• Protect assets from creditors, judgments and regulatory seizure,
• Maintain control of the client's assets throughout their lifetime,
• Eliminate both estate and where applicable inheritance taxes,
• Eliminate probate fees,
• Defer capital gains taxes,
• Reduce, wherever possible, income taxes,
• Establish a structure that will provide the security that your client needs to sleep at night, knowing they have accomplished their asset protection estate planning goals.

1. The Constant Drain   Income from salary and investments is not yours alone. Federal and State Governments can claim up to 50% of your salary. Federal capital gains tax can claim at least 15% of your gain and in many instances more. This is only the Federal government. Many states also tax income along with capital gains and that adds to the total tax number. Actually you lose more than 15% on capital gains since inflation can add to your taxable profit but not to your real profit.
2. Estate Taxes  After paying all of the taxes on your salary and capital gains, you now pay taxes for the right to die.  If not properly structured, your entire estate, everything you have accumulated in a lifetime of paying taxes, is again taxed and at combined Federal and State rates that top 50%.  Estate taxes are probably the ugliest tax of all.  Estate taxes may force a grieving family to liquidate a business or real estate holdings at fire sale prices.  Please keep in mind that the 2010 tax revision is a patch.  The rates for 2012 have a $5,120,000 Federal exemption at a rate of 35%.  However, 21 states plus the District of Columbia have much lower exemption amounts.  In addition unless Congress corrects the patch the exemption in 2013 is $1,000,000 with a rate of 55%.  To lock in the 2012 rates you must either die or complete planning prior to 2013.  There is one other kicker - there is nothing to keep Congress from changing these rates tomorrow morning.  Planning is much more effective than taking a chance on Government.
3. Lawsuits   An average of 43,000 lawsuits are filed every day in the US. The US accounts for over 94% of all of the lawsuits filed in the world. What isn't lost to taxes is exposed 24 hours a day to the threat of imaginative lawsuits: lawsuits from governmental agencies and lawsuits from individuals hoping for a winning ticket in the litigation lottery. The wealth you've accumulated through decades of hard work can be snatched away at the bang of a judge's gavel. The grounds for a government seizure or a catastrophic lawsuit can seem ludicrous - UNTIL YOU'RE THE TARGET!!!

1. Protect your assets from any predator (creditor)
2. Control your assets during your lifetime
3. Eliminate probate
4. Eliminate estate and inheritance taxes
5. Reduce Federal and State income and capital gains taxes
6. Direct distributions of your assets after death
7. Have the ability to modify your system
8. Have the ability to treat your system like building blocks
9. Feel comfortable with your system
10. Laws change - Keep your system current

A good asset protection plan redistributes the assets on a balance sheet. A good plan does not render the individual insolvent - a good plan simply makes it difficult, if not impossible, for a creditor/predator to get to the assets.

There are basically two ways to gain asset protection:

1. Sell, or exchange the asset.
2. Encumber the asset.

FEDERAL ESTATE TAXES 2011 AND 2012
(US CITIZENS OR RESIDENT ALIENS)

What Congress just passed on December 17, 2010 is perhaps the greatest estate tax gift since the inception of the income tax. But remember, this Act is a patch and has a sunset.  That sunset is December 31, 2012.  If this Act is not revised prior to that date the exemption goes back to where it was in 2001.  That is a $1,000,000.00 exemption and a 55% rate.

Exemption
Under the current patch each person is entitled to a $5,120,000.00 exemption from estate taxes with an estate tax rate of 35%.  This exemption is good for not only estate taxes but it is also good for gifting and generation skipping.

For estate tax purposes a surviving spouse “inherits” any unused portion of their deceased spouse’s unused exemption.

Example
Husband and wife.  Husband dies and the estate uses $3,000,000.00 of his estate tax exemption.  The wife now has her $5,120,000.00 exemption plus the $2,120,000.00 that the husband did not use.  This only applies to the estate tax.  It does not apply to gifting or generation skipping.  So from a gifting or generation skipping view, it’s use it or lose it.

It is important to note that there are currently 21 states and the District of Columbia that have instituted a state estate tax.  That may mean that although you may have no Federal estate tax you may have a state estate tax.

It is equally important to note that to use these generous exemptions that planning and funding must be completed prior to the expiration of this legislation, that sunset is currently no later than December 31, 2012 and could be sooner if Congress were to actually get around to doing something about our income tax code.  A revocable trust will not, unless the grantor(s) dies within the time frame of the law, accomplish the utilization of this generous exemption.  A properly structured Ultra Trust (Intentionally Defective Grantor Trust) will lock in these exemptions.

Tax Form