Creating a Successful Wealth Plan for Your Family Business

Altruvista Wealth

Successful businesses typically begin small, and this is especially true of family-owned businesses. Dilip Shanghvi founded Sun Pharmaceutical, the largest drug company in India, with just $160 borrowed from his father. Nike began as a distributing outfit called Blue Ribbon Sports that co-founder Phil Knight that was initially ran from the trunk of his car. Being an entrepreneur requires you not only to believe in yourself and your vision, but that you also hang on when success arrives and takes you for the ride of your life.

With that in mind, consider this: as a business grows and becomes more complex, so does the process of planning ahead for succession, asset protection, and other future challenges and expenses. And while 88 percent of family business owners believe their family will still control their business after five years, the fact is, 70 to 80 percent of family-owned business do not survive through the second generation. These business failures are often due to a lack of comprehensive wealth planning. Such planning must align with the business owner’s goals and values,…

How to Align Your Wealth-Planning Team

Altruvista Wealth

For the high-net-worth, traditional wealth planning often involves “many cooks in the kitchen.” Over the years, as business owners work to build their business, they are likely to accumulate multiple advisors and plans, each with a different strategy. Conventional wisdom might support the idea that having several plans in place is an effective way to prepare for any contingency. However, all too often, these plans and strategies can conflict with each other. While each advisor may have the best interests of the client at heart, disconnect between various plans, combined with ever-evolving client goals, can spoil the broth.

The Dangers of Traditional Wealth-Planning

The types of plans a high-net-worth individual might have in place at any given point in the timeline of their business include:

  • Asset protection plan
  • Estate plan
  • Business plan
  • Insurance plan
  • Retirement plan
  • Investment plan

It typically takes a “catalyst” (i.e. a major life event) to reveal a conflict between two or more plans. Common catalysts include:

  • The sale of your company
  • A substantial…

The Benefits of Different Types of Charitable Giving Vehicles

Altruvista Wealth

When charitable giving is an integral part of a total wealth plan, donors enjoy significant tax savings while supporting a worthy cause. In order to maximize the value of your charitable donations, as well as the value of any assets you wish to transfer to your heirs or other beneficiaries, you must first choose the correct vehicle for your charitable giving. While donor-advised funds tend to be the simplest and easiest ways to give, charitable trusts and private foundations can also be very effective. Let’s take a look at the benefits of all three types of charitable vehicles.

What is a Donor-Advised Fund?

A donor-advised fund is a simple vehicle allowing a donor to make a contribution of cash or appreciated securities to an account. The donor can continue to control how the funds are invested and make on-demand grants to one or more nonprofit organizations. Donors are typically able to make their contributions anonymous, and enjoy some flexibility in recommending grants to qualifying public charities. Contributions to a donor-advised fund are irrevocable.

The benefits of giving to a donor-advised fund include:

  • Donors…

Why Small Business Entrepreneurship Is Thriving in Houston

Altruvista Wealth

The “can-do spirit” Houstonians are known for can be traced back to 1836 to the city’s founders, Augustus Chapman Allen and John Kirby Allen. Where others saw only mosquito-filled swamps along the banks of Buffalo Bayou, the brothers saw possibilities, and convinced people to settle here. When describing Houston, Walter Ulrich, president and CEO of the Houston Technology Center has said, “Entrepreneurship is in our DNA.”

For those new to Houston, or doing business outside of Texas, the reasons why small business entrepreneurs continues to thrive here may not be apparent. Let’s take a look at what exactly is making this city such a great place to start a business and, most importantly, continue to be successful.

Houston’s Educated Workforce

Human capital is crucial to entrepreneurship. In the past decade, Houston added an average of 125,000 residents each year; last year, that number hit 156,000. With Houston's population now at over 2 million, population growth is certainly fueling the city's economy. But if a growing population does not include an educated and highly qualified workforce, businesses, especially small businesses,…

Why Asset Protection is Important for Business Owners

Altruvista Wealth

Asset protection is essential for enhancing the current and future value of a business. Business owners, including small-business owners, need to be prepared for unforeseen external attacks, such as a lawsuit, product liability, and internal events, including employee fraud, or actions by a business partner or family member. Having an asset protection plan in place can reduce the risk of loss of assets to creditors, protect the personal assets of individual owners and shareholders, and deter a claimant from attempting to initiate legal proceedings in the first place.

Before considering the options for asset-protection, it is important to understand the purpose, benefits, and tradeoffs of different types of assets.

Understanding Different Types of Assets

While business assets are often described as being either “safe” or “dangerous,” they actually fall into three separate types, each with different benefits and tradeoffs.

Protected assets are significantly less prone to risk and liability, since they are individually owned and kept separate from a business. Some examples of protected assets include:

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Investment advisory services offered through AltruVista LLC, an SEC registered advisor. Securities offered through ValMark Securities, Inc. Member FINRA, SIPC. 130 Springside Drive, Suite 300, Akron, Ohio 44333-2431. 1-800-765-5201. AltruVista LLC is a separate entity from ValMark Securities, Inc.