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Are you thinking about setting up a private foundation? It can be a wise decision - if it is done correctly, and for the right reasons. There are 5 key points you should consider before taking the big step.

1. What is important to you?

First, you should identify what is really important in your life. After all, the foundation you create should be a good fit for your goals, your dreams, and your vision.

Essentially, your foundation will allow you to take an industry, a hobby, or any activity that is of interest to you and turn it into a tax deductible activity.

2. What exactly is a foundation?

A foundation is a non-profit entity, typically a corporation or a trust. If it is a trust, the foundation will have trustees; if it is a corporation, it will have directors and officers. In either case, there will be quite a bit of bureaucracy, so you should be aware of that before taking this step. And this entity will provide financial support for charitable activities and/or organizations.

3. What are the benefits of setting up a foundation?

A private foundation has many benefits. Among them are tax benefits: contributions to the foundation are generally tax deductible, and the foundation can pay for legitimate expenses related to the purpose of the foundation, so that activities you enjoy anyway become tax free. You will also have a great deal of control over how the funds are spent, so you can be more actively involved in how your money is spent to make the world a better place.

4. How will it work?

By transferring assets to a Private Foundation, you can create an endowment that will generate an income stream to support your interests, now and far into the future. You can create a foundation that engages in charitably oriented activities itself, or one that supports other charities. But either way, your foundation can contribute a great deal of good to the world, and even bring your family closer together to do it.

5. Why it might be right for you

Successful people usually have many different interests. By creating a private foundation, you provide financial support for your personal interests and contribute to the good of society at the same time. It's a win-win all around.

Private foundations can help you pay for pursuing your interests and save taxes, while making a real difference in the world. Claim your free chapter of the ultimate guide to using private foundations for wealth management at: http://PrivateFoundationCenter.com

And for more information, contact the author, International Wealth Management Advisor Thomas Quinlin at: http://LifestyleDesignGroupIntl.com

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Would you like to create a private family foundation? It can be the most rewarding thing you'll ever do -- or not. Take this quiz to find out if you're ready.

To find out if creating a foundation is right for you, mark the following statements as either true or false.

1. The main reason for creating a foundation should be the resulting tax savings.

2. Setting up a foundation is similar to setting up a corporation.

3. A private family foundation would make a terrific Christmas present for my family.

4. If I don't like my foundation anymore, I just close up shop.

5. Done correctly, a foundation can be very rewarding and bring the family closer together.

6. It's important to focus on political correctness when picking a purpose for the foundation, whether I like the activities involved or not.

7. A private foundation is private, so there are few if any reporting requirements and administrative hassles.

Answers

1. False. Tax savings may be one of the benefits, but you should focus first and foremost on what you're passionate about and make that the mission of your foundation. To make your foundation work rewarding, you need to find a way to integrate it with your own passions and your life. Many of the tax savings actually come from your being able to pursue your passions on pretax dollars.

2. True. Setting up a foundation is very much like setting up a corporation. In fact, a foundation is generally set up as a corporation. There's also a significant amount of legal and administrative work that must be done on an ongoing basis.

3. False. A foundation is a huge commitment. Unless your family has been closely involved in the decision making process and is deeply committed to the foundation, it won't work. "Surprising" your family with a foundation is a very bad idea.

4. False. A foundation, like a corporation, is a long-term commitment. It becomes an entity of its own. You can't just start and shut them down at will.

5. True. If your foundation is truly built around your passions and those of your family, and is well integrated into your life plan, it will likely be very rewarding. And working together on a shared passion is bound to result in a closer relationship between you and your family.

6. False. You must create your foundation around your own passions, not around what you perceive to be the politically correct issue of the moment. If you don't, you will lose interest very quickly, and your foundation will become a chore, and maybe a nightmare.

7. False. The name notwithstanding, a private foundation is subject to numerous requirements. For example, there are reporting requirements, legal and administrative requirements, as well as requirements about disbursing funds to charities or for charitable activities.

The Results

How did you do? If you have answered at least 6-7 questions correctly, you may be ready to take the big step. Be sure to get all the fact, though, so your foundation will become the rewarding experience you deserve.

