cess of writing a business plan, defending projections and accepting repayment obligations. It also positions you, the advisor, as the ongoing technical guide.

How Much Capital Is Required?

The family bank concept and your approach can be used for clients of different wealth levels:

• For clients with around $ 1 million: The trust is viable and can begin lending, even if capacity is modest. This is useful for first-generation business owners who want to establish the framework early.

• For clients with $ 3 million to $ 5 million: The structure can fund multiple loans for such clients and generate enough interest for the compounding story to be viable within a single generation.

• For clients with $ 10 million or more: The family bank now starts to act as a true multigenerational institution with formal governance and broad lending capacity.

• For clients with $ 25 million or more: The family bank now becomes a dynasty, capable of supporting enterprises, real estate portfolios and education for every branch of the family tree indefinitely.

Trust-owned life insurance can further extend these advantages. When the Wyoming dynasty trust acquires a properly structured policy from inception, the death benefit flows into the trust free of income and estate taxes, strengthening the lending base. The cleanest approach for your clients is often to fund the trust up front using the lifetime gift and estate tax exemption and have it pay the premiums on new trust-owned life insurance— rather than transferring an existing policy, which can trigger the three-year rule that pulls proceeds back into the taxable estate.

A Different Kind Of Legacy Conversation Your clients have already done the hard work of wealth creation. The next

phase is about design and what that wealth will do to( or for) the next generation. The structures put in place now can guide behavior long after you and your client are gone.

A Wyoming dynasty trust operating as a family bank gives advisors a concrete, implementable framework: a structure, accountability and permanence. It cannot guarantee that heirs will become builders and avoid the fate of Cornelius Vanderbilt’ s heirs, but it can show them that building is the easier, more natural choice.

For advisors focused on multigenerational planning, that is the difference between simply managing money and helping to design an institution that can last 40 generations.

SALVATORE M. CAPIZZI, CEPA, CBDA, is chief sales and marketing officer at Dunham & Associates Investment Counsel Inc. Connect with Capizzi and find additional insights at www. Dunham. com.

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