Don't need "Assignment 2"

Deep Roots Case Study Results from Discovery Assessment: Jack and Emily, newly married and both in their 30's, are seeing you because they are growing a business and want to make sure their personal finances are in order before they get too far. They are primarily concerned with having the right amount of insurance. They are putting all of their energy, time and money into growing their business. The business they are starting is an offshoot of Emily's Dad's nursery business, Bob's Trees, a tree nursery in their small town, but with a big outreach to the surrounding communities due to Bob's expertise in growing trees from seed to sapling disease-free. In fact, less than 5% of his trees since the firm's inception 25 years ago were lost to disease. Emily's Mom, Mary is also an owner and a part-time schoolteacher. Emily is the second oldest in her family of six. Emily's folks are both in their 60's. Unfortunately, Bob and Mary didn't handle their personal finances very well. They both didn't take the time to get any life or disability insurance because they were just too busy, they said. They also thought that insurance was too expensive and wasn't worth the cost. Personal debt management was not much better for Emily's folks. They took long vacations to Hawaii in the nursery offseason and consistently racked up major credit card debt to finance it. They also didn't take care of themselves health-wise. Emily said that she had never seen either one exercise or in a gym, and never seen her dad drink anything but coffee and beer. Mary was addicted to diet soda. She handled the finances with both the business and personally, which created a lot of stress. Needless to say, they both had chronic health conditions. Bob was ready to hand off the business to Emily's older brother Ryan when tragedy struck Bob. While unloading a young tree from a forklift, he suffered a heart attack and needed triple bypass surgery. His days as a hands-on owner were done. Unfortunately, the unintended consequence was that any personal insurance was off the table, due to underwriting issues. Bob decided to stop the hand off to Ryan for now, much to the chagrin to Ryan. Deep Roots is formed Jack and Emily had known each other since grade school. Both went to the same State University, where Emily took up plant biology and Jack studied business. While Emily was in school, she took up and interest in Hazelnut and Chestnut trees. They are easy to grow and produce nuts for decades, and the soil from their area is great for growing both trees. They are also cheap to purchase and require little maintenance. Jack became interest too, but more from the business side. The nuts are in demand and each tree produces over 25 pounds per year. Emily started purchasing trees and planting them on her Gramma's former farmland After graduating, Jack went on to get his MBA at the same State University, and Emily kept purchasing trees using her savings. They soon were up to hundreds of trees, and some started producing nuts. Looking ahead Fast forward seven years and they are up to 300 trees and have plans of planting more. Emily's gramma has given them 1000 acres of full use at no cost. They have plans of someday planting all 1000 acres. They are just starting to positively cash flow and have reinvested all profits into buying more trees and equipment to harvest the nuts. For now, they still work at the nursery. Factors to consider: Jack and Emily live in a guest house on their gramma's farm rent-free. They plan on doing this until the business is stable, perhaps in three years They would like to start a family at the stability time as well Ryan would like to join Depp Roots if offered a job. He was frustrated that his dad put things on hold Jack and Emily would want to buy the nursery if it was for sale Both Jack and Emily are in good health Gramma would like to gift or leave at death the acreage they are growing the trees to Jack and Emily Assignment 1: Please answer the following questions. Provide your answers in a separate Word doc: How are risks to Jack and Emily's business tied to the risks to them personally? What is the biggest personal financial risks facing Jack and Emily? How would you open a life insurance needs analysis discussion with them? How would you evaluate their situation with Deep Roots in the event either one prematurely dies? Would a Buy-Sell agreement have any value? And to whom? How would some of the factors to consider impact their financial plan from an insurance perspective? Which could have the biggest impact? If Ryan would want to buy the Nursery business from Bob, what would be the best method for him? SCIN, Private Annuity? Installment sale? How about for the dad? Assignment 2: Team assignment Make the inputs into MGP and determine the insurance shortfall 1. Create and send in a word document that lists: 2. Your team's name and members 3. The objectives of the client 4. The analysis of their situation from a retirement standpoint 5. Recommendations to