TULANE TAX INSTITUTE. October 31 November 2, 2012

Transcription

1 TULANE TAX INSTITUTE October 31 November 2,

2 Rates & Exemptions $5.0 Mil. $5.0 Mil. $5.12 Mil. $3.5 Mil. $1.0 Mil. Estate Tax Exemption $5.0 Mil. $1.0 Mil. $1.0 Mil. $1.0 Mil. Gift Tax Exemption $5.0 Mil. $5.0 Mil. $5.12 Mil. $3.5 Mil. $1.35 Mil. GST Tax Exemption % 45% 35% 35% 35% Top Transfer Tax Rate

3 No Congressional Action -Provisions sunset and return to 2001 tax Act Transfer Taxes Repealed Current provisions become a 2-year extender Permanent unified transfer tax -Exemptions (indexed?) -Rates?

4 Calendar Year Estate Tax Exemption GST Tax Exemption Gift Tax Exemption Top Estate, GST and GIFT Tax Rates Effective Combined Gift and GST Tax Rates on a new $4.12mm gift to Grandchildren 2012 $5.12 million $5.12 million $5.12 million 35% 0.00% 2013 $1 million $1.4 million (Est.) $1 million 55%* % *60% for estates over $10 million until the benefit of the exemption is recaptured.

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6 Clawback?

7 Removes $5,120,000 from estate Removes future appreciation and income Grantor can pay income taxes Utilize valuation discounts Donee enjoys the gifted assets Avoid State estate tax

8 Client's financial needs Client's wishes Uncertainty Complexity

9 Client's financial needs Client's wishes Uncertainty Complexity

10 Client's financial needs Client's wishes Uncertainty Complexity

11 Client's financial needs Client's wishes Uncertainty Complexity

12 Appreciation potential Fractionalized assets Special use assets Closely-held business interests

13 Appreciation potential Fractionalized assets Special use assets Closely-held business interests

14 Appreciation potential Fractionalized assets Special use assets Closely-held business interests

15 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests

16 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

17 November 2012

18 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

19 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

20 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

21 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

22 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

23 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

24 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

25 Forgiveness of loans Pay off children's mortgages Equalize prior family gifts Eliminate retained interests or powers Non-qualified disclaimers Transfer of GP or control interests ILIT Funding

26 Targeted Planning

27 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

28 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

29 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

30 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

31 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

32 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

33 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

34 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

35 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

36 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

37 Outright gift Trust for descendants Lifetime credit shelter trust Mutual but not reciprocal - spousal trusts Grantor trust GST exempt trust Valuation discounts Installment sale to grantor trust

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