The Naples Daily Newsgives some helpful advice in “Tax Secrets: Top 10 tips for winning the estate tax game.”Take a look:
- Don’t keep property in joint tenancy.
- Don’t put money in a pension or IRA if you’re rich or likely to become rich (in the highest income tax and estate tax bracket). Qualified plans are double taxed up to 64% of your plan funds.
- Your wealth transfer plan to legally reduce or eliminate the estate tax should start ASAP.
- Don’t put real estate in a corporation. Consider using a family limited partnership or an LLC.
- Use a “Retirement Plan Rescue” (RPR), if you have over $300,000 in a qualified plan. This has the power to increase your after-tax dollars by a multiple of 10 or more.
- Create an IDT or intentionally defective trust, if you want to make a tax-free transfer of your family-owned business to your kids and remain in control for life.
- Do create a FLIP (family limited partnership) for all of your assets, like income-producing real estate, vacant land and your stock and bond portfolio that is not included in another tool. A FLIP may reduce the value of these assets by 35% for estate tax purposes.
- Make sure that all your wealth passes intact to your family.
- Make sure that your attorney uses strategies protecting you from creditors and potential lawsuits.
- Make sure you have two separate plans—an estate plan that transfers your wealth in the most tax-effective manner and a lifetime plan that maintains your and your spouse’s lifestyle for as long as you live and works with your estate plan.
Reference: Naples Daily News (January 7, 2017) “Tax Secrets: Top 10 tips for winning the estate tax game”