Taking Aim
Much research in my industry has focused on the question of what factors actually impede the wealth transfer process. While we have written extensively about the confiscatory nature of the estate tax system, the tax code alone is not the only culprit. Ask any trusts and estates attorney about what it means when we say there is a failure of wealth transfer, and our stories are plentiful: Children losing their incentive to be productive working adults due to having more wealth than they need; family planning that incites generational litigation; poor architectures for investment management of the family’s capital; and… Read more
Is Your Estate Plan Constructed on a Solid Foundation?
What better place to start the initial SGR newsletter on estate planning and wealth protection techniques than with a discussion of basic estate planning principles? For most of you, this article will serve to remind you of the fundamentals on which your estate plan has been built. For others, it may provide the building blocks for the construction of your estate plan. JUDICIOUS USE OF THE APPLICABLE CREDIT AMOUNT (“ACA”) IS A CORNERSTONE The ACA, formerly known as the Unified Credit, is currently $3,500,000, and represents the amount of property that each person can pass to his or her beneficiaries… Read more
Where Is the Cash?
Frequently we hear stories about family members, acquaintances, home health care workers, and even clergy financially abusing the elderly and infirm. Sometimes their assets are stolen with the victim’s “cooperation,” as when the victim is influenced for the sake of “convenience” to execute a power of attorney or joint account designation. Following the victim’s demise, the family and duly appointed fiduciaries may be unable to locate valuable personal property, that discover suspicious withdrawals, or bank accounts have been re-titled. In some cases, the beneficiary designations on life insurance policies were changed when the decedent was on his or her deathbed…. Read more
News You Can Use
Are you making gifts this year to family members or others? The annual exclusion for 2009 was increased to $13,000. That is the amount of property each person can give in 2009 to any recipient without Federal gift or estate tax consequences. Is a state holding property for you? We recently found the State of Georgia was holding more than $7,000 in unclaimed property for one of our clients. To see if a state is holding unclaimed property for you, check online at www.missingmoney.com (Florida and many other states) or www.unclaimed.org (Georgia, New York and many other states). Considering a… Read more
Charitable Remainder Trust
A Charitable Remainder Trust (“CRT”) is a split interest trust wherein you retain the right to receive a certain amount each year (expressed as a percentage of the assets or as a fixed annuity) (“Income Interest”) and whatever remains at the end of the trust passes to charity (“Remainder Interest”). A CRT may terminate (1) upon an individual income beneficiary’s death, (2) within twenty years of formation, or (3) the later of the two. The person who establishes the CRT (the “grantor”) receives an income, gift, or estate tax deduction equal to the actuarial value of the remainder interest. Occasionally,… Read more
Shifting Wealth: Using a GRAT in the Sale of Your Business
If you are thinking about selling your business in the next few years, consider implementing some estate planning techniques now that will enable you to shift some of the sale proceeds to your descendants or other beneficiaries. One of the techniques that we successfully use is a GRAT. What is a GRAT? A grantor retained annuity trust (“GRAT”) is an irrevocable trust in which you (the “grantor”) retain the right to receive an annuity payment for a term of years, or for life, or for the shorter of the two. At the end of the term, any assets remaining in… Read more