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For years I have been writing: “If you use the right tax strategies, work with the right professional (typically, lawyer, CPA and insurance consultant), you will create a comprehensive plan to conquer the estate tax. Every time. And legally. Whether you are young or old... Married or single... Insurable or not.”
Unfortunately, the goal of the typical estate planning advisor is to reduce your estate taxes. My goal: eliminate your estate tax.
Over the years, three types of readers have typically called me for help:
Which type are you? Why do I ask? Because since 1995 we have done a test—for the readers of this column—almost every year. We do a complete and comprehensive transfer/estate plan for each reader who responds. Then we report back to you and always select one reader to tell you the details for that reader's plan.
The results are in for 2013; a total of 14 readers (more than expected) responded. Eight were in category one; three in category two and three in category threee.
One of the respondents—Joe, a 64 year old (from Kansas) married to Mary, age 63 — said in his letter to me, “Been reading your column for years. My gut tells me my current estate plan needs a second opinion.”
Joe started his business from scratch. He wants to transfer the business (Success Co.) to his son, Sam. Joe is rich. Has been for years. But sadly, he doesn’t feel rich. Yet, he’s enthusiastic and almost always a happy camper.
Yes, you guessed it... Joe’s “current estate plan” is a typical traditional estate plan with an A/B trust. Really a death plan that can't save a dime of estate taxes.
Joe’s assets and his goals are an almost perfect cross section of all 14 respondents. Read on — bet you'll see some of yourself.
Joe basically has five types of assets:
For estate tax purpose, if Joe got hit by the proverbial bus and Mary predeceased him, his estate is worth $17.7 million. His potential estate tax liability is about $2.8 million.
Joe and I had a number of telephone conferences after he sent me some requested financial date and other information. His goals:
Reducing the Value of Joe's Assets for Estate Tax Purposes
This is the world of getting the maximum discounts allowed by the tax law. Our proprietary system (used for every estate planning client) is asset-based.
The discounts, key strategies, plus the new $5 million life insurance policy, not only eliminated Joe’s estate tax liability but created additional tax-free wealth for the family.
It’s time for the next test
Want to participate in the 2014 test?... Please send the following information (send copies, do not send original documents):
Send them to: Irv Blackman, Wealth Transfer Plan Test, 4545 W. Touhy Avenue, #602, Lincolnwood, Illinois 60712.
What’s our job? To create the right plan for you, your family and your business (that will totally eliminate the impact of the estate tax) and, if you like, to coordinate and work with your local professionals.