Death of the financial spouse

David & Lisa

Case Study 1 Ages 62 & 61

Death of the financial spouse

Primary Goals:
Understand the family finances, manage investment risk, minimize taxes, legacy planning.

The Challenge:
David & Lisa had long dreamed of retirement and living a life on their Leopard 44 catamaran sailboat, exploring the beauty of the Caribbean.

That is of course until the diagnosis. 

Lisa had handled the family finances and handled them well for 42 years of marriage: household budgeting, vacation planning, and even the retirement investing plan.  On the side, Lisa had developed an interest in penny stocks.  For almost a decade, she bet on small start up companies with little success.  But she had even budgeted for her penny stock hobby, so as to not overextend the family finances.

Then one day she hit it big.  A little-known solar energy company on the front end of the rapid recharge battery industry – a company that Lisa believed in long before anyone else noticed – scored a major manufacturing contract with one of the country’s largest auto manufacturers.  The stock had been languishing for years at $0.02 to $0.07 per share.  Lisa kept acquiring more and more of the company, and when the company announced their success to the world, the stock hit $2 a share. Then 5$….then $10. 

And then Lisa got sick. 

David, her devoted husband, recognized early Lisa’s talents in the area of finance and even though the penny stock thing never seemed to work out, he let her enjoy her passion.  He had very little (frankly nothing) to do with the family finances and couldn’t care less what was in the checking account, something that Lisa could never understand. 

The Approach

Lisa knew she needed help.  With her terminal illness closing in on her she knew decisions on family finances needed to shift to David.  She sought the guidance of a local tax planner she knew from her Wednesday night Bridge club.  Diane, in turn introduced Lisa and David a financial planner she trusted.

After the initial introduction, work on planning commenced in haste.  Not only was Lisa’s time running short but there financial situation was rapidly changing.  Included in this was a rapidly increasing net worth, now that the battery company penny stock had taken off.  David & Lisa’s net worth was increasing at $150,000 per month!

The initial goal was to establish a sound, trusting relationship among the three of them, knowing that soon only two people would be at the table making decisions.  It was important to Lisa for someone to help David and take care of her legacy.

Sadly, Lisa would never get to enjoy the Caribbean or the fruits of her years of labor in the penny stock world.  And David found little joy in the family’s newfound wealth without his rock by his side. 

The Results:

David did want to honor the memory of his wife and he felt the best way to do this would be to learn her passion for finances with the goal of protecting his kids and grandchildren.   Finding the right person to work with mattered and as a result, a comprehensive plan was put together that met all their needs:

  • A tax efficient and minimization strategy with the goal of reducing risk and improving returns.
  • Reduced investment costs
  • Minimizing exposure to annual tax issues, such as capital gains tax.
  • A smart rebalancing program.
  • A well-defined estate plan.
  • Reduction of tax liabilities through charitable giving.

David also began to utilize an easy-to-use personal finance and financial planning website, helping him to organize his finances in a way that made sense to him.  David can now enjoy his time with his kids and grandkids with full confidence in what his future holds. 

 Case studies presented are based on actual clients, however, some of the information may have been changed or altered. These studies are provided for educational purposes only.  Similar, or even positive results, cannot be guaranteed.  Each client has their own unique set of circumstances so products and strategies may not be suitable for all people.  Please consult with a qualified professional before implementing any strategy discussed herein. 

No portion of these case studies is to be interpreted as a testimonial or endorsement of the firms’ investment advisory services. 

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