If you own a closely held business, choosing how and when to exit your business is a critical part of the planning. If one of your goals involves benefiting charity, you might consider the use of a charitable remainder trust (CRT). It’s also an option that can help achieve other business exit goals and reduce your overall tax payment.
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Flexible trust planning has never been more important as a result of current and future health, political, economic, and tax uncertainty. Modern directed trusts are one of the best vehicles to provide wealth preservation along with flexibility intergenerationally. Whether the federal estate, gift and GST Tax exemptions are high, low or repealed altogether, trusts still make sense for a multitude of non-tax reasons.
Under Section 663(b) of the Internal Revenue Code, any distribution by an estate or trust within the first 65 days of the tax year can be treated as having been made on the last day of the preceding tax year. Using this rule to treat any distribution by an estate or trust can provide a possible opportunity for tax savings.
A Charitable Lead Annuity Trust (CLAT) is an effective means to reduce current income taxes, transfer wealth to a family free of gift and estate tax, and benefit charity. Here is an illustration of a specific tax planning technique that might be valuable.
Too often, taxes are only thought of once or twice a year, but the reality is that an effective tax plan is considered year-round and on a multi-year basis. Tim Steffen, Baird’s Director of Tax Planning, shares his insights on common tax planning misconceptions, when and why to consider tax planning, and how to respond to legislative changes to the tax code.
Compound growth over time—uneroded by taxes—is key to amassing substantial wealth, and that’s where dynasty trusts come in. It’s designed to minimize taxes over multiple generations. When done correctly, dynasty trusts can leave an enduring and significant financial legacy for generations to come.
Your fellow FOX members have contributed these death and estate settlement tools and samples. Please note that these samples have been provided for illustrative purposes only, and may not represent the latest versions.
Establishing residency in a state with lower tax rates can result in significant tax savings for some individuals and trusts. But changing residency is not as straightforward as it might seem. Additionally, states have become aggressive in challenging residency changes to avoid losing out on tax revenue. This paper reviews the residency rules for individuals, identifies steps to establish new residency, and addresses residency audits. It also provides an overview of the residency rules for trusts.
The New Inflation Reduction Act (the "IRA") was passed with a simple majority vote in the U.S. The IRA would raise approximately $450 billion to pay for deficit reduction, clean energy, and climate investments.
Many parents enjoy witnessing the positive effect a significant gift can have on their children's lives. For example, asset transfer can help children buy a home, raise a family, or start a business. With meaningful benefits to transferring assets during a lifetime from a gift and estate tax perspective, intergenerational planning can be a win-win for those giving and those receiving. Your family's unique goals will determine which annual exclusion gifts strategy is best for you.