Wealth Planning Opportunities in Tough Times

By Hoge Fenton | 04.15.2020 | Firm Post

All-time low federal interest rates and currently low asset values provide historic opportunities for high net worth individuals to transfer wealth.

Take Advantage of Low Interest Rates: The IRS uses federal rates to determine the amount of gifts. Historically low interest rates make these estate planning tools more tax efficient:

  • Low interest rate loans and installment sale of assets to individuals or trusts.
  • Grantor Retained Annuity Trusts (“GRATs”), Intentionally Defective Grantor Trusts (“IDGTs”), certain charitable trusts and other multi-generational irrevocable trusts.

Take Advantage of Current Low Asset Values: Temporarily depressed asset values are an opportunity to efficiently shift wealth to individuals or trusts.

Take Advantage of High Estate and Gift Tax Exemptions. The current $11.58M (inflation-adjusted) estate, gift and generation-skipping transfer tax exemption is a temporary opportunity. The exemption will fall back to prior levels in 2026, but we see risk that the exemption could be reduced earlier due to the cost of the COVID-19 relief effort and changing politics. If you are planning to use the high transfer tax exemptions, we suggest you start the process soon.

Contact our estate planning attorneys to learn more about these historic opportunities and how they fit into your planning.

J. Timothy Maximoff
Silicon Valley Chair, Estates & Trusts
D: +1.408.947.2437
Karen A. Meckstroth
Firmwide Chair, Estates & Trusts
D: +1.408.947.2409

This information is provided as an educational service by Hoge Fenton for clients and friends of the firm. This communique is an overview only, and should not be construed as legal advice or advice to take any specific action. Please be sure to consult a knowledgeable professional with assistance with your particular legal issue. © 2020 Hoge Fenton

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