When a Forbes blogger wanted to parse the estate planning choices of the young billionaires behind Facebook, she turned to TC partner Larry Katzenstein.
Katzenstein, a partner in TC's Private Client group, used his self-designed actuarial software, Tiger Tables, to calculate how much Facebook founders Mark Zuckerberg and Dustin Moskovitz could earn from a smart tax choice they made in 2008 at age 24.
Back then, Zuckerberg, Moskovitz and Facebook CEO Sheryl Sandberg each transferred millions in pre-IPO stock to a grantor retained annuity trust (GRAT), a wealth-transfer strategy that can help individuals create trusts for beneficiaries but avoid the 45 percent gift tax.
Katzenstein estimated that by the end of the GRAT term, the three Facebook heavies could accumulate a total of $204 million in their trusts.
TC’s private client group regularly employs this estate planning technique for clients. The scale of Zuckerberg’s wealth transfer, plus his remarkable youth, makes it somewhat unique, Katzenstein said.
Katzenstein’s calculations appear in a March 7 blog post by Forbes personal finance reporter Deborah Jacobs.