About a year ago, I lost one of my dearest clients when he passed away suddenly as a result of health-related complications. A wonderful man with a reputation for always treating others with kindness, Edward had, over the course of many years, amassed significant wealth for his family and his favorite causes by investing both aggressively and shrewdly. My colleague, Mark Carley, and I had visited Edward at the hospital just hours before his passing. He was alert and in good spirits, and we were both shocked and deeply saddened by the news of his demise.
Shortly thereafter, Mark and I attended Edward’s funeral. The afternoon sunshine was brilliant, and the church overflowed with friends and family who wanted to remember the man and honor his memory.
While his grief-stricken family dealt with the pain of his loss, they were at least able to take comfort in the knowledge that, with the help of their attorneys, accountants, and financial advisors, they’d carefully planned for this day. Mark and I, whom they’d worked with for over a decade, were intimately aware of how the family operated interpersonally and financially. We immediately notified the family’s other advisors.
We created a to-do list and met with Edward’s widow Barbara and their daughter Leslie to review it. Mark and I then drove Barbara and Leslie to Boston, where we met with their attorneys, and subsequently provided them with the financial information they would need to prepare Edward’s federal and state estate tax returns. Through collaboration and careful planning, Edward’s large estate would be subject to virtually no tax.
With the help of our colleague, Brenda VanderSluis, we began retitling and reregistering Edward’s accounts. We oversaw the payout of life insurance proceeds, made distributions to the beneficiaries, and helped them invest their shares.
We highlighted for Barbara the details of her own estate plan. With her husband gone, there was now one less life standing between her and the ultimate implementation of that plan. Importantly, we encouraged her to think carefully about her beneficiaries in order to make sure the plan – created over a decade ago but updated periodically in the years since – still reflected her current wishes.
A few months later, I met with Barbara in Miami where she was visiting her son Julian. It was a trip she and Edward had made together every year for several years, but now this was her first time traveling there alone. We sat in the warm Florida sunshine, reminisced about Edward, and talked about the progress that had been made in settling his estate. We also discussed Barbara’s hopes for the future. She assured me she planned to be around for many more years to come.
We carefully reviewed the family’s resources, and Barbara expressed a desire to share more wealth with her children and grandchildren now, while she was still alive and could see them enjoy it. I met separately with Julian, and he shared with me his hopes and fears about retirement in the not too- distant future. Later, the three of us met together, and Barbara revealed her plan to help him. He was speechless, but what could he say to news like that? It was one of the most touching moments in my career.
“He was speechless, but what do you say when your mom tells you she wants to help secure your financial future?”
I alerted Barbara to the fact that the sole contingent beneficiary of her previously modest IRA now, as a result of her husband’s passing and the combining of his IRA assets with hers, stood to inherit a huge sum of money – far more than she had ever intended to bequeath. Before returning home, I helped Barbara update her beneficiary designations. Though the risk of her untimely demise seemed remote, I didn’t want her boarding another flight until she had done so! Upon my return to Lexington, we completed Edward’s bequests, distributing over a million dollars to relatives and charitable organizations.
Under the terms of Edward’s trust, three new trust shares – each with different estate and generation-skipping transfer tax consequences – were created to support Barbara during her lifetime. We created new custodial accounts for each and determined which assets should fund which shares in order to generate current cash flow for Barbara and maximize the remainder for her heirs.
Mark and I realized Barbara needed to make an important decision: continue working with the attorneys who’d settled her late husband’s estate or begin a relationship with another firm that would help her manage her own. She expressed an interest in making a change and a preference for working with a local firm. Mark and I identified some promising candidates, vetted them, and introduced one of them to Barbara. She is now working with her new attorneys to refresh her planning. We also helped her children do their own estate planning, including alerting them to various powers of appointment they held so they could specifically refer to them in their respective wills.
Recently, we’ve met and begun working with “Generation 3”: Barbara’s grandchildren. At Barbara’s discretion, we’re distributing assets to them as needed to help them purchase their first homes. As it is for many families, equalizing the value of gifts given to each of her children and grandchildren is of great importance to Barbara, so we are tracking these for her and updating her periodically.
Most importantly, throughout the estate settlement process and in the weeks and months since, Mark, Brenda, and I – and all of us here at Lexington Wealth Management – have made ourselves available to the family and will continue to be there for them in the years ahead. We miss Edward’s warmth and grace, but we honor his legacy by making sure his family is well cared for.
Lexington Wealth Management is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC. This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is neither indicative nor a guarantee of future results. The investment opportunities referenced herein may not be suitable for all investors. All data or other information referenced herein is from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other data or information contained in this presentation is provided as general market commentary and does not constitute investment advice. Lexington Wealth Management and Hightower Advisors, LLC or any of its affiliates make no representations or warranties express or implied as to the accuracy or completeness of the information or for statements or errors or omissions, or results obtained from the use of this information. Lexington Wealth Management and Hightower Advisors, LLC assume no liability for any action made or taken in reliance on or relating in any way to this information. The information is provided as of the date referenced in the document. Such data and other information are subject to change without notice. This document was created for informational purposes only; the opinions expressed herein are solely those of the author(s) and do not represent those of Hightower Advisors, LLC, or any of its affiliates.