Good Neighbor Podcast: Bergen
Bringing together local businesses and neighbors of Bergen County
Good Neighbor Podcast: Bergen
Ep. # 99 Navigating Your Financial Life: How Crowne Point Tax and Wealth Council Integrates Legal, Tax, and Investment Strategies
Nik Agharkar doesn't just prepare your taxes – he transforms how you think about your entire financial life. After nearly 20 years as an attorney, including building and selling his own law firm, Nik discovered his true passion lay at the intersection of legal expertise and financial strategy. His journey from litigation to financial advisory reflects a powerful insight: most people struggle with disjointed financial advice that leaves them confused and frustrated.
"Our clients have come to us saying they asked their CPA a question, who sent them to their financial advisor, who sent them to their attorney, who sent them back to their CPA," Nik explains. This endless loop of disconnected advice inspired him to create Crowne Point Tax and Wealth Council, partnering with Shorehaven Wealth Partners to deliver comprehensive financial services under one cohesive umbrella.
The distinction between tax preparation and tax planning emerges as a crucial concept throughout the conversation. While most Americans interact with tax professionals only during filing season, Nik advocates for year-round engagement. "There's no such thing as tax season," he insists. "Tax planning happens every day." Through quarterly meetings with clients, he helps identify strategic opportunities to legally minimize tax burdens while maximizing wealth retention.
Beyond tax strategies, Nik delves into sophisticated estate planning techniques involving trusts, asset protection through business structures, and long-term care considerations. His explanations of Medicaid planning and the "five-year lookback" period highlight how proactive financial planning can protect families from devastating healthcare costs later in life. For business owners and high-income professionals – particularly those in medicine, manufacturing, and corporate leadership – these integrated strategies can dramatically improve financial outcomes and legacy planning.
Ready to stop getting the runaround from disconnected financial advisors? Connect with Nik at crownepointtax.com or find him on LinkedIn to discover how integrated tax, legal, and wealth management strategies could transform your financial future.
Crowne Point Tax & Wealth Counsel
Nik Agharkar
234 Morse Ave #3
Wyckoff, NJ 07481
917-202-1465
nik@crownepointtax.com
crownepointtax.com
This is the Good Neighbor Podcast, the place where local businesses and neighbors come together. Here's your host, Doug Drohan.
Speaker 2:Hey everyone, Welcome to another episode of the Good Neighbor Podcast brought to you by the Bergen Neighbors Media Group. I am your host, Doug Drohan, and today we are joined by my friend, Nik Agharkar. He is the owner and managing member of Crowne Point Tax and Wealth Council. Nik's based out of Wyckoff, New Jersey. Welcome to the show.
Speaker 3:Hey, thanks for having me, Doug.
Speaker 2:Yeah, you have an ESQ after your name. So the name of your company is Tax and Wealth Council, I guess maybe the council is related to the ESQ. So you're a lawyer by trade. Tell us a little bit about your background and then we can get into how that relates to your firm, crown Point.
Speaker 3:Absolutely so. I, like a lot of professionals in their early 40s, took a very kind of a winding and twisting road to get to where I am, started in litigation. So I've been an attorney for almost 20 years. I started out as a litigator and one of the last things I did as a litigator was I built and sold my own law firm. And in doing that and sort of figuring out you know how do I build a business, I really found my joy and my passion, which is again really creating businesses and really making them run.
Speaker 3:And so I was at a firm after I had sold my business and you know it was amazing because they gave me two paralegals, an assistant, they had a marketing department. I didn't really have to do anything for the business anymore, I just needed to be a lawyer. And I was miserable, I was absolutely miserable. And so I thought you know what, maybe I'll go back, I'll get me an MBA, I'll transition careers. And I was talking to a friend of mine who was a management consultant and he was also a former attorney, and he said no, don't do that. Come be a management consultant with us. We drop into Fortune 100, fortune 50 companies. We don't really know what we're doing and we'll solve problems right and you'll basically get your MBA right and you'll learn how all these things work. So I went to management consulting.
Speaker 3:I was in consulting for almost three years and one of the things that kept happening was I would talk to clients and I would take them out to dinners or lunches. We would talk about some of their problems and the strategies at work. But then the conversation would almost invariably change to but you're still a lawyer, right, because I have this side hustle. Do I need an LLC? Or why am I getting crushed on my taxes with these stock options that I have? Or do I need a will? How does this work? What is estate planning? And so that's kind of when the light bulb went off for me that this is the new business, right, this is the model that I can actually really have an impact on people's lives. So I started with sort of just tax planning strategy in estate planning.
