Helping My Family Case Study
“Can I afford to gift to my children and/or grandchildren now without risking my financial independence? They have current financial needs, and I’d rather help now as opposed to leaving them a large inheritance later.”
- Mary Jo, age 62
- Two adult children, three grandchildren
- Divorced, retired woman with a net worth of $2.5 million
Mary Jo is an independent woman, having built a modest net worth while living a very comfortable lifestyle. Fortunately she is in position to leave a nice inheritance to her children and grandchildren. Her adult children are working hard in their careers but still face the normal young family financial concerns: Costly health care, private schools and higher education, among others. While leaving them a nice inheritance is good, it would be more meaningful if she could help pay for their financial needs now.
With the future so unpredictable, how much can she afford to give now and in the coming years without risking her financial independence?
Payne Wealth Partners would recommend preparation of an ongoing analysis of her circumstances to help monitor and maintain her financial independence. Her lifetime financial needs should be continually evaluated in light of tax law updates, changes in her spending needs and desires and unforeseen health care costs. This process identifies “excess” wealth above her basic needs which can then be strategically applied to different gifting opportunities in a tax-efficient manner. The primary goal is to maintain her financial independence; the secondary goal focuses on helping her children and grandchildren now.
Payne Wealth Partners would also recommend an investment management process that is consistent with Mary Jo’s personal risk tolerance and considers the investment return her wealth plan calls for. Such an investment plan should be continually evaluated by reports that compare actual returns to those of appropriate benchmark market indexes.Disclaimer – These case studies are for illustrative purposes only. They are not based on a particular client’s circumstances and are not personal advice. As this information has been prepared without considering your objectives, financial situation or needs, you should consider its appropriateness to your circumstances. You should seek assistance from your financial adviser before acting on this information.
Can I afford to gift to my children and/or grandchildren now without risking my financial independence? They have current financial needs, and I’d rather help now as opposed to leaving them a large inheritance later.
Now that my husband is gone, I’m overwhelmed by the numerous financial decisions I have to make. I fear that I’ll make unwise decisions.