Schwartsman Law Group would like to share an interesting and very strategic approach to life insurance from our partner, Vlad Shafir of Forest Hills Financial Group. Join us in this exclusive content from the most prominent financial advisory group.
The Thompson family’s estate inheritance situation was not an easy one.
With a family business and hefty real estate portfolio in the mix, splitting up $8.5 million in assets fairly among the four kids – Marcus, Tyler, Samantha, and Chloe – was a real challenge.
Samantha, being the one running the business operations day-to-day, was the obvious choice to take over as the successor. Her brother Marcus had the real estate side locked down. But if their parents Robert and Linda just handed the business to Samantha and the properties to Marcus, that would leave Tyler and Chloe out in the inheritance cold compared to their siblings.
Linda and Robert wanted to avoid potential future conflicts between siblings and make sure none of their kids felt slighted, after putting in years of sweat equity helping build the family enterprises. An even split was non-negotiable in their minds.
So how did they ensure Tyler and Chloe got an equal slice without breaking up the indivisible business and buildings? Two words: life insurance.
The Thompsons worked with their financial advisor Vlad Shafir to crunch the numbers and rework their coverage setup. The plan? Samantha stays at the business helm by inheriting it. Marcus takes the real estate reins. But through some insurance planning Tyler and Chloe score life insurance payouts matching the other siblings’ shares when their parents pass away.
Let me break it down:
Samantha gets the $4.5 million business.
Marcus gets the $3 million real estate portfolio.
…and Tyler and Chloe are named beneficiaries to life insurance policies totaling $9 million, netting each $4.5 million to make it all even steven.
By using life insurance as an equalizing asset, the Thompsons could keep their overwhelming sentimental property and ensure continued success of the family’s legacies – all while avoiding any feeling of unequal treatment between the kids.
At the end of the day, this “insure for fairness” strategy gave Linda and Robert peace of mind that their estate would be split by the values they lived by. The trickiest inheritance cases have wiggle room when you get creative with financial instruments and planning.
Written by Vlad Shafir
Financial Representative
Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 200 BROADHOLLOW ROAD, SUITE 405, MELVILLE NY, 11747, 631-5895400. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Forest Hills Financial Group is not an affiliate or subsidiary of PAS or Guardian. CA Insurance License Number – 4112620. 2024-173816 Exp 04/26. Names mentioned herein are purely fictional. Any resemblance to existing situations, persons or fictional characters is coincidental. The information presented should not be used as the basis for any specific investment advice .