Speaker 3:I added my Series 65 and joined Shorehaven Wealth Partners, and between the two firms, between Crowne Point Tax and Wealth Council and Shorehaven Wealth Partners, what we're able to do is create a holistic view of your financial life. So you know, our clients have come to us and said you know, I asked my CPA a question, they sent me to my financial advisor, my financial advisor sent me to my attorney, my attorney sent me back to my CPA. So the person gets the runaround and nothing gets done. And then there are other scenarios where all these people, these advisors, just argue with each other right over who is right and the client is left kind of helpless with not any advice or any path forward. So our model is to really give just cogent, clear and actionable advice to our clients on all of these matters in kind of one place, so they have that one source of truth. So that's kind of how I got to where I am.
Speaker 2:Nice. So from lawyer to tax planner, I mean, that's you know, among other things. So I guess it's not as me, as an outsider, not what you would normally think of as a natural progression of a career, but obviously it makes sense Me being a business owner, having formed an LLC and having a separate financial advisor, having a 401k from my past company, roll it over into an IRA, then I need a SEP IRA. Then somebody tells me about what's a solo 401k? And should I be an S corp? Why am I paying?
Speaker 2:Like every December I was writing these huge checks to get my taxes down. You know, funding my SEP or whatever it was, and I get it because you've got. You know I have a will. I don't have a state attorney, so, yeah, it makes sense to have everything under one, you know, kind of umbrella, because everybody's talking to each other within that firm and you're a client. That's being managed kind of in an integrated way rather than, as you said, it's kind of ad hoc. And you know this guy over here, you know my financial advisors in California. I never met the guy, but I trust them, you know, and and so yeah, no, it makes a lot of sense.
Speaker 3:So one thing that people say to me is that, oh, all these things are so different, they're all kind of all over the place. My response to that is all of these things, even financial advisory, finds its authority in law Right the IRS, the IRS, the Internal Revenue Code, it's the United States code, it's a law right. And so interpreting these things and understanding how they work, this is very much within my skill set, right, and so it's just sort of using my skills in a bit of a different way.
Speaker 2:Right. And then you partner with people that have other skills, and that's what makes it a great value proposition for people. And you say and I've heard this a number of times over my life it's not what you make, it's what you keep. And I don't think you really understand that until you have your own business, because there are lots of ways to tax planning. And I say this too, because for my entire life I had an accountant that did my taxes, but that's not tax planning. And I say this too because for my entire life I had an accountant that did my taxes, but that's not tax planning.
Speaker 2:I used to do TurboTax myself. I did HR Block. Then I had a few accounts, but they really didn't advise me. They just asked me for my documents in January, february, and then they told me what I owed or what I was getting back, and that was it. And it was wasn't like okay, well, you could have done this to offset that. And so I think having tax strategy is a lot different than what most people think of. As an accountant for tax preparation is a huge difference between the two. Is that right?
Speaker 3:Yeah, and you know I look at it as there's. There's no such thing as tax season. There's a tax filing season, Right, there's a time where you have to fill out the paperwork, but tax planning and tax season is every day. You know, a law school professor of mine once told me and this was actually my federal, my federal tax professor said you know, look, you guys can either practice tax or you can malpractice tax, but either way you're going to be in this practice. You have to know this stuff, because anytime you touch money, anytime money comes in, there's tax involved. And so you have to understand how these rules fit together, and especially the state rules as well, to really understand what's happening. And so you know to your point a lot of CPAs or tax preparers, they'll take all of the forms, but at that point they're historians.
Speaker 3:When we're filling out the forms now for 2024, there's very little that I can do to change what happened in the past. The only way to really get ahead of it is to make sure that you're meeting quarterly, which is what I do with all my clients. We meet quarterly. We make sure that we're doing the right things at the right time, pulling the right levers so that you're not writing that huge check right at the end of December. It doesn't hurt so much, but we've paid just enough, Right? You know a lot of people talk to me about getting a tax refund. There's no such thing as a refund. You've basically given the government is your percentage of loan on your money. So you really got to figure out how you can pay the least amount of tax while still being compliant and really make sure you can keep as much as you can.
