Wednesday, July 06, 2011 Certified Exit Planner
I am proud to announce the successful completion of my certification as a Certified Exit Planner. Through the Business Enterprise Institute, I learned and trained to become a Certified Exit Planner (“CExP”). Business Enterprise Institute is a membership-based organization that focuses on helping business advisors assist their business-owners clients with planning for the single, most important financial event of their lives- the transition and exit out of their business. The CExP program is a 100+ hour program covers all area of exit planning: the five critical elements of a successful exit plan, understanding and identifying owner objectives, quantifying business and personal financial resources, maximizing and protecting business value, ownership transfers to third parties, ownership transfers to insiders (children, key employees, ESOPs), business continuity (stay bonus plans, buy/sell agreements), family business planning, and deferred compensation.
Jason Salinardi
BridgeBuilder
Thought for the Week
"A budge tells us what we can't afford,
but it doesn't keep us from buying it."
~William Feather Thursday, June 23, 2011 Charging Order Protection for Members of Limited Liability Companies
Many state laws make a charging order the “sole” remedy for a creditor of a limited liability company (LLC) member. Some states have provided that the charging order is the “exclusive” remedy. The judgment creditor could collect the debtor’s share of any income distributed by the LLC.
A charging order entitles a creditor to distributions (not management fees, loans, or sale proceeds) made to the debtor Member. For this purpose the creditor is given a status that is the equivalent of an assignee of the debtor member’s interest. The IRS (Rev. Ruling 77-137) is read by many commentators to suggest that the assignee should receive a K-1 statement showing the assignee’s share of LLC income, even if no distributions of cash are made from the LLC. Since the LLC is a pass-through entity for income tax purposes, the debtor’s share of undistributed income may be taxed to the judgment creditor even though the debtor did not receive the LLC income. This type of income is sometimes referred to as “phantom income.”
The possibility of “phantom income” can provide a strong disincentive for someone who sues a person owning interests in an LLC or a strong incentive to settle early. If the creditor’s share of phantom income is a significant amount, it may throw the creditor into a higher tax bracket, and could even force the creditor to pay more in income tax in a year than he actually received in income.
For example, Nevada's legislature recently passed revisions to its charging order statutes.
The revisions which are effective October 1, 2011 enhance Nevada's creditor protection laws for its LLCs, LPs and corporations. The revisions expand Nevada's protections to not only make the charging order the exclusive remedy, but to also remove all potential equitable remedies that might apply.
The new legislation also specifies that creditors of a member of a single member LLC and creditors of a shareholder of a single shareholder corporation are limited to the charging order remedy, thereby distancing Nevada from the laws of other states.
BridgeBuilder - Plans for Life
Garrett Griffin Wednesday, June 15, 2011 Estate Planning with IRAs and Qualified Plans
As of December 31, 2010, individuals hold nearly $17.5 trillion in IRAs and qualified plans. These assets now account for 37% of all household financial assets. Because of the way lifetime required minimum distributions are now calculated, retirement plans will frequently be the largest asset held at death.
IRAs and qualified plans were designed to accumulate wealth for retirement, not accumulate wealth for future generations and the tax laws were designed accordingly. As a result, retirement accounts may present the greatest challenge when it comes to funding a Trust. Even the best designed estate plan will fail unless assets are properly titled and beneficiary designation forms are properly completed.
With a properly drafted Trust and a properly completed beneficiary designation form you can leave a $100,000 IRA to a 25 year old beneficiary that will provide the beneficiary with $400,000 of after tax income over his life expectancy with all the benefits normally associated with leaving property to a beneficiary in Trust. Compare this with the $60,000 the beneficiary would receive if left to a Trust that, because of the way the Trust was drafted or the way the beneficiary designation was made, does not qualify for look-through status.
Jason Salinardi
BridgeBuilder
With a two-year old at home, I had to include this thought for the week.
Thought for the Week
"A two-year old is kind of like a blender, but you don't have a top for it."
