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Process: Canal Capital identified holes in their current buy-sell agreement and offered several solutions to their large income tax bills. The process also revealed a need for several of the doctors to engage in financial planning to get their personal affairs in order. By creating an outside board of directors for the doctors, we were able to clearly map out the practice’s direction and mission.
Canal Capital began by implementing personal financial planning for each doctor as a fringe benefit reimbursed by the practice. Then Canal Capital found a solution to their tax problem by performing an audit of the current retirement plan. Most importantly, the buy-sell agreement was updated in a manner that clearly explained what would happen when a partner left the practice. Below are some of the specifics:
Implemented a financial planning reimbursement program that was compliant with IRS rules.
Audited the current retirement plan and made some basic actuarial changes that allowed the doctors to increase their tax deferred contributions.
Thanks to the audit of the original plan, Canal Capital implemented a Cash Balance Pension plan to be used in conjunction with the 401(k). This plan allowed the doctors and other key employees to tax-defer another $100,000+ per year.
Canal Capital used its normal planning process with each doctor and his/her family. This provided comprehensive analysis and management of each doctor’s financial affairs.
The financial planning provided coordination with the assets that the respective doctors had in their two practice’s retirement plans.
Case studies presented are based on actual clients, however, some of the information may have been changed or altered . These studies are provided for educational purposes only. Similar, or even positive results, cannot be guaranteed. Each client has their own unique set of circumstances so products and strategies may not by suitable for all people. Please consult with a qualified professional before implementing any strategy discussed herein. No portion of these case studies is to be interpreted as a testimonial or endorsement of the firms’ investment advisory services.