Ballast Magazine - 1.1

BALLAST Planning Across Generations: Wealth, Wisdom, and What’s Next

100 Years of Preserved Wealth How one family turned wealth into a lasting legacy.

Stability & Strategy Despite bouts of heavy volatility, financial markets continue to exhibit a cautiously optimistic outlook.

“Remain united - not just by shared assets, but by shared purpose and direction.”

CONTRIBUTORS

John V. Boardman, III

Andy Reynolds

Brian Burton

Cameron Hamilton

Frank E. Yozwiak

Trent Lakes

CFP®, CPWA® Founder, CEO

CFP®, CEPA®, MBA Partner, COO

CFP®, CIMA® Partner, CIO

CFP®, MBA, CPWA® Partner, Financial Planning

CFP®, J.D., LL.M. in Taxation Estate Planning & Tax

Paraplanner

PERSONAL FINANCE

BENEFICIARY DESIGNATIONS - YOUR FINAL VOICE In our constantly evolving lives, how can you ensure that your wishes are honored once you are gone? One effective way is to regularly review and update your beneficiary designations. Beneficiary designations are important for two reasons.

First, beneficiary designations offer a way to transfer assets without going through the probate process, which can be costly and time-consuming, often delaying distribution to the intended recipients. Also, beneficiary designations supersede all other directives (trusts, wills, etc.) upon death. Having these beneficiary designations

up to date is vital for a seamless transfer of assets to the intended recipient(s). Beneficiary designations should be set for life insurance policies, annuities, retirement accounts, and even some taxable brokerage accounts.

It’s important to regularly review your beneficiary designations to ensure that your wishes are clearly and accurately documented. Ultimately, a beneficiary designation provides you with the final opportunity to direct how your assets are distributed. So, make sure your intentions are reflected properly.

ECONOMICS

A COMPLEX ENVIRONMENT In early June 2025, the economic landscape shows slowing growth and rising global trade tensions. Both domestic and international indicators reveal a fragile balance between opportunity and risk, requiring careful navigation by investors, business owners, and policymakers.

United States The U.S. economy contracted by 0.2% in the first quarter of 2025, its first quarterly decline in over two years¹.This contraction was primarily caused by a sharp increase in imports, which rose by over 40%, as companies and consumers rushed to make purchases before anticipated tariffs2. Consumer spending growth slowed to its weakest pace in three years, and federal government spending declined as fiscal policy tightened.

Meanwhile, the tariff landscape continues to shift. The

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administration’s decision to increase duties on steel, aluminum, and other key imports reflects a broader protectionist approach³. These policies are intended to bolster domestic manufacturing, but they also introduce inflationary pressures and complicate global supply chains.

The full impact will likely emerge in the coming quarters.

Global Outlook Internationally, major economies are adjusting forecasts in response to the evolving U.S. trade posture.The United Nations revised its 2025 global GDP forecast downward to 2.4% due to geopolitical uncertainty and weakened trade flows4.The European Commission expects just 1.1% GDP growth in the eurozone this year, with concerns about retaliatory tariffs and supply chain disruptions5.

Conclusion (cont. on next page)

In this climate, we advise clients to focus on long-term strategies, diversification, and thoughtful financial planning.

While market conditions may remain volatile, disciplined decision-making will be essential to preserving resilience and capturing future growth.

Sources: 1. Associated Press, “US economy shrinks in Q1 2025 amid tariff-related import surge,” May 30, 2025.

2. U.S. Bureau of Economic Analysis, Advance Estimate of GDP, Q1 2025.

3. CBS News, “Trump doubles steel and aluminum tariffs,” June 2, 2025.

4. United Nations Economic Outlook Report, Spring 2025 Revision.

5. European Commission, “Spring 2025 Economic Forecast,” May 2025.

MARKETS & INVESTMENTS

STABILITY & STRATEGY Despite bouts of heavy volatility in recent months, financial markets continue to exhibit a cautiously optimistic outlook, based on resilient economic fundamentals and strategic policy support.

Economic Growth & Corporate Earnings After a sluggish start to the year, the U.S. economy is showing signs of steady, albeit moderate, growth.

Consumer spending has shown resilience leading into the summer, supported by a strong labor market and gradual wage increases. While inflation has posed challenges, recent data indicates it is beginning to ease, giving the Federal Reserve room to potentially adjust interest rates. Sectors like technology and services continue to perform well, contributing to overall GDP growth.

Though uncertainties remain—such as global tensions and supply chain adjustments—the U.S. economy demonstrates adaptability and strength, suggesting a cautiously positive outlook for continued expansion through the coming quarters.

