After attaining a joint MBA/JD degree, attorney Jim Duggan set out with the intent of simply becoming a corporate lawyer. He was soon introduced to what he describes as, “the gaping holes in almost all closely-held business owners’ planning structures.” He realized the industry desperately needed an integrated legal solution. “My corporate clients were in need of estate planning and tax planning that factored in both their corporate and their personal circumstances. Unfortunately, most attorneys and law firms are specialty focused and therefore unable to provide adequate comprehensive services. In this manner, we are able to ensure that a client has the proper corporate structure, ownership by the appropriate estate planning devices, and succession and tax planning that meets both the business and personal objectives. For the private client, this is the only way a structure can be ‘optimized.’”
Duggan Bertsch is a transactional law firm providing integrated legal services for the private client. They focus specifically on business and corporate, trust and estates, and tax services for entrepreneurs and high net-worth clients. Duggan describes them as “unique from other law firms in the space in that we provide a multidisciplinary planning approach integrating various areas of planning, advisors, and client planning objectives.”
Duggan is married and has two children. He describes his typical weekend as a balancing act between working out, playing sports, coaching his son, and playing piano for his daughter while she practices for theater roles. At age 14, she has been acting and singing in community theaters since she was five. Musicals are her forte and she is also an accomplished violinist. Duggan finds it a real joy to watch her perform.
Having children with such different interests keeps him on his toes. In Duggan’s own childhood, both sports and music were a big part of growing up. He took piano lessons for many years as a child, but quit abruptly in the seventh grade when his basketball coach embarrassed him mid-practice by yelling, “Duggan! You gotta go early – piano lessons!” He quit piano lessons that very night, and did not play again until after high school. Duggan also enjoys being a part of all the sports his son plays. Since his son is involved in football, basketball, wrestling, golf and baseball, there is always something going on. But whether it is music or sports occupying his weekend, Duggan says a good day off is always made better when “capped by a really nice glass of scotch around a fire pit.”
He also dedicates much time to a charitable foundation called Network for Teaching Entrepreneurship (NFTE). Ten years ago Duggan was invited to be one of the founding directors. The organization provides business education and cultivates entrepreneurship for economically challenged students in an inner city public school, providing privately funded courses and teachers. Duggan finds it rewarding to be a part of the organization and likens it to the old saying that it is better to teach a man to fish than to just give him a fish to eat.
When asked what he feels are the biggest issues that he sees in the industry today, Dugan responded, “I feel one of the biggest reasons the private client receives inadequate integrated services from law firms is that law firms are unwilling to step into a broader role of responsibility for fear of liability. On the contrary, we feel our job, to be done properly, necessarily requires coordination among lawyers, accountants, insurance advisors, financial planners and other advisors in order to fully understand and accomplish a client’s objectives.” He also added that as the “proclaimed attack on the country’s ‘one-percenters’ continues, and taxes continue to go up to pay for increasing debt,” he sees private client’s needs in the asset protection and tax minimization areas increasing greatly”.
Asset Protection
In his position of comprehensive planning for closely-held businesses, Duggan says he has had “the great privilege of being able to have a seat within the family construct over a long period of time.” He says he has countless stories of clients who have celebrated the passing of their wealth to the next generation or beyond for no or low taxes, with asset bases fully preserved during a lawsuit or bankruptcy, and the “positive and successful rearing of the next generation in the family investment opportunity and broader family philanthropy.” His greatest reward comes perhaps when clients implement a “virtual family office.” “This effectively converts what is otherwise a fleeting inheritance into a perpetual and disciplined family wealth management opportunity.”
As a practitioner for the private client, Duggan says he feels it is his duty to combine asset protection as a primary planning objective with both corporate and estate planning matters. “The laws continue to improve both inside the U.S. and abroad with respect to asset protection vehicles. This is particularly important to clients who take on the enhanced risks of running their own businesses. It is important for such clients to create structures that utilize the most effective asset protection tools available under current law. Generally speaking, this is a combination of exempt assets, limited liability entities, such as limited liability companies and asset protection trusts.”
“Once upon a time, the asset protection trust solution was limited to the offshore realm, but now we have asset protection trust statutes proliferating throughout the United States. In short, I feel it is inexcusable for the high net worth client to possess a structure in which they are exposed to creditors when asset protection solutions are readily now to eliminate or minimize such exposure.”
What the Future Holds
Duggan says he doesn’t really see anything material on the legislative horizon that would increase or decrease the motivation to do proper planning. “We just went through a massive overhaul of the estate tax regime. It is always in question for political purposes, but in reality, we may be set with our laws on the income tax side, so we aren’t looking at adverse tax legislation anytime soon. I think the situation is the laws are aggressive enough that it makes people want to plan.”
For clients involved with international transactions or investments, the landscape has changed dramatically in recent years and Duggan expects it to continue to change dramatically in the foreseeable future. “New legislation continues to be introduced and regulations refined to ensure that all international activity and assets are fully disclosed to the government.”
Finally, Duggan says the days of operating offshore without reporting are behind us. “For those considering entering into international structures or relationships, or those who have such structures to maintain, international compliance is a top priority moving forward.” Failure to do so, Duggan noted, can lead to criminal sanctions without hesitation.
