April 2011

April Meeting: Estate Planning Updates by Charles Packer

>>> REGISTER NOW FOR APRIL 26 <<<

In 30-plus years of practicing law, Chuck Packer of Hopkins & Carley has just about seen it all: virtually every kind of sophisticated wealth, estate planning and family business issue you can imagine.

These issues often involve complex tax concerns with high-stakes consequences for high net worth individuals and families. Clients throughout Northern California and beyond (including France and Australia) rely on Chuck’s strategic planning counsel and experience with estate, gift and philanthropic tax planning.

Client Successes

• While they had no plan to sell, a small, family-operated business had been approached by two large, publicly traded buyers. The family hired Hopkins & Carley, which negotiated a sales price twice the amount of what had originally been offered. In addition, we transferred shares of the business to trusts for their children in a tax efficient manner, so no gift taxes were paid and the children were set up with a significant amount of wealth. The remaining proceeds were enough for the parents to purchase a number of properties for rental and personal use, as well as to travel and never again work.
• A Bay Area telecommunications pioneer needed help with a variety of business and wealth management matters. Working with this ultra high net worth client’s family office, our group established an entity to own a condo in London and assisted with household staff employment matters. We also established a private family foundation as well as a public charity and continued to provide assistance with estate and wealth transfer planning.
• Several of the founders and management team members of high-profile Silicon Valley companies needed help with estate plans and wealth transfers to children and other family members. Our Family Wealth & Tax Planning group has handled this in a tax efficient manner prior to IPO or other liquidity events, resulting in significant wealth transfers. This has allowed our clients to retain control over their children’s wealth and, in some instances, to establish a tax and estate planning program.

Upcoming Lectures

• Estate Planning Updates, Financial Planning Forum (April 26, 2011)
• Integrating Philanthropy Into Your Client’s Wealth Planning: Family Private Foundations, Tax Strategies for the High-Income Individual (May 6, 2011)
• What Are We Doing With Estate Planning in an Uncertain Environment: A Panel Discussion, Tax Strategies for the High-Income Individual (May 5, 2011)

(Paraphrased from the Hopkins & Carley web site.)

back to top

March Meeting: The State of Silicon Valley by Russell Hancock

Russell Hancock, President and CEO of Joint Venture: Silicon Valley Network, spoke on the 2011 Index of Silicon Valley. The Index is a nationally recognized publication that has been telling the Silicon Valley story since 1995.  The indicators measure the strength of our economy and the health of our community, highlighting challenges and providing an analytical foundation for decision making.

 Educated at Harvard in the field of government, Russell received a Ph.D. in political science from Stanford University where he teaches in the Public Policy Program. Dr. Hancock was recruited away from Stanford to take the helm of Joint Venture in 2003.

Selected highlights of Mr. Hancock's talk in March:

1) The job outlook in Silicon Valley has improved. 12,300 jobs were added this year in comparison to the previous 3 years in which we were losing jobs. He expects this trend to continue.

2) Venture capital funds are starting to flow again after three years off. They are favoring telecom and IT. The IPO market has decreased markedly - there were 11 IPO's last year, which is not back to the old levels but is an improvement. New companies are no longer interested in growing large; instead, they want to stay lean and get purchased.

There are 20,000 start ups at any given time many with seven or fewer people.

3) Income is on the rise with the median at $70,000. The shape of job growth is now an hourglass, however, with mid-range jobs (which he considers the spine of the economy) growing fewer. Instead, top-end and low-end jobs are growing. He noted that this also means that it is more difficult for people at the low end to climb the ladder because there are fewer mid-range jobs.

His observations:
1) This economy is the new reality. He thinks it is a good economy because it is based on reality instead of on permissive practices.

2) The new world is one in which employees can no longer expect lifetime employment with benefits. Companies don't want to bear this burden. Instead, they prefer to stay lean and hire out by contract. He thinks we are becoming a valley of free agents. He thinks the new model will be for many companies to have no employees and consultants as principals. More people will work out of their homes (which has implications for the real estate market). The corporation has become a global entity and is not as likely to become involved in supporting the local community.

3) Funding is an issue. Venture capitalists are not making money as an industry. The myth is that this valley was built in garages - the reality is that it was built with Federal funding. He cited the example of companies like National Semiconductor. The government is now spending money on clean energy and that money is going to other parts of the country like Detroit and Huntsville. In the 60's and 70's we didn't really have much competition with what we do here in Silicon Valley. Now we do. He feels Federal funds should be invested strategically and not just spread out over the 50 states.

4) We are now pinning our hopes on clean technology (like solar). Don't take this as a gift. There are different requirements in these technologies from our previous software-based industry and he thinks the new requirements don't play to our strengths. With software, the intellectual property is on a disk - there are no Federal approvals, no capital requirements, no lives at stake. The situation is different for energy, where the capital requirements are huge and approvals are needed on both the state and federal level. It will be harder for us, especially since the level of Federal money is much reduced. He thinks one strategy may be to form partnerships with different levels of government.

For more details and to download a copy of the report, go to the Joint Venture: Silicon Valley Network web site.

back to top

Estate Planning Symposium

Past President Krista Conover is also serving on the Planning Committee for the 7th Annual Santa Clara Law Kasner Symposium, an estate planning symposium that is likely to be of interest to many Financial Planning Forum members. The event will be held on Thursday, September 22 at the San Jose Doubletree Hotel, 2050 Gateway Place in San Jose. Online registration opened on March 1 at law.scu.edu/alumni/kasner-symposium.cfm. From the web site:

Join us for a one-day estate planning seminar for attorneys, accountants, certified life underwriters, bank trust and investment officers, financial advisers, and other wealth planning professionals. The seminar will provide attendees with most current information regarding the tax, legal, and financial issues concerning estate planning and trust and estate administration. The program includes a series of individual presentations, lunch, breakout sessions, and an afternoon reception.

For more information, visit the web site or contact the Santa Clara Law Alumni Office at 408-551-1748.

back to top

Upcoming Meeting Topics

Watch your email for the opening of registration for this special event. This will be the final meeting of this membership year. Event begins 1/2 hour early and includes hors d'oeuvres and drinks.

 May 24, 2011
       Emmett Carson, Ph.D.
       Silicon Valley Philanthropic Needs and the Silicon
        Valley Community Foundation’s Response

back to top