Explore Devon & Mei's story.*

See how Schwab Wealth Advisory™ could potentially help investors like Devon and Mei plan for a lasting legacy, support their daughters and grandchildren, and make thoughtful adjustments to their trusts and investment strategy in retirement to manage risk.  

A smiling couple standing arm in arm outdoors. Speech bubbles beside them read: "How can we help our daughters build their own wealth?", "Is our current approach aligned with our future needs?", and "Are we being thoughtful about our legacy?"

About Devon & Mei

A circular photo of the same couple looking at each other and smiling warmly. Below the photo are three icons: a group of people, a graduation cap, and a heart with a dollar sign inside.

Meet Devon and Mei,* a retired couple in their late 60s and early 70s living in Florida with $7 million in assets. Now that they're retired, Devon and Mei wanted help making sure their finances were aligned with the future they envisioned. They had several key questions in mind:

  • How can we provide meaningful financial support to both of our daughters without compromising our own goals?
  • What's the best way to make annual contributions toward our grandchildren's education?
  • Is our portfolio too complex or carrying more risk than we need across our trust accounts?
  • Should we continue paying premiums for our long-term care insurance or explore other options?
  • How can we incorporate charitable giving while still planning for a lasting family legacy?

To help bring clarity and confidence to their planning, we worked closely with Devon and Mei to understand their full financial picture, then brought in the right Schwab specialists to explore options that matched their goals.

*These scenarios are for illustrative purposes only, are not the experience of any specific clients, and are no guarantee of future performance or success.

NOTE: Certain services may be provided by affiliated professionals and third-party firms. Schwab Wealth Advisory does not provide specific individualized legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.
 

Estate planning

Devon and Mei* put a trust in place years ago but wanted to revisit it with fresh eyes now that they're retired and thinking more about the next generation.

How Schwab Wealth Advisory helped

We met to better understand their current goals for family, legacy, and charitable giving—and discussed how their existing trust structure could be updated to reflect those priorities.

We then referred Devon and Mei to Schwab's Tax, Trust, and Estate team, who helped them:

  • Ensure that the beneficiaries listed on their brokerage accounts align with their wills and trusts, to clarify what happens in the event of incapacity or death.
  • Identify key areas to revisit with their estate attorney, such as simplifying outdated provisions.
  • Review successor trustee designations and ensure that other key documents—such as powers of attorney and healthcare directives—were aligned with the trust and could help ease the process for their daughters if they ever needed to step in.

Our conversations also gave Devon and Mei space to think about what legacy meant to them—beyond just transferring wealth—and how to structure their plan so it could evolve alongside their family.

*These scenarios are for illustrative purposes only, are not the experience of any specific clients, and are no guarantee of future performance or success.

Employees of Schwab Wealth Advisory, Inc. are not estate planning attorneys and cannot offer tax or legal advice, or create and prepare legal documents associated with such plans. Where such advice is necessary or appropriate, please consult a qualified legal or tax advisor.

Estate planning is about more than assets.

See how our personalized approach can help make things easier for the people you love.

A few years ago, I started working with a client about 75 years old, and they had just inherited a substantial amount of wealth. It was about $10 million. And as we were talking through the goals and objectives, at a certain point they stopped me and they just said, Rich, I'm 75. We've already raised our family. We've raised our four kids. We're not looking to move into a mansion. We're not looking to take a year long trip around the world. 

You know, we were happy with where we are right now, but the next thing they told me is something that's always stuck with me, and it's something that I share with clients to this day. And what he said to me was, it would have been really nice if we had had even a fraction of this money 25 or 30 years ago, when we were actually raising our family, and we could have really, really used it at that time.

And what was great about this particular client relationship is, as we talk through this, and I really saw what was most important to them, we were able to bring in our trust and tax and estate specialist at work within Schwab Wealth Advisory. We coordinated with their estate attorney, with their CPA, and we looked at a number of different strategies to find the type of gifting strategy that really was going to make the most sense for this family.

And ultimately, what was coordinated was they gave a $1 million gift to each of their four children, adult children, to be able to use now in their lifetime. There were still about 5 or $6 million left, so there's still likely a very large legacy that will also go to their kids. But the fact that they were able to provide this to their loved ones now and see their children actually benefiting and their grandchildren benefiting from that money now is something that to this day, they still let us know how important that was to them.

