When our clients with high net-worth meet with us to discuss estate planning, it is common for them to express their desire to retain their wealth while they are alive and to create a plan that transfers their wealth to their loved ones when they die. Their ultimate goal is to have that transfer take place with minimal tax implications and while maximizing the interest accruing possibilities of their assets. After all, you have worked hard for what you have and deserve to have your loved ones enjoy the fruits of your labor. At Hollander & Hollander, P.C., we are able to devise a plan that will accomplish these objectives while remaining compliant with all governing rules and regulations.
WEALTH TRANSFER TAX CONSIDERATIONS
There are special taxes we take into consideration when estate planning for high-net-worth clients.
Gift & Inheritance Tax
A gift tax is a tax on the transfer of property from one person to another person without receiving full value, or any value at all, in return. An inheritance tax operates under the same concept but only applies to assets that are inherited. While the state of California does not recognize any gift or inheritance taxes, the federal government does. Currently, federal law mandates that a gross estate must be worth in excess of 11.58 million for there to be an inheritance tax.
By combining our knowledge of gift and inheritance taxes with innovative gift structuring techniques, our firm is able to reduce the size of a client’s taxable estate while still achieving the client’s end-game of transferring their property to the person or entity they desire.
Generation-Skipping Transfer Tax
Another tax worthy of close consideration is the Generation-Skipping Transfer Tax, which is a federal tax that comes into play when someone, either by gift or inheritance, transfers property to a beneficiary whose age is at least 37.5 years younger than the individual bequeathing the property. This tax eliminates a loophole that allowed individuals to avoid federal taxes by “skipping” their children and bequeathing their assets to their grandchildren. Like the gift and inheritance taxes, the Generation-Skipping Transfer Tax is only applicable when the amount in question exceeds 11.58 million and the tax percentage is 40%.
Knowledge of different taxes, such as the Generation-Skipping Transfer Tax, is imperative when planning for a high net worth individual’s bequest of assets. At Hollander & Hollander, P.C., we make it a priority to keep abreast of all applicable laws and regulations so we can provide our clients with the preeminent representation they deserve.
SPEAK WITH A WEALTH TRANSFER PLANNING ATTORNEY
Constructing an effective plan for wealth transfer requires the advanced knowledge of an experienced estate planning attorney. At Hollander & Hollander, our estate planning attorneys are well-versed in wealth transfer planning. Contact us today to schedule your free initial consultation.