Michael & Sarah: Maintaining Control
Michael and Sarah were successful real estate investors who followed a consistent program of annual reinvestment. They had a combined net worth of $80M, supported by an annual gross income of $4M. They were concerned about protecting their legacy to their children and about estate taxes, but believed that their only estate planning options would come at a tremendous lost opportunity cost to their investment strategy. While they wanted to provide a solid foundation for their three children, they didn’t want it to diminish their real estate investment activity. As a longstanding CPS client, Michael knew that 3D Wealth™ Strategies might provide an answer.
Financial Overview
Michael and Sarah’s assets were allocated between investment real estate ($35M), equities ($35M) and personal real estate ($10M). Their annual income of $4M allowed them to enjoy a comfortable lifestyle with $1.2M in annual living expenses, pay their $1.8M annual tax liabilities and reinvest $1M annually into their real estate portfolio.
The 3D Wealth™ Difference
As part of their 3D Wealth™ strategy, Michael and Sarah were able to create a new $92M income and estate tax-free legacy for their children through the death benefit on their joint and survivor whole life policy. This was done with no negative impact to their investment activities by using the leveraged whole life structure, a loan regime split-dollar agreement and a new dynasty trust. Their real estate investment side fund is now appreciating inside their new dynasty trust, along with their new life insurance policies. By deploying a custom 3D Wealth™ strategy, Michael and Sarah were able to:
- Retain control over their asset allocation
- Reduce lost opportunity costs
- Create estate tax efficiencies
- Enhance legacy for their children
