Friday, February 3, 2023

CFP® & Mentor Komal Motwani On The Virtues Of Careful Estate Planning

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Ian Feldman
Ian Feldman
Ian Feldman is the lead editor for Business News Ledger. Ian has been working as a freelance journalist for nearly a decade having published stories in the New York Times, The Plain Dealer, The Daily Mail and many others. Ian is based in Detroit and covers issues related to entrepreneurs and businesses.

Komal Motwani is an accomplished and impressive player in the financial sector with an education and list of accomplishments that is expansive. Among her many titles, Komal Motwani is first and foremost a Senior Investment Analyst where she is geared toward investment analysis and portfolio management. She also provides coordination of assets with high-net-worth families and individuals and provides financial, investment and retirement/estate analyses to clients in perpetuity.

Her esteemed career has allowed her to contribute her unique perception on the financial sector to a number of high-profile news sources where her articles have been quotes and cited by the best and brightest. She took the time to answer a few questions about the process of becoming a CFP, where investment strategies are going post-inflation, and the virtues of a solid estate plan.

Hey Komal, thanks for taking the time to answer a few questions, let’s start with you describing a little about what a CFP provides people?

Thank you for having me. Of course, a CFP is a Certified Financial Planner, it is a demarcation that only comes from passing one of the hardest exams in the financial sector. It is sort of how the BAR exam is for lawyers, the CFP is for financial planners. Being a CFP affords me a reputation among colleagues and for potential clients, it shows that I have done my due diligence and worked tirelessly to excel in my field of expertise which is, financial planning.

As for what I provide people, I speak for myself when I say that I use my knowledge to provide sound financial planning and advice, portfolio management, investment analysis, retirement analysis, estate planning, and the general coordination of important assets for high-profile clients and conglomerates.

Being a Certified Financial Planner is no small feat, can you walk us through the kind of training and education you had to go through in order to achieve this impressive feat?

It certainly was no small feat; the CFP examination is a 6-hour exam that requires an incredibly nuanced perception of finance and applicability of different concepts toward real-life situations. I didn’t just stumble into the CFP exam; I spent a great many years’ studying the intricacies of finance and earning a Bachelor’s and Master’s degree in Banking & Finance.

I have also spent 10 years in the realm of Investing and Financial Planning across the USA, Singapore, and India.

One of your roles revolves around estate planning, can you enlighten us on just what estate planning is, and the processes therein?

An estate planning is a process of accumulation, management and distribution of assets/wealth considering personal objectives as well as legal and tax ramifications. Basically, it is distributing property to the beneficiaries and honoring the client’s wishes.

Other Estate planning objectives can also include minimizing income, gift, state inheritance and generation skipping taxes; minimizing transaction costs, gathering information for legal probate process, and providing liquidity to the estate of the deceased at the time of the death to pay for costs such as taxes, funeral expenses and final medical costs.

To begin the estate planning process, the advisor / planner should collect the following:

  • Current financial statements
  • Family information & beneficiaries (i.e., parents, children, ages)
  • A detailed list of assets and liabilities, including the fair market value, adjusted tax basis, and expected growth rate for all assets, how title is held, and the date the assets were acquired.
  • Collect Copies of medical and disability insurance policies.
  • Copies of life insurance policies in force identifying the ownership of the policy, the named insured, and the designated beneficiaries
  • Copies of annuity contracts
  • Copies of wills and trusts. Identification of powers of appointment
  • Copies of all previously filed income tax and gift tax returns (as available)
  • Identification of assets previously gifted
  • Other pertinent information

In your dealings with clients, what would you say is the most common oversight in typical estate planning?

There are a number of factors that can be construed as an oversight in the process of estate planning, in my experience the more common ones include:

  • Invalid, out-of-date, or poorly drafted wills.
  • Improperly arranged or inadequate life insurance
  • Possible adverse consequences of not titling the assets correctly.  Leaving all the assets for probate processing can take longer to settle and can possibly create dissatisfaction amongst the beneficiaries
  • Estate liquidity problems – insufficient funds to pay off debts and expenses.
  • Selecting a wrong executor/trustee/manager.

Investments, retirement planning, estate planning – your role covers various facets of finances from small to large scale clients – what would be your most important piece of advice for those who are considering their financial futures?

Planning ahead is always a complicated notion, regardless of your financial status or walk of life. I would always recommend having someone trustworthy be advising or managing your assets for the long-term – as a CFP I have seen too many attempts to juggle too many avenues simultaneously and pay heftily for doing so.

Whether I am advising individuals on estate planning or running company-scale investment strategy I have noticed that the more considered and time taken before making decisions have yielded the more stable results.

So, take your time, and always ensure you know exactly what you’re getting into whether it be investing or planning.

What do you think the future holds for global and local investments – both in strategy and execution?

That is an excellent question, and one that can only be speculated upon with any real weight. The digitization of currencies and the rise of crypto has seen some interesting shifts in the global and local markets in equal measure. I believe we will see a little more fragmentation across the markets that will ultimately allow more niche investment strategies to manifest themselves.

With Stablecoins, cryptocurrency bouncing back, and the introduction of central bank digital currencies across a number of countries, the future is uncertain for any solid strategy, but I am very excited by the prospect of such new approaches to investment.

With rising inflation rates and wariness of financial risks around the world you can certainly understand that some people are worried about their finances, what would you recommend be a healthy financial habit for those who are a little worried about what comes next?

Understandably the world is in a state of inflation pretty much across the board. I have seen that it impacts people in various ways, but there is some understandable hesitance no matter who you are. One healthy financial habit is budgeting, having a clear understanding of your total asset trajectory and situation, in times of inflation there is a temptation to squirrel away as much as possible under the mattress. I would recommend people to invest in safer platforms wherever they can and keep a steady nest egg/rainy day fund aside.

Budgeting and knowing your financial state of being is one of the strongest weapons you can have against increasing inflation.

Finally, what is on the horizon for Komal Motwani?

My current work keeps me very busy; I am very passionate about writing about my field in a number of industry leading publications from MarketWatch to the Wealth Management & European Business Magazine. I try to give back to the community that has fostered me for so long as well, I am a proud member of the NAPFA, Society of FSP and the FPA.

Thank you Komal for your time!

You can follow up with Komal Motwani at https://www.komalmotwani.com

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