I am in the process of studying to sit for my series 7 exam and have had a relative come to me for some advice about how to manage assets so that they can plan for the future of their children/my cousins. Below is a summary of the discussion, I will try to be brief and I would appreciate advice as I do not want to steer them in the wrong direction. Most of my exposure in the financial sector has been working as a broker in the insurance industry and although the concept is familiar it is outside my comfort level to advise especially a family member.


My uncle and aunt are a middle aged couple who want to take cash on hand, stock portfolio, 401k and other real assets and place them into a family trust to preserve and plan for their childrens future. My uncle got married late in life and prior to marriage didnt see the need for life insurance as he never expected to get married. Well he met my aunt who is 10 years his junior and they now have 3 young children and when he started to shop around for life insurance he found out how costly the premiums were given he is 54 and also realized that he/they would not be able to enjoy the proceeds until after his passing.


The idea that he would not be able to enjoy the fruit of his labor while alive ate at him until he and my aunt decided to take their nest egg and invest it and use the gains to enrich their family life and pursue a family business which would be investing in passive income sources, particularly real estate. Their plan as they have explained it to me sounds reasonable and is as follows.


They want to establish a family trust and a holding company to place current and future assets into so that they can preserve wealth through tax benefits, be iunsulated from creditors, defer taxes, establish a steady income stream and to ensure all is in place sooner rather than later so that they can ensure that the look back period for Medicare is well behind them.


They want the core pieces, trust and holding company to withstand due diligence should any liltigation take place and to also avoid probate and to keep their portfolio private from external probing. Each works and the annual household income is >200k per year. They are planning on relocating to NC and want to have this established before the move so as to ensure any new acqusitions are immediately added to the holding company. The approximate value of assets on hand has a current market value approaching $1m.


Now before they go to an attorney to layout their paln they want to go in with a wealth of knowledge so they can sniff out any BS and find the right fit for their needs which is why I would appreciate any constructive input and suggestions.


Thank you in advance for your time and thoughtful consideration.