Wealth Preservation For The Affluent - The WPI …

1 Wealth Preservation For The Affluent A Practical Guide to Help High Income and/or High Net Worth Clients with: Asset Protection Income Tax Reduction Estate Planning Financial Planning Business Management (cost reduction). Wealth Preservation For The Affluent A Practical Guide to Help High Income and/or High Net Worth Clients with: Asset Protection Income Tax Reduction Estate Planning Financial Planning Business Management (cost reduction). By: Cindy Fields, MBA, CWPP . Roccy DeFrancesco, Jr., JD, CWPP . This publication is designed to provide accurate and authoritative information regarding the subject matter covered.

2 It is presented with the understanding that neither the publisher nor the authors are engaged in rendering legal, accounting, or other professional services through the issuance of this book. If you need individual advice on the topics covered in this book, please contact one of the authors for an individual consultation. Also, always seek counsel from an advisor before taking actions based on the material in this book. Laws and products change rapidly and you want to make sure when you implement a plan that it is based on the most up to date information possible.

3 Wealth Preservation For The Affluent By Cindy Fields, MBA, CWPP and Roccy DeFrancesco, JD, CWPP . Copyright 2007 by The Wealth Preservation Institute, LLC. All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without prior written permission from the publisher. The Wealth Preservation Institute, LLC. 8490 Danbury Blvd., #203. Naples, FL 34120. 269-408-1841.

4 269-408-1926 (fax). ISBN 0-9770770-1-2. Table of Contents _____. Wealth Preservation For The Affluent A Practical Guide to Help High Income and/or High Net Worth Clients With: Asset Protection Income Tax Reduction Estate Planning Financial Planning Business Management Table of Contents Page Forward and Help From the Authors .. viii Critical Capital Mass (CCM)*.. xii Chapter One Asset Protection 20. Section 1. Why Professionals Should Protect Their Assets? .. 21. Why Any Client With Wealth Needs to be Asset 25. -Home Owner's 25.

5 -Teenage 26. -Boats, Automobiles, Snow Mobiles, Planes (other toys) .. 27. -Rental Property .. 28. Section 2. Asset Protection Planning .. 31. Section 3. Fraudulent 34. Section 4. Existing Laws Help Protect Your 38. -Homestead 38. -Life Insurance and 41. i Table of Contents _____. Section 5. Retirement Plans (ERISA Governed Plans) .. 43. -Non-ERISA Plans and IRAs (the use of the MAXI-IRA).. 45. Section 6. Typical Asset Protection Solutions (that do not always work).. 47. -Types of 47. Section 7. Corporate 54. -Sole Proprietorships and Partnerships.

6 54. -Corporations (C and S) .. 56. -Types of Creditors (inside and outside creditors).. 59. -Director and Officer 60. -Trustee/Fiduciary Duties .. 61. -Limited Liability Companies (LLCs); Family Limited Liability Companies (FLLCs); and Family Limited Partnerships (FLPs) .. 63. -The Charging Order .. 64. -Where to Incorporate .. 70. Section 8. Trusts as Asset Protection 71. Section 9. Offshore Asset Protection 73. -Offshore Limited Liability Companies (LLCs).. 76. -Offshore Trusts .. 76. -Contempt of 79. -Closely Held Insurance Companies (CICs).

7 81. Section 10. Protecting the Marital Home/Personal Residence .. 83. Tenants by the Entireties (TE) .. 83. Qualified Personal Residence Trust (QPRT).. 85. LLCs and FLPs .. 87. Debt Shields (Equity Harvesting) .. 88. Section 11. Accounts Receivable (Asset Protection)*.. 92. Conclusion/Summary on Asset Protection .. 102. ii Table of Contents _____. Chapter Two Estate Planning 105. Section 1. 106. Section 2. Durable Powers of Attorney .. 108. Section 3. A&B, Marital, or Living Trusts .. 112. Section 4. Life Insurance (different types and the ones that are right for you).

8 116. -Term Life Insurance .. 116. -Return of Premium Term Life Insurance* .. 117. -Whole Life Insurance .. 120. -Variable Life Insurance .. 122. -Universal Life .. 123. -The New Equity Indexed Life Insurance Policy (EILIP).. 125. Section 5. Irrevocable Life Insurance Trusts (ILIT).. 127. Section 6. Leveraged Life .. 130. Section 7. Life 133. Section 8. Reverse 137. Section 9. Disability Insurance (What You Need to Know Before You Buy) .. 140. How to Purchase More than $15,000 a Month in Coverage* .. 144. Section 10.

9 Divorce Protection .. 146. Section 11. Generation Skipping Tax .. 148. Section 12. Charitable 150. iii Table of Contents _____. Section 13. Long Term Care Insurance (LTCI) .. 150. Section 14. IRA Protection (controlling your IRA from the grave) .. 152. Section 15. Family Limited Liability Companies to Lower Estate Taxes .. 154. Freeze Partnerships (receive a 90% discount).. 160. Section 16. Other Estate Planning Tools .. 167. -Grantor Retained Annuity Trust (GRAT) .. 167. -Defective Grantor Trust (DGT).. 167. -Qualified Personal Residence Trusts (QPRT).

10 167. Section 17. Capital Gains 168. Section 18. Mitigating the 70-80% Tax Trap .. 168. Chapter Three Income Tax Reduction Section 1. Introduction and Traditional Solutions .. 176. -401(k) Plan .. 176. -Profit Sharing 176. -Money Purchase Plan .. 177. -New Comparability Plan .. 177. -Defined Benefit Plan .. 177. -IRA .. 178. -Simplified Employee Pension (SEP-IRA).. 178. -Savings Incentive Match Plan for Employees IRA (SIMPLE-IRA).. 178. -Solo 401(k) .. 178. -Next Level Profit Sharing 179. - DASH 401(k) .. 181. Section 2.