Hey everybody and welcome to another episode of estate planning TV I’m your host Christopher small and this is the Internet’s most passionate show about state planning and real quick if you are listening to this intro then what you are about to hear is one of my recent Facebook live videos if you haven’t seen one of those before or.
Didn’t know about them then please go and check out my Facebook page CMS law firm so that you don’t miss them alright without further ado.
Here we go hello everybody and welcome to another episode of estate planning TV I’m your host Christopher small I’m the owner.
Of CMS law firm we do estate planning would you probate that is it you know our model is live a rich.
Life leave a rich legacy and this is the internet’s the most passionate show about estate planning and today by the way hello hello everyone today I’m pretty excited and breathe because we actually have a good episode for you today something a little bit out of the ordinary normally.
I’m out here just answering kind of frequently asked questions normally I’m kind of staying relatively sort of high-level not getting into the weeds too much today we’re gonna get into the weeds.
A little bit and it’s because today’s topic is so fun so fascinating so divisive for so many reasons but today we’re going to talk about how the Trump family Fred Trump married Trump Donald Trump and his brothers and sisters avoided estate taxes when Donald Trump’s parents passed away and before that even.
So they avoided gift taxes they avoided all kinds of fun stuff and they did it some some.
I wouldn’t know if I were to describe them as unique ways but they they they didn’t did it in some ways that.
Some people may may not find interesting.
But I wanted to start by the way with a couple of ground rules okay first things first I found this quote well I didn’t find it I knew about this quote and I’ve known about it for a long time and it’s the truth and I thought I would start with that okay and by the way if you.
See me looking a little bit off the camera it’s because I have notes this is a long one okay so buckle up boys and.
Girls this is going to be a.
Episode right ten and 15 minutes so learn at hand who was a relatively famous Supreme Court justice in legal circles because of his intellect in his analysis but also just because he’s got one of the coolest names in law he’s not around anymore he once famously said anyone may so arrange his affairs that his taxes shall be as low as possible he is not bound.
To choose that pattern which will best pay the Treasury there is not even a patriotic duty to increase one’s taxes all right I wanted to start with that because I think it’s important.
That this is the baseline we are not obligated to pay taxes okay well I put this way we are not obligated to pay more than the taxes that we are obligated to pay which means the lowest amount possible under the rules right and this is totally off topic but I listen to an income tax podcast from a guy who’s an accountant and yes I’m a dork I listen to an income tax podcast.
And I think it’s actually quite interesting but he makes a point he he sort of characterizes income taxes and taxes in general in a way that I have never heard of before and really the way that the taxes are set up the actual taxes that you pay are very very that part of the code is very small but the rest of the code is is outline to do is incentivize you to take.
Action so it’s sort of like getting a discount at you know the store any store buyer what they’re saying is we want you to act over here we want you to.
Put your money over here so if you do we’re gonna give you a break right we’re gonna give you a tax break place basically so just remember that we are starting from that proposition if you don’t agree with that then thank you for paying more taxes than you’re obligated to I guess okay but I’m here in the legal world here.
In the real world we want to pay only the taxes that we are supposed to pay under the rules all right so.
We’re gonna try to get those taxes as low as possible okay now that’s ground rule rule number one ground rule number two by the way although we were talking about the Trump’s they are politically dynamite right not in a good way or a bad way like literally explosive this is not a political podcast okay this is not a political episode I’m not here to talk politics I’m not here to tell you whether.
Being any party is right or wrong okay that’s not what we’re about that’s not what this episode is about whether you’re Republican or Democrat you’d like Trump you hate Trump I want you to listen to this show.
Okay that’s a grabber rule number two I guess ground rule number three is that this is not also a show about whether or not Trump is a good person overall whether its family are good people that’s not why we’re here okay we’re here to learn from from what they’ve done to see if we can save some money.
To see if we can organize our own lives and our own families to create generational wealth which I think there’s no doubt that they’ve done a good job of that that’s what this.
Show is all about okay so I’m not even gonna tell you whether or not I like him we’re doing it.
Okay although I really want to but I’m not going to okay all right so yeah so the real so we’re really here to do today is to look at the ways that Trump how the Trump family sort of avoided.
Or reduced or eliminated estate taxes and I wanted to have this episode for three main reasons one I think when you talk about.
Estate planning let me talk about the state taxes when you talk to talk about income taxes when we talk about business and we talk about generational wealth we talk about any of these things I think it’s always easy to do so with sort of a real-world example that’s number.
One number two I want you to see the value of using a good estate planning attorney.
Okay you cannot do this stuff on with Rocket Lawyer or whatever other sort of you know do-it-yourself software that you want to use okay there’s a reason.
For that because it’s sort of complicated and the payoff is huge so you know you could save many many hundreds of thousands of dollars probably by spending only many many many many few few small thousands of dollars potentially okay and then number three the third reason we’re gonna talk about this is because this is my show.
And I think it’s interesting okay so if you don’t like it you don’t watch if you’re interested keep watching we’re gonna break down how.
Trump saved millions literally on estate taxes so that’s that now one another one other caveat.
I guess another Conneaut and I want to talk about is that as we get into this what you’re gonna see is they utilized some estate tax planning strategies that everyone can use okay but because they were business owners they really have a lot of flexibility and a lot of additional strategies that.
Were opened to them that many other people may not be ok so I just want to point that out.
Because I think it’s a big factor that doesn’t mean to say that if you find yourself in this high net-worth position that you can’t create some businesses and create some business organizations to sort of do some of these things because a Trump the Trump family did that as well as owning legitimate businesses they also created companies just for.
Estate planning purposes but keep that in mind ok that when you when you have these business structures in place you’re just afforded a greater flexibility and you can.
Do other things ok now let’s get into the show finally right we’ve settle the ground rules it’s time to talk Trump estate taxes now I want to preface this I guess too by saying that the things that we’re going to talk about today are gleaned or I took out of that New York Times article that was just released that sort of ran through some of the estate planning and.
The state tax strategies that they discovered were implemented with the Trump family through their reporting efforts ok because I don’t have that information anywhere else so.
Everything I say is going to be based on that particle ok and really the hope the only thing that what I really needed was just a framework to see what they did to talk about how those strategies were sort of work in general okay now to begin what I really want to do is start.
At the end so ma within this article they estimated that Fred and Mary Trump who are Donald Trump’s parents when they passed away or over the course of their lives they had accumulated in a.
State that was around worth around 1 billion dollars billion with a B okay nine zeros and when they passed away they ended up paying oh well so.
What they should have paid with the estate tax at that time at 55% would have been five hundred and fifty million dollars in estate taxes okay that is a big check what they really what they ended up paying in reality was about fifty two million dollars or five percent of their of the estate went to estate taxes okay so in reality they were not able.
To completely eliminate a state taxes one hundred percent but they were basically able to pay 1/10 of the estate tax that they were owed if you just look at it just straight away on paper.
This is the number this is the tax this is the.
This is the amount that should be paid all right so that’s a significant savings right if I told you I was gonna give you 90 percent off of anything you would take it and that’s what they were able to do okay and the.