Speaker 2:Yeah, and I've heard that, like if you're getting a lot back, that means you overpaid during the year and you gave the government your money that you could have used otherwise. But there is a psychological benefit. It's like getting a bonus and you're planning your vacations or your home renovation or whatever it is around your refund. You know you always sit around with your friends hey man, how much are you getting back this year? If you're like neutral, you almost feel like you did something wrong. But what you guys are saying is like no, actually, if you're neutral, then actually you did it right. Yeah, now, aside from so, say I, you know you guys advise me throughout the year. We prepare my taxes, but then I have what you call a tax controversy. So all of a sudden something's been flagged by the IRS. Am I on my own or do you guys help with that? Like, where do where do you step in with issues like tax controversies?
Speaker 3:No, of course I can represent people in front of the IRS, right, I have already and I understand you know that there's there's a process and a method to getting means removed, working with the IRS agents. But there are times where I will then find outside counsel. Right, that is a little more specialized in certain kinds of controversies, right, so you know, the realm of controversies for the IRS is very large, right. I mean, it can be everything from a simple underpayment to, hey, you weren't a resident of this state for a number of days, and so it depends on kind of what the controversy is. But for most of the run of the mill, absolutely I can handle that as well, and if not, that's the best part about working with an attorney. I'm networked in right to the community so I can point you in that right direction.
Speaker 2:Right, so you're not on your own if something were to arise. So I also want to talk about how estate planning comes into tax planning, because one of the things I've learned over my years in my business and working with a lot of senior care businesses and learning a lot from different people in that industry, is that estate planning, you know, there's a lot of estate tax. There's a lot of things with trusts that either have been created or weren't created. There's ways of people having to pay for long term care if they didn't have long term care insurance. So there's a lot that goes into estate planning that relates to tax. Is that correct?
Speaker 3:Yeah, and I mean even past sort of the estate tax because, honestly, at this point it doesn't look like that's going to be much of an issue for the majority of Americans. The estate tax is so high at this point. The exclusion anyway.
Speaker 2:Estate tax is so high at this point the exclusion anyway that there's 5 million or where is it now?
Speaker 3:So right now, I think it's actually a little over. It's almost 30 million for a married couple. Yeah, so it's a ridiculous number, effectively, right, for most Americans, this isn't an issue, but the bigger issues. What you did bring up actually I had a conversation earlier today about this is Medicaid planning. Right. So you know, their Medicaid provides for long term care and for, you know, elderly folks, medicare does not, right? So the difference is that Medicaid is need based. So they look at how much, how many, how much assets do you have?
Speaker 3:Now, the problem is is that you can't have more than $2,000 and own own more than one car. Right, you can't own you. You have to have very, very few assets for that to work. So we have to set up with destitute. You have to grow, yeah, absolutely. So we basically create effectively a legal fiction where they the person that has all the assets puts them into an irrevocable trust. So this is basically creating a separate entity where I'm going to give away my assets to this entity and now a trustee who is not me is going to manage that for the benefit of me or someone else, and so, basically, you now give up control over these assets so that they're not yours anymore, they're not in your estate and so it doesn't count against your income limitations. On Medicaid, now there's a five-year look back, so you have to have this established for five years before applying for Medicaid, but this can then provide you with those long-term care options.
Speaker 3:Now, I always counsel people look, medicaid is for folks who are destitute, so the level of service that you're getting isn't going to be, you know, the Green Acres retirement home. Right, this is going to be something pretty basic, but if you're OK with that, then that makes sense as a strategy. But there are other ways to skin that apple as well. That makes sense as a strategy, but there are other ways to skin that apple as well. Right, I mean the gift tax as well. The limitation is very large For a lifetime gift. It's almost 13 million per person, right? So you can give away a lot of your assets to kids and if the kids are, you know you have that good relationship with them they can manage it for you sort of and make that transfer a little less burdensome on you. But again, it is that careful planning. That's what it comes down to, right, it's starting early and getting ahead of those conversations, so that we're not having those conversations when you're 79 or 80, right, and we need this stuff very soon.
Speaker 2:So yeah, the risk of an irrevocable trust is who you trusting. That's right, I have control of that and you know there's your son, daughter, whomever that? Hey, listen, there's things happen, right. So you have to be very careful about who you, who you choose, and then, if you have multiple children, it can get sticky. What other? So what is a family trust? Or a living? You know well, I know what a living will is. We're not going to talk about that. But the different types of trust, those irrevocable trust what other kinds of trusts are there in case you don't really trust the person you want to give complete control of your assets to? Is there something in between?
