The post Smart Gifting Strategies appeared first on AIO Financial - Fee Only Financial Advisors.

At AIO Financial, we specialize in helping our clients align their investments with their values through socially responsible investing (SRI). We believe in the power of the individual investor—and there’s no better example of that power than proxy season, when shareholders come together to hold corporations accountable.

The 2025 Proxy Preview Report, developed by As You Sow, Proxy Impact, and Empower Venture Partners, underscores how shareholder advocacy remains one of the most powerful tools we have to influence corporate behavior—even in the face of increasing political and regulatory headwinds. Link to report: https://www.proxypreview.org/

Shareholder advocacy refers to the actions taken by investors—often at annual general meetings (AGMs)—to influence a company’s policies, operations, and impact on society and the environment. Through proxy voting and shareholder resolutions, investors can raise concerns about everything from climate change to corporate lobbying practices.

Shareholders owning more than 10% of a company’s shares can call special meetings, and those with over 5% must file reports to the SEC detailing their intentions and transactions.

At AIO Financial, we help clients use these rights to vote their values and engage companies on issues like climate justice, racial equity, and sustainable business practices.

As of February 21, shareholders had filed 355 ESG proposals—a 34% drop from the same time in 2024. Why?

Despite fewer filings, shareholder advocacy is more important than ever. This year’s proposals tackle systemic risks that impact long-term corporate value—and your portfolio.

So far, 78 proposals (22%) have been withdrawn—up from just 7.7% last year. These withdrawals often result from successful negotiations behind the scenes or concern over proposals being blocked by the SEC.

Meanwhile, 221 proposals have received no-action requests—where companies ask the SEC for permission to exclude them. This tactic has become more frequent in 2025, signaling a more adversarial environment for shareholder rights.

The number of anti-ESG proposals is rising and now represents nearly 15% of all submissions. These proposals often attack:

Notably, state officials like Oklahoma’s State Treasurer have joined the push, filing proposals against companies that support racial justice, digital safety, or reproductive rights.

The good news? These proposals are overwhelmingly defeated—with anti-DEI efforts losing 98% of the vote.

The data is clear: Shareholder advocacy works. Over the last two decades, it has led to:

Even in a politically hostile environment, responsible investors are helping shape the future of business—one vote at a time.

At AIO Financial, we empower you to:

You don’t need to be a billionaire or run a fund. If you’re a shareholder, you already have a voice—and we’re here to help you use it effectively.

Want to learn more about socially responsible investing and shareholder advocacy? Reach out today for a free consultation. Whether you’re just starting or you’re a seasoned investor, we’ll help you build a strategy that aligns your money with your mission.

🌐 aiofinancial.com
📞 Schedule a call
📩 Join our newsletter for updates on ESG investing and proxy voting tools

Together, we can build a more sustainable and just future—one vote, one investment, one conversation at a time.

