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Estate Planning


Building a Tax Free Legacy

Using the Self Directed Roth IRA as a Tax Free Business Mechanism for retirement is super cool (more about that here…) but the same set up is even better when you use it with assets you may not need during your retirement that you intend to leave as a legacy to your family.

With the current US Gift and Estate Tax allowing individuals to leave $5 million and couples $10 million without incurring tax if they set things up correctly, the estate tax is not the scourge to family businesses that it once was.

The Self Directed Roth IRA provides two benefits for Estate Planning.  One is that if you convert tax deferred assets into tax free assets, by paying the income tax on the transfer from taxable funds you reduce the size of your taxable estate.  Second, and why this is so powerful, is that you can then leave the Self Directed Roth IRA to beneficiaries who will then have tax free assets available to them for the rest of their life.

That;s right, you can extend the power of this strategy for decades beyond your passing.  Your beneficiaries will probably build a statue to you and celebrate the date of your birth (or death) with a parade and a celebration that lasts long into the night.

Your beneficiaries will not see the benefit of this until they are 59 ½ as they will have the same limitations on receiving compensation from the business as you would but that makes the compounding even that much more powerful.

Using the Self Directed Roth IRA Legacy strategy can be effective for businesses with a long time horizon like rental real estate.  This strategy can also be used to fund businesses on a tax free basis with cash from the original business.  And if you or your beneficiaries run out of imagination or energy you can always convert the business assets into financial assets and ride the slow sleepy preservation strategies on offer to a pleasant tax free retirement.

Join the Business Godfather LLC Family so we can start building your long lasting (tax free) legacy today.