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Managing the Complexity of Partnerships as a Wealth Management Tool

An important factor in generational wealth management is selecting ownership and management structures that minimize income tax for the current generation, as well as minimize estate or inheritance tax for future generations. One such complex but effective structure is a partnership; Limited Liability Partnership (LLP) or Family Limited Partnership (FLP).

The secret to success is to own nothing, but control everything.
-Nelson Rockefeller

While partnerships can be an efficient wealth management tool, they can also be an accounting and reporting nightmare. Partnerships are fluid entities, not just in terms of income and assets but also in terms of withdrawals and additions that result in dynamic profit sharing ratios. This is compounded by the labyrinthine structure of multiple partnership entities with cross holdings and subsidiaries.

As a norm, partners, the true wealth owners, get an accurate picture of their consolidated wealth once a year, when partnership accounts are finalized for tax purposes. This is a result of using conventional accounting software, which does not support the dynamic nature of partnerships. Therefore system data has to be extracted and worked on manually, to calculate consolidated wealth inclusive of partnership shares. Historically, this complexity and the need for manual intervention has prevented share of partnership wealth from being a periodic or on demand report.

Now, with Asset Vantage’s Partnership Module, many manual calculations are eliminated. Wealth owners get a consolidated view of their wealth, including that from partnerships, in a system generated report, any time and any where. Simultaneously, accountants and wealth managers no longer need a stand alone accounting software. Nor do they have to spend time on manual calculation and consolidation, at a partner’s demand or while closing the books.

Using Asset Vantage, accounting for multiple partnership entities can be maintained on a single platform. Each partnership is treated as an individual entity in the system, with the choice to have a static, pre-defined profit share or a dynamic share based on ownership. All accounting for the partnership is done on the system. Investments and holdings are entered into the system, market values get updated automatically for listed investments and manually for others. Contributions and withdrawals are updated through the partnership module.

The software automatically calculates current ownership or share of partnership for each partner through the balance sheet contributions and withdrawals. Using filters, users can also generate wealth reports based on partnership entity or person. Reports generated by selecting beneficial owner are inclusive of partnership cross-holdings, providing an instant, consolidated snapshot of wealth.

The utility of the Partnership Module is not limited to partnerships alone. A trust with multiple beneficiaries can use this feature to monitor and track wealth ownership. Similarly, accounts of privately held companies set up by a family can be maintained on the system, and each family member’s static or dynamic share of wealth will automatically reflect in their name.

Use Asset Vantage to ease accounting and facilitate wealth management through partnerships. Get on-demand reports giving you a consolidated, up-to-date view of your wealth.


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