Broker Check

Legacy Planning

Wealth management goes well beyond simply developing an asset allocation for a client and implementing it. Many of our clients have accumulated significant wealth and need help determining how best to manage it for future generations. Working through the issues surrounding Legacy Planning is difficult but necessary.

Client: 70 year old married couple with a $20 million estate and very modest income needs. They have two adult children who are technically independent but significantly rely on the generosity of their parents to maintain their lifestyle. The clients are also very charitable and make substantial annual donations to local organizations.

What did Cabot do to help?

  • Helped the client formulate a plan for how their wealth would be handled after they’re gone.
  • Illustrated the impact that federal and state estate taxes will ultimately have on their assets at death.
  • Established gift Trusts for the benefit of their kids (with strict withdrawal provisions) in order to transfer wealth now and exclude future growth of that wealth from the clients’ estate.
  • Recommended the client create a charitable foundation and fund it not only with their current money but also incorporate it as part of their estate plan so that a significant portion of their wealth would transfer to that foundation at their time of death. This foundation would exist beyond the passing of these clients, managed by a board of directors, and make yearly distributions to charitable entities that fit within the Foundation’s mission statement.
  • Provided ongoing tax return preparation, tax projections and general tax advice for the clients.
  • Managed their investment portfolios based on their stated goals: current income, income growth for their children, and income growth for their foundation.

Truly understanding the needs and goals of our clients helps us offer creative, targeted, solutions to meet our clients’ needs. In this situation, our clients have far more money than they would ever spend and their wealth continues to grow each year. Without proper planning, a significant portion of their estate would be subject to estate taxes. We also helped our clients realize that their children need limits on how much money they can access at one time. Implementing Trusts to benefit their kids and funding them now gives the client the ability to control distributions. As a result of these discussions and subsequent meetings, the children now consider Cabot to be their trusted advisor and lean on us for help with their major financial decisions.