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Tax Concept with wooden block on stacked

Proactive Planning For Uncertain Times

A comprehensive estate plan that includes gifting is one of the best ways to reduce the value of a person’s overall estate, thereby reducing the person’s potential estate tax upon death. 

When the Tax Cuts and Jobs Act increased the gift and estate tax exemption — also known as the basic exclusion amount — to $11.18 million per person in 2018, many people thought they no longer had to worry about planning for the estate tax. While the current gift and estate tax exemption sits at $11.4 million per person, the exemption is set to fall back to only $5 million per person (indexed for inflation) at the end of 2025. Further adding to the uncertainty is the renewed focus on the estate tax by many of the major frontrunners for the 2020 presidential election. Given all of this uncertainty, people with larger estates may want to plan more defensively.

Strategies To Maximize Annual And Lifetime Tax Exclusions 

In most cases, planning for anticipated estate taxes centers on creating a plan to pay taxes with deeply discounted dollars or shifting future appreciation of assets to the next generation, or both. There are a multitude of advanced estate planning techniques that may be available to you, depending upon your goals and objectives, the size of your estate, your tolerance for risk, etc., including: 

  • Grantor Retained Annuity Trusts;

  • Qualified Personal Residence Trusts;

  • Intentionally Defective Grantor Trusts;

  • Charitable Remainder Trusts;

  • Retirement Trusts; and

  • Life Insurance Trusts.

Contact The Law Office Of Nicole Warmerdam

If you are contemplating incorporating advanced techniques into your estate plan, you should consult with an estate planning attorney who is specialized in this field. We can help you make an informed, educated decision about the risks and benefits of these sophisticated planning strategies.

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