Yes, Virginia there is a Santa Claus! Once in a great while we fall upon an advanced estate planning case for a high net worth family that has quite a bit of cash. How do we solve for the issues that too much cash creates?
Jeff is 75 and Theresa is 72. Jeff recently retired from an executive position in a public company. As a result of his retirement he exercised over $45M in stock options and has 5 more years of deferred compensation payments. Jeff has also sold his 50% interest in his Corporation and the note payments are providing significant income for the next 9 years.
The primary planning goals are to:
- Make sure that they have sufficient funds to live on for the rest of their lives (approx. $725,000/yr. after taxes and gifts).
- Provide for the financial security of the surviving spouse.
- Create an inheritance for their children which protects them from any potential future creditors and/or predators.
- Provide an inheritance to their children in a manner which will enable them to create opportunities for themselves but not encourage them to be unproductive.
- Provide for a charitable gift at death to their family foundation as long as it doesn’t greatly diminish the amount they pass to their heirs.