In Eli and Kelly’s first plan—they tried to have a greater Kingdom impact, but still had a $50,000 tax to pay to the IRS. They did not have any estate tax issues. (The current exemption is $5.43 million per person.)
Even though Eli and Kelly decided to give less to their children, they still increased the size of the total estate by $476,000. Although a small example, this demonstrates a couple who, when faced with the decision of how and how much to give to their children, prayed about it and decided that the $1,100,000 was enough for the two children. Both sons are followers of the Lord and have a heart for the Lord's work. They had no problems with the plan and celebrated their parents' decisions.
Eli and Kelly's plan provides an example of the work we do with families who don't necessarily have an issue with estate tax exposure. Eli and Kelly came to us with questions about giving, budgeting, and inheritances. We were able to sit down with them through the Discovery Retreat and multiple other meetings and define exactly what they wanted to give to their kids and what they needed to live their lifestyle. Once we achieved those goals, the remainder was free to give to their favorite charities. Eli and Kelly couldn't have been happier with the plan we created.
Gary and Leah had done the typical estate planning that you would see from a secular attorney’s office. The use of the Life Insurance policy to replace possible estate taxes is a very common tool. However, it is clear from this flowchart that the policy was much too large for the estate tax, and the children receive a significant amount of money after both parents have passed. In order to properly allocate the distribution of their assets, Gary and Leah set goals and objectives that honored God and that would leave a lasting family legacy.
As you can see from the summary, the Garsons were not only able to reduce their estate tax to zero but they also were able to increase the amount given to Kingdom causes by $16 million. They were also able to dramatically increase their net income. The problem with the inheritance became an easy fix as they worked through the Discovery Retreat.
Gary and Leah had done a fair amount of planning before seeing us but felt uneasy about how much they were giving the children. They were also interested in getting rid of the estate taxes. They had already planned on giving $4 million to ministries but felt that they could do more. Through the Joseph S. Sturniolo & Associates, Inc process they were able to meet all of their objectives and increased their giving to $20 Million.
The planning that Peter and Mary had done previously was thorough and significant; however it did not accomplish their goals. This planning accomplished the goals of a secular attorney who did not take the time to truly understand what the Miller’s wanted. This led to what Peter and Mary saw as an inequitable distribution of their life’s work to their children and the IRS, rather than giving more to the charities that they cared most about.
As you can see, the larger the case, the greater the impact. The Millers were able to increase their Kingdom giving from $3 million to $118 million. They reduced the amount they were giving to their children to $12 million and changed how the children were going to receive their inheritance. They chose to give to each child in a uniquely different way, based on each child’s maturity and situation. Again, the children did not push back on the plan, but welcomed the opportunity to participate in the giving plan. In this case, the family grew closer through a sophisticated giving plan, which I will explain in the last chapter.
As the chart shows, even the best estate planning that money can buy may not be the best estate planning for you. Here, the Miller’s essentially threw away a lot of what they had done with their secular attorney in favor of a more God-centered plan. As a result, their Kingdom Impact increased to more than 30x the original amount, and they could not have been happier with the impact it had on their family.
The case studies presented are hypothetical illustrations and are provided for general information only. All Financial Planning and investment strategies involve risk and there is no guarantee that any strategy will be successful. The information has been obtained from sources considered reliable, but is not guaranteed. Before acting on any financial planning information, consult your Financial & Tax Advisors for individual advice based on your personal circumstances. Past performance is not a guarantee of future results.
Joseph S. Sturniolo & Associates is an investment advisor. Securities offered through Geneos Wealth Management, LLC. Member FINRA/SIPC
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