Estate Tax Planning and the Often-Overlooked Power of the “Med-Ed Exclusion”

The current federal gift and estate tax rate is 40% and once an individual uses his or her lifetime exemption (currently $11.58 million and scheduled to drop to about half of that in 2026, perhaps sooner in light of election results) tax planning becomes difficult and complex. The only simple solutions are making charitable gifts and using the annual gift tax exclusion that allows an individual to make gifts of $15,000 per year to as many people as desired, provided … Continued

Asset Selling to Reduce Estate Tax Exposure

  If you have an estate that may be subject to estate tax next year, particularly if the November election results in a greatly reduced federal estate tax exemption in 2021, now is the time to remove assets from your taxable estate if you can comfortably afford to do so. One of the most effective ways to do this is to sell assets in exchange for a very low interest promissory note.  We are currently experiencing historically low interest rates … Continued

Now’s The Time To Take Advantage Of Transferring Or Selling Assets

  The clock’s ticking for wealthy clients looking to find tax advantages when transferring assets to the next generation or selling their business—especially considering the looming, potentially watershed election. “With a possible administration change and proposed changes to the capital gains rate, it might be wise to complete the transfer prior to year’s end,” said Julia Carlson, CEO and founder of Oregon-based Financial Freedom Wealth Management Group. Democratic candidate Joe Biden’s tax plans include bumps in the top tax rate … Continued

Plan Now for Reduction in Estate, Gift and GST Tax Exemptions

  The federal government taxes the transfer of assets via three separate but interrelated taxes: the estate tax, which taxes the transfer of assets at death, the gift tax, which taxes gratuitous transfers during your lifetime, and the generation-skipping transfer (GST) tax, which is an additional tax assessed when assets are transferred to grandchildren or more remote generations. All three taxes are linked via the federal estate, gift and GST tax exemptions. Plan Now for Reduction in Estate, Gift and … Continued

Making Better Use of Transfer Tax Exemptions

Estate planning entails such rudimentary concepts as having documents in place, having family discussions about testamentary dispositions and bringing in the skill sets of advisors. There are still clients who may well have issues of actually incurring gift or estate tax. Transfers to grandchildren may also be an issue, but generation-skipping, the GST tax, is not our focus here. If transfer taxes are an issue, there is also the annual gifting concept – taking advantage of the $15,000 annual gift … Continued