If you answered fewer questions correctly, you may want to get more information on private foundations. Find out more about how they really work and what is involved at http://PrivateFoundationCenter.com

To help you make sure you get all the details right, get your free sample chapter from the ultimate guide to using private foundations for wealth management by International Wealth Management Advisor Thomas Quinlin at: http://LifestyleDesignGroupIntl.com

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You know what a private foundation is, but what in the world is a supporting organization? How do they relate to each other? And why does it matter?

First of all, the biggest difference is that while private foundations are by definition private, supporting organizations are public charities. As such, they are not subject to the more restrictive rules and limitations that apply to foundations, specifically foundations that don't actually administer their own programs (called non-operating foundations).

Here is an example: When a cash contribution is made to a supportive organization, it is deductible up to 50% of the donor's adjusted gross income. In contrast, a cash contribution made to a private foundation can only be deducted up to 30% of the donor's adjusted gross income.

When you contribute appreciated assets, such as real estate or stock, to a supporting organization, these assets are deductible at full fair market value up to 30% of the donor's adjusted gross income.

In contrast, these same contributions made to a non-operating foundation are only deductible up to 20% of the donor's adjusted gross income. Not only that, but the deduction is only available if the appreciated asset is "qualified" stock, which essentially means that it consists of publicly trades shares.

In addition, supporting organizations are technically "public" charities. As such, they are subject to the "intermediate sanction" rules that apply to public charities. On the other hand, private foundations are subject to the more onerous private foundation operating rules under Code Sections 4940 through 4945. These stringent rules include the following:

1. A 1% to 2% tax on net investment income;

2. An excise tax if at least 5% or more of the value of the foundation's investment assets are not distributed annually;

3. An excise tax (which is really nothing more than an income tax in disguise) on "jeopardy investments." Jeopardy investments are investments where there is a high degree of risk that money could be lost to the charitable purpose.

4. An excise tax on "self-dealing," which is a very broadly defined set of no-no's that include prohibitions of transaction between the foundation itself and certain insiders. The prohibited transactions are far reaching and include certain sales, loans, compensation and providing services or goods between the foundation and certain family members, contributors or foundation managers.

5. Excise taxes on taxable expenditures, e.g., payments to persons or entities other than qualified public charities.

Supporting organizations are not subject to all these limitations. So if you're thinking of setting up a foundation, you may want to learn more about the various options you have, including supporting organizations.

Let's recap: A private foundation or a supporting organization can help you pay for pursuing your interests and save lots of taxes, while you're making a real difference in the world. You're invited to claim your free chapter of the ultimate guide to using private foundations for wealth management at: http://PrivateFoundationCenter.com

The author, International Wealth management Advisor Thomas Quinlin, rides his Harley all over the world, while showing people how to live pre-tax in a post-tax world by turning their interests into a business, a charitable activity, or both. Questions? Contact Thomas at: http://LifestyleDesignGroupIntl.com

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Do you consider yourself wealthy? Or would you like to be wealthy? Whether or not you have a high net worth, there are a number of private wealth management strategies you can use to achieve your dream lifestyle sooner rather than later -- and keep it too.

As a private wealth management advisor, I have been helping clients from both categories. Those who have accumulated considerable wealth and would like to grow it; and those who are still on their way. Both groups need strategies for how to get there.

Either way, there is one ingredient that I insist on. They need to know the answer to the following question, and so do you: Why exactly would you like to be wealthy, and what exactly would make you feel wealthy?

This isn't as stupid a question as you may think. Sure, there's the comfortable lifestyle and financial security. But there are huge differences in terms of what that may actually mean to each particular person.

So answering that question can make the difference between arriving where you'd like to be and enjoying the journey -- or not.

The key private wealth management planning strategy is to become very clear about what exactly a "comfortable lifestyle" means to you. Does it mean living in a villa in Beverly Hills? Or does it mean living comfortably any place you want to live, such as in Costa Rica, for example? The latter may require much less money than the former.

You may also want to think about what you would really like to do in your ideal life. Do you see yourself traveling, playing golf, or pursuing other passions? Do you want to make the world a better place? Or do you mostly want to get the kids through college without going broke?

