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Attorney Janet Pennisi on the looming estate-tax increase on those worth more than $1 million.
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If congress doesn't do something the estate tax is going to jump next year it will rise to.
55%.
Take on everything -- one million dollars joining us now is Janet -- -- she is and atoning you watch out.
-- -- program thank you -- how about your questions -- wanna focus on life insurance policy this as a way of paying the estate tax and I wanna ask you what's the best and most common way of getting around this thing -- -- so let's think obviously.
You're a lawyer so it's not with the insurance -- and life insurance seems to me that's it's a bonanza for life insurance because that's how you pay the estate tax.
Well it's also bonanza for planning because essentially what estate -- all of that is had a plan for the next generation to maintain certain -- of letting.
And you know wealth is about -- stand a living it's.
It's how you maintain next generation's ability to lead the way you live and that's a commercial for you and your estate planning purposes as well did you know that's what we differently and -- -- help people -- make decisions based upon both their fears and also their goals and aspirations right now if we don't have a clear lie it's not -- different hello with electric.
Now suppose not -- if I take out the life insurance policy.
And I pass away.
The life insurance company pays my estate a chunk of money that chunk of money is not.
Tax disease but it's computed into the taxable -- I OK so -- that it goes into minus states.
-- becomes -- of -- states.
And apple possibly subject to a much higher tax rate is that correct cracked that she could remember that a good tax agent may also tell you instead of you owning the policy.
Have your child own policy.
Set -- -- -- that somebody else is paying the premium and -- asset.
You know those -- the kind of things that we get paid to do is to tell people things like that -- so my child could take the best all mind right exactly as long as there's a taxable interest you know remember I can't ensure.
You because I don't have taxable interest in -- -- giving his kid the you know the incentive to -- meant yes right well hopefully it is a little bit more in the taxable insurance president OK yeah -- that so you're telling me as a -- you can -- -- life insurance policy yes but tax advantaged est well that's yeah they can't.
Life insurance -- -- -- -- -- -- tax avoidance and by the way it's tax payment cut now what's the best way of getting around any estate taxes 58.
Gift -- and you know the gifting laws have been very good for people who have a lot of money.
Hu and by a lot of money I mean people who don't need their money.
To sustain their lifestyle could potentially over wealthy that's the super wealthy may think -- like crazy for the last two years that you've got to give it away in seven years before you -- Also you have to give it away so the small business owner who need -- money to either.
Maintained their business through hard economic times -- people that.
Ploughed their personal wealth into their businesses to get -- -- the last couple years they weren't allowed to gift -- is because they needed their money.
-- -- one million dollar threshold isn't really about wealth then is it.
If you really bring all of -- -- people a million dollars is well well when you we were just discussing this in this in the green room right about how you've got your small business the cost of doing business I think this is the price we're getting -- when before the special was five million had a lot more elbow room.
Well also because you know hi my pet -- is when they start -- that millionaires and billionaires in the same sentence that's ridiculous.
You know you can't say somebody wants to franchises of McDonald's who wakes up at 4 in the morning and his son except at 3 in the morning to do the other store.
-- in the same category as someone who's controlling interest in McDonald's.
Those are millionaires and billionaires in the same sentence that's just -- it.
-- quick question.
If I -- a partnership with myself and my spouse is the general partners and we give away the wealth in the family to the limited -- office -- children -- -- avoid estate tax don't.
But you don't you do that much because this portability between and is -- I can't spouses and also because it's 59 in ten million and again.
You know if you believe that they're gonna sit on their -- on December 30 -- And do not saying.
We're gonna be the same guys -- -- two years ago and they didn't do it just took him a year to get around which -- my job difficult so not a good idea we want you back because we wanna.
How wealthy people get around this attacks Japanese everybody -- loyal but the good look like to thank you back.
