Tuesday, April 05, 2016

A Good Problem to Have

The tax returns are filed, or soon will be, and most people want to take a break from matters financial. After gathering the information for the returns, however, it's probably the best time of the year to give a thought to estate planning.

Individual estates under $5.45 million are exempt from Federal Estate tax in 2016, and through some well-known legal maneuvers married couples can exempt double that amount--$10.9 million. In the Bay Area there are many estates with assets above the exemption, and Merrill Lynch Wealth Management has published a useful list of some Advanced Wealth Transfer Strategies:
  • Grantor retained annuity trusts.
  • Life insurance, especially combined with other structures.
  • Qualified personal residence trusts.
  • Charitable lead annuity trusts.
  • Intra-family loans.
  • Private annuities.
  • In most structures there's some or complete loss of control over the assets---loss of control is a major criterion for not being included in an estate--but often the income from those assets can remain with the donor during his or her lifetime.

    None of these strategies is relevant to your humble observer/taxpayer (yet), but I can dream, can't I?

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