I’m going to go over some of the
shareholder resolutions that are proposed for 2025
there has been a drop in the number of resolutions
compared to 2024
we’re still just in the beginning of the season
but that’s partially because of the new SEC leadership
and shifting in rules
making it more difficult for shareholders
to make resolutions to make changes
be advocates shareholders are waiting on this
you’ll see a lot of the proposals are under review
there’s been an increase in private negotiations
so the shareholders
are engaging
but maybe not through the shareholder advocacy
through shareholder resolutions
but just engagement with companies
many resolutions have been withdrawn
that’s higher than last year
and a lot of times
that means that there was an agreement brought up
a lot of no action a summary of some of the proposals
the shareholder resolutions again
environment and climate change are a big
focus of shareholder resolutions
poke a push for climate transition plans
and greenhouse gas emission disclosure
a deforestation in the avocado industry
and tire particulate pollution tire shredding
and then in the financial sector
just scrutinizing the funding of fossil fuel projects
corporate
political influences is another big issue this year
lobbying transparency
as you see allowed exclusions for proposals
um
many of the disclose the resolutions are being blocked
social di topics there are many of those this year
and then there is an increase
there’s a lot of anti environmental
social governance proposals in this
shareholder resolutions
they’re mostly getting rejected by shareholders though
so why engage with companies
it’s another tool it’s a way to make positive change
through your investments as a shareholder
you can make an impact you don’t have to do it
if you invest in a fund
an exchange traded fund
a mutual fund that has similar values
is pushing in the direction you want to push
they will engage on your behalf
they have the knowledge staff
resources to be able to make changes with companies
there are many examples of funds
there are funds that do screening
there are funds that engage with community investment
and there are funds that just engage
they just try to make changes
some of them just vote on shareholder resolutions
and some of them bring up shareholder resolutions
engage with companies to make positive changes
you can
well you’re right
as a shareholder is vote file resolution sue
but you can let the funds do this
you don’t have to be doing this as an investor
and then you can bring up resolutions
you can vote on resolutions
and you can engage with corporations
you own a part of the company
you are an owner and can make
especially if you add your resources to other
like minded investors you can make changes in companies
voting is crucial
you can demand transparency
you can influence supply chains corporate contributions
sustainability greenhouse gas emission disclosure
there are a lot of issues
you can affect and we’ll go over them
we’ll go over some of those that are being proposed
or that are being worked on this year
in overview
the drop is a lot because of these rule changes
SCC policy changes and political pressure
it’s unfortunate but
that’s the environment we’re dealing with right now
it doesn’t mean we shouldn’t engage
it doesn’t mean we shouldn’t try hard to make positive
changes and
if the government’s not gonna make positive changes
it’s a way to make changes and push
because these companies
do influence our political system
why the drop
t C C rule changes
long approved proposals are not being allowed
private negotiations to avoid backlash
so environmental social governance categories
these are the main areas that are being worked on
largest is climate change
corporate political influence
a big amount of anti environmental management
and then you’ve got human rights
diversity at work sustainable governance
health and safety decent workplace climate again
always an issue
transition planning is the biggest piece
climate financing is a big piece
disclosure greenhouse gas emission disclosure plastics
food waste
we’ll go over some of these so emissions proposals
these are some of the companies being targeted
the resolution topic and who’s pushing that forward
Green Century is a mutual fund company
as you so puts out this report each year
there are great non profit
trying to make changes through shareholder engagement
and and this is the format we’re going to see in all
of these proposals
uh climate transition proposals 38 filed
I think with the previous slide too
this is just an example
of the ones that have been filed
some of them get filed and get withdrawn
if the company does and the advocate
and the proponent come to an agreement
a trillium here but companies and the resolutions
adopt greenhouse gas targets
and issue transition plans
align with the 1.5 degrees
just transition proposals
climate finance proposals
so these are for institutions financing fossil fuel
disclose clean energy supply finance ratio
just a lot of its disclosure measure disclose reduce
disclose carbon offset
so this is carbon offset accounting proposals
methane proposals
environmental management
I guess some of the biggest are water use and risks
waste and pollution
we’re early in the season so this number will grow
antimicrobial proposal
biodiversity deforestation proposals
food waste proposals
mining plastic proposals water certification proposals
human rights
well in the pretty similar standards and ethics racism
environmental justice
I guess digital content so human rights policies
indigenous people’s rights proposals
environmental justice proposals
human rights rest data Protection
AI reporting human rights impact
child safety proposals
data Protection forced labor
hate speech
health and safety proposals
we’ve got some health proposals
tax transparency
decent work freedom of association proposals
living wage worker health and safety
diversity at work
d I Metric Metrics and Data Proposals
d a Policy Proposals
some data proposals
corporate political influence
this is always a big one
lobbying elections are the big ones
so political contribution proposals
lobby ing proposals and a lot of this is just report
just disclose value congruency proposals
as you so did a proposal there
sustainable governance
board composition
try to get a diverse board of directors
environmental social governance reporting proposal
compensation proposals
voting rights proposals
anti environmental social governance
there are quite a few of proposals that are against
environmental social governance
again
most of those are getting defeated by shareholders
withdraws there’s a lot of withdrawals
and that’s fine if they’ve negotiated
if they’ve worked something out
pull the shareholder resolution
make it not public just make changes
CC is tightening inclusion rules
anti
esg environmental social governance is rising
we’ve already discussed this
most almost all are getting defeated
why shareholder advocacy matters
it makes a change you’re a shareholder
you can make a change sometimes
you can’t count on the government making a change
greater accountability align investments with values
influence sustainable business practices
I’m with AIO Financial
we help get clients aged with their investments
we have a questionnaire
just to make sure your investments
if you want them to match your values
so that they’re engaging on your behalf
they’re voting on your behalf they’re
working with companies to make positive changes
feel free to call us AIO financial.com
we offer a free consultation
we have some tools on our website
AIO financial.com let me know if you have any questions
let me know if you have any comments
it’s just a brief summary
we use a tool called your stake
to evaluate the impact of proposals
we can compare portfolios
let us know if we can help
alright take care
thank you for watching

The post Proxy Season 2025: How Shareholders Are Making an Impact Amid Political Pushback appeared first on AIO Financial - Fee Only Financial Advisors.

The post Estate Planning Made Simple: Protect Your Legacy appeared first on AIO Financial - Fee Only Financial Advisors.

From shifting policies to economic reforms, the effects ripple across sectors, altering interest rates, currency values, and overall investor sentiment. While short-term uncertainties can disrupt the market, long-term strategies like diversification and sector-specific investments remain reliable approaches to weather the storm.

This comprehensive guide explores how elections shape the stock market, sectors poised to benefit or struggle, and how Socially Responsible Investing (SRI) provides an ethical and profitable investment pathway.

Elections, particularly U.S. presidential races, are synonymous with market volatility. Investors speculate on potential shifts in fiscal and regulatory policies, leading to heightened activity in the months leading up to Election Day. Historical data shows this trend, with increased fluctuations as markets react to polling data, debates, and policy announcements.

