Trusts – Who Needs Them?

Posted on October 8, 2012 by thecomplexestate

I love Infographics. They tell a story and drill down to the information that you want to convey in the most simplistic form when done correctly.

Infographic- Millionaire Corner

Last week Millionaire Corner shared their latest Infographic on trusts. This Infographic nicely laid out the who, what, when and why that would demonstrate to a reader some of the benefits of trust planning. It was also apparent that they did their homework on the largest personal trust companies as displayed at the bottom.

As of late, many of our attorney relationships have voiced their concerns that their clients were not taking their advice about preparing for the possible elimination of the current exemptions.  The fear was that clients would wait until the elections were over and then they would get slammed with business that they would have to turn away or that clients would not be planning at all and lose the opportunity.

When asked how they introduced the exemption opportunity to their clients, they overwhelmingly responded that they mailed letters, wrote newsletters and brought it up at annual client meetings, if they had one.  Now if you are a client and receive a letter from an attorney like the one from this firm your eyes would be glazed over in seconds.

Alternatively, you could write or borrow a white paper like this firm did and experience a similar outcome. You could also keep it very simple and hire someone to create an Infographic like the one from Millionaire Corner or simply share this one with your readers.

Clients are more concerned about holding on to what they have today than giving it away. It may be that the wealth threshold for gifting has increased to a much higher net worth or your clients simply do not understand their options. Whatever the reason, make sure your clients understand in the simplest terms possible what it is that you are trying to educate them on. Infographics are a tool that could help.

Kim Hamilton

InKnowVision, LLC

Filed under: Advanced Estate Planning, Estate Planinng, gifting | Tagged: , , , , | Leave a Comment »

Advanced Planning When The Boat Is Already Full

Posted on July 10, 2012 by thecomplexestate

Tony DiPalo and Chester Bedloe are classic examples of two completely different clients. Both are business owners that have a great need to plan. However, both have had serious medical issues and are aging; Chester is 67 and Tony is only 52 but he has had a heart attack.

Their advisor has been in discussions with both clients for months now. He has explained the opportunities and the potential downside of not taking appropriate action yet both are stalling.

The advisor shares a quote with me from a book entitled “Free Will” and it mentions how difficult it is to make important decisions when one’s boat is already full.

Two clients with seemingly no motivation. What is an advisor to do?

Get to the heart of the matter.

Many times we approach a conversation with a solution to a problem that does not exist, at least in the minds of our clients.

If we start our conversations with something like this, “What is the single most troubling thing on your mind these days?” we just may get the answer were looking for. Conversation, nurturing and listening can provide opportunity where you least expect it.

Although Tony at 52 suffered a heart attack, he more than likely faced his own mortality but he beat the odds. Advanced planning comes in bite size pieces and as advisors we need to “beat the odds”. Don’t make the mistake of asking a client to bite off more than they can chew or to think about mortality when they are not ready to.

Here are three ways to stimulate advanced planning thinking.

1. The high net worth are concerned about cash flow. Cash flow is the first step in advance planning.
2. The high net worth are concerned about increased tax liability. Reducing income taxes is the second step in advance planning.
3. The high net worth are concerned about lawsuit liability. Asset protection is the third step in advanced planning.

These are all current issues and within them there are emotional issues that high net worth families face. Focus on the current and the future will follow.

 

Kim Hamilton

InKnowVision,LLC

 

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What To Do With Cash Flow Surplus – Get Charitable!

Posted on March 9, 2012 by thecomplexestate

Advanced Estate Planning Case Study

Chris is 68 and Beth is 59. Chris has recently just retired from an executive position in a public company. They have always led a relatively simple and conservative lifestyle and as a result have built up a very significant, and liquid, net worth. As part of Chris’s retirement package, he has an annual pension payment of approx. $360,000 (inflating). The pension alone is enough to cover their annual living expenses of $230,000. As a result, they have a large annual cash flow surplus created by the $400k in annual dividends from their equity portfolios and their tax-exempt income from municipal bond portfolios totaling $1.1M.

The main planning objective is to take advantage of the lifetime gifting exemption ($5M each) while it is still available. This is due in part to the large concentration of conservatively invested assets that are growing inside Chris and Beth’s estate. In addition, they are looking to preserve enough assets in order to provide sufficient cash flow that will ensure a comfortable lifestyle with flexibility during retirement.

Find out what advanced estate planning options were chosen including some nice charitable strategies.

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The “Art” of Planning

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.

