Goals
 Goals should be depicted with graphics, text and numbers so that planning team members can “triangulate”
on what the client wants. Some clients and advisers prefer textual summaries of goals, others prefer graphical
bar charts to show allocations of assets, and others prefer specific numerical tables showing year-by-year
after-tax lifetime income and after-tax transfers to heirs. A Blueprint provides all of these summaries.
Sample outputs are shown below.
| GOALS AND OBJECTIVES |
- Maintain our customary lifestyle. This should take about $ 240,000 annually after all taxes and gifts, inflated by 3% annually.
- Maintain adequate liquidity for emergencies and investment opportunities. We prefer to keep at least $ 1,000,000 in cash or
marketable securities that can be readily accessed.
- Ideally, we would like our estate to be distributed as follows: 90% to heirs, 10% to charity, and 0% to taxes.
- Establish and find a charitable organization benefiting organizations that support our favorite causes. Designate assets to this
foundation that would otherwise be lost estate tax.
- Eliminate unnecessary taxes on our estate, capital gains, and income.
- Protect our family from business risk and liability through asset protection and other risk management techniques.
- Summarize all of our affairs in a comprehensive plan format that can be easily updated in response to changing goals, asset vales,
or tax laws.
|
| Source of Cash |
| Income from assets |
73,250 |
100,133 |
111,472 |
123,173 |
135,243 |
201,344 |
820,238 |
1,816,273 |
| Tax exempt income |
87,000 |
87,000 |
87,000 |
87,000 |
87,000 |
87,000 |
87,000 |
87,000 |
| Distribution from CRT |
80,000 |
80,800 |
81,608 |
82,424 |
83,248 |
87,495 |
96,649 |
106,760 |
| Interest payment on GDOT note |
150,000 |
150,000 |
150,000 |
150,000 |
150,000 |
150,000 |
150,000 |
150,000 |
| Earned and other income |
155,000 |
169,850 |
164,440 |
169,373 |
174,454 |
- |
- |
- |
| Total sources of cash |
545,250 |
577,583 |
594,520 |
611,970 |
629,945 |
525,838 |
1,153,887 |
2,160,033 |
| Use of Cash: |
| Living expenses |
240,000 |
247,200 |
245,616 |
262,254 |
270,122 |
313,146 |
420,841 |
565,576 |
| Income tax |
151,041 |
243,009 |
252,382 |
262,122 |
272,246 |
130,910 |
378,741 |
780,248 |
| Total outlay |
391,041 |
490,209 |
506,998 |
524,376 |
542,368 |
444,055 |
799,582 |
1,345,824 |
| Surplus/Shortage |
$154,209 |
$87,374 |
$87,522 |
$87,593 |
$87,576 |
$81,783 |
$354,304 |
$814,210 |
To evaluate how well the plan fulfills the goals and quantified objectives above, it is necessary to analyze cash flows and wealth transfers
with year-by-year summaries of numbers like those pictured below. No plan is complete without fully-integrated summaries of the
sources and uses of cash flow. Moreover, plans should show how money not consumed during lifetime will accumulate for heirs.
| YEAR |
Current |
2009 |
2010 |
2013 |
2015 |
2020 |
2025 |
| Benefits to Family |
|
| Residual estate |
$1,389,953 |
$11,449,471 |
$3,899,553 |
$389,953 |
$389,953 |
$389,953 |
$389,953 |
| Family trust |
1,389,953 |
- |
389,953 |
389,953 |
389,953 |
389,953 |
389,953 |
| Value of IDIT |
1,000,000 |
2,292,511 |
3,626,849 |
4,741,791 |
8,595,909 |
8,595,909 |
14,615,067 |
| IDIT insurance proceeds |
5,000,000 |
5,000,000 |
5,000,000 |
5,000,000 |
5,000,000 |
5,000,000 |
5,000,000 |
| Process from ILIT |
2,000,000 |
2,000,000 |
2,000,000 |
2,000,000 |
2,000,000 |
2,000,000 |
2,000,000 |
| Value of discount to heirs (IDIT) |
3,000,000 |
3,509,199 |
3,947,371 |
4,269,477 |
5,194,471 |
5,194,471 |
6,319,868 |
| Value of QPRTs |
- |
- |
- |
- |
- |
- |
5,053,225 |
| NPV of CLATs remainder interest |
3,807,575 |
7,042,979 |
10,279,576 |
11,265,031 |
12,056,389 |
12,056,389 |
10,335,923 |
| TOTAL assets to heirs |
$17,587,481 |
$25,120,293 |
$29,143,302 |
$28,056,204 |
$28,056,204 |
$33,622,674 |
$44,103,988 |
|
