Wealth Planning

How do we coordinate the needs of the family business with our personal plans for retirement?

Situation Overview

Bill had been working with his family since he was twenty-five. He married the love of his life, Peggy, and together they have worked to grow and build the family business. His parents are no longer involved in the operations of the company. Bill and Peggy want to retire within seven to ten years. A few of their kids are now working in the business with them. While they had addressed most of their financial needs piece by piece along the way, they were feeling uncomfortable about the uncoordinated approach they had taken. In addition, Bill and Peggy were concerned that his parents had done the same.


Bill and Peggy were referred to Capital Planning by their close friends, who also have a family business. The initial steps of the process began with a Wealth Plan Assessment of the eight key components of their financial life:

  • Goals & Objectives
  • Cash Flow Planning
  • Compensation & Benefits
  • Investment Management
  • Tax Planning
  • Risk Management
  • Estate Planning
  • Wealth Administration

The gaps in their wealth plan were identified, priorities were established, and an implementation schedule was developed. Bill and Peggy's chief concerns were:

  • How do we coordinate the needs of the family business with our personal plans for retirement?
  • Should we transition the business to the next generation, or should we position the company for sale?
  • How should our investments be allocated based on our retirement objectives?
  • What changes should be made to our estate plan to minimize the excessive state and federal estate tax?
  • Does the life insurance we have purchased over the years still meet our current needs?
  • Our Irrevocable Life Insurance Trust (ILIT) has not been reviewed since it was first established. Is it still performing according to the plan?


Experienced in wealth and succession planning, Capital Planning took the time to understand their unique circumstances, including their goals, family dynamics, and concerns. Instead of a piecemeal approach, their financial advisor led them through a strategic process that systematically addressed each area of their financial plan and collaborated when necessary with their accounting, legal, and insurance professionals. Working with Bill and Peggy over many months, Capital Planning developed a wealth plan addressing their most pressing issues.

Vision & Goals

We assisted Bill and Peggy in clarifying their vision and goals for the business and their retirement, bringing more insight into prioritizing their time and resources.

Business Succession

To gain knowledge of the business sale process, Bill and Peggy were assisted by Capital Planning in meeting with an investment bank to explore the scenario of selling their company. The good news was that the business was in an excellent position to be sold, based on current market conditions. However, after a family meeting, the children working in the business expressed their interest to buy the company to continue the family legacy. Bill and Peggy agreed, and a plan was put in place by collaborating with accounting and legal advisors.


Their current portfolio was reviewed and repositioned to better align with their retirement plans. Capital Planning designed a custom portfolio based on their return objectives, income needs, risk tolerance, and income tax considerations. Traditional and alternative investment strategies were selected to create a well-diversified portfolio.

Risk Management

Capital Planning requested in force illustrations from Bill and Peggy's insurance professional on their life policies, as well as a current coverage report for property and casualty. The life policies were underperforming, based on original projections, and premium adjustments needed to be made. The property and casualty coverage was in good order, except for the umbrella liability coverage, which was increased.

Estate Plan

Their estate documents had not been updated for years. A thoughtful generational plan was created that would address their wealth transfer goals and the needs of the children and grandchildren. An estate planning attorney was selected to update their documents. Bill and Peggy were subject to estate taxes as they had expected. Capital Planning recommended several strategies that substantially reduced their potential federal and state estate taxes.

  • Family Foundation - They realized they could leave a portion of their estate to a private foundation or donor advised fund that would benefit their favorite charitable organizations, while at the same time reducing estate taxes. Since the kids now had the business, they felt much more comfortable with this strategy. In addition, the decision was not set in concrete and could be modified or eliminated at any time.
  • Irrevocable Life Insurance Trust (ILIT) - Their existing ILIT, including annual documentation (i.e. Crummy letters), was found in good order. Now that the life policies were put back on track with the proper premium amounts, this strategy would have the potential to create estate liquidity as originally planned.
  • Generational Trust #1 - As part of the estate plan, a generational trust was established. Bill and Peggy would make gifts and transfers of the company stock to the trust over the next several years. This allowed the growth of the company stock to accumulate outside their taxable estate, which could be substantial over the next 30-40 years.
  • Generational Trust #2 - Bill and Peggy established a second generational trust for the children that were not participating in the business. They gifted a portion of their LLC units that owned commercial real estate. They used part of their unified credit amount to fund the trust and would make additional gifts each year with their annual gift exclusion amount.

Parents Wealth Planning

Through the planning process Bill and Peggy had involved their whole family to create a multi-generational plan. Even their parents had the opportunity to participate and learn about strategies that would benefit the family. They decided to go through a thorough review of their investment and estate plan.

Real Life Solutions are for educational purposes and are not actual clients. These case studies are based on similar circumstances experienced by our clients. To learn more about our process, see Wealth Planning Services and What We Do Video.


Proactive Wealth Management

Bill and Peggy were provided ongoing wealth planning services to continue to build and monitor their complex wealth plan.

Business Succession Plan - Over the years, Bill and Peggy had aspirations to put a plan in place, but their efforts always seemed to stall. Through a collaborative effort with their entire advisory team a strategy was finalized. Now that the business succession was solidified they can focus on their plans for retirement.

Family Meetings -Ideas were openly shared and perspectives were exchanged by all family members. The formal Family Meeting became an annual tradition to promote family unity.

Investment Management Capital Planning will continue to maintain their custom portfolio based on their return objectives, income needs, risk tolerance, and income tax considerations. The traditional and alternative investment managers selected for the portfolio will be monitored, and web based portfolio reports are available when needed.

Banking and Credit Working with a private banking specialist, Capital Planning assisted Bill and Peggy with establishing an Investment Credit Line. With this line, Bill and Peggy were able to extend their borrowing power for both personal and business needs.

Personal Financial Website A personal wealth management system was established that would keep all of Bill and Peggys plans on course. It provided consolidated account reporting, income and expense tracking, document storage, wealth management reports, electronic mail, mobile access, and wealth plan alerts. Bill and Peggy are also able to access wealth planning reports, such as net worth, asset allocation, investment performance, and tax information.

Experienced Advisory Team - The proactive Capital Planning team is led by a seasoned financial advisor and supported by a dedicated client service associate. As needed, other team members are available, who specialize in financial advising, portfolio administration, and investment research. Regular reviews will be conducted to make adjustments and update Bill and Peggys wealth plan.


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