~Jerry Seinfeld Tuesday, May 31, 2011 Who can be blamed for someone's misfortune?
Don't just think that because you are extremely competent and careful that you don't have exposure. Over the last few decades, expanding theories of liability and the great proliferation of litigation has given increased emphasis to Asset Protection Planning. We live in a "sue society", and as such, it is no longer a question of negligence, but a question of who can be blamed for someone's misfortune Why is there such an increased liability exposure? Although there are numerous factors to consider, the evolution of the legal system has enabled a victim oriented society.
The contingency fee was adopted in the early ‘60s as means to ensure that “innocent victims” would not be denied access to the US legal system. Since then, Plaintiff’s lawyers have been encouraged to take on cases and in essence finance the claim in hopes of a “pay day” in the form of a jury verdict.
Finally, there is attorney advertising. You need only watch some late night TV or drive down the interstate to see this at work. “Call the ABC firm after ANY ACCIDENT. Aggressive Attorneys that work for YOU!” This form of communication simply provides a foundation for a strong societal tendency to blame misfortune and general ills on some specific person or entity in an attempt to obtain financial remuneration from the targeted defendants.
BridgeBuilder assists those concerned about the potential liability arising from the operation of their business or professional practice or ownership of their real estate against their personal assets.
BridgeBuilder - Plans for Life
Garrett Griffin Wednesday, May 25, 2011 Control From the Grave
There is a fine line between protecting your family's inheritance and controlling from the grave. I recently read an article about Wellington R. Burt who died in 1919, yes 1919 that is not a typo, who left behind a multimillion dollar estate. At one point in time, Mr. Burt was ranked among America's eight wealthiest men. He had written into his estate planning documents the unusual provision that his estate would not be distributed until 21 years after the last of his grandchildren died. That 21 years has finally come, 92 years after Mr. Burt's death. He did provide for his children, ranging from $1,000-$30,000/year. His estate is currently valued at approximately $100 million. I bet his children wished their father would have provided more for them and their children. Attached is an article about Mr. Burt's estate and his heirs. It's an interesting read. In addition our partner, Jeff Matsen, is quoted regarding the unusual nature of Mr. Burt's bequest. http://bit.ly/mulz4y
Jason Salinardi
BridgeBuilder
Thought for the Week
"A man always has two reasons for doing anything:
a good reason and the real reason."
~ J.P. Morgan Monday, May 23, 2011 Wealth is at Unprecedented Risk - Consider Asset Protection Planning!
BridgeBuilder – Plans for Life, is a Kansas City asset protection estate planning practice that represents business owners, physicians, other professionals, real estate owners, investors, and other individuals of high net worth throughout Kansas and Missouri. BridgeBuilder assists those concerned about the potential liability arising from the operation of their business or professional practice or ownership of their real estate against their personal assets.
If you are a member of one of the above groups, your wealth is at unprecedented risk! Did you know that more than 50,000 lawsuits are filed every day? How about that 94% of the attorneys reside in the United States or that 97% of all lawsuits are filed in the US? The fact is that 1 in 3 people will be sued in their lifetime.
Asset Protection Planning in its purest form is the planning process of arranging one’s assets to create legal obstacles for creditors and thereby lower your financial profile. Protecting what you’ve accumulated is a crucial responsibility for you and your family. It enables the opportunity to build a network of assets that can grow and eventually span generations. After all, what’s the point of working if everything you work for is constantly at risk? Isn’t it time that you started working on building that bridge?
Next time, I’ll look why there is such an increased liability exposure.
