Mike Built Tax-Free Wealth for Growth and Legacy
Mike built tax-free wealth for growth, retirement, and legacy using the Wealth Multiplier Account™.
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Overview
Background
Mike, a plumbing company owner, expanded his business from a 2-man operation to over 40 full-time employees in just 7 years. With significant net income flowing to his holding company, Mike needed a way to grow wealth tax-efficiently without sacrificing liquidity for business expansion. His priorities included funding growth, setting up a tax-efficient retirement plan, and preserving wealth for his young family. Trustworthy financial advice was crucial for managing today’s needs and ensuring a smooth legacy transfer in the future.
Goals
- Grow wealth tax-free in Holdco.
- Maintain liquidity for expansion.
- Build a tax-efficient retirement plan.
- Ensure a tax-free legacy for his family.
Challenge
Taxation
As Mike’s business grew, so did his corporate tax liabilities. Retained earnings faced high tax rates, and accessing capital meant triggering significant tax bills. With plans to expand his fleet, hire more staff, and buy a building, liquidity was essential. He also lacked a retirement plan and was concerned about estate taxes when passing wealth to his family. Mike needed a strategy to preserve, grow, and transfer wealth efficiently without sacrificing business growth.
Solution
Wealth Multiplier
Mike implemented the Wealth Multiplier Account™, over-funding a participating life insurance policy in his holding company to build tax-free cash values. The policy was used to secure a line of credit at the bank, allowing Mike to lend from Holdco to Opco for business expansion. This setup enabled:
- Tax-free growth of retained earnings.
- Access to capital without triggering taxes.
- A large tax-free death benefit for his family.
- A CDA mechanism for tax-free wealth transfer to beneficiaries.
This approach transformed his financial future.
Results
Post-Implementation
Since setting up the Wealth Multiplier Account™, Mike has:
- Built a tax-free capital pool inside his life insurance policy.
- Secured a line of credit for expansion without tax penalties.
- Funded business growth, including new hires and vehicles.
- Set up a tax-efficient retirement plan using Holdco funds.
- Established a plan to transfer wealth tax-free through the CDA.
This strategy provided Mike with liquidity, reduced tax exposure, and secured his family’s financial future.
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Client Testimonials
Clients who have worked with us using similar strategies.
“Useful book for solving the common challenges of modern estate planning.”
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