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Maximize Quality of Life After Inheriting Funds



Sample Case Study for Nearing Retirement




Manage a recent inheritance, reduce income taxes, determine whether additional funds allow for more travel and gifting to adult children.

The Challenge:

Jacqueline is concerned that additional assets will substantially increase her income tax burden.
The portfolio Jacqueline inherited does not appear to suit her objectives.
Jacqueline and her husband, Mike, want to travel while they still have the interest and their health, but are not sure if the plans are reasonable.
Jacqueline wants to build the long-term value of the inherited assets for the benefit of their children and grandchildren but don’t know if their estate plan addresses this effectively.
The real estate Jacqueline inherited creates additional management responsibilities.

The Positives in Jacqueline's Situation:

Jacqueline and Mike were retired and had adequate funds to be financial secure. The inherited funds provide additional freedom.
Jacqueline and Mike enjoy good health and would enjoy more travel, time with their grandkids, and friends.

Next Steps:

A financial plan to help determine the additional income from the inherited funds.
Work with their attorney to review their estate plan to see if it meets their goals and address the inherited funds.
Assess the inherited portfolio to see if it meets their goals.

Our Analysis for Jacqueline: 

The financial plan shows they can budget as much as $50,000 per year for travel. We will monitor their situation to confirm this each year.
We adjusted the inherited portfolio so it more closely aligns with their goals.
We added a portfolio rebalancing strategy so cash remains on hand for travel expenses.
We will track their income tax picture throughout the year and seek opportunities to prudently lower taxes.

In Summary:

Jacqueline and Mike now have the opportunity to travel while they still have their health and interest in doing so.
Their portfolio is more effectively designed to help bring more stability and increase ongoing dividends to support the planned withdrawals.
Jacqueline's will creates a special trust to transfer her inherited assets to her adult children, with a portion going to a charitable fund that supports a children's charity Jacqueline worked for during her career.
Jacqueline and Mike have the confidence knowing they can travel and benefit from their inherited assets while still building an inheritance for their children.

These examples are hypothetical and for illustrative purposes only. The rates of return do not represent any actual investment and cannot be guaranteed. Any investment involves potential loss of principal.

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