Family Office Presentations

Good-bye Tax Shangri-La

Mark J. Blumenthal, Chairman of Blackman Kallick’s Family Office Services Group spoke at the Family Office Forum in Chicago on June 3, 2011. 

His presentation was a call to action for wealthy families and private business owners to consider the income tax and wealth transfer tax savings opportunities afforded by the following:

  • the new $5,000,000 unified gift and estate rules
  • the impending expiration of the 15% tax rate for dividends and long term capital gains
  • the  low IRS interest rates used for gifting, and
  • the unique valuations of some private and public investments.  

Blumenthal stressed that the tax and investor-friendly “convergence of these four factors could change at any time” and that “the clock is ticking” regarding the end of the current tax breaks on December 31, 2012. 

While many of the family offices and wealthy investors that attended the conference indicated that they were taking advantage of these incentives, Blumenthal warned others that it is “…like the wild, wild west. If you are not buying, selling, or gifting something, you will look back on this period in history and say, I was scared and I missed it!"   

In the near future, wealthy investors should be carefully anticipating the specific impact of any pending tax rate changes and changes to tax preference items, as these changes will affect distinct businesses and ownership structures very differently.

Blumenthal stated, “One thing is certain, there will be winners and losers when Congress changes tax rates and preference items.  For example, the owner of a consulting business might see his or her taxes decrease, while the next-door neighbor, who has the same income but owns a manufacturing plant, could see his or her taxes go up.”

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The Birth of The Family Office

Mark Blumenthal, Blackman Kallick Partner was part of the faculty at the Fourth Annual Family Office Management Conference, January 30-31, 2007, held in Miami, Florida.

Mark presented a case study, which followed the Jones family through a strategic review of their company following an unsolicited offer to purchase the company; explained why the family decided to sell the company after 50 years of ownership; described how the family was able to form a family office that would support their family mission; and reviewed some of the mistakes the family office made in year one and described the family office's priorities for the following year.

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Exposing the Psychological Dilemma of Zero Tax Strategies

Mark Blumenthal, Blackman Kallick Partner was part of the faculty at the Mastering Tax & Estate Planning Summit, January 30-31,2007, held in Miami, Florida.

Mark provided his most recent thoughts on zero tax strategies, stressing the need for investors not to overreact or underreact to taxes. Mark told his audience that one of their most important take home ideas is to "simply understand that taxes are a significant drag on your investment returns." Mark has been a sought-after speaker on this topic for years and described the latest sophisticated tax planning ideas for investors who are focused both on public securities and private investments.

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Understanding the Psychology of Taxes on Investor Behavior

Mark Blumenthal, Partner, was part of the faculty at the 13th Annual Family Office Forum, held June 12-14 in Chicago.

Mark explored solutions for dealing with the psychological dilemma of how an investor cannot overreact or underreact to the reality of taxes. He also discussed how to reduce the "tax drag" on investment returns using sophisticated planning, the impact of recent tax law changes on particular types of investments, a fresh look at Section 1031 like-kind exchanges, an IRS and Washington, D.C., tax update, and the latest and greatest tax planning with the alternative minimum tax.

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Tax Strategies That Can Supercharge Investment Returns

Mark Blumenthal, Partner, served as the chairman of the Mastering Tax & Estate Planning Summit, Jan. 30 - Feb. 1, 2006, held in Coral Gables, Florida.

Mark provided the opening remarks for the conference, attended by family office professionals and their advisors, stressing the challenge of providing long-term tax planning solutions in a short-term political world.

Mark was also a speaker updating his thoughts from previous family office tax conferences (see below) and discussed the latest strategies for eliminating the tax drag on investment returns. He entertained the audience with his perspective on the likely future actions of congress on the affluent. Finally, he shared with the attendees the secret of how to make your long-term capital gain taxes disappear and how this illusion can actually increase your net worth; this secret is not in the outline.

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Reducing Fraud and Other Risks in the Family Office Through Effective Internal Controls

Mark Blumenthal, Partner, was part of the faculty at the IIR's Third Annual Family Office Management Conference, Jan. 30 - Feb. 1, 2006, held in Coral Gables, Florida.

In his presentation, Mark discussed the positive evolution of the family office structure and how this is providing families with more choices and opportunities to access best-in-class service providers. On the other hand, many single/virtual family offices continue to face risks from fraud resulting from inadequate internal controls and poor operational practices. Through comprehensive case studies, Mark illustrated how two family offices dealt with these challenges. Mark also reviewed his recent article titled "Extreme Makeover" that appeared in the January 2006 issue of Worth. Read full article  

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Implementing Tax Strategies to Maximize Investment Returns

Mark Blumenthal, Partner, was part of the faculty at IIR's 12th Annual Family Office Forum, June 2005, Chicago, Illinois.

See "Mastering Tax Law Changes to Improve After-Tax Investment Returns," from January 2005 below for the main points of the speech. Mark updated this presentation and also covered new tax strategies (you can ask him about the opportunity triangle), new rules for reportable transactions and the new Circular 230 rules. Mark also expanded his coverage of the important planning considerations for alternative minimum tax (AMT) on the wealthy and used real examples of some famous public figures to illustrate his thoughts.

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Closing the Family Office Barn Door—Discovering Internal Controls!

Mark Blumenthal, partner, was part of the faculty at IIR's Family Office Management Conference, January 2005, Coral Gables Florida.

In his presentation Mark defined the many different types of family offices including, Single, Multi, Virtual, and Hybrid Family Offices. He also discussed what types of families use family offices and the process that families consider when choosing a family office structure. The focus of this talk, however, was on the vulnerability of most family office's to fraud because of the lack of segregation of duties and family and management's ability to override controls. He defined the three conditions that must exist for fraud to occur, and how to position the family office to mitigate these factors. The highlight of his talk was a Comprehensive Case Study that critiqued the general management controls and business processes of the "Jones Family Office" resulting in recommendations to improve internal controls and best practices for operations.

Request a copy of "Closing the Family Office Barn Door—Discovering Internal Controls!"

Mastering Tax Law Changes to Improve After-Tax Investment Returns

Mark Blumenthal, partner, was part of the faculty at IIR's Mastering Tax & Estate Planning Conference, January 2005, Coral Gables Florida.

In his presentation Mark discussed the impact of the many recent tax law changes on investment strategies and investor behavior, including the impact of the 15% rate for Long-term capital gains and dividends; the use of debt; loss harvesting strategies; the increased cost of a short sale; the impact on certain asset classes and types of investments such as real estate, hedge funds, mutual funds, and ETFs. He also covered recent developments that impact affluent taxpayers including new penalties for failure to report tax shelters and foreign bank accounts, new airplane expense limitations for businesses, and liberalization of the use of S-Corporations for families. Finally, Mark covered in depth why the majority of wealthy taxpayers are in Alternative Minimum Tax ("AMT"), how to know what is triggering AMT, investment strategies to use AMT to actually reduce your taxes, and sophisticated charitable and AMT modeling.

Highlights of The American Jobs Creation Act of 2004

Mark Blumenthal, partner, was the luncheon speaker for the Professional Advisory Committee of the Jewish Federation of Metropolitan Chicago, December 2004.

In his presentation, Mark highlighted The Act's provisions that most impact wealthy families and their businesses including the extraterritorial income repeal; foreign dividends received deduction, domestic production activities deduction; deferred compensation; penalties for failing to disclose reportable transactions and foreign bank accounts, and others.


This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.