Speaker 3:Yeah, so there are revocable trusts as well, right?
Speaker 3:So there are revocable living trusts. These are trusts that do not take those assets out of your estate, so they still would count against any kind of Medicaid issue that you might want, but you get great control, right. So during your lifetime you are the trustee of the trust, right? And you can manage the trust assets however you see fit. And then when you pass away, if you're married, your spouse then takes up the trustee role, and then when your spouse passes away, the trust becomes irrevocable and the successor trustees must then distribute the assets according to the plan in the trust. And that's really one of the biggest benefits of a revocable trust is you can get really granular as to how you want your assets distributed, where you want them to go and when and to whom, and so it can be a really great tool for estate planning in terms of keeping assets out of court, because trusts avoid probate. It's a private process and you can have a lot of granular control over how the money is spent and how who gets what money.
Speaker 2:Does it also protect you from liability in case you get sued? So say, you have a business and you get sued and you want your personal assets protected. Is there a trust that protects those so they can't be liable to any type of lawsuit?
Speaker 3:So you can put your businesses in a trust, but the better way to do it might be and this again, it comes down to personal preference and what the goals are but it might be better to set up a holding company and then separate LLCs or separate entities within that holding company. And this is common amongst real estate investors, right, who might own a portfolio of properties? If you own that portfolio of properties in your own name, if something happens at one property, they can touch all of them, right? And so you know. Let's take the classic slip and fall, right? Let's say that someone fell one of your properties. Well now, if you are, if you are owning that property in your name and you own all of your properties just in your name, that person can come after you for everything. But if we partition it out and we make sort of these silos and contain each of these in those silos and then put a holding company over it, it adds that layer of asset protection.
Speaker 3:A trust can be one part of that, but a trust on its own, especially a revocable living trust, is not going to protect you immediately from liability. What it can do, though, is down the line, if, let's say, you give your money to your daughter and your daughter is married to a ne'er-do-well who has a ton of debt. Right, if you did just a will-based plan and that money went to your daughter, it would actually become marital assets and the creditors could attach your inheritance because of your son-in-law's debts. Right, that is not the case with a trust. With a trust that money that goes to your daughter is protected from the creditors, it's a great way for that to happen if you have those sort of family dynamics. But again, this comes back to I say it again comes back to planning and starting with the client's goals. Right, what are we trying to accomplish? Here is always the first step that I take to see what solutions can we make that will make your life easier. That's what I'm here to do.
Speaker 2:Yeah, and I'd imagine, like just the way I'm having this conversation with you and asking questions, a lot of these things, you don't even know that you need them until you start having the conversation. So someone comes to you to talk about, you know, to talk about tax advisory, and then then from there you might talk about asset protection and wealth management and from there you might find out oh yeah, I have a bunch of kids and that I'm worried. Oh well, what are you doing about your will? I don't know, have you thought about a trust? I don't know what's a trust. So I I see why it makes sense to have everything under one roof rather than saying, well, you should really talk to a lawyer about getting your will, and you should really. You know, this way you can advise and all those things. So I'm kind of a talking walking commercial for you, right?
Speaker 2:now, but I see the value in having everything and I'm speaking through my lens, as you know, as I'm asking these questions and I always say, you know, in my business, when I have people in my magazine as advertisers or writing articles, I always look at it through.
Speaker 2:Look, I'm the average age of, you know, the readers and the residents in the towns that I serve. So what I think is important or interesting or I'm curious about, I assume and I think I assume correctly that most people that that live in these towns, whether it's Wyckoff or Old Japan Harrington Park, are interested in, have, you know, have a need or or curiosity as to, you know, the different types of services that people that I interview on this show provide. So I like to get into a little bit more of your journey, like being I know you talked about it initially, but what has it been like to be a business owner versus working for somebody and starting your own company, having to get your own clients, having to market yourself, having to do website SEO if you do that, seo or paid ad what has that been like? Have you enjoyed it? Has it been, you know, frustrating at times, like what has the whole journey been like for you?
