Presented By: Tim Voorhees, JD, MBA

Transcription

1 Zero Tax and Asset Protection Planning Zero Tax Planning Presented By: Tim Voorhees, JD, MBA 695 Town Center Drive 7th Floor Costa Mesa, CA Tel: Fax: January, 2013, Voorhees Intellectual Property LLC

2 Timothy L. Voorhees Designed and Implemented Hundreds of Zero Tax Plans 34 years of experience developing and implementing Zero Tax Plans. President of the Registered Investment Advisory firm at Voorhees Family Office Services.com and the managing partner of its affiliated tax law firm, Matsen Voorhees LLP JD - Southern Methodist University - Corporate & Estate Planning Law; MBA - Arizona State University - Finance & Accounting Authored two books. Published in Estate Planning Magazine,theJournal of Practical Estate Planning, Insurance News, the elite advisor website of Financial Planning Magazine, and other leading publications. Instructs at Best Tools Workshops for advisers interested in learning how to integrate the most effective zero tax planning tools into financial and estate plans. He also conducts Best Practices Workshops for advisers who seek to integrate advanced Wealth Counseling technologies into their practices Speaks at national conferences of the National Network of Estate Planning Attorneys, ALI-ABA, Kingdom Advisors, the Southern California Tax & Estate Planning Forum, etc. He has also presented at annual conferences for numerous financial advisory firms. Provides mediation and arbitration services as a Certified Christian Conciliator Leads teams that have developed hundreds of Family Wealth Blueprints for high net worth clients 2 January, 2013, Voorhees Intellectual Property LLC

3 7 Highly Practical Topics 1. Why Public Policy Promotes Zero Tax Planning 2. Why Zero Tax Planning Is More Attractive Than Ever 3. Why Everyone Needs a Plan With Integrated Financial and Tax Solutions 4. Why Most Clients Prefer to Start With a Tactical Plan 5. Which Deliverables Are Best 6. HowtoEstablishaProcess a 7. How to Communicate the Message 3 January, 2013, Voorhees Intellectual Property LLC

4 #1 Why Public Policy Promotes Zero Tax Planning 4 January, 2013, Voorhees Intellectual Property LLC

5 . If I went over the toll bridge and through the barrier without paying the toll, I would be committing tax evasion. If, however, I drive the extra mile and drive outside the city of Washington, I am using a legitimate, logical and suitable method of tax avoidance, and I am performing a useful flsocial ilservice by doing di so. For my tax evasion, I should be punished. For my tax avoidance, I should be commended. The tragedy of life today is that so few people know that the free bridge even exists. --U.S. Supreme Court Justice Louis D. Brandeis 5 January, 2013, Voorhees Intellectual Property LLC

6 Synergistically Combine Charitable and Non-Charitable Tools Convert involuntary philanthropy into voluntary philanthropy Integrate complementary tools Low-interest loans Charitable gifts Discounting Life insurance 6 January, 2013, Voorhees Intellectual Property LLC

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8 #2 Why Zero Tax Planning Is More Attractive Than Ever 8 January, 2013, Voorhees Intellectual Property LLC

9 Key Concepts Clients can choose voluntary versus involuntary philanthropy Clients can control 100% of their wealth Estate tax is easily eliminated when combining charitable and non-charitable planning tools Income, capital gains, IRD, and other taxes can be discounted and/or deferred by integrating charitable and other wealth transfer tools 9 January, 2013, Voorhees Intellectual Property LLC

10 Advantages to Clients Addresses personal and family needs Reduces complexity Maintains more family control over wealth Increases opportunity and means to pursue Family values Family unity Community improvement Reduces taxes Integrates with Values-Based Planning 10 January, 2013, Voorhees Intellectual Property LLC

11 See 10 reasons why clients should plan now. Exploit new opportunities to move assets to irrevocable trusts 11 January, 2013, Voorhees Intellectual Property LLC

12 Implement More Trusts Learn ways to super-charge trust strategies Use web-based software to produce customized client illustrations Present marketing materials for business owners, retired couples, and elderly clients Serve attorney referral sources more effectively Provide trust funding services to attorneys Position yourself as the quarterback on every case 12 January, 2013, Voorhees Intellectual Property LLC

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14 #3 Why Everyone Needs a Plan With Integrated Financial and Tax Solutions 14 January, 2013, Voorhees Intellectual Property LLC

