2011 & 2012 Estate Planning Opportunities
2011 & 2012 Estate Planning Opportunities

2011 & 2012 Estate Planning Opportunities

The Tax Relief, Unemployment Insurance Re-authorization, and Job Creation Act of 2010 provided much needed direction in the area of U.S. estate tax law. This act, which had lawmakers on both sides of the isle compromising and defending themselves to constituents, has provided a window into some of the most exciting estate planning opportunities in our lifetime. The key word is window, so the time to act is now.  Many of these provisions expire again after 2012, and we don’t know what will happen after that.

Despite not passing until December 17th, 2010, this act brought some major relief to the question of where the Estate Tax will land going forward. For 2011 & 2012 the Estate Tax limit, the Lifetime Gift Exemption, and the Generation Skipping Tax has been increased to $5 million. This has provided many financially minded attorneys and CPAs the window of opportunity needed to use their creative juices.

We are recommending all high net worth clients consider the following planning techniques to take advantage of these new laws and provisions: Review their existing A-B trusts to ensure flexibility with regard to portability of the Estate Tax exemption; Make gifts to heirs using up your $5 million unified credit to reduce your taxable estate; Consider forming Dynasty Trusts and/or offshore trusts to stretch this gift to future generations and avoid future Estate Tax changes; Consider using Family Limited Partnerships and LLCs to provide additional valuation discounts of the assets you are gifting; and Leverage through the use of Installment Sales to supercharge the amount you can transfer in this 2 year window. Most of these strategies will also increase the asset protection of the underlining assets thus providing great security for your heirs in years to come.

The above recommendations should help you leave a lasting legacy for future generations while at the same time reducing future Estate Tax liability from changing laws.  So act now before its too late!

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