1. Landstar Global Logistics Techniques For Practice Continuation, Estate Plan Strategies, Risk Management, Retirement David Kossak offers securities through AXA Advisors, LLC (NY, NY 212-314-4600), member NASD, SIPC and offers annuity and insurance products through AXA Network, LLC and its subsidiaries. The Kossak Companies are not owned or operated by AXA Advisors or AXA Network. The Kossak Companies, AXA Advisors, and AXA Network do not provide tax or legal advice.
2. Please be advised that this presentation is not intended as legal or tax advise. Any tax information provided in this presentation is not intended to be used by any tax payer for the purpose of avoiding penalties imposed on taxpayer. The tax information was written to support this presentation. You should seek advice based on your particular situation from an independent tax advisor.
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4. Why would Landstar Global Logistics have me speak to you? To expose you to similar issues that we will both face, and potentially give you thought and solutions to rectify these problems. Estate Taxation Life Insurance Retirement Planning
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6. Estate Tax Unified Credit Exemption Levels HR 1836 and after the Sunset Provisions
7. Maximum Estate Tax Rates HR 1836 and after the Sunset Provisions 50 49 48 47 46 45 44 43 55 55 55 55 55 55 55 55 55 55
8. $ 9,780,194 NET ESTATE $17,124,988 TOTAL COSTS $26,905,182 GROSS ESTATE Rockefeller gave away $531,000,000 during his lifetime for educational, religious and charitable purposes. $17,124,988 TOTAL COSTS 12,245,000 *Federal Estate Tax 4,385,644 New York Estate Tax 75,000 Executor's Fee 200,000 Attorney’s Fee 85,996 Administration Expense $133,348 Debts SETTLEMENT COSTS OVER 64% SHRINKAGE * No marital deduction John D. Rockefeller, Sr. Founder, Standard Oil Co., Industrialist & Philanthropist Pocantico Hills, Tarrytown, New York
9. $4,103,216 NET ESTATE $8,672,315 TOTAL COSTS $12,775,531 GROSS ESTATE Cash in Estate - $1,347,886 DEBTS AFTER DEATH $8,672,315 TOTAL COSTS 6,042,272 *Federal Estate Tax 1,603,810 New York Estate Tax 450,000 Executor's Fee 300,000 Attorney’s Fee 259,287 Administration Expense $16,946 Debts DEBTS BEFORE DEATH SETTLEMENT COSTS *No marital deduction; no surviving spouse. Charitable bequests more than $600,000 Alta Rockefeller Prentice Last Surviving Child of John D Rockefeller, Sr. New York, New York OVER 68% SHRINKAGE
10. What Happens To The First Dollar at Your Death after The Unified Credit? (2007-$2,000,000) $.18 $.18 $.18 Is it fair that the IRS receives more than each of your children? $.45 to the IRS Children * There is an applicable exclusion amount. In 2007 it is $2 million, increasing to $3.5 million in 2009. Estate Tax is repealed in 2010 but scheduled to return in 2011 with a $1 million exclusion. •• There is an applicable exclusion amount. Also, notate that the 2nd million is taxed at a rate lower than 46%. $1.00
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12. Estate Planning Solutions Irrevocable Trust Annual Gifts Life Insurance Revocable Living Trust Credit Shelter Trust Living Will QTIP Trust Asset Titling Powers of Attorney BASIC
13. Life Insurance Source: Bragg Life Tables for 2000, 1991, 1986 Changes In Mortality Rates
14. Changes In Mortality Rates* - 68% Female, age 80, non-smoker - 55% Female, age 50, non-smoker - 70% Male, age 80, non-smoker - 60% Male, age 50, non-smoker 2007 vs. 1986 Source: Bragg Life Tables for 2000, 1991, 1986 *Mortality Rates are define as the cost of insurance on an individual
15. Sample Life Insurance Comparisons 1,000,000 Death Benefit This comparison is for informational purposes only and is based on data provided by various sources that are believed to be reliable as of the date of this presentation. In the event of a discrepancy, actual policy terms and current information provided directly by the issuing company at the time of sale will govern.
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17. What is the growth rate on any pre-tax plan? Assumes an 8% rate of return annually for 18 years $1,000,000 $4,000,000 $3,000,000 IRS $1,000,000 Family
18. Are you prepared to accept a low rate of return on your IRA over the next twenty years?
19. IRA and Pension Taxes at Death Estate Tax 46% Income Tax 28% Family 26% This assumes an individual is subject to an estate tax, t he 36% income tax bracket has no unified credit and his heirs choose to pay the estate tax with the IRA. Source HR 1836 and current income tax rates.
20. Question: How many of you have named your spouse as your IRA beneficiary? A contingent to the contingent allows the child to disclaim the IRA Question: How many of you have named a contingent beneficiary on your IRA? Minimum distribution would apply if you were over 70 ½ years old.
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24. REALITY: BOOK VALUE VERSUS GOOD WILL Estate Plans, Top Hat plans, Buy-Sell Arrangements, LI, Key Person Ins. If you fail to plan, Plan to fail Book value is defined as a real value base on hard assets; Goodwill is defined as the potential value base on past performance
