A small business owner needs retirement planning assistance. He eventually wants to transfer ownership interest in the company to his three adult children, two of whom work there. He and his wife also want to provide education funding for their seven grandchildren and to make a gift to their local church.

As part of the discovery process, we ask many questions to surface issues and gain a better understanding of their situation:

  • What do they envision their retirement to be? Where do they plan to spend it and what will they be doing? What standard of living will they desire in retirement?
  • Do they have expectations of income from the company once they retire? Do they wish to have a say in its management or retain voting rights?
  • Have they done an analysis of the family business, its fair market value and allowed for any marketability or minority discounts to its shareholders as a closely-held business?
  • What protections do they have in place in the event of a hardship in the business or a catastrophic health issue? How are their investments, residence and second home titled to maximize asset protection? Have they considered long-term care planning?
  • When was the last time they updated their wills and other estate planning documents? What arrangements have they made for the most tax-efficient transfer of wealth to their children and grandchildren? How would they like to be remembered?

How We Help
After uncovering what is truly important to them, we present them with:

  • A comprehensive financial plan based on their goal of retiring in a few years to Arizona at their attained standard of living;
  • A thorough review of their insurance and any gaps that could result if long-term care were needed by either spouse;
  • Coordination of investments across all their accounts in view of their changed employment and need to generate dependable income from their portfolio;
  • Annual gifting goals and the establishment of their grandchildren’s 529 college savings plans;
  • A way for them to support their church through a Charitable Remainder Trust.

We recommend a qualified business valuation expert to work with their CPA in determining the value of the family business, including any discounts. We also recommend an attorney specializing in business succession plans who will draft a family buy/sell agreement and a multi-year consulting contract for the retiring owner. Finally, working with their estate attorney, we help them update plans for distributing their estate including transferring assets into a “Grantor Retained Annuity Trust (GRAT)”. They establish a life insurance trust to fund any estate tax liabilities and to equalize their estate for their child not employed in the business.

In short, we help them clarify what truly matters in their lives, prioritize their goals and put a process in place toward achieving them, and help them feel ready to enjoy their retirement with confidence.

Examples presented here should not be interpreted as a guarantee of future performance or success. Case studies are hypothetical examples used to illustrate how we help clients plan for a better future. Plans require updating as conditions change. No plan or strategy can assure success. Financial Planning offered through LPL Financial, a Registered Investment Advisor.

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