Case Study: All in the Family - Inter-generational Planning for Oil and Gas Legacy

Setting:

We were approached by a family seeking help to build an inter-generational plan given the substantial monthly oil royalty proceeds from their property in Texas. We partnered with their estate planning attorney and helped them engage an experienced tax firm as we analyzed their new-found wealth.

How Did We Help?

How should our retirement plan be structured?

  • We recommended both a defined benefit (pension) plan and a defined contribution (401(k)) plan for each of the family members to maximize their tax-deferred savings opportunities.

  • As their income tax rates are not likely to drop below the highest bracket, we worked with the tax planning firm to add a Roth component to their 401(k), so that they were able to build a portfolio of Roth, traditional, and defined benefit investment accounts.

How should our health and other insurance benefits be most efficiently structured?

  • We partnered with the family to optimize health benefit plans and other components of their insurance portfolio inside their business entities..

  • We then recommended personal insurance coverage to help fill the gaps remaining from their business-based insurance.

How do we manage the responsible and tax efficient transfer of wealth to our younger generations?

  • We have identified resources for the aging matriarch and patriarch, enabling them to live independently while providing values, traditions, and stories of their family to their heirs.

  • We hold regular sessions with heirs to educate them about money management, using a charitable, family foundation as a tool for instruction/training.

Result:

Family members have custom financial plans to optimize their tax deferred investment opportunities and protect their resources through adequate insurance and estate plans. In addition, they are on a path for transferring their wealth to their children as well as supporting their own foundation as a means of giving back.