However, it’s not merely about party politics—markets respond to anticipated economic impacts, such as tax reform or trade agreements. This heightened uncertainty can present risks but also opportunities for savvy investors.

Markets often “price in” anticipated outcomes based on campaign promises. For example:

Regardless of predictions, results often defy expectations, requiring diversified strategies to mitigate sector-specific risks.

Fiscal policies—like increased spending—often lead to higher deficits, sparking inflation concerns. Rising inflation typically drives up bond yields, affecting their prices. Inflation-protected securities, such as Treasury Inflation-Protected Securities (TIPS), can hedge these risks.

Former President Trump’s term highlights unpredictability. Despite policies favoring fossil fuels, the energy sector underperformed due to declining oil prices, a global renewable energy shift, and the pandemic’s economic toll. This underscores the importance of resilience over speculation.

Elections undoubtedly influence investments, but reactionary moves can be counterproductive. By focusing on diversification, sector fundamentals, and long-term goals, investors can navigate the uncertainties of election cycles. Socially Responsible Investing (SRI) offers an ethical, high-performing alternative, while strategies like rebalancing and currency hedging further reduce risks.

The post The Impact of Elections on Investments: Navigating Stock Market Fluctuations with Diversification and Smart Sector Choices appeared first on AIO Financial - Fee Only Financial Advisors.

Tucson, Arizona, emerges as a premier choice for individuals aiming for a harmonious blend of financial stability and enriching lifestyle.

Known for its affordability, cultural vibrancy, and scenic beauty, Tucson not only accommodates but enhances the quality of life. Here’s how settling in Tucson can lead to a financially wise and fulfilling existence, especially beneficial when partnered with a fee-only comprehensive financial planning firm.

Tucson’s cost-effectiveness stands out as a beacon for potential homeowners. The city’s lower-than-average housing costs enable a luxurious lifestyle minus the financial burden typical of larger metropolitan areas. For a comprehensive financial planner, this translates into assisting clients to divert more funds towards crucial financial milestones like retirement savings, debt reduction, or educational investments. Tucson’s living affordability grants its residents the liberty to allocate finances more generously towards long-term wealth accumulation.

Arizona’s moderate tax regime is a boon for Tucson residents, particularly appealing due to its mild property tax and reasonable income tax rates. This fiscal environment is particularly lucrative for retirees, thanks to the state’s benevolent policies on retirement income, including non-taxation of Social Security benefits. Engaging with a financial planner here ensures that more of your retirement fund is preserved, enhancing spending power in later years.

Boasting over 300 sunny days a year, Tucson invites its inhabitants to revel in continuous pleasant weather, promoting an active, outdoor-centric lifestyle. This climate mitigates healthcare expenses as active residents tend to maintain better health. Financial planning in such a setting includes leveraging the weather for a reduced long-term medical cost, thereby securing financial stability.

Tucson’s strategic position, just over an hour from the U.S.-Mexico border, opens a corridor of cultural and economic opportunities. For professionals and entrepreneurs, this proximity to the border is a strategic advantage, enhancing Tucson’s appeal as a business and cultural hub.

Home to thriving aerospace, healthcare, education, and technology sectors, Tucson’s job market promises stability and prosperity. Top employers like Raytheon and the University of Arizona provide abundant career opportunities, fostering economic growth and job security. 

Discover how Tucson can be your stage for a successful and balanced life. Visit our official website to learn more about Tucson’s unique offerings and how our specialized financial planning services at AIO Financial can help you harness these opportunities for a prosperous future. Engage with us to create a comprehensive financial strategy that turns Tucson’s potential into your success.

The post Why Tucson is the Ideal Place to Live for Financial and Lifestyle Success appeared first on AIO Financial - Fee Only Financial Advisors.

Caring for elderly parents is both emotional and challenging, requiring careful planning, financial management, and tough decisions. My experience caring for my mother has shown me that with preparation and resilience, you can balance their needs with your own.

It’s a responsibility that demands not only emotional strength but also substantial financial and logistical planning. Over time, the needs of aging parents can evolve—simple assistance with daily tasks might turn into managing complex medical issues or finding suitable long-term care solutions.

While providing care for our loved ones is often an act of love and respect, it can also be exhausting, both emotionally and financially. Many caregivers find themselves overwhelmed with managing appointments, medication, personal care, and even the emotional needs of their parents, all while balancing their own families and careers.

Watching a parent age can bring up a whirlwind of emotions—sadness, guilt, frustration, and even a sense of helplessness. You might struggle with feelings of loss as your once-independent parent becomes increasingly reliant on your care.

In my case, it’s been an emotionally exhausting journey. I’ve had to learn to manage my feelings of guilt when I can’t always be there for my mother due to work or family commitments. And yet, it’s important to remember that caring for your parents doesn’t mean sacrificing your own well-being.

According to studies, the costs associated with elder care, especially in the U.S., can be overwhelming. Medical expenses, home care services, and potential long-term care facilities all add up quickly.

