Posted on August 20, 2012 by thecomplexestate
I was intrigued by Richard Orlando’s recent article in Private Wealth entitled “The “Perfect” Family Meeting” in that he provided some good steps to preparing for such an event. However, I know that not every professional advisor or set of advisors can conduct such a meeting with just a list of “must do’s”. Even with years of experience in serving the high net worth in advanced planning, it is that one skillful individual that has been trained and is experienced in facilitation and communication that is needed to engineer the process.
“Research shows that the main reasons families are not able to successfully transfer wealth across generations are a breakdown in trust, communication, planning and governance, and the failure to prepare the next generation, “ the article states. We agree. Having been party to these important meetings, there are many things lacking in the succession planning of a family’s wealth and the most obvious are the heirs.
We’ve seen many advisors use Kolbe Indexes or Family DNA Discovery for each family member as part of the discovery phase or in preparation for the family meeting. These tools are a great way to uncover opportunity and understand communication styles amongst the family before you begin your communication with them.
Remember, a family meeting does not need to be scheduled for just the family’s succession plan. It can be for any important topic or communication that the family needs to know about or wants to share. For example, the risk to the family’s reputation or brand, which can have a direct impact on the family’s financial and emotional health if it were to be threatened or the inherent risk of unstable economic times.
The success of a family meeting is not to be determined by the advisors but by the family itself, both as a unit and as individuals.
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Filed under: Advanced Estate Planning, Family Meetings, High Net Worth, Legacy Planning | Tagged: Advanced Estate Planning, Family Meeting, Financial DNA, InKnowVision, Legacy Planning, Ph.D, Richard Orlando | Leave a Comment »
Posted on June 19, 2012 by thecomplexestate
It is difficult for clients to talk to their children about the family’s wealth. However changes in generational behavior and each generation’s own needs are bringing that conversation to the table as the new US Trust 2012 survey reveals.
We have all heard stories about having to take a parent out of their homes kicking and screaming in order better manage their health and safety. Then there are stories about disinherited children, picking so-called favorites and leaving more money to charity than to family members. The tides are shifting to more purposeful planning and the economic climate has a lot to do with it.
So much has impacted one’s net worth today. Just read the newspapers and you’ll see that people have lost over 40% of their net worth. The younger generation is not holding back in seeking advice on how to best plan for their future. They have a feeling that they will be left bearing the brunt of ill prepared parents and needy children.
Alternatively, boomers are not creating comprehensive plans. While they describe themselves as very private people, they believe that their wills are adequate for their planning needs. Has any one informed them that a will is a public document?
Advisors need to think about how they are communicating with their clients and prospects. There’s a lot more on the minds of the high net worth these days. Getting them to share some of what is keeping them up at night can open the door to endless possibilities.
We agree with a lot of the survey’s findings and would like to hear what you are experiencing when working with a high net worth client.
Filed under: advanced tax planning, High Net Worth | Tagged: Advanced Estate Planning, Cash Flow planning, high net worth, InKnowVision, Legacy Planning, philanthropy | Leave a Comment »
Posted on April 30, 2012 by thecomplexestate
In a poll conducted during a recent InKnowVision webinar, 13% of advisors stated that they only market for high net worth clients approximately 2 hours per week. In addition, fewer stated that they spend a minimum of 2 hours per week. The other 80% surveyed suggested that the do not market for high net worth clients at all.
These stats should not come as a surprise. Many advisors have not prepared a plan to reach this underserved market and as a result are missing enormous opportunity. It appears that this audience of advisors is marketing as if it was 2002 not 2012.
Just look around the country, the estate tax is becoming the “state” of estate tax. High Net Worth individuals and families have taken a cautious approach and are sitting on large sums of cash as Cambridge Associates multi year study suggests. Then there is the fear of the end of the “low tax decade” as we know it. Still many of the high net worth have no advanced estate or tax planning in place.
What does this mean for advisors? There is much work to do in this area. Advanced planning requires applied knowledge, a team approach and a marketing edge. There are plenty of high net worth individuals and families that need advanced estate and tax planning help. Are you up for the challenge?
Filed under: Advanced Estate Planning, High Net Worth, high net worth tax planning | Tagged: Advanced Estate Planning, advanced tax planning, Business Succession Planning, charitable planning, high net worth, Inheritance tax, InKnowVision | Leave a Comment »
Posted on March 5, 2012 by thecomplexestate
More often than not, advanced estate planning for the ultra high net worth contains assets such as fine art and fine collections such as automobiles, wine, and guns for example. Each has its own unique circumstances and emotions tied to them.
Artist Jason Brammer
Recently, one of our business owner clients disclosed a fabulous $40M collection, of which $20M was crated in the basement of their home. They were already making annual gifts to a major museum. However, at this time, they were in need of creating liquidity to meet their business transition needs and maintain their lifestyle as they prepared to leave their family owned business.
