## FAQ

### What is a perpetual purpose trust?
A perpetual purpose trust is a unique structure that can be used to facilitate an internal succession plan for a firm. It allows founding partners to monetize their ownership without indebting newer advisors.

### How does a perpetual purpose trust work?
A perpetual purpose trust “owns” the underlying RIA and facilitates a succession plan by providing founding partners with an up-front payment financed by a loan taken out by the business, as well as ongoing earn-outs. This allows the original partners to monetize their stakes without burdening the next generation of advisors with debt.

### What are some benefits of using a perpetual purpose trust?
Some benefits of using a perpetual purpose trust include creating a more equitable leadership structure, distributing power across the organization, and helping the next generation of advisors build their own practices and economic capabilities.

## Conclusion
In this episode of the Financial Advisor Success Podcast, we learned about how Michael Kramer and his firm used a perpetual purpose trust to implement a successful internal succession plan. By allowing founding partners to monetize their ownership without burdening newer advisors, the firm was able to create a more equitable leadership structure and empower the next generation of advisors. This unique approach highlights the importance of thoughtful succession planning and creating a sustainable business model for the future.