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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.

With the looming December 31 expiration of the Bush tax cuts, the threat of sequestration, and the need to raise the debt ceiling in January, neither Democrats nor Republicans will want to face the consequences of inaction and/or no agreement. The nature of these issues and the convergence of interests and deadlines lead us to predict a deal that fully or substantially avoids sequestration, partially extends the Bush tax cuts, and raises the debt ceiling.

Reporting requirements for capital asset sales have changed, and the IRS is now in a better position to verify and track your activity. This article explains the IRS’ equation: verify + track + match data + audit = increased tax collection.

The IRS has begun checking real estate transfer records in at least 15 states. So far, the new initiative has netted more than 500 cases for audit, and there will likely be many more depending on the results of the taxes collected from this initial effort. Similar initiatives are likely, as the IRS is budgeted to receive additional funds to seek out other tax cases of unreported gifts and income.

New cost basis reporting rules for securities sales allow the IRS to better track an investor’s capital gains and, as a result, help the agency collect all the money it can. For investors, getting the correct cost basis recorded now is important because it will set the bar for how much they pay on future gains.

The opportunity for families to transfer a significant amount of wealth from now through the end of 2012 is unprecedented. Certainly there are many technical or quantitative issues to consider, but don’t forget to focus on the more qualitative issues, especially in preparing your family for the receipt of the assets.

Investors are well advised to take into account the interest rate environment when considering wealth transfer options. Interest rates are important when establishing trusts, reviewing existing estate plans, and lending money to family members. The current rates used to value wealth transfers are near historic lows.

This brief client alert highlights provisions of key 2012 estate, gift, and generation skipping transfer tax provisions and strategies for wealthy individuals to consider in their estate planning.

This Educational Insights defines the most common types of trusts used in asset management and estate planning, and highlights their key features.

This quarterly newsletter features the articles, "Estate Planning Key to Succession Planning," Exploring the Ins and Outs of Net Operating Losses," and "Tax Tips."