Related Matters Newsletter
by Ronald P. Weiss, Esq.
Bulkley, Richardson and Gelinas
You pay a fortune in taxes. You pay income taxes on what you earn and on what your investments earn. You pay taxes on what your employees earn. You even pay taxes on inflation. And the income tax rules are so complex, so you have to spend days and incur substantial fees just to pay your income taxes. Then, when you die, the government plans on taking a substantial portion of the wealth you have left after all the income taxes. If you are in the highest income and estate tax brackets, this means that for every dollar you earn that is taxed at ordinary income tax rates, your children will inherit only 27 cents.
The laws of our country are designed to make it difficult for you to transmit a substantial estate relatively intact to your children. In response, estate planners have created a number of techniques to help you leave as much as you can to the next generation. Unfortunately, the most common techniques, outright gifts and placing assets into irrevocable trusts, will most likely put assets outside of your control. This may make you uncomfortable if income producing assets, especially your family business, are involved. These methods may also give rise to estate and gift taxes based on the full value of what has been transferred. More…