Advanced Estate Planning

The best tax planning technique is to give away your assets while you are still living. However, for most people this isn’t realistic for a variety of reasons. Accordingly, advanced planning typically involves more extensive and complex techniques focused on reducing the size of your taxable estate and, to some extent, providing enhanced asset protection. These techniques are most often utilized by more affluent clients with taxable estates (e.g., valuation of the gross estate greater than $10.6 million for a married couple). In most cases, to obtain the desired tax benefit, trusts used in advanced planning are irrevocable and gifts are final.

Common objectives of advanced planning are to: to get assets out of your estate (so they won’t be taxed when you die), allow tax deferred growth, avoid or defer capital gains on highly appreciated assets, reduce death taxes with valuation discounts, give to your favorite charity(s), and provide liquidity to pay taxes.

While advanced strategies most often deal with estate and gift taxes, they can also affect income taxes. For example, a gift to a charity may generate an immediate charitable deduction against income tax. When selling highly appreciated property, the owner will incur significant capital gains tax. But this can be

Sophisticated planning strategies may include:

  • Dynasty (Generation Skipping) Trusts;
  • Tax Free Gifts;
  • Irrevocable Life Insurance Trust;
  • Intentionally Defective Trusts;