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Scenario 1- NO ESTATE PLANNING- John Money Bags, a former US Attorney,
is an investment advisory firm executive residing in Manhattan, New
York and is a United States taxpayer. John's net worth is $50 million
(U.S. Dollars). John is 60 years old and married with two children.
John has a real estate portfolio valued at $40 million dollars and
$10 million dollars of various assets. John dies and leaves his family
an estate worth $50 million (U.S. Dollars). John's heirs will have
an estate tax bill in the amount of $25,000,000. This estate tax will
be payable to the United States Treasury nine months after his passing.
His heirs will net $25,000,000.
Scenario 2- ADVANCED ESTATE PLANNING SOLUTION- by Jeffrey N. Zisselman,
Attorney
John Money Bags, a former US Attorney, is an investment advisory
firm executive residing in Manhattan, New York and is a United States
taxpayer. John's net worth is $50 million (U.S. Dollars). John is 60
years old and married with two children. John has a real estate portfolio
valued at $40 million dollars and $10 million dollars of various assets.
I recommend establishing a family limited liability company (FLLC)
to hold Johns $40 million real estate portfolio. By transferring the
real estate portfolio to the FLLC and applying a 40% discount ($16,000,000)
we can lower his taxable estate to $34,000,000.
Therefore, when John dies he leaves his family an estate worth $34,000,000
million (U.S. Dollars). Johns heirs will have an estate tax bill in
the amount of $17,000,000. This estate tax will be payable to the
United States Treasury nine months after his passing. His heirs will
net $33,000,000.