How do you want to spend the rest of your life?

There is no “one-size-fits-all” plan to fit every investor and every financial goal.

It is never too early - or too late - to plan. But if you don’t plant the seed, the tree will never grow.

Where do you want your bridge to take you?

As a client, you are family - not just a number.

Are you living to work, or working to live? There is a big difference.

“We make a living by what we get, but we make a life by what we give.” - Winston Churchill

Case Study: A Woman On Her Own

 

Can insurance be costing you much more than you think?

 

The following is a hypothetical case study that demonstrates a proposed approach for a single woman with one responsible, independent adult daughter who needs more cash to spend annually.

 

SITUATION

 

The client’s goals are to travel with her daughter and add to her antique doll collection. Her sources of income are a personal pension plan, social security and some stocks. She owns bank stocks, which she had received as a gift, that have an extremely low cost basis and a single premium deferred annually.

 

In her will, she has included a charitable gift. The bank stock pays a low dividend and she owns a $100,000 insurance policy that had been recently purchased from a local life insurance agent.

 

APPROACH

 

The focus should be on important considerations for the woman’s goals and desires:

 

–The life insurance agent allegedly advised her that the death proceeds would go to her daughter as inheritance. The client’s understanding was that her daughter could use the insurance proceeds to pay death-related taxes. She has been using her dividends as interest for her living expenses.

 

–LD Lowe could calculate her estate value and would likely determine her estate would owe federal estate tax. Part of this calculation would demonstrate the life insurance proceeds would be included in her taxable federal estate. This could be disturbing to the client, as her desire is to create an estate for her daughter with the insurance or use the insurance proceeds to pay taxes. Ironically, the insurance would actually generate more taxes because the death proceeds were subject to the federal estate tax.

 

After consulting with the client to determine the priority of her objectives, a plan could be prepared for her to review and shared with her attorney.

 

As a result of new planning:

 

–The client could use income tax deduction strategies during her lifetime which would coincide with her estate plan to include a charity in her will.

 

–She could transfer a block of the bank stock to a charitable trust. The trust could then direct an 8% annual income to her, improving her cash flow. She could also realize a significant income tax deduction during her lifetime. Her charitable gift could then be implemented with the irrevocable charitable trust. Upon her passing, assets in the trust would pass to the charity.

 

–The newly-generated excess income and tax savings from the trust could be gifted to her daughter instead of being left to accumulate in her taxable estate.

 

PROJECTED RESULTS

 

An estate plan could be executed that would reflect her specific goals:

 

–The plan could generate cash flow while not incurring needless federal taxes.

 

–The daughter would be informed of the strategy of her mother’s estate plan. The client could then be able to travel, add to her doll collection, and have peace of mind that her daughter was prepared to handle any estate issues that would fall to her in the future.