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The
GOLDPLAN® model is a relatively complete and extensive financial
planning technology. Given the various assumptions made in constructing
a model— and subject to
their limitations and other unknowns— any given scenario allows you to see in
a specially designed report, a year by year projection of an estate's overall performance.
The report also allows you to see a projection of the estate's constituent parts such as income
and expenses (including estimated income taxes) and the valuation of each asset category
each year for the next 26 years. Included is a
summary of how your estate would likely be distributed and how much your beneficiaries would receive after settlement costs, if
you and/or your spouse died along the way.
Once
a basic model is formulated, we can vary any one or more assumptions in
any combination that seems reasonable to test likely outcomes in order to arrive at whatever you consider
to be an optimum result. The challenge is to pick assumptions
that are consistent with a reality that might not be evident or
well understood in mainstream thinking.
The
purpose of the report is to help you visualize, hopefully with with unusual
clarity, how your estate might look
during various stages of your life as you plan for any number
of financial goals, including making
provisions for children's or grandchildren's education, managing debt
and choosing between financing alternatives, choosing appropriate life insurance products, planning for retirement or the
possibility of needing long term care, making charitable gifts,
transferring business or other estate assets to the next generation, setting up various trusts
or investment accounts, and/or handling estate
settlement costs.
A basic illustration is a theoretical overview
of an entire estate moving through time... allowing you to see that all
of the significant aspects of financial and estate planning decisions
are interrelated and interdependent.
The illustration is also a
roadmap for success... a guide to help you manage your estate to achieve the goals you have in mind.
Once
you see such an illustration, you will understand why it is, that if you
don't look at an estate in its overall context, you can easily miss the big
picture.
In
addition to illustrating assumed market appreciation or
depreciation of capital assets, GOLDPLAN® can project the year
by year change that results from the liquidation or accumulation
of assets after taking into consideration annual income from all
sources, the tax on that income, and the assumed expenses of
the estate over the next 26 years (or until the assumed deaths
of the estate owners, whichever comes first).
If
you only consider the value of current assets and assumed
investment returns and not the many variable aspects of ongoing
cash flow, you can easily miscalculate how the nature and
character of an estate is likely to change over time.
This
is particularly true if you rely on the software or advice most
commonly offered to investors or estate owners —
software, for example, that might illustrate financial or estate planning
concepts — but is really designed to aid agents in selling
insurance, annuities or other financial products. A
failure to understand the underlying assumptions built into
packaged products can sometimes lead to unpleasant surprises.
When you integrate new techniques or products
into a GOLDPLAN® model, you can obtain a more comprehensive
view, which illustrates overall results quite elegantly and
simply. There's really no substitute for being confident and
clear.
You
should keep in mind that it will probably be many years before
the plan you put in place today will meets its tests; and by
then there might be no turning back.
I
do not maintain that financial modeling can actually mirror reality or
predict the future... it cannot. Nor do I claim that this technology
does not have its limitations...
of course it does. But that doesn't change the
fact that the closer you come to modeling how things really work, the
more likely it is that you— and those who depend on you— will make good
decisions.
Your questions and comments are welcome.
Feedback
"Very
complete package.
Head & Shoulders above other attempts I have seen and tried..."
— Andrew J. Urban, Jr.
Attorney
"Goldplan
is a clever Excel
application..."
— Michael Roselius, CPA
The CPA Software News
Reviewed August 2001
Rating: 4 stars out of 5
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