For a young couple raising a family, times were tough. But through years of hard work and scrimping on expenses, they started a business that began with a dream, a pickup, and a backhoe. The values of the lessons learned by their character, financial stewardship, perspective, appreciation, and work ethic transitioned them from having very little money to holding sizeable wealth. After years of hard work, Mom and Dad realized that their children would someday inherit a substantial sum. Like many of Capstone’s clients, the family was introduced by their accountant to the Capstone team to provide leadership and technical expertise on the estate plan design process. This couple wanted to reduce the estate transfer tax to the government and increase the benefit to their family and community. They wanted their children and grandchildren to understand the importance of community and philanthropy. They wanted their family’s legacy to have an impact on others whose life circumstances were not quite as fortunate as theirs.
What the Client Accomplished (Plan by Design) with the Guidance of Capstone:
Following several conversations with the parents and their accountant and attorney, the estate plan began to take shape. In the end, a couple of trusts were established to reduce the governments’ estate tax from $17.5 million down to $11.6 million. A family loan was created to move some money to the kids to pay for their existing life insurance. The insurance was moved out of the estate into a separate trust. Capstone modeled the “Plan by Default” compared to the “Plan by Design” of their team. Following the sale of their business in 2016, the impact of a well-constructed estate plan was significant.
Through the collaborative efforts of their accountant, attorney, and the financial professionals at Capstone, this couple directed the impact of their wealth versus accepting conventional estate planning wisdom. Less tax was paid, more wealth was retained coupled with responsible financial management, and the family’s commitment to community and philanthropy through charitable giving was achieved. At the conclusion of planning, the couple also created a family partnership with investments and commercial real estate.
CASE STUDIES DISCLAIMER
Names, locations, and ages have been changed in these case studies. These case studies are presented to demonstrate the scope of our wealth management services and the benefit of collaborating with our clients’ tax and legal advisors and other centers of influence. We do not just provide investment advice and in presenting these case studies we do not claim any benefits of our investment advice. Not every client we serve experiences the levels of service provided in these case studies; nor do they achieve similar outcomes. There are many factors and/or specific industry circumstances our clients present that we cannot control but will directly affect a client’s experience and outcome. Therefore, in retaining our services, DO NOT expect similar experiences or outcomes.