Three reasons to contact clients about the estate tax

Three reasons to contact clients about the estate tax

The American Taxpayer Relief Act of 2012 made several estate tax provisions permanent, creating planning opportunities that advisors may review with clients seeking to lessen the tax impact. 1. New exemption amount affects all clients The now-permanent $5 million exemption may have unintended consequences for clients at lower wealth levels who feel they do not

New estate tax exemption offers lasting fix

New estate tax exemption offers lasting fix

The American Taxpayer Relief Act of 2012 made permanent changes to the federal estate tax law, including establishing a $5 million exemption, indexed for inflation. The new exemption amount means approximately 4,000 estates could still cross the threshold and be subject to estate tax, according to the Tax Policy Center. This number is fewer than

Many heirs miss out on a valuable tax deduction

Many heirs miss out on a valuable tax deduction

While estimates may have decreased due to the Great Recession, baby boomers are still likely to inherit trillions of dollars as wealth is transferred from the previous generation. In fact, a 2010 study by MetLife estimated the boomer generation will inherit $8.4 trillion (based on 2007 data). Indeed, on a historical basis, inheritances or gifts

Election elevates tax reform debate

Election elevates tax reform debate

This election season has re-energized the debate about the tax code and how to make it more effective. In general, most proponents of “tax reform” call for simplification through a combination of fewer (and presumably lower) marginal tax rates and an elimination or sharp reduction in tax preference items. To understand the evolution of the

Crafting a succession plan? Consider these estate-planning strategies.

Crafting a succession plan? Consider these estate-planning strategies.

There are several estate-planning strategies that can be used to transfer business wealth efficiently. Buy-sell agreement A buy-sell agreement is a legally binding agreement for transfer of ownership when one owner exits. The agreement is usually funded with life and disability insurance. Typical models include cross-purchase and stock redemption. A cross-purchase arrangement involves business partners

Transferring business ownership? Read this.

Transferring business ownership? Read this.

Advisors can play a role in helping clients navigate the many options for transferring business ownership. Step 1: Choose a successor • Sell to partners. This option may provide continuity with customers and associates, but a sale in the open market could be more valuable. • Transition to family. Family ownership can have challenges and

Succession planning critical for business survival

Succession planning critical for business survival

From financial security to providing for family members, succession planning is an important process for any business owner. Unfortunately, many entrepreneurs, particularly small, family-owned businesses may not have a plan in place. Of the more than 25% of family-owned businesses expected to change hands in the next five years, nearly half of them do not

Gifting opportunities in 2012

Gifting opportunities in 2012

With major changes to estate and gift tax rules on the horizon in 2013, affluent investors should consider taking action now to plan a financial legacy. Download Putnam’s new investor education piece, Gifting opportunities in 2012, for details on: The federal gift tax rules Rules about lifetime gifts How gifting strategies may skip a generation

Planning considerations for non-traditional households: unmarried couples

Planning considerations for non-traditional households: unmarried couples

Unmarried couples have unique financial planning considerations because the rules involving retirement, insurance, income taxes, and estate taxes differ from those that apply to married couples. Fortunately, planning strategies may be used to deal with varying limitations or exclusions. Retirement. Beneficiary designations are critical for unmarried couples because they cannot take advantage of rules governing

Estate planning considerations for 2012

Estate planning considerations for 2012

Next year the federal estate tax environment will change dramatically unless legislation is passed in Washington. In fact, according to the Tax Policy Center, the number of estates subject to tax will increase by over ten times (roughly 3,600 taxable estates to over 43,000) while total estate tax revenue received by the government will increase