Comments on: What is the Estate Tax Trap High Net Worth Individuals Fall into?

By: Arohan

Arohan — Mon, 09 Aug 2010 14:49:09 +0000

I would have to assume that the changing laws regarding estate taxes make this planning all the more difficult. How do you plan for contingencies and wouldn’t a law change necessitate asset movements that might trigger taxation?

By: Evan

Evan — Fri, 15 Jan 2010 23:42:03 +0000

Kevin,

Irv wrote it. I agree that it is a poor choice of words, since it really means that upon the first death the $3.5 is what you are saving from the second’s death gross estate (and growth).

The other strategies are very interesting, and yes they are aggressive but not incorrect by any means. The FLP seems to go back and forth every month I read Trusts and Estates Magazines.

By: Kevin M

Kevin M — Fri, 15 Jan 2010 22:22:21 +0000

I’m confused, was this post written by Irv or Evan?

“Letâ€™s summarize: If the unified credit continues at $3.5 million (or whatever Congress finally blesses us with as estate tax free), the best a TEP can do â€“ as far as saving you estate tax â€“ is to save you tax on the $3.5 million for the first spouse who dies. Thatâ€™s it.”

This is absolutely incorrect, but I thinks it’s merely a poor choice in wording as the author admits in the previous paragraph that all tax is deferred until the second spouse to die.

The other strategies are interesting – I’m not sold on the “management C Corp” (what’s the business purpose) and use of FLPs. Those are pretty aggressive strategies that can easily run afoul of the IRS.

By: Evan

Evan — Tue, 12 Jan 2010 18:39:05 +0000

GST is a whole other bag of problems. GST isn’t a huge problem unless your estate is huge AND your children’s estate is already huge.

By: Evan

Evan — Tue, 12 Jan 2010 18:27:51 +0000

Tyler,

Check out my category on Estate Taxes – it should be a start

By: Joel

Joel — Tue, 12 Jan 2010 07:09:23 +0000

It would be very informative to see you post a follow up post to this that deals with some of the specifics of how you would handle avoiding not only estate tax but also some strategies for avoiding any Generation Skipping Transfer (GST) tax as well because it seems that many strategies like the one outlined above could set themselves up for trouble down the road potentially.

By: Joel

Joel — Tue, 12 Jan 2010 07:05:30 +0000

Very nice job with this post and great specific strategies mentioned towards the end – especially the point about the C Corp formation. – Joel

By: Tyler WebCPA

Tyler WebCPA — Tue, 12 Jan 2010 00:47:28 +0000

Fascinating post and it is very true that CPA’s and other tax advisors focus more on current taxes than estate taxes. I’d love to be able to save my clients 100% on estate taxes, but I don’t think you explained how to do that. I guess I will have to follow up and see your own web site.