Jul 1, 2025
Client Background
A couple in their 70s and 80s consulted us to plan their financial legacy. With sufficient income to cover their living expenses for life, their primary goal was to pass on as much wealth as possible to their children.
Challenge
The couple’s investment portfolio was overly conservative, reflecting their age but not their goal of wealth transfer to the next generation. This cautious approach limited growth potential, reducing the assets available for their children. They needed a strategy to optimize their portfolio for their heirs while ensuring their own financial security.
Solution
We reframed their investment time horizon to focus on their children’s lifespan, effectively extending it to a multi-generational perspective. We shifted their portfolio to diversified, higher-risk investments better suited for long-term growth. Additionally, we collaborated with their estate planning attorney to implement annual gifting strategies, leveraging the 2025 annual gift tax exclusion of $19,000 per recipient to transfer wealth tax-free. We also explored an irrevocable life insurance trust to further enhance their legacy plan.
Results
By adjusting their investment strategy, the couple’s portfolio achieved greater growth potential, better positioning their assets for their children’s future. The annual gifting strategy reduced their taxable estate while transferring wealth efficiently. They gained confidence that their legacy would support their children’s financial security, aligning with their long-term objectives.
Are you investing with your heirs’ future in mind? Contact Michael Brady for a personalized consultation to discuss how your wealth can align with purpose and possibility.
Jul 1, 2025
Client Background
A retired couple approached our wealth management firm seeking to optimize their financial plan. With a modest income primarily from Social Security and minimal investment earnings, they had accumulated significant assets, including a sizable estate. Their primary goal was to pass as much of their wealth as possible to their children while minimizing tax liabilities.
Challenge
Upon reviewing their most recent tax return, we identified an opportunity. The couple’s income was nearly equal to their standard deduction, meaning they were paying little to no income tax but were underutilizing their deductions. This “wasted” deduction represented a missed opportunity to extract wealth from their tax-deferred retirement accounts tax-efficiently, limiting the legacy they could leave for their children.
Solution
We recommended a strategic Roth IRA conversion plan. By increasing withdrawals from their traditional IRAs and converting those funds to a Roth IRA, we could raise their taxable income to fully utilize their standard deduction. Since their deductions offset the additional income, these withdrawals were effectively tax-free. The Roth IRA conversions also positioned their assets for tax-free growth and distributions, enhancing the wealth they could pass to their heirs without future tax burdens.
Results
Through this strategy, the couple successfully converted a significant portion of their IRA assets to a Roth IRA without incurring additional income tax, preserving more of their estate for their children. The tax-free nature of the Roth IRA ensured that future growth and distributions to their heirs would be free from income tax, aligning with their goal of maximizing their legacy. The couple gained peace of mind knowing their wealth transfer plan was both tax-efficient and aligned with their long-term objectives.
Are you making the most of your deductions to optimize your wealth transfer? Contact Michael Brady for a personalized consultation to discuss how your wealth can align with purpose and possibility.
