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Estate planning strategies to consider before 2021

On Behalf of | Nov 20, 2020 | Estate Planning

Politics aside, the outcome of the November election could have a dramatic effect on estate planning strategies. Several opportunities to transfer wealth could end sooner, depending upon a change in administrations.

That’s why it’s crucial to talk to an experienced estate planning attorney and a certified public accountant (CPA) to consider your options over estate or gift tax options, and other ways to transfer or protect assets, such as real estate investments or business entities.

Take advantage of the federal transfer tax exemption

High-net-worth individuals have a significant opportunity to reduce taxes under the $11.58 million transfer tax exemption. The exemption is more than twice what it was four years ago. While it’s not scheduled to end until after 2025, the threshold could change depending on the election and future congressional action.

Other strategies to consider

For estates between $10 million and $20 million, taking advantage of current laws depends upon how individuals want their assets managed. Here are three strategies with aligned products:

Strategy: Benefitting from assets and appreciation removed from the taxable estate.

  • SLAT – Spousal Lifetime Access Trust
  • BDIT – Beneficiary Defective Inheritor’s Trust

Strategy: Transferring assets and appreciation to future generations.

  • GRAT – Grantor Retained Annuity Trust
  • Gift or sale of an interest in family partnerships

Strategy: Benefitting charities as well as heirs and grantors.

  • CLT – Charitable Lead Trust
  • CRT – Charitable Remainder Trust

Scrutinize your options now

Each of these strategies offers significant advantages, but it’s advisable to consult a knowledgeable lawyer to discuss which of these products best fits your goals and objectives. While 2020 has been challenging in many ways, there are still opportunities to put the best estate plan in place for you and your family.