Section 3 – The Family Wealth Protection Fortress
How to Get the Results You Want
Pretend for a moment that you are in a one-on-one meeting with Irv Blackman. Our subject… your Wealth Transfer Plan.
Can you guess what the first item on the agenda might be?…
Objectives — your specific objectives — are really the human side of the planning process.
Actually, the easiest part of The System is the technical part… knowing the law and how to legally beat up the IRS.
The tough part is to make you — and every member of your family, particularly your spouse — comfortable with your Wealth Transfer Plan.
Irv’s job is to stand along side you and make sure you ask the right questions. Then, you can use the answers to set your objectives.
Irv asks each client (say it is “you”) to walk with him into the future for 5 to 20 years (depending on your age and health). Then, he asks you to look back and tell him what you would like to have accomplished over that time frame. For yourself? For your family (spouse, children, grandchildren)? For your business? The answers help pinpoint your objectives.
NOTE: Most clients spell out their objectives based on three factors: the type of assets they own, their family situation and their age. Your objectives should never be set in stone; over time most factors — certainly age — change.
The System uses your specific objectives as the first step in a three-step process (really the three sides of your Family Wealth Protection Fortress) to create your comprehensive Wealth Transfer Plan.
Now, you are ready to learn how The System begins the process of giving you the results you want by…
BUILDING YOUR FAMILY WEALTH PROTECTION FORTRESS
You can build an impenetrable fortress — The Family Wealth Protection Fortress (FORTRESS). Once built, you and your family are inside. Your wealth — including your business — is inside too. Tax collectors are locked out. Others who are not welcome — for example, creditors, those who might want to sue you, and those who leave your immediate family because of divorce — are also locked out.
THE FORTRESS Is a Triangle
So, of course, THE FORTRESS has three sides:
1. Your specific objectives
2. Your specific assets
3. The specific strategies used to satisfy your objectives based on the assets you own.
You are the master of the FORTRESS. You have complete control of each and every asset inside the FORTRESS.
Think of the FORTRESS as having various rooms with the keys to those rooms (and the assets inside) only available to or controlled by the person with the keys. While you are alive, you alone possess the master key to the front gate of the FORTRESS and a separate key for each of the rooms inside. (Depending on the particular strategy being used, you will hold the key — means to have absolute control — as a general partner, trustee, own the voting stock or by other control means as required by The Strategy)
You will learn how and when to pass the keys to your FORTRESS to your kids or anyone else you want.
Remember, your FORTRESS will be different too. Specifically designed for you, your family and your business.
Let’s take a closer look at the three sides of the FORTRESS.
SIDE ONE – Your Objectives
Specific objectives are set for you… your business… and for your family. These are the five most common objectives in almost every Plan.
1. “Don’t interfere with my lifestyle (or my spouse’s lifestyle after I’m gone).”
2. “I want to control my business and other assets for as long as I live.”
3. “If possible, eliminate the estate tax.”
4. “Treat the kids fairly” (or “equally”).
5. “Transfer my business to the business kids tax-free.”
The pleasant surprise is that all of these objectives (and more) are easily accomplished using The System.
SIDE TWO – The Four (or Five) Types of Assets
Each significant asset you own is reviewed. You determine its ultimate use (for example, keep it, sell it or gift it) for the rest of your life and if its final disposition meets your objectives. Then, each asset is categorized into one of the following logical types:
3. Income in respect of a decedent (IRD) [typically funds in a qualified plan, like a profit-sharing plan, IRA or 401(k)]
4. All other assets — cash, securities, real estate, partnership interests, oil wells, etc.
5. If you (or your spouse) are insurable, you have a fifth asset.
SIDE THREE – The Strategies
The System contains 23 core strategies and even more supporting strategies. There are literally millions of possible combinations. The Strategies usually only four to seven per Wealth Transfer Plan — are selected to produce the desired results you want for each asset you own and to accomplish all your specific objectives.
Every strategy or combination of strategies, when properly done (that’s the way we do ‘em), are currently accepted by the IRS. View The Strategies like the bricks, mortar, lumber and other material used by a skilled architect to build a solid FORTRESS (actually, your Wealth Transfer Plan).
Once you have your list of specific assets and goals, the selection of exactly the right strategies or combination of strategies to use in your Plan is easy. Actually, the System does it for you.
Who and What are Inside the FORTRESS?
The typical occupants of the FORTRESS are you, your spouse, your children and your grandchildren. You may allow other occupants in: your elders (parents, grandparents), other relatives, charities or anyone else with whom you want to share your wealth. All, or at least substantially all of your assets — including your business — are also inside the protective walls of the FORTRESS.
Each individual and each of your assets are protected from.
1. The IRS
4. Ex daughters-in-law and sons-in-law who divorce your children (or other individuals inside the FORTRESS).
Finally, no two FORTRESSES are ever alike. Similar, yes… because of The System. But the devil is in the details. The next step in the process shows you how to get the details right so The Strategies you select to complete the FORTRESS are perfect for the assets you own and to accomplish your objectives.
You are now ready to begin selecting The Right Strategies. Want to learn how? read more here…