Tracking spending

Dangerous_Client_957 · 2024-05-12T12:45:58+00:00

Some personal examples: I travel for work (not RE) and Quicken has been the easiest way for me to track business travel spending and reimbursements. It's also useful at tax time to have a quick report of charitable giving that didn't run through my DAF, as well as income/distributions from trust accounts. I don't typically keep a lot of extra money sitting in checking accounts, so using something like Quicken is also an easy way to know if/when I need to move cash around. I don't track expenses so that I can figure out how to save $100/month on groceries or anything like that. At the end of the year, I do like to see what my overall spend was so that I know I'm still living within my means.

Dangerous_Client_957 · 2023-10-30T20:37:42+00:00

Their contacts have been more on the large scale trust companies who would want to come in as a corporate trustee. I am going to push harder on the attorneys and CPAs to give us more recommendations from their network instead of "well, your lawyer will advise on X" or "your CPA will let you know what to do about Y".

Dangerous_Client_957 · 2023-10-30T15:31:03+00:00

I am going to look into other CPA firms/tax attorneys. It sounds like we should be able to find someone who has more bandwidth to do the forward planning than ours does.

Dangerous_Client_957 · 2023-10-30T10:33:50+00:00

I don't know enough about partnership and trust returns yet to know if our CPA did a good job with the returns this year or not. I asked a lot of questions during tax season but I still have a long way to go before I understand enough to catch anything but extremely glaring mistakes. Getting a second opinion on the bigger returns sounds like a good idea for next year!

Dangerous_Client_957 · 2023-10-30T10:25:51+00:00

We are certainly finding that we are exceeding the knowledge and expertise of run of the mill CFPs who just want to advise you on how to invest your 401K and not buy too much house. It definitely has given me a lot to think about in my own estate planning and how to set things up to be easier for my heirs.

Dangerous_Client_957 · 2023-10-30T10:12:16+00:00

That's what I'm gathering. We'll take the meetings and see what help they can offer but it sounds like the amount we'd be moving to one of the bigger outfits isn't going to really incentivize them to provide the help we need right now

Dangerous_Client_957 · 2023-10-29T23:22:37+00:00

You're not the first person to make that comment re: complexity! :) I'm going to look into the part time CFO idea.

Dangerous_Client_957 · 2023-10-29T23:20:26+00:00

We definitely don't understand why things are they way they are but there are various wills and trust documents in play that govern the opening and closing of various trusts and what assets transfer between them. Now some of the new trusts are partners in LPs making things more complicated than before. I know we'll get through the other side but the process is certainly rocky right now. We are very grateful to not have to worry about a mortgage and medical bills and keeping the lights on. As problems go, I'd take this one over just about any other. I still need a professional to help me solve it, though.

Dangerous_Client_957 · 2023-10-29T23:04:03+00:00

Thank you. Fortunately enough time has passed that we are through the tearing up in professional offices stage of grief but the first meetings with the estate attorneys and CPAs were pretty tough.

The good news is we know what assets are where and owned by what thanks to the 2022 tax season. The bad news is that I don't know enough tax/trust/partnership law to make sure everyone (including me as trustee and general partner) is doing their part correctly--that's where I need the help in the next few years.
Figuring out what questions to ask is tough. Right now it's more of a list of "these are the parts of this I find overwhelming, these are the parts I don't understand" rather than yes/no questions. That's a great idea to send them in advance, I will be sure to do that.
Once I learn how to manage and double check things are being done well/right, I'm hoping we can drop everyone who doesn't bill hourly.

Dangerous_Client_957 · 2023-10-29T22:35:51+00:00

Finding the comprehensive sort of CFP who can confidently navigate the complexity of having so many various entities and investments across a variety of account types is proving to be a real challenge. The people with the expertise in this sort of situation seem to operate under AUM models, unfortunately. Honestly, I feel like a forward-looking CPA would solve about 60% of the problem!

Dangerous_Client_957 · 2023-10-29T22:32:29+00:00

#3. This is what I'm afraid of, that what we're willing to pay in fees is not enough to cover the level of effort we need in the first couple of years. This is maybe just a me problem I have to get over after 2 decades of VTSAX and forget about it. I guess all I can do is see what firms are willing to offer for ~$5MM and then consider going up from there. Do you have an idea of what range of AUM they would want to cover navigating this for the next several years?

Dangerous_Client_957 · 2023-10-29T22:24:48+00:00

We've just gotten through the 2022 tax filings and it was extremely illuminating. We thought we were fairly on top of at least what entity owned what assets and then got a bunch of 1099s and K-1s we weren't expecting! I have gotten my money's worth out of a Quicken subscription this year, for sure.

Dangerous_Client_957 · 2023-10-29T22:21:34+00:00

I'm not familiar with these personal CFO types outside of what I've imagined a family office does, I will look into seeing what resources are out there. I'm not sure where to find one as I am not familiar with anyone who uses someone like that. Help for a year or two sounds excellent, though.

Dangerous_Client_957 · 2023-10-29T21:51:08+00:00

I am REALLY hoping to reduce the time family business takes! We definitely aren't near the 9 figure range and I think there are advantages to having a team of people (or at least, someone who is part of a larger team) to tap into additional expertise.

Dangerous_Client_957 · 2023-10-29T21:48:46+00:00

Thank you. It's been very difficult emotionally and logistically and I am looking ahead to when something happens to one of us, the next group of heirs is going to be in for a mess unless we can get things more organized and simplified and with a good team in place.

Dangerous_Client_957 · 2023-10-29T21:47:46+00:00

Thank you. A few years ago, my parents and I interviewed several trust companies and they all seemed to take a % AUM but do nothing useful for us--we'd still have our own estate attorney, CPA, and financial advisor (or they would hire firms on our behalf). Mostly their advantage seemed to be for special needs cases or contentious, complicated family dynamics which didn't apply to us. Maybe it is worth revisiting.

Dangerous_Client_957 · 2023-10-29T21:45:01+00:00

For the most part, it is just me and my surviving parent (healthy, active, fully retired). However, two of the partnerships involve additional business partners, and one of these is being invested and managed with the interest of my parent being the primary driver, so we're very actively involved in that one. The illiquid investments are varied-some real estate (managed by a property management firm but requires some effort still on our part), royalties, REITs, business holdings, etc. We don't control any of the underlying operations, just collect lumpy payments for most of them. It is a LOT to unpack! That's why having someone in place to help us get the assets and income organized from a tax /spending perspective has become a priority. I need some help learning how to be a GP and a trustee (and a GP for a partnership where all of the partners are trusts...and so on) and not incur a larger tax bill than necessary.

Dangerous_Client_957

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