Legacy and Tax Savings all in one
Sep 01, 2013OUTCOME: A win-win for the client, charity and family.
As happens frequently, we had clients with highly appreciated property facing stiff capital gains tax upon sale. The home was purchased first is a residence in a district of Boston, and later became a ... three unit investment property. The property had been depreciated to 200,000 and the sale price was 2.6 million. The clients also have 10 years between them, good health especially for the younger one, and predilection for charitable causes. We recommended and the clients adopted a charitable remainder unitrust to which the property was conveyed prior to sale, and from which they would receive income, for life. At about $200,000 per year income, they could easily afford $50,000 per year going into $2 million of life insurance on the younger client. The result is that they receive $150,000 a year, which is an improvement over their former real estate income, on top of their other income sources. They would leave a guaranteed $2 million to their children from the life insurance proceeds, and they would make a sizable impact on their community through this charitable outlet that they so cleverly created.
