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  • Cole Gorman

Pre-2021 estate planning moves for high-net-worth individuals

Regardless of anyone’s political leanings, a connection exists between politics, the U.S. economy and estate planning.

Estate planning attorneys saw an uptick in activity before the 2016 election for individuals wanting to protect assets. Given the uncertainty over the 2020 election and potential policy changes, it’s wise to assess your estate plan this fall.

Take advantage of the transfer tax exemption

There are several strategies to consider to capitalize on the current favorable estate planning landscape. Perhaps the most significant opportunity for high-net-worth individuals is to move up to $11.58 million to another person without paying a federal transfer tax.

The 2020 exemption is more than double what it was in 2016, and married couples can transfer $23.16 million. While this exemption is due to end in 2026, that could change depending upon the outcome of the November election.

Other estate planning moves to weigh

Reducing tax liabilities is essential for people with estates worth between $10 million and $20 million. Which moves to consider depends upon your strategy. Here are three goals and the products that could be a good fit:

Goal: Transferring assets and appreciation to future generations

  1. GRAT: Grantor Retained Annuity Trust

  2. Sale or gift of an interest in family partnerships

Goal: Benefiting from assets and appreciation removed from the taxable estate

  1. SLAT: Spousal Lifetime Access Trust

  2. BDIT: Beneficiary Defective Inheritor’s Trust

Goal: Helping charities while benefiting heirs or grantors

  1. CLT: Charitable Lead Trust

  2. CRT: Charitable Remainder Trust

Protecting your assets

Besides these moves, Tennessee is one of a few states that allow asset protection trusts, also known as Tennessee Investment Services Trusts. These trusts can be worthwhile for high-net-value individuals and can last for 360 years to protect future generations.

While some restrictions apply, an experienced estate planning attorney can help you determine whether this trust is a good fit for your family, and help you take advantage of current laws by reducing taxes and maximizing your estate’s wealth.

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