Alan, 61 and his wife Gloria, 57 lived in Westport, Ct. for 35 years before recently purchasing a second home in Palm Beach Gardens, Florida. Alan has been the CEO/Founder of the clothing business for over 3 decades and had built a net worth of about $28 million, $18 million of that being the value of the business. The couple has three sons, all in the family business. Alan and Gloria worked closely with their New York based advisors, but Alan had little patience for discussing broad based estate plans and disagreed with Gloria over how to distribute their assets to the kids. Gloria was confused regarding the tax implications of estate planning.
When they finally initiated their initial estate plan, the existing advisors drafted a will with marital deduction and bypass trust provisions, revocable living trusts, health care advanced directives and durable power of attorney.
We were introduced to Alan and Gloria thru a non-profit organization after Gloria indicated interest in creating a planned gift for them. In our first meeting, we showed the couple some innovative ways to produce gifts to the charity by re-directing tax dollars. Then, after our discussion of charitable giving, Gloria touched on the subject of the family business. To further understand their goals, we asked questions regarding how they saw the business growing, how the kids became involved and if there were any family concerns. We then discussed asset protection.
Alan admitted his conflict regarding advanced planning was deeper than saving money on taxes. His personal issues included giving up control to his sons and facing conflicts about aging. We asked some personal questions that touched his heart and helped him face these tough issues.
We then introduced Alan and Gloria to a prestigious law firm that specialized in eliminating estate taxes. The Florida lawyers complemented the New York team. After the advisors discussed the entire plan with Alan and Gloria, it was approved and initiated.
The plan included 2 Family Limited Partnerships, a Defective Grantor Trust, a Charitable Lead Trust, a Family Foundation and a Wealth Preservation Trust. This plan protected the family's assets and will save them millions of dollars in gift and estate taxes. The team of advisors have now completed their first annual review and added a Dynasty Trust, as a result of another addition...a grandson.