18400 Von Karman Avenue
Suite 400
Irvine, CA 92612
ph: 949-660-0661
fax: 949-756-2624
Articles
A Tax-Smart Way To Transfer Ownership
Employee Stock Ownership Plans
Ready to retire and looking for a way to transfer ownership in your business? Concerned that too much of your wealth is tied to one asset? If you are the owner of a closely held business and are worried about potentially hefty tax bills when you sell some or all of your shares, you should consider a tax-smart alternative - an employee stock ownership plan (ESOP). An ESOP can allow you to diversify part of your stake in your company while simultaneously helping to secure its future profitability.
An Intriguing Exit Strategy for Today's Business Owner
One of the more difficult challenges facing a business owner is the formulation of a viable and economically beneficial exit strategy at retirement. Typically, the main goals of such an exit strategy are 1) to identify a qualified buyer, and 2) to receive fair compensation for the business, which would, in turn, translate into a desirable retirement income.
Buy-Sell Agreement Keeps Your Business Afloat
Alex and Brad, both in their mid-forties, had just celebrated the tenth anniversary of Consulting, Inc., their market consulting business. The next morning, before going to work, Brad suffered a heart attack while jogging and died later that day. Alex suddenly lost his long-time business associate. What's more, after the estate was settled, he found himself with a new co-owner -- Brad's wife.
Buy-Sell Agreements -- Taking Care of the Eight D's
Most all closely held businesses, especially multi-owner corporations and partnerships need to have a buy-sell agreement in place. Individually owned businesses can also profit from the use of a buy-sell agreement. This is essential for smooth transition of ownership upon the occurrence of several events, namely the "Eight D's." We'll discuss each one individually in the corporate context, however, most would also apply to partnerships. In a single-owner business, the buyer could be key employee(s), a competitor, a supplier, or even a customer.
Considerations on Selling Your Business
Whatever your motivation for selling your business, you'll only get one chance to maximize the return on your years of hard work. Do it the right way and you could get the price you want and reduce the impact of capital gains and estate taxes. Do it the wrong way and you might end up with a hefty capital gains tax bill and estate planning headaches.
Considering Your Options
To attract and keep top employees, more companies are offering them employee stock options. If you receive employee stock options as part of your compensation package, careful planning can help you make the most of them.
Involving the Family Can Be Good Business
As a family business grows, the owner must ultimately consider how the entity will prosper once he or she takes leave of the helm. With proper preparation, the change-in-command should go smoothly.
Protecting Your Business And Family Wealth: Lifetime Strategies
Procrastination. That's what many successful business owners do, instead of effectively planning for the future. Now that they have accumulated sizable wealth, they become immobilized by seemingly conflicting concerns: how to retain control of their assets as they approach retirement age, retain enough income to live on after retirement, minimize their children's estate taxes, and help provide for their families' security after they die. Mixed into the equation may be a desire to eventually pass on the business to the next generation.
Rewarding and Retaining Key Employees
As your business grows and you add staff, choosing the right benefits and retirement plans becomes more complicated. You have many options to choose from. That variety, however, gives you a better chance of picking a plan that more precisely meets your needs -- such as rewarding key employees, beefing up their savings, and providing incentives for them to stay with your company.
Section 105 Plans Can Help You Manage Health Care Costs
Section 105 of the Internal Revenue Code may very well be one of the "best-kept secrets" for managing your company's health care costs. The medical reimbursement plans allowed under Section 105 provide sole proprietors, partnerships, C corporations, and limited liability companies (LLCs) a full tax deduction for employee medical benefits. This includes premiums paid to fund employee/dependent health insurance and other non-insured medical expenses (e.g., dental and vision care). As a small business owner, finding the right combination of employee benefits and tax savings is important to your company's cost management strategy.
Taking Care of Business
For many owners of closely held businesses, their business is not only the most significant asset they own, but also, essentially, their life. Deciding how to pass ownership interests on at retirement or death can be as much an emotional issue as a financial-planning concern.
Donating Stock to Charity
If you are thinking about making a donation to a charity, you might want to consider making a gift of appreciated stock or mutual fund shares rather than a cash donation. A gift of appreciated property often provides increased tax benefits, along with the satisfaction of contributing to a cause you believe can make a difference.
Philanthropic Sensibilities
Like most wealthy individuals, you'd probably like to pass as much of your estate as possible to your heirs. At the same time, you may have one, or many, charitable interests to which you'd like to donate money. To find the balance, considering a structured philanthropic giving strategy for your estate is a must.
The Gift of Giving
The charitable remainder trust (CRT) is a tax-advantaged estate planning tool that allows you to plan for a future charitable gift while providing an income, lowering your taxes and reducing your estate.
Financial Planning: A Natural Career Choice For Small Business Owners
Much has been made of the fact that the first of the 76 million baby boomers turned 60 years old in 2006. And with good reason: over the next 50 years, an unprecedented amount of money - at least $41 trillion1 - will change hands, generally being handed down to the next generation as the boomers age.
