The Steps Jack Took for His Children
I had a dear client whom I worked with for several years. The first time Jack and I met, I asked him my typical question: What is the most important thing I can help you with? For Jack, there wasn’t just one thing, there were many. We went on to organize his priorities, one of which was to prepare for “someday, I won’t be here and all of this will transfer to my (adult) children: how can we make it easier for them?” We reorganized his accounts, combining what made sense to consolidate. Jack went from 26 accounts to just a few. Jack went from three advisors to one. We made sure the assets that belonged in his trust were titled properly and that beneficiary designations were up to date. We repositioned assets for tax favored treatment that would extend to his beneficiaries.
We retained copies of all his important documents, such as his will, trust, and power of attorney. We communicated regularly with Jack’s CPA. We met together with his attorney. We involved his oldest child to assist with the organization of Jack’s other assets and become familiar with our team and operations.
Each time his life insurance premiums came due, Jack asked me if he should continue to pay: after all, he had other sizeable assets to pass on and give his children a generous inheritance. I advised Jack to keep paying his premiums for many reasons: he could afford to, he had already paid a substantial amount into the policies and if kept in force, they would provide a guaranteed leverage of dollars by means of the contractual death benefit which would pay out tax-free with immediate liquidity upon filing the claim.
Ultimately, the life insurance proceeds delivered that immediate liquidity to Jack’s children, who then had the financial responsibility of maintaining his home, business, and other assets. This influx of cash provides the gift of time—time to thoughtfully manage his affairs without the pressure to sell prematurely. Rather than being cornered into a “fire sale,” as is too often the case, the family could steward Jack’s legacy with care, dignity, and deliberation, making well thought out decisions on their own terms.
After several years of working together, when that “someday” arrived, I was heartbroken. I remember it as if it were yesterday. While I felt immense sorrow, I was also deeply gratified knowing we had fulfilled Jack’s wishes exactly as he had intended: to be thoroughly prepared. Even though his children were mature enough to have raised children of their own, no one is really ever emotionally ready to let go of the hand that has been there to hold theirs for their entire lifetime. But at least Jack prepared their financial lives to be easier. He was as caring as he was smart and savvy. Inheritance is often times not an easy process, but for Jack’s family, it went as smoothly and tax-efficiently as it possibly could have, because of the steps Jack took for his children.
LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715) 343-9600 or louann.schulfer@lpl.com TheWealthInformationLady.com SchulferAndAssociates.com
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