Financial planning case studies that we have developed and implemented for our clients include:
In developing a financial plan for a married couple (second marriage for both) it was determined that the existing estate plan would transfer a large portion of assets to their respective adult children, bypassing the surviving spouse. When highlighting this fact in their retirement cash flow projection, it became apparent that this could have a negative impact on the surviving spouse’s ability to maintain his or her desired standard of living in retirement. The success of the projection hinged on all of their combined assets being available for both spouses to use for a specific period of time. Use of a Q-TIP Trust and the purchase of term life insurance policies provided workable solutions for their concerns.
A high-earning, independent consultant in his late 50s was behind in accumulating investment assets for retirement. His wife was already contributing the maximum amount to her employer’s 401(k) plan. The couple had excellent cash flow and was in a high tax bracket. We assisted the husband in establishing a Single Person Defined Benefit Pension Plan. This enabled him to defer a significantly higher percentage of his earnings than his current retirement plan and save on current income taxes. The strategy is currently helping the couple catch up on retirement savings.
Sale of a Small Business
An entrepreneur was trying to sell his business. His prospects looked good and it appeared that the sale proceeds could be substantial. We recommended gifting shares of his company stock to his children, prior to any sale. When the business sold, this strategy saved on income taxes as well as potential estate taxes since all future growth in those shares was transferred to his children.
Concentrated Stock Position
An executive client had over half of her net worth attributable to her employer’s company stock and stock options. Additionally, she was required to hold a certain number of shares of company stock. To increase the diversification of her investments, West Financial Services recommended adequate insurance, an enhanced savings and investment program, and a systematic program for selling stock and exercising options.