15 8,000,000+ Millionaires Served by Financial Planners 800, Deci-Millionaires i Served by MFOs $10,000,000+, Net Worth MFO = Multi- = Deci-millionaire Family Office $100,000,000+ Net Worth = Centimillionaire 80, Centi-Millionaires Served by MFOs & SFOs 900+ Billionaires Served by SFOs SFO = Single Family Office 15 January, 2013, Voorhees Intellectual Property LLC

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18 #4 Why Most Clients Prefer to Start With a Tactical Plan 18 January, 2013, Voorhees Intellectual Property LLC

19 Popular Strategies in 2012 Dynasty Trust Insurance as an Asset Class ESOPs Insurance Trust Review Premium Financing Pension Rescue Tax-Efficient Buy-Sells Annuity Income Maximization IRA Maximizer Sale of Partnership Interests to a Family Grantor Trust Financed Indexed d UL Annuity Arbitrage Private Split Dollar Zero Tax Estate Planning Spousal Lifetime Access Trusts Intellectual Property Strategy Qualified Money Conversion Defined Benefit Combo Equity Appreciation Sharing Cost Segregation Study Captive Insurance Company Tax-Efficient Squeeze Freeze 19 January, 2013, Voorhees Intellectual Property LLC

20 Illustrate Advanced Trust Design Techniques A) Annuity Arbitrage. Transfer extra wealth to heirs taxefficiently B) Leveraged ILIT. Facilitate the tax-efficient funding of premium financing strategies C) IDIT with Insurance. Monitor cash flows and inheritance amounts year-to-year y 20 January, 2013, Voorhees Intellectual Property LLC

21 A) Annuity Arbitrage TAX ADVICE DISCLOSURE To ensure compliance with requirements imposed by the IRS under Circular 230, we inform you that any U.S. federal tax advice contained in this communication (including any attachments), unless otherwise specifically stated, was not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any matters addressed herein. 21 January, 2013, Voorhees Intellectual Property LLC

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23 $1 Million Annuity or IRA Value 23 January, 2013, Voorhees Intellectual Property LLC

24 How Does Annuity Income Maximization For Deferred Annuities Work? 24 January, 2013, Voorhees Intellectual Property LLC

25 How Do The Scenarios Compare? 25 January, 2013, Voorhees Intellectual Property LLC

26 Who Should Consider This Idea? Individuals age in fair health or better Confident of adequate retirement income from other sources Adequate personal liquidity Desire to preserve estate for family Willingness to initiate transfers now Suitable assets 26 January, 2013, Voorhees Intellectual Property LLC

27 B) Leveraged ILIT TAX ADVICE DISCLOSURE To ensure compliance with requirements imposed by the IRS under Circular 230, we inform you that any U.S. federal tax advice contained in this communication (including any attachments), unless otherwise specifically stated, was not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any matters addressed herein 27 January, 2013, Voorhees Intellectual Property LLC

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29 How Does Premium Financing Work? 29 January, 2013, Voorhees Intellectual Property LLC

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31 Insurance Funding For Large Illiquid Estates The Challenge Many affluent individuals would like to acquire life insurance for estate planning but face significant obstacles. Their assets are illiquid If sold a capital gain tax would be due If gifted a gift tax would be due They believe their strategic assets would be better if left at work 31 January, 2013, Voorhees Intellectual Property LLC

32 Double Taxation Of Traditional Premium Payments 32 January, 2013, Voorhees Intellectual Property LLC

33 Solution 33 January, 2013, Voorhees Intellectual Property LLC

34 How Does Premium Financing Work? Case History 34 January, 2013, Voorhees Intellectual Property LLC

35 Assumptions Summary 35 January, 2013, Voorhees Intellectual Property LLC

36 Internal Rates Of Return At Death 36 January, 2013, Voorhees Intellectual Property LLC

37 Who Should Consider This Idea? Individuals age Average to good health Net worth $10 million or more Desire to acquire insurance coverage now but current cash flow and/or annual gifting capacity is limited Desire to maintain long position in assets with significant growth and/or income potential Sophisticated investor comfortable knowledge about the benefits and risks of leverage 37 January, 2013, Voorhees Intellectual Property LLC

38 Benefits Increase benefits to family Enhance estate liquidity Acquire insurance coverage now without need to liquidate assets or allocate significant and immediate cash flow Keep strategic assets at work longer 38 January, 2013, Voorhees Intellectual Property LLC

39 C) Dynasty Trust TAX ADVICE DISCLOSURE To ensure compliance with requirements imposed by the IRS under Circular 230, we inform you that any U.S. federal tax advice contained in this communication (including any attachments), unless otherwise specifically stated, was not intended dor written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any matters addressed herein. 39 January, 2013, Voorhees Intellectual Property LLC

