Securing your Legacy
for Generations

Private equity entry does not just change who owns a professional services firm. It changes the questions the management team needs to be asking about their benefit programs, and the urgency with which those questions need to be answered.Attorneys want to know when it fits into estate plans. CPAs want clarity on the tax mechanics. Wealth managers want to understand how it’s actually implemented. And nearly everyone asks the same underlying question:

When does PPLI make sense and when should we walk away?
That’s changed.

Most law firm partnership agreements include a buyout or equity redemption arrangement; a mechanism for compensating retiring partners for their ownership interest. The structure varies and may include lump sum payments, installment arrangements, formulas based on years of service or origination credit. What most of these arrangements share is that they are unfunded.
Attorneys want to know when it fits into estate plans. CPAs want clarity on the tax mechanics. Wealth managers want to understand how it’s actually implemented. And nearly everyone asks the same underlying question:

When does PPLI make sense and when should we walk away?
That’s changed.

The executive benefits conversation usually starts in the wrong place. It starts with products: someone proposes a deferred compensation plan, or a life insurance arrangement, or a cash balance structure. What rarely happens first is the more fundamental question: what are we actually trying to accomplish, for whom, and over what time horizon?Since then, we’ve received more questions about PPLI than any other topic we’ve written about this year.

Attorneys want to know when it fits into estate plans. CPAs want clarity on the tax mechanics. Wealth managers want to understand how it’s actually implemented. And nearly everyone asks the same underlying question:

When does PPLI make sense and when should we walk away?
That’s changed.