This paper provides an analysis of the new 3.8% Medicare surtax set to take effect in 2013 and recommends planning strategies to reduce its impact. Atlantic Trust suggests several vehicles to mitigate the effect of this tax, including tax-exempt bonds, rental real estate, S-Corporations, Roth IRA conversions, charitable remainder trusts and installment sales.
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It has been more than three years since the enactment of Sec. 877A, which introduced a mark-to-market tax on U.S. persons expatriating on or after June 16, 2008. Its introduction has impacted the decisions of many to attain a green card or citizenship. It can be costly for wealthy individuals to become a covered expatriate (as described below) and, consequently, taking steps to avoid becoming a covered expatriate has become a fundamental part of pre-immigration planning.
Time is of the essence. Significant wealth planning opportunities are set to expire at the end of 2012. It is critical for wealthy families that have taken a wait and see approach to the future of gift and estate taxes to formulate a plan now. Developing and implementing well thought out and properly structured wealth planning strategies takes months, not weeks.
In the past year, the IRS sharply increased the number of returns it audited, particularly those of high-income earners. According to a government official, this is an effort “to build public confidence in the tax system, encouraging voluntary compliance” and to make sure that both the low end and high end of the income scale are subject to the same rules. This paper reviews recent trends on how the IRS selects individuals for audits and how to be prepared for one.
The purpose of this paper is to explore some of the financial strategies that may increase the likelihood of enhancing traditional wealth transfer techniques. Since wealth engineering depends on a reasonable forecast of investment returns, this paper begins with a general overview of investment concepts and principles of diversification before examining some of the the most widely used financial instruments (GRAT, sales to IDGTs, etc.) to introduce the concepts of risk reduction and leverage beneficial to wealth transfer.
The two-year window is closing on opportunities for families to capitalize on gift, estate, and generation-skipping tax provisions of the 2010 Tax Act. In this 2012 Financial Executives Forum session, Susan von Herrmann, a partner in Schiff Hardin’s private clients and trusts and estates group, looked at gifting strategies in light of the Act's impending expiration.
In this election year competing visions of tax reform is center stage front page news. Mark Blumenthal, partner and chairman of the Family Office Service Group at Blackman Kallick Plante Moran discussed at this 2012 Financial Executives Forum session why this year may be a once-in-a-lifetime tax planning opportunity for both businesses and wealthy investors and provided insights into the tax implications for investments, gifting opportunities, and business structures in light of next year’s scheduled changes in the tax laws.
Choosing an executor is one of the most important decisions individuals make when preparing their will. This white paper explains the executor’s role and offers insights into how you might choose an executor for your estate.
Americans are likely to see tax simplification and a more efficient process in 2013. Under tax simplification, there will likely be fewer deductions, but tax rates will be lower. However, the actual outcome of various tax initiatives will be very unpredictable regardless of what the candidates say during the campaign.
An integrated approach to estate planning and wealth management can achieve a greater likelihood of successful wealth transfer and minimization of transfer taxes. Wealthy clients who embrace this approach can hope to realize their wealth transfer goals early enough in their lifetimes to obviate reliance on transfers at death at significant extra transfer tax cost.