Many families find themselves facing the difficult choice of whether to provide care themselves or seek professional help, both of which come with financial and emotional trade-offs. Understanding the financial implications early on can help you make informed decisions that benefit both your parents and yourself.

One of the most important things you can do when it comes to caring for aging parents is to create a detailed financial plan. Without a proper strategy in place, you could find yourself in a situation where you’re scrambling to cover unexpected costs, or worse, risking your own financial stability.

A well-thought-out financial plan for elder care covers healthcare costs, long-term care options, and legal considerations such as estate planning. Ensuring that you understand both your parents’ financial situation and your own will allow you to navigate the complexities of elder care with confidence.

The first step to take is getting a full picture of your parents’ financial standing. This includes their income sources—whether through pensions, retirement funds, or Social Security—and their expenses. Understanding their medical expenses, debts, and monthly living costs will provide a clear sense of their financial capacity for healthcare and living arrangements.

Healthcare is often the largest financial burden for families caring for elderly parents. Whether it’s managing regular doctor visits or planning for long-term care, the costs can escalate quickly. In the U.S., healthcare costs are notably high, especially when it comes to specialized or extended care.

However, one potential solution to ease this burden is to explore international healthcare options. For example, some families have found that receiving medical care in countries like Mexico, specifically in areas like Ajijic, provides high-quality, affordable care. My own family benefited from this option, as it allowed us to access excellent care without draining our financial resources.

By thinking outside the box and researching more cost-effective options, you can ensure your parents receive the care they need without risking financial ruin.

When taking care of elderly parents, legal matters must be addressed sooner rather than later. Updating legal documents such as wills, powers of attorney, and healthcare directives ensures that your parents’ wishes are honored if they can no longer communicate them.

Establishing a trust can help manage their assets efficiently and shield them from unnecessary tax burdens. Additionally, setting up durable powers of attorney for both finances and health care will allow you or other trusted family members to make decisions on their behalf when the time comes.

Many caregivers overlook government resources, which can significantly offset the cost of elder care. Programs like Medicare and Medicaid can provide essential financial support. Veterans and their families may also be eligible for additional benefits through the Department of Veterans Affairs, and community-based services can further reduce the strain of caregiving.

It’s critical to familiarize yourself with these options and maximize the resources available to your family. Doing so can ease the financial load and provide more comprehensive care for your loved one.

As much as caring for an elderly parent is a priority, you must not neglect your own financial well-being. It’s easy to fall into the trap of paying for everything out of pocket, which can quickly jeopardize your savings and retirement plans. Building a financial plan that includes your parents’ care while still maintaining your own financial health is crucial.

Consider meeting with a financial advisor to create a balanced approach that addresses your needs as well as those of your parents. This step is particularly important if you have children of your own to support, as you don’t want to compromise their future while caring for your parents.

Balancing elder care with your daily life is an ongoing process. Juggling work, your children, and your parents’ care can feel overwhelming at times. It’s easy to burn out if you don’t have the right support system in place.

It’s important to remember that you don’t have to do it all on your own. Delegating responsibilities to other family members, hiring professional caregivers, or even reaching out to community resources can lighten the load. In my case, working together with my siblings and dividing up responsibilities has helped us manage my mother’s care while also allowing us to maintain our own personal and professional lives.

Self-care is an essential part of the caregiving process, even if it’s often overlooked. It’s easy to neglect your own health when you’re focused on caring for someone else, but in the long run, this approach can lead to burnout. Making time for simple things like exercise, hobbies, and relaxation can help maintain your mental and physical well-being.

By keeping your own health a priority, you’ll be in a better position to provide care for your parents. You cannot pour from an empty cup, and neglecting your needs will only make it harder to manage the demands of caregiving in the long term.

Caring for elderly parents is a deeply personal journey, one filled with emotional highs and lows. While the responsibility can be overwhelming, with careful planning, financial preparation, and the right support, it’s possible to navigate this chapter of life without losing sight of your own needs.

From understanding your parents’ financial situation to exploring alternative healthcare options and managing the emotional toll of caregiving, there are numerous strategies that can help you maintain balance and provide the best care for your loved ones. With a comprehensive plan in place, you can ensure your parents’ needs are met while preserving your own financial and emotional health.

Are you struggling to balance your financial health while caring for an elderly parent? Consult with AIO Financial for personalized financial planning services. Our experts can help you create a comprehensive plan that addresses both your needs and those of your loved ones. Schedule a consultation today to take the first step towards financial peace of mind.

The post Navigating the Complexities of Caring for Elderly Parents: A Balanced Approach appeared first on AIO Financial - Fee Only Financial Advisors.

High-net-worth individuals (HNWIs) require more complex and tailored financial strategies to manage their wealth effectively. With investable assets of $1 million or more, HNWIs often face unique financial challenges, from tax minimization to complex estate planning. Financial planners specializing in this niche must address these complexities to ensure wealth is not only preserved but also continues to grow across generations. By utilizing strategies that span investment diversification, risk management, and charitable giving, financial planners play a pivotal role in securing the financial future of HNWIs.

