CLIENT EXPERIENCE

Challenge: The trustee of a multi-generational trust wanted to pay out only income to the beneficiaries to preserve principal that supported the needs of future generations.

Solution: To meet this objective, the assets of the trust were invested in Palisade’s high-quality equity strategy, which is customized toward stronger income generation and growth. Since investing in the strategy over ten years ago, Palisade has prudently grown the income and principal balance of the trust. As a result, distributions have increased at a rate higher than inflation, which helped maintain purchasing power and brought comfort to the beneficiaries. Palisade’s long-term hold/low turnover investment discipline helped minimize capital gains taxes, to preserve more of the principal balance for future generations.

Challenge: A multi-generational family wanted to obtain access to several different investment managers and asset classes.

Solution: Palisade helped a client create a family partnership, that included members from several generations, with the investment objective of broadening their asset diversification. By pooling capital and utilizing our expertise to search for outside managers, the family met their objective by obtaining access to investment managers specialized in Private Equity and other high growth asset classes. By acting as a single entity, the partnership allowed the family to qualify for lower fee breakpoints. As an ongoing part of the client's estate planning, the partnership structure has been a useful mechanism to transfer wealth to family members at a discounted value.

Challenge: The next generation sought assistance navigating the challenging process of settling their parent's estate.

Solution: Palisade advised and educated family members throughout their parent's estate settlement process. In this role, we coordinated all tasks that produced the necessary information and guidance for their attorney to complete the estate taxes by the filing deadline. Prior to the assets being distributed, Palisade worked with each family member to create an asset allocation customized to their current income, future growth, and risk tolerance needs. The assistance, advice, and education provided are all integral to Palisade's comprehensive investment advisory relationships.

Challenge: The income beneficiaries of a large family trust were seeking cost-effective financing for their new residences.

Solution: Palisade worked with the trustee and the trust's attorney to develop a creative and more beneficiary friendly lending structure. Instead of utilizing a traditional bank mortgage, the trust lent money directly to the income beneficiary. This structure provided the beneficiary with a significantly lower interest rate than a bank mortgage, established a more attractive lending period, and locked in a fixed rate, interest-only loan (within IRS guidelines). In addition to the lower lending rate and more favorable lending terms, the interest paid was a payment that circled back to the beneficiary. With some of the trust's investable assets reallocated to mortgage loans, the assets invested under Palisade's management were reduced which directly reduced the client's asset management fees.

Challenge: Investing the proceeds from the family business sale to produce similar or greater income than the lost businesses income.

Solution: Prior to our client’s private business sale transaction, Palisade provided pricing, trust taxation, trustee, and escrow guidance. Following the sale, Palisade constructed a high-quality, dividend paying equity portfolio to replace their lost business income. As a result, the family has benefited from an asset with greater industry diversification that received the more favorable qualified dividend tax rate. With their portfolio invested in high-quality securities with consistent dividend growth, their investment portfolio generated more income then they previously received from the business, while also providing long-term equity growth for future generations. Key to Palisade's investment discipline is a process that allows for each portfolio to be customized to each client's current income, future growth, and risk tolerance needs.

Challenge: To create an optimal philanthropic legacy plan after the sale of a family business.

Solution: To support the client's goal to remain engaged and maintain control of their charitable portfolio and giving, Palisade helped guide the client through the process of establishing a private family foundation. The assets were invested in Palisade's high-quality equity strategy focused on long-term capital appreciation and dividend growth. The family has enjoyed watching the portfolio grow in value while significantly enhancing their charitable impact. The success of the foundation has encouraged the client’s children to engage in the family’s charitable mission and prepared them to continue its legacy.