A Tale of Two Oranges
Let us talk about a tale of two oranges.
Assume for a second that all your net worth over the years that you have accumulated is represented by an orange. That includes all your business, all your personal assets, your investment accounts, your jewelry, your art collection, pretty much anything you can think of. And when all is said and done, IRS is going to want to have 40% of this as an estate tax. Call it a success tax if you may. And in some states when you add in the state amounts as well as any final expenses, it can approach 50%.
So, if, in fact, a check had to be made for 50% of everything that you own, and it is represented by this orange, how do you think IRS would like to have that 50%? When I asked this question to most of our clients and our prospects, they simply take this orange, they cut it into half, and they say, “Well, one half belongs to IRS. The other half belongs to me and my family.” And they could not be more wrong.
Let me show you how IRS actually takes their fair share. What they do is they take an orange, they find the most liquid part of the assets, and if they cannot find that they take the best part of the assets, the absolute best assets they can find, they find access to it, and then they take that best asset and they squeeze out all the liquidity from it to pay the estate tax due to the IRS. And then they leave you with pretty much a worthless empty shell. And if I am the IRS and you are the prospect and the client; you are going to end up with this (worthless shell) and I am going to end up having all the liquidity.
So, my question to you is, if you are fortunate enough to assemble a nice sized estate, wouldn’t you like to have a choice of whom you would like to leave those assets to? In the absence of proper planning, your family and their future generations will not have that choice. So, I suggest you talk to an estate planning attorney or your financial advisor. Or give us a call, even if it is only for a second opinion, and we can help you structure a solution that will keep most of these assets within the family and provide peace of mind that you have struggled so hard for so many years to accumulate.
Vijay
Securities and investment advisory services offered through Royal Alliance Associates, Inc. member FINRA/SIPC. Royal Alliance Associates, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Royal Alliance Associates, Inc. 8607 Westwood Center Drive, 3rd Floor, Vienna, VA 22182. 703–893–2550.
