In this family, the husband had managed the finances and investments for the household throughout the couple’s marriage. Still, he wanted his wife and adult children to learn to make wise financial decisions.
The husband had recently received a large lump sum distribution from his company’s buyout, and he will continue earning a salary for a few years after the buyout. He signed up for a retirement course with his wife so she could gain an understanding of the financial fundamentals. Once they became our clients, his wife was involved in every meeting to understand how the family would function financially if the husband passed.
After the large liquidity event, we worked with the family’s estate planning attorney to create a flow chart of their current estate plan and how the assets would flow to the wife and kids. Additionally, we met with the three adult children so they could understand the wealth that will eventually come to them and the responsibility that it entails.
Once the family was aware of their wealth and responsibility, we continued working with the estate planning attorney to develop further estate planning with specific intentions and structuring to minimize the estate taxes due at death. The couple became clear on how they would like assets to flow to their children and any eventual grandchildren that come along. Additionally, we were able to move the life insurance policies to an irrevocable life insurance trust (ILIT). This action moved $7M of life insurance outside the taxable estate, saving over $2.8M in estate taxes.
The family’s financial education continues. The oldest son recently participated in our Wise Wealth Decisions course to learn how to build a strong financial foundation as he sets out on his career. Both daughters participated in our Women’s Course to learn the foundations of personal finance and investing. We will continue meeting with the family as their circumstances change.
