A Story from our Family Office

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.
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.

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