One of the common themes that we continue to see among our clients is the idea that leaving too much money to children will spoil them. InKnowVision often employs the family bank concept to help people understand how they can re-gain control in this complex area. Join us as we look at this interesting concept and understand how to present it to clients, how to determine the client profile for this strategy and how to implement this type of planning.

1. S C O T T H A M I L T O N
I N K N O W V I S I O N . C O M
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Family Banks

2. Why Look At Family Banks
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 Attorneys
 Money Managers
 Life Insurance
 CPAs

3. What Kind of Inheritances Are There?
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4. 90 Day Inheritance
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5. 90 Day Inheritance
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6. Reliance Inheritance
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7. Family Banks
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8. Why Use a Family Bank?
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 Are there important life lessons to share with family
members?
 Successes
 Failures

9. Why Use a Family Bank?
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 Do you hope to extend your family legacy through
multiple generations?

10. Why Use a Family Bank?
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 Are you concerned that your heirs are not yet
prepared to handle the wealth you have
accumulated?

11. Why Use a Family Bank?
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 Have you built a net worth sizable enough to
capitalize on opportunities and benefit from wealth
regeneration?

12. Why Use a Family Bank?
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 Are there enough individual family members so that
together you could benefit from a broader exchange
of ideas and a more formal decision-making process?

13. Why Use a Family Bank?
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 Are you open to new ideas from your family
members and accepting that their wealth
regeneration strategies may differ from your own?

14. Why Use a Family Bank?
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 Do your children, grandchildren etc.
have entrepreneurial interests outside your core
family business that should be encouraged and
supported?

15. Why Use a Family Bank
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 Good source of credit – friendly loan officer
 Good terms
 Fixed rates
 No demand provisions
 No excessive collateral (unless beneficial)
 Less like a proctology exam

16. Steps to Success
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 Have a clear family vision.
 Determine mission and family “brand” before setting
up a Family Bank.
 Know how you want to be perceived by the
community and extended family.
 Be explicit about what you want to accomplish.

17. Steps to Success
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 Well-Defined Participation Process.
 Not all family members can be involved in
management.
 Be diligent in choosing who will manage.
 Use an application and interview process that
requires them to meet minimum age standards and
demonstrate applicable education and/or skills.

18. Steps to Success
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 Formal and predictable loan process
 Applications
 Appraisals
 Credit checks
 Standard loan terms and lending policies
 Think through what failure to re-pay means

19. Steps to Success
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 Evolving Leadership.
 Consider term limits that rotate members in and out
of family council positions.
 This encourages:
 Accountability and fresh thinking,
 Allows younger family members to become involved, thus
extending the success into future generations.

20. Steps to Success
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 Formal Communications.
 Passive family members don’t want to be in the dark.
 Have a reporting structure was much like sharing corporate
board minutes.
 Managers should meet periodically
 Managers should be transparent to all family members, who
can have a forum to provide feedback.

21. Learning from Mistakes
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 The wealth creator holds the reins too tight

22. Learning from Missteps
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 Failure to include multiple generations

23. Learning from Missteps
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 Dismissal of some viewpoints and an unwillingness
to consider unorthodox thinking

24. Approaching Family Bank
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 How long did it take to create your wealth?
 How fast would you like to see it spent after you are
gone?

25. 50 – 50 Option
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26. Family Bank
Borrower/
Beneficiary
Family Bank
Borrower buys
assets
Loan
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•Business
•Houses
•Education
•Charitable

27. Family Bank
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 Asset protection for assets collateralized by loans

28. Family Bank-Asset Protection
Beneficiary
Beneficiary's
Net Worth?
$0
Family Bank
Beneficiary buys
assets
Loan
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Assets pledged as
collateral for loan

29. Structures for Family Banks
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 ILITs
 GDOTs
 QPRTs
 GRATs
 Jurisdictional Trusts
 LLCs, LPs

30. Assets To Fund Family Bank
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 Exemption Gifts
 Leveraged Gifts
 Life Insurance
 Family Business

31. Questions
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