Case Study 4

The Challenge:

A closely-held personal services company in existence for over 20 years had experienced phenomenal growth over the past 5 years. The majority shareholder was being impacted by the highest marginal tax rates.

The Needs:

 

Develop an aggressive plan to provide for a more favorable tax position by establishing various methods for reducing the tax impact created by client’s high income position

Ensure a long-term planning technique is employed to enable an exit strategy that would reduce the tax effect of transitioning client from business

Protect client’s assets from potential third party claims

The Solution:

By assessing the client’s current, mid-term and long-term income needs, Lopez & Co was able to develop a means for ensuring income flows to client and to family in such a way that would reduce the current tax effect and allow client to maintain life-style.

All techniques provided had proven record of success if previously challenged by taxing authorities. Client employed various vehicles for transferring wealth to family members to leverage family members’ more favorable tax impact. The plan included ways for reducing current taxes, protection of assets and an exit strategy. The strategy resulted in significant savings in current tax liability.

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