Integrated Case Project
This project will test your knowledge in the areas of insurance, retirement plans and estate planning.
Please use what we’ve discussed during the semester to formulate your answers. Here are the facts of
the case. At a minimum, please answer the questions found at the end of the case. If you’d like to
expand your answers with additional projections or recommendations, feel free to do so. The case
counts for 15 points of your final grade.
There is no minimum or maximum in terms of pages to complete this exercise. Again, you answer the
below questions, great. You expand and want to add more recommendations, great. Some
recommendations you may want to make may require additional information. State what you would
recommend and what you would need to know to accurately recommend it.
• Wanda and Bill Murry have come to you seeking professional financial advice.
• They are married with twins
o The twins are both 12 years of age.
o Wanda is 48 years old.
o Bill is 49.
• Wanda is a physician with her own practice.
o She has 5 other employees that work for her, all of whom are either Helpants, nurses
or admin.
o The business revenues are $2,000,000.
o She pays herself a salary of $750,000.
o The business has a profit at the end of the year of $500,000.
o She has never installed a retirement plan for her employees.
• Bill is an engineer and works for an engineering company that he does not own.
o His gross salary is $200,000.
o His employer has a 401(k) plan plus profit sharing.
The 401(k) plan has both a before tax contribution option as well as a Roth
401(k) contribution option.
He contributes 10% of his gross salary to the before tax option of the 401(k)
plan.
His employer matches him with 5% of his pay
Profit sharing contributions paid by his employer add an additional $20,000 to
his 401(k) plan.
His current balance in the plan is $3,000,000.
• Cash Flow and taxes
o Given their incomes, they pay a significant amount of federal taxes each year (ignore
state taxes for this exercise)
Federal tax = $475,000
They have no significant deductions against their income due to having paid off
their house
o Each year, after paying all their bills and putting money aside for the children’s
estimated college costs, they have extra cash flow.
Their extra cash flow is $500,000 a year
• They invest in a brokerage account just in Bill’s name
• The account is currently worth $10,000,000
• Balance Sheet as of today:
Assets
Cash/checking $ 2,000,000 in joint name
Brokerage account $10,000,000 in Bill’s name
Bill’s 401(k) $ 3,000,000 in Bill’s name
Education accounts $ 500,000 in Wanda’s name
House $ 5,000,000 in both names
Beach house $ 3,000,000 in Bill’s name in South Carolina (they
live in a northern state – doesn’t matter where for this case)
Term Insurance As described below
Liabilities – none at this time, they have paid up all their debts
• Insurances
o Wanda has $1,000,000 group term insurance thru her job
o Bill has $1,000,000 group term insurance thru his job
o Each of the group insurances name the other spouse as primary beneficiary, there is no
named contingent beneficiary
• They have not completed any estate planning documents
Given the above facts and focusing on insurance, retirement plans (and their tax implications) and estate
plan issues, answer, at a very minimum, the following questions. Please be as detailed as possible with
your answers. For example, just saying “they need a will” is not enough. Describe what happens if one
or both die today without a will, what components should they include in the will to assure their assets
pass on to the other probate free? What about the kids? What should the will address about the kids?
This is just one example to get you started. We have discussed all facets of what you could and should
consider for this client throughout the semester. Even if you don’t plan to be an advisor, you could very
well find yourself in this situation, personally, so what would you want to accomplish through planning,
either on your own or with an advisor/other professionals?
Questions:
1) Do you feel they have enough life insurance?
a. If so, why?
b. If not, how much should they have and why?
c. What are the impacts of their current beneficiary designations on their insurance?
d. If you suggest additional insurance, how should it be owned?
i. Who should beneficiaries be?
ii. What about contingent beneficiaries?
e. What type of insurance would you suggest?
i. What are the pros and cons of each?
ii. If you suggest permanent, what type and why?
f. What are the impacts of the insurance on their estate?
2) Is there any other type of insurance you would suggest to protect themselves (besides auto and
house insurance, or malpractice insurance for Wanda)?
3) What would you recommend for Wanda as far as retirement plans?
a. What impact will the retirement plan you suggest have on her future?
b. What impact will the retirement plan you suggest have on her taxes today or tomorrow,
depending on the type of plan you suggest?
c. What impact will the plan you suggest have on her business and employees?
4) What do you recommend for Bill’s retirement plan?
a. What are the differences between a pre-tax contribution to his plan and a Roth 401(k)
contribution?
b. What about beneficiaries of his current 401(k) plan?
i. The facts don’t mention anything, but what would you recommend?
ii. Based on what you recommend above, what would happen to the 401(k) plan if
he died before retirement?
1. Who would it go to?
2. What are the tax implications?
5) What do you recommend regarding estate planning?
a. What would happen today if one or both died?
i. What would be probated assets?
ii. What would happen to the children?
b. Assume the following:
i. Cash assets continue to grow at 1% rate of return plus what they are adding to
their cash assets
ii. Brokerage account grows at 9% rate of return
iii. 401(k) grows at 9% rate of return
iv. House values grow at 4% rate of return
v. Education accounts are spent to pay for college
vi. They have purchased the life insurance you recommended above (if any) and
based on how you suggested they own it, they still have it
vii. They both die in a car accident in 15 years
c. What would be the value of their estate based on the above assumptions and assuming
the same estate tax thresholds as today (2022), what would the estate tax liability be
assuming they did no current estate planning?
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Integrated Case Study
This project will put your insurance, retirement, and estate planning skills to the test.
Please base your responses on what we’ve discussed during the semester. The following are the facts:
the situation Please, at the very least, respond to the questions at the end of the case. If you’d like to, you can
Feel free to elaborate on your answers with further estimates or recommendations. The situation
15 points are deducted from your final grade.
There is no set number of pages required to finish this exercise. You respond to the question once more.
Great answers to the questions below. You’ve grown and want to add more recommendations, which is fantastic. Some
recommendations you may want to make may require additional information. State what you would
recommend
