Case Narrative $$ The Hunt Family n nRelationship First Name Age nHusband Martin $58$ nWife Kahleen $45$ nSon Jon $16$ nDaughter Sarah $14$ nSon Randall $10$ n nPlan Preparation Date: n nMartin owns an architecture firm. He started the firm $25$ years ago. He pays himself $150,000$ per year, this is expected to raise at $4\%$ per year. n nKahleen works as an RN at a local hospital. Her salary is$75,000$ per year and expects pay increases of $2\%$ annually. n nThey live in New York and would like to relocate to Delaware in retirement $$ more specifically Sussex County where the tax rates are lower. Their New York home cost $650,000$ which they purchased $13$ years ago on a $30-$year mortgage at $5\%.$ It$$s now worth$800,000.$ Current balance left is $400,000.$ They pay$3000/$month in P I. They would love a home where they could walk to the beach from in retirement and expect this will cost over $1\mathrm{.}1$m$.$ However, they expect property taxes to drop considerably. Currently, they pay$20,000/$yr$.$ n nThe Hunts also own a rental property condo. They$$ve already paid this off. It$$s worth $200,000$ and costs about$600/$month in HOA, taxes and maintenance fees. They rent the property for n$1200/$mo$.$ They$$re not sure if this is a good investment or not. n n nMartin would like to create a succession plan for his business, but he does not know where to start. He has two employees that have been around over $15$ years that would be dedicated to the future of the firm and willing to take over if needed. n nMartin and Kahleen would like to pay about half of the college education for Jon and Sarah. They do not anticipate Randall going to college. They don$$t currently have any dedicated vehicles to help plan this. They estimate this will currently cost$12,500$ per year for each child $$ based on $25,000$ current tuition. Tuition inflation is expected at $6\%.$ n nThe Hunt$$s son Randall has autism, they would like to set money aside for him for the future in case something happens to both of them. They do not want this money to affect government benefits. n nMartin has long$-$term disability insurance. It replaces $60\%$ of his income and he pays$225/$mo$.$ Kahleen has group short term disability insurance provided through work. n nMartin has a $500,000$ term insurance policy which expires next year. Kahleen has$250,000$ group term insurance through work. Martin owns a whole life insurance policy with a death benefit of $50,000.$ He bought this $25$ years ago. He pays$1500$ per year and it has a Cash Value of $27,000.$ The expected real rate of return on premiums is $4\%.$ n nMartin has a will but no other estate planning documents. He last updated the will $8$ years ago. Kahleen has no estate planning documents. n nThey currently have a home equity loan they used to finish their basement. This cost n$50,000$ and currently have a balance of $24,700$ at a fixed $7\mathrm{.}75\%.$ The duration is $10$ years, this started $6$ years ago. They currently pay$600$ per month. n nThe Hunts have an HO$2$ Homeowners Policy $$ Coverage A $1,000(400$k limit$),$ Coverage B n$1,000(30$k limit$),$ Coverage C $500,$ replacement value $(100$k limit$),$ Coverage E $400$k limit$),$ Coverage F $(5$k$/$person$)$ Insurance Policy and a $25/50/25$ Auto insurance policy. Their auto deductibles $$ Collision $750,$ Comprehensive$100.$ n nMartin maxes out his SIMPLE IRA Contribution. Kahleen contributions up to the limit on her hospital$$s $100\%$ match up to $6\%$ of her income. n nThey estimate general inflation will be $3\mathrm{.}5\%.$