close the gap Deep Roots Case Study Results from Discovery Assessment: Jack and Emily, newly married and both in their 30's, are seeing you because they are growing a business and want to make sure their personal finances are in order before they get too far. They are primarily concerned with having the right amount of insurance. They are putting all of their energy, time and money into growing their business. The business they are starting is an offshoot of Emily's Dad's nursery business, Bob's Trees, a tree nursery in their small town, but with a big outreach to the surrounding communities due to Bob's expertise in growing trees from seed to sapling disease-free. In fact, less than 5% of his trees since the firm's inception 25 years ago were lost to disease. Emily's Mom, Mary is also an owner and a part-time schoolteacher. Emily is the second oldest in her family of six. Emily's folks are both in their 60's. Unfortunately, Bob and Mary didn't handle their personal finances very well. They both didn't take the time to get any life or disability insurance because they were just too busy, they said. They also thought that insurance was too expensive and wasn't worth the cost. Personal debt management was not much better for Emily's folks. They took long vacations to Hawaii in the nursery offseason and consistently racked up major credit card debt to finance it. They also didn't take care of themselves health-wise. Emily said that she had never seen either one exercise or in a gym, and never seen her dad drink anything but coffee and beer. Mary was addicted to diet soda. She handled the finances with both the business and personally, which created a lot of stress. Needless to say, they both had chronic health conditions. Bob was ready to hand off the business to Emily's older brother Ryan when tragedy struck Bob. While unloading a young tree from a forklift, he suffered a heart attack and needed triple bypass surgery. His days as a hands-on owner were done. Unfortunately, the unintended consequence was that any personal insurance was off the table, due to underwriting issues. Bob decided to stop the hand off to Ryan for now, much to the chagrin to Ryan. Deep Roots is formed Jack and Emily had known each other since grade school. Both went to the same State University, where Emily took up plant biology and Jack studied business. While Emily was in school, she took up and interest in Hazelnut and Chestnut trees. They are easy to grow and produce nuts for decades, and the soil from their area is great for growing both trees. They are also cheap to purchase and require little maintenance. Jack became interest too, but more from the business side. The nuts are in demand and each tree produces over 25 pounds per year. Emily started purchasing trees and planting them on her Gramma's former farmland After graduating, Jack went on to get his MBA at the same State University, and Emily kept purchasing trees using her savings. They soon were up to hundreds of trees, and some started producing nuts. Looking ahead Fast forward seven years and they are up to 300 trees and have plans of planting more. Emily's gramma has given them 1000 acres of full use at no cost. They have plans of someday planting all 1000 acres. They are just starting to positively cash flow and have reinvested all profits into buying more trees and equipment to harvest the nuts. For now, they still work at the nursery. Factors to consider: Jack and Emily live in a guest house on their gramma's farm rent-free. They plan on doing this until the business is stable, perhaps in three years They would like to start a family at the stability time as well Ryan would like to join Depp Roots if offered a job. He was frustrated that his dad put things on hold Jack and Emily would want to buy the nursery if it was for sale Both Jack and Emily are in good health Gramma would like to gift or leave at death the acreage they are growing the trees to Jack and Emily Assignment 1: Please answer the following questions. Provide your answers in a separate Word doc: How are risks to Jack and Emily's business tied to the risks to them personally? What is the biggest personal financial risks facing Jack and Emily? How would you open a life insurance needs analysis discussion with them? How would you evaluate their situation with Deep Roots in the event either one prematurely dies? Would a Buy-Sell agreement have any value? And to whom? How would some of the factors to consider impact their financial plan from an insurance perspective? Which could have the biggest impact? If Ryan would want to buy the Nursery business from Bob, what would be the best method for him? SCIN, Private Annuity? Installment sale? How about for the dad? Assignment 2: Team assignment Make the inputs into MGP and determine the insurance shortfall 1. Create and send in a word document that lists: 2. Your team's name and members 3. The objectives of the client 4. The analysis of their situation from a retirement standpoint 5. Recommendations to close the gap