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41 How Does The Dynasty Trust Work? 41 January, 2013, Voorhees Intellectual Property LLC

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43 Goals And Objectives 1. Find ways to pass more wealth to our heirs during our lifetime without incurring gift taxes. We are currently gifting gas much as we can annually to an Insurance Trust. 2. Maximize inheritance to heirs. We would consider additional insurance if we could find a way to own the insurance outside of our estate. 3. Reduce or eliminate gift and estate taxes. 43 January, 2013, Voorhees Intellectual Property LLC

44 Comparison Of Benefits Dollars in Millions 44 January, 2013, Voorhees Intellectual Property LLC

45 IDIT Strategy Advantage 45 January, 2013, Voorhees Intellectual Property LLC

46 Comparison Of Benefits To Heirs By Year 46 January, 2013, Voorhees Intellectual Property LLC

47 Installment Sale To IDIT 47 January, 2013, Voorhees Intellectual Property LLC

48 #5 Which Deliverables Are Best 48 January, 2013, Voorhees Intellectual Property LLC

49 Summarize the Value Proposition Sample Diagram Example: Current Proposed Estate Taxes $14,300,000 $100,000 Benefit to Heirs $15,200,000 $18,900,000 Income Tax Savings $0 $200,000 Benefit to Charity $0 $21,300, January, 2013, Voorhees Intellectual Property LLC

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51 #6 How to Establish a Process for: Generating More Fee Income Implementing More Investment and Insurance Cases Documenting More Gifts for Charities Consistently Collecting More Positive Client Satisfaction Surveys 51 January, 2013, Voorhees Intellectual Property LLC

52 Hi-Tech, Hi-Touch Cornerstones Marketing Training/ Coaching Business Plan Administrative Workflows Planning/ Production Tools 52 January, 2013, Voorhees Intellectual Property LLC

53 #7 How to Communicate the Message Estate tax practitioners need to know how to build the following concepts into estate plans: Income tax plans Business transition plans Business formation design/drafting Asset protection Will contest prevention Legacy planning to equip heirs Trust planning Special needs trust design/planning 53 January, 2013, Voorhees Intellectual Property LLC

54 What kind of client is suitable for implementing the concept? Has or may have a potential estate tax liability Cr Cares about what htwill illhpp happen after ftrhe or she dies Is moderately or very charitably inclined Is willing to begin transferring some wealth now 54 January, 2013, Voorhees Intellectual Property LLC

55 Strategy Flyers, Case Studies, and Sample Plans 55 January, 2013, Voorhees Intellectual Property LLC

56 Benefits to Advisers Differentiates you in the market Attractive to higher net worth clients Creative Simple Flexible New document drafting opportunities New rfrrl referral opportunities pprt Good for family and community 56 January, 2013, Voorhees Intellectual Property LLC

57 7 Highly Practical Topics #1 Why Public Policy Promotes Zero Tax Planning #2 Why Zero Tax Planning Is More Attractive Than Ever #3 Why Everyone Needs a Plan With Integrated Financial and Tax Solutions #4 Why Most Clients Prefer to Start with a Tactical Plan #5 Which Deliverables Are Best #6HowtoEstablishaProcess a #7 How to Communicate the Message 57 January, 2013, Voorhees Intellectual Property LLC

58 Information Available: Attorneys All All FamilyOfficeCounsel.com com All 58 January, 2013, Voorhees Intellectual Property LLC

59 Thank You! Marketing Zero Tax Planning Presented By: Tim Voorhees, JD, MBA 695 Town Center Drive 7th Floor Costa Mesa, CA Toll Free: 888-WSC-FIRM ( ) Tel: Fax: January, 2013, Voorhees Intellectual Property LLC

60 Disclaimer Family Office Services, Inc. and Matsen Voorhees LLP do not give tax, accounting, regulatory, or legal advice to its clients unless clients have a current engagement defined in a signed retainer agreement. Clients must consult with advisers regarding the tax, accounting, and legal implications of these proposed strategies before any strategy is implemented. The effectiveness of any of the strategies described will depend on a client s individual situation and on a number of complex factors. Nothing in this presentation is intended to offer securities or investment advice. Any discussion in this presentation relating to tax, accounting, regulatory, or legal matters is based on our understanding as of the date of this presentation. Rules in these areas are constantly changing and are open to varying interpretations. 60