Ben and Jennifer are in their mid-40’s. Until about a year ago, they both worked full-time – Jennifer at a large asset manager, and Ben at a large consulting firm. At that time, Jennifer left her job at the asset manager, and Ben started his own consulting business. Both are thriving and earning substantially more than in their prior lives as employees.
They own their primary home (with a mortgage) and own a second rental property outright. They had a couple of investment accounts with well-known large companies and they each had old 401K plans (standard and Roth) at different companies.
Ben’s business was immediately profitable with low overhead, so managing the surplus cash flow became a challenge. The couple had questions about income tax planning and what strategic moves to make. They felt that while their investments had done well, they were not getting the advice they needed with respect to taxes, wills, trusts, and their former 401K plans.
Ben and Jennifer have two elementary school-aged children. They have started college savings accounts for both children, but not enough to pay for a four-year private education.
We met with Ben and Jennifer every other week over the course of a few months. We reviewed their entire financial picture – assets, liabilities, debt, insurance coverage, simple wills, and tax returns. We discussed their family tree – parents, siblings, children – in order to get to know them and to get a good picture of future expenses or inheritances.
We also reviewed their insurance coverage – life, home, vehicle, umbrella, and corporate policies – and worked with them and their agents to ensure the right coverage. In addition, we made recommendations regarding establishing a full estate plan, including the creation of a trust for their minor children.
- The couple established a solid estate plan, including wills, trusts, powers of attorney, health care proxies, with protection for their minor children.
- Their investments are no longer scattered and more accurately reflect their risk tolerance, with better transparency and management.
- Insurance policies were reviewed and increased by their agent under our direction to ensure proper coverage.
- We reduced their income tax bill substantially by establishing a retirement plan for Ben’s business and had a conversation about the accounting for the rental property.
- We implemented a contingent succession plan in conjunction with an attorney that we recommended for Ben and one of his key employees in the event of Ben’s premature death or disability.
According to Ben and Jen
The hardest part of this process was making the time to find someone who could act as a fiduciary and assist on all fronts.
Their biggest take-away was the peace of mind that their minor children will be protected and that they now understand the complexity and inter-dependencies of all the moving parts of their financial life.