The "perfect storm" is said to exist when there is a convergence of weather conditions or events that individually carry far less power than a
storm resulting from their chance combination. Converging events that lead to a perfect storm are rare.
Although perfect storms carry with them extremely destructive forces, the current economic, financial, tax, and political conditions have
converged to make this a "perfect storm" time, in a very positive sense, for making wealth transfers to family members. Significant drops in
asset values, low interest rates, possible changes in the tax laws to eliminate certain currently available valuation discounts, other potential
changes in the estate and gift tax laws that would significantly reduce the benefits of certain estate planning techniques, and possible
increases in the capital gains rate all make this a particularly opportune time to shift wealth to family members in a very tax efficient manner.
Techniques as simple as direct, outright gifts of up to $13,000 each in value to any number of persons can generate significant transfer tax
savings, as can more complex techniques, some designed to take advantage of the current $1 million exemption amount for federal gift tax
purposes, such as loans to family members, sales to family members or to grantor trusts, and the creation of grantor retained annuity trusts.
In many situations, these savings would not have been possible but for the convergence of the current conditions.
A recent article in the Wall Street Journal discusses in more detail how the present conditions make family wealth transfers potentially
more beneficial now than ever before, and discusses some of these wealth transfer techniques in more detail. To view the article,
CLICK HERE.
Your JW Wealth Transfer attorneys would be happy to work
with you and to guide you through this perfect storm of unprecedented opportunities for effective wealth transfer planning.
If you have any questions regarding this e-Alert, please contact
R. Thomas Groves, Jr. at 214.953.5734 or
tgroves@jw.com.
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