High-net-worth individuals (HNWIs) are typically categorized based on their liquid investable assets. Here’s a breakdown of the general categories:

Each category requires distinct financial planning strategies, particularly as wealth increases. The more complex a financial profile becomes, the more critical it is to engage a professional financial planner with expertise in handling substantial assets.

For HNWIs, the stakes are higher when it comes to managing wealth. Traditional financial advice may no longer suffice once a certain level of assets is reached. As wealth grows, so too does the complexity of managing taxes, investments, and succession planning. The role of a financial planner is to provide a customized approach that addresses the specific needs of HNWIs. Key areas include:

For HNWIs, minimizing taxes is key to wealth preservation. With high-income brackets and complex tax scenarios, strategic planning can reduce liabilities and enhance wealth retention.

HNWIs should continue maximizing tax-deferred accounts like 401(k)s and explore advanced options such as deferred compensation plans or cash balance pension plans for higher contributions.

Charitable vehicles like Donor-Advised Funds (DAFs) and Charitable Remainder Trusts (CRTs) provide immediate tax deductions and long-term philanthropic benefits, offering personal fulfillment and tax advantages.

Effective estate planning with tools like Dynasty Trusts, GRATs, and ILITs helps HNWIs transfer wealth across generations while minimizing taxes, preserving family assets, and ensuring financial security.

At AIO Financial, we offer a range of services designed to help you achieve your financial goals while aligning with your values. Explore our key services below:

What qualifies as a high-net-worth individual (HNWI)?
HNWI typically refers to individuals with at least $1 million in liquid, investable assets.

Why do high-net-worth individuals need specialized financial planners?
Due to the complexity of their financial situations, HNWIs require advanced strategies for tax minimization, estate planning, and investment diversification.

How can tax-loss harvesting benefit HNWIs?
Tax-loss harvesting allows investors to sell underperforming assets to offset gains from other investments, reducing taxable income.

What is a dynasty trust, and how does it benefit U-HNWIs?
A dynasty trust allows wealth to pass across generations without being subject to estate taxes, ensuring long-term wealth preservation.

How can charitable giving reduce tax burdens for high-net-worth individuals?
Vehicles like Donor-Advised Funds (DAFs) and Charitable Remainder Trusts (CRTs) allow HNWIs to donate appreciated assets, receive immediate tax deductions, and avoid capital gains taxes.

What is the role of a family office in managing U-HNWI wealth?
Family offices provide personalized wealth management services, including investment management, tax planning, and estate planning, ensuring that all aspects of a U-HNWI’s wealth are efficiently managed.

Financial planning for high-net-worth individuals is a dynamic and multi-faceted process. As the complexity of managing wealth grows with the size of the assets, specialized strategies become essential for preserving wealth, minimizing taxes, and ensuring that wealth is passed on to future generations in a structured, tax-efficient manner. Through personalized financial advice, sophisticated investment strategies, and well-structured estate plans, financial planners help HNWIs achieve their financial goals while securing a legacy for their heirs.

The post Financial Planning for High Net Worth Individuals appeared first on AIO Financial - Fee Only Financial Advisors.

At Engine No. 1, we believe in the power of active ownership to drive meaningful change. Our investment strategies are designed to improve governance, optimize capital allocation, and foster long-term sustainability.

Engine No. 1’s approach to engagements is highly strategic and focused. We aim to enhance governance structures, optimize capital allocation, and encourage companies to develop long-term strategies that support a lower carbon footprint. This method sets us apart from traditional divestment strategies, as we believe in driving change from within.

Our campaign at ExxonMobil exemplifies our commitment to improving governance and pushing for sustainable practices. By engaging directly with the company, we strive to create a more responsible and forward-thinking corporate strategy.

We focus on transparency and accountability, ensuring that the companies we invest in are held to the highest standards. Our goal is to create long-term shareholder value while addressing critical environmental and social issues.

Active ownership is at the core of Engine No. 1’s investment strategy. We engage deeply with the companies we invest in, advocating for improvements in governance, strategic direction, and environmental impact. This hands-on approach allows us to influence positive change and drive sustainable growth.

Our ETFs, such as Vote and Net Zero, leverage our voting power to support environmental and social shareholder proposals. By focusing on active ownership, we aim to create a ripple effect that encourages the largest companies in the U.S. to adopt more sustainable practices.

Collaborative engagement with other investors and stakeholders is essential for driving meaningful change. Building consensus and working across the ecosystem allows for a more unified and effective approach to influencing corporate behavior. By joining forces, investors can amplify their impact, ensuring that companies are held accountable for their governance, strategy, and environmental practices. This collective effort is crucial for achieving long-term, sustainable improvements in the corporate world.

At Engine No. 1, we believe that collaboration is key to our success. Our strategy involves working closely with other investors to push for better governance and more sustainable business practices. This approach not only strengthens our position but also fosters a culture of accountability and transparency within the companies we engage with. Together, we can drive significant change and promote a more sustainable future.

