High Net Worth Case Study


Each month we present a real case (names and details changed) in a case study format.

In this month's high net worth case study we have the following case facts:

John is 48 and recently divorced with two young children. He currently spends about $200,000 a year after taxes. John owns and operates a trucking company which creates significant taxable income each year in excess of $2M. This income is somewhat deceiving because it’s not really free cash to John. Instead, he uses the profits to plow back into his business so that he can purchase and transport more product. In this planning scenario, it is essential that John have the ability to push all of his company profits each month back into the business to build and grow value for future sale.

The current value of the business is estimated to be about $10M and is owned inside an LLC.

John also has other cash/securities in a separate LLC worth approx. $10M. J

John has two big concerns, the first of which being his key employee.

His key employee maintains the connection with most of John’s buyers and suppliers and would be essential in preparing the business for future sale.

John’s second concern is his two daughters.

He wants them to be provided for now and into the future, but he does not want to leave them a large outright inheritance.

His wish is for them to have the opportunities that their significant inheritances will allow, while at the same time not receiving everything in an uncontrolled manner.

You can also view our recorded case study webinar here: http://www.slideshare.net/inknowvision.

InKnowVision is a leader in designing plans that work for high net worth clients in the areas of taxation, estate planning and business planning. Advisors rely on InKnowVision to solve complex problems for their high net worth clients and families.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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