The Founder's Triumph
Each complex challenge calls for
its own custom solution.
The founder of a public company had a 20% ownership position worth approximately $50 million. His goal was to create a family legacy in which the stock would be diversified in a tax-efficient way. Our team took advantage of a window of time when the founder could establish a 10b5-1 sales program allowing him to diversify 10% of his holdings per year when the stock hit certain target levels. We also created a 10b5-1 program through which the client could give shares to a charitable remainder trust, creating a tax deduction to offset the capital gains from stock sales. Finally, we helped him establish a family foundation that would be the ultimate beneficiary of the trust.
Our team advised two founders of a public biotechnology company through a merger with a European public pharmaceutical company. The merger left our clients with a large number of American Depositary Receipts (ADR’s) that would have taken over a year to liquidate given the low volume. With our assistance, our client converted the ADR’s to the more liquid ordinary shares trading in Europe. Our team was able to complete the transaction in one day through our global network of traders.
For one family, our team played an integral role in transferring over $20 million in assets from parents to children and grandchildren by using a combination of grantor trusts, family limited partnerships, and an irrevocable life insurance trust.
The founder of a public company saw his stock sink to an all time low of $10 while he maintained a large concentrated position. Through the financial planning process, we discovered that he felt the stock was undervalued and needed very little of this concentrated position diversified in his estate to accomplish his own retirement goals. We advised him to set up a Grantor Retained Annuity Trust (GRAT) as a means to transfer any growth of the position over the next two years out of his estate without incurring any gift tax. The stock grew over 100% during the tenure of the GRAT allowing him to transfer over $10 million tax free to his children. In addition, we set up an Irrevocable Life Insurance Trust and funded it with a $10 million life insurance policy that ultimately pays the proceeds estate tax free to his children. These two recommendations provided over $20 million to his children, estate and gift tax free.