Disclosures:      

Schwab Wealth Advisory™ ("SWA") is a non-discretionary investment advisory program sponsored by Charles Schwab & Co., Inc. ("Schwab"). Schwab Wealth Advisory, Inc. ("SWAI") is a Registered Investment Adviser and provides portfolio management for the SWA program. Schwab and SWAI are affiliates and are subsidiaries of The Charles Schwab Corporation.

Portfolio Management provided by Schwab Wealth Advisory, Inc., a Registered Investment Adviser and affiliate of Charles Schwab & Co., Inc. (Schwab). Please read the Schwab Wealth Advisory and the Schwab Wealth Advisory, Inc. Disclosure Brochures for information and disclosures about this program. The Wealth Advisor, Associate Wealth Advisor, and other representatives making investment recommendations in your Schwab Wealth Advisory accounts are employees of Schwab Wealth Advisory, Inc.

This information provided here is for educational purposes only and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

This material is intended for general informational purposes only. This should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.

Financial Planning consultations are conducted by employees of Schwab Wealth Advisory, Inc. ("SWAI") or Charles Schwab & Co., Inc. ("Schwab") depending on the complexity of your financial situation. SWAI and Schwab are Registered Investment Advisers and wholly owned subsidiaries of the Charles Schwab Corporation.

Certain services may be provided by affiliated professionals and third-party firms. Schwab Wealth Advisory does not provide specific individualized legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.

Asset allocation and diversification strategies do not ensure a profit and do not protect against losses in declining markets.

© Charles Schwab & Co., Inc., Member SIPC. All rights reserved.

(0725-PYAV)
Video Transcript

Estate planning with a Wealth Advisor

A few years ago, I started working with a client about 75 years old, and they had just inherited a substantial amount of wealth. It was about $10 million. And as we were talking through the goals and objectives, at a certain point they stopped me and they just said, Rich, I'm 75. We've already raised our family. We've raised our four kids. We're not looking to move into a mansion. We're not looking to take a year long trip around the world. 

You know, we were happy with where we are right now, but the next thing they told me is something that's always stuck with me, and it's something that I share with clients to this day. And what he said to me was, it would have been really nice if we had had even a fraction of this money 25 or 30 years ago, when we were actually raising our family, and we could have really, really used it at that time.

And what was great about this particular client relationship is, as we talk through this, and I really saw what was most important to them, we were able to bring in our trust and tax and estate specialist at work within Schwab Wealth Advisory. We coordinated with their estate attorney, with their CPA, and we looked at a number of different strategies to find the type of gifting strategy that really was going to make the most sense for this family.

And ultimately, what was coordinated was they gave a $1 million gift to each of their four children, adult children, to be able to use now in their lifetime. There were still about 5 or $6 million left, so there's still likely a very large legacy that will also go to their kids. But the fact that they were able to provide this to their loved ones now and see their children actually benefiting and their grandchildren benefiting from that money now is something that to this day, they still let us know how important that was to them.

Disclosures:      

Schwab Wealth Advisory™ ("SWA") is a non-discretionary investment advisory program sponsored by Charles Schwab & Co., Inc. ("Schwab"). Schwab Wealth Advisory, Inc. ("SWAI") is a Registered Investment Adviser and provides portfolio management for the SWA program. Schwab and SWAI are affiliates and are subsidiaries of The Charles Schwab Corporation.

Portfolio Management provided by Schwab Wealth Advisory, Inc., a Registered Investment Adviser and affiliate of Charles Schwab & Co., Inc. (Schwab). Please read the Schwab Wealth Advisory and the Schwab Wealth Advisory, Inc. Disclosure Brochures for information and disclosures about this program. The Wealth Advisor, Associate Wealth Advisor, and other representatives making investment recommendations in your Schwab Wealth Advisory accounts are employees of Schwab Wealth Advisory, Inc.

This information provided here is for educational purposes only and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

This material is intended for general informational purposes only. This should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.

