A whirlwind week: taxes, death and marriage

Matthew McKee, CFA, CFP? and I had planned to write about taxes with April 18th still fresh on our minds.?

Given the events of my past week, there are two other wealth-related topics I feel compelled to cover: death and marriage.?

So we’ll take those three in turn.?

Taxes

Tax filing is now behind (most of) us, but it’s never too early to start planning for next year. By the time you are filing for 2023, it may be too late to take advantage of any number of opportunities.?

Here’s what we worked on with clients this tax season:

• Directing excess savings into tax-advantaged accounts like IRAs, 401ks and 529s
• Creating Donor Advised Funds, funded with appreciated stock and written against income
• Establishing retirement programs for business owners to shelter profits from income taxes?
• Taking inventory of realized capital losses to write against income and capital gains
• Finding a CPA to work with

Death and marriage

On Saturday, April 22 I had two great honors. First, I officiated my sister‘s wedding ceremony on a sandy peninsula in St. Thomas.?

Later that night, my father would pass along word from New Jersey that his mother (my grandmother), Florence Colarusso, had died an hour before the ceremony. Then he bestowed the second honor by asking me to draft the obituary.?

I had a few more days in St. Thomas to reflect on the emotional weekend and can’t help but tie them to themes of wealth that are central to our conversations with Target Rock clients.?

Marriage as a wealth-building institution

I’ll borrow directly from my remarks as officiant of my sister’s wedding:

In our society, marriage has two purposes. First, it’s the best way we know of declaring romantic love from the mountaintop for all to see and hear. The bonds cemented in this way are stronger and last longer.

But it’s not just a ceremony to join two young love birds in matrimonial bliss.?Marriage is the opportunity for a couple – and the community around them – to make that ever-important shift in perspective from near-sightedness to far-sightedness. When we shift our gaze further into the future, the possibilities increase exponentially.

A few observations about marriage from personal experience and in our work with clients:

• Marrying my wife was the best investment I ever made.
• Marriage, like any legal merger, is subject to the risk of a wide range of potential outcomes. Assessing this risk versus its potential rewards, and minimizing the former while maximizing the latter is legitimately challenging!
• Married couples who successfully shift their perspective longer-term have tremendous potential to create wealth. In fact, married couples are four times as wealthy as unmarried couples who live together.

Romantic, right?

Best wishes, Robin and Liz!

That other certain thing (not taxes)

Oh, Mommom. What a way to go out. Peacefully and with dignity, at 95, leaving behind a matriarchal legacy of epic proportions.

But before getting into it, here are the?wealth-and-death questions to ask?yourself or discuss with your spouse:

• Do you have a will? Has it been updated recently?
• Are your beneficiaries up to date on all your investment accounts?
• Certainly, if you have young kids, you have adequate and appropriate life insurance, right?
• Do you know if you’ll outlive your money, or will your money outlive you?
• Should you consider long-term care insurance, for yourself or your parents?
• Do you have a potential estate tax liability to start minimizing now?

And finally: what kind of legacy do you want to leave?

From the obituary:

Until the very end she remained actively engaged in the lives of her four surviving children, 19 grandchildren, and 25 great grandchildren, who will forever remember Sunday gatherings at her home in New Vernon, where she lived for the last 48 years.?

My grandmother, whom we all called Mommon, lived in a sumptuous in-law suite with my aunt and uncle. These Sunday gatherings have always been the highest manifestation of wealth in my eyes. Attendance often swells beyond 50 – a combination of family, friends, and anyone else pulled into the orbit of this remarkable household. Food is always plentiful.?

My Aunt Dale hosts the show as her raison d’être. My Uncle Joe – a successful financial advisor and a lifelong role model of mine –?rests peacefully when and where he can, always approachable for a chat about golf or business, until the hostess summons him to a task.?

In this scene, you would have found Mommom rooted in a suitable throne, which changed by the season. During summer parties she’d perch on the verandaed deck overlooking the pool patio. In cooler months, she’d be in the den, music room, or in her spot at the kitchen table greeting arrivals.?Wherever she sat, she was always surrounded by a bevy of descendants and loved ones.?

I had the privilege of one more visit with her the Tuesday before her death. A business lunch brought me within 15 minutes of her doorstep, so I cleared the afternoon.?

On this “quiet” Tuesday, Mommom’s home was bustling with three other generations of family. She sat upright, hip to hip with me at the full dinner table and ate half a chicken cutlet.?From this visit, it was never clearer to me that the main source of my grandmother’s wealth was her family.?Many loving hands took care of her in these final weeks.

We also had some alone time in her room, where I helped her get comfortable. Her gleaming white carpet, lavender couch, and expansive vanity filled with a menagerie of collectibles, family pictures and religious iconography gives her room the aura of an inner sanctum. We practiced breathing deeply into the belly and letting go of what we couldn’t control. She told a breathy short story about my dad when he was around my kids’ age.?

Family as wealth?

It takes serious investment to forge the bonds of marriage, raise offspring, and keep the clan in orbit for decades like my grandmother did. The social ties went well beyond her ample roster of blood descendants; many people regarded Florence as family by choice.?

For her, and I’m sure for many of us, those investments are a joy to make – ones we know we won’t regret in our final days.