Comprehensive approaches

Scenario 1: Blended Family Finances


Challenges: 
Consider a couple forming a blended family with children from previous marriages and significant financial/lifestyle assets, business interests, and separate/ community property concerns. Their planning needs would be complicated. The couple would want to maintain the lifestyle they had worked so hard to achieve while being able to:

  1. Help pay for grandchildren’s educational expenses, allow for annual gifting to their children, and fulfill philanthropic desires.
  2. Insure a comfortable and consistent level of income to the wife should the husband predecease her.
  3. Create and implement an estate distribution road map that would reflect their desires.
  4. Deploy strategies to reduce current income/capital gain tax liabilities and eventual death tax liabilities.
  5. Hold structured investment portfolios that met their financial needs while attempting to preserve capital and allow for long-term growth.

Our Solution: 
Banta’s approach to this scenario would start with careful prioritizing of their goals and concerns. We would then review their financial assets and business interests to determine whether their asset base and cash flow could support their lifestyle needs. Next would be a comprehensive financial and estate planning process. This would include coordination with experienced independent professionals including tax advisors, financial planners and attorneys, whether introduced by us or brought to the relationship by our clients. Ultimately we would seek to accomplish the following:

  1. Creation of a detailed schematic/road map outlining cash flows and revised estate distribution.
  2. Creation of a Charitable Remainder Trust (CRT) to fulfill philanthropic desires, reduce tax liability from the sale of any business interests, diversify any concentrated (low cost basis) stock holdings, and reduce the size of the overall estate. Creating a CRT would also help generate create a cash flow stream to the wife, should the husband predecease her.
  3. Creating and funding Qualified Personal Residence Trusts (QPRTS) and Irrevocable Life Insurance Trusts (ILITS) to reduce the size of the estate and create liquidity for potential death taxes.
  4. Develop an investment strategy and allocation model with guidelines for creating and managing customized investment portfolios.

The Lesson:
Many people don’t know who to turn to for the necessary coordination, expertise, and resources when facing complex financial decisions. We help clients comfortably and clearly articulate their desires and concerns. Our holistic approach allows us to understand all the moving parts in our clients’ personal and financial positions. We are typically able to satisfy our clients’ desires and concerns while developing a road map that we can revisit annually, or as necessary. This road map can serve as the foundation for making sound financial decisions, helping ensure a high comfort level regardless of the market environment.

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** Some services are provided by outside service providers. Please see important information regarding outside professionals we refer.

Disclaimer: These scenarios are intended only as hypothetical illustrations of the types of services that may be provided through Banta Asset Management, LP.  While elements of the scenarios here are drawn from actual client experiences, all Banta clients are managed based on individual circumstances. These scenarios are meant to illustrate our holistic approach to individual circumstances rather than specific experiences a Banta client can expect. Consequently, you should not assume that your experience would be the same, no matter how similar your circumstances are to these scenarios. Adverse market conditions and other contributing factors would impact accounts and would likely cause these hypothetical scenarios to be altered accordingly.

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