Wealth preservation

Campbell Allen excels at developing tax saving strategies for our clients on several different fronts; those are personal and business income tax, and estate tax. As we all know, income tax is one of the major factors in reducing a family's net worth. It is not, however, the biggest culprit in delaying a successful financial future.

That award goes to estate tax or death tax. Estate tax is the government's last grab at your family's wallet. Essentially, the government taxes you for dying. Not only do they tax you again on money you have already earned, they also tax your family on assets before they receive them. This tax can be as high as 65-70 percent of your total estate and must be paid in cash, usually within nine months.

If your family does not have the cash available to satisfy this tax, they will have to liquidate assets to raise the necessary funds to pay the government. This liquidation process can include prize family possessions, such as the family home or other treasured family heirlooms. The family's choice of when to sell an asset is not relevant in this situation. So now your family experiences personal and financial loss. Because of a forced sale, the asset usually sells at substantial discount. This can be especially devastating to a family with a business or large real estate holdings.

A prime example of this, is the estate of the Joe Robbie. Robbie's family lost the Miami Dolphins and the family named Joe Robbie Stadium due to the need for cash to pay estate taxes. That sale meant that the Robbie family was out of the football business. In a survey among heirs to successful family businesses that failed, 97.9 percent failed because of liquidation to pay for estate taxes. Even if your estate has liquid assets, your family still faces a heavy tax burden. The process to prevent this problem is wealth transfer planning.

During this process, Campbell Allen analyzes your family structure and your personal financial goals to build a strategic plan that will greatly reduce or eliminate estate tax. Remember, without planning your family could be facing a death tax as high as 70 percent. Procrastination Tax. That is really what the estate taxes are to your family.

When asked about estate taxes, Columbia law professor, George Cooper, said:

"The fact that any substantial amount of tax is now being collected can only be attributed to taxpayer indifference to avoidance opportunities or a lack of aggressiveness on the part of estate planners."

There are famous examples of the Procrastination Tax (estate tax) at work eroding a family's wealth. J.P. Morgan built the family fortune into a colossal financial and industrial empire and formed the U.S. Steel Corp, the first billion-dollar corporation in the world. A brilliant businessman, yet 69 percent of his estate, over $12,000,000 was lost to taxes and costs. The list goes on and on: John Rockefeller Sr.; Alwin Ernst, CPA of Ernst & Young fame; Frederick Vanderbuilt; and William Boeing all lost over 50 percent of their family's wealth to estate taxes and costs.

You don't need to be one of these statistics. Campbell Allen will create a strategic and customized wealth transfer plan for you and your family, which will greatly reduce or eliminate estate taxes and avoid the procrastination trap.