Build A Strong Foundation
As the parents of Baby Boomers are transferring their wealth to their children, and as the Baby Boomers consider how and when to transfer their wealth to younger generations, estate planning has never been more important. We understand the inherent challenges and complexities involved in critical matters such as wills, trust management, guardianships, bequests and funeral arrangements. As we work with you, we focus on two primary objectives: (1) ensuring that the right people receive the right assets at the right time, and (2) minimizing the taxes triggered upon a client’s death and thereafter.
Estate Tax Liabilities and Income Tax Planning
As a result of changes made to the law in December 2017, individuals can now pass up to $11,400,000 during their lifetimes (or at death) free of any gift taxes for gifts made or estate taxes upon an individual’s death. A married couple can double this amount and use any tax-free amount not used at the first death upon the surviving spouse’s death. Thus, it is possible to pass up to $22,800,000 free of tax. For those with assets in excess of this limit (including the amount of any life insurance which you may own and your retirement plan assets, such as IRAs and 401(k) accounts), estate taxes are largely a penalty for failure to plan. In many cases, however, estate taxes can be avoided with careful lifetime planning.
As a result of these changes in the tax law, estate taxes will not be an issue for many people. Opportunities for reducing future income tax liabilities through careful planning are, however, still available even when estate taxes are not an issue. A well-tailored estate plan needs to consider whether tax planning should be incorporated and contemplate future changes in the law, while minimizing the estate tax and income tax burden to the extent possible. Regardless of whether estate taxes are an issue, estate planning presents an opportunity to protect family members from third party claims, imprudent financial decisions, and spendthrift tendencies. A well-crafted plan will evaluate whether such protection is needed and when and how to provide it.
Our practice includes analyzing the ownership of assets to ensure that the correct assets pass to the desired family members free of tax. In addition, we explore with clients lifetime options for reducing the tax bill triggered at death, including lifetime gifts to family members or to trusts for their benefit.
Our attorneys are familiar with the use of the sophisticated estate planning “tools” which may be appropriate, including wills, trusts (whether lifetime or testamentary), family partnerships or LLCs, life insurance trusts, grantor retained annuity trusts or unitrusts, charitable remainder trusts, and charitable lead trusts.
The key to a successful estate plan is taking the time to determine where you are and what your objectives are. With time and an organized plan, it is often possible to pass assets to your family at a greatly reduced or eliminated tax cost. Let us work with you to develop your plan and to secure the foundation you’ve worked so hard to build.