Best Estate Planning Advice: Don't Let Estate Tax Make You Bankrupt

    I want to tell you about a family I’ve recently been working with.  Most families don't have to be too concerned about getting wiped out by the federal estate tax because the exemption amounts these days are so high.  Maybe about 1% or less of the population or families in America are subject to that tax.  But, I was working with a family recently that had accumulated some wealth.  The father had passed away a few years earlier and now I'm working with both the mother and the children to try to preserve as much as they can.  They came in and I quickly discovered that the legal work that had been done for the father and the things that were done when the father died, extremely confused the family.  They had no idea what had been done, so we took several hours sorting through a bunch of complex legal documents and estate tax returns to just get them up to speed so that they understood how the husband had left things to his wife, to their children, to their grandchildren, and even to their future great-grandchildren.

     So they wanted to do whatever they could do to minimize the tax, but they really wanted to keep it simple.  We had lots of conversations about things, like the step-up in basis and appreciated stock.  We talked about the double step-up in basis so things got stepped up when the husband died and again when the wife died.  This can really save a lot of capital gains tax.

     We talked about the estate and gift tax and how they had really maxed out on the lifetime giving while the husband was still alive.  We talked about how there's the potential that mom may set up some charitable interest or some donor advised funds through some of the large financial institutions to provide some income tax benefits and some estate tax avoidance. We also talked about how mom would want to leave things to her children, grandchildren, and future great-grandchildren.  We talked about the income tax aspects of all of this.  So. it was a really good discussion, kind of a high-end discussion.  Those are the kinds of things that must be discussed with families around Louisiana who have accumulated some wealth.  There was a lot of discussion about how the husband had left his wife the usufruct of certain things.


     When there are large estates, these are some of the topics that we have to address to make sure that Louisiana families can protect what they have worked so hard to accumulate for their loved ones.  So, if you are in the situation where you are concerned about avoiding this 40% estate tax, losing 40% of everything you own when you pass away, then you may want to reach out to us, we can have a conversation and take it from there.