Teresa Jackson is in her 70s and has accumulated a substantial amount of assets and wealth with her husband. Teresa has a large, close-knit family with two daughters, a son, and two grandchildren. Teresa’s husband, Harold, recently passed away. Teresa needs clarification on issues related to Harold’s estate, and guidance on the best way to steward the assets left to her and the children.
Challenges: Lack of Clarity and Added Complexity
- During Harold’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.
- Some 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 some of her assets to her 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 give.
How Would Legacy Planning Help Teresa?
Clarification and Simplification
- Clarifying conversations. First, we’d establish some objectives with Teresa and her family:
- 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.
- Partnership with professionals. We would work with Teresa’s attorney and CPA to gain clarity on the family partnership and estate plan in order to help to weigh the costs and benefits of dissolving the family partnership.
- Charitable giving opportunities. Legacy Planning could help Teresa establish a gifting strategy to decrease her tax liability.
- Real estate valuation. We can help arrange an assessment of the primary residence and property to get an idea of the value.
- Investment advice. We can help the family reevaluate the concentrated stock position and navigate decisions around reducing exposure to diversify and mitigate risk.
Multi-Generational Wealth Planning Creates Stronger Relationships and Stronger Plans
As we frequently note, there is no such thing as a purely financial decision. The decisions we would use to help Teresa and her family could dramatically impact their financial position and peace of mind. Teresa’s scenario highlights that multi-generational wealth planning often involves many voices and perspectives. At Legacy Planning advisors, we strive to be an objective, wise voice that helps facilitate conversations and navigate emotional topics.
