Epic Real Estate Investing - How to Keep the IRS Out of Your Inheritance | 342

Episode Date: February 6, 2018

Tax Hacker Tuesday is back to show you how to keep the IRS out of your inheritance. Learn why you should plan ahead and be very careful with your language to avoid losing your inherited assets to the IRS. Avoid paying unnecessary taxes. Create your winning estate plan with Epic Real Estate Investing and Tim Berry on Tax Hacker Tuesday! ______   The free course is new and improved!  To access to the two fastest and easiest strategies to a paycheck in real estate, go to FreeRealEstateInvestingCourse.com or text “FreeCourse” to 55678. What interests you most? • E.ducation • P.roperties • I.ncome • C.oaching Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Did you know that up to 50% of your lifetime income will be wiped out by taxes? What if you could stop this madness? Isn't it about time you play on a level playing field with the wealthiest 1%? Now you can. Tim Berry, attorney at law, shares here each and every week current tactics and strategies that anyone can implement to hack the tax code. Protect your assets and keep what's rightfully yours.

It's time. for Tax Hacker Tuesday. Well, I think that you'd be surprised that the IRS loves it when you get in trouble and have assets. How much is going to change hands from older people, older people, over the next few years? I don't know. How much are you going to give me, Bernie?

I think about, am I going to give you? Hey, let me ask you a question. Close your eyes. What do you say? What do you say? So how much is going to exchange hands through the auspices of older people that the IRS is sitting there saying, yes, I hope their children have a tax problem. Well, you know, here's the amazing thing is they have all these analytics, you know, about the, what is it, not generation X and Y.

What's the Woodstock generation called? I've already forgotten. Oh, the baby boomers. See, my mind's going, everybody. And they have something called the age wave. And all the baby boomers are getting older. And now as they're starting to pass away, they're passing on assets the next generation. And as trillions upon trillions of dollars of assets are being passed on the next generation.

So I finally got you to say how many assets? We've went through all around and you're telling them, find a trillion. I'm going to turn you. I go by the word. So why is the IRS ecstatic about this? Because they're sitting there and they're filing liens on the offspring that have tax problems. And they're sitting there going, I can't wait until they get their inheritance. And so what happens whenever Little Johnny, Little Susie, they owe the IRS 100,000, 200,000,

and it isn't even just the IRS. They might owe a spouse, a bad spouse, a predatory spouse. They got involved in a bad relationship, and they get a judgment against them from the spouse. Or whatever, it could be anything out there. Whenever Little Johnny, Little Susie inherit assets, what happens with those assets, Bernie? Well, according to the trust or the will, if there's not any sense, special language, it goes directly to the children that the grandparents or the parents designate who gets that asset.

So mom and dad. I said if there isn't special language that happens. So little Johnny, little Susie, they have some IRS debts, let's say. And now mom and dad have goed up in a state of a couple hundred thousand bucks and little Johnny is supposed to inherit, let's say, $50,000. Now whenever mom and dad pass away and that money goes down to Little Johnny because they don't have the right language in the will or the trust, what happens to that money? With the IRS is leaning on it? Yeah.

It doesn't go to Johnny. The IRS takes it. It goes right to the IRS. Now, we read a court case that came out just last week. And in that court case, Little Johnny, same fact pattern, he was inheriting one third of a condo. The condo is worth about $80,000. dollars. Now, everybody out there is very crafty. So what they said is, oh, Little Johnny said, I know I owe you IRS money, but I'm going to enter into a settlement with my brothers and sisters

were in return for me releasing involved claims against the estate. I agree to give up my ownership interest inside the condo. Was that effective, Mr. Garland? No, it wasn't, because in the person's trust her will, in this case, it was a will that she, the mother was distributing to all the children in equal shares at that point. So at the instant that she passed on, the instant she passed on, he had a right at that time to the property. And so the IRS lien, boom, attaches to that right to the right. And little Johnny was out of luck. One third of mom's estate got given to, that's proper English, I believe, was taken away by the IRS. Now, Bernie, what are the remedies for disaster. Should I ramble on about the remedies? Do you want to ramble on?

Well, the, incoherently or coherently, okay? Here's the thing. You have to have special, you have, first of all, have to understand this, that at the time that you have a right or an interest in something, a lien can attach to that right or interest. So, you have to have special language, either in a will or a trust. Is that correct? That's correct. And here's the thing. I'm going to make a statement I'll probably get in trouble for. the IRS probably loves legal zoom. The IRS probably loves these online will drafting software because typically inside those documents,

it says little Johnny shall inherit at the age of 25, 50%, and at the age of 35, the other 50%. Well, guess what? That means the IRS can take away 50% whenever Johnny turns 25 and the other 50% whenever Johnny turns 35. The better thing to do is Johnny never inherit a thing in his personal name. Rather, Johnny or Susie inherits in the form of a trust. The IRS lien only attaches the assets. Johnny or Susie inherit outright. So if they inherit in the form of the

trust, and they can control that trust. The IRS lien doesn't attach. The bad guys don't take the assets away. So it's all in the wording. You need, what happens is that moms and dads and grandparents aren't educated in the use of words that means something of whether or not their hard-earned money is going to go to where they want or it's going to go to the government. Absolutely. And here's another dirty little secret. These aren't the subjects people talk about over Thanksgiving dinner. They don't talk about, oh gosh, the IRS is laughing at me again. What do I do, Mom and Dad? Right. So you may not know little Johnny, little Susie, have these issues, and now you set up this estate plan and you give the assets to them and it's a recipe for disaster plan ahead don't expect

them to tell you of their issues you need to plan in your estate plan about providing for them and wiping out the concern of the IRS taking away those assets that's it for today as we dream of a tax system that works just for you but until then you have tim berry see you next tuesday for another episode of tax hacker tuesday This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com.