Tag: conference call

Conference Call: Top 10 Estate and Tax Planning Issues in the News

There are several tax and estate planning strategies that high-net-worth individuals (HNWIs) should consider seizing upon before year-end. In a conference call with clients today, John O. McManus, founding principal of McManus & Associates, weighed in on timely topics for the benefit of clients, from legislative initiatives that may impact estate planning to why an estate plan needs to include provisions governing digital assets. Below, listen to the call recording and find an outline of the issues covered during the discussion:  

  1. What legislative initiatives and political current events may impact estate planning? If enacted, the SECURE Act will drastically limit the ability to “stretch” an IRA for your children and the estate and wealth tax proposals of the Democratic candidates for President may suggest urgency in need to complete wealth transfers.
  2. How does being diagnosed with a significant health problem impact the estate plan? It is best to re-focus on the estate plan and have difficult conversations with family members and advisors as soon as reasonably possible because of the elevated concern about incapacity or demise.
  3. Why should major life events cause one to re-visit the estate plan? Marriages or divorces in the family, the acquisition of new assets or investments, starting a business can all serve to undermine the intended estate plan or create a new blind spot or vulnerability. 
  4. What are the important principles in planning for the modern family? Blended families, same-sex marriages, single-parent families, and domestic partnerships each raise their own nuanced considerations, which places a greater emphasis on a specialized and flexible approach. 
  5. Why and how should you discuss your estate plan with your children? Discussing death, taxes, and asset protection may be uncomfortable, but they are essential to best prepare your heirs for their inheritance. 
  6. What is a family mission and how can it be integrated into the estate plan? It is important to consider imparting sentiments in support of the family legacy, such as preserving family traditions and values. 
  7. What are the risks of failing to properly plan for the disposition of a specific asset, such as a home, personal effects, a business, or even frequent flyer miles? Items that may have a sentimental value or disproportionately favor one child over another may cause divisiveness and other complexities. 
  8. What estate planning lessons can be drawn from the Financial Independence, Retire Early (FIRE) movement? Prudently structuring discretionary trusts can avoid an outcome in which children are deprived of their motivation for self-sufficiency and can also provide opportunities for them to amplify their personal wealth. 
  9. Once an estate plan is completed for the time being, what are the practical steps that should be taken to protect the documents and other important information? Current best practices include various options for physical and electronic storage to ensure these materials are readily available during an emergency or tragedy. 
  10. Why must an estate plan include provisions governing digital assets, including web-based accounts and cryptocurrencies? Wills, Trusts, and Powers of Attorney should specifically authorize a fiduciary to have access to all information, including online and digital passwords to ensure efficient access to accounts.

Conference Call: Proposed Treasury Regulations and Discounting

Proposed IRS regulations were recently issued that would eliminate discounting of transfers of family business interests. Valuation discounting is now time-sensitive, as this opportunity is scheduled to be eliminated, possibly by the end of the year.

Partnerships are sophisticated vehicles for unifying family investments, providing for the orderly transfer of assets, delivering asset protection, and maintaining centralizing control. These partnerships are legitimate entities that facilitate the distribution of wealth to family members and the growth of family assets. Partnerships also afford the opportunity for discounts on asset transfer to family members; while discounting is not the number one reason for creating partnerships, the strategy is worth noting.

The Treasury Department has finally issued its dreaded proposed regulations limiting discounted transfers among family members. This means the clock is ticking until the public hearing on December 1, 2016, which will help determine the strategy’s fate. Final regulations can be issued at any time after that date and will become effective 30 days after their issuance.