Case Studies

Capstone’s clients realize that time is their most valuable resource.

Instead of constantly monitoring their investments and keeping up with changing tax laws, they want to enjoy the benefits of their hard work.

Clients typically seek our guidance in areas such as the following:

Business<br> Owners

Business
Owners

Developing an optimal exit strategy
Executives<br> & Professionals

Executives
& Professionals

Deciding how long to continue working
Farmers, Ranchers & Owners of Commercial Real Estate

Farmers, Ranchers & Owners of Commercial Real Estate

Minimizing the impact of taxes
High-Net-Worth Families

High-Net-Worth Families

Leaving a meaningful legacy for future generations

Business Owners

Background:

Running a successful company can be so time-consuming and stressful that very few business owners want to continue working until they are no longer physically able to do so. Taking time to develop a well-thought-out exit strategy can allow you to enjoy a comfortable lifestyle in retirement.

Capstone worked with a married couple who started thinking about their exit strategy after they received an unsolicited phone call from an out-of-state competitor who offered to purchase their business. The husband had just turned 50 and their children had no desire to run the business, so they decided to sell their company to an outside buyer. Their initial plan was to sell the company’s building and inventory without making any changes to the business.

What the Client Accomplished (Plan by Design) with the Guidance of Capstone:

This couple initially came to Capstone for advice on how to invest the proceeds of the sale of their business in a way that would enable them to achieve their financial goals. Capstone started a discussion on ways to increase the value of the business prior to selling it. Over the next three years, this couple worked hard to increase the value of their company. Consultants helped them expand their customer base, update their computerized inventory system, increase their online sales, and strengthen their management team. Taking a team approach to advance planning, Capstone’s financial professionals worked closely with the couple’s CPA. The wife focused primarily on working with the team of advisors, while her husband continued to run the business.

Pie Chart - Sale with unsolicited offer
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Pie Chart - Sale through collaborative team approach

In Summary:

Through conversations with this couple, opportunities were identified that could potentially increase the business’s value that maybe otherwise would not have been pursued. The decision was made to implement those changes with the collaboration of business consultants and other advisors, then seek to sell; versus accepting an unsolicited offer.

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.

Executives and Professionals

Background:

Peter Griffin was a computer engineer working out of San Jose, CA. When he started working for his employer, Peter’s focus was on the future: He was helping to build something special that would be on the forefront of transportation. The company valued talent like Peter’s, and they always reminded their employees that somewhere in the future the payout would equal their effort. As Peter worked for the company, his life continued to evolve. He had started as a young engineer and now he was older, married, with a young family. As his situation continued to change, Peter worried that he might need to leave the company to attain a more reliable financial future for his family.

What the Client Accomplished (Plan by Design) with the Guidance of Capstone:

Capstone helped Peter understand his long-term prospects. Utilizing current data about what the family had saved and spent, Peter was able to see the future with greater clarity. Peter was also able to see the long-term opportunities that would be available to him if he stayed with the company. A few years later, that magic day arrived: Peter’s company rolled out an Initial Public Offering of stock. The benefits of Peter’s long-term commitment to his employer had become abundantly clear: he now held shares worth several million dollars.

Capstone worked with Peter to clarify new goals. Peter established a plan to lower the risk to his portfolio through sales of company stock and diversification of the proceeds. He and his wife developed a plan to fund charitable causes that were important to them. Working collaboratively with Peter’s accountant and attorney, Capstone’s financial professionals designed a long-term tax-efficient plan that would secure the finances of the Griffin family for multiple generations.

Pie Chart - Sale with unsolicited offer
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Pie Chart - Sale through collaborative team approach

In Summary:

Peter presented uncertainty about his family’s financial future and his current employment situation. Capstone assisted Peter in assessing his current financial situation, his financial goals, and the opportunity staying with his current employer presented. An Initial Public Offering was completed and Peter was able to exit at a target value that has set him on a path to achieve his family’s financial goals. Had Peter not come to Capstone, he maybe wouldn’t have understood or seen the value of staying with his current employer.

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.

Farmers, Ranchers & Owners of Commercial Real Estate

Background:

Margie Clark, a 70-year old widow, was ready to sell the ranch she and her late husband had worked on for 35 years. They had bought the ranch for $2 million, and its current fair market value was $11 million. Margie also wanted to set aside some cash from the sale of the ranch, but she was aware that there would be serious tax consequences as a result of the sale. Margie turned to Capstone Wealth for guidance. After researching her options, Capstone suggested using several financial tools that would reduce tax friction while providing a comfortable lifestyle for Margie.

What the Client Accomplished (Plan by Design) with the Guidance of Capstone:

Margie was able to sell her home and surrounding buildings on the ranch for $1 million. The remainder of the ranch was sold to the same buyer for $10 million. The 121 Principal Residence Exclusion allowed her to avoid capital gains tax on her basis plus up to $250,000. Capstone guided Margie on placing $4 million of the property into a 1031 exchange, which avoided upfront capital gains on that portion of the transaction. To further assist Margie’s tax planning, Capstone worked with a charitable foundation and together they recommended to Margie and her tax advisor that she place $3 million of the proceeds from the ranch into a Charitable Remainder Trust, which not only avoided all capital gains tax but also generated a significant charitable deduction. Margie could use the deduction to offset much of the tax on the $4 million portion of the ranch she sold outright. The family secured a $3 million life insurance policy with some of the additional income generated by the charitable gift, 1031 exchange, and investment portfolio.

Pie Chart - Sale with unsolicited offer
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Pie Chart - Sale through collaborative team approach

In Summary:

Margie presented a significant capital gains tax liability situation; created only by her family’s hard work. Tools were identified and used to eliminate capital gains taxes, increase charitable giving, generate annual income, and retain wealth for the family and their legacy.

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.

High-net-worth Families

Background:

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.

Pie Chart - Sale with unsolicited offer
Image of right arrow
Image of down arrow
Pie Chart - Sale through collaborative team approach

In Summary:

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.