The Estate Tax Wake-Up Call of 2022

Hi this Roy Jones man talk radio podcast admissions to break down the walls of recent nomination, your chosen truth radio broadcast will be starting in just a few seconds. Thank you. This is the Truth Network welcome to finishing well brought to you by Cardinal guy, certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well for over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started. Finishing well, finishing well is a general discussion and education of the issues facing retirees.com are no advisors on trial CFP some insurance this show does not offer investment products or investment advice welcome to finishing well in five financial planner Hans Schild today show is the estate tax wake-up call of 2022.

Apparently that could be coming our way in a biblically we want to talk about wake up calls are actually they look bad in a way but they kind of in a website meant for evil God means for good. So often and so near.

Interestingly, in the hundred 19 Psalm King David in verse 71 says something really interesting to see in his talking about the letter tapped there in that verse that says it was good that I was afflicted because I learned my statutes, and so sometimes when these wake-up calls come in fact almost always when they come in a what Satan means for bad. God has some good in but the good is hidden in there, which is common with the letter Tet means and so I don't know if you're like me, but you may have had a tough diagnosis in your life. At one point in time or another but you know I can remember when my cancer diagnosis came there were so many things about that that were very, very difficult, but I can always say that was the worst of times it was the best of times, gives her the things I learned about love and there were things I learned about community and there were things I learned about people during those times that I don't know how but I will earn them any other way then to go through some things and so wake-up calls as a general rule, take us out of our comfort zone where we want think about it and all of a sudden now oh well, you know like that softshell crab that's finished shed is shallow if it didn't start getting uncomfortable get squeezed in there he would he would never get rid of that old shell. Well, sometimes we we need to get rid of our financial shells so that we can take a look at it what's really going on inside what you will better with calling you probably know, the infrastructure bill, which is okay the stuff coming out of the news. Some of the native or urban legend. I usually don't start talking about tax-free visions that are not law. Better to wait until they are actually law but this one is pretty serious and with the gist of it is going to raise taxes and they have to raise taxes if they want to pass all the ending talking about doing over the next years mystery and 1/2 trillion dollars in back and forth year.

A lot of the discussion over the amount of the spending and the projects that spent on your almost nothing about the taxes that are going to come along with you and I think the reason for that is why the goal Congress people, senators and many people they'd they don't really understand this And tax provisions in the estate tax better than most people do and all this stuff is prepared by the Congressional Budget Office within the IRS there constantly looking at things where they could raise taxes and there also looking at things so they could cut taxes as a flavor for that self and the build back better at what is concerned me. Is this return of estate tax or the estate tax been there all along that the exemptions of the special been so high that it doesn't affect but of the gist of you percent of the people in the country is really like 1% and there you're talking about increasing or lowering the exemptions and start in that direction. Still a lot of people again be asked like what what what what why is this concerned me right now and 11 million change exemption into my stake could be over $11 million pay no estate taxes and then lowering that no I don't have either one of those millions has a supply well.

The fact is that particular part of the provision does so, but it could apply to you if you work in a small business you work for a family owned business or held by a few families and when those people move on retirement passed away in the estate tax.

One of the reasons they raise the thresholds in the beginning of a lot of this is to effectively protect those smallish businesses from from doing all this planning and having to worry about the estate tax is wipeout a small business about budget states that I do on the value of the business actually make and sell the business or close it down or something right because a lot of small farmers coming that's you know how you continue to have food is that you know these if these farms are forced to sell because of estate taxes. Oh my goodness, farmland got 5000 7000 8000. The middle part of the country and $12,000 an acre and you take 100 acre farm in 10,000 acre euros million dollars.

Thousand acre farm your $10 million, possibly more than the revenue the deck and generated projected for word and all the expenses thinking for a lot of small businesses. How much of that business worked well be a lot profitable enough to pay 40 or 50 or 60 or 70 people to work. Your year in bonuses and to provide service and then the likelihood of that continuing on for several years and small businesses are worth a lot and so that's why these threshold raise at least that was the politics behind it is. Let's get the thresholds for the exemption amount of high enough smallish businesses don't need to worry about that for small to medium-size businesses what's happening now is cut in half if this new legislation passes on from 11 million to 6. There are so quit saying to discuss the politics of the issue is much as the wake-up call to look at these things in our lives right yeah will in and you talk about the way mostly spoke plan for estate taxes is through the use of licensure is you know you by 2 million $3 million life insurance policy on the owner of the primary and then you use the money that comes from life insurance to pay the estate taxes people pass on about as simple as it gets. But then you got a problem. So you bought a $2 million life insurance, then people die and that they own the policy that increases their statement to so that that's a problem in the set up is grantor trust people have people like me done this over time in you know that specific kinds: individual life insurance trust which is a way to hold the life insurance outside of the ownership person that's covering.