A Good Plan Just Got Better
The cost of a college education can be staggering. Total expenses at private universities currently average more than $33,000 a year1. The annual cost for state colleges averages about $16,3001. For many families, qualified tuition programs - also called Section 529 education savings plans - are an attractive way to help meet future education expenses.
Education Planning For Today
Paying for a child's college education is an expensive proposition - but not an impossible one. With the right strategies, you can go a long way to meeting this challenge whether your child is still in preschool or already in high school.
Can a Revocable Living Trust Help You?
In recent years, revocable living trusts have been touted as a simple, cheap supplement to wills. But are they? It's called a living trust because you set it up and put some or all of your assets into it during your lifetime. Typically, you serve as trustee which gives you control of the assets until death. After your death, they are distributed according to the terms of the trust document and don't go through probate, which can be costly and time-consuming.
Choosing The Right Trustee
Trusts can be used to accomplish any number of estate planning goals. But the success of a trust strategy often depends on how well the trust is managed - and that depends on the abilities of the person (or institution) named as trustee.
Shielding Your Estate From the Government
What do Elvis Presley and you have in common? Absolutely nothing, you're probably thinking. But if your estate plan isn't in order, you may have the same problem he had before he died in 1977 at the age of 42. At his death, his estate was valued at over $10 million, but federal estate taxes and other estate settlement costs of more than $7 million reduced its net value to under $3 million1. With a more carefully prepared estate plan, Elvis might have been able to leave more to his daughter and other family members, and less to the federal government.
Smart Planning Can Minimize Estate Taxes
For today's business owner, death can mark the beginning of a significant tax problem. The investment and sweat that went into building your business year after year could add up to a whopping federal estate tax bill for your heirs -- up to 47% of the combined value of your company and other assets.
Taking Aim at a Moving Target
Do you own a growing business? A high-value home in a strong real estate market? A substantial investment portfolio? The appreciation of assets like these is a good thing. But owning appreciating assets may also increase your exposure to future estate taxes, which is not a good thing.
Yours Mine and Ours: Estate Planning for the Blended Family
In a "traditional" estate plan, each spouse provides for his or her assets (or most of the assets) to pass to the surviving spouse, with the understanding that those assets will go to their children at the surviving spouse's death. This planning approach may work well when the spouses have only been married once - to each other - and the only children involved are the ones they have together.
An Introduction to Life Settlements: A New Look at Life Insurance
A Life Settlement enables older individuals, businesses, and other organizations to sell life insurance policies they currently own - but no longer want or need - for an amount greater than the cash surrender value.
Do Give Life Insurance a Second Thought
Say the words "life insurance" to some people, and you're likely to get a less than enthusiastic response. But, more and more frequently, people are discovering that life insurance can be a helpful financial planning tool. Life insurance offers a way for you to help provide for your family, protect your business, and make charitable gifts without reducing your estate.
Do You Need Disability Income Insurance?
No one likes to think about becoming disabled. But it happens far more often than you may think. According to the Social Security Administration, a 30-year-old worker has a three-in-ten chance of becoming disabled before reaching retirement age 1. The Department of Health and Human Services estimates over 50 million people have some type of long-lasting health condition or disability.2
Long Term Care Insurance: Is It Right for You?
The average cost for a private room in a U.S. nursing home now exceeds $200 a day and is at $74,000 annually - up 5.7% from the amount last year1. At this rate, the cost could quickly deplete almost anyone's assets. One way to protect yourself and your assets is to purchase a long-term care insurance policy - just in case.
Are Your Assets Really Diversified?
You've heard the old investment adage, "Don't put all your eggs in one basket." It's good advice. A diversified portfolio should be at the core of any well-planned investment strategy. While a worthy goal at any age, it's especially desirable as your net worth grows over the years.
Do Give Annuities Another Look
With the ongoing uncertainty of the stock market, people are continuing to investigate other financial vehicles, and annuities are just one of those options. Everyone has heard about annuities, but what actually is an annuity and why may they be a good retirement planning tool for you?
Dollar Cost Averaging: The Smart Investor's Edge
Wouldn't it be great to know in advance when to buy or sell an investment? You could purchase an investment at its lowest price just before a surge in value. Or, you could sell an investment just as it reaches its peak before dropping. If you knew the right time and acted on it, investing would be easy. Unfortunately, there's no crystal ball that shows what the future holds for the financial markets. That's why many investors take advantage of dollar cost averaging.
Escape The Highly Appreciated Stock Shock
Years ago, when you found the right one, the only one for you, you promised to have and to hold. And, because you were faithful, you can now watch that $4-per-share stock trade at $124 in today's market. Unfortunately, the dividend payout, at about 3%, is inadequate for your income needs. You think about selling it all or diversifying, potentially doubling your dividend income, but you're reluctant because of the significant capital gains tax you would have to pay.
Six Questions to Ask Before Selling an Investment
Think back to when you first started setting money aside in a long-term investment plan. Depending on when you began investing, you may have already seen your investments ride the ups and downs of shifting economic trends. Or maybe investing is a new experience and you're not quite sure what to make of your investment's performance amid economic and market shifts.
