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OWNERSHIP ADVISORS’ FAMILY-WEALTH COUNSELING TEACHES FAMILIES HOW THEY CAN TRIUMPH OVER DEATH AND TAXES AND LEAVE A LEGACY OF SOCIAL CHANGE
06-21-2003 - Cleveland, OH - In the end, the government can't help those people who wish they’d spent more time at the office, but it sure does its part for those who wish they’d spent more in taxes. In this world, where death and taxes are the only absolutes, the government makes absolutely certain that for those people without solid estate plans in place, the two arrive together. So when they leave this world, unwitting – and unwilling – philanthropists are made, as the government helps them give – and give generously – to the taxman.
Consider, for example, the billionaire Cleveland businessman who, in his more than 90 years on this earth, made a name for himself as a person who cared deeply for others. His generosity was legendary – rather than investing in lavish clothing, luxury cars or even in such commonplace creature comforts as air conditioning in his home, he opted instead to share his wealth with others. He gave to the institutions that supported his concern for humanity, he gave to the employees who helped him achieve corporate success, he gave to the schools that taught children the value of giving. And when he died, he gave to the government.
Without a solid plan in place, his estate went through probate and the disbursement of funds was published in the local newspaper for all to see. The man’s grandchildren got nothing. His son was awarded $25 million and his daughter was given that amount 14 times over, with a $340 million inheritance. But the one who received the most couldn’t even be considered a member of the family, despite his nickname. When all was said and done, Uncle Sam inherited nearly half of the man’s wealth, taking $450 million for his coffers.
Richard Tanner, President of Ownership Advisors, Inc., a family-wealth counseling firm, works closely with his clients to ensure that they will not endure a similar ordeal. “We help people see that their values – not just their valuables – are transferred,” Richard says. No matter how much money you have, when death arrives, you can’t take it with you. But with the help of Ownership Advisors you can be sure it will continue working for what you believe in and benefiting the people you care about. And a solid plan will not only save your estate from an overwhelming tax burden, but will also save your family from the embarrassment of having their financial and personal information publicly disclosed.
As difficult and uncomfortable as it may seem to discuss the particulars of your finances with your spouse or other family members, it’s precisely the thing you need to do, Richard says. Because it’s the only way you’ll avoid the difficulty and discomfort they’ll experience related to those finances when you’re no longer around to discuss them. Using an approach very different from the somewhat detached administration of traditional financial planning, Richard empowers his clients to make decisions that are not only sound financially, but emotionally and socially as well. As a family-wealth counselor, he works hard to help the families he serves not only feel good about the way they handle their wealth, but to also do good in the process.
A contributing author of "Giving...Philanthropy for Everyone", a question and answer reference book written for professionals such as attorneys and advisors and a technical resource that gives advice, support and guidance for making charitable contributions, Richard is an expert at helping people find the most effective ways to donate. He not only thoroughly understands the business particulars of philanthropy, but he also embraces and appreciates the broader social implications and benefits of giving, as he helps his clients to do the same. Richard’s remarkably in-depth research, coupled with his uncanny insight, enable him to match his clients with their ideal charitable organizations – the organizations that espouse the same values as their prospective benefactors, both in principle and in deed. “When we talk about philanthropy, it’s important for people to consider the difference between having a small amount or even millions extracted from their estates to permanently and forever be used by the government, versus having their families in control of that wealth,” Richard says. “In the latter case, the social good that money can create for generations to come is an incredible legacy a family can leave, and people really have that choice! One of the beautiful things about family-wealth counseling is that it begins to open the door to the realization that you can do good things with your money - money that otherwise would be thrown away in the form of taxes.”
Unlike traditional financial planners, who deal almost exclusively with numbers, Richard takes a much more human approach to his work. Remarkably hands-on, Ownership Advisors is the thoughtful and insightful alternative to firms that concentrate only on the cold, hard facts. The plans Richard creates, implements and manages for his clients are tailor-made to address not only their financial concerns, but their familial, emotional and social concerns as well. As they work through the process, many of Richard’s clients find that not only has he helped them establish good, solid financial plans, but he’s also helped them open the lines of communication about important topics that would otherwise remain unexplored.
Richard’s family-wealth counseling approach is so effective because he takes the time to get in touch with the family whose financial plans he’s been entrusted to develop. He gets to know each of the families he’s working with by inviting them to a personal retreat. This innovative and incredibly lively event offers Richard a unique glimpse into the hearts and minds of the people who are looking for the best ways to ensure their finances will be used for the most good, both during their lifetimes and after they’re gone. Usually attended by a husband and wife, the retreat also presents a one-of-a-kind opportunity for
couples to talk about their individual and shared desires for passing on their wealth to their families and funding charitable organizations. Since they speak candidly about their feelings as well as their finances on the retreat spouses who do not handle the family’s books are often learning for the first time about the particulars of the family portfolio. They can make their opinions heard about the way things are managed. The retreat, therefore, not only helps Richard do a better job in mapping out the family’s finances, but it also helps the families do a better job themselves in the way they explore and share ideas and feelings.
These one-day personal and often deeply emotional retreats present other advantages and have broader implications for Richard and his clients as well. “Essentially, the idea of the retreat is to help people hone in on what is their life purpose. If they have all the money they need to survive in the future, what is it that will give them significance and success going forward? I ask them, ‘What is it that you want to do with your life?’ If I’m meeting a business owner, another big question is about succession. I ask, ‘What are you going to do with your life if you should sell your business?’” Richard explains. “Many times, business owners don't complete their estate plans because they get a lot of psychological and emotional gratification from being a businessperson. Much of their life centers around being the CEO or owner of the business. We help these people identify their passions outside of business and to see where they can apply their talents, skills and passions in a philanthropic way. Other times, we deal with families that have complicated histories, problems and businesses. As we talk, these people often share with me that they really have never told anyone all of the things they’re telling me. I value their openness and I appreciate that the retreat has put me in a very unique, very privileged position.”
