Project Description

Case Study: Sandwiched Between Generations

HomeCase Study: Sandwiched Between Generations

Some well-timed and well-placed stock purchases…

had earned the Nolan family significant wealth over the years, and they were living comfortably on their investment income. The son, Andrew, knew his mother was aging and sought the advice of their long-term financial advisor at their bank on how to best protect their wealth as his mother aged. Referred to an estate planning attorney, the family set up a trust to ensure the mother’s wishes would be followed, and the family’s wealth would transfer to the next generation.

Busy with his family and work, Andrew thought everything had been taken care of and pushed it from the back of his mind. With questions on how to care for his mother as she aged, and whether the family’s wealth could be used for certain expenses, Andrew recognized that the financial advisor from his bank was not providing comprehensive financial planning and came to Passport Wealth Management.

Step 1: Discovery

Reviewing the family’s goals, finances, and plans for the future, Passport Wealth Management (PWM) recognized that although a trust had been legally created, it hadn’t been properly funded. That’s where having comprehensive financial planning can make all the difference. PWM creates a plan, follows up on action items, and often works closely with estate planning attorneys and CPAs, to make sure that things are completed and checked off the list.

Step 2: Identifying Points of Tax Savings

Times of transition can result in opportunities to make changes to a family’s financial future. Looking back to when Andrew’s father died, PWM also identified missed opportunities in their estate planning that may have short-term and long-term tax advantages. Although time had expired to recognize those opportunities, PWM worked in tandem with the family’s attorney to petition the IRS to extend time to allow a non-timely filing of a certain form due to extenuating circumstances. That successful petition may save the family as much as seven figures in future taxes.

Step 3: Organize Charitable Giving

PWM opened a Donor Advised Fund (DAF) for Andrew’s mother, which better organize her charitable giving and allowed her to recognize a tax benefit to the hundreds of small dollar donations she was making each month to different charities. As part of their comprehensive financial planning services, PWM also reviewed the family’s insurance liabilities and recognized that the mother, who was still driving at her advanced age, had insufficient property & casualty insurance, leaving her assets potentially at risk in the event of a car accident.

Step 4: Mitigating Estate Tax and Supporting Family

The beauty of life is that we are constantly experiencing transitions that can create opportunities for families to achieve their dreams. As Andrew’s children continue to age to adulthood, there may be opportunities for his mother to mitigate the estate tax burden, such as giving gifts of stock to him and her grandchildren now while current estate tax legislation is favorable. The growth of such gifts might avoid estate tax in the future.

Knowing that they have a fiduciary in their corner…

an individually legally responsible for acting in their best interest, and knowledgeable about holistic financial planning, Andrew, his mother, and his family are spending their time together.

All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. This is a hypothetical case study, not a statement of client experience.  The situation described above is reflective of the processes, views and opinions of Passport Wealth Management and does not reflect the opinion or testimonial of any particular client. 


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