The future of sustainable investing is being reshaped by innovative approaches that prioritize active ownership and engagement. Engine No. 1 is at the forefront of this movement, pioneering strategies that link environmental and social issues to shareholder value. By focusing on the largest companies and driving change from within, Engine No. 1 aims to create long-term value while addressing critical global challenges.

Investors have a unique opportunity to make a significant impact on the world’s largest companies through Engine No. 1’s approach. By engaging deeply with these companies, pushing for improvements in governance, strategy, and environmental impact, investors can help shape a more sustainable future. The potential for meaningful change is immense, and Engine No. 1’s ETFs offer a compelling way for investors to be part of this transformative journey. As the landscape of sustainable investing continues to evolve, Engine No. 1’s pioneering strategies highlight the power of active ownership in driving positive, long-term outcomes.

Find answers to common questions about Engine No. 1 and their innovative approach to sustainable investing.

Engine No. 1 is reshaping the landscape of sustainable investing with its unique approach to active ownership and engagement. By focusing on the largest emitters and driving change from within, they aim to create long-term shareholder value while addressing critical environmental and social issues. For investors looking to make a meaningful impact, Engine No. 1’s ETFs offer a compelling option. To learn more, visit their website and explore how you can be part of this transformative journey.

Discover how Engine No. 1 is transforming the world of sustainable investing. Visit their official website to learn more about their innovative strategies and how you can contribute to driving meaningful change.

The post Transforming Companies with Engine No. 1 ETFs appeared first on AIO Financial - Fee Only Financial Advisors.

Discover the essential aspects of inheritance and financial planning in our comprehensive guide. Learn about IRA rules, taxes, and estate strategies.

Inheritance can be a complex and emotionally charged topic. Inheritance laws, taxes, and planning strategies can feel like a maze. This blog aims to provide a detailed understanding of inheritance, focusing on IRA rules, taxes, estate taxes, and limits.

The Basics of Inheritance

Inheritance refers to the assets that an individual bequeaths to their heirs upon their death. These assets can include cash, investments, property, and personal belongings. The process of transferring these assets is governed by laws that vary by jurisdiction, but there are common principles and rules that apply broadly. Inheritance can be a complex and sensitive matter, but here are some general rules of thumb to consider:

Understanding the Legal Framework

Inheritance laws vary significantly between countries and states. Familiarize yourself with the laws governing inheritance in your jurisdiction to ensure compliance and fairness. This knowledge is fundamental, as it impacts how assets are distributed, which taxes apply, and the overall process.

Communication is Key

Clear communication among family members can help prevent misunderstandings and conflicts regarding inheritance. Discussing plans and expectations openly can mitigate potential disputes later on. Transparency is essential to ensure that everyone understands their roles and what they can expect.

Update Your Will Regularly

Life circumstances change, so it’s essential to update your will periodically to reflect these changes. Births, deaths, marriages, divorces, and changes in financial status should prompt a review of your estate planning documents. A current will ensures that your wishes are honored and reduces the risk of legal challenges.

Consider Fairness and Equity

While it’s important to treat beneficiaries fairly, fair doesn’t always mean equal. Consider each beneficiary’s needs and circumstances when dividing assets. This approach ensures that your estate plan aligns with your values and provides the necessary support to each beneficiary.

Plan for Taxes

Inheritance taxes can significantly impact the distribution of assets. Consult with a tax professional to understand the tax implications of your estate plan and explore strategies to minimize tax liabilities. Effective tax planning can preserve more of your estate for your heirs.

Account for Non-Financial Assets

Inheritance isn’t just about money. Consider how sentimental or non-financial assets, such as family heirlooms or real estate, will be distributed among beneficiaries. These items often carry significant emotional value and should be handled with care to honor family traditions and memories.

Name Executors and Trustees Wisely

Select trustworthy individuals to execute your estate plan and manage assets on behalf of beneficiaries. Ensure they understand your wishes and have the skills necessary to fulfill their roles effectively. The right executor or trustee can greatly influence the success of your estate plan.

Provide for Dependents

If you have dependents, such as minor children or disabled family members, ensure they are provided for in your estate plan. Consider establishing trusts or other arrangements to safeguard their financial security. These provisions are crucial for maintaining their quality of life and meeting their ongoing needs.

Be Mindful of Family Dynamics

Family relationships can influence inheritance decisions. Be aware of potential conflicts or tensions among family members and take steps to address them proactively in your estate plan. By anticipating and mitigating potential disputes, you can foster harmony and ensure your wishes are respected.

Seek Professional Advice

Estate planning can be complex, especially for large or high-net-worth estates. Consider consulting with estate planning attorneys, financial advisors, and tax professionals to develop a comprehensive plan that meets your goals and objectives. Expert guidance ensures that your plan is legally sound and tax-efficient.