So when the death benefits are paid out and out to the beneficiaries not included in the estate really got a whole bunch of provisions to really make those useless war with claw those back into the estate so there really going after the middle size estate and the reality is the billionaire he could people with hundreds of millions of dollars. This is really kind of a nonevent just means the little book more estate taxes are not successful in avoiding it.

Somehow, this is really going to affect those family farms and small businesses. And if you work in one of those mean this is a consideration that you get your owners are little concerned about this and they have questions certainly been around situations a lot but it really gets back to some of the basics of estate planning really just even beneficiaries right where you need to safely take the wake-up call should be a wake-up call for every drug care about my statement concerning what happens.

My working about what a legacy behind my children and grandchildren and what from a financial standpoint, what am I gonna leave and concern to you then okay.

i mean existing many times this concerned most people it's as simple as somebody having a life insurance policy. the named beneficiary. and if you just pay the premium on that thing and have provision for premium for the rest your life. that's simple estate planning. you just name a beneficiary your children or grandchildren or whoever you name is going to get that about my tax-free. that's what the not changing that. okay, in life insurance is still going to be income tax-free life insurance benefits paid beneficiaries income tax-free mobile learning in this language of the gonna mess with that. this is talking about estate tax and so when is a wake-up call about those that would be the very first thing the second thing is right now under the law is a step up in basis for capital assets are things that you own like land home stocks anything at the capital asset you loan and then when you die you leave that to the next generation. they don't have to pay tax on the gain of the business of law stands right or income taxes on the gain or the amount sucked so for instance if your father owned a piece of land that was some sort of investment that is $100,000 for dan when he died, it was worth $800,000 will be disabled before he died he would have to pay tax on that 700,000 holding it till death do you you inherit that basis of $800,000. so if you subsequently sold much at all income tax, capital gains tax on the sale of her talking about doing away with will break right in the middle, a stepup in basis, but this is a been a really really critical time on i'd really never heard about until preview show. that's why it's important that you listen to these and get the helpful videos that are under cardinal advisors hereto as well as cargo guy.com and complete card for living in retirement right back with a lot more of this wake-up call. hans and i would love to take our show on the road to your church, sunday school, christian or civic room. here's a chance for you to advance the kingdom through financial resources and leveraging hahn's expertise and qualified charitable contributions veterans aid and attendance ira social security care and long-term care.

just go to cargo guy.com and contact tom to schedule a live recording of finishing well, your church, sunday school, civic group cardinal guy.com that's cardinal guide.com welcome back to well in today's wake-up call for estate taxes.

this new bill that's headed for we hope not to be passed but it could be passed pretty soon you have the sense that it probably will be passed.

yeah, i think you negotiate down and doing nothing negotiate down the taxi so that's really what the delay is right down the back and forth to arrive at number go through but it doesn't.

this tax stuff is going away to escape it up again next year in the same business people negotiating this and congregating like a text, those of the people deep inside the government just got these studies waiting. that's all funded. you could do this you could do this you could do this you do this raise you. this amount of money over the next they got that stuff going on all the time and so what i think is even if it doesn't pass. this isn't going away. so let's use it as a wake-up call to first of all understand a little bit of what's going on behind the scenes, then certainly apply it to your own situation in your own family situation and if you're like most people, you're not one of these high multimillionaires.

that's even thinking about estate taxes, but i'd like you to be a wake-up call when you think about your own estate so we were just on the stepup in basis. we have the example where we had no like a father. $100,000 for property just sat there any news worth quite a bit more, but he held it until he died. and then his son inherited cells in right after his death over. soon after some point after $-800,000 selling is under the current law, son would not owe any taxes because when we talk about stepup in basis basis, stepped up from 100,000 $800,000 in the following son selleck now with an $800,000 base. we were able to do that with some real state that my wife inherited from her mother and paid no taxes on the money we got from selling the land with her mother expected this so they're talking about messing with that just sounded to me is while people need to be aware of that and wherever they go to get that kind of tax help if they were inheriting property american fixing the salad well need financial plan itself was self-serving.

you know that that's what i do is espn certified planner and also, clu, a chartered life underwriter and life study. all my life estate reagan attorney involved and i'm been asking questions of the attorney is a nonattorney and i don't practice law, but many times attorneys are going to really good look in a very narrow window around getting the property sold that sort of thing getting the deed properly. look at the estate taxes in the middle so i need to get otis cpa and figure out those and so we as a financial planner.

what i do in my business people going hopefully before the become a big problem so were planning and estate planning will the father still alive in our example were to sit down and lay things out and make good decisions so that we know what's coming.

