Purpose
Roles
Goals
Controls
Project Management
   
Experience with Roles/Goals
Audits of Roles/Goals
Software for Roles/Goals
Article Explaining Roles, Goals, Workflows, Cash Flows, and Controls

Goals

Goals should be depicted with graphics, text and numbers so that planning team members can “triangulate” on what the client wants. Some clients and advisers prefer textual summaries of goals, others prefer graphical bar charts to show allocations of assets, and others prefer specific numerical tables showing year-by-year after-tax lifetime income and after-tax transfers to heirs. A Blueprint provides all of these summaries. Sample outputs are shown below.

GOALS AND OBJECTIVES
  1. Maintain our customary lifestyle. This should take about $ 240,000 annually after all taxes and gifts, inflated by 3% annually.
  2. Maintain adequate liquidity for emergencies and investment opportunities. We prefer to keep at least $ 1,000,000 in cash or marketable securities that can be readily accessed.
  3. Ideally, we would like our estate to be distributed as follows: 90% to heirs, 10% to charity, and 0% to taxes.
  4. Establish and find a charitable organization benefiting organizations that support our favorite causes. Designate assets to this foundation that would otherwise be lost estate tax.
  5. Eliminate unnecessary taxes on our estate, capital gains, and income.
  6. Protect our family from business risk and liability through asset protection and other risk management techniques.
  7. Summarize all of our affairs in a comprehensive plan format that can be easily updated in response to changing goals, asset vales, or tax laws.

Source of Cash
Income from assets 73,250 100,133 111,472 123,173 135,243 201,344 820,238 1,816,273
Tax exempt income 87,000 87,000 87,000 87,000 87,000 87,000 87,000 87,000
Distribution from CRT 80,000 80,800 81,608 82,424 83,248 87,495 96,649 106,760
Interest payment on GDOT note 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000
Earned and other income 155,000 169,850 164,440 169,373 174,454 - - -
Total sources of cash 545,250 577,583 594,520 611,970 629,945 525,838 1,153,887 2,160,033
Use of Cash:
Living expenses 240,000 247,200 245,616 262,254 270,122 313,146 420,841 565,576
Income tax 151,041 243,009 252,382 262,122 272,246 130,910 378,741 780,248
Total outlay 391,041 490,209 506,998 524,376 542,368 444,055 799,582 1,345,824
Surplus/Shortage $154,209 $87,374 $87,522 $87,593 $87,576 $81,783 $354,304 $814,210

To evaluate how well the plan fulfills the goals and quantified objectives above, it is necessary to analyze cash flows and wealth transfers with year-by-year summaries of numbers like those pictured below. No plan is complete without fully-integrated summaries of the sources and uses of cash flow. Moreover, plans should show how money not consumed during lifetime will accumulate for heirs.

YEAR Current 2009 2010 2013 2015 2020 2025
Benefits to Family  
Residual estate $1,389,953 $11,449,471 $3,899,553 $389,953 $389,953 $389,953 $389,953
Family trust 1,389,953 - 389,953 389,953 389,953 389,953 389,953
Value of IDIT 1,000,000 2,292,511 3,626,849 4,741,791 8,595,909 8,595,909 14,615,067
IDIT insurance proceeds 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Process from ILIT 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
Value of discount to heirs (IDIT) 3,000,000 3,509,199 3,947,371 4,269,477 5,194,471 5,194,471 6,319,868
Value of QPRTs - - - - - - 5,053,225
NPV of CLATs remainder interest 3,807,575 7,042,979 10,279,576 11,265,031 12,056,389 12,056,389 10,335,923
TOTAL assets to heirs $17,587,481 $25,120,293 $29,143,302 $28,056,204 $28,056,204 $33,622,674 $44,103,988
 

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