In early January, Congress passed the American Taxpayer Relief Act, which cemented the $5 million exemption amounts for the estate tax, the gift tax and the generation-skipping transfer tax. Soon after, PNC conducted its annual Wealth and Values Survey of American millionaires, who expressed some rather surprising viewpoints.

For example, more than 80 percent of respondents to the 2013 survey indicated that each generation should be responsible for creating its own wealth. That percentage is up from 65 percent in the 2007 survey.

“This is a trend that I personally have seen as I talk with clients,” said Kathy Kraeblen, senior wealth planner for PNC’s eastern Carolinas region. 

There are 10 PNC branches in the Wilmington market, and the bank ranks fifth in terms of local market share. 

“Warren Buffet is a good example of the trend,” Kraeblen said. “They want to help their kids along, but not so much that [the kids] lose their own initiative. They want their kids to experience the satisfaction of accomplishment, of contributing to society.”

Kraeblen added that 86 percent expect to pass on something to their heirs, and nearly 80 percent expect to pass on at least $500,000.

Substantially, more than half of the responding millionaires acknowledged they had received some help from their parents, and 91 percent said they are doing more for their children. 

About 84 percent have helped or expect to help pay for their children’s higher education. More than half (61 percent) are willing to help their children purchase a car; 45 percent are willing to chip in on a down payment for a home.

“There are different ways of structuring gifts and paying for education, so get advice from an attorney or advisor,” Kraeblen said.

She emphasized that while 82 percent of respondents had wills and 52 percent had established trusts and/or retained estate managers, many plans for the ultimate transfer of wealth were thin on details. 

“The survey shows that only 20 percent of respondents have gone so far as to stipulate how they will pass on their assets and whether inheritance will be age-based or gradual,” she said. “A lot of families really need to think about when they want their children or grandchildren to gain access to these assets.” 

“Passing along values is important to people in the millionaire category,” Kraeblen continued. “They should talk to an estate planning attorney, especially if they want to establish a dynasty trust – one that is designed to last for multiple generations – to keep from having an estate tax potentially imposed on each successive generation.

“A trust protects assets from creditors and predators and enables them to be managed and kept in the family line in the event of a divorce. You can specify what the funds can be used for and encourage the right kind of behavior from your heirs. But it does take a lot of planning.”

Kraeblen said that surprisingly few of the business-owner millionaires surveyed had tackled succession planning. 

“Of the 20 percent of these millionaires who are business owners, only 15 percent have a formal succession plan in place,” she said. “That is another thing that is important to talk about: passing a business on.”

Live Oak Bank highlighted as top employer in state

Live Oak Bank was recently named one of the 2013 Best Employers in North Carolina. 

The Wilmington-based SBA lender sits atop the list of small- to medium-sized employers that was compiled by Business North Carolina magazine with the help of the N.C. Council of Society of Human Resources Management and Harrisburg-Pa.-based Best Companies Group.

Fully paid health insurance and profit sharing were two employee perks that helped send Live Oak Bank to the head of the class. 

In a news release, bank CEO Chip Mahan said that Live Oak has always put its employees first, recognizing that happy employees make for happy clients. 

“We are proud of what we’ve created at Live Oak Bank. This is the most significant award that I have ever been involved with, and one that we shall strive the hardest to retain,” Mahan said in the release.

Since its founding in 2007, Live Oak Bank has provided small business loans to professionals wishing to start or expand their business. Live Oak’s lenders specialize in acquisitions and refinancing as well as real estate loans and ground-up construction projects. The bank lends to those in the veterinary, dental, medical, pharmacy, death care and investment advisor industries nationwide.

A two-part process was used to create the Best Employers list, according to the release. The first part – worth 25 percent of the score – evaluated each nominated North Carolina company’s workplace policies, practices, philosophy, systems and demographics. The second part – worth 75 percent – surveyed employees to measure their experience.

There was no fee for companies to participate.

For more information on the list and program, go to www.BestEmployersInNC.com.

First Federal announces merger

First Federal Bank, with seven offices in the Wilmington market, will soon have an expanded presence in the Carolinas.

First Federal’s parent, Charleston, S.C.-based First Financial Holdings Inc., announced Feb. 20 the signing of a merger agreement with SCBT Financial Corp. If the agreement is approved by regulators and shareholders, the transaction should close in the third quarter of 2013.

First Federal has 66 locations in the Carolinas and is the third-largest financial institution headquartered in South Carolina, ranking 8th in deposit share market. Locally, the bank is also 8th in deposit share market, with deposits of $236.8 million. SCBT Financial is the parent company of SCBT, NCBT, Community Bank & Trust, Savannah Bank and Bryan Bank & Trust.