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Case Study - Jonathan and Susan

Case Study - Jonathan and Susan

Jonathan and Susan Gilbert, a married couple, are 77 and 75 respectively, and are both retired. They have 5 children and 13 grandchildren. Although the children are at different levels of financial success, none of them are struggling. The Gilberts own more than $78M in real estate, which carries debt of approximately $53M, and provides cash flow of approximately $2M per year. They own 10% of a closely held business. Their share of the business is worth $70M, and the business produces approximately $10M per year in income. The Gilberts also have cash and other liquid assets totaling $25M giving them a total net worth of approximately $130M.

Two of their children, a daughter and a son, are involved in the business. They have done extremely well and have significant net worth of their own because of their 10% interest in the business. The remaining three children, though not part of the business, are nevertheless in good financial condition. They each have a net worth in the $5-10M range.

Several years ago, one of the children faced a tough battle with cancer. Since then, Jonathan and Susan have been very interested in giving to cancer research, both through increased lifetime giving, as well as major gifts at their deaths.

Client Goals and Concerns

Jonathan and Susan’s primary goals include:

  • Maintaining their lifestyle. This requires approximately $2M annually after taxes and gifts.
  • Providing for increased annual charitable gifts during life and a significant charitable gift at death.
  • Maintaining liquidity for emergencies and investment opportunities.
  • Reduce income taxes.
  • Reduce estate taxes.
  • Provide an unequal distribution of the estate for certain children, based on need.
  • Provide asset protection, both for themselves, and for the children.

The Solutions

As with all our clients, integrated planning solutions vary from client to client. This situation used six different planning strategies, which were designed to meet all the client’s goals and mitigate as much risk as possible.

We will look at one of the strategies used in this client’s plan.

Charitable Life Estate

In order to help with current income taxes, we advised the Gilberts to gift their Florida condo to a charity immediately, while retaining a life estate. They had the right to live there until their death. This gift created a deduction of $2.3M and a nice income tax savings with no change in lifestyle.

Annual Meetings and Maintenance

Our annual maintenance program helps Jonathan and Susan to stay on track with monitoring their cash flow and lifestyle needs as well as the choices they made in the planning process.


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