2006 “Quick Tour”

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2006 “Quick Tour”

Access Seven Levels of ServiceAccess Seven Levels of Service

© Tim Voorhees, JD, MBA, 1996-2005

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Timing of Deliverables


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Free Discovery Session Precedes Low-Cost VPL


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Value Showcased in Sample Deliverables:

• Family Wealth Statement

• Financial Checkup

• Value Proposition Letter

• Plan

• Implementation Documents

• Quarterly and Annual Reports


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• Based on Family Retreat and Questionnaire

• Clarifies family goals• Documents preferences for

transferring wealth to heirs• Establishes charitable giving intentions• Guides advisers

Family Wealth Statement


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Financial Checkup• Includes a current plan analysis and

“report card”• Easily upgraded into a Comprehensive

Plan• Includes a summary of income tax,

insurance, investment, estate tax, retirement, and/or business succession issues


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Value Proposition Letter

• Summarizes results of current plan• Estimates potential benefits of planning• Recommends course of action• Estimates fees


Value Proposition Letter Value Proposition Letter –– Sample SummarySample Summary


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Planning Process: Consider 100+ Goals

• Minimize Taxes• Accumulate Wealth• Protect Assets from

Creditors• Manage Risk• Maintain Control• Manage Cash Flows• Increase Charitable

Giving Potential• Coordinate Estate

Distribution

• Manage Family Business Succession

• Maintain Control over Personal Affairs

• Maximize Control over Social Capital

• Increase Social Capital Leverage

• Allocate Assets more Efficiently

• Protect against Estate Admin Exp./Delay


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• Aircraft Acquisition Strategy• Revocable Trusts• Irrevocable Trusts• DSPA’s• Health Powers• Long-term Care• Business Continuity• Costless Collars• STAMPS• Newstar• LESOP • Synthetic Equity• Tax Free Sale of S-corp• Financial Independence Model• Investor Play Basket• Conversion of Paper Profits• Advanced Asset Allocation• LLC

• Private Equity• 402E Roll-Over• ESO Foundation• Portfolio Design• Contingent Deferred Swap• Dynasty Trusts • Offshore Investments• GRAT• QPRT• CLAT• Multi Class FLP• ILIT• CRT• VCUT• ULP• Short Term CRT• QDOT• NIMCRUT

• IRA Access Strategy• Tax Efficient Strategies• Family Bank• Stock Option Strategy• Private Foundations• SERP Exchange• Fractional Ownership Discounts• Non-taxable Installment Sales • The Family Bank• Values Transference• CRT Rollover• Wealth Responsibility Retreat • Junior Advisory Board• Education Trusts • Never Too Late Trust• Performance Trusts• Tundra Trusts• ESOP

Planning Process: Consider 200+ Tools


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• Accelerated Inheritance Trust• Alaska Trust• Asset Monetization Strategies• Bargain Sales• Business Continuity Plan• Business Sale Basis Boost*• Business Succession Planning• Charitable Gift Annuities• Charitable Installment Purchase• Charitable Lead Annuity Trust• Charitable LLC• Charitable Remainder Trust• ChESOP• CLUT• Common Trust Fund• Dynasty Trusts• Employee Stock Ownership Plan• ESO Foundation

• ESOP• Exchange Fund• Family Bank• Flip CRT• GDOT• Gift Annuity• Gift of Appreciated Property• Investor Play Basket• LeMans• Multiclass FLP• NIMCRUT• Nontaxable Installment Sales• Offshore Insurance• Offshore Investments• Pooled Income Fund• Private Foundations• Property Value Freeze

• Public Family Foundation• Q FOBI• Receivable Asset Monetization• Re-Engineered Corporate Bal. Sheet• Sales Leaseback• SCINS• S-corporation recapitalization• Super CLAT• Synthetic Equity• Tax-Efficient Investment• Tax-Free CRT Distributions• Tax-Free S Corporation Sale Strat.• Three-Class Partnership• Three-Tier CRT• Tundra Trusts• Unitrust Limited Partnership• Wealth Replacement Trust

Consider Dozens of Business Sale ToolsConsider Dozens of Business Sale Tools


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Tactical Plan • Focuses on a single strategy• Compares to status quo• Inexpensive• Quick turnaround


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Summary Blueprint• Combines several planning strategies

• Addresses primary planning goals

• Simpler and less expensive than a Comprehensive Family Wealth Blueprint®


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Comprehensive Family Wealth Blueprint®

• Addresses all major components of planning• Multiple strategies recommended• Fully integrated cash flows, tax and estate distribution• Extensive documentation

CURRENTPLAN

PROPOSEDPLAN

CURRENTPLAN

PROPOSEDPLAN

Heirs* 15.2 18.9 Heirs* 34.8 40.9Estate Tax 14.2 0.0 Estate Tax 37.4 0.0

Charity 0.0 21.3 Charity 0.0 33.5* A portion of the benefit to heirs is qualified plan money. Withdrawals from these plans will be treated as ordinary income.

