T MAKE IMMEDIATE CHANGES. property character. This would give a spouse tributions begin. All in all, carefully planned Fight the urge to make immediate (and his or her beneficiaries) potential claim timing of how and when your income is real- large purchases with the funds. Rash to a portion of those assets in the event of ized can lead to significant tax savings; so decisions can be costly and difficult death or divorce, negating the protection any plan you already have needs to be re- to remedy. mechanisms your predecessors worked vised to include your inherited funds. Also realize that receiving an inheri- hard to create. tance can be an emotional time, likely 5. PLAN YOUR OWN LEGACY. linked to the loss of a close loved one. 4. CONSIDER TAXES. Reevaluation of your own legacy is crucial. Give yourself time to process the change Taxation concerns don’t cease once the es- This includes such actions as updating es- and create a strategy before making any tate has been settled. Revisiting your per- tate-planning documents to incorporate the big spending decisions. sonal tax outlook after an inheritance is newly inherited assets. You also should re- assess your wealth-transfer goals and strat- ABOUT US egies to ensure the most appropriate tools are utilized for your new wealth level. Mech- ICHARD P. SLAUGHTER ASSOCIATES IS A LEADING WEALTH-MANAGEMENT FIRM, anisms that were appropriate prior to the SPECIALIZING IN DELIVERING TAILORED STRATEGIES AS A FIDUCIARY AND inheritance might no longer be your best ADVOCATE FOR HIGH NET WORTH INDIVIDUALS, FAMILIES AND BUSINESSES. option, depending on your goals and out- R look. This is particularly important when RICHARD P. SLAUGHTER ASSOCIATES INC. 13809 Research Boulevard, Suite 905, Austin, TX 78750 512.918.0000 Slaughter Associates constructs wealth-management strategies around a financial plan, providing active, diversified and conservative asset management through internal an inheritance puts you near the lifetime estate-tax exclusion, as tax-efficient strate- experts. These experts establish a collaborative relationship with clients and all their gies such as lifetime gifting can be a power- financial service professionals, helping clients navigate the financial complexities that ful way to transfer wealth tax-free. high net worth individuals and families face. Founded in 1991 in Austin, Texas, by Richard Once your plans are established, com- P. Slaughter, Slaughter Associates is one of the original fee-based firms in the nation. municating them to heirs is critical, to Through its subsidiary, RPS Retirement Plan Advisors, Slaughter Associates works with ensure your efforts are not in vain. Your corporate clients by providing 3(38) fiduciary services, which help mitigate risk for plan wealth manager can help educate future sponsors and secure retirement readiness for employees. With offices in both Austin and heirs on the skills necessary to manage their future wealth to ensure the family the Dallas-Fort Worth Metroplex, Slaughter Associates has been recognized by the National wealth is preserved across generations. l Association of Board Certified Advisory Practices as a Premier Advisor and has been awarded Exemplary status for expertise in personal risk management. l

WORTH.COM AUGUST-OCTOBER 2017 179

Richard_Slaughter_WOR48.indd 179 8/9/17 11:01 AM Amy Kothmann, CFP® Financial Advisor

Richard P. Slaughter Associates Inc. 13809 Research Boulevard, Suite 905 Austin, TX 78750 Tel. 512.918.0000

[email protected] www.slaughterinvest.com

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Richard P. Slaughter Associates Inc. is featured in Worth® 2017 Leading Wealth Advisors™, a special section in every edition of Worth® magazine. All persons and firms appearing in this section have completed questionnaires, have been vetted by an advisory group following submission by Worth®, and thereafter paid the standard fees to Worth® to be featured in this section. The information contained herein is for informational purposes, and although the list of advisors presented in this section is drawn from sources believed to be reliable and independently reviewed, the accuracy or completeness of this information is not guaranteed. No person or firm listed in this section should be construed as an endorsement by Worth®, and Worth® will not be responsible for the performance, acts or omissions of any such advisor. It should not be assumed that the past performance of any advisors featured in this special section will equal or be an indicator of future performance. Worth®, a publication of the Worth Group LLC, is a financial publisher and does not recommend or endorse investment, legal or tax advisors, investment strategies or particular investments. Those seeking specific investment advice should consider a qualified and licensed investment professional. Worth® is a registered trademark of the Worth Group LLC.