This marker identifies the single largest potential "reset button" on your family’s generational wealth. In the Melqart Private framework, estate tax isn't just a fee—it is a 40% wealth confiscation that occurs at the exact moment a family is most vulnerable.
What it is: A calculation of the projected transfer taxes due upon death, net of your current planning strategies. This marker evaluates the gap between your total net worth and the "Net-to-Heirs" amount. It specifically audits whether your assets—including life insurance—are positioned inside or outside of your taxable estate.
What it tells you: It measures your Generational Leakage. It answers the question: Is your wealth a private legacy or a future tax windfall for the government? It reveals if you are crossing the federal or state exemption thresholds without the defensive trust structures needed to "freeze" or "shift" that value.
Why This Matters Financially
Estate taxes are unique because they are immediate and irreversible. Unlike an investment loss, you cannot "wait out" an estate tax bill. It must typically be paid in cash within nine months of death.
The "40% Cliff" Example:
Imagine a household that has built a successful business and real estate portfolio worth $25 Million.
The Unprotected Estate: If the owners pass away in 2026 (when exemptions are scheduled to drop significantly), the amount above the exemption is taxed at 40%.
The Confiscation: A $25M estate could easily trigger a tax bill of $5M to $8M.
The Liquidation Spiral: Because the wealth is tied up in a business and real estate, the heirs don't have $8M in cash. They are forced to sell the family’s best assets in a "fire sale" to pay the IRS. They lose the asset, the future income from that asset, and the pride of ownership—all in one event.
How You "Lose" Money:
The "Insurance Trap": As we called out in Protection, if you personally own a $5M life insurance policy, the IRS takes $2M of it in taxes. You are paying premiums for a benefit that the government partially intercepts.
The Valuation Peak: Without planning, you are taxed on the fair market value at the time of death. If your business triples in value over the next 10 years, your tax bill triples with it. Proper governance "freezes" that value today so the future growth belongs to your children, tax-free.
The Risk: You lose money through structural inertia. Many families assume they have "time" to plan, but estate tax is a binary risk. By the time you need the plan, it’s often too late to implement the most powerful strategies. At Melqart, we view an unoptimized estate as a 40% liability on your balance sheet that needs to be retired immediately.