BridgeBuilder – Plans for Life
Garrett Griffin Thursday, May 19, 2011 Do It Yourself Estate Planning
I've had several clients come in with Wills and Trusts they prepared themselves. It is a universally bad idea to prepare your own estate planning. Don't just take my word for it. Here is a link to a recent Forbes blog post by Rob Clarfeld: http://onforb.es/lJGYfA
Jason Salinardi
BridgeBuilder
Thought for the Week
"Discipline is the bridge between goals and accomplishments"
~ Jim Rohn Monday, May 16, 2011 BridgeBuilder Announces the Addition of Jeffrey R. Matsen
BridgeBuilder – Plans for Life, the Wealth & Legacy Planning Group of the Kansas City Law Firm, Kevan D. Acord, P.A.., is pleased to announce that Nationally Recognized Estate and Business Planning Attorney, Jeffrey R. Matsen and his Orange County California firm, Wealth Strategies Counsel (WSC) of Bohm, Matsen, Kegel, & Aguilera LLP are “Of Counsel” to BridgeBuilder. This relationship provides BridgeBuilder with additional resourcesand prestige associated with Attorney Matsen and his firm; ultimately increasing the services to their clients with Estate, Business and Asset Protection Planning as well as the ability to provide Offshore services.
Attorneys Garrett Griffin and Jason Salinardi are co-founders of BridgeBuilder – Plans for Life (BB) BridgeBuilder is the only Wealth & Legacy Planning firm providing comprehensive and continuing solutions to medical professionals in Kansas and Missouri. BB specializes in preserving, protecting, and transferring the wealth and legacy of clients in this risk laden, tax-burdened, and litigious society. BB serves doctors and dentists who have a new practice, are transitioning or exiting out of their current practice, are concerned that their personal assets are exposed to our litigious society, or simply have not developed a comprehensive Wealth & Legacy Plan.
Jason M. Salinardi graduated from the University of Missouri-Columbia in 2000 with his B.S.and Master’s in Accountancy, from the University of Missouri-Columbia Law School in 2003, and from the University of Missouri-Kansas City Law School with an LL.M. in Taxation in 2004. Jason is licensed to practice law in the States of Missouri, Kansas and Illinois.
Garrett L. Griffin is a third generation attorney. He received his B.S. in Business Administration from William Jewell College in 1998 and graduated from the University of Missouri – Kansas City School of Law in 2001. He went on to receive his LL.M. (Master of Law in Taxation) from the University of Missouri – Kansas City School of Law in 2005. Garrett is licensed to practice law in the States of Missouri and Kansas.
BridgeBuilder is the Wealth & Legacy Planning group of the Kansas City, Missouri Law Firm of Kevan D. Acord, P.A. KDA is the preeminent tax boutique firm in Kansas City. Employing tax attorneys and Certified Public Accountants, KDA provides comprehensive tax consulting and compliance services to some of the country’s largest companies, including Dairy Farmers of America, the country’s largest dairy cooperative. KDA, BB, and Matsen team up to provide the most comprehensive tax, estate, and asset protection solutions to clients in Missouri and Kansas.
Attorney Jeffrey R. Matsen’s knowledge, professionalism, responsiveness and integrity have vaulted him to the top of his field culminating in his designation by Worth magazine as one of "America’s Top 100 Attorneys", by Los Angeles Magazine as one of California’s "Super Lawyers". The Nationally Renowned Attorney Rating Service, ‘AVVO’ has rated Mr. Matsen a perfect "10/10 Superb" and he has continued to achieve the highest "AV rating" and has been designated a "Preeminent Lawyer" by the only other prestigious attorney rating directory, Martindale Hubble. He is internationally recognized in the areas of Asset Protection, International Trusts and Offshore Business Entity Formation and has a myriad of world-wide legal, financial and business connections.
Matsen is the founding partner of Wealth Strategies Counsel(WSC), the Estate Planning and Business Transactions Department of the Orange County California premier law firm of Bohm, Matsen, Kegel & Aguilera, LLP with offices in Orange County California, New York City, Washington D.C., Detroit, Chicago, Salt Lake City, Boise Idaho, Monterey/Carmel California, San Diego, Honolulu, and now, Kansas City. With over 35 years of experience, WSC handles complex and sophisticated asset protection, estate and business planning matters locally, nationally and internationally. WSC serves a variety of clients by providing solutions they can count on and advisors they can trust. WSC make certain that their client’s wishes are not only being fulfilled, but that they are sound and tax advantaged.
