Open Illustrative Case Study
The Situation: Couple in their early 50s, with 5 Children, Estate Value: $15,000,000.
Problem: The couple would like to protect their assets and transfer a significant portion of their wealth to their children as efficiently and with as much growth as possible. After calculating the growth of their estate through their life expectancy, they realize there will be a significant estate tax upon the second spouse’s death despite having incorporated certain Trust strategies into their plan.
Based on very conservative growth rates the estate is projected to grow to approximately $28 million with a potential estate tax of $7 million.
Solution: After a discussion with the couple and their tax and legal advisors, we developed a gifting strategy designed to efficiently leave their children a financial legacy. With their attorney we created an Irrevocable Life Insurance Trust (ILIT) that will purchase a $7,000,000 survivorship life insurance policy (also called second to die life insurance) that will pay a tax free death benefit to the trust at the surviving spouse’s death. The couple will make annual exclusion gifts to the trust (to be treated as split gifts) of $56,000 for 20 years. They expect the trustee to use these gifts to pay the policy premiums.
Result: By creating the ILIT and making the $56,000 in annual gifts to the trust each year for 20 years, the couple believe they have protected their wealth transfer by using the life insurance proceeds to pay for the estate taxes. The benefits of the ILIT include tax savings, control of assets after death and second to die life insurance policies typically provide guaranteed money for your heirs at a lower cost than two separate single life premium policies. Though this is only an illustration of how we can work with clients, the team at Resnick Advisors works with families to achieve their long term wealth transfer goals.
We work with you to evaluate your unique circumstances, objectives, risk tolerance and future aspirations to find the most appropriate wealth management approach for your financial goals.
Planning in many cases may be the first step, but it can also be the biggest. Integrated Financial Planning is essential for successful wealth management over the long-term. Working with our team of experienced advisors, we will customize a financial plan that puts you on track to achieve the goals you have set for your future.
In each step of our process, we are focused on having you feel confident and clear on what your plan is and how it fits into your broader objectives. Your advisor will ensure that you are comfortable with all aspects of your plan, and will drive the execution of next steps, while being supported by the full Resnick team. You can expect your advisor to regularly communicate any reasons to readjust your strategy based upon major life changes or circumstance. Our best successes come with clients who are confident that the decisions made in their financial affairs are aligned and being executed according to the agreed upon plan.
We seek to help our clients make an investment in their children and grandchildren’s future through education funding. We work to incorporate education funding strategies into your overall investment objectives. We know that investing in your children can be one of the most important things you can do for their future and we look to help you make this investment in the most efficient way possible for you and them. Through our research on the best college saving tools and available plans, you can be sure your loved ones are able to achieve their long-term education goals with your support.
We provide legacy planning to help ensure the smooth, tax-efficient transfer of wealth for our clients. We partner closely with outside estate and tax planning professionals to help reduce the challenges of passing on your wealth from one generation to the next. We are also experienced in succession strategies for business, to maintain the efficient continuity of family business operations for years to come. We know this is an area of wealth management that requires our team to know you, your goals, and your family intimately. We are careful to coordinate all dynamics that surround estate planning and implement a plan that best suits your goals and aspirations for the future.
Many of our clients are dedicated to supporting organizations that are important to them. Our team is experienced at understanding your values and reasons for giving, and helping to incorporate strategies to most efficiently support their causes. Philanthropic giving is part of our clients’ overall wealth management strategy, and our advisors help maximize the benefit for you and your benefactors.
The Resnick team helps clients navigate philanthropic giving and ensure that they are using the most tax-efficient strategies to maximize the gift to charity, and reduce taxes to their estate.
At Resnick Advisors, we are dedicated to taking a holistic approach to helping you achieve your goals. This means understanding how to best integrate tax-efficient strategies into our financial plans. Our advisors can work closely with your tax professional to monitor all changes in tax laws so that you can feel confident that your plans are flexible and rebalanced as changes arise. We believe in communicating to you so that you are not only aware but also understand the reasons why a part of your portfolio will be modified, and the outcomes of these changes.