Do you own a business with one or more individuals? Undoubtedly, your interest in the business represents a substantial part of your net worth and is likely your “pride and joy.” So it’s normal if your fondest wish is for the business to continue long after you’re gone or for you to keep it running if a co-owner or partner dies first. (more…)
Even though the Tax Cuts and Jobs Act (TCJA) doesn’t include many revisions to estate tax laws, it does provide one major enhancement. Under the TCJA, the unified gift and estate tax exemption of $5 million, which is indexed for inflation, is doubled to $10 million. The indexed figure for 2018 is $11.18 million ($22.36 million for married couples). This means that only the wealthiest families run a risk of federal estate tax liability (although state taxes may offer additional challenges). Given the substantially increased exemption amount, consider re-examining your lifetime gift-giving strategies. (more…)
In this podcast, Julie Malekhedayat from our Family Wealth and Individual Tax Planning Group discusses:
- Life insurance policies and how they work with estate taxes
- Would it make sense to remove a life insurance policy out of your taxable estate?
- How do life insurance policies interact with estate and income taxes?
- How do I know if I’m the owner of a life insurance policy?
Vacation homes are typically treasured by families and often pass down from generation to generation. But there may be more to transferring the family lake cottage or beach house than first meets the eye. If you plunge ahead without careful planning, it could disrupt harmony and lead to a “family feud.” In some cases, relationships may be severed forever. (more…)
The Tax Cuts and Jobs Act (TCJA), which generally went into effect at the beginning of 2018, lowers individual and corporate tax rates, reduces or eliminates many deductions and enhances other tax breaks. One thing the new law doesn’t do is repeal the federal estate tax. But the TCJA does include other provisions that can impact your estate plan. (more…)
By Julie Malekhedayat, Principal
ASL Family Wealth and Individual Tax Planning Group
Qualified personal residence trusts (QPRTs) are an estate planning technique that can provide both tax and non-tax benefits to certain taxpayers looking to gift a principal residence, second home, or vacation home slowly over a number of years using a discounted gift value. However, before entering into a QPRT, you should consider the advantages and disadvantages in order to determine if it is right for you. (more…)
By Chris Bitter, Senior Valuation Analyst and Jeff Faust, Director of Valuation Services
Taxpayers are still awaiting new tax regulation changes that may affect the valuation of family-owned entities. In April 2015, Cathy Hughes, from the Treasury’s Office of Tax Policy, announced that the Treasury would amend regulations under IRS Code §2704 around mid-September. However, the Treasury has yet to release any new regulations limiting the applicability of valuation discounts on family-owned entities. Much speculation has arisen as to what the new regulations will look like. In November 2015, senior IRS official Leslie Finlow stated “Guidance on restrictions on estate valuation discounts for certain corporations and partnerships is expected very soon and won’t be based on previous administration proposals. (more…)
By Julie Malekhedayat, Principal
Trusts are a fundamental part of most estate plans — do you have one? Do you need one? If you do have one, do its provisions create even more trusts at your death? And if so, are they still a good idea?
Most everyone with assets will benefit by holding those assets in a revocable trust, commonly known as a living trust. Living trusts allow your heirs to transfer your assets after your death according to your wishes as outlined in the trust document, without the need for probate court oversight and approval. As the name implies, a revocable trust can be changed or completely revoked at any time before your death. It will also maintain your privacy at your death, whereas probate court proceedings are public information.
By Jeff Faust and Megan Bigham
Upcoming tax regulation changes may have sweeping effects on how family-owned entities are valued.
Initially, the IRS did not allow discounts for lack of control in valuing family-owned interests. In 1993, the IRS ruled that these interests were not collective and therefore lifted the limitation for this discount. However, there are still some situations where discounts for lack of marketability and lack of control are challenged on the basis of IRS Code §2704.