3 Practical Examples

Here are three real-life examples from our clients that help you visualize the power of approaching this topic in a holistic and structured way, rather than hiring multiple firms to work on each component in a haphazard, independent, and completely uncoordinated manner.

These are actual cases, but the names and some of the details have been altered to maintain privacy and confidentiality of the clients.

  • The first example is a doctor who owns a medical practice.

  • The second is a serial entrepreneur in the technology space.

  • The third is a high-earning executive at large corporation.

Below, we have broken down the possible strategies that Dr. Patel, Ms. Garcia, and Mr. Thompson could benefit from deploying.

We have also listed how the strategic and consulting services that are offered by us, Law and Tax Consulting, could be more holistic and beneficial for these clients in the long-run, especially when you compare the comprehensive list of services that clients typically have access to when they hire a typical or traditional estate planning firm that offers wills, trusts, healthcare directives, and power of attorneys.

Example 1: Dr. Patel - Family Practice Owner

Dr. Patel, a successful physician in her early 40s, married with two minor children, and owns a family practice, is interested in the following:

  • asset protection

  • wealth preservation

  • tax reduction

  • giving back to the community

  1. Traditional Estate Law Firm Services:

    1. Drafting a will to detail asset distribution and appoint guardians if necessary.

    2. Crafting a revocable living trust to avoid probate and manage asset distribution.

    3. Creating a buy-sell agreement for transferring ownership interest in the family practice.

    4. Providing tax planning strategies to minimize tax liability for the estate.

    5. Drafting asset protection provisions within estate planning documents.

    6. Structuring real estate holdings to minimize probate and tax implications.

  2. Law and Tax Consulting Services:

    1. All the above services, where required, in addition to the following list.

    2. Business Succession Consulting:

      1. Conducting family meetings to discuss succession planning goals and strategies.

      2. Providing advice on leadership development and training for potential successors.

      3. Assisting in the implementation of a formal succession plan for the family practice.

    3. Financial Planning Consulting:

      1. Reviewing Dr. Patel's current financial situation and long-term goals.

      2. Developing customized investment strategies to optimize asset growth and preservation.

      3. Advising on retirement planning and insurance needs for Dr. Patel and her family.

    4. Legacy Planning Consulting:

      1. Facilitating discussions on philanthropic goals and charitable giving strategies.

      2. Assisting in the establishment of a private foundation or charitable trust.

      3. Providing guidance on creating a legacy that aligns with Dr. Patel's values and aspirations.

    5. Charitable Planning (Private Foundation):

      1. Assisting in the establishment and structuring of a private foundation to support causes important to Dr. Patel and her family.

      2. Drafting foundation bylaws and governance documents to ensure compliance with legal requirements.

      3. Providing ongoing advice on grantmaking strategies and foundation administration.

    6. Gift Tax Planning:

      1. Advising on gift tax implications of transferring assets to heirs or making charitable contributions.

      2. Structuring gifts to maximize tax benefits and minimize gift tax liability.

      3. Utilizing lifetime gift exemptions and annual exclusion amounts to reduce potential gift tax consequences.

    7. Estate Restructuring:

      1. Analyzing Dr. Patel's current estate structure and identifying assets that could be removed from the estate to reduce estate taxes or simplify administration.

      2. Recommending strategies such as gifting assets, creating trusts, or utilizing other estate planning tools to transfer ownership or control of certain assets outside of the estate.

      3. Drafting necessary legal documents to implement estate restructuring strategies effectively and ensure compliance with relevant laws and regulations.

    8. Selling the Practice Consulting:

      1. Evaluating different avenues to sell the family practice, such as selling to a private buyer, merging with another practice, or transitioning ownership to existing partners or employees.

      2. Providing guidance on valuation methods and negotiation strategies to achieve the best possible outcome for Dr. Patel.

      3. Assisting in the preparation of sale agreements and facilitating the transition process for patients and staff.

    9. Family Philanthropy Consulting:

      1. Facilitating discussions among family members to identify shared philanthropic values and goals.

      2. Developing a family philanthropy mission statement and strategic plan for charitable giving.

      3. Offering guidance on engaging multiple generations in philanthropic activities and fostering a culture of giving within the family.

You can see in this example that a traditional estate planning approach, although effective and extremely beneficial, does not complete the "legal and tax" puzzle for the client, Dr. Patel.

