Tax planning is an important part of any kind of plan design. Taxes and death are often said to be the only certainties in life. However, consider change. Change is an absolute constant in all of our lives. The people important to us in our lives are subject to change. People are born and people die. Our wealth changes. Sometimes it goes up and sometimes it goes down. When it goes down we hope it comes back up. Health changes.
The law changes! Especially the tax code (Internal Revenue Code). It is imperative that your estate planning attorney have a background in taxation. Travis H. Perry has an LLM in taxation from the University of Denver. LLM stands for a Master in Laws of Taxation. It is a post law degree in taxation. Additionally, he worked for a large CPA firm for four years in the area of estate, gift and trust (fiduciary) taxation. Please refer to his profile on this website.
A story called The Free Bridge illustrates my thoughts on tax planning.
The Free Bridge
I live in Alexandria, Virginia. Near the Supreme Court chambers is a toll bridge across the Potomac. When in a rush, I pay the dollar toll and get home early. However, I usually drive outside the downtown section of the city and cross the Potomac on a free bridge.
This bridge was placed outside the downtown Washington, DC area to serve a useful social service, getting drivers to drive the extra mile and help alleviate the congestion during the rush hour.
If I went over the toll bridge and through the barrier without paying the toll, I would be committing tax evasion.
If, however, I drive the extra mile and drive outside the city of Washington to the free bridge, I am using a legitimate, logical and suitable method of tax avoidance, and am performing a useful social service by doing so.
For my tax evasion, I should be punished. For my tax avoidance, I should be commended.
The tragedy of life today is that so few people know that the free bridge even exists.
Justice Louis Brandeis, US Supreme Court |