Turning Your Wealth Into A Purposeful Resource

Once you’ve reached a certain level of wealth, you may start thinking, “What comes next?” It’s not uncommon for your focus to move from accumulation to making an impact on the lives of others if you have $3 million or more of investable assets. As a high achiever, you may find yourself at a crossroads where you realize that wealth alone isn’t your only end goal. 

It’s what you do with that wealth that truly matters. Whether you benefit heirs, impact your community, leave a legacy, or simply find more time to focus on what matters most, this is your moment to redefine your relationship with your wealth.

As fiduciary fee-only financial advisors, we understand and appreciate the creative spirit that drives you. We also share your passion and determination while recognizing that everyone may define success differently. Consequently, we tailor our financial planning and investment management services to fit where you are and where you want to go.

Today’s blog will look at ways to turn your wealth into a purposeful meaning. Let’s get started.

Philanthropy and Charitable Giving

One of the most direct ways to infuse purpose into your wealth is through philanthropy. Establishing a donor-advised fund (DAF) allows you to save money for charitable causes while reaping tax benefits. A DAF can be particularly effective for reducing income and capital gains taxes, estate taxes, or mitigating taxes on your heirs’ inheritances. 

By contributing to a DAF, you may receive an immediate tax deduction while retaining the ability to direct grant recommendations to your chosen charities over time.

Working with a fiduciary financial planner in Chicago or a fee-only financial advisor in St. George can ensure your charitable contributions are optimized for maximum charitable impact and tax efficiency. 

Charitable giving supports causes close to your heart and provides a positive way to reduce your taxable estate. 

How Working With an Objective Financial Advisor Makes a Difference 

Impact Investing

Another way to align your wealth with your values is through impact investing. This strategy involves investing in companies, organizations, and funds to generate social or environmental benefits and financial returns. Unlike traditional philanthropy, impact investing allows you to support causes while still owning and growing your wealth.

For instance, you can invest in renewable energy companies, affordable housing projects, or businesses focused on social equity. This approach allows you to put your money where your values are, supporting the changes you want to see during your lifetime. 

Working with an investor advisor in Chicago or St. George who understands impact investing can help you identify opportunities that align with your goals and values while providing competitive financial returns.

Legacy Planning

Your legacy is more than just the money you leave behind—it’s about the values and principles you pass on to future generations. Legacy planning involves thoughtful consideration of how your wealth will be distributed and how you can instill a sense of purpose in their decision-making.

Creating a family foundation is one way to ensure your values continue to guide your wealth after you’re gone. This can also be an effective tool for reducing estate taxes, particularly in Illinois, where estate taxes are some of the highest in the country. By establishing a foundation, you can set specific charitable goals and involve your family in decision-making, ensuring that your wealth continues supporting the causes you care about for future generations.

When planning your legacy, you should consult a fiduciary financial advisor in Chicago who can help you navigate the complexities of estate planning and ensure your wealth is distributed to reflect your values and financial goals.

Watch our video, “Three Ways to Make Paying Taxes Less Taxing!”

Protecting Your Estate from Unnecessary Taxes

In all the years we’ve provided wealth management services to high achievers, we’ve never had anyone tell us they want to pay more taxes than are legally required! Protecting your wealth from unnecessary taxes is vitally important. Every dollar of tax is one less dollar for your future use or that of your family. The following are a few tax planning strategies that you should consider.

1. The Use of Trusts

Trusts are powerful tools for protecting your estate from taxes and ensuring that your assets are distributed according to your wishes. By placing assets in a trust, you may be able to reduce the value of your taxable estate, potentially lowering your estate tax liability. 

There are various types of trusts, such as revocable living trusts, irrevocable life insurance trusts (ILITs), and charitable remainder trusts (CRTs), each offering different benefits and tax advantages.

2. The Use of Strategic Gifting

The IRS allows individuals to gift up to a certain amount each year without incurring gift taxes. For 2024, the IRS has set the annual gift tax exclusion at $18,000 per individual.

By making annual gifts to your heirs, you can reduce the size of your taxable estate while providing financial support to your loved ones while you live. This strategy can be particularly effective in Illinois, where estate taxes can majorly impact larger estates.

3. Leverage Tax-Efficient Investing

Some investments offer tax advantages that can help reduce your overall tax burden. One popular example is investing in municipal bonds, which can avoid federal and sometimes state income taxes. 

Also, tax-loss harvesting strategies and innovative tax mitigation strategies can offset capital gains incurred from the sale of a business or outside investments, reducing taxable income. Working with a fee-only financial advisor in St. George can help you identify and implement these tax-efficient investment strategies.

Why Partner with Cogent Strategic Wealth?

Managing significant wealth requires more than investment expertise—it requires a comprehensive approach that aligns with one’s goals, values, concerns, and long-term vision. 

At Cogent Strategic Wealth, we specialize in helping high achievers like you transition from wealth accumulation to purposeful wealth management. Our team of expert Chicago investment advisors can take the heavy lifting off your shoulders, allowing you to focus on what matters most. 

Consider us your financial department—trusted partners who listen closely and provide clear, dependable advice every step of the way.

Whether you’re reducing Federal estate taxes or those at the state level, like in Illinois (or elsewhere), optimizing your charitable giving, or creating a lasting legacy, we’re here to guide you.
Let Cogent Strategic Wealth help you turn your financial success into a meaningful force for the good of your heirs, future generations, and the causes you believe in.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Cogent Strategic Wealth provides investment advice only through individualized interactions. Certain information is based upon third-party data, which may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. © 2024, Cogent Strategic Wealth®