The House has just approved the Senate bill. President Obama will sign it later this week. Now what? [Hint: You’ll be doing NEARLY EXACTLY what you’ve been doing the past few months, but without the time pressure.]
We now have a “permanent” $5MM (indexed for inflation) estate, gift and GSTT exemption and a 40% tax rate. Remember that the word “permanent” really means “until they change it next time”. This is an opportunity for all of your clients to continue to use their $5MM gift and GSTT exemptions by making gifts into Dynasty Trusts. All of our wealthy clients should continue to make these gifts. This is a great opportunity. We don’t know when Congress will next change the exemption. Don’t procrastinate. It might be one year, might be two years, might be three years, etc. Look at Nevada as the jurisdiction of choice. See the Dynasty Trust State Rankings Chart.
Congress hasn’t touched valuation discounts, GRATs and other techniques. Again, keep using them. Great news that our tools are intact.
Income taxes were raised for the wealthy. So CRTs should be more on your mind. Don’t rush and do them for everyone. They’re still overused. But at least consider them more than before.
High early cash value life insurance should be used even more than before given the higher income taxes. Those of you who don’t understand this product should take your favorite life insurance agent out for lunch and get up to speed.
Asset Protection Estate Planning:
The congressional bill DID NOT change the fear of law suits and divorces. You should continue to suggestion Dynasty Trusts for asset protection planning and also Domestic Asset Protection Trusts – especially using the Hybrid Version (see http://www.oshins.com/images/Hybrid_DAPT.pdf). And I can’t find any reason not to use Nevada as the jurisdiction of choice given that it’s ranked #1 in the DAPT State Rankings Chart (Download Chart)
Combine the DAPT with the Double LLC strategy for extra protection.
Steven J. Oshins, Esq., AEP (Distinguished) is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. Steve is a nationally known attorney who is listed in The Best Lawyers in America® and has been named one of the Top 100 Attorneys in Worth magazine. He was inducted into the NAEPC Estate Planning Hall of Fame® in 2011. He has written some of Nevada's most important estate planning and creditor protection laws, including the law making the charging order the exclusive remedy of a judgment creditor of a Nevada LLC and LP (in 2001, 2003 and 2011), the law changing the Nevada rule against perpetuities to 365 years (in 2005) and the law making Nevada the first and only state to allow a Restricted LLC and a Restricted LP creating larger valuation discounts than any other state allows (in 2009). He is also the author of the Annual Domestic Asset Protection Rankings which you can download from our Free Resources page. Steve can be reached at 702-341-6000, x2 or at email@example.com. His law firm's web site is http://www.oshins.com.
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