Family Wealth and Estate Planning News You Can Use

Tax Secrets of the Wealthy: The sooner the better - wealth transfer shouldn't wait


Tuesday, January 1, 2008

Maybe I'm getting' older, but the audiences at my tax-saving seminars seem to be getting younger.

Here's an often asked question. "Irv, when should I start my estate (or wealth transfer) planning?"

The short answer will astound you - the sooner you start, the better for you and your family.

The simple truth is that we know (based on 51 years of experience) how to pass all (every dime) of your wealth - intact - to your family. Best of all, we can do it no matter how old you are and no matter how much you are worth. Stop for a moment. Write down the total value of your wealth. Is it $2 million? $12 million? More? Less?

That's the number we can get to your family. All taxes, if any, paid in full. Simply put, we know how to disinherit the IRS. Legally. And easily. And every time for every taxpayer.

So what's the advantage of starting earlier?

One of the basic principles of winning the wealth-transfer-planning game is to get into a tax-free environment. Then, stay in that environment for as long as you can (usually for life and even after death is the ultimate goal).

Here's what you accomplish: Your wealth grows at an accelerated rate because it is compounding tax-free. Common sense tells you it is better to start the tax-free compounding process sooner than later.

For example, a sum of money (say $100,000) will double every eight years if it earns 9 percent a year tax-free. So in 24 years (about one generation), the $100,000 will grow to $800,000. Now get ready to be shocked - but with financial pleasure.

In a second 24-year period - a total of 48 years - that original $100,000 will reach (a drum-roll please) $6.4 million.

Now, then, what are the tax-free environments?

There are two easy-to-do-such environments in the tax law: (1) life insurance and (2) certain charitable trusts (under our crazy American tax law, you can actually make a profit by giving to charity).

Let's summarize and at the same time show everyone how to take advantage of the lesson taught in this article: If you are young (have a generation or more of life expectancy), get into a tax-free environment as soon as you can.

Following are two rules to get you started:

(1) If you are not young (for this discussion, 50 years old or older), put your kids or grandchildren into the tax-free environment. Start now with an appropriate gift-giving (to younger family members) program, life insurance or appropriate charitable gifts.

(2) At any age, you can disinherit the IRS and transfer 100 percent of your wealth - intact - to your family. Simply put, if you are worth $5 million, $5 million to your family; $25 million, then $25 million (or any other amount, larger or smaller).

Want to learn how to get into a tax-free environment (basically, use IRS-accepted strategies to create wealth without taxes)? Or how to make appropriate gifts (use strategies that give you huge discounts for tax purposes: like family limited partnerships, grantor annuity trusts and non-voting stock)? Reading this column is a good start. But to get a jump start, consult a professional.

Finally, because this tax-free environment approach is such a powerful tax-saving and wealth-building approach, it raises many questions. Get the professional answers!

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Irv Blackman is a certified public accountant and lawyer who specializes in estate planning, business succession and asset protection. Contact him at or call 417-9732. His Web site is