Profession: Realtor
Location: Honolulu, Hawaii

Emi’s Client:
Mr. Yamada owned a vacation home in Hawaii and approached Emi to help him find an investment property that qualified for accelerated depreciation tax credits in Japan.

Mr. Yamada’s tax advisor in Japan advised him to purchase a wooden framed property older than 22 years to help off-set part of his income tax liabilities due in Japan. Mr. Yamada also shared that he owns and operates a successful software development company and the eldest of his three children serves as its Vice President. Mr. Yamada wishes to transfer his collective personal and business assets equally to his children and is unsure as to the manner in which to do so without creating ill feelings amongst his children, as his younger two are not actively involved in his company as is his eldest son. At the same time, his assets are predominantly represented by his business holdings and he is faced with the dilemma of effectively disinheriting his other heir(s) should he transfer all of his assets to the one actively involved in the business through custom succession planning.

Introduction to The Pacific Bridge Companies (TPBC):
After interviewing Mr. Yamada and conducting research, Emi learns wooden frame structures referred as “Mokuzo” in Japan that are 22 years or older provide maximum depreciation credits. Emi wants to ensure she provides her clients access to the best opportunities wherever they may exist. In addition, Emi learns Mr. Yamada wants to ensure their Hawaii vacation home stays in the family as all their children enjoy vacationing in Hawaii. Because of this, Emi calls on TPBC to assist in ensuring Mr. Yamada’s goals are appropriately addressed.

Financial Focus:

  • Income Tax
  • Wealth Accumulation and Preservation
  • Wealth Transfer Planning

Financial Alternatives Coordinated by TPBC:
A suitable multi-unit apartment property was identified on the West Coast of the Mainland US. This provided Mr. Yamada with the income tax deductions he sought. Additionally, TPBC advised Mr. Yamada to create buy/sell agreements between the siblings. This agreement contractually obligates the child that will run the business to buy the stock inherited by his siblings who are not otherwise involved in the family business upon the immediate passing of their father. At the same time, this ensures that all corporate assets and voting rights are retained by the intended successor of the family business, while providing cash to those heirs who are not contributing members of the family company. The buy sell agreement was formally funded through life insurance from the United States to ensure that the company successor has the necessary cash to honor his contractual promise and buy the stock from his siblings when Mr. Yamada, his father, passes away.