Planning for Clients Who Don’t Want
to Do Any Estate Tax Planning!
You see this situation all the time - - a prospect or client has a large estate and doesn’t want a big chunk to go to Uncle Sam, but doesn’t want to transfer away any assets while he or she is living and doesn’t want to buy any life insurance either. Or the prospect’s or client’s decision making is simply “frozen” until the future of the Estate Tax is sorted out.
So what can you do?
It’s fairly simple to explain to the prospect or client: “You don’t have to make any gifts or buy insurance. After you’re gone, most of your estate will immediately go to your beneficiaries tax free and a portion will be set aside to pay its income to charity for a few years - - after which time your beneficiaries will receive that portion tax free too. Your beneficiaries don’t need to get your whole estate immediately, so this is a great way to cut out the IRS and also do some good!”
This seemingly simple, yet elegant estate tax strategy is something called a “T-CLAT” (or, in legal jargon, a Testamentary Charitable Lead Annuity Trust).
Although the T-CLAT is simple, at least on the surface, designing the T-CLAT formula so it “zeroes out” the Estate Tax is not quite so simple.
Do you know…
- The 12 ways to draft a T-CLAT formula?
- The advantages and disadvantages of each?
- How to avoid the big trap - - the formula resulting in nothing remaining for the beneficiaries at the end of the T-CLAT term?
- How the type of estate assets and their cash flow have to be factored in?
If you’re a CPA, financial advisor or estate planning attorney who deals with high net worth prospects and clients, you should join us and nationally renowned estate planning attorney, Paul Hood, for a special 90 minute program entitled “T-CLATs: Beyond the Basics”.