Sue had built a thriving healthcare business. We had worked with Sue for only a few years when she called with devastating news. She had developed a terminal cancer and suddenly had a very short life expectancy. In the next few days we met with Sue and her husband , Mike.
Their long-term plan suddenly became a short-term plan. She wanted to stabilize her account values and wanted assurance that an estate would be intact to pass down to her children.
Death offers several unique planning opportunities in regards to “step up basis” for taxes, insurance values and survivor options. We advised to not sell any “taxable assets”. We recommended selling her assets in her traditional IRA and dividing her assets into 3 separate annuity contracts and into a portfolio of discounted corporate bonds with survivor puts. These new assets would protect asset values while offering unprecedented growth opportunities.
Annuities offer a form of life insurance. It is uncommon for Silvia McColl to offer annuity solutions, but in Sue’s case, it made all the sense in the world. It was a chance to acquire a degree of insurance even though her life expectancy was short. Three contracts offered diverse exposure in different market sectors. Following a bull market, all three contracts registered impressive short term games, then Sue past away. Within a few weeks the market experienced an historic correction with the outbreak of Covid 19. Sue’s contracts reflected the violent downturn, but were soon redeemed by Mike with zero loss in value.
Already purchased at a discount, Sue’s bonds also reflected some degree of loss in the stalled economy. But, throughout their holding period, the bonds paid interest and were redeemed at PAR value realizing a robust gain during a period of falling asset values. We were honored to have known Sue. Her service packed the church and many, many sang
her praises. Mike said, “I’d give up every cent I have to have her back.” Mike and Sue planned well and Sue’s vision for her children is intact.