Orlando, FL, June 25, 2009 - Starting July 1st, 2009, Schwab will waive commissions on electronic equity trades and reimburse transfer of account fees charged by contra brokers until June 30, 2010 if you are new-to-Schwab and Allgen Financial Services, Inc. You must open an account by the end of this year.
What does this mean for you?
Allgen custodies its clients’ accounts at Schwab Institutional. As we actively manage your investments, there will be no fees charged by Schwab for any trades conducted on your account for one year. This can mean significant savings for you. Depending on the size of the account and amount of trades, you could save thousands of dollars. In addition, you will be reimbursed any fees for moving your account to Allgen Financial Services, Inc. & Schwab from another institution. This makes it a great opportunity to consider moving your account over to us since this offer will most-likely only be available for a limited time.
If you would like to learn more about this offer, and/or consider moving your account over to Allgen Financial Services, Inc., please contact us today at: (407) 210-3888 or toll-free 1(888) 6ALLGEN (625-5436).
According to a study sponsored by U.S. Trust, owners of ultra-high-net-worth (UHNW) family businesses remain exposed to business succession, asset protection and estate planning issues.
“Owners of ultra-high-net-worth family businesses often have a team of advisors focusing on an array of needs such as wealth management, tax strategies and succession planning, without addressing the bigger picture,” said Chris Zander, managing director and head of the Multi-Family Office (MFO) Group at U.S. Trust. “Given the near-term and long-term complexities with managing a successful family business, it is crucial that these families think about the wealth tied to their business and their personal fortune in a holistic, strategic manner.”
The study revealed that while a large majority of owners of UHNW family businesses have wealth transfer plans in place, most of these plans - both professional and personal - have lapsed.
– While over three quarters (76%) of owners have succession plans, only 38 percent implement them, inadequately addressing issues of succession
– Most individuals with succession plans in place are not focusing on tax-mitigation issues (73%), even though nearly all participants (93%) report a desire to lower the tax burden associated with transferring the business
Asset Protection Strategies Missing
A significant portion of owners of UHNW family businesses desire to maintain control of the business and are concerned with protecting their wealth, yet fail to create asset protection plans, which provide wealth structuring strategies that maximize tax efficiencies and mitigate risk.
– Almost nine out of 10 (89%) business owners were “very” or “extremely concerned” about protecting the family’s wealth
– However, nearly three quarters (73%) of them do not have asset protection plans in place
“Most owners of ultra-high-net-worth family businesses don’t implement strategies for asset protection in large part because no one has educated them about such options,” Rosenthal noted.
Estate Plans Outdated
The treatment of estate planning mirrors that of succession planning, with the majority of owners creating estate plans without updating them often enough to keep them viable.
– Over three quarters (78%) of owners have personal estate plans; however, 89 percent have not updated them after a life-changing event such as marriage, birth or death rendering the plan obsolete
– More than half (54%) of participants lacking estate plans reported difficulty dealing with their own mortality, and one quarter (25%) cited a lack of time as reasons for not creating a plan
With the upcoming elections and the tax-fallout many professionals are expecting, and with the already-enacted estate and gift tax sunset approacing, updating and implementing business succession plans, personal estate plans, and asset protection plans take on a new significance.
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
1. Name the types of creditors you need protection from
2. Is AP planning only about forming entities? how else can you protect assets?
3. Should you own REAL ESTATE (e.g., rental property, a vacation home/condo or vacant land) in your own name?
4. For a “professional,” is it good asset protection to have assets titled in the non-professional spouse’s name?
5. Who is everyone’s top creditor every year - guaranteed?
6. How should you own stocks, bonds, mutual funds, etc.?
7. How do you protect against downturns in the stock market and if so how?
8. How do you own boats, waverunners, snowmobiles, or planes, etc.?
9. How do you protect the equity in your home?
10. How do you mitigate capital gains taxes?
11. Do you know how an offshore asset protection trust (OAPT) works and does your money need to go offshore to have a properly setup OAPT?
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
Although distributions from a Roth 401(k) or Roth 403(b) account have always been eligible for rollover into a Roth IRA (in two steps–by first rolling the distribution over into a traditional IRA, and then converting the traditional IRA to a Roth IRA), the Pension Protection Act of 2006 now (in 2008) allows employees participating in traditional (non-Roth) qualified plans (e.g., 401(k), 403(b), governmental 457(b)) to rollover directly into a Roth IRA for distributions received after December 31, 2007.
Only direct (trustee to trustee) rollovers qualify (e.g., 60-day indirect rollovers do not).
Generally, the same rules apply to these rollovers as do to conversions of traditional IRAs to Roth IRAs (rollover includible in gross income (except after-tax contributions), and no 10% early distribution tax).
Taxpayers with AGI of at least $100,000 or who are married filing separately, are not eligible for this direct rollover to a Roth. These limitations were repealed by the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), but not until 2010.
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
When a decedent dies owning stock in a closely held corporation or partnership, the valuation of those shares is a perennial problem precisely because they are closely-held (i.e., there’s no ready market for the ownership interests). Since estate tax is ad valorem (based on the assets’ values), valuation usually impacts the ultimate estate tax liability significantly.
The IRS position on the estate taxable value of closely held business interests is generally that they should reflect the underlying assets’ values, i.e., the market value of the investments inside the entity. For example, a family limited partnership owning publicly traded stock should generally be valued at the market value of the publicly traded stock, as opposed some valuation reached by another valutaion approach (e.g., present value of future discounted cash flows, data from actual sales of comparable limited partnerships, etc.).
To date, the IRS has been generally unwilling to allow for the “built-in” capital gains tax on those underlying assets when computing the value of the interests in the closely held entity (sometimes referred to as “tax-effecting” the valuation). This is problematic when the entity holds highly appreciated assets which, if sold, would generate a significant capital gains tax.
A recent decision by the Eleventh Circuit (Alabama, Florida, Georgia) in Estate of Jelke v. Commissioner reversed the Tax Court and held that, when valuing a decedent’s stock in a closely held company, the estate is entitled to a discount for the company’s entire “built in” capital gains tax liability on its underlying investments. By following this rationale, the Eleventh Circuit observed that courts are not burdened with trying to predict when a decedent’s assets will be sold and the tax paid to arrive at the taxable value of the closely held business interests.
That decision by itself - that the built in capital gains tax potential is fully allowable in computing the value of the assets in the entity - is significant. Other courts (namely, the Tax Court) dealing with this issue have proposed speculative ways to discount the potential tax liability based on the present value of some expected future liquidation. In so doing, the discount for the tax is clearly less than the dollar-for-dollar approach in the Eleventh Circuit’s decision in Jelke.
NOTE: Query whether other circuits will follow the Eleventh Circuit on this issue. The Fifth Circuit (Texas, Louisiana, Mississippi) has an earlier court decision (Estate of Dunn) which was actually the first to emerge with a precise methodology re: the allowable reduction for built in capital gains taxes and how to calculate them for estate tax valuation purposes.
NOTE: Query how this result will bolster tax-effecting closely held business interests where the underlying assets themselves are not publicly traded and thus have no ready ascertainable fair market value (e.g., an operating business). That debate has been ongoing…
For professional investment advice on this topic contact: Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com www.allgenfinancial.com
Orlando, FL, June 25, 2009 - Starting July 1st, 2009, Schwab will waive commissions on electronic equity trades and reimburse transfer of account fees charged by contra brokers until June 30, 2010 if you are new-to-Schwab and Allgen Financial Services, Inc. You must open an account by the end of this year.![[del.icio.us]](http://www.allgenfinancial.com/financialnews/wp-content/plugins/bookmarkify/delicious.png)
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