When planning for your family’s wealth, do you want to use people who can tell you how to get there but leave you on your own to figure out what to do? Or, would you rather use someone who can carefully walk you through the entire wealth stewardship planning thought process?
A case study that demonstrates the power of comprehensive and integrated creative planning. It truly is an excellent example of business succession planning at its best!
Can you truly “make a profit and give it away”? This question seems to be such an absolute contradiction of terms. Yet, this giving reality is not new. Jesus said, “Give and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.”
How one family’s Master Stewardship Plan enabled them to accomplish all their personal and family goals and objectives but also create a major endowment to support seven Christian ministries into perpetuity.
When I was in personal practice, my clients and their advisors would see the bottom-line results of my comprehensive Master Stewardship Plan designs and they would often look at me in disbelief and ask, “How did you do that?” When they look at the financial outcomes, it seems to indicate that $2 + $2 = $11. But it was not “smoke and mirrors” and it was not “magic.” What they were seeing is the effect of the careful and strategic integration of three powerful planning concepts – all combined into one carefully integrated Master Stewardship Plan.
These two powerful trusts are mirror opposites of one another. Properly designed, the Deferred Inheritance Trust pays its income to charity or a family foundation for a term of years or life, then terminates. The trust assets then pass to the heirs, gift/estate tax free. The Enhanced Income Trust, pays its annual income to the family. Upon termination, the trust assets pass to your charity/family foundation.
Jesus tells us that we are to be as shrewd as serpents and as innocent as doves. These two behaviors are not mutually exclusive. Shrewdness is not opposed to honesty, and honesty is not opposed to shrewdness. The best stewardship planning utilizes the epitome of shrewdness while honoring both the spirit and the letter of the laws of our land.
The Deferred Inheritance Trust (IRS named a Charitable Lead Annuity Trust) may be one of the most underutilized Family Wealth Planning tools available.
One of the most effective and creative techniques in Family Wealth Counseling is combining what is called compression planning with charitable planning strategies. Each of these two techniques by themselves is quite effective, but when they are combined, the financial leverage created is hard to believe.
Of all the issues that affluent parents face in planning, none consumes more time and emotional energy than that of inheritances—and for good reason. There is no area of planning that could be more devastating to a family than an ill-conceived or ill-timed inheritance. I have yet to see an inheritance plan with which parents were entirely satisfied when the actual distributions were clearly outlined for them.