Don & Ara Vallaster – Comprehensive Wealth, Income & Legacy Plan

Meeting Recaps, Strategy Roadmap & Next Steps | Updated 03/03/2025

"Protecting your income, minimizing taxes, maximizing charitable impact & seamless transfer"

Overview / Evolution of Discussions

Our planning has evolved across three key meetings, each building on the last to create a comprehensive, integrated strategy:

1
Meeting 1

Liquidity event & initial allocation (no DST)

2
Meeting 2

Annuity details, brokerage growth, estate map intro

3
Meeting 3

Refined income (~$195K+), layered annuities, tax harvesting urgency, charitable focus

💰 Stable Income

$180K+ replacement income, disruption-free

📈 Growth & Liquidity

Brokerage engine for legacy and access

🛡️ Tax Minimization

Oregon/federal exposure reduced strategically

🌿 Charitable Legacy

Wildlife/nature focus, Ara-controlled foundation

Liquidity Event Recap (~$4M Proceeds)
Tax Position

~$4M losses offset gains → essentially tax-free

No DST/1031 Needed

Losses eliminate deferral benefit — simplifying the entire strategy

Redeployment
  • Cash out: $500K–$1M liquidity/living
  • Redeploy: ~$3–$3.5M across vehicles

Pie: Cash | Annuities | Brokerage | Private Investment

Income & Protection Strategy

Target: $180K–$195K+ reliable, disruption-free income — built from layered, protected sources.

🛡️ Annuities (~$120K)

Layered 5/7/10-year FIAs providing a protected floor — no downside, ~7% target, 10% free withdrawal annually

📊 Private Investment (~$75K)

e.g., PDF-like vehicle at 15% on $500K → ~$75K/year in high-yield income

Annuities – Layered for Stability & Liquidity

Strategy: Staggered 5-year, 7-year, 10-year FIAs (~$2M total) — designed so liquidity windows open progressively, never leaving income exposed.

The laddered structure ensures that as each window closes, the next tier is maturing — providing continuous access without disrupting the income floor.

Pros
  • Principal protection — no downside risk
  • Tax-free basis return if zero crediting year
  • Death benefit with fast payout
  • 5/7-year: Earlier liquidity (no/low penalty after window)
  • 10-year: Bulk for longevity/best performance
⚠️ Cons
  • Illiquidity/surrender charges early
  • Mitigated by layering + brokerage buffer
Brokerage – Growth & Liquidity Engine
~$1.5M Allocation

Target: 10%+ aggressive growth — US heavy, international, emerging, mid/small cap, possible ESG/green alignment

Liquidity: Quick access, no income disruption

Legacy/Step-Up Basis: Inheritance buffer for heirs

No ongoing AUM fees: Build once, passive

Projection: ~$4.7M in 12 years at 10% growth

Overall Portfolio Allocation

~$4M proceeds strategically split across three vehicles — each with a distinct job in the plan:

🛡️ Annuities (~50%)

Income stability & longevity — the protected floor

📈 Brokerage (~37.5%)

Growth & liquidity — the "rocket fuel" for legacy

💎 Private/Alt (~12.5%)

High yield (~15%) — draw first alongside annuities

Broader Estate – Current Risks

With ~$30–$32M in real estate (fractional/wholly owned, southern WA/Portland), the estate faces significant exposure without proactive action:

Oregon Estate Tax

~$2–$5M+ potential exposure at 10–16% rates

Federal Exposure

At/near exemption (~$30M now), with sunset risk on the horizon

Probate & Forced Sales

Without structure: probate nightmares, forced sales, capital gains on sale

Recommended Estate Map (Vallaster-Style)

A multi-layered structure designed to consolidate, protect, discount, and transfer wealth efficiently — with Ara in control of the charitable mission.

🏢 Holding Co
  • Consolidate all LLCs/shares
  • Governance & control layer
  • 20–40% valuation discounts (lack of control/marketability)
  • e.g., $10M gift valued at $7.5M for transfer purposes
🌿 Charitable Foundation
  • Low cost basis/high gain assets → Foundation
  • All gain goes to charity — no capital gains tax
  • Ara as President — controls giving (wildlife/nature)
  • Salary/admin possible; 5% annual distribution
Tax & Compounding Benefits
No-Action Scenario
  • $5M+ estate tax hit
  • Capital gains on sale later
  • Probate delays and forced liquidations
  • Full tax drag on $30M compounding
Transfer Strategy
  • Reduce taxable estate to low millions
  • Discounts + charitable gifting → minimal/no federal, low Oregon
  • 20–30 year outlook: Full compounding on $30M (vs. tax drag)
  • Significantly higher net to family/foundation
Charitable Legacy Focus

The foundation is not just a tax tool — it is Ara's platform to direct lasting impact toward the causes that matter most: nature, wildlife preserves, and refuges.

Bulk Giving (~80%+ to Foundation)

Minimize taxes while maintaining full control over the direction of giving — nature/wildlife preserves/refuges

Ara Manages — Salary Possible

5% annual distribution (admin + grants) — Ara as President with full governance authority

Tax & Impact Benefits

Tax deductions, no cap gains on gifted assets, and a lasting family impact that outlives the estate

High-gain assets transferred directly to the foundation eliminate capital gains entirely — turning a tax liability into a philanthropic legacy.

Implementation Timeline & Next Steps
01
Phase 1 — Next 1–2 Months
  • Form Holding Co (Vallaster Family Real Estate Holdings, LLC)
  • Appraise properties for discount valuation
  • Consult estate attorney (coordinate with us — we attend?)
02
Phase 2 — 2–6 Months
  • Fund irrevocable trust (SLAT-style, Ara as Trustee)
  • Start discounted gifting (Form 709 filings)
  • Evaluate charitable setup (Foundation Source)
03
Phase 3 — Ongoing
  • Monitor/review portfolio and estate structure
  • Tax loss harvesting if viable
  • Adjust for liquidity event proceeds
Our Role & Support

We are committed to being a true holistic partner — not just an advisor, but a collaborator in every phase of this plan's execution.

Holistic Guidance

Annuities (no direct fees), brokerage setup, estate coordination, charitable optimization — all under one roof

Low / No Fees for Core

Commissions on insurance, waived AUM if planning — aligned with your outcomes, not our revenue

We Show Up

Happy to attend attorney meetings, foundation board sessions, and ongoing reviews — as a true partner

Thank You / Contact

Thank you for the trust — we are committed to your security, your legacy, and your passions.

"The path forward is clear — protected income, a growing legacy, and a charitable mission that reflects who you are. We're honored to walk it with you."

Questions? Updates? Call or text anytime. We are here for every step — from the next attorney meeting to the next generation.