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| News & Scoreboards |
10 Questions for Your Private Banker - 8/04
08/02/2004
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The U.S. Tax Court gave family limited partnerships a reprieve in May by
clarifying the requirements for structuring these popular estate planning tools.
Is it time for me to consider an FLP for my own estate? Do I need to restructure
my existing FLP in any way to meet the terms of the new Tax Court ruling?
How
will my family business’s pension plan react to rising interest rates? Is it
time to reconsider how I invest the assets in the retirement plan? How will an
increase in rates affect the calculation of my company’s future pension
liabilities?
Private equity firms that plan to issue shares are reconsidering
their fees, according to the Wall Street Journal. Investment bankers are
advising at least some of these firms that their traditional 2-plus-20 (2
percent management fee and 20 percent of capital gains) cost structure is too
expensive. If they do cut their fees, will this make these “business development
corporation” share offerings a better investment than my limited partnership
interests in the same firms’ traditional private equity vehicles?
Germany
plans to issue its first inflation-linked bonds next year. The United States and
France have recently increased their inflation-linked bond issuance, and the
United Kingdom and Italy also offer these instruments. Do these belong in my
portfolio? Does it make sense to have an internationally diversified portfolio
of inflation-linked investments?
Fine art valuations are skyrocketing, as
evidenced by the record-
breaking price set at Sotheby’s in May for Picasso’s
“Boy with a Pipe.” In light of this, should I have my own collection reappraised
to ensure I carry an appropriate amount of insurance? Is this a particularly
advantageous time to use my art portfolio as loan collateral?
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