Inheritance and IRAs

Types of IRAs

Individual Retirement Accounts (IRAs) are popular retirement savings vehicles that come in different forms, each with its own rules regarding inheritance:

Inheriting an IRA

When an IRA owner dies, the account typically passes to a designated beneficiary. The rules for inherited IRAs depend on whether the beneficiary is a spouse, non-spouse individual, or an entity such as a trust or estate.

Spousal Inheritance

A spouse who inherits an IRA has the option to treat the account as their own, roll it over into their own IRA, or remain a beneficiary. Treating the account as their own allows the spouse to defer required minimum distributions (RMDs) until they reach the age of 72 (or 73 starting in 2023). If the spouse remains a beneficiary, they must begin taking RMDs based on their life expectancy or the deceased’s age at death.

Non-Spousal Inheritance

Inheriting an IRA as a non-spousal beneficiary can be complex, with rules varying based on when the original account owner died. This section will delve into the specifics of non-spousal inherited IRAs, including the regulations before and after 2020 and the minimum distribution requirements.

Rules for Non-Spousal Inherited IRAs Before 2020

Before the passage of the SECURE Act (Setting Every Community Up for Retirement Enhancement Act) in December 2019, non-spousal beneficiaries had more flexibility in taking distributions from inherited IRAs. The key provisions were:

Stretch IRA Provision

Example: If a 30-year-old inherited an IRA, their life expectancy factor might have been around 53.3 years. The first year’s RMD would be the account balance divided by 53.3, and each subsequent year, the factor would decrease by one year.

Rules for Non-Spousal Inherited IRAs After 2020

The SECURE Act significantly changed the rules for non-spousal inherited IRAs, introducing the 10-year rule for most beneficiaries. Here’s how the new rules work:

The 10-Year Rule

Eligible Designated Beneficiaries (EDBs)

Minor Children

Example: A minor child inheriting an IRA at age 10 would use the life expectancy method until they turn 18. At 18, they must then distribute the remaining balance by the time they turn 28.

Minimum Distribution Requirements Before and After 2020

Example of 10-Year Rule Application: If a non-spousal beneficiary inherits an IRA worth $500,000, they can choose to take no distributions for the first nine years and then withdraw the entire amount in the 10th year. Alternatively, they can take distributions at any time during the 10-year period, potentially spreading out the tax liability.

Strategic Considerations for Non-Spousal Inherited IRAs

Given the changes brought by the SECURE Act, non-spousal beneficiaries should consider the following strategies:

Tax Planning

Investment Strategy

Charitable Giving

Trusts and Estates

If a trust or estate is named as the beneficiary, the distribution rules can be more complex. Generally, the 10-year rule applies, but it’s crucial to work with an advisor to navigate specific trust provisions and tax implications.

Taxes on Inherited Assets

Income Tax

Inherited assets are generally not subject to income tax. However, there are exceptions:

Capital Gains Tax

Inherited assets benefit from a “step-up” in basis, which means the cost basis of the asset is reset to its fair market value at the date of the original owner’s death. This can significantly reduce capital gains taxes if the asset is sold by the beneficiary. For example:

Estate Taxes

Estate taxes are a critical component of estate planning, impacting how much of an individual’s assets will be passed on to their heirs after death. This section will provide an in-depth look at estate taxes, including the federal estate tax, gifting above the exclusion limit, the concept of portability, and strategies for minimizing estate taxes.

Federal Estate Tax

Exemption and Rate

Estate Tax Calculation

To calculate the estate tax, first, determine the gross estate value, which includes all assets owned by the deceased, such as real estate, investments, bank accounts, and personal property. Subtract any allowable deductions (e.g., debts, funeral expenses, charitable donations) to arrive at the taxable estate. Apply the estate tax rate to the taxable estate to determine the amount owed.

Example: If an individual’s estate is valued at $15 million, the taxable estate after deductions might be $14 million. The estate tax would then be calculated on the amount exceeding the $12.92 million exemption, i.e., $1.08 million, taxed at the applicable rates.

Gifting Above the Exclusion Limit

Annual Gift Exclusion

The annual gift exclusion for 2024 is $17,000 per recipient. This means individuals can give up to $17,000 per year to any number of recipients without incurring gift tax or using their lifetime exemption.

Lifetime Gift and Estate Tax Exemption

The lifetime gift and estate tax exemption is $12.92 million for 2024. Gifts made above the annual exclusion amount reduce this lifetime exemption.

Filing Form 709

When an individual gifts more than the annual exclusion amount to a recipient, they must file IRS Form 709, the United States Gift (and Generation-Skipping Transfer) Tax Return.

Example: If an individual gives $20,000 to a friend in 2024, they have exceeded the annual exclusion by $3,000. They must file Form 709 to report the excess amount, which will reduce their lifetime exemption by $3,000.

Portability of Estate Tax Exemption

Definition of Portability

Portability allows a surviving spouse to inherit the unused portion of the deceased spouse’s federal estate tax exemption. This can effectively double the exemption amount available to the surviving spouse.

Electing Portability

To take advantage of portability, the executor of the deceased spouse’s estate must file an estate tax return (Form 706) and make an election for portability.

