Less estate tax planning may be better for older rich clients: Tax Strategy Scan | Financial Planning

 

Less estate tax planning may be better for longer-living rich
Thanks to longer retirement horizons, rich households may benefit from doing less tax-related estate planning, experts told Bloomberg. “People used to do a lot of wealth transfer planning when they were in their 60s, and I’m seeing people waiting longer to focus on transfers of wealth to the next generation or generations,” according to Jessica Galligan Goldsmith, co-managing partner of Kurzman Eisenberg Corbin & Lever. They’re not as willing to “simply give up large chunks of wealth because there’s more concern that they will ultimately need some back.”

Should clients be worried about the ‘tax torpedo’?
Clients should plan carefully to help minimize the tax bite on their income after they retire, writes CFP Roger A. Young for Kiplinger. That’s because up to 85% of their Social Security benefits will be taxed if their taxable income in retirement exceeds a certain threshold, he says. “This can create a unique situation to avoid: what researchers dub the ‘tax torpedo.’ You’ve been hit by this torpedo if you pay a high marginal tax rate because additional income causes more Social Security to become taxable,” says Young.

Less estate tax planning may be better for older rich clients: Tax Strategy Scan | Financial Planning

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