As it turned out, we were able to create a plan that provided for increased cash flow, a reduction in taxes and a peace of mind using the $20M worth of art stored in their basement. Had we not taken our client up on the offer to come to their home there was a good chance we could have missed this opportunity, as the advisory team did not have these assets listed on any of the balance sheets.
When planning for art the advanced estate planning team should include an expert art advisor and an advisory team with extensive experience in estate and tax planning for these unique assets.
Be sure to make a visit to your clients’ homes. A planning opportunity may be hanging on a wall or hiding in the basement.
Filed under: Advanced Estate Planning, charitable planning, Estate Planning for Art, gifting, High Net Worth, Legacy Planning, philanthropy | Tagged: Advanced Estate Planning, Art Planning, Business Succession Planning, Cash Flow planning, charitable planning, estate planning, high net worth, InKnowVision, Tax Planning | Leave a Comment »
Posted on February 15, 2012 by thecomplexestate
After completing over 900 integrated plans ($10- $100M in net worth) during the past nine years, we can confirm that cash flow and meeting lifestyle needs matter.
There is a gaping hole in integrated planning that exists between the financial and legal world. You can’t have one without the other. Clients fear that you will disrupt their cash flow, impede their lifestyle and make them give up control and that’s just the beginning. These are by far the most common reasons clients do not embrace integrated planning. If I was approached by an advisor whether it be an attorney, financial advisor or CPA, trying to sell me a strategy or plan and charging a large fee without understanding my lifestyle and cash flow needs first, I would run the other way. Wouldn’t you?
Advanced estate planning or business transition planning, for example, can’t be done in a vacuum. Over the years we have seen many plans put in place only to see them fall apart because clients didn’t really know what they had and how it affected their cash flow. Finding out the client’s goal and objectives is the first step. Securing their cash flow and lifestyle needs should be second.
Once you’ve come to terms with knowing their cash flow and having them confirm it with you and the rest of the advising team, then you can move into the planning options that will achieve the greatest results.
Take a lesson from us. Cash is king. That is why we start at the top of the wheel, where the cash is.
Filed under: Advanced Estate Planning, advanced tax planning, Business Succession Planning, Business Transition Planning, Estate Planinng, High Net Worth, high net worth tax planning, Uncategorized | Tagged: Advanced Estate Planning, advanced tax planning, Business Succession Planning, Cash flow, estate planning, high net worth | Leave a Comment »
Posted on December 5, 2011 by thecomplexestate
Whether a loved one is at death’s door or the tax law is about to change, there is an inevitable deadline looming for both.
Last week I received five phone calls, Facebook notifications and emails from friends and extended family that a parent had passed away during the Thanksgiving holiday. It was a shock to have them happen all at once. But then again who plans on dying.
In between attending wakes, funerals and sending sympathy cards, Scott and I had a chance to see the movie The Descendants, which by the way I urge every planner to see along with their clients. It is reflective of the state in which we plan as well as for those who planned for us. Both death and estate planning have something in common, finality.
The tax law will change at the end of 2012 if not before. And it will have finality. This is why the current call to action for so many advisors and their clients is to move the planning process forward. The deadline is fast approaching.
When my dear friend told me about her father’s recent passing she said, “ He stopped at the lawyer’s office to sign his will on the way to the hospital and he left me with the mess. Thanks Dad.” I could say nothing but only hope that we can encourage clients to be more purposeful than this in their planning, deadline or no deadline.
Filed under: Advanced Estate Planning, advanced tax planning, Business Succession Planning, charitable planning, Estate Planinng, High Net Worth, high net worth tax planning, Legacy Planning, philanthropy | Tagged: Advanced Estate Planning, advanced tax planning, Business Succession Planning, charitable planning, estate planning, Inheritance tax, Legacy Planning | Leave a Comment »
Posted on November 30, 2011 by thecomplexestate
Here is the definition by Merriam-Webster’s;
1. A : the state or condition of being entitled : right
B : a right to benefits specified especially by law or contract
2. : a government program providing benefits to members of a specified group; also : funds supporting or distributed by such a program
3: belief that one is deserving of or entitled to certain privileges
Here is the definition provided by a client shared by one of our advisors,
“Whatever I made during my lifetime, my children told me that they are entitled to it when I die.”
And that’s the truth.
Sad to say but we have created a sense of entitlement for our heirs and we have not heard the last of it. Advanced estate planning and business succession planning bring out the best and the worst in families. Divisions amongst family members can come at a time when planning needs are at their greatest. Overcoming this obstacle is a grand feat for anyone but there is hope.
