The sailing is smooth, sometimes

RocheHarborThis month, Kevin Fitzwilson and his team cruised by boat up to beautiful Roche Harbor to meet with Coldstream clients. A great time was had by all. The weather on the return trip, however, allowed this hearty crew to ‘soak up’ all the fun they could handle, earning a new and likely permanent respect for the words ‘small craft advisory’. It was a true team effort on the trip home, and Jenny Dunne contributed to our team’s safe return with her ability to repair windshield wipers, on-the-fly.

#alsicebucketchallenge

Detlef Schrempf, with help from his Coldstream team members, accepted the #alsicebucketchallenge from former teammate Shawn Kemp and has challenged NBA players Terrence Jones and Terrence Ross, Talking Rain CEO Kevin Klock and F5 Network CEO John McAdams to match his $1,000 donation. Coldstream has accepted the challenge and will be making a $1,000 donation as well!

Coldstream Announces New Chief Investment Officer

HowardColdstream Capital Management, Bellevue, is pleased to announce the promotion of Howard Coleman to the position of Chief Investment Officer. Known for his upbeat and intensely driven nature, Coleman has led Coldstream’s Investment Strategy Group and been a member of the firm’s Investment Committee since his previous firm, Genesee Investments, LLC, was acquired by Coldstream in 2012. Prior to joining Coldstream, Coleman spent 15 years as General Counsel, Managing Director, and Investment Committee member for Genesee Investments, LLC, which managed several hedge funds and hedge funds of funds with peak assets totaling approximately $500 million. “Howard has articulated a compelling vision for Coldstream’s investment platform,” says COO Phil Platt. “We are confident his leadership will enhance Coldstream’s investment offering and help deliver strong risk adjusted returns for our clients.” Additionally, Coleman has served as an outside director to private equity and hedge funds, and he has chaired the Investment Committee and currently chairs the Board of Governors of Antioch University. He earned his BA in Political Science from Antioch College and JD from the University of Washington.

About Coldstream

Established in 1996 in Bellevue, WA, Coldstream serves the unique needs of affluent families, companies, and foundations throughout the United States. With approximately $1.5 billion of assets under management, Coldstream also specializes in 401K plan design, risk management, and financial advisory services.

Coldstream volunteers at Eastside Baby Corner

Recently our Coldstream team volunteered at Eastside Baby Corner, an organization that makes a positive difference in the lives of children and families in need by collecting and purchasing children’s items. With the help of volunteers, Eastside Baby Corner distributes these items, free of charge, through agencies who are providing services for families in east King County.

Use a Buy-Sell Agreement to Sell Your Business

After you have a valuable financial interest in your company, you may want to think about various exit strategies. A funded buy-sell agreement with your co-owner or partners can provide security to you, your partners and your family. A buy-sell agreement is a legal contract that is common in closely held businesses. It is an agreement you can enter into now that provides for the future sale of your business interest. When carefully drafted, your buy-sell agreement may be used to set the taxable value of your business interest.

The buy-sell agreement provides a measure of security for both parties of the sale. The buyer is bound by contract to buy your interest, and the buyer knows that you are not allowed to sell to another party. In addition, the buy-sell agreement identifies the conditions under which a sale will occur. You can choose the events that will trigger the sale of your interest under the agreement. Typical trigger events include death, long-term disability, retirement, and divorce.

With a buy-sell agreement in place, your family is relieved of any potential worries about what to do with your business interest if you should become sick, disabled, or die. Your plans for the business will have already been established and the pricing and financing terms agreed to in writing. Your family won’t have to search for a buyer or be at a negotiating disadvantage when they find one.

Typically, life insurance is used to fund a buy-sell agreement. When life insurance is used, either the company or the individual co-owners buy life insurance policies on the lives of each co-owner. If you were to die, the policy owners (the company or co-owners) receive the death benefits from the policies on your life. That money is paid to your surviving family members as payment for your interest in the business. Besides the death benefit, if sufficient cash values have built up within the policy, the funds can be accessed to purchase your business interest following your retirement or disability.

There are three types of buy-sell agreements. In an entity buy-out, the business itself buys separate life insurance policies on the lives of each of the co-owners. The business is the owner and beneficiary of the policies. In a cross purchase buy-sell agreement, each co-owner buys a life insurance policy on each of the other co-owners. Each co-owner usually pays the annual premiums on the policies they own and are the beneficiaries of the policies. If there are many co-owners, multiple policies must be purchased for each co-owner. The third type of buy-sell agreement is a hybrid agreement that combines features from both the entity purchase and cross purchase models.

Life insurance creates a lump sum of cash to fund the agreement at death and the proceeds are usually paid quickly, ensuring that the buy-sell transaction can be settled quickly. While life insurance proceeds are generally income tax free, a C corporation may be subject to the alternative minimum tax (AMT).

Buy-sell agreements can be set up for companies with one or many owners. Just as there are different business ownership arrangements, there are different forms of buy-sell agreements. The buyer could be any or all of the current co-owners, an outside third party, or the business entity itself. While there are many advantages to setting up a buy-sell agreement, there are also disadvantages. One such disadvantage is that the agreement typically limits your freedom to sell the business to outside parties.

Contact your Coldstream Relationship Manager to discuss the pros and cons of a buy-sell agreement if you think that such an agreement is right for your business.

About Coldstream

Coldstream Earns Honors Coldstream was named one of the Puget Sound Business Journal’s Eastside Fastest Growing Private Companies for 2014. We were selected based on net revenue growth over the three years ending in 2013. While we are honored to have been part of this illustrious list, we recognize it is you, our clients and…

Tips on Preventing Fraud

Unfortunately, in our ever interconnected and automated world, we are seeing a big uptick in cases of fraud. While it is unlikely all cases may be prevented there are several ways you can better protect yourselves and your information. While there is no current way for the IRS to alert you if a Tax Return…

A Green Light for Further Gains?

The first half of 2014 turned out to be positive almost everywhere you looked in the financial markets. After posting a stellar 2013, the bull market and asset inflation have continued. While back to back large double digit annual returns from stocks do not happen often, it is normal to see a positive return in…

Coldstream Earns Honors

Coldstream was named one of the Puget Sound Business Journal’s Eastside Fastest Growing Private Companies for 2014. We were selected based on net revenue growth over the three years ending in 2013. While we are honored to have been part of this illustrious list, we recognize it is you, our clients and friends, who make…

On the links at Chambers Bay

This week Relationship Managers Kevin Fitzwilson and Joe Cervantes attended a TD Ameritrade-sponsored event at the beautiful Chambers Bay Golf Club in Tacoma. The course, which will host the 2015 U.S. Open, was in spectacular shape, the weather cooperated, and a splendid time was had by all. The event enabled our team to meet with…