4969 US Highway 42 • Suite 2100 • Louisville, KY 40222
502-895-6644
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CASE STUDIES

If you would like to learn more about what we do to help our clients, we invite you to review the case studies below. See for yourself just how Geer Financial Services can help clients with even the most complicated financial matters.

Case Study: Zero Estate Tax Plan with Life Insurance

Situation: James, 65, and Jeri, 62, are retired and have built a significant estate of $14 million.

The couple is not currently making annual exclusion gifts to their four children. They would like to leave their children the amount they can pass transfer tax-free, which under current law is $10 million. Because they are active in their community and regularly support various charities, they would like any funds in excess of this amount to benefit charity not the IRS. After their death, James and Jeri would ideally like their children to continue their philanthropic activities. They are looking for a recommendation that provides flexibility and accomplishes their philanthropic and wealth transfer goals.

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Case Study: Dynasty Trust with Life Insurance

Situation: John, 78, and Susan, 80, are successful, retired and currently worth $23.5 million, $8 million of which is in municipal bonds.

The couple maintains a moderate lifestyle and are not consuming all their income. They are making annual exclusion gifts to their two children and their spouses, as well as to their five grandchildren. A portion of the monies are funding a $4 million survivorship policy in an irrevocable life insurance trust. They plan to continue making cash gifts. John and Susan are very conservative and like the idea of using life insurance as an asset class. They have also indicated that they would like to each use $1 million of their lifetime gift tax exemptions. John and Susan don’t like complex strategies and are looking for an uncomplicated recommendation.

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Case Study: Estate Maximization

Situation: John, 78, and Susan, 80, are successful, retired and currently worth $20 million, $1 million of which is in a deferred annuity with a basis of $200,000.

The couple has four children, maintain a moderate lifestyle and are not consuming all their income. They do not rely on the deferred annuity to meet their lifestyle needs and the deferred annuity could be thought of as an excess asset. They are not currently making annual exclusion gifts to their children. John and Susan would like to maximize wealth transfer to their family and are concerned about the potential taxation of the deferred annuity at their death. They have heard the deferred annuity may be subject to multiple levels of taxation (income tax and estate tax) and may reduce the value received by their children by up to 70 percent. They are open to the idea of acquiring life insurance outside of their taxable estate provided it can be accomplished without incurring gift tax. John and Susan do not like complex strategies and are looking for an uncomplicated recommendation.

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Case Study: Enhancing a Charity's Cash Flow

Situation: Charities are not immune to market fluctuations, and many charities likely found themselves impacted by the market downturn of 2008.

As a result, it’s likely that many charities now find themselves experiencing a significant decrease in revenues, such as donations and investment income. As a result, some of them may need to convert significant portions of their endowment to cash to meet current cash flow needs to sustain their charitable purposes. This provides a unique opportunity for you to help charities enhance their endowment income by implementing an annuity arbitrage plan.

This approach may work best when a charity possesses a low-risk, low-yield fixed rate asset and is using the income provided by the investment to fulfill its charitable purpose.

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Case Study: Survivor Survivorship

Situation: A client has an established estate plan that includes an existing second-to-die policy. One of the insured under the life insurance policy has already died. The surviving insured is in relatively good health. The client and advisors believe that there is a remaining need for a life insurance death benefit.

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