Both BB and WSCare members of Wealth Counsel (WC) a national association of Estate Planning attorneys and a leading provider of tools and intelligence to the Estate Planning community. It provides its member attorneys with back office technology solutions and continuing legal education that keeps them on the leading edge of professional knowledge and engages the attorney membership in a collaborative network where each attorney can exchange ideas and problem solve. There are over 1000 member attorneys nationally in Wealth Counsel, including many of the leading Estate Planning practitioners in the country. Attorney Matsen has presented continuing legal education through WC and continually collaborates with other WC attorneys, which is how the two firms became associated and began working on mutual cases together.
“I am excited to be affiliated with BridgeBuilder and value their opinions and ideas! The decision to join their firm on an “Of Counsel” basis was made after considerable due diligence and concluding it is a very professional and outstanding firm. Our combined expertise and resources provide a strategic advantage to our mutual clients,” stated Jeffrey R. Matsen, Founding Partner, Wealth Strategies Counsel.
“BridgeBuilder is thrilled to have someone of Jeff’s caliber on our Wealth & Legacy Planning team,” stated Garrett L. Griffin. Jason M. Salinardi added, “We look forward Jeff’s involvement as we enhance the asset protection planning solutions offered to our Kansas City clients.”
Garrett Griffin and Jason Salinardi
BridgeBuilder – Plans for Life
Architects at Preserving, Protecting & Transferring Family Wealth Sunday, May 15, 2011 What is Asset Protection?
Last week Garrett shared the definition of Asset Protection Estate Planning. I want to give an analogy that I use to help people understand what we are talking about.
Like most people (I hope) I always wear my seatbelt. My car has front and side airbags that are triggered to release upon impact to provide further protection. Like most people (again I hope), I do not drive around with the plan or hope to get into an accident to see if the seatbelt and airbags work. But I do know based upon research and evidence, that I will be protected in the case of an accident and be glad I have that seatbelt and airbag protecting me.
Asset Protection Estate Planning is the process of installing a seatbelt and airbags to protect your financial wellbeing. We utilize the necessary asset protection tools to install that seatbelt and airbags for you. Hopefully, you will never need them, but you and your family, your business, your partners, etc. will be very glad you do if attacked.
Jason Salinardi
BridgeBuilder
Thought for the Week
"A bank is a place that will lend you money
if you can prove that your don't need it."
~ Bob Hope Tuesday, May 10, 2011 The Case for Asset Protection Estate Planning
We spend a lot of time on building and learning how to build our fortunes; unfortunately, we spend very little time and very little is ever taught on the subject of protecting our fortunes from creditors. Unfortunately, we live in a very litigious society (more than 50,000 lawsuits filed daily), and as such it is no longer a question of negligence, but a question of who can be blamed for someone’s misfortune.
As you probably can see, if you have any degree of even modest wealth, your assets have considerable exposure to creditors. Therefore, we must engage in special estate planning methods to protect your assets.
We call these special estate planning methods "ASSET PROTECTION ESTATE PLANNING"! Asset Protection Estate Planning can be defined as: the process of organizing one's assets and affairs within an estate plan that protects assets not only from liabilities and litigation,but also from disability or guardianship probate, death probate and estate taxes.
Why should you engage in Asset Protection Estate Planning?
Besides the obvious reason - that you should be inclined to protect those non-exempt assets you have worked so hard to earn -you should engage in asset protection estate planning for the following reasons:
(1) Peace of Mind
(2) Avoiding Probate and Estate Taxes
(3) Liability and Malpractice Insurance Savings
(4) Reduced Settlements and Number of Suits
(5) Exemplary Damages
(6) Liability Insurance Carriers can go Bankrupt
(7) Strategic Bargaining Power with Settlement of Claims
In future posts, we’ll continue to explore the case for Asset Protection Estate Planning and some of the various techniques.
BridgeBuilder – Plans for Life
Garrett Griffin |