“The ancient Egyptians built elaborate fortresses and tunnels and even posted guards at tombs to stop grave robbers. In today’s America, we call that estate planning.”
— Quotation from Committee Chairman Bill Archer, House Ways and Means, during the debate on eliminating “death” taxes.
A simple will, just isn’t enough! Your government wants two-thirds (2/3).
Rocco Beatrice
Rocco Beatrice
The Dreaded Phase-In of the 2001 Tax Act has increased your need for Estate and Gift Tax Planning. see table below
A TRUST is nothing more than a private CONTRACT.
The purpose of a TRUST is to create an “Artificial Legal Person” to hold, preserve, and manage your wealth for the benefit of your heirs.
The Medallion Trust®
(Registered Trademark of Estate Street Partners, LLC)
In anticipation of congress making additional changes to the estate tax and gift tax rules, the MEDALLION TRUST® has been financially engineered to take advantage of your “legal exceptions/exemptions loopholes” – by claiming your tax exemptions, now!!! You can give away up to $1,000,000 of your wealth this year ($1,000,000 for the year 2002 to 2009, and back to $675,000 in 2010 (see table below). NOTE: The Dreaded Phase-In of the 2001 Tax Act has increased your need for Estate Tax and Gift Tax Planning.
By “GIFTING” your assets to the MEDALLION TRUST® and by filing IRS Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) you can claim your unified credit against taxes that would normally be paid by your estate. Thus, for the year 2006 you and your spouse each can “GIFT” up to $1,000,000 ($2,000,000 combined) of your wealth without incurring any tax liability. (For the new Tax Act, see below)
Tax Neutral
There’s absolutely no downside risk with the MEDALLION TRUST®. By engineering your assets around “legal exceptions and tax exemptions” you can avoid unwanted taxable results by claiming your loophole, now!
- ESTATE – The Fair Cash Value of anything (in your name) on the date of your death.
- ESTATE TAX – Anything in your estate (in your name) is taxable up to 55% with small reductions under the new Tax Act of 2001. Anything NOT in your name, is NOT taxable.
- PROBATE – Anything in your Trust, avoids probate. Anything NOT in your Trust, goes to probate, with or without a will.
- WILL – A listing of your wishes to be executed on the date of your death. A will does not avoid probate.
- TRUST – An “artificial legal person” created by private contract.
Congress: “Death and Taxes”
Various tax proposals were being bandied about, including House Ways and Means Chairman, Bill Archer, who said that he was “pushing” to “g-r-a-d-u-a-l-l-y phaseout” the death tax within the next 10 years. (The word “gradually” has been emphatically stretched out.) “Death by itself should not trigger a tax” said Chairman Archer. The Dreaded Phase-In of the 2001 Tax Act has increased your need for Estate Tax and Gift Tax Planning. (see table below)
The federal government has done all it can to ensure they become your largest “heir” by collecting estate taxes from 37% to 55% on 100% of your wealth. The 2001 Tax Act stretches out a small reduction but not eliminated. Only Japan has a higher rate of estate taxes at 70%. Germany takes a maximum of 40%, while Australia and Canada, take nothing.
“I believe, we all should pay taxes with a smile. I tried, … but they wanted cash.”
-anonymous, The Penguin Dictionary of Humorous Quotations
Add it all up!!! Federal tax, state tax, probate fees, legal fees, accounting fees, appraisal fees, administrative and executor fees, and etc. fees; it could easily cost you 70 to 80% of you hard earned estate. You can avoid these unwanted results.
Some statistics on death & transfer taxes:
- 13 times in 25 years, congress has changed the rules. Congress is always tinkering with the “Death Transfer Tax.” They believe, they know better than you, how they should spend your money; before and after your death.
- 43% federal death tax rate or $2,170,250 owed by a California resident who died with a $5,000,000 estate, plus an additional 10% payable to the state of California. (source: CA-Probate.com)
- 70% – percentage of Americans who die without a will. (source: Wealthcare.com)
- 35% – the percentage of widows aware of the 55% federal estate tax.
