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Financial Legacy Review

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Navigating Estate & Tax Planning in 2021

Higher Taxes. Lower Exemptions. Fewer Options.

We are here for you and your family. Click below to get started on creating or updating a comprehensive estate plan.

Time Is Running Out to Protect Your Wealth

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It’s When, Not If

At best, you have until January 1, 2022 to implement crucial tax mitigation and trust planning strategies. At worst, your options may disappear as soon as the bill is enacted.

Your best strategy to avoid suffering negative impacts from these reforms is early, proactive planning.

Headline Estate & Gift Tax Reforms

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Decrease to Individual Estate Tax Exemption

How will this affect me?

The proposed bill includes a reduction of the individual estate tax exemption from $11.7M to 3.5M. That’s a 70% decrease! For a married couple, their combined estate tax exemption could drop from $23.4M to $7M! If your individual assets exceed $3,500,000 or your combined married assets exceed $7,000,000, you may be negatively impacted.

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Decrease to Lifetime Gift Tax Exemption

How will this affect me?

The proposed bill includes a reduction of the individual lifetime gift tax exemption from $11.7M to $1M. That’s a 108% decrease! In short, individuals will not be able to gift more than $1M without triggering a taxable event. Additionally, per person, per year gifts will be limited to $15k. If gifting is part of your tax planning strategy, you may be negatively impacted.

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Increase in Estate Tax Rates by Bracket

How will this affect me?

The proposed bill includes a new graduated system for estate tax brackets. These new rates increase in estate tax rates to 45% for estates valued at $3.5–10M, 50% for estates valued at $10–50M, 55% for estates valued at $50M–$1B, and 65% for estates value above $1B. If you individual or married estate is valued at $3.5M or above, you may be negatively impacted.

Headline Trust Planning Reforms

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Generation and Dynasty Trusts

These long-term trusts allow Grantors to set assets aside that will benefit multiple generations. These so-called Dynasty Trusts have been exempt from the generation-skipping tax (GST).

The proposed bill requires that these multi-generational trusts be taxed occasionally as generations change. The GST would now apply with no exclusion to any trust set up to last more than 50 years. Moreover, pre-existing Dynasty Trusts will be deemed “terminated” 50 years after the passage date of the bill.

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Grantor Retained Annuity Trusts (GRATs)

Funds transferred to GRATs are not considered taxable gifts, and earnings arising from these assets can pass to family members tax free. Short-term GRATS (so-called “Walton GRATs”) have been found to be a particularly effective tax planning strategy.

The Sanders proposal would impose a minimum 10-year term on any GRAT. It would also require that a portion of the initial funding be considered a gift for tax purposes: As written, the lesser of 1) 25% of the fair market value, or 2) $500,000.

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Defective Grantor Trusts

Defective Grantor Trusts offer income and gift tax benefits because the trust is both exempt from federal estate taxes and considered owned by the grantor for income tax purposes. Grantors can take advantage of multiple techniques to exchange or sell trust assets all on an income tax-free basis.

The proposed bill would, in effect, require that all Defective Grantor Trusts be fully funded before this bill passes. If not and the trust was created, funded, or transacted with after the new law was enacted, the death of the Grantor would trigger a taxable event.

Your Goals.

Your Legacy.

Our Help.

Your Financial Legacy Blueprint

Your ability to direct, protect, and preserve your financial legacy depends on having a comprehensive estate and asset management plan in place. During the Financial Legacy Review we will begin to outline your Financial Legacy Blueprint by considering these six key areas.

Estate Planning

Work with us to create an individualized estate plan that meets your current financial goals and secures your financial legacy as well as your family’s future.

Estate and Gift Tax Planning

Properly implented tax mitigation strategies are a critical aspect of any comprehensive plan to protect a financial legacy.

Wealth Management

Take advantage of all of the available strategies to secure your wealth and ensure ongoing financial stability for your family.

Asset Protection

Proactive planning to protect your valuable assets from creditors, lawyers, malpractice claims, foreclosures, or disaffected family members.

Trusts and Asset Distribution

Trusts allow you to designate precisely how and to whom your property and assets are distributed during your life or after your death.

Probate Avoidance Strategies

Take the necessary steps to avoid probate, spare your family stress, and ensure your assets and property are distributed according to your wishes.

Protect and Preserve Your Financial Legacy.

Be proactive. Ensure you’ve taken necessary steps to protect your wealth and assets and mitigate estate and gift taxes. Schedule your free Financial Legacy Review today to get started.

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Asset Protection Checklist Dentists

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Our 20-point asset protection checklist will put you on the path to better and stronger asset protection strategies.

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Download and Start Planning

Our 20-point asset protection checklist will put you on the path to better and stronger asset protection strategies.

Success! Please click the confirmation email in your inbox!

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