YEAR 2001 YEAR 2020

YEAR 2001 YEAR 2020

0.0

5.0

10.0

15.0

20.0

25.0

CURRENTPLAN

PROPOSEDPLAN

Heirs* Estate Tax Charity

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

CURRENTPLAN

PROPOSEDPLAN

Heirs* Estate Tax Charity

DOLLARS IN MILLIONSCOMPARISON OF BENEFITS

Case Study: Before and AfterCase Study: Before and After


Family Legacy Status

$15,196,800

Financial Independence

Status

$19,070,400

Social Capital Legacy Status

TaxGift

Total

$14,203,200 -

$14,203,200

Social Capital Legacy Goal

TaxGift

Total

$- 10,000,000

$10,000,000

Family Legacy Goal

$17,000,000

Financial Independence

Goal

$6,929,520

SOCIAL CAPITAL LEGACY

Decrease Tax by $14,203,200Increase Gift by $10,000,000

FAMILY LEGACY

Increase Gift by $1,803,200

FINANCIAL INDEPENDENCE

Available Planning Resources $12,140,880

JOHN AND SUSAN SAMPLE

FINANCIAL INDEPENDENCE TRIANGLE

Gap Between Current and Desired ResultsGap Between Current and Desired Results


HEIRS

$15,196,800

2nd estate

1st estate

Income

DEATH OCCURS IN 2001

CURRENT ESTATE DISTRIBUTION DIAGRAM

INSURANCE

$2,500,000

TAXES AND EXPENSES

$50,000

MARITAL TRUST

$9,625,000

SUSAN

$16,650,000


$27,000,000

Income

$675,000

FAMILY TRUST

TAXES AND EXPENSES

$14,253,200

CurrentCurrent Plan FlowchartPlan Flowchart


SUSAN

$10,537,255


$20,400,000

Initial annual income of $80,000

Testamentary gifts

$229,197 annual income

$11,500,000 assets contributed

$8,050,000 GP and LP units received

$700,000 LP units gifted, $5,000,000 sold

Installment payments

Benefits distributed per terms of ILIT

Contribution of $2,350,000 of LP units

Assets distributed per terms of GDOT (including $11.5m of insurance proceeds)

Initial contribution of $1,000,000Annual gifts of cash

DEATH OCCURS IN 2001

PROPOSED PLAN DISTRIBUTION DIAGRAM

2nd estate

1st estate

Income

ILIT

$2,500,000

TAXES AND EXPENSES

$50,000

MARITAL TRUST

$8,812,745

HEIRS

$18,898,339

SAMPLE FOUNDATION

$21,317,896

Income

$-

FAMILY TRUST

TAXES AND EXPENSES

$67,708

FLP

CLAT

TESTAMENTARY CLAT

CRT

$1,000,000

GDOT

Proposed Plan FlowchartProposed Plan Flowchart


ASSET VALUE AND INCOME PROJECTIONSCURRENT PLAN

YEAR Current 2001 2002 2003 2004 2005 2010 2015 2020Asset ValuesCash and cash equivalents 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$

Marketable securities 10,000,000 10,766,271 11,583,599 12,454,837 13,405,493 14,447,479 20,855,721 29,837,011 42,411,285

Municipal bonds 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000

Other investments 6,500,000 6,694,458 6,895,292 7,102,150 7,315,215 7,534,671 8,734,749 10,125,968 11,738,772

Qualified retirement plans 1,600,000 1,727,636 1,865,847 2,015,114 2,138,988 2,224,129 2,640,697 2,977,908 3,117,762

Investment real estate 2,500,000 2,549,862 2,600,859 2,652,876 2,705,934 2,760,052 3,047,321 3,364,488 3,714,667

Personal residences 3,000,000 3,089,750 3,182,442 3,277,916 3,376,253 3,477,541 4,031,423 4,673,524 5,417,895

Personal property 1,900,000 1,900,000 1,900,000 1,900,000 1,900,000 1,900,000 1,900,000 1,900,000 1,900,000

Total assets in estate 28,000,000 29,227,976 30,528,038 31,902,893 33,341,883 34,843,872 43,709,911 55,378,900 70,800,381

Less estimated liabilities (1,000,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000)

Combined net worth 27,000,000$ 28,227,976$ 29,528,038$ 30,902,893$ 32,341,883$ 33,843,872$ 42,709,911$ 54,378,900$ 69,800,381$

Sources of Taxable IncomeCash and cash equivalents 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000

Marketable securities 800,000 861,302 926,688 996,387 1,072,439 1,551,634 2,223,250 3,163,867

Other investments 455,000 468,612 482,670 497,151 512,065 593,624 688,173 797,781

Qualified retirement plans - - - 37,335 85,978 124,747 177,884 243,631

Investment real estate 200,000 203,989 208,069 212,230 216,475 239,006 263,881 291,346

Gross income 1,480,000$ 1,558,903$ 1,642,427$ 1,768,103$ 1,911,957$ 2,534,011$ 3,378,189$ 4,521,625$

FullyFully--integrated Cash Flow Summariesintegrated Cash Flow Summaries


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• Wealth Counselor since 1978. • Co-founder of The Wealth Design Center and

founder of Family Office Services. • Expertise in zero tax and charitable planning

issues• Certified mediator • BA in Economics, MBA in Finance, JD in

corporate and estate planning.

Tim Voorhees, JD, MBATim Voorhees, JD, MBAFamily Office Services Founder and President


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1. Contact Brown and Streza at (800) 447-7090 or (949) 453-2900.

2. Request CE training through Family Office Services.

3. Have client provide information to Prepare a Value Proposition Letter. (Request our fact-finders.)

4. Have client engage the Family Office Services planners to develop the VPL with your input.

5. Review the benefits of engaging FOS planners to develop a complete plan that minimizes tax while maximizing benefits for your client, your client’s heirs, your client’s business, and/or your client’s favorite charities.

Next Steps

Tim Voorhees, JD, MBA, 1995-2003

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We offer a Free Discovery Session to any client bringing his/her balance sheet and legal documents. See www.FreeDiscoverySession.com. Please phone, fax, or email us:

Phone: 800-447-7090Fax: 866-447-7090Email: [email protected]

Contact Us

2006 “Quick Tour”

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