Learned Scott Ross

Created irrevocable trusts for the 3 children of a company founder that each qualified for an additional $10 million Qualified Small Business Stock (QSBS) exclusion, and that defer California state income tax. So altogether, the family had $40 million of QSBS exclusion. When the company liquidity event occurred, the family paid no federal capital gains tax on $40 million of gain, and the childrens irrevocable trusts paid no California state income tax. If trust distributions are made to the children at a later time when they are California residents, then the California state income tax will be paid at that time on the amount distributed. Until the time of the distribution, the entire trust will grow free of California state income tax, much like an IRA for California tax purposes. And the amount not distributed will continue to grow free of California state income tax. If distributions are made to the children at a later time when they are not California residents, then no California state income will be paid on these distributions. Developed a strategy to transfer $75 million of family legacy real estate to a dynasty trust without incurring gift tax, and fully covered by generation-skipping tax exemption. The dynasty trust will protect that real estate from estate tax, creditor claims and divorce claims in perpetuity. Worked with venture capital partners to transfer carried interests to irrevocable childrens trusts at the beginning of the fund when those interests were of modest value, and watched those interests grow in value to more than $10 million, thereby transferring significant wealth while using minimal gift tax exemption. Developed multiple term of years flip charitable remainder trust strategy to hold extensive position in large public company that was a possible hostile acquisition target, so that client could (a) benefit the clients private foundation when he chose by terminating one or more of the trusts early in whole or in part; (b) get the stock into a structure which would avoid capital gains tax on a sudden forced sale in a hostile acquisition; and (c) still give the client the right to cash flow from one or more of the trusts if he decided he needed it, by triggering the flip mechanism.