U.S. corporate earnings for Q1 2025 have demonstrated resilience, with the S&P 500 repor ting a 10.1% year-over-year growth, surpassing initial expectations of

7.2%². This performance was bolstered by robust results in technology and healthcare sectors. However, challenges per sist, including trade policy uncer tainties and elevated valuations, which may influence future earnings trajectories³. Despite these headwinds, the overall earnings landscape remains positive, reflecting underlying economic strength and corporate adaptability.

easing, along with signs of a rebound in consumption driven by improving real incomes, should support overall growth5.

In China, policymakers are targeting 5% growth in 2025, similar to last year’s pace. Fiscal policy is also set to become more supportive, and the languishing property sector shows signs of bottoming after several years of contraction5.

Monetary Policy & Inflation Global central banks remain highly coordinated in easing monetary policy, with only a few increasing interest rates. This market-friendly backdrop is the most favorable outside of recessions in three decades4. In the U.S., the Federal Reserve has lowered the federal funds rate by 100 basis points over three meetings in late 2024, bringing it to 4.25%–4.5% in response to declining inflation.

Conclusion While challenges persist, the financial markets are navigating through them with resilience.

Economic growth, corporate earnings, and supportive monetary policies provide a solid foundation for continued market strength.

Investors are advised to remain focused on long-term opportunities, particularly in sectors demonstrating strong fundamentals and growth potential.

Global Markets and Trade International markets are showing signs of strength. In Europe, fiscal policy has turned more supportive after recent progress to reform Germany’s debt brake.The European Central Bank has eased its policy rate, with two rate cuts completed and at least one more likely. This combination of fiscal and monetary

Sources: 1. Federal Reserve Bank of Atlanta, “GDPNow,” May 16, 2025.

2. AInvest, “Q1 Earnings Surge Signals Resilient Market Momentum as Tech and Healthcare Lead the Charge,” April 28, 2025.

3. AInvest, “Corporate Earnings Have Been Solid. Here’s Why Analysts Fear the Rally is Unsustainable,” May 6, 2025.

4. Neuberger Berman, “Equity Market Outlook 1Q 2025.”

5. Nuveen, “Annual 2025 Outlook the Economy and Markets.”

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C A S E S T U DY

BUILDING A LEGACY The Power of a Multi-Generational Family Financial Plan

In today’s complex and fast-paced financial environment, families with substantial assets face a critical question: How can we ensure that our wealth not only endures, but also empowers future generations?

The answer lies in the thoughtful design and disciplined execution of a multi-generational financial plan.

For high-net-wor th families, the stakes are significant—but so are the opportunities.

A multi-generational financial plan goes far beyond the mere transfer of wealth. It’s about passing down wisdom, values, and a shared vision of stewardship. When properly structured, such a plan becomes a strategic road map for preserving, growing, and purposefully distributing wealth across generations— grandparents, children, grandchildren, and beyond—while reducing tax exposure and aligning with the family’s long-term objectives. But the true value lies not just in the documents or structures; it’s in the collaborative implementation and shared commitment to the plan across generations.

The Thompson Family Take, for example, the story of the

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Thompson family, whose journey began with a single restaurant, which grew into a thriving national chain.

Rather than waiting for a triggering event—such as a death or business exit—the Thompsons proactively par tnered with a sophisticated financial planner specializing in complex, high-net-worth strategies.

The result? A comprehensive wealth preservation plan that reshaped the family’s future.

Estate Tax Planning A cornerstone of their strategy was the establishment of a multigenerational, irrevocable trust. This structure allowed the Thompsons to transfer significant assets outside

their taxable estate, maximizing their lifetime gift tax exemptions before anticipated changes in tax law. They also employed a Grantor Retained Annuity Trust (GRAT) to efficiently transfer rapidly appreciating business assets to the next generation at a minimized gift tax cost.

Instilling Values & Vision To reinforce financial literacy and long-term stewardship, the Thompsons, with guidance from their planner, developed a robust family governance framework. This included structured family meetings, education funds, and charitable giving initiatives. These meetings weren’t just about financial performance—

they were about legacy and purpose.

Adult children participated in strategic decision-making, while younger family members were encouraged to research and nominate charitable causes to receive annual distributions from the family’s Donor Advised Fund. This approach fostered a deep sense of involvement, responsibility, and shared vision across generations.

Diversifying Family Assets Recognizing the risks of having the majority of their wealth concentrated in their business, the Thompsons worked with their financial planner to prudently diversify. A por tion of their business holdings was liquidated and reinvested into a thoughtfully constructed, taxefficient investment portfolio. This portfolio was designed to support generational goals: delivering growth for younger heirs, income for older family members, and utilizing low-basis positions for charitable contributions to reduce tax impacts.

These discussions not only resulted in smarter asset allocation, but also served as a real-time educational

opportunity for the next generation to learn about prudent investing and risk management.