Benefits of Portability

Example: If a husband dies in 2024 with an unused exemption of $7 million, the surviving wife can add this amount to her own $12.92 million exemption, giving her a total exemption of $19.92 million.

Strategies for Minimizing Estate Taxes

Lifetime Gifting

Trusts

Charitable Giving

Family Limited Partnerships (FLPs)

Estate Freezes

Freezing Techniques: Techniques such as GRATs and installment sales to intentionally defective grantor trusts (IDGTs) can “freeze” the value of an estate, shifting future appreciation to heirs.

State Estate Taxes

Limits and Planning Strategies

Annual Gift Exclusion

One effective strategy for reducing estate tax liability is through gifting. The annual gift exclusion allows individuals to give a certain amount per year to any number of recipients without incurring gift tax. For 2024, the annual gift exclusion is $17,000 per recipient.

Lifetime Gift and Estate Tax Exemption

In addition to the annual gift exclusion, there is a lifetime gift and estate tax exemption, which is the same as the estate tax exemption—$12.92 million for 2024. This means individuals can give away up to this amount during their lifetime without incurring gift or estate taxes.

Trusts

Trusts are powerful tools in estate planning. They can help manage and protect assets, minimize estate taxes, and provide for beneficiaries according to specific wishes.

Beneficiary Designations

Keeping beneficiary designations up to date is crucial. Beneficiary designations on retirement accounts, life insurance policies, and other assets supersede wills and trusts. Regularly reviewing and updating these designations ensures that assets are distributed according to current wishes.

Roth Conversions

Converting traditional IRAs to Roth IRAs can be a strategic move, especially for those who expect to be in a higher tax bracket in retirement or who want to leave tax-free assets to heirs. While conversions are taxable events, the future tax-free growth and distributions can be beneficial.

The Role of Financial Planners

Financial planners play a critical role in helping clients navigate the complexities of inheritance. Key responsibilities include:

Conclusion

Inheritance planning is a multifaceted process that requires careful consideration of various factors, including IRA rules, income and estate taxes, and strategic limits. By understanding these elements and working with knowledgeable financial planners, individuals can ensure their assets are distributed according to their wishes while minimizing tax burdens and maximizing benefits for their heirs. Whether through gifting, trusts, or other strategies, effective inheritance planning provides peace of mind and financial security for future generations.

Frequently Asked Questions

What is the difference between a traditional IRA and a Roth IRA?

A traditional IRA allows for tax-deductible contributions, but withdrawals in retirement are taxed as ordinary income. A Roth IRA, on the other hand, involves after-tax contributions, and qualified withdrawals in retirement are tax-free.

How often should I update my will?

You should review and update your will whenever there are significant changes in your life, such as births, deaths, marriages, divorces, or changes in financial status. Regular updates ensure that your will reflects your current wishes and circumstances.

What is the step-up in basis for inherited assets?

The step-up in basis means that the cost basis of an inherited asset is reset to its fair market value at the date of the original owner’s death. This can reduce capital gains taxes when the asset is sold by the beneficiary.

What is the 10-year rule for inherited IRAs?

The 10-year rule, introduced by the SECURE Act, requires non-spousal beneficiaries to distribute the entire inherited IRA within 10 years of the original owner’s death. There are no annual RMD requirements during this period, but the account must be fully distributed by the end of the 10th year.

How can I minimize estate taxes?

You can minimize estate taxes through strategies such as lifetime gifting, establishing trusts, charitable giving, and taking advantage of the annual gift exclusion and lifetime exemption. Consulting with estate planning professionals can help you develop a tax-efficient plan.

What is portability of the estate tax exemption?

Portability allows a surviving spouse to inherit the unused portion of the deceased spouse’s federal estate tax exemption. This can effectively double the exemption amount available to the surviving spouse, providing significant tax savings.

The post Inheritance: IRA Rules and Tax Implications appeared first on AIO Financial - Fee Only Financial Advisors.

Welcome to a new era in retirement planning! At AIO Financial, a fee-only financial advisory firm, we are excited to unveil our groundbreaking Retirement Planner App. Designed to simplify your financial future, this tool helps you visualize and plan for your retirement with precision.

Getting started is easy:

Explore a range of tools tailored to both individuals and couples:

Take control of your financial planning:

Stay informed with dynamic tools:

Our app is completely free, providing everyone with access to top-tier financial planning tools. Discover extensive features and see how they can help you achieve a secure and fulfilling retirement.

We value your feedback! Connect with us through our website for a free initial consultation to discuss your financial goals.

The AIO Financial Retirement Planner App isn’t just a tool—it’s a partner in your journey to financial independence. Calculate your needs, explore retirement scenarios, and take guided steps towards the future you deserve.

Join us at AIO Financial—where your financial independence is our priority. Download the app today and start planning the retirement you truly deserve!

The post Retirement Planning Tool appeared first on AIO Financial - Fee Only Financial Advisors.