There are a lot of moving parts that will continue to change, and it's important for her to have a firm like ours by her side, helping her navigate the complex and ever-changing world of business, nonprofit, and estate law.

Example 2: Ms. Garcia - Serial Entrepreneur

Ms. Garcia is a 35-year-old entrepreneur who founded a successful tech startup. She has accumulated significant wealth through her business ventures and investments in technology companies. Ms. Garcia is unmarried and without children, has a partner she has been dating for 4 years, and wants to ensure her:

  • asset are protection

  • wealth is preservation

  • tax are reduced

  • wealth is benefiting society

  1. Traditional Estate Law Firm Services:

    1. Drafting a will to detail asset distribution and appoint guardians if necessary.

    2. Crafting a revocable living trust to avoid probate and manage asset distribution.

    3. Providing tax planning strategies to minimize tax liability for the estate.

    4. Drafting asset protection provisions within estate planning documents.

    5. Structuring real estate holdings to minimize probate and tax implications.

    6. Identifying different methods of selling business interests with minimal tax implications.

  2. Law and Tax Consulting Services:

    1. All the above services, where required, in addition to the following list.

    2. Business Succession Consulting:

      1. Assessing Ms. Garcia's current and future business interests to develop succession planning strategies.

      2. Providing guidance on structuring ownership and management transitions for her tech ventures.

      3. Assisting in the implementation of a formal succession plan to ensure continuity and sustainability of her business legacy.

    3. Financial Planning Consulting:

      1. Reviewing Ms. Garcia's investment portfolio and financial goals to identify opportunities for portfolio expansion and diversification.

      2. Developing customized investment strategies to align with Ms. Garcia's risk tolerance and long-term objectives.

      3. Advising on alternative investment opportunities, such as venture capital, private equity, and real estate syndications.

    4. Legacy Planning Consulting:

      1. Facilitating discussions on philanthropic goals and the legacy Ms. Garcia wishes to leave behind.

      2. Exploring options for establishing a private foundation as a vehicle for philanthropy and impact investing.

      3. Providing guidance on structuring charitable giving strategies to maximize social impact and tax benefits.

    5. Private Foundation Considerations:

      1. Conducting a comprehensive analysis of Ms. Garcia's philanthropic objectives, including her desired level of involvement and legacy aspirations.

      2. Advising on the benefits and drawbacks of establishing a private foundation, such as control over charitable activities, tax advantages, and administrative responsibilities.

      3. Assisting in the creation of a mission statement and governance structure for the private foundation, including the selection of board members and grantmaking priorities.

      4. Providing ongoing support and guidance on foundation administration, compliance with regulatory requirements, and strategic philanthropic initiatives.

    6. Estate Restructuring:

      1. Analyzing Ms. Garcia's current estate structure and identifying opportunities to optimize tax efficiency and protect assets.

      2. Recommending estate planning strategies, such as trusts and gifting strategies, to minimize estate taxes and facilitate wealth transfer to future generations.

      3. Drafting necessary legal documents to implement estate restructuring strategies effectively and ensure compliance with relevant laws and regulations.

    7. Family Philanthropy Consulting:

      1. Facilitating family discussions to foster a shared understanding of philanthropic values and goals.

      2. Developing a multigenerational philanthropy plan to engage family members in charitable activities and instill a culture of giving.

      3. Offering guidance on creating meaningful philanthropic experiences that align with Ms. Garcia's vision for her family's legacy.

Here's the beauty of the Consulting Model: It is not a "this OR that model", it is a "this AND that" model. The services offered by a traditional law firm such as drafting and implementing are needed after strategic roadmaps and blueprints and formulated - it's an essential part of the plan, and you can still leverage the wills or trusts have you have in place.

There is no "right or wrong" approach - the keys to the kingdom are in your hands. Design your Wealth Preservation Masterplan the way you want - it's your money, use it how you want!

Example 3: Mr. Thompson - High-Earning Executive

Let's look at one more example in the bifurcated format that we have used above.