So he can devote his full attention to the family during the retreat, Richard makes a tape of the day, which he keeps confidential. The content of the tape is then transcribed into a book of sorts, which is presented to the family. From this transcript and using the ideas the family gives him to create a “statement of purpose,” Richard extracts the vital information necessary to develop a family mission statement or family-wealth letter of intent. This one- to four-page document outlines all the things that are important to the couple as it describes very clearly what they value, what choices they’ve made for managing their wealth and why they made those decisions. Richard asks the couple to alter and amend the document any way they see fit, then to sign off on it. This ensures that Richard and anyone else who reads the information is clear about the family’s desires and motivations, even when they’re no longer able to discuss them.
Additionally, with his clients’ permission, Richard gathers all of the financial information and documentation available about the estate through inquiries to lawyers, banks and financial planners used by the family. He uses this information to make a diagram of the finances, which offers the family an easily understood summary of the different and potentially disparate accounts and funds that make up the family’s portfolio. Richard even offers to present and explain all of this information to the couple’s children and other family members, if they’d like him to. Finally, Richard takes all of the information he has gathered from the retreat and through the family’s financial statements, and he maps out a financial plan that addresses all of the family’s concerns as it minimizes tax exposure and maximizes the opportunity for giving and creating a family legacy. Again, he presents the information in a visual and easy-to-interpret format, this time in the form of a Power Point slide show. After he’s heard the family’s feedback, Richard makes requested changes and with their sign-off, he oversees and manages this newly established family-wealth plan.
For their part, Richard’s clients say they couldn’t be happier with his insight, professionalism, attention to detail and his one-of-a-kind technique. Dudley Blossom, former part-owner of the Cleveland Indians and for whose father and grandfather Blossom Music Center was named, says he’s already realized returns on the work Richard has done for his estate. “I’m very glad we went through the family-wealth counseling,” Dudley says. “Richard got us to focus on getting away from as much estate tax as we could and he has a variety of vehicles for that. The main reason this counseling was important is that it was the first time someone sat down and did a thorough review of our financial situation and gave my wife, Kay, a clearer picture of our financial affairs. It sets me more at ease that if I predecease her, she will be taken care of and she has a better understanding of our financial situation. The process also made me more aware that we have the resources and capability of giving more than I knew.”
Art Holmes, a Cleveland entrepreneur, also appreciated Richard’s fresh approach. “Developing the statement of purpose was a great, healthy exercise,” Art says. “Richard and his company then came up with a number of good ideas that could better accomplish what we wanted to do. What I hadn’t done before in working with financial planners was address all the different issues. I had mainly thought about giving in my lifetime and giving after death, not about optimizing along the way while my wife, Christy, and I are alive and during our retirement. They helped us look at retirement differently.”
Richard’s innovative thinking and insightful financial-services applications extend well beyond estate planning as well. A nationally recognized expert in Employee Stock Ownership Programs (ESOPs), Richard and his team have years of experience helping ESOP companies resolve repurchase liability challenges. Ownership Advisors Inc. has the in-house capability to perform complete actuarial-based repurchase obligation studies targeting companies’ specific needs. They understand the complex assumptions used to develop a prudent forecast and can help companies understand how each assumption affects the outcome. Richard is a well-known authority on the use of ESOPs in family-held companies and has written and lectured extensively on the subject.
Dick Abbott, founder, CEO and chairman of the board of ACRT in Cuyahoga Falls, says Richard and his OAI team, with their insight and well-researched advice, made a tremendous impact on the welfare of his company and its employees. “Richard is a very qualified financial advisor and he doesn’t try to push insurance policies or mutual funds. He doesn’t push a service or product but guides you to have knowledge and make educated decisions,” Dick says. “His team helped us to implement the establishment of our ESOP to our 300 employees. We realized one of the key benefits to this approach when we lost our largest client, which filed bankruptcy. Our employees went to bat to manage the problem. As a result of the ESOP, the employees truly had a stake in the continued success of our company. As employee owners, they saw and took ownership of solving the situation. They doubled up on vehicles, found the cheapest gas, worked no overtime, committed to working on Saturdays if they took time off during the week. If I had tried to implement all this with no employee ownership, there would have been a revolt.”
Through Ownership Advisors, Richard has assembled a diverse and highly qualified team of professionals who not only have a great deal of experience and expertise, but who also have a passion for the work they do for others and help others do in society. With more than 15 years of experience in wealth management, Richard has authored numerous articles on business succession and charitable estate planning. He is a regular speaker for numerous industry and professional groups and he maintains membership in several professional organizations. A graduate of the University of Akron and a classically trained musician, he enjoys close ties to the community and frequently performs in the Cleveland area.
Ownership Advisors, Inc. is located at 6100 Oak Tree Blvd. South, Suite 290, in Cleveland, Ohio. Richard may be reached by phone at 216 328-5538 or by email at rtanner@ownershipadvisors.com.
Contact:
Richard Tanner
President
Ownership Advisors, Inc.
6100 Oak Tree Blvd., South
Park Center Plaza 1, Ste. 420
Independence, Ohio 44131
Phone: 216-328-5538
E-mail: rtanner@ownershipadvisors.com
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