[CarrotAndStick]

This had been posted earlier:

To: Perdogg

This one of the best known super rich scams. It’s called estate planning. A former boss of mine did it. It is designed to avoid paying huge inheritance taxes on transfer of ownership of the corporation.

First you set up a family foundation and name your kids as perpetual trustees with salaries and expense accounts.

Second you donate a billion dollars getting a billion dollar tax deduction.

Third, as a condition of the donation, the foundation has to purchase life insurance that will pay out in excess of what your kids would have gotten after taxes if you had simply left the company to them in the first place.

The benefits are that you get to look like a great guy. You don’t have to pay anymore taxes the rest of your life. Your kids get more than they would have anyway because life insurance isn’t taxed, and they have the salary and expense accounts for the rest of their lives.

Sweet huh?

4 posted on 12/26/2007 6:07:46 PM EST by Soliton

[robomatik]

thats probably exactly what hes doing. good response.

[longtermmemmory]

which is why Warren Buffet opposes the end of the estate tax. He sells the insurance.

[Sgt_Schultze]

This is the racket Bill Gates and Warren Buffet are running. Both favor retaining the inheritance tax but both are avoiding paying it by placing their sizable fortunes into the Gates Foundation Trust.

Buffett thinks nobody should be made rich because of who they were born to. So he has also placed about a billion into each of three trusts to be run by his children. There they can enjoy the fruits of daddy’s labor by drawing a healthy administrator fee while free from the worry about inheriting so much loot.

[sportutegrl]

You say that like it is a bad thing. I personally don’t have a problem with someone figuring out a way to keep Uncle Sam’s greedy fingers off his family’s inheritance, considering he has already paid taxes on it once. Even Whoopi Goldberg gets this.