Tax Secrets: Slay the estate tax monster

Irv Blackman

Estate planning seminars are one of the joys of my professional practice. I relish every minute as the presenter. The audience learns how to beat up the IRS, legally.

This is the story of one of my seminars. It was two minutes to 4:30 p.m., and my three-hour seminar – on how to transfer all of your wealth to your family – was almost over. “Okay, one last question,” I said, letting the 150-business owner audience know that the how-to-beat-up-the-IRS-legally show was about to end.

What a last question: “Irv, how come you explained in 3 hours what my CPA and lawyer haven’t done in years? Eliminate my estate tax. What do you do that’s different and how do you do it?”

Two minutes! I needed at least 15 minutes to answer the question. Since I was the last speaker, the audience agreed to stay a bit late. First, I explained that the secret is not knowing the tax law and dozens of sexy sounding tax-saving strategies. That’s the technical stuff. It’s available to all who can read. On an equal footing. But sounding off about your knowledge of the strategies (what the typical advisor does) sells. Big time. But like the sizzle of a steak – sounds good and smells good for the moment. But in the long run, the quality of the steak is what counts and that – just like a quality tax plan – needs the touch of an experienced and knowledgeable advisor who knows how to listen to his client first and then knows exactly what to do.

Ready? Here’s the difference and more importantly, how we get it done. Every client's estate plan goes through a three-stage system. In the first stage we gather the necessary written information: financial statements and tax returns, a family tree and all documents that affect the business owner or IRS (for example, wills, trusts and buy-sell agreements). The information is analyzed and used to start the planning meetings: usually two to four conferences on the phone. The initial purpose of the conferences is to list three specific sets of objectives: for (a) the client (and his/her spouse when married), (b) the business and (c) the family (typically, the children and grandchildren).

The financial data and objectives are used to start the system's second stage: designing the exact plans to meet the client’s objectives. Typically, there are four plans for each client: a lifetime tax plan, a retirement plan, a business transfer plan and a wealth transfer plan (includes an estate or death plan). All the plans must dovetail. Each plan must satisfy these two requirements: (1) be understood by the client and (2) accomplish a predetermined objective (for example, maintain my lifestyle for as long as I live; control my business and other assets; treat the children fairly).

No, I don’t do all the work. My network (knowledgeable and experienced professionals) of experts does. For example, a network lawyer does the necessary documents. Business valuations are done by a valuation expert. An insurance specialist analyzes your existing policies and knows how to build tax-free wealth using the IRS’ money. I’m just not smart enough to know everything a network of professionals can know. My job is to coordinate all aspects of the plans.

The third stage of the system is really a test. We make sure that your entire wealth (whether you are worth $6 million, $30 million or more or less) will go to your family, all taxes paid in full. So, for example, if you are worth $14 million the entire $14 million – every dime of it – to your family.

Reread the above paragraph. If your tax plan (or plans) does not meet the above test, you must get a second opinion.

Everything I cover in my seminars (and much more) is on my website: Browse through it. You’ll be glad you did. If you have a question about anything in this article (or what you read on my website), you are welcome to call me (Irv) at 847-767-5296. Or email me (