The federal estate tax can be reduced or even eliminated with advanced estate planning measures for any estate. In fact, the federal estate tax is a voluntary tax; if you don’t plan, you volunteer to pay it. Here is a memorable federal estate tax lesson from the owner of Hooters, the infamous restaurant chain. When Robert H. Brooks died, his family sold Hooters, in part, because was it worth approximately $250 million dollars and the estate tax, at that time, was 46% or $115 million … [Read more...] about A Federal Estate Tax Lesson from a Surprising Source – Hooters
Tax Avoidance
Gifting Can Be Complicated
By now, most wealthy people know that the current gift tax exemption lifetime limit in 2022 of $12.02 million. This is in addition to the $16,000 annual gift exclusion per gift that is in effect in 2022. However, a good gifting plan is not as simple as just giving away the maximum amount of money that you can. Before gifting anything, you need to consider how much you can afford to give away. To know that, you will need to make an estimate of how much money you will need for your own … [Read more...] about Gifting Can Be Complicated
Decanting: It’s not Just About Wine
Decanting is a familiar process in winemaking as well as in chemistry. However, it is also a sophisticated process in estate planning. California recently passed legislation enabling it's use in the state. Question 1: What is decanting? Decanting is the process of transferring property from one trust to another. Specifically, the term applies when a trustee transfers property from one irrevocable trust to a new trust that has terms different than the original. Question 2: Why is … [Read more...] about Decanting: It’s not Just About Wine
Death Taxes Primer: Estate Taxes vs. Inheritance Taxes
It comes as a surprise to some people that there can be a tax imposed on your assets after you pass away. The extent of the taxation can vary depending on where you happen to reside in the United States. When you examine the facts you find that in California we are rather fortunate in this regard. To understand these taxes you have to know the difference between an estate tax and an inheritance tax. The estate tax is imposed on the entirety of the estate before it is passed on to the heirs. … [Read more...] about Death Taxes Primer: Estate Taxes vs. Inheritance Taxes
Flexible Estate Plans
Most of us can not plan when we will pass away. It could happen tomorrow or in 20 years. The inability to plan for when you will pass away can create problems for your estate. Because the estate tax changes almost every year, you need to have a flexible estate plan that can absorb those changes. If you die in early 2022, the estate tax only affects estates that are over $12.06 million. If Congress passes certain pending legislation, that might change. You really should not have to worry … [Read more...] about Flexible Estate Plans
A Primer on Gift Taxes in 2022
Both the gift tax and the $16,000 annual gift tax exclusion (in 2022) confuse nearly everyone. The bottom line is that in early 2022 you can give away way more than $16,000 without paying gift tax. In fact, most people could give away every penny they have and still not pay gift taxes. Here’s some tips on how to give away assets without paying gift tax. In early 2022, you can give away $16,000 per calendar year to as many people as you’d like. The annual gift tax exclusion is unlimited, … [Read more...] about A Primer on Gift Taxes in 2022
Charitable Trusts — Lead or Remainder?
A charitable trust is an excellent way to accomplish a number of estate planning goals all at once. If giving to a cause dear to you heart is important to you, then creating a trust allows you to do so even after you are gone. In addition, you can structure a trust to provide for both a charity and non-charitable beneficiaries by creating a lead or a remainder split interest trust. Both lead and remainder trusts may also offer tax and probate avoidance benefits as well. Whether you decide on a … [Read more...] about Charitable Trusts — Lead or Remainder?
Estate Planning and Charitable Giving — Key Points
If you have been fortunate enough to be in a position during your lifetime to donate to charitable causes, then you may wish to continue doing so long after your death. Just as you make plans to provide for your family members and loved ones after your death, you can include charitable giving in your estate plan as well. A thorough consultation with an experienced and qualified estate planning attorney is, of course, necessary in order to incorporate your charity into your estate plan; however, … [Read more...] about Estate Planning and Charitable Giving — Key Points
Estate Planning: Essential for Small Business Owners
If you own a small business, make sure you include your interest in the business in your estate plan. Even if you plan to leave all your interest in the business to a family member, failing to structure the transfer of your interest in the business in the right way could subject the value of the interest to estate or gift taxes. With proper planning, you may be able to minimize or eliminate estate or gift taxes by using one of the numerous business succession options. Sale of Your Business: … [Read more...] about Estate Planning: Essential for Small Business Owners
Handy Estate Planning Tips for You and Your Family
We’ve put together a collection of estate planning tips for you and your family. If you’re like most people, there will be at least one thing on this list that you haven’t thought of yet. Others will serve as a gentle reminder to take action. 1. You need to name temporary guardians so that someone is authorized to care for your children in the event you are disabled (temporarily or permanently) and unable to care for them yourself. After all, your will, appointing permanent guardians, … [Read more...] about Handy Estate Planning Tips for You and Your Family
