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Underlying Concepts We Employ In Our Planning



David Southwell

Understanding the fundamental concepts through which a strategist approaches his or her work is vital to your selection of a strategist and to consideration of proposed strategies. We have developed these concepts through our many years of working with clients and planning professionals in different disciplines.

1. Real wealth accumulation for a family begins with a visionary generation and will seldom come through your professional operations. Your professional activities and relationships will provide initial funding, personal contacts and investment opportunities. What you do with these will ultimately determine your wealth and your personal freedom to enjoy your wealth.

Real wealth accumulation for a family is a generational concept. Too often it is accumulated by one generation and lost by the next. Careful planning and structuring will prevent family wealth from being wasted by an unwise generation, unforeseen events or adverse governmental action. Through wise planning and careful structuring of trusts and the investment and business interests of those trusts, and qualified retirement accounts and creative use of philanthropy, a visionary generation may accumulate wealth in such a manner that what was earned and accumulated so dearly will provide a growing and protected resource for many generations to follow.

2. What you do not own cannot be taken from you. Every professional, especially those who are highly visible or controversial or who are involved in politics or healthcare, are significant targets for financial predators. The term “financial predators” encompasses more than legal claimants and their lawyers. The term may also include the full range of advisors, family and over-zealous governmental authorities.

3. Own nothing, control everything. Strategically placing assets into various legal structures does not necessarily mean a loss of overall control; neither does it mean that the assets cease to be a source of financial and social benefit. Carefully drawn structures are able to protect your assets from predators without requiring that you no longer have influence over the management of your assets. Although your control will be less direct and less visible than it is today, it should not be less effective.

4. Careful tax planning is essential to wealth accumulation. A well-planned business structure not only provides quality asset protection, but also arranges the flow of income, and the timing of income recognition so as to minimize taxes. Careful tax planning also involves the wise use of tax-exempt and tax-deferred structures and various insurance structures to reduce taxes and build wealth. Tax increases that will significantly impact investment (passive) income is already “on the books” and is “hidden” in significant recent Federal legislation. We believe that taxes will continue to increase and will increase significantly before reason comes back into vogue.

As governmental units become more needful of new revenues and more aggressive, the timing of income recognition, the classification of that income and the venue in which the income is recognized will be increasingly important.

5. What you earn today must provide for today and tomorrow. Your family and your future are your number one creditors and your most important financial obligation is to provide for both – family and future generations.

6. You must understand your planning and be able to supervise its maintenance. No plan is better than the maintenance it receives. You must understand the structure that is created for you, understand how the structure functions, and make certain that it is maintained. Since you are the only “permanent” member of your financial team, it is important that you are sufficiently engaged in your program so that you may ensure that proper maintenance is done to keep your structures effective.

7. The cost of strategic planning is usually paid for by the savings generated. Building a strategic plan that reduces your exposure to predatory claimants and that reduces your current and future tax burden will require us working together. It is a highly technical and expensive process. The savings generated will generally far exceed our fees in the first year. This makes future savings and the peace of mind that comes from knowing that your wealth is protected a generous bonus for making a wise decision.

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David Southwell

David Southwell has spent his business career providing tax, wealth transfer, asset protection planning, and business and financial advisory services for domestic and international clients. David is a Member of the American Institute of Certified Public Accountants, the Florida Institute of Certified Public Accountants and is a Member of The Society of Trust and Estate Practitioners.

David has provided advisory services to clients engaged in international trading of food, fertilizer, metals and petroleum commodities and infrastructure programs with third world nations, including international marketing, buy/sell contracts, contracts dealing with international relationships and financial programs, letters of credit, banking relationships, business development, and has provided treasury and custodial services to clients for whom Trust Advisors Corporation serves as Paymaster/Custodian.