Kim Hamilton

Filed under: Advanced Estate Planning, charitable planning, Estate Planning for Art, gifting, High Net Worth, Legacy Planning, philanthropy | Tagged: , , , , , , , , | Leave a Comment »

Why Cash Flow Matters

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.

Kim Hamilton

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: , , , , , | Leave a Comment »

5 Ways to Assure Your Clients Plans Are Reviewed Annually

Posted on February 7, 2012 by thecomplexestate
Advanced estate planning can be complex. It can also fall apart when you least expect it. Here are a few tips to help keep clients in tune with their planning.
  1. Tell them.  Clients will pretty much do what you ask so long as they trust you.  If you tell them that their plan will be reviewed at least annually then they will expect it.
  2. It’s Part of My Service.  Make it part of your process and assure clients that this benefit will far out weigh the risk.
  3. Share a Story. Most planning mistakes are made because plans are not updated, implemented or executed.  Sharing a story about anyone of these unfortunate events could help clients see why they should get a periodic review.
  4. Benefit vs. Cost. The value of keeping on top of one’s plan is priceless.  Would any of your clients want an outcome that was different from their stated goals? I know no one who wants to pay more for planning than is necessary. I guess we could say the same about taxes!
  5. Family Matters. Reminding clients why they choose to plan in the first place assures that their cash flow, lifestyle needs and family protection goals will be met and are often subject to change.

During this tax season, the opportunities to talk with clients and their other trusted advisors are numerous. Be sure that CPAs have copies of your clients most updated plan or at least a summary. Include the financial advisor as well. Plan to meet with all team members face to face to be sure that everyone is on the same page and clients are not at risk and they are not missing opportunities.

 

Kim Hamilton

Filed under: Advanced Estate Planning, advanced tax planning, Business Succession Planning, Business Transition Planning, Estate Planinng, Legacy Planning | Tagged: , , , | Leave a Comment »

Key to Overcoming Uncertainty

Posted on January 2, 2012 by thecomplexestate

Every year about this time I look forward to the WealthCounsel and Trust and Estates Industry Trends survey. It paints a picture of what is happening across the estate planning landscape.

Some might say InKnowVision only represents the 1% and they are probably right. Although we did not participate in the survey we can share some pretty interesting statics of our own.

100% of our business owner clients, along with help of their advisors, successfully planned their estates and prepared their businesses for the years ahead.

100% of our business owner clients saved at least $200,000 or more in income tax savings.

100% of our business owners instituted an annual maintenance agreement for the up keep of their plans.

Our advisors earned $50,000 or more in additional revenue with several earning over $100,000 per client engagement.

We successfully shifted the conversation away from the political arena and  expiring tax cuts of 2012 to a more certain conversation on what can we do now to increase cash flow, meet lifestyle needs and grow our client’s businesses.

We enjoyed a 100% closing ratio.

We experienced on average 7 new leads a week.

Not to mention that we helped several business owners keep thousands of people employed and gifted more to charity.

So were does all this leave us? Ready to tackle the busiest planning year yet.

Where does it leave you…uncertain?

Good riddance to 2011 and buckle in for busy and profitable 2012. 

Kim Hamilton
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Filed under: Advanced Estate Planning, advanced tax planning, Business Succession Planning, charitable planning | Tagged: , , , , , , | Leave a Comment »

Shareholder Revolt Leads To Advanced Estate Planning

Posted on December 13, 2011 by thecomplexestate

Allen and Nancy Wilson are 58 and 53 respectively. Both are physicians with a combined annual income of approximately $300,000. Many years ago they invested in a company that was designed to grow through acquisition of other similar companies.

The company now has significant value and generates $4-$6 million in annual taxable income for our clients. The bad news is that the company only makes distributions sufficient to pay taxes on the income.

As a result of shareholder revolt, the company has now agreed to provide an additional $1M in distributions to Allen and Nancy until the expected sale of the company, which should occur sometime in the next 5 years.

Upon sale of the company, there will be an enormous capital gains event for Allen and Nancy. They currently spend about $750,000 per year and expect to be spending their investment account principal over the next few years until the company sells and provides them with a large influx of cash.

This story ended on a positive note. Thanks to the shareholder revolt, these clients were able to achieve significant success through the advanced planning process.

Now onto the remaining five hundred plus shareholders….

Filed under: Advanced Estate Planning, advanced tax planning, Estate Planinng, high net worth tax planning | Tagged: , , , , , , , | Leave a Comment »

All it takes is a deadline to motivate planning

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.

Kim Hamilton

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: , , , , , , | Leave a Comment »

Entitlement- Defined by a Parent

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: , , , , , , | Leave a Comment »

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