How Annual Reviews Can Keep You Out Of Court- Advance Estate Planning

Posted on October 10, 2012 by thecomplexestate

As luck would have it in a recent court case (Thomas Lane Keller, et al. v. United States, Case No. 10-41311 (5th Cir. Sept. 25, 2012)). coming out of Texas (not ours) the tax payer was victorious even though there were holes in the planning documents.  Victorious was an understatement to the tune of $115,375.59. Now that was some refund! 

I can only imagine the feeling the trustee had when he opened the letter from IRS demanding of $147 million in estate tax, chest tightening and stomach churning. How about the look on the advisory team’s faces when they received the news, pale and stunned?  Did they warn the client and the trustees about a potential audit? Maybe and maybe not.  Were they aware of the possible enormous malpractice claims that could come as result of potential negligence? Who knows.

Not to long ago we left it up to the advisory teams to schedule the annual estate and tax planning review meeting for clients that we created design plans for. That was until we started getting calls from advisors saying that their clients were being audited. It did not take long to realize that the plans we created, which the teams implemented, had no annual oversight.

Two years ago we made a change. We started by telling every new client and their advisory team that there would be a maintenance phase to the plan design and that it would be facilitated annually for a fee. This put us on a path towards much happier clients and very pleased advisory teams.

Clients today need to be prepared for the good, bad and the ugly. They also must know that they have a competent team to support them, one that is diligent about annual meetings, oversight and cares more about their clients than the fee they receive.

Kim Hamilton

InKnowVision LLC

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

High Net Worth Are Not Getting Attention

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?

Kim Hamilton

Filed under: Advanced Estate Planning, High Net Worth, high net worth tax planning | Tagged: , , , , , , | Leave a Comment »

The Greatest Gift

Posted on January 9, 2012 by thecomplexestate

Advanced planning has many plusses, not to mention tax savings. If a person can afford to do complex planning then more than likely they can afford to gift.

Many of us, to the point ad nauseam, have read and spoke about the ability to gift during this opportune time. Charity is usually part of the discussion as well as using one’s annual gift tax exclusion.

Many of our Goal Achiever plans involve the use of the lifetime exemption, annual gift tax exclusion as well as charitable planning techniques. Historically annual gifting was intended for example to fund college education, down payment on a home, start a child’s or grandchild’s new business and moving highly appreciated assets out of one’s estate.

I believe “gifting” has a new intention. Survival

Today, you could be seeing it thrown as a safety net. There have never been so many college grads with so much debt, without jobs, and living at home. Never have you seen so many breadwinners out of work long-term and their family’s suffering.

The annual exclusion is now the new lifeline. Consider someone who can actually afford to make five annual gifts. That is $65,000 tax-free which in today’s society can actually help a family of five get through a rough period of long-term unemployment.  It won’t make them rich but it will put food on the table, pay the mortgage (or least some of it) and keep the heat on.

Families can create a letter of understanding stating that annual gifts made are intended to help during this difficult period, are irrevocable and should not become relied on when things turn the corner.

It can also help a young college grad begin to wipe out his/her debt so they can focus on getting a “real job” in their respective field.  Sadly, it is a waste to get a four-year degree and only become a barista at a coffee shop.  Annual gifting can be the new “post” college funding.

What can you do to get your clients to think differently about annual gifting when it means survival?

 

Kim Hamilton

Related articles

Filed under: gifting | 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 »

HNW Women May Hold The Purse Strings

Posted on November 10, 2011 by thecomplexestate

Susan Raymond, EVP of Changing Our World, gave an excellent presentation at the AFP in Chicago on The Coming Gender Transition in Wealth. With the changes in the economy and the world as a whole, it is no wonder that women are more focused on planning than investing. 

George Walper of the Spectrem Group states, “Planning must be much broader” and advisors should “help clients plan for overall life issues rather than asset allocation.”

A pearl of wisdom in an uncertain time.

 

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

A Matter of Life or Death

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: , , , , , , , , , | Leave a Comment »

Is Advanced Planning Discretionary?

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: , , , , , , , , , , | Leave a Comment »

Perception Matters

Posted on September 28, 2011 by thecomplexestate

Today I gave a webinar presentation to a small group of diverse advisors on the topic of profiles of the wealthy and the opportunities many leave on the table. I received a comment ,” Wow – talking about putting things into perspective”, which leads me to these points.

It was a revelation for many  advisors who thought their clients had done all the planning possible. Except they haven’t. Some of what was shared resulted in lackluster planning, clients knew very little about was in their plans, and the biggest “ah-ha” moment was when they realized that they might not be considered their client’s most trusted advisor.

It is always interesting when we poll wealthy clients and then we poll their advisors. There is a big disconnect. I hope we can close this gap by asking the right questions and acknowledging that we must do a better job. Our clients need us as much as we need them. They deserve better.

Filed under: Advanced Estate Planning, Business Succession Planning, Business Transition Planning, charitable planning, Estate Planinng, High Net Worth, Legacy Planning, philanthropy | Tagged: , , , , , , , , | Leave a Comment »

No Process for High Net Worth Planning

Posted on August 25, 2011 by thecomplexestate

Yesterday when I surveyed my webinar audience of 56 advisors, 86% stated that they did not have a process to engage a high net worth client. In addition, the same group stated that they did not have a marketing plan to attract them.

Here is why advisors need a process and a marketing plan, missed opportunity.

A recent survey conducted by Private Wealth Magazine tells us that there is a reason why we need to add a process to engage high net worth clients. If we include non-investment business such as lending, estate planning and insurance to the mix of planning services,  an advisor can expect to receive on average $104,000 of additional annual revenue. They can do this by employing a comprehensive planning process that can be measured. The results will speak for themselves.

Don’t let an opportunity pass you by.

Filed under: Advanced Estate Planning, Business Succession Planning, Business Transition Planning, Estate Planinng, High Net Worth, High Net Worth Insurance Planning, Legacy Planning | Tagged: , , , , , , , | Leave a Comment »

Should Pet’s Inherit?

Posted on August 17, 2011 by thecomplexestate


In a recent Florida Law Review, Frances H. Foster outlines the complexities of 21st century for planning for natural vs. non natural benefactors. I would love to hear what our colleague Peggy Hoyt has to say on this review. Or perhaps we could get some feedback from the pets themselves.

No matter what the topic is, a little publicity on important planning topics goes along way today.

Filed under: Legacy Planning, Pet Estate Planning | Tagged: , , , , , , | Leave a Comment »

Follow

Get every new post delivered to your Inbox.

Join 239 other followers

%d bloggers like this: