Tax Secrets: Learn the difference between an estate plan and a wealth transfer plan

Irv Blackman

Why should you know the difference between an estate plan and a wealth transfer plan? Because not knowing is dangerous to your economic health. Could destroy your tax health. Worse yet, enrich the IRS; at the expense of your family.


The traditional estate plan – consisting of a will and a revocable trust – is in reality a death plan. It just lays there until you go to heaven, and when you do, guarantees the IRS a big payday.

Simply put, a traditional estate plan (standing alone without any additional tax planning) can and will hurt you, your family and your business. Severely!

But wait a minute, you aren’t dead yet.

More:Tax Secrets: Transfer your business? Do it wrong and the IRS wins

Enter the unique tax-saving system we call “Wealth transfer.” Wealthy taxpayers have used the concept of wealth transfer for years: Develop a lifetime tax plan that transfers all of your wealth – intact and tax-free – to your family. Burn it into your mind: You must have a lifetime plan, not only a death plan. If you own a business, a separate lifetime plan to transfer your business (tax-free) to your children, who are working in the business, must be integrated into your overall wealth transfer plan. Of course, your lifetime plan is tailor-made to dovetail with your death (will and trust) plan.

When should you complete your plan? The sooner, the better. Your plan must focus on lifetime strategies – like a QPRT, IDT and FLIP (qualified personal residence trust, intentionally defective trust and family limited partnership, respectively). Every strategy does a separate tax-saving trick, yet allows you to control each of your assets – including your business – for as long as you live.

All in all, there are 23 wealth transfer strategies (and an endless number of combinations and variations). These strategies (typically, only four to six are used for each client) when used to build an overall comprehensive tax plan, answer the three basic questions that have been asked by my clients, seminar audiences and readers of this column over the years: (1) “Irv, how do we [me and my spouse] maintain our lifestyle for life?” (2) “How do I maintain control of my assets, including my business, for life?” (3) “How do I get all of my wealth – intact – transferred to my family (typically kids and grandkids) without any reduction for taxes?”

For many years, I’ve thought of writing a book that answers these questions. Of course the book would be about wealth transfer. Well, it’s done! And the title is (a drum roll please) “Tax Secrets of the Wealthy.”

Here’s a sample of what you’ll learn, via the strategies, (1) why your qualified plan [profit sharing, 401(k), IRA] is a tax trap and how to turn the tables on the IRS; (2) how to create a private retirement plan, that creates tax-free dollars; (3) how to eliminate the capital gains tax; and (4) how to give significant amounts to charity, without a single dollar of cost to your family.

You’ll also learn how to transfer your family business – yet keep absolute control for as long as you live – to your children; totally tax free (no tax paid by you or your kids).

Read the book. In effect, it gives you a second opinion on your current estate plan. Or it shows you how to start from scratch and create the perfect wealth transfer plan for you, your family and your business. Whether you are young or old. Single or married. Insurable or not.

Want a copy of the unique and only book that shows you and your professional advisors – step-by-step – how to keep your wealth intact for your family, instead of losing it to the IRS? Send for “Tax Secrets of the Wealthy” (Normally $367, but only $287 for readers of this column – check payable to Irv Blackman. Receive an instant refund if the book doesn’t save you 100 times its cost. Write to Irv Blackman, Book Division, 4501 Concord Lane, #430, Northbrook, IL 60062. If your tax pain is overwhelming, call me (Irv) at 847-767-5296. or email me (