The President of a South Florida children's charity contacted us regarding one of their board members. Her name was Annie, a lovely 80 year widow living in Del Ray Beach, Florida. Annie had been married to Martin, a well-respected heart surgeon. Over the years, due to hard work, prudent investing and diligent saving, their net worth had grown to about $17 million dollars.
After Martin passed away, Annie was determined to be wise with her assets and philanthropy. Her goals were to protect her estate and to provide her four grandchildren with as much of her money tax free as possible. She also wished to create two significant naming opportunities to preserve her family name and benefit her favorite causes.
Our first meeting was at the offices of the charity. Annie requested that the President of the charity attend to create an extra comfort factor. At that meeting, Annie shared with us numerous stories, anecdotes and her wishes. She also asked a lot of questions. We learned that her three sons all earn a handsome living and she was concerned with asset preservation. She didn't want to hand her hard earned family fortune to Uncle Sam.
Our second meeting was at Annie's home, where she spoke openly about her finances, philanthropic goals and family dynamics. During this meeting we explained how we could achieve her goals and provide the benefits she desired. The conversation was free flowing, light and delivered in plain English, not in legalese or mathematical equations. From that second meeting we discovered that Annie owned 85 percent of a family holding company, with her four grandchildren owning the remainder.
We then met with her advisors, reviewed multiple solutions and did side-by-side comparisons of the most effective IRS-approved strategies available. What we created was a blend of trusts that allowed Annie to substantially avoid capital gain tax, eliminate estate taxes and address the Personal Holding Company's excess cash concerns.
This was done through the use of numerous trusts that allowed her to retain significant control, provided flexibility and accomplished her goals of wealth transfer to her loving grandkids.
The conclusion was that Annie spent about $66K in advisor fees, but but her estate will save about $7 million in taxes. This allowed her to make million dollar planned gifts to her two favorite charities. Annie was thrilled when each non-profit customized larger than life brass signage in recognition of the spectacular gifts that were created from redirecting tax dollars. And now her family name will live in perpetuity, as she desired.