Estate Planning

The goal of estate planning is to minimize the IRS estate transfer tax that is imposed on significantly sized estates. Most estate planning tools are designed to accomplish one or more of the following:

  • Eliminate unnecessary taxes on the estate
  • Minimize unavoidable taxes and settlement costs that the estate will incur
  • Position the estate for maximum flexibility to take advantage of any future tax law changes
  • Create the liquidity needed to pay any transfer taxes in the most cost efficient method

 

Below are some frequently used estate planning tools and techniques:

I. Eliminate

II. Minimize

III. Liquidity

Will
Living trust
Unified credit bypass trust
Irrevocable life insurance trust
Charitable planning
Charitable remainder unitrust
Charitable lead trust

Gifting combinations
Outright gift
Annual exclusion
Purchase techniques
Installment sale
Private annuity
Self cancelling installment note
Buy/sell agreements
Discounting opportunities
Family limited partnership
Grantor retained annuity trust
Grantor retained unitrust

Life insurance
IRC 6166
IRC 303 redemption
Zero coupon bonds


Other tools such as the Qualified Terminal Interest Trust (QTIP) are available to maintain control of assets, either after death or during lifetime.

 

Note: A trust is a legal arrangement that may result in the inability to change the trust in the future, requires relinquishing control over the trust assets, must be properly administered, and has other significant consequences.  Before implementing any plans based on your specific circumstances and objectives, you should consult with your personal legal, tax, and financial advisors.