Financial Planning consultations are conducted by employees of Schwab Wealth Advisory, Inc. ("SWAI") or Charles Schwab & Co., Inc. ("Schwab") depending on the complexity of your financial situation. SWAI and Schwab are Registered Investment Advisers and wholly owned subsidiaries of the Charles Schwab Corporation.

Certain services may be provided by affiliated professionals and third-party firms. Schwab Wealth Advisory does not provide specific individualized legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.

Asset allocation and diversification strategies do not ensure a profit and do not protect against losses in declining markets.

© Charles Schwab & Co., Inc., Member SIPC. All rights reserved.

(0725-PYAV)

Family gifting

Devon and Mei* had recently helped one of their daughters buy a home and wanted to provide a similar gift to their younger daughter.

How Schwab Wealth Advisory helped

We explored several options to help them structure the gift without compromising their own financial flexibility or triggering unnecessary taxes:

  • Making the full $500,000 gift upfront, with the understanding it would count toward their lifetime gift tax exemption.
  • Spreading the gift over time using the IRS annual exclusion amount, giving $19,000 per year, per spouse, to help minimize gift tax reporting requirements.
  • Opening a brokerage account with a transfer-on-death (TOD) designation and funding it with $500,000, giving Devon and Mei flexibility to manage the assets during their lifetime while still outlining a clear path for transfer.

After weighing the options, they chose the brokerage account strategy, which offered them ongoing control and flexibility while potentially avoiding capital gains tax if assets were held until death.

*These scenarios are for illustrative purposes only, are not the experience of any specific clients, and are no guarantee of future performance or success.

Schwab Wealth Advisory does not provide specific individualized legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.

Before executing any tax strategies ensure you understand the technicalities and certain risks including unintended tax implications.

Contact your Schwab Financial Consultant or connect with us to learn more.

Let's talk

Supporting education

Devon and Mei* wanted to help cover college expenses for their three grandchildren, one of whom lives outside the United States.

How Schwab Wealth Advisory helped

We reviewed different ways they could help fund education and discussed how each option might impact taxes, control, and financial aid eligibility:

  • A custodial account offers flexibility but gives the child full control of the funds at the age of majority.
  • A Coverdell ESA allows for tax-free growth but comes with lower contribution limits and income-based eligibility.
  • A 529 plan offers tax advantages and high contribution limits, but more restrictions on how the funds can be used.

Given that one of their daughters is living overseas temporarily, Devon and Mei chose to use 529 plans for all three grandchildren, providing a simple and consistent strategy they could revisit each year as part of their annual gifting.

They also considered front-loading contributions to take advantage of five years' worth of annual exclusions in a single year—maximizing potential tax-free growth. It also gave them a platform to talk with their daughters and grandchildren about the value of saving and planning ahead.

*These scenarios are for illustrative purposes only, are not the experience of any specific clients, and are no guarantee of future performance or success.

A special gift-tax exclusion allows for contributions exempt from federal gift taxes of $95,000 ($190,000 per couple) per beneficiary in a single year. To qualify for the special gift-tax exclusion, you need to file a United States Gift-Tax Return form to treat the gift as if it were made in equal payments over five years. To avoid gift tax, you should make no additional gifts to the beneficiary during those five years. To qualify for gift-tax exclusion, contribution must be received by December 31. If you are a Kansas taxpayer and make a contribution between January 1 and the tax filing deadline, you are allowed to choose either the current tax year or previous tax year for the state income tax deduction.

Managing health risks

Devon and Mei* were re-evaluating their long-term care coverage after Devon was recently diagnosed with Parkinson's disease. They weren't sure whether it made sense to keep paying premiums—and wanted help understanding the potential financial impact of their options.

How Schwab Wealth Advisory helped

We introduced Devon and Mei to a Schwab Insurance Specialist for a detailed review of their long-term care policy and available alternatives.

At the same time, we brought in a Planning Specialist to help model potential scenarios for future care costs—factoring in Devon's diagnosis—to see how different choices might affect their long-term financial plan.

This gave Devon and Mei a clearer picture of both the policy's value and the potential trade-offs of self-funding care—including its impact on legacy planning, family dynamics, and the long-term durability of their financial plan.

*These scenarios are for illustrative purposes only, are not the experience of any specific clients, and are no guarantee of future performance or success.

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