| DATE |
LOCATION |
| August 11/12 |
Watkins Glen |
August 25-26 |
Sonoma, California |
| September 8/9 |
Watkins Glen |
Happy
New Year!
One
in 5 family business participants has not addressed any
estate conservation issues beyond writing a will. Business
continuation is difficult enough under normal circumstances,
but if it has to take place following the unexpected death
of a key person or owner, the complications can increase
exponentially.
Company-owned
life insurance is one way to help protect a business from
financial problems caused by the unexpected death of a
key employee, partner, or co-owner. If the covered individual
dies, the proceeds from this type of insurance can help
in several ways. Here are some examples.
Fund
a buy- sell agreement.
A buy- sell agreement typically
specifies in advance what will happen if an owner or key
person leaves the company, either through a personal decision
or because of death or disability. The death benefit from
a companyowned life insurance policy can be used to purchase
the decedent’s interest in
the company from his or her heirs.
Keep the business going.
If a decision is made to continue the business, there may
be a period when operations cease while the survivors develop
a plan to move forward. The death benefit can be used to
help replace lost revenue or to pay costs associated with
keeping the doors open, including rent, utilizes, lease
payments, and payroll. It may also help the surviving owners
avoid borrowing money or selling assets.
Replace
Lost Income.
If a business owner has family members who
depend on the income from a business, which simply could
not continue If he or she were suddently gone, the proceeds
from company owned life insurance could help replace the
lost income and help protect the family’s
quality of life while they adjust and move on. The appropriate
coverage amount will depend on several factors. It could
be a multiple of the buisness owner’s annual salary
or the company’s operating budet. Don’t forget
to factor in such details as the cost of hiring and training
a successor, where applicable, and debts that the family
may have to repay. A thorough examination of a buisness and
the related personnel should be conducted before the exact
amount of coverage is determined. Remember that the cost
and availability of life insurance depend on factors such
as age, health, and the type and amount of insurance purchased.
Before implemeting a strategy involving life insurance, it
would be prudent to make sure that the individual is insurable.
The loss to an owner can be devasting to a small business.
A company owned life insurance policy may help reduce the
finanical consequences if such a loss were to occur.
John Gorsline and John Fitch at the Saratoga
Auto Museum
Happy New Year!
We
are looking forward to 2007 with it’s promise of
new opportunities, new adventures,
and new races in the coming year!
We
hope you enjoy the photos
in this edition of - Glorious
Goodwood, the Nascar Nextel Cup awards
celebration in NYC,, and the Autosport Banquet in
London – what great events!
We
are also introducing (or re-introducing to some of you)
to another valued colleague, Bert
Livingston. Bert is a joy to know and
work with – one of our resolutions in
2007 is to introduce Bert to as many
of our valued friends as possible so
you can share in Bert’s compassion
and expertise!
A
brief description of how a ‘donor
advised fund’ is included in this edition
of our newsletter. We’d like to share
how this worked for us; We set up a “DAR’ to
benefit a local cancer hospital
and recommended that it purchase a ‘race-car butterfly. ‘Butterflies’ were
donated and constructed based on
the donor’s passions – of course, ours
being racing. We can’t wait to show
you the pictures of my ‘Mini-Cooper
racing butterfly!. The assets for this
donation were transferred into the
DAF - with no capital gains, and a
maximum tax deduction received!
We’d love to help you set up one too – as
us how!
All the best for a healthy & the happiest
New Year in 2007!
newsletter >>>
Giving
Through Donor-Advised
Fund
A Donor-Advised Fund (DAF) offers the opportunity
to
create an easy-to-establish, low cost, flexible vehicle for
charitable giving as an alternative to direct giving or creating
a
private foundation. Donors enjoy administrative convenience,
cost savings and tax advantages by conducting their
grantmaking through a Donor-Advised Fund.
Community foundations pioneered
the development of Donor Advised Funds and a number of commercial
sponsors,
educational institutions, and independent charities now offer
this service.
Because the Fund is housed
in a public charity, donors receive the maximum tax deduction
available, while avoiding
excise taxes and other restrictions imposed on private
foundations. Further, donors do not incur the cost of
establishing and administering a private foundation,
including staffing and legal fees. Since the maximum tax
deduction is received by the donor at the time of the gift,
the
foundation administering the fund gains full control over
the
contribution, granting the donor advisory status. As such,
they
are not legally bound to the donor, but make grants to other
public charities upon the donor's recommendation. Most
foundations that offer donor advised funds will only make
grants from these funds to other public charities, and will
usually perform due diligence to verify the grantee's tax-exempt
status.
Current tax law allows
the donor of appreciated securities or other assets to get
a tax eduction for the market value of
the donation and avoid capital gains taxes. This double tax
advantage can make donating appreciated assets to a charitable
organization more attractive than selling the assets and
donating cash. By donating appreciated assets to a donor
advised fund and then advising the fund to make donations
to
several charities, one can reap these tax advantages without
the
hassle and paperwork of transferring non-cash assets to several
organizations. While private foundations in the United States
are heavily regulated by the Internal Revenue Service,
including rules on oversight and minimum annual payouts,
donor advised funds housed in public charities are not subject
to the same tax restrictions. fund.
After
the sale of your Business…
more
info >>>
HPI
Recipient
more
info >>>
