Wealth Transfer Plan And More
The basic tenets of The System are:
- To select the appropriate Strategies
- To accomplish your Goals
- Based on the Assets you own
To a large measure your goals are driven by the amount of your wealth and the specific assets that make up your wealth. These goals for our purposes—though stated separately are intertwined—are divided in two:
- Tax and economic goals
These are dollar-driven goals, typically to reduce or eliminate taxes, accumulate more wealth for the family and/or give more to charity.
- Human goals
These are goals of the heart. Your feelings. Your passions. Your individual set of values. (Simply put, goals that turn you on, light your fire and satisfy your inner self.)
A Short Review
This is a good point to review where we have been (in this wealthy individuals part of the website), in order to prepare us for where we want to go.
Various parts of this website talk about goals… your goals. There are four core goals that apply to almost everyone:
- Maintain your lifestyle (and your spouse’s) for as long as you live.
- Control your assets, usually for life.
- Business succession (particularly for a family owned business)
- Asset protection.
Now let’s explore how the first core goal (lifestyle) typically changes as the amount of wealth (asset value, particularly discretionary spendable assets) increases. Remember, when maintaining lifestyle is a goal, it—of necessity—must be the centerfold of the Wealth Transfer Plan. The following schedule summarizes what we have previously covered. It also is a steppingstone to the next subject: the Mega-Wealthy.
|Category of Wealth
Based on Goals
|Net Worth (NW)|
|1. Predominant goal is to maintain lifestyle|
|(a) Little guy
(b) Less-than-medium-NW individual
|Less than $3 million
$3 million to $10 million
|2. Maintain lifestyle usually not an issue (goal) but could be|
|(a) Medium-NW individual
(b) High-NW individual
|$10 million to $25 million
$25 million to $100 million
|3. Maintain lifestyle is clearly not an issue (goal) but could be|
|$100 million to $1 billion
$1 billion and over
A NOTE ABOUT FAMILY BUSINESS SUCCESSION
When there is a family owned business and one of the goals of the owner is to transfer the business to one or more of the owner’s kids or grandkids, the business succession goal—like the lifestyle goal—is usually a predominate goal. A proper Wealth Transfer Plan satisfies all predominate goals.
It should also be noted that the last two core goals—control, when required, and asset protection—always are an integral part of the Plan.
Over time, a metamorphosis takes place: The Strategies needed to satisfy your goals (as explained throughout this website), change as the size of your net worth grows. We are now ready to explore the world of the Mega-Wealthy.
A Closer Look at the Mega-Wealthy
In the long run, the defining factor (almost like a law of nature) is your exact goals and how you implement them, rather than the size of your wealth. Even the Mega-Wealthy cannot escape the defining factor.
Ah, but there is a difference. A big difference. The Mega-Wealthy can have goals, dreams and visions that only immense amounts of wealth can satisfy.
For the Mega-Wealthy the first core goal—maintaining lifestyle—drops off of the radar screen. Usually it is replaced by two new significant core goals, outlined as follows:
1. Philanthropy goals
- Gift wealth during life, or
- Gift wealth after death, or
- A combination of above
2. Transferring-wealth-to-future-generation goals
- Enrich the kids and future generations as much as possible, or
- Limit kids to a specific percentage or dollar amount (the concept is don’t spoil the kids) and play the philanthropy game for the balance
1. When a family business represents a significant portion of the total wealth, business succession (until satisfactorily dealt with during the lifetime of a Mega-Wealthy Business Owner) remains a core strategy.
2. Some individuals never escape the “Maintaining-my-lifestyle goal.” They seem to be pulled by some type of powerful magnet that is always capable of cooking up the perfect economic storm that will certainly destroy their wealth… The usual stuff: skyrocketing inflation, war, devaluation of the dollar, fall of the central government and you name it… All or most, of course, could strike at the same time.
For these folks, maintaining lifestyle was, is and will forever remain a core goal. And that’s okay. The advisor’s job does not change. Nor does how The System is to be used. The Wealth Transfer Plan must be designed to fulfill the individual’s goals.
AND LET’S NOT FORGET
There is a tendency for goals to change—no matter the amount of your wealth—as you get older.
The System works well—does its job to create the perfect Plan for you, your business and your family—no matter the size of your wealth. Because of the leverage—to take advantage of the flaws in the tax law—designed into The System, the greater the amount of wealth you have accumulated, the better The System works for you.
Immediately! And in the future. By saving taxes. And by creating additional tax-free wealth.
To end this section, let’s put it his way: The System works well for everyone, but it works best to multiply your wealth when you have attained the financial heights of the Mega-Wealthy or Billionaire.
Free special report:
How to transfer your business (to your kids), yet keep control
When closely help with business owners call me for help with their business successions plan they typically have two goals:
- Get their business out their estate (particularly when it is growing in value) in a tax effective manner
- keep control for long as they live
it is a rare that the business owner finds an advisor who knows how to accomplish both goals.
this special report shows you how to keep absolute control of your business while transferring it to your successors.
Free Special Report:
How to legally eliminate your state tax liability
When people of means contact me to help do their estate plans (or review their existing plans), they typically have two goals concerning their estate tax:
- Reduce their potential estate tax liability
- Make sure there is enough liquidity to pay the potential estate tax liability
Well, my goal and the goal of this special report is to show you how to eliminate your potential estate tax liability whether you are young or old , married or single, insurable or uninsurable.
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