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Meet Linda. Linda’s business is vacation. Along with her family, she owns and operates hotels and resorts throughout the country. Over the years, she has built a $27 million portfolio in resort real estate.
Lately, as Linda watches her family grow, she’s been thinking about her legacy. She wants to pass down as much of her wealth as possible and is concerned about the estate tax burden that will fall to her children when she’s gone.
Linda met with her Wells Fargo Private Bank team to discuss her situation. Together, they considered estate transition planning options that could help Linda preserve her financial legacy in an efficient way.
Many options were available to Linda but life insurance coverage floated to the top.
Her team explained that when Linda passes away and the life insurance policy is exercised, it can provide the tax-free funds for her family to help cover the taxes on her estate.
Because the policy is significant, there are sizeable premiums. Linda was concerned that paying the premium each year may impact her current lifestyle, or drain her business cash flow.
Her private banker described how financing the premium payments using credit could help her preserve her cash flow and keep her assets intact.
Linda determined that this was the right option for her. By working with her team, estate planning attorney, and tax advisor to move some of her assets into a trust structure, combined with the premium financing solution, Linda was able to achieve even further estate and gift tax efficiencies.
This solution enables Linda to optimize the wealth transfer to her children while protecting the resort real estate and her family’s personal assets.
Today, Linda feels more confident that her estate is in good shape for the people that matter most to her.
Using credit in estate planning to preserve family assets is one example of how credit can be put to work for you.
Let’s start a conversation about credit. Contact Wells Fargo Private Bank to learn more.
Reference to credit is subject to credit qualifications.
Wells Fargo Private Bank provides products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries. Wells Fargo & Company and its affiliates do not provide legal or tax advice. Please consult your legal and/or tax advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of you own situation at the time your taxes are prepared.
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