<b>More and more families are seeking new and innovative options for transitioning diverse asset types. The <a href="/solutions/supporting_organization" title="Supporting Organization">Supporting Organization</a> at WaterStone best meets many families’ objectives for asset transition and estate planning.* </b>The Supporting Organization or “SOâ€ is a 501 (c)(3) public charity offering a maximum charitable deduction. Charitable distributions from the SO may be made to favorite charities and ministries. It also allows the family more flexibility in transitioning very diverse types of assets. 
 
<b>New Tax Changes:</b> Influencing asset transition and estate planning are the recent IRS changes which establish the Federal estate tax exemption at $5 million for the tax-free transfer of an estate to the next generation in 2011 and 2012. For some wealthy families, this may be extremely inadequate and has led to the creation of WaterStone’s <i>Supporting Organization</i> solution. It’s a tool that allows very significant estate and asset transition in a preferred environment. In addition, it permits continued family and professional advisor involvement, as well as support for ongoing charitable purposes.
 <h2>Case #1</h2>

A California real estate investor, Mr. Richardson, has invested a lifetime building his family assets. Needing a strategy for transitioning these accumulated assets, he chose the WaterStone <i>Supporting Organization</i> solution. 
 
<b>Highlights:</b>
1) <b>He was able to donate real estate, subject to debt, into his family <i>Supporting Organization</i>. </b>Although his donation was subject to “bargain saleâ€ rules, it could not have been contributed into other charitable tools, like charitable trusts or Donor Advised Funds. 
 
2) Mr. Richardson serves in a minority role on his SO Board of Directors; <b>he speaks into the disposition of assets, investments and charitable distributions.</b>
 
3) Because of the <i>Supporting Organization</i> structure, <b>the family’s business objective to hold the donated assets as much as five years before final disposition was permitted.</b>
 
4) The asset was carved out of his taxable estate, reducing potential tax burden on the family and alleviating management concerns.   
 <h2>Case #2</h2>
<img src="{filedir_1}supporting-organizations-web.jpg" width="299" height="180" class="floatright" />Facing a critical health problem, 60 year-old agricultural businessman from the mid-west required a comprehensive plan. Mr. Arnold’s agricultural business, a C corporation, was valued in excess of the $5 million estate tax exemption. He chose a family <i>Supporting Organization</i> at WaterStone for the transfer of assets to his heirs, as well as to his favorite charities. 
 
<b>Highlights:</b>
1) <b>By transferring a minority interest in his corporation to his SO, the asset was removed from his estate, providing the desired tax relief.</b>
 
2) Because of the <i>Supporting Organization</i> structure, <b>the discounted minority interest may be sold at market value to either the business or to family members.</b>
 
3) A family member serves on the SO Board of Directors; <b>she has input over asset disposition and charitable distributions</b> which support the family's favorite charities and ministries.
 
You may know a family ... perhaps your own ... with similar needs, objectives and charitable visions. Let’s talk. We’ll listen. <b>The WaterStone <i>Supporting Organization</i> solution works! </b>We would love to serve you and your team of advisors. 
 
*The selection of this tool of choice is driven by the complexities of family assets and short and long term family and charitable objectives. Let us know how we can help you. Contact us at (719) 447-4620 or waterstone@waterstone.org to discover how your family asset transition objectives can be achieved with a family <i>Supporting Organization</i> at WaterStone. 

<p>For a print version of this article, <a href="{filedir_1}Flexible-Asset-Transition.pdf">download the pdf</a>.</p> 
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