The wealthiest taxpayers have many tools at their disposal to pay less to Uncle Sam. Some tactics, like donating to charity via trusts, might seem far-fetched but are perfectly legal.
One goal of estate planning is to bring some certainty to a multitude of variables. Recent increases in inflation, interest rates and market volatility, however, are causing some experts to reassess their options.
If you don’t have a spouse or children, you might think you don’t need to do much estate planning. However, if you have any assets, familial connections, or interest in supporting charitable groups – not to mention a desire to control your own future – you do need to establish an estate plan.
Giving may provide the donor with a sense of purpose, as well as a sense of responsibility.
A charitable trust allows you to donate assets to a chosen tax-exempt charitable organization or nonprofit and comes with certain tax benefits to help you minimize what you might owe to the government.
Estate planning is not just about saving taxes, it is also about managing and protecting your assets against future creditors, both for you and for your beneficiaries.
The most well-known ‘death’ tax is the Federal Estate and Gift Tax. However, the reality is that few people really have to worry about the cost of federal estate taxes.
Estate planning strategies such as family limited partnerships and gifts to charitable trusts are part of an estate planning professional’s toolbox to achieve client goals, such as minimizing taxes, effectuating philanthropic plans, teaching younger generations about a family business and passing on wealth.
Charitable giving comes in many forms. Some people donate annually to their favorite charities, while others may volunteer their time or professional services.
A more present sense of one's own mortality may drive those who have not made plans before to begin the process of creating an estate plan. For those who have existing plans, are they up to date? How does the changing economic environment affect prior decisions?