Mr. Thompson is a 58-year-old executive at a Fortune 500 company, earning a substantial salary and bonuses. He has been diligent in saving and investing throughout his career and is now considering retirement within the next 7-10 years. Mr. Thompson is married with adult children and has the following goals and objectives:

  • asset protection

  • retirement income

  • wealth preservation

  • tax reduction across many fronts

  • charitable investing

  1. Traditional Estate Law Firm Services:

    1. Drafting a will to detail asset distribution and appoint guardians if necessary.

    2. Crafting a revocable living trust to avoid probate and manage asset distribution.

    3. Providing tax planning strategies to minimize tax liability for the estate.

    4. Drafting asset protection provisions within estate planning documents.

    5. Structuring real estate holdings to minimize probate and tax implications.

  2. Law and Tax Consulting Services:

    1. All the above services, where required, in addition to the following list.

    2. Financial Planning Consulting:

      1. Reviewing and structuring Mr. Thompson's current financial situation and retirement goals.

      2. Developing a comprehensive retirement income plan, including reallocation for retirement savings and expenses.

      3. Advising on tax-efficient withdrawal strategies from retirement accounts and other investment vehicles.

    3. Investment Portfolio Management:

      1. Assessing Mr. Thompson's investment portfolio and identifying potential risks.

      2. Recommending investment strategies to optimize portfolio growth and income generation during retirement.

      3. Providing ongoing monitoring and rebalancing of the investment portfolio to align with Mr. Thompson's changing financial objectives.

    4. Insurance Planning:

      1. Reviewing Mr. Thompson's existing insurance policies, including life insurance, disability insurance, and long-term care insurance.

      2. Assessing insurance coverage gaps and recommending appropriate policies to mitigate risks and protect assets.

      3. Analyzing the role of insurance in Mr. Thompson's estate plan and retirement income strategy.

    5. Legacy Planning Consulting:

      1. Facilitating discussions on Mr. Thompson's legacy goals and philanthropic aspirations.

      2. Advising on charitable giving strategies and legacy planning techniques to support causes important to Mr. Thompson and his family.

      3. Exploring options for creating a lasting impact through charitable trusts, donor-advised funds, or other charitable vehicles.

    6. Private Foundation Considerations:

      1. Assessing Mr. Thompson's interest in philanthropy and exploring the possibility of establishing a private foundation.

      2. Providing guidance on the benefits and challenges of private foundations, including tax advantages, administrative responsibilities, and impact potential.

      3. Assisting in the creation of a philanthropic mission statement and governance structure for the private foundation, if applicable.

    7. Estate Restructuring:

      1. Analyzing Mr. Thompson's current estate structure and identifying opportunities to minimize estate taxes and streamline asset transfer.

      2. Recommending estate planning strategies, such as trusts and beneficiary designations, to facilitate efficient wealth transfer and asset protection.

      3. Drafting necessary legal documents to implement estate planning strategies and ensure compliance with applicable laws and regulations.

    8. Retirement Planning:

      1. Developing a retirement income strategy tailored to Mr. Thompson's financial goals and lifestyle preferences.

      2. Reviewing retirement savings accounts, such as 401(k) plans and IRAs, and recommending contribution levels and investment allocations.

      3. Advising on Social Security claiming strategies and other retirement benefits available to Mr. Thompson through his employer or other sources.

The Next Step

ADMINISTRATIVE TRUSTEE

An Administrative Trustee is generally appointed to manage the administrative functions in a trust, including, but not limited to:

  • Maintaining or arranging for custody of accounts

  • Maintaining storage of tangible or intangible property

  • Trust bank accounts and record-keeping

  • Trust accounting and communication

  • Responding to trust inquiries or requests

  • Preparating or reviewing trust tax returns

  • Maintaining legal documentation

  • Compliance updates and filings

We invite you explore our Administrative Trustee Services to see if our team can help you manage your administrative matters.

The Key To Success: Compliance

A trust is an extremely powerful legal tool that can be crafted to be as creative and innovative as grantor and trust drafter. Trusts can accomplish your goals and wishes while giving you legal and tax benefits at the same time - as long as you can stay in compliance.

That's where our team of experts at Fractional Trustee can help. We can step in as Administrative Trustees and devote our attention to administration and compliance.

Our unique ability to create an environment that streamlines and aligns the manner in which the Grantor, Board of Trustees, Fiduciaries, Advisors, Protectors, and Beneficiaries operate has made us one of the fastest growing firms in this arena.

The Next Step

Schedule an assessment

We invite you to schedule a call with our team and help us understand your goals and objectives.

If there is a good mutual fit, we'll invite to second interview where we can dig deeper and develop a clear set of roles, duties, and objectives that relate to our engagement.

Schedule a call below - we look forward to meeting you.

**Your information is 100% confidential and secure**

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