Become a Client Service Advisor!

Excerpted from http://biz.yahoo.com/prnews/080611/clw030.html?.v=101

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Estate Plans Outdated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