Taxes And Trustees- Two Thoughts For Our Clients
Written on October 31, 2023

Taxes And Trustees- Two Thoughts For Our Clients

What is Tax Loss Harvesting?

Throughout 2022 you may have been hearing about tax loss harvesting. The tough market conditions we experienced last year have brought this strategy into focus again. Essentially if you have losses on investments in taxable accounts (not IRAs), you can sell those assets and realize a loss. This loss can be counted against current or future gains, and your taxes can be reduced. For example, if you had $100,000 invested and realized a loss of $20,000 in 2022, you could count those losses against current or future realized gains and avoid $4,760 in taxes if you were in the top tax bracket.

As always, this is a strategy that should be applied based on your individual situation. But here at OFM we have been harvesting losses as we realign portfolios in our ever-changing financial landscape.

Why do I need Successor Trustees?

As much as we all don’t like to think about it, a well thought out estate plan is essential. A common tool for such a plan is a Living Trust which many OFM clients already have. These trusts allow you to be the trustee during your lifetime and use the funds as you normally would. Then after you pass a successor trustee of your choosing takes over. Trusts direct the trustee on how to handle your assets after your passing. One of the most important decisions when making a trust is who to appoint as successor trustee. A responsible and willing relative or friend is a good option. Also consider an additional successor or two if the first successor can’t serve. Discussing this with those relatives or friends can be a great way to make sure they’re willing and able to take on the task when you’re not around to direct them. Those conversations can be awkward at first, but a well-established estate plan is a key part of financial wellbeing.

The Hourglass is an OFM Wealth Publication.  This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice.

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