Vol. 2   Issue 3 - March 2010  -  www.cannonfinancial.com

Planning Ideas - Three Strategies for Handling Income in Respect of a Decedent

   It is not uncommon to encounter affluent and high-net worth (HNW) clients with large amounts of Income in Respect of a Decedent (IRD). IRD refers to income streams payable to the decedent during his or her lifetime and continuing after death. Examples include survivor benefits associated with retirement assets, such as IRAs, qualified retirement plans (QRPs), and nonqualified annuities.

    In most instances, wealthy clients will not be required to depend on these “retirement” assets for retirement income. Even after taking required minimum distributions (RMDs) into account, the assets may continue to increase in value until the owner’s death. A natural inclination is to designate children or grandchildren as the beneficiaries. Properly structured, this arrangement allows the assets to continue to grow tax-deferred with RMDs stretched out over the beneficiary’s lifetime.
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Practice Management - Repositioning for Lift

   Any time your practice undergoes change, you are presented with the opportunity and maybe the obligation to proactively contact affected clients and centers of influence (COIs). The change could involve something relatively tactical, such as adding a new specialist on your team, or a new product offering. Alternatively, it could involve a major strategic shift, for example, the shift from a commission-based model to a fee-based model, or the transition from an investment management model to a wealth management model.

    Whatever the change, you have only one shot at making a new first impression with clients and COIs. At Cannon, we refer to that initial conversation as your Repositioning Statement. Getting it right can make the difference between lift-off or engine failure for your practice. Read More.

Taxes - IRS Releases Data on Top 400 Incomes

   The IRS began releasing data on the 400 taxpayers with the highest adjusted gross income (AGI) back in 1992. Their data is summarized in four tables, which are chock full of juicy tidbits about your highest income clients.

    IRS Table 1 contains frequencies, money amounts, and average dollar amounts for the major income, deduction, and tax credits reported on Form 1040. IRS Table 2 shows ranges of marginal tax rates for the various statutory rates (including the alternative minimum tax rates) that were in effect for Tax Years 1992 through 2007, while IRS Table 3 shows the range of average tax rates up to 35 percent and over, computed as total income tax divided by adjusted gross income. Read More