Traditional tax planning involves investing in something or claiming an expense, but the accompanying tax liability isn’t gone, just deferred.  The problem is most basic strategies like funding a qualified plan are actually cash flow killers, because one must invest $1 to save 50 cents in tax, but the $1 has been rerouted away from the capital intensive business or private investment strategy to lesser productive, and often riskier, investments.

What’s True Tax Mitigation?

True tax mitigation is the coordination, integration, and alignment (timing) of all tax rights to truly reduce taxation long-term, and even through to the next generation.  A Private Retirement Plan precisely allows for these advanced planning tactics as a “tax-smart” trust.

A “Tax-Smart” Trust is 3-dimensional, in that it can capitalize on the inherent tax benefits of the assets owned in the trust, but also claim tax exemption benefits awarded to trusts, and finally pass-through tax rights to other entities inter-related to the trust.

Capitalizing on all items of Tax:  Deductions, Deferrals, Exemptions & Credits

Once we fund the PRP and protect both current equity and future cash flows, we can then apply and leverage tax benefits and our low-cost trust financing resources.  When infused together, our PRP cash flows can increase the retirement trust funds, creating a new profit-center for our clients.

The goal is to solve for chronic tax exposure (bleeding) and convert future income into “Tax-Free” benefits, but trusts are one of the rare entity structures with rights that allow such opportunities.  Assets and businesses by themselves do not.  Find out why.

Incentive Tax Credits (ITCs) & Alternative Investments: as capital and earnings flow through one of our active trusts, like the Private Retirement Plan, or Legacy Trust, we can harvest some of the capital to source alternative investment options.  These often provide $ for $ tax credits that can offset and mitigate active, passive and cap gain income tax, while simultaneously helping to diversify the PRP retirement portfolio.

The net impact is a substantially improved tax-efficient plan that doesn’t disrupt a private business, but actually improves cash flow and creates substantial new tax wealth, all protected “in Trust”.