Additionally, the financial planner manages the families investment por tfolio, and helps the family articulate and implement their longterm vision. It’s not about quick fixes or generic advice; it’s about crafting a dynamic, evolving strategy tailored to the unique needs, values, and relationships within the family.

The Impact

The results speak for themselves.

The family’s net worth has continued to grow, the estate tax burden has been substantially reduced, and each generation is now actively contributing to the “Remain family’s collective united - not mission.

More impor tantly, the just by shared Thompsons remain assets, but by united, not just by shared purpose shared assets, but by and direction.” shared purpose and direction.

Legacy Through Intention

Wealth is more than just numbers on a balance sheet—it’s a legacy of effort, intention, and purpose. A multi-generational fi n a n c i a l plan, thoughtfully built and actively maintained, ensures that a family’s legacy is not left to chance, but shaped deliberately with clarity, compassion, and expert guidance.

It’s the intersection of technical excellence and deep family insight.

This intersection is where a true legacy is established.

Leadership & Oversight Plans like the Thompsons’ are often brought to life and kept on track by seasoned, sophisticated financial planners. This professional acts as the central coordinator, aligning the work of legal and tax advisors.

H I G H N E T W O RT H P L A N N I N G

CONSUMPTION VS. SAVING - WHERE IS THE LINE? “Spend less and save more” has built entire radio empires—and for good reason. It’s solid advice for the many Americans who would struggle to cover a $1,000 emergency without debt.

But the families we serve are in a different place.

Income generally meets or exceeds their needs, and the challenge isn’t affording life today—it’s ensuring that one’s lifestyle can be sustained tomorrow.

income in retirement. If we’re too far off from being able to reproduce our income in retirement, it’s time to tip the scale toward saving more today.

This action provides a double benefit: not only are you setting aside more for the future, but you’re also gradually adjusting to a lifestyle that requires less. This balance is something we continuously monitor over time to make sure we are always on track with your retirement goals.

Our #1 and most powerful tool for finding this balance is Monte Carlo testing. We test assumptions and scenarios about spending, saving, and investing, and we use the results to understand the likelihood of maintaining your

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THE BALLAST BULLETIN Did You Know?

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Behind Ballast

WE WORK WITH CHILDREN & GRANDCHILDREN TO HELP THEIR FINANCIAL JOURNEY

READS AND CONVERSATIONS WE’VE ENJOYED LATELY

UPDATES, MILESTONES, AND THE PEOPLE BEHIND BALLAST

Did you know we are here to guide not only you but also your children and grandchildren on their financial journeys? By engaging with younger generations early, we can equip them with the tools to build wealth confidently. From mastering budgeting and under standing investments to navigating tax strategies, we tailor our guidance to meet their unique aspirations and needs. Equally important, we can help ensure a seamless, tax-efficient wealth transition.

By working with your estate planning attorney and accountant to carefully craft estate plans, trusts, and gifting strategies, we help minimize tax burdens and potential disputes, and maximize the value passed to your heirs. Involving your family now fosters financial literacy, aligns expectations, and strengthens intergenerational wealth continuity – preserving your legacy for future generations.

UNREASONABLE HOSPITALITY

Book by Will Guidara

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“Helps young athletes & parents put competitive sports in perspective” -- Jeff Lehmann

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Book by Mel Robbins

“A simple, yet effective concept to live by...” - Dereka Bradley TRACTION: GET A GRIP ON YOUR BUSINESS

Book by Gino Wickman

“A great read for all business owners.” - Andy Reynolds

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“Every other month it’s delivered & I read it from cover to cover.” - Carole Simpson

CULTURE APOTHECARY

Podcast by Alex Clark

“A deep dive into trending and interesting wellness and lifestyle topics.” - Madeline Flynn

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The first half of the year was full of exciting milestones for the Ballast team!

In February, Advisor Cameron Hamilton welcomed his second daughter, Betty, and earned 5th place for his BBQ sauce at Hogs for the Cause, supporting pediatric brain cancer research. That same month, Director of Communications Madeline Flynn got engaged in Sun Valley, Idaho.

In March, administrative team members Dereka Bradley, Carole Simpson, and Christopher Benge represented Ballast at the Mission Health Magic Annual Gala (above).

Compliance Officer Jeff Lehmann and Chief Operating Officer Andy Reynolds have been busy cheering on their kids in basketball and soccer.

And congrats to Executive Assistant Charlotte Flynn on buying a new home in Versailles and competing in a recent equine event.

