Financial Planning

A financial plan is a comprehensive and ongoing process that requires careful coordination of every financial aspect of your life. As your certified public accountant (CPA), we take the lead in this coordinated effort by bringing together a team of trusted professionals including Certified Financial Planners™ and insurance professionals. When you rely on our firm’s team approach, your financial plan becomes a dynamic resource for making vital decisions about the life events that impact your finances.

“He who fails to plan is planning to fail.” -Winston Churchill

The Time for a Financial Plan

Unlike tax preparation or estate administration, financial planning has no due date and is therefore often delayed or avoided by people busy with day-to-day life. Waiting for a life event like retirement or the loss of a loved one to work on a financial plan is often too late to be effective. We believe that planning should begin as soon as your career begins, and if you are in a stage well beyond that point, then your planning should begin today. If you have parts of a plan in place, such as investments and retirement accounts being managed by an advisor or insurance policies for life, health, and disability, then it is time to bring them together with our tax planning to give you a comprehensive view of your finances.

Benefits of Working with a CPA on a Financial Plan

Gaining the ability to make informed decisions is the primary objective of a comprehensive, coordinated financial plan. When we design your plan, we consider your current circumstances, your future goals, and the important questions that you will need to answer. As you gather some research and prepare to contact a CPA at our firm, start thinking about your own answers to the following questions about financial planning:

  • How much should I be saving in an emergency fund?
  • Do my current earnings and spending habits align with my long-term goals?
  • How much should I be saving for a home, children, college, and similar expenses?
  • Is my family protected in case of unforeseen circumstances such as illness or an unexpected death?
  • What would I like to do when I’m retired, and how much money will I need to make that happen?
  • I’m self-employed; how do I create a business succession plan?
  • Are my investments being managed to meet my personal goals?
  • Am I maximizing investment income and minimizing taxes?
  • When should I begin taking Social Security?

From the beginning of this process through each annual review, we can use your financial plan as a roadmap to achieving your goals. We can work with you to actively manage your affairs and properly file tax documents so that you are prepared for any situation. Contact a New York estate planning CPA at our firm to discuss your goals today.

Estate Planning

Estate planning is the implementation of financially efficient strategies to facilitate your wealth transfer goals. This includes estate tax minimization strategies, gifting strategies, charitable giving strategies, business succession planning, special needs planning, and risk management. Managing such financial matters on your own can be daunting, so it is beneficial to retain the help of a New York estate planning certified public accountant (CPA) to ensure that your estate plan is complete and effective.

At Carter CPA LLC, we work with highly skilled estate attorneys to draft basic legal documents such as wills, power of attorney documents, and healthcare proxies or living wills, as well more advanced estate planning documents such as revocable living trusts, irrevocable trusts, legacy trusts, credit shelter trusts, qualified terminable interest property (QTIP), and qualified personal residence trusts (QPRT).

We bring in Certified Financial Planners to create a customized financial plan for each family that is designed to ensure that investments are allocated appropriately based on your goals and risk tolerance. In addition, we work to determine if life insurance and long-term care insurance can be used to maximize the transfer of wealth to the next generation and manage risk; to project cash flow requirements based on different life expectancy scenarios; and to review beneficiary designations and asset titling.

Our starting point for this service begins with calculating the value of your gross estate. Your gross estate includes everything you own: real estate, retirement accounts, business interests, life insurance proceeds, and personal property. While many clients are aware of the federal estate tax and the current federal exemption of $5,250,000, many still fail to realize that most states also impose an estate tax. In many cases, state estate taxes are greater than those at the federal level.

The Impact of State Estate Tax

A married couple living in New York with a Gross Estate of $3M would not incur any Federal Estate taxes since the value of their estate falls below the Federal exemption of $5.25M. In New York, however, the state exemption is only $1M causing this couple to have more than $2M subject to State Estate Taxes and a potential tax bill in excess of $75,000.

That same couple, if living in New Jersey, would be subject to State Estate Taxes in excess of $120,000 as New Jersey’s exemption is only $675,000.

If this couple has a large portion of their assets in real estate, a business or property their heirs will be forced to sell the assets to pay the taxes or to use up the only liquid assets to maintain those assets.

Estate Administration

The required tax filings relating to estate and gift taxes include:

  • Preparation of Federal and State Estate Tax Returns (Form 706)
  • Preparation of Federal Gift Tax Returns (Form 709)
  • Preparation of Trust Returns (Form 1041)
  • Preparation of Estate Income Tax Return (Form 1041)

If your estate plan includes gifting and trusts, then we can prepare those annual filings for you routinely. During the difficult time after the loss of a loved one, we guide you step by step from re-titling assets to obtaining values for reporting. We complete the returns and assist you with the distribution of assets after all taxes are paid. We conclude this process by making our tax services and financial planning available for the heirs to assist them in managing the assets inherited, as well as discussing their own estate plans. Contact our firm to learn more about how a New York estate planning CPA can help you!

Divorce Services

A divorce is an emotional, legal, and financial matter. You may seek the support of a therapist, friends and family, and an attorney to assist with the emotional and legal aspects, but going through this process without the guidance of financial advisors trained in divorce can be a costly mistake. Our certified public accountant (CPA) can, for example, assist with reviewing your finances, create an estate plan, and explain relevant tax laws.

We can assist you with accumulating the necessary financial information as well as support your attorney in the financial decisions related to your divorce settlement. We also can work with you to determine how your new circumstances will impact your future.

Preparing Financial Data

One of the primary steps in laying the groundwork for your divorce is the preparation of a financial affidavit. Information pertaining to your assets, liabilities, income and expenses are compiled in a document, which is called a statement of net worth in New York or a case information statement in New Jersey. The accuracy of this document is critical when negotiating an equitable distribution of assets as well as spousal and child support.

We prepare these documents and analyze the differences in the information submitted by each spouse. Our review process may reveal missing or hidden assets or even the inappropriate use of marital funds. Our goal is to give you the peace of mind that all decisions made in the divorce are based on fair and accurate information.

Gaining an Equitable Settlement

An equitable settlement cannot be obtained without careful review of all financial aspects of the divorce. Assets that seem to be equal based on fair market value are not necessarily equitable when one considers the tax consequences of disposition, the potential for appreciation or depreciation, or even the age of the spouses. All aspects of a financial plan are needed for the determination of value and the division of assets. In determining support, the tax implications of dependency exemptions and tax credits can be used to maximize family finances. Overlooking these matters by using standard protocols such as alternating every other year will not work for most families. Our analysis of each aspect of the financial agreements will benefit all parties.

Planning for the New Financial Picture

Your post-divorce financial plan is the beginning of your future. From determining your new budget based on the parameters of your income and expenses as well as projecting your investments for future goals and retirement, our focus on the present and future will guide you through your transition period and keep you moving forward. Contact a CPA from our firm today to begin creating a clear financial plan that will benefit you.