Tax Efficient Investing: A Wise Choice
Taxes can take a chunk out of your investment returns; yet, many investors don't give much thought to taxes when they make investment decisions. While investment decisions shouldn't be based entirely on tax considerations, tax-efficient investing may make a significant difference in your net gain. Employing some of the following strategies could help you retain more of your potential investment earnings and lessen your tax obligation.
The Folly Of Market Timing
These days, some people may have a "sure-fire" way to time the stock market. Just check out the Internet. You can find screens advertising market timing services. A trip to your local library will yield an equal abundance of market timing theories in books, magazines, and other periodicals. And some of these theories may or may not work.
Why Consider Variable Annuities?
You may already participate in an employer-sponsored retirement plan and/or contribute to an Individual Retirement Account (IRA) or Roth IRA. If so, congratulations! You're one step ahead of many Americans when it comes to saving for retirement. But chances are you will still need additional retirement savings to secure your financial future and reach your retirement goals.
Across the Miles - Reach Out and Help
Today, life in America commonly finds families scattered across the country. With family members often separated by hundreds or thousands of miles, it may be extremely difficult to manage the care of an older parent or relative living far away. To help facilitate the best care possible for your loved one, and to help alleviate the stress long-distance caretaking could cause, you may want to take steps now to be prepared, should the need arise.
Careful Planning May Help Non-citizens Avoid Tax Traps
One of the most important estate tax planning tools available to married couples is the unlimited marital deduction. The deduction allows one spouse to pass an unlimited amount of property to the other spouse without incurring any federal estate or gift taxes.
Keeping a Reality Check on Personal Debt
Most everyone has, at some point in their lives, accumulated personal debt - some more than others. Whether debt is a cause for concern depends upon a number of factors, including how the economy is faring, your particular earning and economic prospects for the near and long term, and the type of debt you incur. By being conscious of your spending habits, including credit card use and large purchase habits, you can better understand ways to control debt - before it starts to control you.
Buy the Core and Then Explore
A solid foundation supports the floors and walls of the building above. Without it, the building may not be strong enough to withstand bad weather and years of use.
Demystifying IRA Distributions
For most of us, the big worry about retirement planning is building a sufficient nest egg. But according to the Employee Benefit Research Institute, millions of Americans have Individual Retirement Accounts (IRAs) totaling $3.67 trillion, an historic high in 2005.(1). It may be that the trickier part of an IRA isn't putting money into it-but taking money out.
Don't Wait To Plan Your Retirement
Most of us find it easier to earn and spend money than to save it. Planning and saving for retirement too often takes a back seat to other priorities. Why is procrastination the rule, rather than the exception when it comes to retirement planning?
Fine-Tuning Your Entire Portfolio
When it come to investing, are you a micromanager? Or a hands-off type? Micromanagers obsess over their portfolios. They switch in and out of investments with every tic and tremor on Wall Street or in the economy. Hands-off types are the opposite. While they might polish and buff their cars every weekend, they pay little attention to whether their portfolios are on track to help achieve their investment goals.
Getting More Out of Your Retirement Assets
For years, you've been investing in an IRA or employer-sponsored retirement plan, and, thanks to the benefits of tax-deferred growth potential, you now have a considerable nest egg - enough to enjoy a comfortable retirement and pass a tidy sum on to children and grandchildren. Or so you think. Unfortunately, after taxes, only a small percentage of your retirement savings may be left.
Multi-generational IRAs - A Strategy for Retirement Assets
Who should benefit from your retirement assets - you and your family or the federal tax coffers? The answer is easy: you and your family, of course. Achieving that goal is more difficult. These days, very few people stay at one job for their entire careers. So, by retirement, you and your spouse may have assets in four or five - or even more - employer-sponsored retirement plans and individual retirement accounts (IRAs). How you utilize those accounts at retirement can make a big difference in the amount of assets available to pass on to children or other heirs.
Plan Today, for Retirement Tomorrow
Planning and saving for retirement, like cleaning out the attic, may be something you figure you'll get to later. But when "later" arrives at retirement age, you may not have the financial resources to enjoy your golden years.
Retirement Planning, Scared or Prepared
If you are planning on winning the lottery, don't bother reading this. For the rest of you, however, it is never too early to begin planning for a comfortable retirement. Given the new economic realities of retirement planning, building up a nest egg is a top priority. No longer can you rely on the government or employer-provided pensions to carry you through your retirement years. The long-term viability of the Social Security system is uncertain, given the crush of aging baby boomers who will begin retiring after 2010.
1031 Exchanges, A Tax-Deferred Real-Estate Strategy
This article is for educational purposes. 1031 exchanges have restrictions and limitations.
When the time comes to sell your real estate, some owners of highly appreciated real estate could be staring at a substantial capital-gains tax bill. A section of the Tax Code may help you convert your appreciated property into an income stream-while deferring up to 100% of the capital-gains tax that would otherwise be due on the sale.
