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Financial Advice | Financial Planning | Investing | Private Equity

Simplifying complex wealth liquidity planning

Wednesday, January 05, 2022

Simplifying complex wealth liquidity planning

Client Results

$30 million

Cumulative property value

80%

Financing secured from private bank

Background

Nicholas approached us with a trust that contained five properties in various jurisdictions, cummulatively valued at $30 million, as well as an investment portfolio worth $1 million.   

He discussed his concern that, upon his passing, his wife and children might need to sell the properties to release funds and provide liquidity. Though he has no issue with them selling the properties, he was anxious about them selling in an unfavourable market.   

Nicholas’ main goal was to protect his family and ensure they get the full amount inherited should anything happen to him.   

The solution  

Taking all this into consideration, Nicholas was advised to purchase a $5 million Universal Life policy with a single premium of $1 million. To do so, he used his portfolio held with his global private bank to secure 80% of the financing for the policy. Given his cash flow position, the bank financing the insurance contract was the most effective solution.   

He was also informed that his portfolio could be used to provide additional revenue to fund the interest payments on the loan. Though Nicholas was still in his 50s and already had a will, we encouraged him re-assess his will to account for any developments in regulations in the years since establishing his will. While doing so, he took the opportunity to seek additional advice around estate planning, particularly regarding the ownership of each property.   

Since his properties were spread around various jurisdictions, it was necessary for Nicholas and the team to understand the tax implications of each property as well as the validity of his estate plan across borders.   

After working through the complexities of his estate planning with the help of our trusted partner firms that include lawyers, subject experts and trustees, Nicholas felt re-assured knowing his family would have the liquidity they need and that his overall inheritance plan was clearly organised.   

  

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