- 60% to 85% – the percentage of gross household income that you will need for your retirement to sustain your current lifestyle. (source: Wall Street Journal)
- $23,500,000,000 – the amount of tax dollars collected from 1998 estate tax returns filed. (source: US Treasury Department)
The MEDALLION TRUST® was meticulously crafted and specifically engineered to take advantage of your “Gift” and “Estate Unified Tax Credit.” This legal exception/exemption (LOOPHOLE) is presented in the table below.
The New 2001 Tax Act:
| YEAR | OLD LAW EXEMPTION (GIFT & ESTATE TAX)1 | ESTATE TAX EXEMPTION2 | GIFT TAX EXEMPTION3 | ESTATE TAX MAX %4 |
|---|---|---|---|---|
| 1999 | $625,000 | N/A | N/A | 55% |
| 2000 | $675,000 | N/A | N/A | 55% |
| 2001 | $675,000 | $675,000 | $675,000 | 55% |
| 2002 | $700,000 | $1,000,000 | $1,000,000 | 50% |
| 2003 | $700,000 | $1,000,000 | $1,000,000 | 49% |
| 2004 | $850,000 | $1,500,000 | $1,000,000 | 48% |
| 2005 | $950,000 | $1,500,000 | $1,000,000 | 47% |
| 2006 | $1,000,000 | $2,000,000 | $1,000,000 | 46% |
| 2007 | $1,000,000 | $2,000,000 | $1,000,000 | 45% |
| 2008 | $1,000,000 | $2,000,000 | $1,000,000 | 45% |
| 2009 | $1,000,000 | $3,500,000 | $1,000,000 | 45% |
| 2010 | $1,000,000 | $0 (repealed) | $0 (repealed) | 55% |
| After 2010 | $1,000,000 | $0 (repealed) | $0 (repealed) | 55% |
If you know the year you’re going to die you may be able to maximize your estate and gift taxes.
CONGRESS is always tinkering with the “Death Transfer Tax” by eliminating, reducing your legal exceptions loophole, or who knows? Why take this unnecessary risk? You can avoid these unwanted results. There’s NO downside to implementing your MEDALLION TRUST®. The Dreaded Phase-In of the 2001 Tax Act (presented in the above table) has increased your need for Estate Tax and Gift Tax Planning.
The new Tax Act created two layers:
One for the transfer of your wealth at death;
The other for how much you can give away in your life-time.
Can you trust them?
You can avoid these unwanted results with the MEDALLION TRUST®
The MEDALLION TRUST® is designed to LOCK-IN your LOOPHOLE without any downside risk.
- If your exclusion goes up you merely add additional assets to your MEDALLION TRUST®
- If your exclusion is reduced or eliminated, you have LOCKED IN your LOOPHOLE.
Additional benefits of the MEDALLION TRUST®:
- Income Tax Neutral – absolutely no downside to all “income tax” benefits from underlying asset(s), i.e. you receive deductible real estate tax, mortgage interest on your form 1040.
- Defers Capital Gains Taxes on Real Estate (under certain conditions). Contact us for more information.
- Eliminates the expensive, time consuming “Probate Process” that could take years and consume your wealth.
- Eliminates Estate Taxes and Legal Fees in settlement of your hard earned estate
HOW DO I GET A MEDALLION TRUST®?
- Your TRUSTEE which could be your best friend, lawyer, accountant, … any individual you select will set up:
“The —Name— MEDALLION TRUST® under the laws of your state.
- You “GIFT” your private residence or any other valuable assets(s) at Fair Market Value, to:
your MEDALLION TRUST®Note: your Non-Taxable gift(s) are subject to your legal loophole amounts (see above).
