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This was the subject of a recent seminar I gave. The right answer to this question is important to your economic health. Your family’s economic health. And your business’s economic health.

Why? Because the wrong answer is not only dangerous but can destroy your tax health. Worse yet, enrich the IRS and put your family and business in tax jeopardy. For years. Maybe for life.

The sad fact is only 10 percent (11 people) of the audience (112 people) knew the difference between an estate plan and a wealth transfer plan. Worse yet, not one person in the audience answered, “Yes” to the question, “Do you have a wealth transfer plan or are you working on one?”

“What about your estate plan?” I asked. Thirty-two people had a completed plan; 26 were working with their professional advisors on their estate plans. A great start to the seminar. All 112 people in the audience needed help. They would get it.

“You are about to learn how to beat up the IRS… But legally,” I told them. Following is a summary of the main areas covered during the two-hour seminar.

A side note: The current (and terrible) estate tax law, signed by the president back in January, 2001, (because of the uncertainty it has created) makes what you are about to read even more important.

The traditional estate plan — consisting of a will and a revocable trust — is in reality a death plan. It just lays there until you die, and when you do, guarantees the IRS a big payday.

Simply put, a traditional estate plan (standing alone without any additional tax planning) can and will hurt you, your family and your business. Severely!

But wait a minute, you ain’t dead yet.

Enter the unique tax-saving system we call “wealth transfer.” Wealthy taxpayers have used the concept of wealth transfer for years: Develop a lifetime tax plan that transfers all of your wealth — intact and tax-free — to your family. Burn it into your mind: You must have a lifetime plan, not only a death plan. If you own a business, a separate lifetime plan to transfer your business (tax-free) to your children, who are working in the business, must be integrated into your overall wealth transfer plan. Of course, your lifetime plan is tailor-made to dovetail with your death (will and trust) plan.

When should you complete your plan? The sooner, the better. Your plan must focus on lifetime strategies — like a QPRT, IDT and FLIP (qualified personal residence trust, intentionally defective trust and family limited partnership, respectively). Every strategy does a separate tax-saving trick, yet allows you to control each of your assets — including your business — for as long as you live.

All in all, there are 23 wealth transfer strategies (and an endless number of combinations and variations). These strategies (typically, only four to six are used for each client) when used to build an overall tax plan, answer the three basic questions that have been asked by my clients, seminar audiences and readers of this column over the years:

(1) “Irv, how do we [me and my spouse] maintain our lifestyle for life?” (2) “How do I maintain control of my assets, including my business, for life?” (3) “How do I get ALL of my wealth — intact — to my family without any reduction for taxes?”

For many years, I’ve thought of writing a book that answers these questions. Of course the book would be about wealth transfer… the core subject of my seminars. Well, it’s done! And the title is (a drum roll please) Tax Secrets of the Wealthy.

The book introduces a unique and highly organized system that is not designed to beat the estate tax (the wrong ball). Instead the system focuses on your wealth (the right ball). The book teaches you how to use the system and the 23 strategies to pass your entire wealth (or even increase the amount of wealth) to your family without any reduction for taxes or other costs.

Here’s a sample of what you’ll learn, via the strategies, (1) why your qualified plan [profit sharing, 401(k), IRA] is a tax trap if you are in the highest tax brackets (the IRS gets 75 percent or more, your family only 25 percent) and how to turn the tables on the IRS (your family gets 100 percent of the dollars in your plan); (2) how to create a private retirement plan, that creates tax-free dollars for your retirement; (3) how to eliminate the capital gains tax; and (4) how to give significant amounts to charity, without a single dollar of cost to your family.

You’ll also learn how to transfer your family business — yet keep absolute control for as long as you live — to your children… totally tax free (no tax paid by you or your kids).

Think of the strategies and the system (designed especially for the owner of a closely held business) as the bricks, mortar, lumber and other material used by a skilled architect to build a solid house (in this case a solid wealth transfer plan).

You owe it to yourself, your family and your business: Review your current estate plan. If your family will not receive every dollar of your wealth, there is truly a way to get the job done. Legally. And easily.

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Irv Blackman is a certified public accountant and lawyer who specializes in estate planning, business succession and asset protection. Contact him at Blackman@EstateTaxSecrets.com or call 417-9732. His Web site is www.taxsecretsofthewealthy.com.