Essentials of Personal Financial Planning

CHAPTER 6 CHARITABLE GIFT PLANNING BASICS

CASE STUDY

Bob and Rebecca Anderson, both age 53, have worked for their local brewery, Moose Hair Ale, for the past 30 years. They met at the Moose, married at the Moose, and held their reception in the tap room. They never had children, saved all of their money, and have worked for the same employer for decades. Moose Hair has a retirement plan which owns 100 percent of the brewery. At age 55, employees have the ability to retire without a reduction in benefits.

It’s hard for them to believe, but Bob and Rebecca have become multimillionaires. Each of their retirement plan accounts is worth $1 million, and they have managed to save up to $2 million in their taxable investment account. Their taxable investment account is all low basis stock ($200,000) from a single brewery, which has been bought and sold over the past 30 years by international brands.

They plan to work for another 18 months, at which time they will both turn age 55. Their hope is to dial back their volunteer work at the county museum and travel the world. They have a niece, Betsey, with whom they are very close. She will watch the house while Bob and Rebecca are traveling. It is their hope to leave their estate to Betsey when the last of them passes.

What solutions would you as their personal financial planner suggest to Bob and Rebecca to address the low basis stock, ...