66•


Watch out!


YOUR TAXES (Continued from page 64.)


boasted on his stationery that he is “a Board Certified Specialist in Estate Planning, Trust and Probate Law.” • Joe (48 years old) owns Success


Co. (an S corporation) that he started from scratch, is very profitable and growing. Joe likes Larry profession- ally, but feels that somehow the plan Larry created falls short of accom- plishing Joe’s goals. Without going into great detail this


is what we (not only me, but my net- work of experts) advised Joe to do: • Retain Larry and sign his docu- ments, after one suggested change. • Since the TEP does not legally


speak until Joe dies (when that will be is uncertain, but according to the life expectancy tables, about 35 years) a lifetime tax plan should be created. So, simply put, everyone should


have two plans: a death plan (TEP) and a lifetime plan. The purpose of the life- time plan (an example follows) is to take such actions and employ various


strategies so that by the time you go to the big business in the sky, the estate tax has been eliminated or you have created enough tax-free wealth that any estate tax liability is covered. Re- member, it’s not what you are worth today that’s socked with the estate tax, but the amount you (or your spouse) will be worth after both of you have entered the pearly gates. Also remember that Joe, like the


typical guy, wants to control his wealth – particularly his business – to the day he dies. Here’s the list of 10 Strategies (ac-


tually there are more) we wove into a comprehensive lifetime plan for Joe, his family and his business: • Asset protection strategies to


protect Joe’s personal assets and, sep- arately, the business assets. • A management corporation (a C


corporation) was set up to provide Joe (but not other employees of Suc- cess Co.) with many tax-free fringe benefits (including long-term care and deductibility of all – Joe, his wife and four kids - medical expenses).


•THE WHOLESALER® — JANUARY 2011 • A family limited partnership for


Joe’s investment assets. • A non-qualified deferred com-


pensation plan for his two key em- ployees (an easy way to prevents employees from leaving and compet- ing with you). • A common paymaster to save


significant amounts of payroll taxes every year. • Create a plan to use a portion of


the profits of Success Co. to pay for the children’s college education. • Transfer Success Co. to the chil-


dren tax-free, yet Joe maintains con- trol. • Set up a family foundation and a


charitable lead trust as a tax-effective way to make substantial charitable contributions without reducing the children’s inheritance. • A strategy to save income taxes whenever a new unit of Success Co. is opened. • How to make the insurance on


Joe’s life estate tax-free and buy over $3 million of second-to-die life insur- ance using the government’s money. And finally, a question clients al-


ways ask, “Irv, how do I know when my estate plan is done and done right?” Here’s a two-point answer: • When your advisor can look you


in the eye and tell you – whether you are worth $5 million or $50 million (or more) – that the estate plan cre- ated for you will eliminate the impact of the estate tax. Simply put, if you are worth $11 million, $11 million to your family (all taxes paid in full), if worth $44 million, $44 million to your family. Fill in your own number. • The advisor can explain in sim-


ple English how each strategy works to save those millions. As always, any questions, call me (Irv) at 847-674-5295.


n


Irv Blackman, CPA and lawyer, is a re- tired founding partner of Blackman Kallick Bartelstein, LLP (CPAs) and Chairman Emeritus of the New Cen- tury Bank (both in Chicago). Want to consult? Need a second opinion? Con- tact Irv by phone at 847/674-5295, e- mail blackman@estatetaxsecrets.com or visit his website at www.taxsecrets - ofthewealthy.com.


See contact information on page 98 • Be sure to visit www.thewholesaler.com for web exclusive articles and videos! •


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