Background:
When Jessica Mitchell walked into our office, she was overwhelmed, not only with the grief of her recent loss but also with the sudden responsibility of managing a sizable inheritance. With no previous experience in dealing with vast sums of money, Jessica was cautious about ensuring her mother's hard-earned wealth was managed wisely and securely.
Challenges:
Jessica faced multiple challenges. Firstly, there was the emotional aspect of her inheritance, which added a layer of complexity to her decision-making process. She wanted to honor her mother's legacy while also ensuring a comfortable future for herself and her family. Additionally, Jessica was unfamiliar with the intricacies of tax implications, estate planning, and investment strategies associated with such a windfall.
Our Approach:
Understanding the sensitivity and importance of the situation, our team started by establishing a strong foundation of trust with Jessica. We held several in-depth discussions to ascertain her long-term objectives, risk tolerance, and immediate financial need. The outcome of these discussions:
We created a liquid emergency fund, ensuring that Jessica had quick access to funds without disturbing her investment assets.
Recognizing the potential tax and estate implications, our team collaborated with Jessica’s CPA and estate attorney to ensure that her assets were structured properly and in line with her overall goals.
Given Jessica's desire to create a lasting legacy and her interest in philanthropy, we established a Donor Advised Fund. This approach helped her reduce current year income taxes, but also allowed her to support causes that both she and her mother held dear.
For the remaining assets, we devised a diversified investment strategy aligned with her long-term goals as detailed in her Retirement Plan.
Results:
Within a year, Jessica witnessed the benefits of the tailored financial plan. The strategies we implemented assisted her in most aspects of her financial situation. Most importantly to her, the Donor Advised Fund gave her a deep sense of fulfillment, knowing she was continuing her mother's legacy of giving.
Conclusion:
Our collaboration with Jessica underscores the importance of comprehensive, empathetic, and proactive financial planning. By understanding her unique circumstances and goals, we were able to design a strategy that not only preserved and grew her inheritance but also allowed her to navigate her new financial reality with confidence and purpose.