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How to avoid the estate tax, and gift taxes Advisors will tell you
that when you die, your heirs can experience a Our advisors are telling you that if you structure it right, your heirs will pay 0% tax on your estate. Estate Tax The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706 (PDF)). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets. Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify. After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2 percent of all Americans. The "Death" Tax is killing family businessA family-owned business stands to lose nearly half of all its assets when it passes from one generation to the next. That's over half of everything, including land, buildings, equipment, money, and more — all because of the current Estate Tax law which is really a tax on death. The reality is, people can't afford to pass on their business. They sell out, letting long-time employees go. Not because they want to. But because they have to. And the echo reverberates through an entire community. If you're concerned that eliminating the Death Tax will add to the budget deficit, don't be. Independent studies reveal that it would actually help reduce the deficit. Gift Tax The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not. The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift. Private Plan The Private Plan to which we refer in our other pages here is the plan that will alter your estate tax situation dramatically if you want it too. Whatever you put into the Plan will avoid "death" and gift taxes altogether if you set it up right. We can advise you as to the proper methods to accomplish this. What most people think is the “best” way to save just isn’t. The IRS and Congress approved over 25 years ago, a Retirement Savings program popularly referred to as a “Private Plan” which is not any of the standard government deferred plans. Senior Program –in addition, we have a program for seniors in the age range of 68 – 88. If you fit into this category, (or know someone who does) this could be another form of income. The senior(s) must be of reasonably good health, have assets such as a home, investments, retirement income, etc, who might qualify for a plan that would put in their pockets a considerable amount of money without spending a dime and without pledging their assets. Read More
Contact me for an personal interview at no cost to you. We must analyze your position, and your present investments and assets to see if this is a fit for you.
Lee Zebold, BSc, LX
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