Helping clients recognize early on that they can do something productive to ward off the entitlement issue can enhance and strengthen the client advisor relationship. It can also give clients a peace of mind knowing that there is a process that can help them navigate through difficult conversations.
A word of warning; the entitlement generation is not limited to the “Y”s. The economy has expanded it to the early age boomers and “X”ers as well.
Filed under: Advanced Estate Planning, advanced tax planning, Business Succession Planning, Business Transition Planning, Estate Planinng, High Net Worth | Tagged: Advanced Estate Planning, Business Succession Planning, Business Transition Planning, Entitlement Issues for Heirs, estate planning, Inheritance, Legacy Planning | Leave a Comment »
Posted on November 9, 2011 by thecomplexestate
It is indeed a ‘perfect storm’ for estate planning and no matter where you turn this is all you read about. Your high-net worth clients are reading about it too. However this does not mean that they will act on this opportunity.
During our recent InKnowVision technical webinar we addressed the uses of GRATs (Grantor Retained Annuity Trusts) in the advanced estate planning process. The use of GRATs are commonly used. Unless tested against or integrated with other advanced estate planning options, a high net worth client and their advising team may never really know the true benefit of this advanced estate planning strategy for the larger estate. In return, this could prove more costly and less effective than the desired result.
Advanced estate planning or high net worth tax planning as some call it, requires the security and peace of mind that comes with protecting cash flow or enhancing it . This can be the deciding factor whether or not a client can or will move forward.
As one commenter put it, “Fabulous idea! Where am I supposed to borrow the money to carry out your recommendations?
By starting with a comprehensive cash flow and balance sheet analysis you can be assured that not only will you find the money to carry out the recommendations, the high net worth client and their advising team will be well equipped to make wise choices in the planning process that can produce the desired results.
Revisiting where you start the advanced planning process can be a matter of life or death…. tax that is.
Filed under: Advanced Estate Planning, advanced tax planning, Business Succession Planning, Business Transition Planning, charitable planning, Estate Planinng, GRAT, High Net Worth, high net worth tax planning, Legacy Planning, philanthropy | Tagged: Advanced Estate Planning, Business Succession Planning, Business Transition Planning, charitable planning, estate planning, Estate Planning and Probate, Grantor Retained Annuity Trust, GRAT, high net worth, Inheritance tax | Leave a Comment »
Posted on November 1, 2011 by thecomplexestate
Not a week goes by where this isn’t some communication about the estate tax; the good, the bad and the ugly. It is tied to deficit reduction, holiday giving, history, and how to correctly “soak the rich”.
This communication has a direct impact on us. During the next three to four weeks InKnowVision will receive, more than likely, ten or more calls from advisors whose clients want to do year-end planning. If history repeats itself, then at least three of those will be planned for and implemented.
When was the last time you heard a business owner say something like this,
“I owe it to my 200(+) employees to keep them employed. I’ve already made it. All I want is enough to support my current lifestyle so that my wife and I can enjoy our final years together. Help me to create a plan to make this transition so I can feel great about its outcome.”
Owner, $80M manufacturing company
InKnowVision Case 2011
Times like these do not lend themselves nicely to “discretionary” advanced planning. There is too much at stake.
Filed under: Advanced Estate Planning, advanced tax planning, Business Succession Planning, Business Transition Planning, Estate Planinng, High Net Worth, high net worth tax planning, Legacy Planning | Tagged: Advanced Estate Planning, advanced tax planning, Business, Business Succession Planning, Business Transition Planning, estate planning, high net worth, Inheritance, Inheritance tax, Legacy Planning, Tax Planning | Leave a Comment »
Posted on October 21, 2011 by thecomplexestate
This week I read question posed by a colleague on LinkedIn.
“What’s holding you back from creating an estate plan?”. Several people responded. This particular answer posted by a business owner was troubling. Here is what he stated…
- Since I am going to live forever, why do I really need to be concerned? Let other people be concerned about mortality instead.
- I don’t want to be bothered by accountants, lawyers and financial planners.
- The estate tax guidelines seem to be attracting more government attention recently. Because of that, it can be tough to stick to a long-term plan that could be made useless.
- With some effort, it may be possible to identify investment “vehicles” that offer tax benefits and probate-avoidance benefits without having to deal with outside “professionals”.”
It sounded like this business owner dislikes advisors. Although he does not say why and quite frankly it does not matter. It does raise a question. Are we doing the best collaborative job possible in addressing our client’s concerns?
No one wants to be “bothered” but everyone wants to be served.
Filed under: Advanced Estate Planning, Business Succession Planning, Business Transition Planning, Estate Planinng, High Net Worth, high net worth tax planning | Tagged: Advanced Estate Planning, Business Succession Planning, Business Transition Planning, estate planning, high net worth, Tax Planning | Leave a Comment »