- You and your spouse each will file a “Gift Tax Return IRS Form 709” for the value of the asset(s) gifted to:
your MEDALLION TRUST®
- A checking account is established in the name of your trust with power of attorney granted to you or your spouse (as the attorney in fact). All your expenses are paid through your MEDALLION TRUST®
What’s the difference between an UltraTrust® and a Medallion Trust®?
| Features/Benefits | the ULTRA TRUST® | the MEDALLION TRUST® |
|---|---|---|
| Purposed Tax Law Changes: Twelve times in 24 years – the number of tax overhauls. Tightenings for some; headaches for all. Congress is always tinkering with the idea that they know better than you about where your money should go. |
TAX NEUTRAL the ULTRA TRUST® was meticulously crafted to hold your primary residence and all your other significant assets with total positive income tax benefits, i.e. real estate tax and mortgage interest deductions on your Federal form 1040. Under certain conditions it may defer your capital gains taxes. Assets in your trust, avoid probate. |
TAX NEUTRAL (same as UltraTrust) In addition, the MEDALLION TRUST® was carefully engineered to take advantage of your Estate Gift Tax Unified Tax Credit Exemption LOOPHOLE. Congress is always thinking of amending, reducing, eliminating and who knows what eles? The MEDALLION TRUST® will freeze your legal loophole. If it goes up, you can add to your trust. If it goes down, you are locked in. It’s specifically engineered for this benefit. |
| How is the trust funded? | Assets to the ULTRA TRUST® are “exchanged” at Fair Market Value in return for a Private Annuity | Assets are “gifted” at Fair Cash Value to the |
| Why Transfer your assets in your trust now! | If you put assets in your ULTRA TRUST® now! you will escape Probate and you will NOT pay Estate Transfer Taxes. Your Gross hard-earned estate is taxable up to 55% federal tax, plus your state may also impose a tax. |
If you gift your assets to your MEDALLION TRUST® now you will escape Probate and you will NOT pay up to 55% Estate Transfer Taxes. Of significant tax deferral benefit if you gift assets that will appreciate significantly over time i.e. stocks, bonds, real estate, a business, tetc. |
| Forms filed with the IRS | At initial set-up, none. Thereafter, yearly information return to beneficiaries through K-1 “Information Return” | IRS Form 709, “U.S. Gift Tax Return” is filed with the IRS by April 15 after the gift is made. Thereafter, same as ULTRA TRUST® |
| Dollar Limitations that can be transferred to the Trust | UNLIMITED NO DOLLAR LIMITATIONS ON MONEY TRANSFERRED TO YOUR ULTRA TRUST® (specifically engineered for this benefit) |
LIMITED to your Estate Gift Tax Unified Tax Credit Exemption LOOPHOLE: Amount that can be gifted and not subject to a gift tax exemption (per person): 1999 – $625,000 2000 & 2001 – $670,000 2002 to 2009 Congress created two layers. One for Estate Tax, One for Gift Tax. (see table above) The Amount you can give away in your lifetime is capped at $1million. – $1,000,000 2010 and thereafter – $675,000 |
| Assets that can be transferred | Personal residence, other real estate, your cash account, your investment account, your automobile, your insurance policy, your sub “S” stock, your Limited Liability Company, General Partnership interest in a Limited Partnership. All your valuable assets. | Same as the UltraTrust. However, assets transferred to the MEDALLION TRUST® are subject to the above Gift/Estate Tax Unified Credit dollar limitations. Note: If the credit goes up, you add to your trust. If the credit goes down or eliminated, you are LOCKED IN. |
| Asset Protection Wealth Preservation | YES (specifically engineered for this benefit) |
YES (specifically engineered for this benefit) |
| Eliminates the Probate Process | YES (specifically engineered for this benefit) |
YES (specifically engineered for this benefit) |
| Eliminates Estate Taxes | YES (specifically engineered for this benefit) |
YES (specifically engineered for this benefit) |
| Tax Benefits to your Federal Form 1040 | YES (specifically engineered for this benefit) All tax-deductible attributes of underlying assets transferred to your ULTRA TRUST® ultimately are “passed through” to your Federal Form 1040. |
YES (specifically engineered for this benefit) All tax-deductible attributes of underlying assets transferred to your ULTRA TRUST® ultimately are “passed through” to your Federal Form 1040. |
| Cost to implement | US$12,500 | US$12,500 |
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