Do you need a new bucket list?

I often speak with you about treating capital not as a single monolith, but in purpose-driven "buckets." Every bucket gets its own label, allowing you to clearly visualize the moving parts of your financial plan. This month, we will evaluate several bucket options that may deserve a place in your financial plan.

I urge you not to pool your wealth into one big account that lacks imagination. Instead, dream about the experiences and goals in life that you truly wish to trade those dollars for and create a bucket labeled specifically for that purpose. The psychological benefits of this process are well documented: eliminates guilt and worry, mitigates loss aversion, reduces cognitive load and decision fatigue, and establishes boundaries prior to moments of stress.

At a foundational level, you already have buckets for spending (your checking account), saving (your savings account), and retirement. Perhaps you have segmented assets for larger purchases, such as a home, a car, or a wedding. Some of you may have even established a general investment bucket, which I affectionately refer to as the war chest if it has no designated purpose.

The question on the table is, “Are there any other buckets that now deserve a place in my plan?” Once your foundational living expenses and long-term security are fully anchored by a mix of guaranteed retirement income, rental cash flow, and reliable portfolio yield, a fundamental shift occurs. You move from wealth accumulation to wealth intent. You begin thinking about deploying your wealth in ways that may not have felt possible just a few years ago.

Let’s review 12 ideas for your surplus wealth to see if any of them resonate with you.

MONEY FOR YOU

This capital is dedicated strictly to your immediate quality of life, bucket-list travel (pun intended), home enhancements, and personal fulfillment without guilt or hesitation. It is typically the easiest category to which people assign purpose and most often simply requires managing the balance between short-term and long-term use.

• Now: The “now” bucket is for any spending that you plan to execute within the next 12 months. Because the use of the money is imminent, it should be divested from the market as soon as it reasonably makes sense. I prefer to keep that cash in a bank account separate from the primary checking and savings accounts.

• Soon: The job of the “soon” bucket is to cover anticipated spending in a 3-to-5-year window. This bucket should be invested in a combination of lower-risk, highly marketable securities designed simply to beat inflation. This allows for an easy transition to cash and the now bucket when the time arrives to use it.

• Later: This is the de facto “war chest.” Usually this consists of money that you will need or want more than five years from now, but you’re not really sure how much or for what purpose. It’s important that these assets are invested to align with the higher end of your risk tolerance and still retain a degree of liquidity.

MONEY TO SHARE

The reality is that despite my constant urging to spend more of your hard-earned wealth on yourself, you probably won’t. After all, you didn’t achieve financial security by splurging and squandering. Research shows that most people won’t spend it on others during their lifetime, either. Only an estimated 20 to 30 percent of transferred wealth occurs through lifetime gifts rather than posthumous bequests.

My plea to you is to consider doing more giving while living. Whether it’s family, neighbors, or charitable organizations, why not share those gifts while you can at least experience the warm and fuzzy feeling that accompanies an open heart and open hand?

These assets are designated to help children and grandchildren build solid foundations today. They can fund education, assist with home purchases, seed-fund early investments, and instill financial stewardship while you are here to witness the impact.

We would be remiss in our planning not to acknowledge that certain situations require guardrails on giving. We certainly have to be careful providing anyone more money than they can responsibly manage. However, good planning and communication will allow us to implement the proper protections, whatever they may be.

• Annual gifting: While the lifetime estate tax exemption - $15 million per person in 2026 - will cover most of us comfortably, it is still worth noting that any individual can gift up to $19,000 to another person without triggering tax consequences or filing requirements. A married couple could each give $19,000 to a child, totaling $38,000. A regular cash gift is typically best for adult children or adult grandchildren.

• UTMA/UGMA: These accounts are governed by the laws in your state, but they are all designed to allow you to make a gift today that a minor receives in the future. The gifted funds can be invested, making these accounts a good fit for descendants who have a horizon of five or more years before they reach the age of majority in their state. The caveat here is that control of the account is fully transferred to the recipient once they reach legal adulthood.

• 529 Plans: The rules regarding the qualified use of 529 plans have relaxed considerably in recent years, making these accounts worthy of consideration if your goal is to commit the funds to use for educational purposes. While there is no tax deduction for contributions, any growth in the account is completely tax-free for qualified distributions. The owner also retains control over the account.

• Trump Accounts: A newly available tool created under Internal Revenue Code Section 530A—commonly referred to as "Trump Accounts"—offers a unique structure worth evaluating alongside traditional 529s and custodial accounts. They offer substantial long-term tax advantages for minor children. A key highlight is that children born between January 1, 2025, and December 31, 2028, are eligible for a one-time $1,000 seed contribution directly from the federal government. Even if you do not plan to make ongoing contributions, taking advantage of Uncle Sam’s contribution for an eligible child or grandchild in your family is a smart move.

