A successful estate plan is the last gift you can give the most important people in your world.
Many people think that an estate plan is just a collection of confusing paperwork written in archaic lawyer-speak to transfer property to someone else when they die. You sign some documents, check “estate plan” off your list of things to get done, and then get on with life.
But while the documents are very important, the estate “plan” is a strategy we design together and put into motion. And a successful strategy can only come from a process of understanding who you are, who and what’s important to you, and then developing a clear plan to make the most of what you have and pass it on when you’re ready. Most importantly, the estate plan must be reviewed and actively maintained to make sure that it succeeds for you when it matters most. (Click here to learn more about our planning process.)
A successful estate plan also establishes a strategy to make sure your wishes get followed if you end up in the hospital unable to speak for yourself. It ensures that the people you trust the most are empowered to act with the least amount of friction and delay when time and privacy matter the most. After you’re gone, a successful estate plan makes sure your loved ones are prepared to receive and responsibly manage the legacy you leave behind.
Whether your wealth is very modest or whether you’ve built a fortune, someday you will pass it on to someone else. With careful planning you can provide for and protect your loved ones from bad decisions, failed relationships, or people with bad intentions. You have the power to give them protection that they can’t give themselves.
If you’ve never created an estate plan, or if your plan hasn’t been reviewed in a while, we can help you design and implement a strategy that honors your life’s work and protects the people you care most about.
Contact us to get started.
Special Planning Situations
Many taxes are voluntary. In fact, the federal estate tax is COMPLETELY voluntary.
Ordinary income and capital gains tax
Many of our clients are business owners, and many also have property that has increased substantially in value over time. That may include stock in a closely held company, real estate, bitcoin or other cryptoassets, or collectible art or vehicles. This often means that there is massive state and federal capital gains tax liability waiting for them when they get ready to sell. We help our clients strategically eliminate or defer that capital gains tax liability by taking advantage of opportunities under the Internal Revenue Code and under the laws of more attractive jurisdictions.
For people with high income there are often powerful strategies to help them reduce their tax liability, often while keeping more of their income and doing significant social good at the same time. Sometimes this means implementing creative charitable planning strategies during life, or putting strategies in motion that will kick in after death. Other times it’s just a matter of finding efficient options for managing income.
A note about estate tax…
Under the current tax law each individual has a $10,000,000 estate tax exemption (adjusted annually for inflation). Married couples can double that amount, passing more than $20 million to their heirs when they die – assuming their estate plan is structured properly. While the vast majority of Americans will never have to worry about that, there are a few things to keep in mind:
- First, the federal estate tax law enacted in 2017 is set to automatically expire at the end of 2025. Unless Congress extends the law, the estate tax exemption goes back down to $5 million per individual (again adjusted annually for inflation). That will capture a lot of families who currently don’t have to worry about the tax laws.
- Married couples don’t get to “automatically” double their estate exemption. Planning has to be proactive and intentional to do that. Without intentional planning you’ll lose some or all of the estate tax exemption when the first spouse dies.
- Even very wealthiest individuals don’t pay estate tax if they let us help them. There are creative planning opportunities under the tax code that allow people with even hundreds of millions of dollars in wealth completely avoid the estate tax. (Like we said, the estate tax is VOLUNTARY.)
A final note
One of the most important things to remember about strategic tax planning is that you have to stay on top of your plan as circumstances change. Learn more about how we do that on our planning process page.
Cryptoassets like bitcoin, Ethereum, Cryptokitties, and others have transformed the concept of value and wealth on a global scale, but these innovative assets are uniquely challenging to deal with in an estate plan. Crypto owners must not only effectively manage asset custody during their lives, but they must also securely manage the transition of their cryptoassets when they become incapacitated and after they die.
Cryptoassets also often generate significant state and federal capital gains tax liability that can be mitigated or eliminated with careful planning. We blend strategies from the most attractive domestic and international jurisdictions to help individuals and families with cryptocurrencies or other cryptoassets reduce their tax footprint and provide significant privacy and protection in the process. (And yes, we proudly accept payment in bitcoin (BTC), bitcoin Cash (BCH), and various other cryptocurrencies.)
With significant changes in international law the United States has become a privacy haven for the world. With a stable, diverse economy and with many other nations now sharing bilateral information (the U.S. doesn’t), many wealthy non-U.S. individuals continue to invest in U.S. companies, real estate, and other assets. Others, like professional athletes and entertainers, relish privacy and want to minimize their tax footprint. With strategic planning in advance, we can dramatically reduce the impact of U.S. tax on a family’s global holdings in highly secure, highly private strategies.
As a cyclist and an athlete, you know that your passion puts you at special risk. Like you, we spend hours on the road or on trails, seeking solitude and enjoying nature. We know that bad things can happen no matter how prepared we are. That’s why we have a special planning approach for cyclists and other athletes like you. Click here to learn about our planning approach for cyclists and other athletes.