planning
PRESERVING
Your Family’s Wealth
M
F O R G E N E R AT I O N S by Kelsie Tabbert, CPA, Tax Senior
Many individuals spend their lives working hard to accumulate wealth to provide for their family and pass on their wealth to future generations. Without careful and thorough estate planning, your accumulated wealth given to your heirs could be substantially reduced due to estate and gift tax. Active planning should be taken to ensure this wealth stays within your family for generations in the most efficient and effective way possible. Under current tax law, individuals can die with $11.95 million ($23.9 million for a married couple) and not pay a dime of estate tax. This very generous lifetime exemption doubled in 2018 from $5.49 million ($10.98 million) and is set to drop back down again in 2026. If the value of your estate meets or exceeds the current lifetime exemption, estate and succession planning can maximize wealth preservation and minimize the tax your heirs must pay to Uncle Sam on your behalf. A multitude of estate planning tools are at your disposal and can work to accomplish a variety of needs.
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B oerne B usiness M onthly | July 2020
Strategic gifting is one of the most effective methods used to transfer assets out of your estate to your beneficiaries, as well as shelter your assets from estate tax. Under current tax law, individuals can gift $15,000 annually to another individual, estate and gift tax free. For most high wealth individuals, gifting away assets using this annual exclusion threshold may not be enough to effectively transfer your wealth by the time you pass away. Consulting an estate attorney or CPA to assist you with these gifts, will help you transfer assets to your heirs efficiently and effectively. Deciding which assets get transferred, when they get transferred, and in which method they are transferred, involves strategic and careful planning. Liquidity, asset growth potential, and ease of transferability, all play a role in strategic gifting. If you expect to owe estate tax when you die, access to liquid assets becomes essential. If a substantial part of your estate is comprised of illiquid assets, the burden of obtaining sufficient liquidity to pay the estate tax is now on your
