PodcastTax breaks for estates that were part of the Tax Cuts and Jobs Act of seven years ago will end at the close of next year unless Congress says otherwise, meaning the estate tax exemption could be halved from its current $13.61 million for an individual in December 2025, with amounts exceeding that incurring the 40% estate tax.
Azriel Baer spoke with Financial Advisor Magazine highlights the importance of educating clients on trusts:
“Wealthy clients might know about trusts in the abstract but don’t know the details. Many clients are suspicious of trusts because they don’t understand how they work and are scared of losing control,” said Azriel J. Baer, trusts and estates partner at Farrell Fritz in New York.
With an “ILIT,” an irrevocable trust primarily designed to own life insurance, “an individual can either transfer an existing policy to an ILIT or sufficient cash for the trustee to purchase a new or existing insurance policy,” Baer said. “An ILIT is a good tool to leverage the death benefit of life insurance so that the policy proceeds are available to the beneficiaries without incurring estate tax.”
“For gift tax purposes, only the value of the remainder interest in a GRAT is considered a taxable gift,” Baer said. “One popular technique is to structure the GRAT so that it’s ‘zeroed out’ [so] no gift tax exemption is used.”
Read the full article here:
Looming Cut In Estate Tax Exemption Has Advisors Looking To Trusts (fa-mag.com)
