February Captain’s Log

Compass log book rope

Mitigating Federal And State Estate Taxes Through Proper Planning And Communication

An initiative at Anchor Wealth in 2024 is to have proactive conversations with our clients who may be affected by estate taxes upon their passing. Often, clients are unaware that certain states impose estate or inheritance taxes in addition to federal estate taxes.

Unfortunately, Illinois is one of those states. Under current law, the federal estate tax unified credit is set to sunset to a much lower amount on 1/1/2026.

If your estate will be subject to either state or federal estate taxes, this means there will be money that will not pass on to your beneficiaries, instead remaining with our state and federal governments for their determined use. How often have you heard stories about businesses or family farms being sold due to lack of planning?

Illinois imposes an estate tax on estates valued at more than $4 million. A good rule of thumb is that the tax levied on the value of the estate exceeding the $4 million threshold is about 20%. The State of Illinois has maintained the $4 million estate tax limit since 1996, without adjusting it for inflation.

Additionally, the federal estate tax exemption for 2024 is $13,610,000 and will be adjusted for inflation in 2025. On 1/1/2026, the federal estate tax credit reverts back to $5 million, adjusted for inflation. Estates exceeding this threshold could face a federal estate tax rate of up to 40%.

It’s crucial to note that this would be in addition to any estate or inheritance taxes levied by your state.

Tax laws are subject to change, and exemptions and rates may vary in the future. There are various estate planning strategies that individuals can use to minimize or eliminate estate tax liabilities, such as gifting, trusts, and other advanced planning techniques.

The team at Anchor Wealth can facilitate these discussions with our clients by asking a series of questions about their desired end result for their estate. Certain strategies can be implemented immediately.

We can also connect you with a qualified tax professional or estate planning attorney to navigate these complexities effectively and ensure compliance with current laws.

This area is unique, and what might be best in one situation may not be optimal for another due to different assets and goals.

Make sure to reach out to Anchor Wealth for a personalized analysis or to review your existing plan today!

Young couple with financial advisor

How Much Money Do You Need To Work With A Financial Advisor?

Effectively managing your money helps pave the way for a secure retirement and many financial advisors would say that process should begin when you start earning your first paycheck. But when is the right time to begin working with a financial advisor? Are there minimum assets needed before scheduling that first meeting?

The bottom line is there are no financial requirements needed before scheduling a consultation with a financial advisor. One prevalent misconception is that individuals need to amass a significant amount of savings before seeking the advice and help of a financial advisor. The truth is financial advisors are equipped to assist individuals at various stages of their financial journey, whether they are just starting to build a nest egg or have already accumulated substantial assets.

The First Step: Scheduling a Consultation

The initial step in working with a financial advisor is not contingent on a specific savings threshold. Rather, it begins with the simple act of picking up the phone and scheduling a consultation. During this meeting, the advisor will gain insights into your financial goals, review your current financial situation, and discuss potential strategies to help you achieve success.

Building a Foundation, Not a Fortune

Many financial advisors, like those at Anchor Wealth Management, emphasize the importance of identifying savings goals and the path to reach them rather than waiting until a specific asset number is reached. That sets the foundation. Whether you’re looking to save for short-term goals, such as a home purchase, or long-term objectives like retirement, the guidance of a financial advisor can set you on the right path.

This involves understanding your financial targets, reviewing your current situation, and charting a potential path forward. Financial advisors can review your finances and goals to help you find the right financial plan for your future.

Inclusive Approach

Anchor Wealth Management welcomes individuals at all levels of their financial journeys. Whether you’re just starting to build your financial stability and retirement plan or whether you’re looking to optimize your existing investments, Anchor believes in providing education and knowledge to guide you on the right path to make informed decisions. We understand that everyone’s financial story is different, and we aim to create options for those struggling with budgeting and financial planning.

No Income Restrictions and Free Consultations

Anchor Wealth Management sets itself apart by not imposing income restrictions on its clients. This means that our services are accessible to a wide range of individuals, regardless of their income level. Moreover, our firm offers free consultations for those seeking to meet with a financial advisor in the Rockford, Freeport, and Lanark regions. We believe in providing an opportunity to be financially stable, whether you are looking for ways to budget over the summer or retirement planning, our experts are here to help!

Tools for Personal Finance

For those looking to gain insights into their personal finances before meeting with a financial advisor, Anchor recommends using tools from financial experts like Dave Ramsey. Online resources and tools can be valuable in gaining a better understanding of your financial situation and identifying areas for improvement. Dave Ramsey Budget Calculator.

Working with a financial advisor is not one-size-fits-all. By taking the first step, whether through a phone call or utilizing online tools, individuals can start the journey toward building a solid financial foundation with the guidance of a financial advisor. Remember, it all starts with a conversation.

By Shane Stuart, Wealth Advisor

Learn More about Shane and the AWM Team

Adam’s Nightstand

I finished reading Raise the Bar: How to Push Beyond Your Limits and Build a Stronger Future You by Ben Alldis. The author is my go-to Peloton instructor for the workouts I do in the morning at home.

My goal for 2024 is to read two new books per month. Of these 24 books to read in 2024 three of them are centered around learning more about my health. I must admit I do believe this is the first book about health I may have ever read!

My goal in 2024 is to learn more about being healthier. Seeking to learn more about practical insights into nutrition, exercise, and rest.

The book was more about the author telling his story around how he overcame challenges in his life. This was an inspiring read, even if it learned more towards the mental aspects of health rather than specific strategies for improving diet, exercise, and rest.

Learn More

Galentine’s: A Tea Party And Flowers

Galentine’s is a relatively new global holiday that celebrates women and their friendships, meant to serve as a reminder for women to support and uplift each other.

On Friday, February 16th the ladies of Anchor Wealth Management hosted a Galentine’s event at our office in Rockford.

The day began with a high tea service provided by Tracey Vukalov, owner of the Vintage Goose Cafe.

The ladies and their guests, enjoyed a variety of teas, finger sandwiches, scones, tarts, and other delicious treats.

Following the tea service, attendees made a DIY floral arrangement. Christina Krupa, owner of Buckets N’ Blooms helped the ladies design the beautiful arrangements they took home to enjoy.

Our next event is a Pickleball Clinic that will be held at UW Sports Factory in Rockford on March 1st. Jen Selchow, owner of Rockford Pickleball and PPR Pro, along with her staff will hold an exclusive clinic for AWM clients and their guests.

Call Chris DeSchepper at (815) 201-5011 Ext. 1020 to reserve your place today. Participation is limited, and a few openings remain for this event.