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26. |
Leave
a Lasting Legacy |
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High
net worth individuals, looking farther down the road for advanced
tax planning, may want to establish a Legacy
Trust.
The
Legacy Trust combines a Tax-Free Inheritance Trust, Generation-Skipping
Dynasty Trust, and an Asset Protection Trust all under one roof.
This
proven, irrevocable dynasty trust enhances the benefits of a plain
irrevocable trust by minimizing estate taxes and hedging your estate
from creditors, judgments, and malpractice suits.
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27. |
Review
Insurance Options |
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If
you already own an insurance policy or have been thinking about
purchasing life insurance, consider having an irrevocable trust
purchase and own the death benefit of your cash-rich life insurance
policies.
Technically,
an irrevocable trust resides "outside" of your estate.
Thus, when the death benefit is distributed, the policies within
an irrevocable trust will not be subject to estate taxes.
In
addition, your heirs will also avoid having to pay income taxes
on those death benefits.
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28. |
To
Roth, or Not to Roth |
|
The
Roth IRA
opens up an excellent savings opportunity, especially for younger
retirement-minded savers.
Unlike
traditional IRAs, the Roth IRA has a contribution ceiling of $3,000
annually that is not tax-deductible.
The
Roth IRA basically uses non-qualified, after-tax money to fund it.
However, when it comes time to draw income from your Roth IRA, the
proceeds will be 100% tax-free (provided that you hold the Roth
IRA for at least five years and you're over age 59 1/2).
Younger
taxpayers, who plan on being in a higher tax bracket later in life,
may benefit the most from using this retirement vehicle. Be sure
to check with your tax advisor for additional details. And click
here for more information on the Roth IRA.
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29. |
Splitting
Hairs, Splitting Dollars |
|
When
it comes to insurance, you can maximize growth while minimizing
taxation through Split Dollar Insurance.
A
portion of your policy is earmarked for savings, while the remainder
provides tax advantages and a guaranteed death benefit.
By
purchasing Split Dollar Insurance, you can access the excellent
tax advantages of insurance while reducing your out-of-pocket costs.
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30. |
The
Reverse Split |
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Another
mindful way to reduce taxes is through the use of Reverse Split
Dollar Insurance.
By
funding your company's pension plan with reverse split dollar insurance,
you can build substantial cash values as part of an executive bonus
plan. You can also secure a tax-free income, while your corporation
maintains rights to the insurance policy's death benefit.
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31. |
Title
Your Business Properly |
|
Investigate
the tax advantages inherent in different forms of ownership. Different
forms of business come with different rates
of taxation.
For
instance, corporate taxes are usually higher than individual tax
rates, which would apply to sole proprietorships and partnerships.
Of
course, corporations are afforded much more liability protection,
and the trade-offs of titling your business should be carefully
considered.
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Capital Gains |
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Mortgage and Equity |
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Education Tax Breaks |
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Gifting Options |
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Sheltering Rental Income |
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Using Your Unified Credit |
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Social Security |
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Tax-Free Munis |
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Estate Tax Reductions |
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Life Insurance |
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IRAs and 401k Plans |
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And much more |
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