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Financial Plans for Entities and Not Just for Individuals

When we hear about financial planning, it is usually in the context of how important it is for individuals to have a financial plan and how this service may be provided by an investment adviser, a broker, insurance agent or one of a myriad of other titles and designations. It is true that most of us will benefit from some financial advice, particularly when it is objective and is provided by someone with real experience in financial advising. However, it is equally true that many of the other entities with which we may be concerned would benefit from financial planning as well.
Whether it is an estate or one of a variety of family trusts or even a small business, a financial plan can help with one’s own individual plan as well as with the administration of and expectations for the entity. For example, an individual with a charitable remainder unitrust would benefit from a detailed plan for the trust alone which would show the amount and nature of the cash flow the individual could expect to receive during the trust term. That information would be very useful in the individual’s own plan and tax planning and typically would provide a much better estimate than would otherwise be available.
An additional benefit of having a separate plan for an entity is the value that plan adds for the trustee or other fiduciary responsible for the administration of the entity. The plan can illustrate how different approaches to investment selection and allocation will impact not only current income but also future value which would pass to the ultimate or remainder beneficiaries when the interest of the current income beneficiary terminates. The entity plan helps the trustee to make decisions on the timing and amount of distributions as well as their source – qualified dividends, capital gains, interest – and also impacts tax planning for both entity and beneficiaries.
As you can see, financial plans are not just for individuals or couples, but are important tools for both trustees and beneficiaries  Best results come from a thorough financial plan and choices based on the information derived from that plan and its various scenarios.


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