Bucket Five: Personal Significance

Bucket Five is personal significance. Personal significance is achieved by giving something to somebody else. Earnings in Bucket Five are allocated to fund specialty designed long-term care contracts, which allow the doctor to fund up to $3m with non-taxed compensation, ultimately funding a permanent endowment.

One component of Bucket Five planning is the permanent endowment program. It administers funding for 501(c)(3) nonprofit organizations that support values important to the doctor and society.

For our clients who reach Bucket 4 and 5, we use an array of tax-optimization structures. The precise structures utilized are not determined at the outset. They are the result of an individualized consultation and customized structures meeting the needs of each individual’s risk profile, tax-optimization needs lifelong objectives.

One way of determining a client’s need is the economic “loss test.”