Estate Planning and Transitioning Family Assets

Client Situation: Mike and his second wife Barbara got married in 2010. Mike had four children from a previous marriage and Barbara has one son from a previous marriage. Mike has been a Beacon Pointe client since 2012. In 2013 we did a deep dive financial plan for Mike. He had a complicated situation because he owned eight real estate properties (mostly commercial) and six family limited partnership interests that he managed for himself and his siblings. He also had three trusts – a Survivors Trust, Marital Trust and Bypass Trust – because his first wife passed away and they split the estate up at that time. From a financial and estate planning standpoint, there were many moving parts. Overtime, Mike was also beginning to lose cognitive capacity, so we wanted to make sure his wishes – alongside his family goals in partnership with his wife – were planned out prior to his full loss of cognitive capacity.

Investable Assets: His investable assets started small as most of their net worth was tied up in businesses and real estate. They started by investing $1 million with Beacon Pointe in 2012. Over time, their accounts grew as he sold his business, and sold off properties. Now, their investments with us totals to approximately $12.5 million.

Beacon Pointe Value Add:

We understand that every client has their own unique financial circumstances. Our success in the case was predicated on:

  • Financial Planning – We did a deep dive to get Mike organized and provided a clear picture of his financial life so that we could explain to his wife Barbara the different assets, how they were all titled, as well as organize existing cash flows. Barbara and their successor trustee daughter felt very comfortable understanding how all the moving parts worked, and they both took comfort in knowing they have a knowledgeable and trusted wealth advisory partner guiding them through important decisions and strategize about the future.
  • Estate Planning – We worked with their estate attorney to get Mike’s estate plan updated to reflect his new intentions of benefitting his new wife during her lifetime while protecting the assets for his children. We also updated the estate plan more recently to have successor trustees take over responsibilities.
  • Portfolio Management – Mike is a risk-taker and had plenty of cash flow, so we were able to invest the portfolio aggressively. Along with new additions to the portfolio, the portfolio has grown substantially from market growth.

Goals:

  • To organize Mike and Barbara’s financial life before failing health impacted their ability to make decisions
  • To preserve and protect inherited assets
  • Assist in managing Mike’s assets with care
  • Foster portfolio growth for the legacy assets while providing enough cash flow to support their existing lifestyle

Beacon Pointe Action Items:

  • Investment Strategy: Developed and implemented a customized investment plan
  • Get Financially Organized: eMoney Online Financial Planning Dashboard
    • Consolidated and linked all accounts
    • Listed all real estate properties with proper titling for organization and understanding
    • Modeled cash inflows from various properties and estimated expenses
    • Showed projections of how cash inflows will change after various real estate sales and how potential cash flow shortfalls would be made up
  • Beneficiary, Assets Title, Cash Flow and Estate Plan reviews
  • Family Meeting: Helped adult children understand the long-term financial plan and explained who the new trustee was including associated responsibilities

To view other Beacon Pointe client case studies, click here.

Important Disclaimer: Case studies presented are hypothetical scenarios and intended for illustrative purposes only.  They do not represent an actual client or an actual client’s experience, but rather are meant to provide an example of the Beacon Pointe’s process and methodology.  An individual’s experience may vary based on his or her circumstances. There can be no assurance that the Firm will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of the Firm’s investment advisory services, and it is not known whether the hypothetical clients referenced approve of the Firm or its services. The information contained herein should not be construed as personal investment advice. 

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