Step 2 - Setting Up UBOs and Managing Assets and Liabilities

A comprehensive guide on setting up unique beneficiary owners (UBOs), adding assets and liabilities, and understanding the metrics of asset appreciation and indirect liquidity.

June 6, 2024 By Chris Morris

Next, we'll learn how to efficiently manage the details of UBOs (unique beneficiary owners) and assets within an estate planning tool. By following simple steps, you can accurately input UBO information, such as family members, trusts & companies, and tailor the level of detail based on client preferences. Subsequently, we'll delve into adding assets such as financial (equities) or non-financial (real estate), specifying the economic and legal exposure, and determining asset appreciation rates and liquidity metrics. This comprehensive approach ensures a thorough representation of assets and liabilities, catering to varying client needs. Let's get started.

1. Adding UBOs and Managing Details

Once the profile details are set up, we will add the list of UBOs, which are the unique beneficiary owners. This list includes all individuals who own or represent holdings of assets within your estate. To begin, click the Add button and enter a name.

Step #2: Click "Enter Full Name" — Click "Enter Full Name"

Add as many UBOs as required. It is first recommended to create the primary client as a UBO. Example if, the client account is "Tom Joris" the first UBO would be "Tom Joris". This is important for asset allocation ownership per UBO on the Asset & Liability identity card details.

The list of UBOs can be specific, like the exact name of the beneficial owner, or as vague as needed for client anonymity. Next, we will add the list of assets and liabilities. Let's begin by clicking to add an asset.

Step #5: Under the Balance Sheet "Assets" tab click "+" — Under the Balance Sheet "Assets" tab click "+"

And now, we have the asset identity card, containing all the essential information for adding a specific asset, which we will use later. Let's add a non-financial asset such as a ski chalet in this example.

Step #6: Click "Enter Asset Name" — Click "Enter Asset Name"

Step #7: Click "Enter Value" — Click "Enter Value"

Step #8: Choose the underlying currency of this asset — Choose the underlying currency of this asset

Step #9: Since this is a real estate asset, click "Illiquid Asset" — Since this is a real estate asset, click "Illiquid Asset"

Step #10: A "Key Family Holding" refers to specific assets that are crucial to a family's financial portfolio, typically assets that the family uses directly, such as their primary residence. Selecting "Yes" for key family holdings on the identity cards section indicates that these assets should be excluded from stress testing. — A "Key Family Holding" refers to specific assets that are crucial to a family's financial portfolio, typically assets that the family uses directly, such as their primary residence. Selecting "Yes" for key family holdings on the identity cards section indicates that these assets should be excluded from stress testing.

Step #11: Choose the sector which most accurately represents the asset — Choose the sector which most accurately represents the asset

Step #12: Click "Real Estate" — Click "Real Estate"

Step #13: Choose the "Climate Change Exposure" rating of the asset. I.e. based on your own assumptions or leveraging our AI suggestion integration (COMING SOON). What is the long term impact of climate change on this particular asset and how will this impact its economic value? — Choose the "Climate Change Exposure" rating of the asset. I.e. based on your own assumptions or leveraging our AI suggestion integration **(COMING SOON)**. What is the long term impact of climate change on this particular asset and how will this impact its economic value?

Step #14: In this case, a ski chalet in Switzerland (depending on geographic location) may he at "High" risk of climate change impact, therefore potentially impacting the economic value of that asset over time. — In this case, a ski chalet in Switzerland (depending on geographic location) may he at "High" risk of climate change impact, therefore potentially impacting the economic value of that asset over time.

Step #15: Next we define the "Country of Economic Exposure" of the asset. Which economy is this asset exposed to? Where does it sit geographically? — Next we define the "Country of Economic Exposure" of the asset. Which economy is this asset exposed to? Where does it sit geographically?

We will then select the country of legal exposure. Is this country held through a trust, through a charitable organization, or through a company registered in a different country? In this case, this asset is held through a British Virgin Islands Trust.

Step #18: Select the countries that are relevant. — Select the countries that are relevant.

Step #19: Up to 2 legal jurisdictions can be selected. — Up to 2 legal jurisdictions can be selected.

