Donald Trump’s election as the 45th President of the United States on November 8 is expected to bring changes to the tax laws for individuals and businesses. President-elect Trump had made tax reduction a centerpiece of his economic plans during his campaign, saying he would, among other things, propose lower and consolidated individual income tax rates, expand tax breaks for families, and repeal the Affordable Care Act. As the next few weeks and months unfold, taxpayers will learn more about Trump’s tax plans.
Wealth Transfer Strategies
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On November 9, 2016, many Americans woke up to (or stayed awake for) an unexpected election outcome. As of that day, the downside for the DOW and the S&P 500 Index appeared to be less than the declines that occurred after the 2008 and 2012 elections. However, it is still early. During these uncertain times, it is best to stick with your investment plan as we wait to see how trends play out in the coming months and longer term.
Tax Topics, October 2016
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In this edition of Tax Topics, the focus is on the IRS release of the 2017 inflation-adjusted numbers, along with planning points to keep in mind for both year-end and in general. It also has the November 7520 rate and applicable federal mid-term rates.
2016 Year-End Tax Digest
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From a tax perspective, 2016 was a relatively calm year. But this relative calm shouldn't create complacency. Instead, it creates two significant opportunities for year-end planning. First, you can redirect the time and energy spent understanding new laws in years past toward a holistic look at your tax situation and plans for the future; you might just identify tax-saving strategies that were previously unnoticed. Second, you can devote that extra time to learning more about the new rules that did go into effect this year.
Basic Lifetime Giving at a Glance
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Lifetime gift planning can include gift to spouse, annual exclusion gift, UTMA accounts, 2503(c) Trust, funded Crummey trust, 529 plans, payment of tuition and medical expenses, gift to irrevocable life insurance trust, and gifts to qualified personal residence trust (QPRT). When it comes to the basic estate and gift planning, it helps to have an at-a-glance view of the types of gifts available and their benefits, tax consequences, restrictions and limitations, and requirements.
When evaluating possible estate planning counsel, there are many variables to consider such as educational background and professional experience, skills, and review process. To help you determine if the prospective attorney is truly qualified to help you, there are ten key questions to ask and guidelines to follow.
Oversight and Governance of the Trust Company
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You’ve created a great trust structure, but is the family interested and engaged? To garner buy-in, interest, and commitment from the family the trust company structure must be designed in a way that is both functional and empowering for current and rising generations. In this webinar, Thomas C. Rogerson, Senior Managing Director and Family Wealth Strategist, Wilmington Trust illustrated how to strengthen structures within partnerships, how to keep the trust company relevant for future generations, and how and where processes and services should be outsourced.
IRS Attacks Valuation Discounts
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Recently proposed IRS changes to reduce or eliminate valuation discounts could dramatically increase the transfer tax cost of shifting property to members of your family in the future. The loss of valuation discounts is of significant concern for high-net-worth individuals for whom federal transfer taxes are an issue. It’s possible that some of the regulations could become effective as early as December of 2016, so it’s important to consult with your tax and legal advisors to evaluate your planning options.
The rules of the game in estate planning have changed. No longer can planners be so focused on the estate tax liability. They now must be equally focused on income taxes. In the past, taxpayers were willing to give up a step-up in basis at death in order to reduce or eliminate estate taxes. That is often no longer a good trade. With a smaller difference between income and estate taxes, taxpayers and planners must now consider the impact of both, especially for those in states with their own high income taxes.
Selling Estate Guns or Large Gun Collections
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Although surveys vary, it is estimated that one-third of Americans own a gun. Therefore, the probability that a professional fiduciary (whether a trustee or personal representative) will be responsible for handling the sale or transfer of a firearm is relatively high. A fiduciary selling a gun collection faces unique challenges of both valuation and liability. Although it may be a time-consuming task, researching and using various alternative methods can uncover the best price, with care taken to abide by state and federal regulations, and will likely resolve both issues.