Estate Tax Management

A retired self-made man wants to ensure that his family receives as much of his legacy as possible, without suffering huge tax hits when his estate is settled.

Meet Mr. Harrison: a long-time entrepreneur who had amassed a considerable fortune by the time he reached age 80. Retired and interested in keeping life simple, his wealth was sitting in an investment holding company.

His one concern?

Ensuring the legacy he passed onto his 3 adult children when he passed was secure.

His one request?

That we avoid fancy corporate structures, and keep things simple. We reviewed two things on Mr. Harrison’s behalf: his will, and the inventory of his estate. Based on what we found, we made two recommendations:

  • That Mr. Harrison move from splitting his will in thirds (one equal chunk of the estate to each of his three children), to a trust system. Why? Heavy taxation.
  • Rather than being taxed on one straight sum, by moving assets into three trusts (one per heir), his children could choose to slowly remove the money at their discretion, drastically reducing the annual income they’d be taxed on. That he start to liquidate his investment holdings company immediately. Why? Double taxation.

If Mr. Harrison had passed away at that moment, the value of his investment corporation (a considerable amount) would be included on his final tax return and the estate would take a huge tax hit. Then, if his children were to liquidate the company and take the value in cash, they would be taxed on it again.

The Results

The trust system was established immediately, to protect Mr. Harrison’s personal wealth for his children. In two years over a third of the value of his investment holdings company was removed from the corporation, to protect it from double taxation.

Simple changes created a huge impact, and Mr. Harrison’s legacy is now secure for his future generations.

Interested in keeping what’s yours in your estate?

Call to set up a complimentary consultation.