Step #20: Define the Returns & Liabilities — Define the Returns & Liabilities

Step #21: The cash distribution rate of an asset, often referred to as the yield or dividend yield, measures the annual cash payments (distributions) made to investors relative to the asset's current market value. This rate provides an indication of the income the client can expect to receive from their investment as a percentage of the asset's price. — The cash distribution rate of an asset, often referred to as the yield or dividend yield, measures the annual cash payments (distributions) made to investors relative to the asset's current market value. This rate provides an indication of the income the client can expect to receive from their investment as a percentage of the asset's price.

Step #22: The accrued distribution rate represents the proportionate share of distributions that have been accumulated but not yet paid out to the investor or asset holder over a specific period. It is particularly relevant for income-producing investments like bonds, mutual funds, and real estate investment trusts (REITs), where distributions might be accrued over time before being disbursed. — The accrued distribution rate represents the proportionate share of distributions that have been accumulated but not yet paid out to the investor or asset holder over a specific period. It is particularly relevant for income-producing investments like bonds, mutual funds, and real estate investment trusts (REITs), where distributions might be accrued over time before being disbursed.

In this case, based on the data we have, we assume that this asset will appreciate by 3% year-over-year.

Indirect liquidity % of an asset like a house refers to the ease and speed with which the asset can be converted into cash or cash equivalents through alternative means other than a straightforward sale. For example, a home equity loan or line of credit. These financial products allow homeowners to borrow against the equity they have built up in their home. Later, this helps identify the clients potential liquidity profile.

Note: Indirect Liquidity (in%) not available if the "Direct Liquidity" is set to "Liquid Asset"

Step #25: In this scenario we are assuming a 50% Loan-to-Value (LTV) ratio, referring to the ratio of a loan amount to the appraised value of this asset. — In this scenario we are assuming a 50% Loan-to-Value (LTV) ratio, referring to the ratio of a loan amount to the appraised value of this asset.

Selecting a Specific Liability

Next to the "Asset" column input section, there is a "Liability" section which can also be populated. This could include, mortgages on properties, margin loans on stock portfolios or any form of leveraged lending. The details are filled out the same with 1 difference - > "Cost of Dept %". In a mortgage context, the "Cost of debt %" typically refers to the interest rate that the borrower agrees to pay on the mortgage loan. It represents the effective cost to the borrower for utilizing the loaned funds and is crucial for calculating the overall expense of the debt over its term.

If you have a Liability related to an asset, you can assign this specific liability in this section.

Step #27: Next we define the ownership structure of the assets. Who owns what? Depending on the list of UBOs inputted, the asset ownership can be split accordingly. — Next we define the ownership structure of the assets. Who owns what? Depending on the list of UBOs inputted, the asset ownership can be split accordingly.

Step #28: If splitting across multiple UBOs, ensure the share to all UBOs equates to 100% — If splitting across multiple UBOs, ensure the share to all UBOs equates to 100%

Finally, File Uploads. If you have notary deeds, portfolio PDFs, Insurance documents or more, you can add these to the asset identity card for future reference and file storage purposes.

Step #29: Click "Enter Name" — Click "Enter Name"

Step #30: Upload appropriate files and click "Upload" — Upload appropriate files and click "Upload"

Click "Save" to complete the process

Repeat the process for all assets that you want to track. This can be as granular or as anonymous as you seem fit.

Step 2 - Setting Up UBOs and Managing Assets and Liabilities

A comprehensive guide on setting up unique beneficiary owners (UBOs), adding assets and liabilities, and understanding the metrics of asset appreciation and indirect liquidity.

June 6, 2024 By Chris Morris

1. Adding UBOs and Managing Details

In this case, based on the data we have, we assume that this asset will appreciate by 3% year-over-year.

Note: Indirect Liquidity (in%) not available if the "Direct Liquidity" is set to "Liquid Asset"

Selecting a Specific Liability

If you have a Liability related to an asset, you can assign this specific liability in this section.

Finally, File Uploads. If you have notary deeds, portfolio PDFs, Insurance documents or more, you can add these to the asset identity card for future reference and file storage purposes.

Click "Save" to complete the process

Repeat the process for all assets that you want to track. This can be as granular or as anonymous as you seem fit.