Speaker 3:Yeah, so it's interesting because this is my second time around, right. So the first time around I really leveraged the internet because it was gosh almost 10 years ago now. Right, so I know people don't think it, but 10 years ago internet advertising was still somewhat burgeoning, right, as Facebook ads were actually still pretty cheap and you could get in front of people in a lot of different ways because there was also no data privacy laws. So I sort of leveraged the wild, wild west days of advertising on the internet to go from zero clients to 122 in nine months. That's, my business absolutely exploded, right. But important lesson I learned is be careful what you wish for, right, Because it became overwhelming. The reason why I ultimately decided to sell was I was working nonstop, right, I literally started that business with a laptop, a cell phone and myself and that's it, Right. So it was very, very intense. It was like drinking through a fire hose.
Speaker 3:So this time around, what's been really enjoyable is actually focusing on the service model and sort of what am I trying to accomplish? And honestly, I haven't really been advertising for the last year that I've been in business, because we've been refining this message. Right, We've been trying to figure out, kind of what works for the marketplace, what are people looking for. And I think now we have that story, so now it's ready to go. So I think you know I haven't really spent a ton of time on website or SEO or paid ads, because what I've been trying to do is build the messaging right and sort of build that community first and see what are people interested in and, most importantly, grow at a rate that's sustainable, right, Because growing at that crazy rate you know you're going to burn out right. I'd much rather sort of go slow, get a few clients sort of every month and make it. Keep it small for as long as I can, because then I'll be able to manage and really deliver great service Right right.
Speaker 2:That's great. That's a great lesson, I think, for a lot of people. There's a saying about go slower to build faster. In the fitness world they say that, like time under tension, you know, if you lift heavier but go slower, you're going to build muscle quicker and strength quicker. And in business, there's a kind of a philosophy as well as be more strategic, and it's not always about quick, quick, quick. There's a kind of a philosophy as well as be more strategic. Yep, and it's not always about quick, quick, quick. It's about be be strategic, be deliberate, but you'll grow faster in the long run, a more sustainable business. So, nick, how do, how do people reach you? What's the best way to find you? And, yeah, website, what do you recommend?
Speaker 3:Absolutely. I'm on LinkedIn. You can find me there, for sure. You can find me at crownepointtax. com or shorehavenwealth. com. Nick N-I-K at crownpointtaxcom is probably the easiest email and, yeah, reach out, right, anyone can find me. I'm all over the internet. I post on LinkedIn. I post articles on how business owners can save on taxes and I'm happy to chat with anybody who could use my services.
Speaker 2:And I forgot to ask who is your typical client, any size company, or is there a typical size client or type of company that you work with?
Speaker 3:No type of size company that you work with. No, no type of size. I generally find that folks in the medical field, actually manufacturing or packaging, and then wealthier folks with stock options that work at larger companies, are folks that I can do the most with. You know, I tell people that if you look at the tax code, there's maybe 10 pages dedicated to w-2 employees and the rest is all for investors and business owners, right. So ultimately, if you're a w-2 employee and you kind of had no other sources of income and it's not enough to really create any sort of investment income, it's very difficult. It becomes really hard to save on taxes or do to do much tax planning. So it's, it's very difficult, it becomes really hard to save on taxes or do much tax planning.
Speaker 3:So it's typically, it's really anyone with a business right or it's folks that have. You know. I call them the unfortunate rich, because it's true that about between $165,000 and $650,000, those earners pay the most in tax. And now what I found is that the billionaire class has latched onto this to say, oh, we pay the most. They are not included in these $150,000 to $650,000 people because they're not making any W-2 income, right?
Speaker 3:I mean, you look at how Jeff Bezos lives. He basically borrows against his Amazon stock and funds his life that way on loans, right, so they don't really pay tax. Their effective tax rate is very minimal, right. But the folks that are actually the frontline workers, that are, you know, the very successful folks working in large companies, the doctors, the lawyers that are making a ton of W-2 income they need to be able to move that money around and put that money to work in a really smart way, and that's going to end up helping them save on taxes.
Speaker 2:Okay.
Speaker 3:Excellent.
Speaker 2:Excellent. All right, nick. Thank you very much for being on the show. We're going to close out with Chuck and Dan. It was great. It was great seeing you and, and you know you and I'll be right back. Yeah, great to do that.
Speaker 1:Thank you for listening to the Good Neighbor Podcast. To nominate your favorite local businesses to be featured on the show, go to gnpbergen. com. That's gnpbergen. com, or call 201-298-8325.