Sharon Laynee (age 50) is a part owner (30%) of Petro King, a C-corporation and recently divorced from David (age 50) who is unemployed and entitled to collect $8,000 per month in alimony from Sharon for the next 15 years (until age 65). Sharon’s mother, Lucy (age 75), has Alzheimer’s and is in a custodial care facility. Lucy’s 20 year life expectancy is projected to cause her to outlive her financial resources. Sharon intends to support Lucy from the time when Lucy runs out of money until her death. Sharon’s daughter, Amy, and Amy’s husband, John, and their daughter, Allison, all live with Sharon. Sharon wants to provide a college fund for Allison in addition to allowing Amy, John and Allison to continue living with her while John works part-time and finishes his college degree.

Sharon’s salary last year was $350,000. She expects salary increases equal to the general inflation rate after this year. Her net worth is $1.955 million, of which $1,000,000 is the value of her interest in Petro King. Sharon has a mortgage and car loan as well as the alimony obligation for the next 15 years. If you consider the alimony she pays to David as debt, Sharon’s debt load is high and could preclude her from qualifying to refinance her existing home.

Financial Goals and Concerns

1. Determine Sharon’s tax filing status. Whatever her filing status, Sharon has informed you that she will spend any refund she gets.

2. Determine how to increase Sharon’s monthly cash flow and/or reduce her monthly expenses.

3. Sharon plans to retire at age 65 with annual income of $200,000 in today’s dollars including Social Security

   estimated to be $25,000 per year at full retirement age (67) (in today’s dollars).

4. Sharon wants to provide for Lucy, her mother, who has a life expectancy of approximately 20 years

   although she has experienced severe cognitive decline (Alzheimer’s).

5. Sharon wants to provide a quality college education for Allison, her granddaughter.

6. Sharon wants to review and update her risk management plan and investment portfolio.

7. Sharon wants to create an estate plan.