• Qualified Charitable Distributions: If you have attained the age that requires you to take minimum distributions (RMDs) from your IRA(s) and you are charitably inclined, then you should evaluate Qualified Charitable Distributions (QCDs). Instead of having that distribution paid to you as taxable income, you can have it paid directly to one or more qualified 501(c)(3) charitable organizations. This directly lowers Adjusted Gross Income while satisfying your RMD. If you already regularly give from your income and take RMDs, this is an essential tax-efficiency tool.

MONEY TO LEAVE

As long as you have the assets to maintain your own lifetime security, you will have assets to leave. For many, this will include a home, personal valuables, and cash on hand. But unless unexpected expenses arise, there is likely your unused “later” bucket that will naturally pass forward as well. Your estate plan should be structured to pass down wealth smoothly, tax-efficiently, and securely to future generations or charitable causes.

• Roth IRAs: Roth IRAs are the very best type of accounts to earmark for legacy giving. They have no tax implications upon inheritance, avoid probate, and will continue to appreciate tax free until distributed. Most non-spouse beneficiaries have up to 10 years to fully distribute the account, allowing a decade of continued compounding. Because of their inherent long-term time horizon and preferential tax treatment, these accounts are excellent for very marketable investments at the higher end of your risk tolerance.

• TOD/POD: Assets titled “Transfer on Death” or “Payable on Death” bypass probate and allow taxable assets to receive a full step-up in cost basis upon death. This means unrealized capital gains built up over your lifetime are eliminated for your heirs.

• Trust Accounts: A trust account performs two main functions: avoiding probate to maintain family privacy, and regulating the disbursement of funds according to your explicit directives. These accounts protect heirs from sudden wealth responsibility or creditor risks.

• Life insurance: Life insurance is a vital risk management tool during earning years. It passes directly to a beneficiary without being subject to probate or income taxes. However, for wealth transfer, accumulated assets in investment accounts often serve as a far more flexible engine once term protection is no longer required.

Clearly there are some options out there that I did not cover here, but these mark the most popular ways the wealthy use buckets and labels to simplify the execution of their financial plan. Reframing surplus wealth into these purpose-driven buckets provides clarity on what can be spent today, shared now, and preserved for tomorrow. It also revolutionizes your future by estate planning from an abstract end-of-life task into an active, rewarding lifestyle strategy.

THE CAPITAL PURPOSE MATRIX

To help visualize how surplus capital is categorized across time horizons, tax treatments, and control levels, we use The Capital Purpose Matrix during our annual planning deep dives.

DIMENSION	BUCKET 1: PERSONAL LIFESTYLE	BUCKET 2: LIVING IMPACT	BUCKET 3: LEGACY & ESTATE
Primary Purpose	Personal fulfillment, bucket-list travel, & experiences	Real-time family support, education, & early wealth building	Multi-generational asset transfer & long-term legacy
Time Horizon	Short-to-Medium Term (1–5 Years)	Near-to-Intermediate Term	Long-Term / Post-Mortem
Core Strategy	Capital preservation & flexible liquidity	Strategic gifting & targeted growth accounts	Maximum tax efficiency & generational wealth protection
Key Vehicles	High-Yield Cash, Taxable Brokerage Accounts	529 Plans, Section 530A Trump Accounts, Direct Gifts	Dynasty Trusts, Donor-Advised Funds (DAFs), Roth Conversions
Client Control	100% Personal Control	Guided / Shared Control	Fiduciary / Delegated Control

PUT IT IN WRITING

As you are relabeling your buckets, there is no better place to store this information than your RightCapital portal. This gives your plan the highest likelihood of success, shares all of the details with me, and allows me to develop a plan to complement your design.

The most immediate action you can take is customizing your account architecture. You have the ability to assign custom labels to every individual account in your profile. Rather than seeing a generic brokerage or IRA account ending in four digits, you can rename those line items to match your actual life goals—whether that means labeling an account "Bucket 1: 2027 European Travel," "Bucket 2: Grandkids College Fund," or "Bucket 3: Legacy War Chest."

Once your accounts carry these custom labels, we establish definitive asset allocations tailored specifically to each account's designated job. Instead of applying a single, blanket risk profile across your entire net worth, RightCapital allows us to lock in conservative, highly liquid allocations for your short-term "Now" accounts while giving your "Later" and legacy accounts the dedicated, growth-oriented posture required to compound effectively over decades.

Beyond static allocations, RightCapital enables us to model definitive distribution schedules for each custom-labeled account. Whether you want to structure a recurring monthly transfer from a liquid cash bucket starting next spring, or schedule a series of strategic annual gifts to family members over the next five years, these explicit cash flow timelines can be programmed directly into your interactive model to show exact timing and execution.

You don’t have to know how to construct all of that within RightCapital - that’s my job. But I do advise you to use it as a repository for what you’re thinking in any given moment.