Tag Archives: Estate Planning

Wealth Management.com – “Green Book Signals Green Light to Grandfathered Estate Planning”

wm-resource-network-centered

 

 

 

“Now that we have the Green Book, which covers all of the same ground as the STEP Act, it seems that we no longer need to be concerned with retroactive provisions and can advise clients to take certain proactive steps….Green Book = Green Light.”

To read the full article, click here.

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Forbes – “‘Mathing Out’ Estate Tax Planning Strategies” by Alan Gassman

Forbes

 

 

“Well-meaning advisors and their studious clients are not always running the numbers to help ensure that the strategies and techniques they are using will provide the best-expected results….We have found from years of experience that there is no substitute for taking out a calculator or spreadsheet and reviewing the most probable scenarios (as well as possible or unexpected situations) to determine the expected and non-expected outcome of any given technique in order to produce the most accurate map possible of the estate planning territory.”

To see the full article, click here.

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Finseca: What comes around goes around – Charitable Remainder Trusts and Wealth Replacement Life Ins Return to Spotlight

“As part of their comprehensive legacy plan, clients who are charitably inclined, hold significant highly appreciated assets, and wish to create a lifestyle “annuity” should consider a CRT, especially if they can benefit from an income tax charitable deduction. Selling an appreciated asset inside a CRT may provide an economically superior result compared to selling the same asset in a client’s own hands, especially when done in conjunction with purchasing additional life insurance through an irrevocable life insurance trust (“ILIT”).”

To read the full article, click here.

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NY Times – “How the Wealthy Are Trying to Anticipate Biden’s Tax Increase”

“Financial advisers say they have been flooded with calls from clients who are trying to predict which of President Biden’s tax proposals will become law….I don’t know where we’re going with any of these taxes,” said Bill Schwartz, managing director of Wealthspire Advisors, which advises clients with $5 million to $20 million in assets. “But I do know it’s really difficult right now to justify what people call a loophole or what I call using the tax code to your advantage. In fact, it’s really hard to justify any of these techniques for the affluent right now, not that I think they’re right or wrong.”

To read the full article, click here.

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NY Times -“Well, Mom Always Did Like You Better”

“When you’re planning to divide your estate unequally, explain the reasons to your heirs, and remember: They might be hurt anyway….For most older parents, it is simpler to leave each adult child the same inheritance. But is equal always equitable? For many, the answer is no. And as the pandemic drives people to draft or update their estate plans, more are confronting that question….While leaving equal inheritances is the norm, many parents appear open to bequeathing their adult children different amounts. Two-thirds of Americans 55 and older said a child who provided them care should get a bigger inheritance than children who did not….The survey also found that one in four parents said an adult son or daughter who has children should receive more than a child who does not.”

To read the full article, click here. 

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NY Times: “Tales from two sons whose fathers died without a succession plan”

Tales from two sons whose fathers died without a succession plan.

“Financial advisors worth their fees will always discuss the need for succession plans with clients who own businesses.  But that doesn’t mean business owners will listen….People just don’t want to do it.”

To read the full article, click here.

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“What Jeffrey Epstein Did to Earn $158 Million From Leon Black?”

A very interesting article in today’s NY Times Business Section.  Estate planners will be surprised at the issues discussed.

“The answer: help rich people pay less in taxes.  In the case of Mr. Black, the chief executive of Apollo Global Management, his advice could have been worth as much as $2 billion in savings, according to a law firm’s review of Mr. Black’s business dealings with Mr. Epstein….Mr. Epstein’s specialty was suggesting ways for wealthy clients to use sophisticated trusts and other investment vehicles to reduce their tax liability while passing on assets to their children, according to documents reviewed by The New York Times and interviews with 11 people familiar with his work. In the process, he collected hefty fees — usually based on a cut of the anticipated tax savings….In Mr. Black’s case, according to the review by the law firm Dechert, the savings were enormous: about $1 billion for a single GRAT.  Mr. Epstein’s detection of a problem in a trust set up in 2006 and his proposed solution were “the most valuable piece of work” that he performed, the report said.  “Outside legal counsel described the solution as a ‘grand slam,’” according to the Dechert report, which was commissioned at Mr. Black’s request after The Times reported in October that he had paid Mr. Epstein at least $75 million in fees.”

To read the full article, click here.

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The Estate Tax May Change Under Biden Affecting Far More People

NYTimes

 

An interesting article in today’s NY Times authored by Paul Sullivan.  He writes, “So the question for taxpayers now is:  What happens once Mr. Biden can begin enacting changes in tax policy?  The biggest long-term change involves the estate tax.”  Sullivan goes on to discuss the possible loss of step-up in basis, “A Biden administration may move to change this for logical and revenue reasons.  Imagine trying to determine the capital gains from AT&T stock that your grandmother bought in 1943 when record-keeping was done with a pencil and paper.  Today, cost-basis information can be retrieved in seconds.”  He goes on to discuss some of the inherent problems in this approach.

A different approach could be adjustment to current estate tax exemptions and rates.  “With Democrats controlling the legislative and executive branches, there is concern that the exemption level could drop to $5 million or even $3.5 million…For the wealthiest in the country, the bigger concern is the rate itself.  It’s now at 40%, but it was as high as 55% in 2001.”

To read the full article, click here.

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Trust Modifications: Innovative Techniques for Outdated Instruments

Happy Thanksgiving to All:

“Although the grantor of an irrevocable trust surrenders the right to revoke the trust and amend its terms, the restrictions are no longer as limiting as they once were. Alternatives to judicial modifications abound. From nonjudicial settlement agreements to new trends in decanting practices to innovations in modifications by consent, clients, trustees, and beneficiaries have many potential avenues for modifying an irrevocable trust to accomplish their legacy planning goals.”

To read the full report, click here.

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