Are You Utilizing the GST Rules
to Maximum Advantage
for Your Clients?
With the current, high estate tax exemption, many practitioners believe “generation skipping” tax planning (keeping inherited assets out of the children’s taxable estates) is no longer needed for most clients, just for very large estates.
However, the estate tax exemption could be frozen or even reduced after the 2016 Presidential election. Even if this doesn’t happen, many married estates will likely underutilize the “generation skipping tax” (“GST”) exemption because it isn’t subject to portability. And keep in mind that inherited estates may grow during children’s lifetimes because, even in moderate sized parents’ estates, trusts are often being set up for children (such as for asset protection, divorce, blood-line distribution control or income tax reasons). The reality is, GST planning is appropriate in lots of estates.
But, do you know (and properly apply) the GST rules, including:
- Who are “skip persons” versus “non-skip persons”
- What are “direct skips” versus “indirect skips”
- The difference between the annual GST exclusion and life GST exemption amounts?
- The automatic allocation rules?
- When do you allocate the lifetime GST exemption amount to “indirect skips”?
- How does late allocation of the lifetime GST exemption amount work?
- How do you calculate the “inclusion ratio”?
- How to split trusts into GST and non-GST shares via “qualified severance”?
And, even if you do know the GST rules, do you know how to use the following techniques to maximize the benefit to your clients:
- “IDGTs” - - How to use installment sales to leverage the GST exemption?
- SPLIT DOLLAR - - How to use split dollar to even further leverage the GST exemption?
- PREMIUM FINANCING - - Use bank premium financing to leverage life insurance policies in GST exempt trusts?
- “HEET” TRUSTS - - How to use non-exempt trusts to pay for the health and education of skip-persons?
- SALES BETWEEN NONEXEMPT AND EXEMPT TRUSTS - - How to use sales of assets between client trusts to reduce the GST?
- TAX EXCLUSIVE GIFTING - - How paying gift and GST tax can result in a lower rate than paying estate and GST tax or two layers of estate tax?
- GENERATION JUMPING - - How jumping over a generation of skip-persons can be very effective planning?
- PARTNERSHIP FREEZES NOT SUBJECT TO THE GST RULES - - How to draft partnerships to shift wealth free of GST?
Join us and Robert Keebler, CPA/PFS, MST, AEP (Distinguished), CGMA, for a special 2-part presentation series entitled, “Understanding and Taking Maximum Advantage of the GST Rules”.