Zero- Estate Taxing Fed & State

We found a lawyer who specialized in taxation and is suppose to be good at zero estate taxes.

some questions I have are

How do you know if the transfer of estate assets to heirs will be successful or w/o taxes after death of estate holder also the elimination of any death taxes that state or feds would take?

The above in light of that you pay the lawyer to do this work many years before your death and that you wouldn’t know what happen after, right?.

What does IRS Circular 230 do for Clients in terms of ethics? Would it cause more vagueness in terms of written promises?

Is typical cost for this legal work 1% of estate value?


Estate planning is done while you are alive. You know exactly what was done and when it was done since you are the one who has to sign the documents. Anything transferred out of your estate at death is subject to estate tax and probate.

I’ll tell you the secret to zero estate taxes and I won’t charge anything. Give it away before you die. Gift and income taxes are a separate matter as is making sure your wishes are executed. Probate lawyers usually take 10% of the gross value of the estate to probate it. The tax man and your creditors get paid before your heirs see a penny. My advice when a lawyer wants a % of the assets of a fee to set up an estate plan is simple. RUN!!! This kind of work can be done for a flat fee or hourly rate.

Lawyers ethics are governed by your state’s bar association.

Since private annuity trust were disqualified earlier this year the attorney wants to use a SCIN to move current Comm properties to heirs. A SCIN (self-canceling installment note) is a type of promissory note and currently allowed by the IRS to make the heirs the owners and pay off the debt w/o any taxes.
I wonder how strong a case this is in light of PATs being lost as a zero-tax tool. IRS constantly makes changes to their laws.

For other assets the attorney plans to use an IDGT or intentionally defective grantor’s trust. Again, same concerns here with regard to stability with IRS.

The lawyer is charging a flat fee and small compared to the size of the outstanding part of the estate exposed to estate taxing. (They also say that fees by others are normally 1% of the estate assets under re-structuring) Fee is $12.5k for a ~$4M exposure that the lawyer knows about. There is an undisclosed amount of muni-bonds of similar $ volume - should that be included, we expect the attorney’s fee to remain the same, is that appropriate?

If a Law office (in Utah) with one partner having the CALBAR license, does that entitle their LLC to use any lawyer in their LLC to do work in CA? We were told that most of it is federal and if state bar has concerns the attorney with CALBAR would step in.

The smart money said PATs were never any good. The IRS only issued the ruling because too many people were abusing them. All that other stuff you mentioned is along the same lines. It’s valid until the IRS decides it’s not. Why aren’t’ they suggesting the irrevocable trust? That is a pretty standard tool to avoid estate taxes.

Utah has more than it’s fair share of tax and AP experts promoting crap, but I don’t know if your firm is good or bad. I suggest you meet with someone local who can represent you in court if there are any problems. He can work with these out of state people to draft your plan. Remember that a good plan incorporates financial planning, tax minimization, business continuity, estate planning, and asset protection. It is a system to reach all your goals. Focusing on just one area is bad planning.

yes – totally agree re:… a good plan incorporates financial planning, tax minimization, business continuity, estate planning, and asset protection

The partner/attorney we are dealing with has an office in Las Vegas and in Beverly Hills. She has been making a special effort because of age of client, to come to Seal Beach, CA to personally deliver her list of what she can do. She includes four items you mention. The one missing is business continuity, sort of, because the SCIN could work for bus. cont. also. This depends on heirs and what their plans are. That would be a separate issue she could deal with if so desired, pending a united strategy by all heirs.

re: irrevocable trust? I think the reason is that the estate owner doesn’t want to loose control or somehow wants to be part of the decision making. An irrevocable trust is an arrangement in which the grantor departs with ownership and control of property, right?

Re: promoting crap - I asked for is their client litigation history, both the LLC and the individual lawyer and there is none.

Thanks BLL for your comments!

You are thinking about the asset protection trust, which is not accepted in most states. A grantor doesn’t necessarily cede control when he funds the trust, but he can. It depends on the purpose of the trust. IRTs can be used to hold limited partnership shares of a limited partnership as means to remove assets from estate taxation. No control is given with the shares, just the value.