Background
First generation owners of a multigenerational family business looking for solutions to tax efficiently gift to third generation. The family has a keen interest in financial markets and is looking to expand their holdings beyond the public markets.
Callan Capital Solutions
- Provide detailed financial planning analysis to determine how much to transfer from First Generation’s estate.
- Collaborate with council to create an Irrevocable Trust transferring securities to the Third Generation and out of the First Generation’s estate.
- Convert existing tax deferred account to Roth IRAs.
- Fund Charitable Lead Trust (CLAT). The First Generation’s Donor Advised Fund (DAF), the Charitable Beneficiary, receives a fixed annuity each year from the CLAT. At the end of the CLAT’s term, the remainder of the trust is given to a named Charitable Beneficiary, the Third Generation.
- Introduce family to our suite of private investments delivered through “interval fund format” providing periodic liquidity provision and 1099 tax reporting.
Results
- First generation can confidently know how much to transfer to Third Generation.
- Roth IRAs can be used as a vehicle to transfer assets to Third Generation.
- CLAT produces a tax deduction, contribution to DAF and another vehicle to transfer asset to Third Generation.
- Tax deduction can be used to offset taxes from transfers.
Disclaimer:
Our case studies are intended for illustrative purposes only and meant to provide an example of Callan Capital’s process and methodology. They represent specific client’s experiences based on their specific facts and circumstances with some details excluded and or changed to protect the anonymity of the client. An individual’s experience may vary based on their unique circumstances. Similar results cannot be guaranteed in comparable situations. This case study should not be interpreted as a testimonial or endorsement of Callan Capital, and it is impossible to determine whether a specific client would have been satisfied with their results.