Benjamin Franklin said there are only two certainties in life– Death & Taxes! When it comes to planning your Results-Based Estate Plan, you need to consider the double whammy of "Death Taxes." Also known as Estate Taxes, these are taxes on the transfer of assets upon death. The law regarding Death Taxes is in a constant state of flux because they are largely politically-driven. In the current acrimonious political climate it is anyone's guess as to the future of the Death Tax. However, one thing is certan – it is best to approach it conservatively (in terms of your legal planning) for a worst case scenario. Note: Charitable Bequests reduce the value of your estate subject to Death Taxes. If, given the option, would you rather be a voluntary philanthropist supporting the charitable causes of your choosing, or an involuntary philanthropist by your financial support (i.e., through avoidable Death Taxes) of causes selected for you by Congress and the White House?

When some life insurance agents sell a policy, they tell their clients that life insurance is "tax-free." Unfortunately, that is only partially true. The life insurance proceeds only escape income taxation, if paid out in a lump sum. However, if you own your policy or even retained the right to change the owner and/or beneficiary, then you have "incidents of ownership" and the IRS will include the value of the death benefit in your estate value subject to Death Taxes (see previous video). As a result, your life insurance potentially could create a Death Tax where there might not otherwise be one. By the way, once taxpayers learn of this life insurance fact of life, many of them transfer policy ownership to someone else. Problem: The IRS is ahead of them and will include in their estate value the proceeds of any life insurance policy transferred within three (3) years of death (subject to very limited exceptions).

Additional planning methods may need to be considered to minimize the impact of Death Taxes, even between generational transfers. Also, depending on the size of the estate, advanced techniques may be required to reduce the estate value now without relinquishing control, so there will be less estate value subject to Death Taxes later on. This Estate Plan Result applies to single clients, as well as to married clients.

Do you want to prevent your child or children from withdrawing your entire retirement fund balance in a lump sum to pay for expensive houses, fast automobiles and exotic vacations? If he, she or they are responsible and financially mature, then this may not be of concern. However, if you are concerned, then you will want to ensure the longest possible stretch period for the withdrawal of the retirement funds. In other words, the IRS wants to see the retirement funds paid out more and faster, while taxpayers want to see them paid out as little as required and over the longest possible period. This can be one of the most complex areas of tax planning.

In certain circumstances, more planning than Stretch IRA – Basic planning is required, if you want to ensure the longest possible stretch period for the withdrawal of the retirement funds. This especially is true if there is great disparity between the ages of your eldest and youngest beneficiaries. This can be one of the most complex areas of tax planning.