Advanced Estate Planning

Strategies to Reduce Capital Gains and Taxes

Gifting

For moderate estates and larger, a gift of $500,000 (such as a residence) during your lifetime could subject a beneficiary or beneficiaries to $100,000 in capital gains taxes, assuming a 20 percent combined federal and state tax rate. Depending on the value of the total estate, this same property left to someone at death may not be subject to any estate or capital gain taxes. Consider estate gifting strategies to increase the benefit to your beneficiaries.

Family Limited Partnerships (FLPs) and

Limited Liability Companies (LLCs)

Family Limited Partnerships (FLPs) and Limited Liability Companies (LLCs) can be useful for estate tax planning purposes, as well as asset protection purposes, particularly for clients with real property, business holdings, and a high net worth. These entities can also be effective in providing a mechanism to gradually transfer not only property or business interests, but also the management and related responsibilities of such wealth.

Charitable Trusts

With charitable planning, substantial tax benefits can be obtained by properly planning with charitable entities including Donor Advised Funds, Charitable Remainder Trusts, Charitable Lead Trusts, and Foundations. If you are charitably inclined and you own assets which have highly appreciated or have a large net worth, you may benefit by creating a charitable trust. These techniques can assist in reducing capital gains, gift inheritance and/or estate taxes.