Client Profiles


"I would love to do something for my grandchildren so they can afford a good college education, but how?" asked Peter Livingston and his wife, Penny. They had seen the cost of college escalating while their own children were trying to get their feet on the ground with mortgages, paying off their own college loans, and the costs of raising the kids. They had recently sold Peter’s manufacturing business and wanted to use some of that money to start a college fund for the grandchildren. They knew enough about the process, having educated their own three,but were the rules still the same now? Do they gift the money to the children or to the grandchildren? Can they pay the tuition bills directly? Should they take advantage of these popular state programs and buy tuition "credits"? What about the new "529" plans? Would their gifts disqualify the grandchildren for financial aid? Is it a good idea to pay for the education, or should the grandkids share in the cost of it?



Lester and Charlotte McWilliams were about to meet with an insurance agent who was referred to them by Lester’s golfing buddy. His buddy, Jerome, told Lester that this agent was a very good man. One whom he could trust. Lester and Charlotte had been through their share of "insurance men" who assured them that the company they worked for offered the very best of coverage for the best price. It seemed that each time they had an insurance "review", they needed more insurance. Why would this man be any different?

Lester had ample coverage at his accounting firm and they owned significant amounts of whole life insurance they bought when Lester started the firm. The bank needed the insurance as collateral for the loan they gave to him to start the practice. But the loan was now paid off. They had lots of investments in the stock market and some real estate besides. More insurance was out of the question. Charlotte wondered if they had the right kind and if they were they paying too much. She wasn’t too sure that this "review" would answer that question.



Arlene and Tom Morales had saved their money for at least twenty years in a 401K plan at her company and one at his. They believed that safety was the best choice since this money was for their early retirement. Tom attended a meeting at his firm given by the investment company that managed their savings plan and discovered that "safety" may not be the best course when planning for an early retirement. And they knew that Tommy and Cathy, their children, would be needing money for college in a few short years. They had read something about saving for college with US Savings Bonds. They bought those every week as an automatic deduction from their paychecks.

As an attorney, Tom felt he was savvy enough to select the investments for their 401K plans and for the college educations of their children. But after that meeting he attended with the investment adviser at his firm, he wasn’t so sure. Would an aggressive mutual fund be a good thing for them? All the other partners at the firm were gloating about the great picks they made in the stock market. Wasn’t that too risky? What about "safety"? Surely that has a place in retirement money. How do you know how much of each type of asset you should own?



Anita and Joe Mazzarello had acquired a nice estate thanks to Joe’s shrewd investment in several commercial and residential properties in their area and some lucky picks in the stock market. They were both very active participants in their local YMCA and they made an annual contribution to the fund-raising campaign. They had been talking to their attorney about some estate planning strategies, mostly centered around gifting assets to their children. Anita and Joe both liked this idea because it gave them the opportunity to see the benefits of their generosity while they were alive and well. But the attorney suggested they go one step further. How about doing some substantial gifting to the YMCA, now? That generosity would have many benefits all around: income to Joe and Anita, a current income tax deduction, and a deduction for their estate when they passed on. And it would save a huge amount of capital gains taxes later on. The Y would receive a very large gift and would be able to show their appreciation to the Mazzarellos now. If the gift were one of the commercial properties Joe had in his portfolio, the Y could sell the building and take the full proceeds without paying any taxes, a feat Joe could never pull off! Seems like a "win-win" deal. Is it?



Betty and Lou Jones were looking to retire to a warm climate and one that would get them within 100 miles of Tracy and Jonathan, their two grandchildren. They thought they had the means to buy a condo in an adult living community and travel several times a year for at least a week or two. But they started to worry when they learned of their neighbors’ plight. Charlie and Jean Thompson were all ready to make the big move to South Carolina and buy the house on the 18th hole when Charlie’s company informed them that his pension plan was going to be distributed to them in a lump sum.
They didn’t know what to do with it. Should they invest it in an annuity with an insurance company? Should they give it to a broker? Should they take it to a bank? How much should they take every month? Would Jean have enough to maintain her standard of living if Charlie predeceased her? What about taxes? Betty and Lou thought they had it all figured out. Lou’s pension was to pay them a monthly benefit and one to her if he died. That monthly amount would have been perfect to give them what they needed. Did Lou have the option to take his pension in a lump sum? What was the better course of action? Now they were very confused.