The net worth required for any of these can be vastly different. It won't necessarily take millions to feel like you're living a millionaire's lifestyle -- if you know what you're doing. Not that there's anything wrong with being "really" wealthy. But you can achieve a wealthy lifestyle -- while still being wise with your money -- long before you have amassed a huge net worth, if you have the proper private wealth management guidance.

So before you start focusing on the financial aspects of being wealthy, why not start focusing on the lifestyle you want to achieve?

Take some time out and think through the following questions:

1) Where would you like to live?

2) What would you like spend your time doing?

3) If there were any one thing you would like to achieve, what would it be?

4) Who would you like to spend time with?

Write down the answers. And add as much detail as you want.

And then, work on finding out where you are right now and how you can get from where you are to where you would like to be -- and how far along on that journey you'd like to be 6 or 12 months from now. What will it take?

If you do have a high net worth, you'll probably have more flexibility. Still, there are important aspects to keep in mind to ensure that your wealth will be protected and allowed to grow.

If you're still working on building up your assets, you'll have to work harder when it comes to figuring out how to get to your goals.

However, there are several things you can do to increase your net worth significantly. These can include saving on your child's college education, saving on taxes, as well as increasing your income. An experienced private wealth management advisor will be able to help with any of these.

These questions are just a few of the ones you need to answer for yourself to guide you in planning your wealth management strategies to get the results you want.

If you're ready to escape the daily grind and achieve real wealth for all the right reasons, visit http://LifestyleDesignGroupIntl.com to get Thomas Quinlin's free guide that coaches you to discover (and achieve) your ideal lifestyle design.

Thomas is an international private wealth management advisor who only works with clients who are willing to explore what they really want out of life and design a plan to get there.

Contact him at his blog at http://PrivateWealthManagementIntl.com if you're ready to live your dreams.

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Retirement funds and 401k plans can be a little confusing even in the best of times. And the question about Roth Conversion only adds to the complexity. Read on for expert answers to some of your key questions about Roth Conversion, 401k limits and 401k deadlines to make sure you'll get the most from your retirement savings.

What are the current 401k limits?

The 2010 limit for contributions to a 401k for employees who are 49 years of age or younger is $16,500. That is subject to change as adjustments are made on a yearly basis.

Employees who are 50 or older are allowed what is called a "catch up" contribution. The amount for this is currently an additional $5,500, for a total of $22,000. Since these limits will likely change for 2011, be sure to check for the latest numbers at that time.

What about 401k deadlines?

You may know that you have until April 15 of the following year when you put money into an IRA. That's not the case with 401k accounts! For those, you will have to make any contributions by the end of the same calendar year.

So if you want to make contributions for 2010, be sure to make it by December 31st of 2010, i.e., the year for which you want them to count. Don't miss your 401k deadlines or else you'll lose out on the deductions.

What about Roth Conversion and Roth 401k Accounts?

Roth 401k accounts are different from the traditional 401k accounts. Here, the money is contributed from your after tax income. There's a plus side, however: once you retire, you can withdraw that money tax-free. Or you can keep it where it is and let it earn some more money for your later years -- or your heirs. The limits and deadlines are the same as for the traditional 401k.

To Roth or not to Roth?

Whether you choose to invest in a traditional 401k or a Roth 401k or both, the limit for your 401k contributions applies to the total amount you contribute to the traditional 401k and a Roth 401k together.

In other words, you cannot double your contribution by contributing to both types of 401k, but you can choose how much you contribute to each kind, up to the maximum limit allowed for both together. Going over your 401k contribution limit can result in stiff taxes and penalties, so avoid this at all costs.

Fortunately, there are financial advisors that can help you work your way through the details. They are there to sweat the small stuff so you won't have to.

Get help from a financial advisor who specializes in overcoming 401k contribution limits by helping you to invest in alternative investments that can yield a much higher return with excellent safety.

These kinds of investments are especially powerful inside Roth accounts, which high income earners can finally take advantage of in 2010.

Ask private wealth management advisor Thomas Quinlin about Roth Conversion when you talk with him about options to supercharge your 401k.

Contact Thomas at http://LifeStyleDesignGroupIntl.com --

And get more information about Roth Conversion at: http://RothConversion2010.net

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