Sandy Smith Fact Set:
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Sandy, Recently Widowed (Sam passed in 2019)
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Three Grown children
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Sally (oldest child) has Special Needs
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5 Grand Children (with more to come)
Sandy recently lost the love of her life, Sam.
Sam had been promoted to Director of Engineering for an international oil and gas exploration firm 2 years before he became ill. His salary was $250,000 per year plus substantial annual bonuses. He had no equity share in the firm. Sam and Sandy had accumulated a substantial balance in their retirement accounts and own 12 rental properties with NO DEBT.
Sandy graduated from an East Coast liberal arts college specializing in health care issues. She worked as a consultant until Sam became ill at which time she retired to provide care in their home.
Sam and Sandy have devoted their life to their family. They lived well within their means. After 38 years of marriage and a lot of collaboration with their Financial Advisors, they had established a solid estate plan.
Sandy is concerned about how her financial plan will work moving forward. She wants to better understand how it all fits together to provide for Sally’s special needs while giving her other daughters a fair distribution of the resources that remain at the end of her lifetime.
Step 1: Discovery (What Matters Most – for Sandy)
| Sandy’s Concerns | Notes and Comments | Action item | |
|---|---|---|---|
| Providing For Sally | Sam and Sandy set up a Special Needs Trust for Sally and now that Sam has passed, Sandy want to be sure that Sally’s entitlement benefits will remain after Sandy passes. | Review estate plan and the trust with a new estate lawyer who can help with updates and education for Sandy and Family. | |
| Equitable Distribution | While Sally’s needs are very important to Sandy, her other daughters are also important in terms of equitable distribution of any remaining assets. | Set up Family Meetings to educate each daughter about the estate plan. | |
| Education Planning | With 5 Grandkids (and the possibility of more in the future), Sandy would like to set up a way to fund college and/or vocational training for each of them. | Research funding options, including non-traditional vocational training and Biden BBB plan provisions. | |
| Retirement Planning | Continue to monitor Sandy’s retirement funds and update her financial plan with new goals (travel, etc.) | Set up next plan review. Update Sandy’s goals: Travel, Family Vacations, College funding, etc. | |
| Tax Issues | Sandy is not happy with the CPA that Sam has used for 20 years. CPA has made errors in tax returns that cost Sandy over $5k last year. | Search LinkedIn to find a local CPA who will coordinate our planning efforts. |
Step 2: Gap Analysis
| Net Worth | Cash Flow | ||
|---|---|---|---|
| Total Assets | $2,450,502 | Income (all sources) | $135,000 |
| Less Total Liabilities | (145,000) | Total Annual Expenses | ($145,000) |
| Net Worth | $2,005,000 | Net Cash Flow | ($10,000) |
| Planning Issues | Next Steps | Sandy | Jim | |
|---|---|---|---|---|
| Estate Planning | Upload current copy of all estate planning documents to . | Upload Documents | Review Documents | |
| Estate Planning | Review special needs trust and pour revocable trust. Set up account at Charles Schwab. Journal funds into Trust account as needed. | eSign DocuSign Envelope | Create DocuSign Envelope | |
| Estate Planning | Estate Planning Lawyer – review is needed. Sandy would like to interview a new attorney who is willing to provide more education in addition to updating legal documents. | Search for local attorney | Search LinkedIn and help Sandy find a new attorney | |
| Retirement Planning | Update Sandy’s retirement plan. Annual Review goals, investment performance, milestones. | Prepare for next planning meeting. | ||
| Eduation Funding | Let’s talk about how Sandy wants to help grand children with college, tech school, and other training. | Reflect | Add to meeting agenda | |
| Tax Issues | Get copy of last two year’s tax returns. | Review Tax Returns. Meet with CPA (after tax season) | ||
| Investment Issues | Currently, about $500k in cash that needs to be allocated. | Review Deals | Present Deals |
Step 3: Recommendations (Pending)
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Estate Planning Recommendations
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Retirement Recommendations
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Education Funding Recommendations
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Risk Management (Insurance) Recommendations
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Tax Planning Recommendations
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Investment Planning Recommendations
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Cash Flow Recommendations
Step 4: Implementation and Execution of Recommendations
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Coming Soon!
Results:
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The information provided here is educational and should not be considered or construed as legal, accounting (tax), or financial planning advice. The strategies described may not be suitable for all individuals or families. These Estate Planning Case Study Examples are provided for illustrative purposes only.
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