2017 essential tax and wealth planning guide

Globalization

“Globalization” may have only seemed an abstract and distant term yesterday. Today, with companies and businesses expanding their footprints, workforces, and talent, and investment capital becoming more mobile, globalization is truly unstoppable. The world we live in is increasingly borderless. It is no longer uncommon to see cross-nationality marriages, members of the same family living in different countries, or individuals living in one country but working in another. Understanding how to manage global tax obligations effectively has become more important for many individuals and families.

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Family office

The roots of the family office extend back to the late 19th century when many family offices were founded to manage the significant fortunes of successful tycoons. While the original family offices were in many cases established for those individuals who had created large manufacturing empires, today we observe many hedge fund and private equity founders, as well as technology and real estate entrepreneurs, forming family offices following a significant liquidity event.

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Post-election tax policy update

On November 8, the nation elected Donald Trump as its 45th president and in so doing handed him significant authority over federal tax law and regulations. The election of a new president typically ushers in the prospect of significant policy changes and along with it an awareness of the complexity involved as proposals are released, debated, modified, and, in some cases, enacted. From the standpoint of tax policy, however, it is unclear whether the tax code changes that Trump has envisioned will be enacted into law in their current form.

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Philanthropy

A person’s legacy may often be defined as the actions and contributions that are made during a lifetime. It is what you want to be remembered for after you pass, and it often gives future generations of your family the guiding principles that you encourage them to live by after you are gone. Planning for your legacy will be driven by many motivations: a hope that you will be remembered by family and friends, a desire to leave wealth to charities about which you are passionate, or a need to build a vehicle that will connect your family for generations to come.

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Tax implications of fund investing

The idea of pooling resources and spreading risk using investment funds (or funds) is not a new idea. It has been used for a long time and the complexities associated with funds continue to grow. Similar to traditional investments, such as a direct investment in a marketable security, to the economic cycles from the Great Depression, to the dot-com era, to the global financial crisis of 2008/2009, impact the success of these vehicles. However, many view access to investment through funds with qualified investment professionals as a valuable diversification tool in the management of their investment portfolio that helps to mitigate the impact of economic cycles.

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Post-mortem considerations

In an ideal world, every wealthy individual has prepared for an orderly estate distribution, either in favor of his or her family, charity, or both, by proactively transferring wealth during his or her lifetime and by leaving a thoughtful, well-constructed estate plan that has also taken taxes into consideration. But in the real world, many estate plans remain a work in progress for reasons ranging from evolving business complexity to family conflict, ill health, and indecision. Consequently, the need for post-mortem planning is inevitable.

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Tax policy and elections

With the general election campaign now in high gear, Republican presidential candidate Donald Trump and Democratic presidential candidate Hillary Clinton have begun to make their final case to the voters, with their respective tax plans playing an important, if not always prominent, role.

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Individual income tax planning

While opening the door to income tax planning is an important step to take throughout your life, many see the myriad of taxes and the complicated rules behind them as a barrier to planning. We encourage you to not let this be the case for you. Your overall tax burden undoubtedly consumes a large percentage of your income. We believe that investing the time to understand the character of income that your activities and investments produce and the different taxes associated with those activities will lead you down the path to realizing a more tax-efficient result.

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Wealth transfer planning

Planning to leave your legacy to your heirs (including charity) can be complex and difficult to face. There is no easy way to say it—anticipating your death is an uncomfortable topic. The issues that need to be confronted are far easier to avoid than to address. Yet effective wealth transfer planning may reduce the likelihood of family conflict, preserve wealth, reduce estate costs, and save taxes.

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Unique investments

Individuals, family offices, and asset managers are increasingly interested in diversification tools for investment portfolios. Examples of these may include art, airplanes, and yachts. Each of these unique investment classes presents specific tax issues, in addition to practical and personal considerations.

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