Note Sale/QTIP Creative Planning Opportunities for 2020 For Clients Hesitant to Plan

September 14, 2020

Wealthy individuals who wait to take planning action to eliminate estate taxes may lose the ability to use their current $11,580,000 estate and gift tax exemption. While no one can predict election outcomes, clients need to understand that a political change in November 2020 could lead to lower estate and gift tax exemptions, and restrictions on many planning techniques, effective as early as January 1, 2021. The time to act is now! Implementation of the planning process can take several months or longer. Consideration of the step transaction doctrine and the reciprocal trust doctrine might suggest planning for a time between various components of a plan. For example, using valuation discounts often requires time for an appraisal. Changing the ownership of assets may require getting approval from co-owners, lenders, complying with terms of governing documents for the entities to be transferred, and more. Additionally, uses of valuation discounts, note sale transactions, and other techniques, may be subject exposed to gift tax return audits as well as possible IRS challenges. The costs and risks of discount planning might be reduced by using the “2-Step Process” described below. This webinar will enable advisors to understand the legal and financial dynamics underlying a handful of estate and gift tax planning concepts and how those concepts might be implemented over two calendar years (2020 and 2021), or both in 2020, to position clients for a possible reduction in the estate tax exemption and to use such techniques to position families to reduce estate and gift tax exposure regardless of whether a January 1, 2021 reduction in the exemption amount occurs. The techniques presented may provide a valuable option for those taxpayers who are reluctant to complete a gift transaction without knowing the results of the election and perhaps without knowing the changes. This program may be construed as attorney advertising. No CPE or CLE credits are offered but a certificate of attendance will be provided.