Please Note: The following case studies reflect the actual experiences of individual clients serviced by Steele Larson Advisors wealth management. The case studies are provided for EDUCATIONAL USE only. Advice provided—and any resulting savings—is specific to the facts and circumstances surrounding each client. No promises or savings guarantees should be inferred from these provided case studies. Professional legal, tax and financial advice should be obtained prior to any financial activity or transaction.
Case Study #1
A Dentist (age 34) located in Phoenix, AZ had worked with several other financial advisors before being introduced to Steele Larson Advisors Wealth Management (SLA). He was frustrated by the piecemeal advice he received in the past from various advisor and was looking for a more comprehensive solution. After being introduced by a friend who was a client of SLA, he was intrigued with their complete concierge-like service across the disciplines of tax, accounting, law, insurance, investments, business efficiency and real estate.
SLA accomplished the following for the Dentist, his wife and family:
SLA set up a custom cash flow management system (Cash Concierge) to track spending, pay bills and shorten the time needed to manage his finances from 1 hour per month to 7-8 minutes per month. They also set up a document retention system so he would know what to keep and how long to keep it—and know what to save for taxes.
SLA also set up a coordinated financial plan for retirement, children's weddings and educational expenses. The investment plan allowed them to know exactly how much to save based upon the number of years to the goal and established a targeted yearly investment return. The planning showed them how to accomplish their financial goals with the least amount of investment risk.
SLA identified ways to save money on existing life insurance plans. By reallocating insurance premiums, the Dr. and his wife obtained an additional $1 million of protection for 2/3rds of the cost.
By reviewing their existing health coverage—SLA saved the client more than $1,000 per month in health insurance premiums on their group health plan.
SLA also helped their client get an additional $1 million in liability coverage by simply restructuring their Home, Auto and Property insurance-at no additional cost to them.
SLA reviewed the client's legal entities and showed them how to save an average of $8,000 every year in employment and income taxes.
The Dr. didn't have a buy/sell agreement with his partner—so SLA put that in place which guaranteed the Dr's wife an additional $450,000 in a secure buyout if her husband passed away unexpectedly. The value of the Dr.'s dental practice would evaporate within weeks without a dentist to service the existing patients.
SLA's client was negotiating the purchase of a building through a partnership of other dentists-SLA helped him save $50,000 off the purchase price by negotiating with the partnership on the depreciation and lack of control within the partnership.
The clients knew they needed an estate plan—but didn't know where to begin. SLA helped the client protect their personal and business assets from predatory litigation as they coordinated their estate plan to avoid probate. SLA saved the client tens of thousands of dollars in fees and months of hassle in legal and estate issues.
Because of SLA, the clients have the needed financial information at their fingertips to make everyday financial decisions—and expert financial advice when they need to make large financial transactions.
The Dr. is fond of saying—"Why couldn't I have met you guys 10 years ago…I would be so much farther ahead than I am now."
Case Study #2
A plastic surgeon (46) solicited the help of Steele Larson Advisors for complex tax, estate and asset protection issues. Although he is an excellent surgeon-with no pending patient claims-he was concerned about safeguarding his business and personal assets from litigation. He was also interested in pro-active tax planning and avoiding future probate and estate hassles for his family. After a thorough review of his financial situation and carefully identifying his long-term objectives-SLA's team of financial planning, legal, tax and real estate professionals put in place the following initiatives for the Doctor and his family:
- SLA created a legal structure that incorporated estate planning and asset protection techniques. The basic structure included a revocable living trust for probate avoidance, an irrevocable life insurance trust to hold insurance policies to avoid future estate tax (saving $2 million dollars in future estate tax-2008 tax tables) and other charging order protected entities to isolate business and investment risks.
- SLA reviewed his investment methodology and discovered that the Doctor was taking too much risk in his investments to achieve his desired financial goals. The Doctor was looking at retiring within 5-7 years and needed to scale back his risk level in anticipation of that event.
- SLA automated all of the personal and business bill payment and accounting activities. Prior to working with SLA, he and his wife spent approx. 4-5 hours per month in financial tracking activities (even with a bookkeeper on staff).
- SLA analyzed his business, investment and personal tax matters-and identified a misreported depreciation issue on the previous year tax return. He received a $17,000 tax refund after amending the return. He now receives automatic E-Reminders to do year end-tax planning in October.
- SLA established a qualified defined benefit plan which allowed the doctor and his wife to defer more than $100K for retirement each year.
- SLA's realty professionals negotiated and completed the purchase of a $1MM real estate transaction.
- The doctor began to prepare for the eventual sale of his practice. Several different methods and sale transactions were discussed and how to best prepare for the event. He settled on a time-structured business transition. Over the next several months, the physician identified a likely candidate and began an expense sharing agreement with the new associate. After the evaluation period is completed, the buy-sell arrangement will be formalized and buy out terms discussed and finalized. In the interim, the business has benefited from the reduced overhead and the scheduling flexibility of another doctor on staff.
The greatest benefit has been the peace of mind for the doctor and his family. He is able to focus on patient care and clinical issues without the worrisome financial details.
Case Study #3
A successful general contractor was referred to SLA by an existing client. The contractor did multi-million dollar commercial and government jobs throughout the southwestern U.S. Although he had a reputation for quality craftsmanship and safety, he was worried about the rising industry trend of construction defects and general liability claims. He was even considering closing down his thriving business-rather than run the risk of a major litigation event.
Furthermore, although he took meticulous care of his business affairs, his personal financial affairs were somewhat neglected and documentation was scattered and inconsistent. The mandate from the client was to "get his personal finances under control" and protect his assets and reduce insurance costs. SLA established a personal finance system which aggregated all of the client's financial data in one place for the client and allowed his SLA Wealth advisor to review it on a periodic basis. A document filing and retention system was instituted to retain the necessary legal, tax and financial paperwork. Retirement and investment projections were completed to identify the necessary annual investment rate and savings targets required to achieve his financial goals.
Estate planning and asset protection systems were put in place to maximize estate tax exemptions, provide for the contractor's minor children and protect the family's accumulated nest egg. Although no legal protection structure is "bulletproof"-the contractor felt comfortable with the planning and continued to operate his company after the legal structures were implemented.
To reduce insurance costs the contractor decided to form and participate in a captive insurance company. The contractor raised his deductible to reduce insurance costs, obtained additional insurance policies and paid the first portion of premium dollars directly to the captive insurance company. The transaction provided a business tax deductible expense and lowered the overall insurance costs while providing similar levels of liability protection. The insurance planning saved the company $420,000 in tax and insurance costs during the first year of implementation.