Case Studies2018-04-27T14:59:07+00:00


Preparing for retirement. Paying for college. Or simply buying a second home. Beaumont can help improve every aspect of your financial life.

Case Studies

SITUATION: Our client is divorced from his first wife, with whom he has two children. He is remarried and wants to purchase a home with his second wife, which led to discussions about estate planning. He owns the bulk of the assets in his second marriage, creating a potentially inequitable situation should he pass away, since both he and his second wife have minor children from previous marriages.

GOAL: Our client wanted to provide for his second wife—but he wanted to name his children as the ultimate beneficiaries of his assets. He needed a flexible plan that would meet the needs of his family regardless of when he died, whether by funding his children’s immediate college needs or helping them when they have children of their own.

SOLUTION: We began by preparing a net worth statement, cataloguing all assets and liabilities, as well as detailing how they were titled and who the designated beneficiaries were. We then prepared a chart, showing exactly how money would flow through the estate. After a review with our client, it became clear that his current plan did not accomplish his objectives. Working with his trust and estate lawyer, we drafted a plan that provides for his wife after his death, while still passing the bulk of his assets to his children.

SITUATION: Our 64-year-old client is approaching retirement. His wife (62) spent the early part of her career as a school teacher, but decided to stop teaching years ago, when their second child was born. Although they have a substantial net worth, they would like to make intelligent choices in navigating the options offered by the Social Security Administration.

GOAL: The couple would like to calculate the optimal time for each of them to begin collecting social security benefits, as well as understand their options and the impact of various election strategies.

SOLUTION: The social security system is complex, with different guiding principles for primary earners and their spouses, and different payment amounts depending on what age clients begin collecting benefits. We were able to help our clients understand the specific risks and benefits associated with each of their choices. Not being in immediate need of money, they assumed that they should not start collecting social security benefits until each reached age 70 and were eligible for maximum benefits. Our analysis helped them understand that this is not necessarily the case, and that the best options were those that provided the most comfort based on their preferences.

SITUATION: Our client was an early employee at a growing technology company. Along with her salary, she has collected stock options as a portion of her compensation over the years. The company is continuing to grow, but now a significant portion of her invested net worth is comprised of her employer’s stock. She recognizes that she has a diversification issue, since weakness at the company could threaten not only her employment, but also her invested assets.

GOAL: The client would like to free up some cash to buy a home, as well as diversify by starting to invest outside of her company. She also wants to minimize the tax impact from exercising her options.

SOLUTION: We reviewed each series of options our client had been granted and created a strategy to exercise the options in tranches so as not to create significant alternative minimum tax income. Since the stock has performed nicely of late, we advised her to pay some ordinary income tax to take advantage of the recent stock appreciation and buy a home. With the current cash need addressed, we will become more strategic in exercising further tranches, delaying sales in order to qualify for long-term capital gains, funding a diversified portfolio over time.

SITUATION: Our clients are in their early 60s and live in New England. While on vacation in Georgia, they came across a home for sale in an area they loved and had visited many times. Although they plan to work for a few more years, they could see themselves retiring to this home.

GOAL: Our clients wanted a thoughtful approach to the decision about whether or not they could afford a second home, and if they could, how to go about financing it.

SOLUTION: Because we had already created a thorough financial plan for these clients, we incorporated their potential purchase into their existing plan. We stress-tested their portfolio using the new cash flow projections, which provided comfort that they could afford the new purchase. Once the big picture planning was completed, we set about discussing ways to finance the new home, including traditional lending, as well as using their portfolio as financing collateral.

SITUATION: Our client is an investment professional and has always managed his own portfolio, in addition to preparing his tax returns and some basic financial planning. Yet, as he nears retirement, he has realized that it would be helpful to have a partner in the endeavor—someone who could look at his situation with fresh eyes, and who could continue to take care of his wife’s finances should he predecease her.

GOAL: Our client wanted a holistic view of the four major areas of his finances: managing his money, preparing taxes, estate planning, and insurance choices.

SOLUTION: We made a seamless transition in assuming responsibility for his portfolio, consulting with him on asset allocation, as well as the timing of the portfolio transition. He continued not only to feel involved, but to be involved. After learning that his family attorney recently retired, Beaumont also introduced him to several highly-qualified estate planning attorneys, then participated in his estate planning process, discussing charitable gifting, insurance coverage, and his annuities.

SITUATION: After years of building several successful businesses, our client informed us that he has decided to sell his primary business, while continuing to run several small companies in semi-retirement. Neither of our client’s two children are interested in joining the family businesses: One recently graduated and, the other is a junior in college. The anticipated liquidity event represents a significant lifestyle change for the entire family.

GOAL: Our client wants to make sure that his family is prepared both financially and strategically for the changes ahead, as well as ensuring that the transition takes place thoughtfully and efficiently.

SOLUTION: Through a series of meetings, we initiated a pre-planning process with our client, reviewing his family’s long-term goals and objectives. The meetings were conducted in consultation with his tax and legal advisors to identify opportunities for greater tax efficiency, as well as incorporating plans for his children’s legacy and charitable giving. As part of the planning process, Beaumont revised the client’s financial planning analysis to illustrate various options for them to consider.

We also created detailed educational materials for our client’s children. The presentations were designed to help them understand broad financial concepts, as well as some of the specific issues related to the trusts that had been established for them. The discussions were incorporated into our ongoing client meetings, which allowed their parents to direct the conversation, with Beaumont providing deeper expertise in the areas needed.