Original Financial Impact
- Late 30’s/early 40’s and 2 young children.
- Owned a rapidly growing business with a desire to exit the business within the next 5-10 years.
- They had 2 business loans and a mortgage totaling 12% of their assets.
- Basic legal documents provided their children their entire estate at death.
- No plans for a lifetime inheritance.
Original Family Impact
- They wanted to be intentional with how they were raising their children but unsure where to start.
- They didn’t know what conversations to have around wealth and the timing of those conversations with their children.
- There was a desire to be more generous but little clarity around the impact the family could make.
- Reduce their annual income taxes
- Minimize capital gains taxes on the sale of their business
- Determine how much inheritance they would like to provide their children
- Develop the timing to provide their children their inheritance
- Eliminate at least $2.5 million in unnecessary estate taxes
- Increase charitable giving by at least $15 million
- Develop a plan to include family in giving
- Created core values and family purpose statement for parents and adjusted as kids matured.
- Equipped family members to speak into these in a way that resonated with their personal purpose.
- Wrote letters capturing the family story and the vision and dreams for their children.
- The family created “must haves” for the family to continue to fulfill it’s calling.
- Annual meetings to bring the whole family together to discuss financial and relational issues as were age appropriate.
- Priorities and clarity for their giving focus.
- Establish Family Foundation.
- Engaged family in volunteering and mission trips.
Solutions & Implementation
- We created a debt repayment plan that allowed them to be completely debt free in 2 years.
- We utilized a Charitable Remainder Trust to avoid capital gains tax when the company was sold.
- We created an inheritance strategy that provided each child the desired $500,000 lifetime inheritance and an insurance trust to provide $1,500,000 testamentary inheritance.
- We created a charitable giving plan to strategically gift cash and asset gifts to take advantage of charitable deductions.
- They directed all of their remaining assets to their foundation after their passing.
- In 4 years their business grew to $12.3 million from $6.4 million.
Lifetime Income Taxes
Capital Gains Tax on Business Sale
Case studies are for informational and illustrative purposes only and not to be considered a guarantee of results.
Actual results will vary with each situation.