Business Owners
At Baughman Financial Group, we work towards helping you reach financial independence sooner and with less risk. We do that by identifying inefficiencies in your current personal and professional structure and then capitalize on those inefficiencies by converting them into savings which compound for you year after year. Once you have reached financial independence, we seek to help you protect your wealth from taxes, inflation, and unnecessary risk.
The more successful that you become, managing your success does not get easier, it becomes more difficult. That's why it is so important to have a financial plan in place. A plan that assesses where you are now, defines where you want to be, and when, and determines how you will get there.
We focus on four cornerstones that should be equally weighted:
Tax Optimization and Pension Planning - During your wealth accumulation stage, it is important to take advantage of all means possible to defer tax on income while enjoying tax-deferred growth on the investment of that income. We work with business owner clients to ensure proper business structure and pension design, and with executive clients to manage their business equity through stock option exercise planning and/or the management of non-qualified deferred compensation.
During your wealth distribution stage, managing investments for tax efficiency with proper integration with your wealth transfer or estate plan becomes critical.
Risk Management - Your ability to continue to accumulate wealth for your family should not be derailed by circumstances beyond your control. Unfortunately, accidents happen and illnesses occur in life. We want to ensure that your family is protected against such circumstances. We perform a risk assessment review as part of your financial plan and write insurance policies for life, disability, health and long term care when necessary. It is possible, with the right structure, to have the cost of coverage paid for with "before-tax" dollars. As financial independence is reached, it often makes sense for a client to "self-insure" for these unexpected events. Ongoing reviews will help make this determination.
Does the company have a buy/sell agreement? Is it funded with life and disability insurance? How long since the plan has been reviewed? Does the agreement represent the current desires of principals? Is it adequately funded based on current value of the business? Does the company have Key Person coverage for owners/executives? A comprehensive risk management assessment can help answer these questions and guide you to implementing the right solutions for your business.
Portfolio Design & Management - We believe that clients should only assume the amount of risk in their portfolios that is necessary to have the highest probability of reaching their financial goals within the time horizon and risk tolerance parameters that have been defined. Any more risk is unnecessary and may result in unexpected losses. We use an approach that focuses on risk management first, emphasizing diversification across asset classes to reduce risk.
Please remember that diversification and asset allocation does not guarantee a profit nor protect against loss in a declining market. They are methods used to help manage risk. No strategy assures success or protects against loss in periods of declining values.
Asset Protection & Estate Planning - A number of strategies may be implemented to protect assets. These may include establishing the appropriate structure for your business, using qualified plans that provide protection of assets from judgement under ERISA, using trusts to protect assets from creditors and from taxes on the transfer of wealth to future generations. Other strategies involve the use of trusts to reduce taxes with the use of insurance to leverage assets.
What is your Business Continuity/Succession Plan? Who will manage/own the company if owner(s) becomes disabled or dies? Have Durable Powers of Attorney been named? Have Guardian’s for owner's children been named? Have trusts been created to ensure the desired disposition of assets, avoid probate and minimize transfer taxes?
We will work with you and your estate attorney to help you implement the right plan for your estate.