Conference Call Recording: “Preserving the Family Retreat: Top 10 Planning Strategies”

This year presents a wonderful opportunity to take advantage of the $5MM exemption (combined $10MM between husband and wife) to move businesses, private equity ownership, stock portfolios, or cash out of your name and into trust for the benefit of loved ones. The chance to transfer real estate into trust is a very popular choice, as well.

For years, there have been numerous strategies available to transfer real estate in a tax-efficient manner, but this year there is increased flexibility. The advantages and disadvantages to choosing one’s second residence as a funding source for the $5MM exemption should be considered. For many, a second residence serves as a place of rich memories, a place for the family to still gather, and a place you hope your children and grandchildren will continue to enjoy. By putting this asset into trust, you will have created greater assurances that this home or a successor home will remain in the family for many years.

Strictly from a financial standpoint, is real estate the best asset to transfer? The answer may be that in some instances we are not able to get the best discounted value. On the other hand, since real estate is naturally discounted due to current market forces, it may present the best financial and emotional option.

McManus & Associates invites you to investigate these and other relevant planning issues for second residences.

LISTEN HERE: “Preserving the Family Retreat: Top 10 Planning Strategies”
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The following are the topics that are covered during the discussion:

1. Joint tenants with rights of survivorship (the typical ownership between husband and wife) – what protections does it afford?

2. Planning with LLCs – what are the strategies for anonymity and tax planning?

3. Revocable Living Trusts – is it just about avoiding probate for out-of-state summer homes?

4. Qualified Personal Residence Trusts – allow for great discounts, but is it an appropriate strategy to use with the $5M exemption?

5. Lifetime Credit Shelter Trusts – don’t allow discounts other than market discounts, but is the flexibility with the trust worth the loss of discounts?

6. Funding a trust with life insurance or other assets to provide liquidity – who pays the bills to fund the expenses for the residence and how does this affect the family dynamics?

7. Lifetime trusts for children after parents pass away – is the asset protection for children in their marriages and the exemption from general skipping transfer tax worth the effort?

8. Use of the trust as a vehicle to hold properties located in New York by owners who work in, but live outside of New York – are there strategies to avoid the income tax on non-New York residents using a trust?

9. The family mission for seasonal/vacation residences – does having the family home preserved in trust for generations lead to more stress and divisiveness for your children or does it achieve your goal of creating generations of happy family members at the retreat?

10. Important, but often overlooked, clean-up paperwork related to real estate transfers – how critical is it to confirm that all deeds have been retitled, all tax forms filed, and lease agreements executed?

McManus & Associates would love to help you determine the best way for you and your family to take advantage of the $5MM exemption.

Posted in Conference Call