U LT R A - H I G H N E T W O RT H P L A N N I N G

THE THOUGHTFUL TIMING OF FAMILY GIFTS We often guide clients through one of life’s most unexpected life challenge, gifts made in adulthood often personal financial decisions: how and when to give money come at pivotal moments. to children and family. While estate We encourage clients to align gifting planning traditionally focuses on leaving with both financial readiness and family wealth behind, we believe there’s great need—balancing long-term security with wisdom in giving during your lifetime, “Giving while opportunities to provide support when particularly when your loved ones may living offers it matters most. Thoughtful, well-planned benefit most. something more giving reinforces your values, strengthens valuable: the Strategic gifting can meaningfully family bonds, and creates lasting memories. ability to witness reduce the size of your taxable estate, the impact of It also opens opportunities for financial which may lessen potential estate taxes your generosity.” education and stewardship. When and preserve more wealth for your family members receive money during family. But beyond the tax benefits, their adult lives, it often fosters deeper giving while living offers something more conversations around responsibility, valuable: the ability to witness the impact planning, and gratitude.

When done wisely, gifting is not of your generosity. Whether it’s helping a child buy a first only a tax-smart strategy—it’s a deeply rewarding one. home, support a grandchild’s education, or navigate an

C H A R I TA B L E P L A N N I N G

DONATING APPRECIATED SECURITIES We love charitable giving. In our experience, those who are most charitably inclined are often the happiest and most fulfilled. As with anything that has to do with a dollar, we aim to optimize. In terms of charitable gifting, donating appreciated securities, such as stocks or mutual funds, is a smart way to support charitable causes while optimizing your tax benefits.

market value today, but you would also avoid the capital gains tax (and potentially net investment income tax) on the $6,000 gain.

That’s a win-win-win.

For example, assume you want to donate $10,000. You could write a check for $10,000 to your charity of choice and get a $10,000 tax deduction (assuming you itemize deductions).

Alternatively, you could low basis donate securities worth $10,000. If you paid $4,000 for those securities years ago, by donating them directly to the charity, not only would you get the $10,000 deduction for their fair

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TA X & E S TAT E P L A N N I N G

LIFETIME TAX OPTIMIZATION We don’t prepare tax returns for our clients, but every recommendation we make across your financial lifetime is rooted in the tax code. From a planning perspective, there are only a handful of end outcome for your dollars: you spend them, you give them to someone or a cause you care about, or they are consumed via taxation. We’ve yet to meet the family that wants that third bucket to represent a larger portion of the pie, but unfortunately that’s what happens when your only tax planning is to minimize your tax bill each year.

As planners, our goal is to minimize lifetime tax, often across two generations. That often means taking actions that reduce your net worth today in order to pay less tax

later during your life, or to make inherited assets more tax efficient when passed to the next generation.

Let’s imagine Dave is 60 years old and retiring this year from his job where he earns $500,000. In this final tax year of high wages, we elect to accelerate several years of charitable gifts via a donor advised fund, wiping out income in the 35% tax bracket instead of in subsequent years in the 24% tax bracket. Then in his 60’s, we may proactively distribute funds from his large IRA in order to utilize that 24% bracket. Both actions generate tax today, but avoid more tax tomorrow, leaving Dave more after-tax cash flow and his heirs a balance sheet with less embedded tax to inherit.

WA N T M O R E F RO M B A L L A S T ?

STAY CONNECTED & WATCH LIVE Join us for our upcoming live webinars to learn more and ask questions, or book a oneon-one meeting with our team to see how we can support your goals with clarity and confidence. We’d love to connect!

Scan the QR code to tune in or visit BALLASTPLAN.COM/CONNECT for more.

Live Webinar Schedule (all times eastern): • • •

Tuesday, July 15th at 4:00 p.m. - Mid Year Market Update Tuesday, August 12th at 4:00 p.m. - 100 Year Family Wealth Plan Tuesday, September 16th at 4:00 p.m. - Tax Optimization of Charitable Giving

Visit BALLASTPLAN.COM to learn more about our team, our services, or to set up a free consultation.

To speak to a member of our team, call 859.226.0625 or email INFO@BALLASTPLAN.COM. Ballast is located at 400 E.Vine Street, Suite 400, Lexington, KY 40507, however we serve clients nationwide.

Ballast, Inc. is a registered investment adviser with the SEC. Registration with the SEC does not indicate that the adviser has achieved a particular level of skill or ability, nor is it an endorsement by the SEC. All investment strategies have the potential for profit and loss. Ballast, Inc. is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Any specific strategy or market/economic commentary may or may not be appropriate for your individual situation, may not have discussed all material implications of implementing said strategy, and may be reliant on data provided by outside resources. Prior to implementing any strategy or investment decision discussed in a Ballast commentary, please consult with the appropriate professionals to confirm thoroughness of the strategy presented and the appropriateness of said strategy for your individual situation.

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