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Estate Planning Archives | Wealthspire

cliff

Mitigate New York’s Estate Tax Cliff with Smart Estate Planning and Gifting Strategies – 2021 Update

By and Blog
While the large increase in the federal estate tax exemption has provided many with federal estate tax relief, New Yorkers must continue to plan for New York estate tax. For a quick review of the New York Estate Tax “Cliff” basics, see the “Understanding New York’s Estate Tax “Cliff” blog post. What is the current exemption from New York estate tax again? The current New York estate tax exemption amount is $5,930,000 for 2021. Under current law, this number will remain until January 1, 2022, at which point it will rise again with inflation. Who does the Cliff affect? Everyone…
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tax law changes

Estate Planning in Light of Tax Reform: Your Questions and Our Answers – 2021 Update

By and Blog
This post will help you unpack some of the estate and gift tax provisions of the 2017 Tax Reform Act, as well as answer some of the most pressing questions raised by the changes. In a nutshell, what stayed the same and what changed? One major item that stayed the same is the simple existence of an estate tax. The initial tax reform bill from the House called for a complete elimination of the estate tax, which didn’t make its way into the final law.  Trump had also talked about altering the current date-of-death basis step-up for gains above a…
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gst tax

Basics of Federal Estate, Gift and Generation-Skipping Transfer (“GST”) Tax – 2021 Update

By and Blog
The bad news is that there is a Federal tax on assets that you give away during life, at death, and to individuals two or more generations below you. The good news is that this tax will only apply to the wealthiest Americans and, even so, there are strategies you can use to minimize or avoid its application. The Federal estate, gift and GST tax only kicks in above a certain dollar threshold. Furthermore, there are additional wealth transfer strategies that do not trigger any tax at all if structured properly. Taxable Gifts There is a Federal estate and gift…
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SLATs

Spousal Lifetime Access Trusts (SLATs): FAQs – 2021 Update

By Blog
What is a Spousal Lifetime Access Trust (SLAT)? It is a trust that you (the grantor) set up for the benefit of your spouse and your descendants. You would make a gift to the SLAT, using some of your federal lifetime gift exemption (currently $11.7M in 2021) to shield that gift from gift tax. While you give up all your rights and control over the gifted assets, your spouse will have access to the gifted assets as beneficiary of the SLAT. When does it make sense to have a SLAT? You should consider creating a SLAT if you have a…
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new york estate tax cliff

Understanding New York’s Estate Tax “Cliff” – 2021 Update

By Blog
It has been over six years since some dramatic changes were made to New York’s gift and estate tax law. For many clients, the subject of the New York estate tax “cliff” continues to remain a source of confusion. This is for good reason. The New York cliff is not easy to understand, nor is it easy to know how it may impact your particular situation. The answers below are intended to guide those who remain baffled by the New York estate tax cliff. Does New York have an estate tax? Yes. New York, like several other states, has a…
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account beneficiaries

Pay Attention to How Your Accounts are Titled

By Blog
Do you have sizeable jointly held accounts with your spouse? Is your estate large enough that it could be subject to federal or state estate taxes? If you answered yes to both of these questions, then pay attention, because your Will may not do what you think it does. What’s the problem here? Your Will is not the end of the story. Your Will might only “work” if you title your accounts properly. It’s not uncommon for us to see well-drafted Wills with solid tax planning incorporated into the estate plan. In the case of a high net worth client,…
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question trustee

The One Question All Trustees Should Ask Themselves

By Blog
Have you ever seen the show The World’s Most Extraordinary Homes? My favorite segment in each episode occurs when the hosts interview the architects. The architect will describe the origin of his creative vision for the home, how the shapes and colors used in the home might be symbolic of the thing that inspired that vision, and how the materials were sourced and brought to the land on which the home was built. All of these factors coalesce to inform how the home will be lived in. Each of the architects will discuss the care he took in designing the…
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private equity

Estate Planning Opportunities for Private Equity Partners

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As a founder of a private equity (PE) fund, you are likely more interested in sourcing new deals and successfully getting your fund off the ground than thinking about proactive estate planning. This is understandable, but the reality is that a PE fund interest, specifically the carried interest (often referred to as “carry”) earned as general partner, is an ideal asset to gift for estate planning purposes. The main reason is because of its high potential for appreciation and low initial value. What is carried interest and why is it an attractive asset to transfer? PE funds, as well as…
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CLAT

Charitable Lead Annuity Trusts (CLATs)

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What is a Charitable Lead Annuity Trust (CLAT)? A charitable lead annuity trust (“CLAT”) is a type of charitable trust where a charity, donor advised fund, or foundation of the grantor’s choosing (the “Lead Beneficiary”) receives annual payments, either for a term of years or the grantor’s lifetime. At the end of this defined period, the remaining CLAT assets are distributed to the CLAT’s non-charitable beneficiaries, who are usually the grantor’s descendants, or trusts for the descendants’ benefit. How do CLATs work? For CLATs, the Lead Beneficiary receives fixed payments each year. The term of the CLAT may be for…
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