Teresa’s story highlights two of the most important principles we emphasize at Legacy Planning Group. The first is a long-standing, trusted relationship. Teresa has been a client for almost a decade, and we continue to meet and speak with her on a regular basis. The second focuses on the importance of equipping future generations to be wise stewards. After helping Teresa through all the issues associated with the estate and asset dispersion, her adult daughters and son became clients and we shepherd them in their own financial situations. —Jerry Black, Founder & Managing Principal
- During Harold Jackson’s life, he amassed a great deal of stock in one particular large U.S. company as well as multiple real estate properties. Harold had created a complex family partnership during his life for estate planning purposes. While the partnership shielded the family from estate taxes, Teresa and other family members were concerned about the complicated nature of the partnership and needed clarity.
- Inadequate record keeping made it difficult to clarify the status of the partnership.
- During the discovery process, Legacy also noted that the family members had emotional ties to the stock and some of the real estate in the partnership that were clouding their judgment and making decisions difficult. Particularly, the family wanted to keep the primary residence that Teresa was keeping up herself and the concentrated stock position.
- Teresa wanted to gift to some of her assets to children while she was alive in order to see the impact, as opposed to just passing it after her death but did not know how to accomplish that or how much she could gift.
- After meeting with Teresa and her children we established three specific objectives:
- Assist Teresa in gaining clarity on the complicated estate and partnership issues.
- Work with Teresa and her family through the emotional ties to real estate, assets, and stock.
- Minimize Teresa’s estate tax exposure by giving her options to gift to family members during her lifetime.
- To address the first objective, Legacy advisors worked with both the attorney who drafted the partnership and the CPA doing current tax filings, to gain clarity on the family partnership and estate plan.
- We were then able to weigh the costs and benefits of dissolving the family partnership and ultimately, with the family’s approval, decided to dissolve it.
- During the process, we became aware that Teresa had more assets than she needed for living expenses, with her pension, social security, and other assets. We established a means for gifting to her children by helping her disclaim certain assets and gift others from her own estate to decrease her tax liability.
- We arranged for a builder to assess the primary residence and property to get an idea of the value. After the valuation, one of the Teresa’s children made the decision to purchase the home, which kept the home in the family — just under new “management.” The family still spends time at that house on a regular basis, enjoying the memories and the emotional ties.
- We also helped the family navigate the decision to reduce its holdings in one stock and diversify to mitigate risk. As it turned out, this same stock was greatly affected by the 2008 market downturn, and the decision to diversify preserved over 90% of the family’s wealth compared to what wealth would have remained had they stayed solely invested in the single stock.
The decisions we helped Teresa and her family make dramatically impacted their financial position and peace of mind. First, we helped the family work through emotional ties with assets and equities, which allowed them to keep the primary residence and shelter a large amount of their equity during the market downturn. As we frequently note, there is no such thing as a purely financial decision. Teresa has also found a great amount of joy in the opportunity to gift to her children during life using methods that are tax sheltered.
Our relationship is still strong with Teresa. After we completed the estate and diversification, all her children became clients of Legacy Planning Group. Now we meet with each subset of the family separately on an annual basis. While each situation is different, we are helping Teresa, her children, and grandchildren all make wise financial decisions, helping and unifying three generations of one family..
Teresa’s story highlights two of the most important principles we emphasize at Legacy Planning Group. The first is a long-standing, trusted relationship. Teresa has been a client for almost a decade, and we continue to meet and speak with her on a regular basis. The second focuses on equipping future generations to be wise stewards
While this client story is true, names and certain information have been changed to protect identities.