Benefit Restoration Strategies

Benefit Restoration Strategies

July 26, 2018

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Benefit Restoration Strategies: Creating Long-Term Value for Companies and their Executives

Fulcrum Partners provides the following case study of a family-owned company that had an outdated shareholder agreement. Further complicating the company’s problems were: (1.) the need to retain certain key employees, and (2.) a pattern of flat earning in recent years.

This case study provides straightforward insights into the problem and its answers. Review the report to see examples of the multiple opportunities created when applying the flexible solutions proposed by the team at Fulcrum Partners.

Overview of Benefit Restoration Problems and Strategies

Summary of: Business Succession Planning; Ownership Transition; and Key Employee Rewards, and how deferred compensation under Section 409A is often the solution.

Buy/Sell Planning

  • Entity stock redemption—fewer shares outstanding—no basis change
  • Cross purchase–owners insure each other and buy deceased shares—Basis increase
  • Hybrid

Split Dollar Life Insurance

  • Used often when the person or entity that needs the proceeds does not have the resources to pay for insurance, or as an executive benefit.
  • Endorsement method
  • Collateral assignment

Estate Tax Planning

  • With two generations (or more) involved, we are presented with challenges and opportunities. Challenges primarily are to avoid increasing the senior generations estate without giving up control. Opportunities are to bypass the traditional taxable transfers and thereby legally avoiding estate tax.

Long Term Incentive for Key Employees

  • We all know the challenges of retaining and rewarding key people in successful family businesses. How can we help our clients win the war for talent?

You can download the PDF Creating Long-Term Value for Companies & their Executives here.

Securities offered through Valmark Securities, Inc. Member FINRA,  SIPC, 130 Springside Drive, Akron, OH 44333-2431, Tel: 1-800-765-5201. Investment Advisory Services offered through Valmark Advisers, Inc., which is a SEC Registered Investment Advisor. Fulcrum Partners LLC is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.

 photo credit: Aidan Bartos

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.

Securities offered through Lion Street Financial, LLC (LSF) and Valmark Securities, Inc. (VSI), each a member of FINRA and SIPC. Investment advisory services offered through Lion Street Advisors, LLC (LSA) and Valmark Advisers, Inc. (VAI), each an SEC registered investment advisor. Please refer to your investment advisory agreement and the Form ADV disclosures provided to you for more information. VAI/VSI and LSF/LSA are non-affiliated entities and separate entities from OneDigital and Fulcrum Partners.

Unless otherwise noted, VAI/VSI, LSF/LSA are not affiliated, associated, authorized, endorsed by, or in any way officially connected with any other company, agency or government agency identified or referenced in this document.

Lion Street Advisors // Lion Street Financial

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