maybe point this out. that's really really helpful to know people out there didn't have any idea that there was a stepup in basis.

they sell the property and then they reported it as income and they didn't necessarily know who knows what kind of mess they make for themselves about just getting professional help or the heirs's putative father situation maybe sold the property where he knew he passed away some reason your short period of time, but someone had an encouraging� sell this property will skip the sample before he died he sells it for $700,000 and pays taxes on a $600,000 gain on this one asset. where is it they just held it until after the raven.

no taxes know that the value of information is really important and you know what i want to stress is that a big part of this there messing with life not messing with the life insurance cell in terms of the any income taxes due by beneficiaries. they're doing it within the context of the estate because it life insurance of your life insurance is owned by you. it's included in your estate if you have a small state under the threshold really matter the estate tax, but if your life insurance owned by some other entity or some other person then the death benefit is included for the average person life insurance is a wonderful way to do estate plan and say okay well first of all, you know how much premium you can afford 400, 200, $300 a month. then we can sit down, we can say okay if your health is good enough to buy this or even if your health for all wherever we want to put on the greatest still life insurance plans available.

people but any case we could. we can sit down and figure out an amount of life insurance in an amount you'd like nation beneficiaries set up a policy once you pay the premium while i was gonna say point none of this legislation can have anything to do simple estate plan like that kind of those who have businesses and and things like that. that's this is common where you know this legislation really does affected greatly and even i was at work. in most businesses, you know, obviously might consider talking to the owners about it.

you know you guys have you thought through, you know some of this in the financial planning goes around like my life. i would pass away pretty stencil value to and get some very important people who work in me some of my family members and just all my employee and we have a plan in place where two of my employees own life insurance policies on my life and they pay the premium. then i separately save them in their salary is not directly so i'm not paying the life insurance. i pay them enough extra in their salary pay the spring, so when i die, they're going to receive significant amount of money each and what they're required to do with that pay that to my wife for the purpose of this will be a down payment on jan the whole idea that his business continuity insurance like were planning around us estate tax.

we don't want that life insurance to further increase the value what i'm not real happy on the stepup in days is if they actually passed that my wife probably going to have to pay some income taxes on the growth they don't stepup in basis is to be able to sell the business for whatever she wants to them know we should not have to think tax and field written into estate planning for a lot of folks out there working in these family-owned companies or the wake-up call itself. what would you sensitive time calling what i would do is to just understand this a little better. the darkest rich people that live in some of us to hate the runaround in the option for origins and a lot of these people that fit into these thresholds own the very businesses that you work at, or perhaps you trade or you very much and can't stand businesses right here in your community. and so they are lowering the threshold essentially and they are probably the lower more than once they realize whatever it's gone up from 600,000 to 11 million this day over 20 some years new 600,000 when i was doing this back in and just got up and up and up and up and up and up.

you know it's it's made its way. they just kept raising it so that they would exempt more and more businesses now they're going the other direction at half and it could go longer over time, so just a good time to get a wake-up call that you really need to do some stapling for yourself even if you got anywhere near this category.

psalms again kind of summary on this for all of us. it's a sort of a wake-up call and so what are some of the steps that we should do this we hopefully wake up to this sustained issue of the very first thing to do all your beneficiary forms life insurance on your ira and 401(k) for your spouse and any annuities that you own any beneficiary.

we can look at and she was named and possibly update that be a good start of looking at stapling look at the balance in the pretax ira and 401(k) money and say that when this beneficiary receives that pretax no taxes. that's truly look at hidden estate tax is income taxes that are due on the fisheries to beneficiaries of inherited ira to plan for that we can look at your licensure and just take a look at how much you have, you want to purchase more young but who specifically you want to go to look at your charitable contributions so just generally speaking, i think that this whole business of estimate the estate tax. this could be a blessing that forces people that are in the know about what they'll do to really get out there estate plan and consider some change change for some breakfast that you listen today again shows brought to my carnal guide.com or you can find hans's book as well as on this email and contact information. if you think and g this business thing. some we need to contact him and and and get some financial planning done this, you know, the wise steward and in luke 16 certainly, you know, we need to be about our business when we get these, wake-up call, so again it's cardinal advisors if you're looking at the youtube channel to see further videos on the subject, and we thank you so much on scripture. thank you. finishing well is a general discussion and education of the issues facing retirees carnal guide.com cardinal advisors upon trial cfp some insurance this show does not offer investment products more investment and we hope you enjoyed finishing well you by carnal guide.com visit carnal guide.com for free downloads of the show previous shows on topics such as social security, medicare and iras, long-term care, life insurance, investments and taxes as well as best-selling book, the complete carnal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows what you get.

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