4. The Client
Adrian is a world-famous Electronic Dance Music
DJ called “DJ Nightcrawler.”
Has $20,000,000 in total assets.
Earned an adjusted gross income of $1,000,000 in
2014
5. The Strawberry Farm
Adrian owns a
strawberry farm in
Poteet, TX.
He won the farm in
a bet on San
Antonio Spurs v.
Dallas Mavericks
game.
Just like most
times, the Spurs
won.
6. The Strawberry Farm
Adrian wants to show his appreciation to his
hometown Spurs for all that they do for the
community.
7. The Strawberry Farm
Adrian would like to
leave some of the
lucrative strawberry
farm to the Spurs'
public charity, Silver
& Black Give Back,
in his will.
This is a 501(c)(3)
public charity.
8. The “Will Way”
(Addressed to Adrian from
Hereafter)
You would like to
leave 10% of the
strawberry farm,
worth $1M, to
Silver & Black
Give Back in your
will.
The other 90% of
the farm would go
to Diego.
9. The “Will Way”
Under the Will idea,
Silver & Black Give
Back would get
$100,000 worth of
land when you die.
Diego would get
$900,000 worth of
land. Seems like a
good idea for Deigo!
10. But wait….
Uncle Sam would take
$360,000 from Diego
because of a 40% estate
tax.
This would leave Diego
with $540,000 worth of
land from the strawberry
farm.
11. My proposal:
Give a remainder interest in the strawberry farm to
Silver and Black Give Back.
This gift will result in $139,450.32 in money saved
from the current income taxes you owe.
You currently owe in $353,045.75 in federal
income tax.
13. The Value of Your Gift
Given your age and life
expectancy, the IRS
would value your gift at
$352,170
This would be a gift you
could make under IRS
regulations.
14. The Money You Would Save
Using the IRS tax
rates, you would
have $139,459.32 in
money saved from
taxes.
Use this money to
purchase a Life
Insurance Policy for
Diego!
15. The Irrevocable Life Insurance Trust
(ILIT)
You could purchase an ILIT to avoid
present and estate taxes for you and
Diego.
You could only gift $14,000 a year to do
this; here is how.
16. The Insurance Policy
State Farm’s Life Insurance Policy Calculator
estimates that it would cost you $788.78/mo;
$9,066.43/ yr for 15 years to purchase $581,705
of coverage.
This is $41,705 more in asserts than Diego would
receive if you were to leave him 90% of the
Strawberry farm in his will.
17. Conclusion
Giving Silver & Black Give Back a
Remainder Interest ASAP would result
in a great tax reduction.
That tax reduction could purchase a
guaranteed $40,000 extra for Diego
once Adrian dies.
It is a WINNING DEAL!