First Financial Resources

Fact Situation: Client Age – late 70’s, widower. Estate size = $7,000,000+. Successful entrepreneur. Planning to date: typical wills, trusts, insurance trusts, investment portfolio, assets to children at death, non-deductible insurance planning, gift taxes due on gifting, unfunded estate tax liability remaining of $3,500,000. Little if any charitable planning. Children’s and grandchildren’s inheritances subject to claims of creditors and divorcing spouses. No incentives or values tied to inheritances. Total net shrinkage in estate at 47%. Liquidation of certain highly personal assets required to settle estate. No endowments or scholarships to schools or favored charities. Extremely high income taxes on majority of income. His assets were open to claims of creditors. Basically, this man had “assumed” his highly paid advisors had utilized the latest and most up to date techniques to plan his affairs.

We were able to accomplish the following:

(1) We eliminated estate taxes entirely.

(2) We increased his net after-tax spendable income by 35% by reducing income taxes.

(3) We reduced his insurance costs and made them deductible.

(4) We “bullet proofed” his assets and protected them from lawsuits and claims from creditors.

(5) We eliminated capital gains taxes on the sale of his appreciated assets.

(6) We facilitated the updating and improvement of his wills, trusts and legal documents.

(7) We created a family foundation to keep his and his wife’s name highly memorable and visible in the eyes of family, friends, charities, schools and universities in perpetuity!

(8) We created dynasty trusts running for generations for his children, grandchildren and great-grandchildren that included his values, morals and beliefs. We provided incentives to future generations in place of “free rides” in order to promote happy, healthy and productive lives and lifestyles.

(9) We protected the assets of his heirs from lawsuits, IRS claims, creditor claims and divorcing spouses.

(10) We accomplished all of this at a total cost of less than 1% of his tax savings!

This man now enjoys a larger income which allows him to currently gift to his favorite causes without affecting his lifestyle. He has created endowments at no current cost to himself (the current tax savings are paying for it). He has eliminated worry over the estate tax problem and the future of his business. He has given his family his values along with his wealth, protected their assets and he has passed along incentives for them to lead and live good lives.