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What, When, Where & How!

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1What, When, Where & How! Empty What, When, Where & How! on Thu May 06, 2010 8:39 am


(This post is a continual work in progress because the IQD Wealth Management System (IWMS) is continually evolving, please stay tuned)

The following are Questions with their respective answers, not in any particular order. Most of the questions that have been raised previously have led to posts being created and where applicable, a link is given to the posts? Forum Members are invited to submit their additions to the list by Posting A Reply.

Q. What is the IQD Wealth Management System (IWMS)?

A. The short answer is: The IQD Wealth Management System (IWMS) is comprised of an Asset Allocation Model (AAM) implemented using a variety of tax advantaged wealth management vehicles. It's objectives are to Keep More and Protect What You Keep. It is supported by The Wealth Management Group (WMG) Forum. The long answer is contained in the Executive Summary

Q. Is the IWMS new?

A. The core part of the system was designed to to assist me, my family (including extended) and clients who are IQD investors. System design started in 2005 with our original purchases of IQD.

All of the tax-advantaged vehicles used in the system have existed in the IRS code for a long time, (example: CRT rules were incorporated in the Code in 1969). They have just been integrated together in some unique ways for a unique economic event. Kinda like a better mousetrap.

Q. Who invented the IWMS?

A. We don't think invented is quite the word we would use to describe what transpired, but we led the development team, which consisted of a number of professional colleagues who are also IQD investors. And development is still underway as laws and the world's economic situation change.

Q. Can any IQD investor use this system?

A. Yes, but it is optimally designed for the investor whose AAM has personal objectives plus at least two income objectives (current & deferred), and post RV will be in the highest tax bracket in all of the various tax structures. (i.e. annual current investment income over $373,000 and an estate value over $7 million, which equates to approximately 10 million+ IQD RV'd at a planning rate of 1 IQD = $1 USD)(Note: That's just a planning rate, we have no inside info on the actual rate)

At IQD investment levels less than that, one or two pieces of the system (CRT or CRT w/WRT) can be very effective, however. My office staff calls it IWMS Lite.

Q. Are there any age restrictions on the system?

A. Realistically the youngest age would be 18 and we are 70, but that's not the maximum we hope!

Q. Are there any educational or background requirements to use the system?

A. No, but there is a definite mindset requirement. The basic concept is that an investor(s) will empower themselves through research and gathering their own information resources (the forum will try to provide tips where some are available). The purpose here is "not to give you a fish, but to teach you how to fish," so you can build your own fishing company and then diversify.

Q. Where do you get the system and who installs it?

A. The basic concepts of the system are outlined in the Executive Summary and further described in detail in the various Wealth Management Activities sub-forums. The individual IQD investor has the responsibility to learn the concepts, then develop, install and utilize their own personalized version. Where there are administrative requirements like CRT documents / administration / reporting etc. they are available from the consultant who is responsible for that particular system area.

Q. Do you need a lawyer and/or CPA to install/use the system?

A. That is entirely up to the individual IQD investor. We strongly recommend you consult with your personal financial team, with respect to any wealth management matters. The Wealth Management Group (WMG) Forum is not engaged in the dissemination of legal and/or tax information.

Q. How much does the system cost?

A. The system concepts have no trademarks, no patents etc. and no cost to learn. There are costs to implement some of the concepts used and accomplish the following:

  • establish qualified retirement plans;
  • produce the various trust documents;
  • provide trust reporting as required;
  • manage assets as required;
  • fund the insurance contracts selected;
  • analyze and implement asset protection plans;
  • establish private foundations or donor advised funds;
  • implement selected estate plans and .....

Here are some representative cost estimates (actual costs will be determined upon execution of the respective consulting/service agreement):

(a) Self Trusteed ROTH 401(k)*: $1,400 analysis/document (one time cost), $750/annual admin
(b) Self Trusteed Charitable Remainder Trust (CRT) Model (i.e. CRUT, CRAT
$300/document (one time cost), $600/annual admin
(c) Asset Management*: managed agency contracts - 1.5% of invested assets annually
(d) Institutional Trusteed Wealth Replacement Trust (WRT)*: $1,000/documents (one time cost), $700/annual admin
(e) CVLI: premium based on age, health status and insurance company selected
(f) Asset Protection: $200 analysis, subsequent costs vary with the program selected to be implemented.
(g) Private Foundation*: $4,500 to implement, $4,500 annual admin

Note: * Represents costs that are usually paid directly from the respective trusts or organization.

Example: A CRUT with a WRT plus an Asset Protection Program would have an estimated cost of $1,300 for documents, $950 for annual admin, 1.5% of invested assets annually for asset management services, CVLI premium costs and $200 Asset Protection analysis plus selected program costs.

Q. We have a sizeable IQD inventory, what is the systems capacity?

A. We don't have an answer to that question. Since different AAM objectives can best be handled with a variety of tax-advantaged vehicles, and each is totally scalelable, theorectically there is no system capacity limit.

As an example, our personal Asset Allocation Model (AAM) uses the following vehicles to meet it's objectives, which is based on a planning RV rate of 1 IQD = $1 USD. If the RV rate is significantly higher we would either increase the amount processed by each vehicle, or increase the number of vehicles:

  • Personal Gifting of IQD;
  • Roth 401(k) account for deferred income (funded with IQD), with CRUT(2)
    as primary beneficiary;
  • CRUT(1) for immediate capital gains income for two lifetimes (funded with IQD); self-trusteed
  • CRUT(2) for immediate tax-free income for two lifetimes (funded with unused after tax distributions from CRUT(1)); self -trusteed
  • A private foundation which is also the remainder charitable beneficiary to CRUT(1), CRUT (2), and our son & daughters CRUT's.
  • Under review are: (1) A CRAT w/CVLI in an ILIT, insured is our daughter, beneficiary is our grandson (we call it the Grandparent's plan, funded with IQD), self trusteed, (2) A PPLI contract funded with a Roth 401(k) distribution in 2011 and (3) An offshore Roth IRA for international investments funded with a Roth 401(k) distribution in 2011.

Q. Will the system ever change?

A. Probably, since it has already undergone a number a number of change since the basic version was developed.

Q. Where does an IQD investor get help when needed?

A. That's what this support forum is for. Either post your question in one of the sub-forums where appropriate or communicate directly with one of the consultants through the private messaging system.

Q. There's only one consultant listed - the Administrator, who do I communicate with?

A. The other consultant's will be available as their services are required. The pre-RV period is geared to research, analysis and planning, and the Administrator is the system consultant for those areas.

Q. What do I do first?

A. (1) Decide whether the IWMS is the approach you want to take to maximize your IQD investment; (2) Learn the concepts of the IWMS; (3) Develop an Asset Allocation Model (AAM); (4) Decide which tax advantaged vehicles you will use to implement your AAM; (5) Increase your financial literacy by using the resources of the WMG Forum, (6) Implement your AAM post-RV then the fun really starts, because Wealth Management is a very unique activity (i.e. you have to have acquired wealth to even need to participate).


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