THE SITUATION:
Susan Collins, 62
Mrs. Collins had been very successful with her business and other investments, with a net worth of $40 million which was projected to continue to grow. She was looking for a way to bequest $10 million to each of her three children ($30 million total) – with any remaining estate going into a charitable trust for division among several organizations.
THE PROBLEM:
Much of Mrs. Collins financial assets were already being utilized in various businesses and other investments. Additionally, the client had previously utilized much of her unified credit with other planning. The federal and state estate tax was projected to be in excess of $20 million.
THE SOLUTION:
Leveraged Planning®
Since Mrs. Collins was committed to providing the maximum amount possible to both her children and the charitable organizations she had supported for many years, she needed a solution that could help to alleviate the tax burden on her estate.
After looking at a range of options provided by her financial planner, Mrs. Collins settled on a traditional premium financing arrangement from GFD’s Leveraged Planning Solutions for Individuals offering. Mrs. Collins’ financial planner and family attorney worked with her to establish an ILIT that could act as the funding source and servicer for the loan arrangement that GFD facilitated with GFD’s lending affiliate. GFD helped Mrs. Collins’ financial team select an insurance product that was illustrated to provide a cash value upon her death that was sufficient to cover the expected tax costs that would be incurred during the transfer of her estate. The total loan amount was used to fund ten annual premium payments. The loan principal would be paid off by a distribution from the policy cash value.