Here’s a case study illustrating how we transformed a complex succession challenge, involving overseas properties, minor children, and intricate family dynamics, into a robust wealth-building strategy, fortified by a $7 million life insurance plan.
Around two decades ago, Kabir, a dynamic entrepreneur, embarked on a business venture in Azerbaijan, establishing a thriving presence in the region’s oil and gas sector. Alongside his professional pursuits, Kabir’s personal life unfolded.
His first marriage, a short chapter, closed with an amicable divorce. Fast forward a bit, Kabir found love again, and together they crafted a joyous life while raising two boys. His initial marriage, though brief, concluded amicably in divorce.
In subsequent years, he found love anew, constructing a joyful life with his second partner, nurturing two children.
Throughout this journey, Kabir consistently excelled in his professional endeavors, amassing substantial wealth. He played the property game, investing strategically back in Mumbai, his hometown.
To juggle the international dynamic (his wife and kids being Azerbaijani), he decided to put those Indian properties under his father’s name.
Navigating Family Dynamics
But wait, there’s more complexity. Kabir’s brother, based in India, wasn’t exactly diving into fruitful endeavors; instead, he leaned on their retired father for support.
All the properties are presently registered under Kabir’s father’s name in India, posing a potential risk for Kabir.
He was pretty sure his brother wouldn’t easily release control over those assets. In case something happened to Kabir, he realized the slim chances of his wife and kids accessing the assets or the funds tied up in them.
The entire situation was touchy, as most family dynamics are, and one that he couldn’t openly discuss with his father.
Adding to the mix, around 13 years into his second marriage, Kabir and his second wife also decided to part ways. Now, Kabir grapples with a few challenges.
He’s got this nagging worry. What if, you know, he’s not around tomorrow?
The property empire tagged under his father’s name might not be readily accessible to his children. The substantial cash stash lounging in India might also pose a challenge for his kids to tap into.
Given that his children are still minors, they’re not exactly equipped to handle the nitty-gritty of business transactions, property sales, or the complexities of accessing bank accounts and navigating investment portfolios.
A Strategic Plan
After hashing out the details in extensive talks with Kabir, I laid out the most straightforward path I could envision. I suggested that Kabir consider selling off his properties in India and ferrying the funds back to Azerbaijan.
But then, looming large in the picture was the next big head-scratcher: What on earth does he do with all that cash in Azerbaijan?
Kabir was in need of a solid investment plan that could grow his assets and ensure they were easily accessible for his kids when he wasn’t around.
You can probably guess where this is headed. The straightforward solution for Kabir was to opt for a substantial Life Insurance policy.
Kabir was on board, and we kicked off the process to secure an offer from a Life Insurance company.
Considering Kabir’s consistent success in business, his substantial net worth, and his excellent health, the Life Insurance company came back with an impressive offer — a life cover worth 7 million dollars. He qualified for ‘super-preferred’ rates, the top-tier pricing.
So he had a decision to make: Should he go all-in on the coverage, or was there such a thing as too much?
Securing Their Future
If you’ve been tuning in to my content, you’re aware that Life Insurance is like a powerhouse in your financial toolkit.
However, the catch is, its availability has a limited window, and the costs keep climbing every day.
So, I suggested to Kabir, “Let’s kick off the life insurance policy at the 7 million mark. Lock in as much coverage as possible.” This strategic move guarantees that Kabir’s two boys would receive three and a half million dollars each when he’s not around.
While Kabir absolutely has the liquidity to pay his premiums out of pocket, he plans to gradually divest from the property portfolio in India, repatriate the funds back to Azerbaijan, and use this money to complete the life insurance premium payments.
Simultaneously, he crafted a will, appointing his wife as the guardian for their children and his best friend, who conveniently happens to be a banker, as the executor.
This well-thought-out plan ensures that if anything happens to him, his wife steps into the role of taking care of the kids.
The money from the life insurance will go straight into the trust Kabir set up for his kids. The profits from the 7 million dollar portfolio will act as a financial safety net for the children.
This straightforward scenario emphasizes a concept we discussed earlier regarding life insurance for single or divorced parents.
Cases similar to Kabir’s are a testament to the effectiveness of a robust wealth-building strategy. They prove that with a bit of foresight, you can pave the way for long-term financial security.
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