Scroll to Top

Thanks, Congress. Wealthy investors hold off on estate tax planning

By dailymail / Published on Tuesday, 11 Jul 2017 15:46 PM / No Comments

If you have plans to transfer wealth either at death or through gifts during your lifetime, don’t make a bet on how Congress will proceed on tax reform. Instead, act based on your long-term goals.

Here are the estate planning essentials to consider:

Have your basic documents in place: Estate planning begins with the will, a living trust — a document that places your assets into a trust for disposition at death and that will keep you out of probate — your health-care proxy and your power of attorney.

“Everyone needs to do a basic estate plan and to define the conditions under which heirs inherit,” said Strauss.

Don’t fixate on the estate tax protections of trusts: Federal estate taxes aren’t the only reasons to establish a trust. They also offer asset protection from creditors and state income tax savings. The incomplete nongrantor trust, for instance, can help wealthy families move their tax exposure to a jurisdiction with no state income taxes.

“The majority of people should plan as usual, and the estate tax aspect should only be the overlay — not the planning driver,” said Douglas.

If you have an estate plan, revisit it: Now might be a good time to make sure your documents still reflect your wishes. You can also talk with your attorney to build in flexible provisions that will work one way if tax reform happens and another if it doesn’t.

“The estate tax has come and gone five times in the history of the U.S., and there is no reason for anyone — unless they’re in their 90s — to believe there won’t be an estate tax at their death,” said Keebler.