I am ready

The Asset Allocation Model (AAM) described above is a textbook example of a Wealth Management Group member effectively utilizing the resources provided here in the forum.

If you read all of Shelby's posts you can trace his activities from the start of the development process to the present. We were privileged to provide assistance as requested.

His AAM follows the basic IWMS guidelines and is divided into a personal section, current income section, deferred income section and charitable contribution section. The following effective Tax Planning provisions are utilized:

(1) Resources are allocated to cover the worst case tax scenario for the personal section post RV.
(2) The use of the CRAT to provide current income will defer the initial tax burden generated by a post RV exchange over a 10 year period.
(3) The contribution of CRAT distributions not needed for current needs to a CRUT, will provide a current charitable contribution deduction which will offset the tax liability under #2.
(4) The CRUT's assets will be invested to generate tax-free income.
(5) The use of a ROTH 401(k) account for deferred income will produce tax-free income after the account is in existence for 5 years and the participant and the participant reaches 59 1/2.
(6) The use of the different CRT models removes assets from the estate, thereby minimizing estate taxes.
(7) The use of a Private Foundation will provide additional charitable contribution deductions.

Next will be the implementation phase and the asset protection review. It should be an exciting time, watching an outstanding plan come together.

While waiting for the RV I've had time to further comtemplate my AAM. As such here is an update...

I have purchased 4 piles of IQD that I intend to use to see my Private Family Foundation. I've made contact with Foundation Source and believe there may be a path with which I can exchange these piles into the account that is linked to my foundation which may result in a complete elimination of capital gains taxes on these piles. One of my post RV businesses that I intend to run will revolved around the determination of charitable distributions from the foundation. Ultimately, this will also be an employment option for my children (who are currently ages 9 and 4).

Also, my use of a CRAT is in question. As you know one of the benefits of the CRAT is the deferral of captial gains taxes which is a good thing. However, given the current state of our government and proposals for tax increases in many areas (income, health care, investments, etc), if the RV occurs in 2010 it will be possible for me to exchange the 10M IQD that was initially intended for the CRAT for cash, pay the Long Term Capital gains taxes, then deposit the after-tax money into my CRT which will then provide tax-free income for life if invested properly. My thinking is that the the initial tax sting that I'll feel using 2010 tax rates may be less than the tax sting in the out years which will clearly be at a higher rate which will mitigate (or possibly eliminate) the benefit of the tax deferral.

Now, if post RV it is determined that IQD exchange related taxes are treated differently that other investments in terms of capital gains, then to me, the benefit of the tax deferred CRAT is clearly the better option.

For now, we sit patiently...