Mariner Wealth Advisors provides a 2017 year end wealth planning review.
Dec. 11, 2017 Article

2017 Year End Wealth Planning Review


As we approach the end of the year, it is a good time to review your financial objectives and make sure you remain on track to achieve your goals. Below we highlight a few key-planning facts you should consider as we move into 2018.

Consider Making Qualified Charitable Distributions (QCDs) From Your IRA

QCDs allow people over 70½ years old who are subject to required distributions from their IRA to redirect up to $100,000 of their Required Minimum Distribution (RMD) to charity. This is a meaningful benefit for charitably inclined clients, as any amount contributed to a public charity is now excluded from calculations impacting overall tax rates, taxation of Social Security, income tax phase-outs and Medicare premiums.

Required Minimum Distributions (RMD)

IRA owners who turn age 70½ during 2017 have until April 1, 2018, to take their first required minimum distribution and must take the second by December 31, 2018. IRA account owners already in distribution mode must take their annual RMD by Dec. 31, 2017. It’s important to make sure the total RMD amount is satisfied across all qualified retirement plan and IRA accounts. As long as the full RMD amount is satisfied, you are able to withdraw the RMD from a single IRA or a combination of IRA accounts. Required minimum distribution rules for an IRA versus an employer’s sponsored qualified plan, such as a 401(k), are treated differently if you are still working. If you are over age 70½ and still working, you do not need to take an RMD from your employer plan until you retire.

Beneficiary Designations

The end of the year is an excellent time to review beneficiary designations for IRAs, qualified plans and life insurance policies. This is especially true if you have had life changes in your family such as birth, divorce and/or death. The distribution of these accounts is determined by the beneficiary form, not the individual’s will. This critical detail is often overlooked and can cause unintended consequences and should include primary and successor beneficiaries.

Consider Capturing Capital Losses to be Used Now or Later (Tax Loss Harvesting)

At its most basic level, tax loss harvesting is selling a security that has experienced a loss—and then buying a correlated asset (i.e., one that provides similar exposure) to replace it. The strategy has two benefits: it allows the investor to “harvest” a valuable loss, and it keeps the portfolio invested and balanced at the desired allocation.  With the capital loss recognized, it can then be used to offset capital gains realized over the course of a year – gains on which would otherwise be taxed. 

Please consult your wealth advisor before taking action since your personal circumstance will determine if this strategy is appropriate.  

Roth IRA Conversion

The end of the year is a good time to consider whether a Roth IRA conversion makes sense. With a traditional IRA, contributions are generally tax-deductible and distributions are taxed at ordinary income tax rates. In contrast, contributions to a Roth IRA are not tax-deductible, but earnings can be withdrawn income-tax free if you are at least 59½ and have had the Roth for at least five years. Converting a traditional IRA in to a Roth doesn’t always make sense, but you may consider it if:

  • You have a long time until retirement
  • You anticipate being in the same or a higher tax bracket when you begin distributions
  • You can pay the tax from sources other than the IRA

Appreciated Securities for Charitable Giving

It is not unusual to look at charitable contributions as a tax strategy. From a wealth-planning standpoint, charitable planning offers a great opportunity to reduce one’s tax liability for the year. An important consideration when planning contributions is whether to donate cash or appreciated securities.

By donating appreciated securities, an investor can avoid capital gains on that long-held security. This increases the value of the donation compared to selling the stock, paying the capital gains tax, and then giving the cash proceeds to charity.

Donor Advised Funds

If you would benefit from a large charitable deduction in 2017, and are charitably inclined, you may want to consider a donor advised fund. A donor advised fund will allow you to make a large gift now and take the tax deduction while deferring the decision on which charity you would like to receive the funds.

Review Your Insurance Policies

The end of the year is an excellent time to review your insurance. Whether your policies are related to disability, life insurance, or property and casualty (P&C), it’s important to review these policies on an ongoing basis.

Consider the immense property damage caused by hurricanes over the past few months. The degree of financial loss of those affected by the storms has been largely contingent on their P&C coverage levels and is a good reminder of why an ongoing evaluation of insurance is so important. Through the review process, your advisor can confirm that your ownership and beneficiary designations are consistent with the objectives of your financial plan. As tax laws continuously change, maintaining proper ownership of your life insurance is critical to ensuring that potential proceeds from life insurance death benefits are impacting your beneficiaries as intended.

For term life insurance policies, your advisor can assist you with monitoring renewal periods and researching alternative coverage options. Whether your goal is to replace income or pass wealth to the next generation, an insurance review can provide peace of mind. 

Estate Plan Review

If you experienced any significant life changes in the last year, such as a marriage or the birth of a child, it is important to consider the impact of those changes on your estate plan. Drafting new wills and durable powers of attorneys is a critical first step for newly married couples and new parents. Additionally, if one of your children recently married, it can be beneficial to re-examine your beneficiary designations to confirm assets are being directed in the  manner intended.

You may also want to review your estate distribution plan along with any creditor protection language in case your children receive an inheritance. In terms of generational estate planning, it’s important to check your estate documents to ensure they contain language that covers after-born children. This ensures any children in your family not initially named within your estate planning documents will be included in the transfer of assets at your death.

Take Advantage Of The Annual Gift Tax Exclusion And Make A Gift To Family

For 2017, the annual gift tax exclusion allows an individual to give up to $14,000 ($28,000 for married couples) gift tax-free and without counting toward the individual lifetime exclusion. In 2018, the annual gift exclusion amount is increasing to $15,000 per individual ($30,000 for a married couple).

Consider Ways To Minimize Taxes By Spreading Out Income

If your income varies from year-to-year, or if you expect to be in a different tax bracket in the future, consider using multi-year projections to take advantage of long-term planning opportunities to minimize income taxes. Examples of such tax planning strategies include accelerating the timing of income or recognition of capital gains so that lower tax brackets can be filled or, conversely, postponing the receipt of income or capital gains and accelerating receipt of losses in order to reduce income in higher tax years.


The information contained herein is not intended to be personal legal, investment or tax advice or a solicitation to buy or sell any security or engage in a particular investment strategy. Nothing herein should be relied upon as such. The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. There is no guarantee that any claims made will come to pass.

Mariner Wealth Advisors (“MWA”) is an SEC registered investment adviser with its principal place of business in the State of Kansas. Registration of an investment adviser does not imply a certain level of skill or training.  For additional information about MWA, including fees and services, please contact MWA or refer to the Investment Adviser Public Disclosure website. Certain MWA representatives are licensed insurance agents and are compensated for the sale of insurance-related products through an affiliated insurance agency.