2. Diversified Planning Portfolio
Basically your average client with a significant investment portfolio but no single high-growth asset.
Planning Option: Book Entry Grantor Retained Annuity Trust (GRAT). With this technique, the planner creates a single-member LLC that holds the stocks in the client’s account. This has the added benefit of allowing all transfers to be recorded electronically in the client’s private company records.
Once this LLC is in place, a GRAT or series of GRATs can be created, each gifted separate classes of company units tracking each stock position. While the functionality of GRATs is a bit beyond the scope of this gallery, here the ability of the client to transfer LLC stock to and from GRATs quickly allows them to either lock in success or restart the process quickly if the value of the stock drops beyond a certain point to limit damage.
The financial advisor and estate planner must work hand-in-hand to make this aspect work well, as it has to be set up in accordance with the client’s overall investment plan. For example, the GRATs can be constructed to reflect sectors instead of individual holdings. Only the advisor can provide this info, so teamwork is imperative.