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Advisor Opportunities Using Trusts Sandy Cardy Mackenzie Financial Corporation

Advisor Opportunities Using Trusts Sandy Cardy Mackenzie Financial Corporation. Strategic use of trusts. ). Initiate tax and estate planning discussions Customize basic strategies RESULT: Increased satisfaction with your value Opportunities for business building . Topics to cover today:.

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Advisor Opportunities Using Trusts Sandy Cardy Mackenzie Financial Corporation

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  1. Advisor Opportunities Using Trusts Sandy Cardy Mackenzie Financial Corporation

  2. Strategic use of trusts ) • Initiate tax and estate planning discussions • Customize basic strategies RESULT: • Increased satisfaction with your value • Opportunities for business building

  3. Topics to cover today: • Why trusts? • Basics of taxation • Case studies: • Asset protection • Handicapped beneficiaries • Business Succession • Income-splitting testamentary trusts • Insurance Trusts

  4. Minor children Special-needs dependents Family members who are not “financially astute” Income-splitting Retirement planning Charitable giving Inheritances Marriage Divorce Confidentiality Probate Family law property claims Trusts – Who is a prospect?

  5. Inter-vivos Trusts Testamentary Trusts • Taxed at graduated rates • Flexible year end • No attribution • Top tax rates • Calendar year end • Attribution Trusts

  6. Case Studies

  7. Robert’s ins. policy: $500,000 Robert’s will: $1,000,000 to John Trusts - inheritance planning- The Evans family Robert (85) + Emma Evans John’s Parents Sam (22) Son John (56) Heather (20) Daughter Kate (55)

  8. Delay distribution of assets Control over assets Save on income tax Testamentary Trusts (created after death) Case #1-Testamentary trusts

  9. John’s inheritance of $1,000,000

  10. Evans Family Trust John - ? Kate - $8,000 Sam - $8,000 Heather - $8,000 John’s inheritance $60,000 Income$24,000 paid to beneficiaries$36,000 Total Taxes = $8,000

  11. The Power of Testamentary Trusts Joan’s $1,000,000 inheritance from his parents is generating $60,000 interest income annually.

  12. Testamentary trusts - planning opportunities • Income splitting for high income beneficiaries • Income sprinkling for beneficiaries with dependant children • Designated income

  13. Case #2 – Insurance trust • Vivian (68) • Widowed but well off • 4 children • 3 successfully independent • 1 dependent on Vivian at age 36

  14. Issue Unequal sharing Legal wrangling Family discord Possible solution Will planning Gifting Alter Ego trust Insurance trust Vivian dies?

  15. Insurance trusts • Funded with the proceeds of life insurance policy • Established outside estate as separate trust • Beneficiary designation pays proceeds of policy to individual - receives proceeds as trustee • Documentation to establish an insurance trust: • Last Will and Testament • Trust Declaration or Trust Agreement

  16. Insurance trusts – advantages • Taxed as testamentary trust • Probate avoidance • Creditor proof • Confidentiality

  17. Case # 3 - Handicapped beneficiaries • Amanda, age 6 • Father • Life insurance proceeds $250,000 • Designated beneficiary • Options available • In trust for account • Annuity • Formal trust

  18. “Henson” trust • Fully discretionary • Control of assets • Prescribed • beneficiary election Trustee $250,000

  19. Case #4 - Jackson Tool & Die • Age 56 • Wife Joan (55) • Children • Eric (27) • Cody (22) • Joanne (17) Bill Jackson Owner/Manager $5 million Jackson Tool & Die

  20. Estate freeze - trust Bill Family Trust Common shares Debt and preferred Operating Company

  21. Estate freeze - strategies to consider • Use the capital gains exemption now • Recommend multiple wills

  22. Estate Freeze - The real nitty gritty • When to freeze – will owner have enough value to live on in the future? • How do you protect children’s shares from matrimonial claims?

  23. Case #5 – Asset protection • Lou (70) • Divorced – married Anna Nicole 2 years ago • 3 children • 2 grandchildren • Anna Nicole (32) • Divorced • 1 son

  24. Issue Family law issues Estate depletion Lou’s children disinherited Legal wrangling Family discord Possible solution Will planning Gifting Alter-ego trust Spousal trust Lou dies first?

  25. Protection of assets Control of capital Confidentiality Jurisdiction shopping Probate avoidance Alter Ego trust Lou and/or Anna Nicole Assets Lou and/or Anna Nicole Children

  26. Mackenzie is here to help • Client Service Group • Sales Reps • Private Client Group • Tax and Estate Planning • Mackenzie University

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