The first step is to gather the necessary data to ensure a thorough understanding of your situation. This becomes the basis for the creation of a financial model, which is used to evaluate your current financial situation. It will show your current asset allocation, your net worth, the direction and rate of its change, your cash flow, income and estate tax liability and other items. Also, we'll review your wills, trusts, life and disability income insurance, and any other legal arrangements you've created.
Step two is to develop your personal financial objectives. Frequently, our clients say "it's to make sure that I have a source of income that I cannot outlive, and secondarily, to leave a legacy for my family, and, perhaps the community". But often it's more complex, and involves thinking about things that you have never considered, prompted by questions that perhaps you have never been asked.
Step four entails the development of recommendations - specific strategies for implementation. Equipped with pro's and con's of each, and an economic model to determine their impact, you'll be in a position to determine what is appropriate for you. Many strategies you will elect to implement, some now, some in the future, others you will reject. But the decision will be yours. The agreed upon strategies will be reduced to writing in a comprehensive report.
The fifth step is implementation. This is where your other advisors will be most instrumental. You will have a game plan, a specific course of action to take to your attorney. Armed with this information, he or she will be in a position to help you. He or she will draft or amend the required documents. Your CPA will be instrumental in the documentation of many of the strategies involved.
Again, there are strategies that had you not first determined your basis (your objectives), and a method of evaluation (the financial model), then you would not have been equipped to pursue them.
Step six is the ongoing review process. At least annually, an update of your plan should be done to encompass any changes in the economy and the tax law, as well as in your personal situation and objectives. As a result of this process, you can be comfortable that your financial plan continues to be up to date.