Page 37 - MetalForming March 2010

But what if the Type 2 client has sold the business and now sits on a pile of cash or over the years has accumu- lated a sizeable amount of cash and a significant stock and bond portfolio? Typically, those clients also have a large amount (often in excess of $1 million) in their qualified plan (401(k), profit- sharing plan or IRA). Almost all either were or have turned conservative—their goal is to maximize their rate of return on these investable assets, while mini- mizing risk. One of the fun parts of the planning system we use for these clients is to help them accomplish this goal.
One final fact about Type 2 clients: Their wealth (in normal times) tends to double every six to nine years, exacer- bating the estate-tax problems. So, of course, we design a lifetime plan to maximize the growth of the client’s
Are You
wealth, but dovetail the lifetime plan with the estate plan to eliminate the impact of the estate tax.
It’s not as complicated as you think. Take this article to your professional advisor and discuss how the following strategies, which we use for most Type 2 clients, might apply to you:
• For your business:
a) A captive insurance company to significantly lower your property and casualty insurance costs, and
b) An intentionally defective trust to transfer your business to your kids or employees (really the best succession plan) tax-free.
• For your residence:
a) A qualified personal residence trust, or
b) A 50/50 revocable trust ownership. • For your qualified plan funds (i.e.
401(k) IRA):
a) A retirement plan rescue, or
b) Subtrust (both avoid double tax-
ation of your funds) and turn them into 3 to 5 times more tax-free wealth.
• For your investment-type assets (like real estate, cash-like assets, stocks and bonds) a family limited partnership.
When the above strategies are done right, it is not difficult to escape the clutches of the estate tax monster.
And if you have charitable intent, look into charitable lead trusts, charitable remainder trusts and those wonderful family foundations. You can leave millions of dollars to charity without reducing the amount of your heir’s inheritance.
Have a question? Check my web- sites: www.taxsecretsofthewealthy.com and www.estatetaxsecrets.com. In a hurry, call Irv at 847/674-5295. MF
Don’t get caught behind the 8 ball
Have you been wanting extra copies of an article published in MetalForming for your own promotional efforts— trade shows, meetings, mailings, etc ?
Reprints are cost effective and will produce a high- quality piece of literature for your particular needs.
We do all the work, and you’ll have your reprints in three weeks—all at a surprisingly low cost!
Call Sue Cubranich at 216-901-8800/scubranich@pma.org for full details.
Going Green?
We want to hear what your plant is doing to become more efficient, more environmentally friendly and reduce costs by implementing green initiatives.
Send your news to
bkuvin@pma.org, or call
Brad Kuvin at 216/901-8800 ext. 125.
www.metalformingmagazine.com
METALFORMING / MARCH 2010 35