Case A
Background: Client, age 42 with $1 million of various investments using after-tax dollars. His objective was to set aside these dollars for his retirement because he did not have a significant retirement plan and he wanted to maintain his current investments. He also desired to be sure that no matter what might happen from a legal perspective, that these assets were as ironclad safe as possible from any creditors, negative court rulings, etc.
Solution: We created an opportunity that allowed him to place all of his current investments into a very tax-friendly strategy. This strategy provided investment flexibility so that he could keep all his current investments with his current investment manager and to take the profits that he was receiving from his investment in a private LLC (over $100,000 of passive income) to be used in a tax deferred strategy. The result was that he was able to withdraw over $250,000 of “tax free” dollars from age 62 until age 90 (over $7,250,000). We created an international trust for him in a jurisdiction that had never experienced a broken trust; thus providing him the ability to maintain his current investments in the U.S. yet providing him the safest environment possible for his assets. Prior to our working with this client, he was unable to use any of his current investments to achieve the above results.
Case B
Background: Client age 57 owned a successful restaurant business and desired to minimize the taxes on his business income. His personal gross income averaged about $450,000 yearly. He also had two kids, ages 34 and 31 that desired to incorporate some estate planning for them.
Solution: We established a captive insurance company for his business in which he owned 50% and the two kids each owned 25%. We were able to reduce his annual taxes by $70,000 and create a tax deferred account that accumulated $220,000 annually. From this amount he was able to pass along to each kid $55,000 annually of pre-tax income without impacting his living lifetime gift tax exemption. Neither the kids nor their Dad ever had to pay taxes on this accumulated amount until they accessed the funds…and then only at corporate dividend rates.
Case C
Background: Client age 47, single, desired to protect his personal assets prior to a potential marriage (just in case his marriage goes awry). He wanted something more ironclad and less costly than a pre-nuptial agreement which could be challenged in court, etc.
Solution: We established an international trust and moved all of his investments that qualified into the trust. Additionally we created a tax beneficial strategy for his investments to enhance his future net worth and funds available to him for retirement or future use.