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Protecting the Family Legacy
A couple in their late 50s, had built a portfolio of investment and real estate assets valued at nearly $30 million. They were about to enter retirement, and it had been many years since the couple had revised their estate plan. Most of the couple’s net worth was concentrated in real estate assets that they wished to conserve for their children and grandchildren. The couple had three specific goals: to implement an asset allocation that would produce sufficient retirement income, to minimize estate taxes without paying significant gift taxes, and to protect the real estate assets from liquidation in the future to settle estate taxes.

Their advisor assembled and led a cross-disciplined team that included financial planners, estate attorneys, and certified public accountants to develop a comprehensive strategy to address the clients’ concerns. The team developed a cash flow analysis of the couple's income needs, and an investment policy designed to meet their return goals throughout retirement. They also worked with the couple's estate attorney to create an irrevocable life insurance trust (ILIT) and a series of zero-tax gifts to the couple’s children to provide liquidity for future estate tax liabilities. The strategy not only protected a portion of the children’s inheritance from divorce or creditors but also transfered its growth outside of the clients’ estate, reducing the future tax burden. In addition, the trust assets will provide the children with tax-free cash flow in the future so that estate taxes can be settled without liquidating the couple’s real estate assets.

This client profile should be viewed as hypothetical even though some details may be specific to strategies developed for actual clients. They are for illustrative purposes only intended to demonstrate the capabilities of Hines Warner. They are not intended to serve as investment advice since the availability and effectiveness of any strategy are dependent upon your individual facts and circumstances. Results will vary, and no suggestion is made about how any specific solution or strategy performed in reality. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for final recommendations and before changing or implementing any financial, tax, or estate planning strategy. Future performance can never be guaranteed.