Inheritance Concerns

An example of an inheritance concern:
A client comes to us with a substantial inheritance. She is divorced, has worked all her life, and suddenly finds herself with a large stock position that has a very high tax liability. More importantly, there is an emotional element to her inheritance that is leaving her paralyzed and unsure what to do.

After visiting with her for a time, we discovered that her goals are to:

  • Maintain her current lifestyle and travel the world
  • Help her grown children and grandchildren financially and to provide a place for them to all gather while she is still alive
  • Create a wealth transfer plan to her grown children at her passing
  • Be able to give to her favorite charities without leaving herself financially stranded
  • Maintain an emotional tie with what her parents had given her
  • Minimize tax liability

The solutions identified through planning and collaboration with many professional on her behalf are to:

  • Create a charitable remainder trust (CRT)
  • Gift a substantial position of the inherited stock to the CRT
  • Use the income from the CRT to purchase life insurance as an asset replacement (gifted stock) vehicle

The preceding is a hypothetical case study and is for illustrative purposes only. Actual performance and results will vary. This study does not represent actual clients but a hypothetical composite of various client experiences and issues. Any resemblance to actual people or situations is purely coincidental. This case study does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted.