If you have accumulated any wealth during your lifetime, and you have the desire to pass all or part of that legacy on to your heirs, you have probably been reading quite a bit lately about the unique planning opportunities that exist today.
And, it is true, that there are some conditions in the market place that have created unique and almost unparalleled opportunities to pass wealth to the next generation.
Historically low interest rates, real estate values, and temporary impairment in the value of otherwise strong family businesses mean that you can use a variety of techniques to pass stock, land, income producing assets, and interests in real estate to your heirs at a fraction of the long term value of those assets.
These conditions are not likely to continue, and there is a move afoot in Washington to eliminate some of these valid planning tools.
So planning now may be important. But, many people rush into these techniques without careful consideration of a number of important factors.
First and foremost, most of these techniques involve some aspect of irrevocability. It is therefore essential to review your current and long term cash flow needs to ensure that the gifting techniques will not impair your own security and lifestyle.
Care must also be taken to make sure that the technique or techniques used are the best match possible under all of the assumptions and current conditions. For example, should a GRAT be used? What happens if the trust is a grantor trust and you remain liable for the taxes? How does that impact your retirement cash flow?
The short version is that the time for action may be now and the need for speed is present. But, these techniques require you to carefully analyze your current estate, your cash flow and lifestyle needs, the risks of the marketplace and the best technique or combination of techniques for you under all circumstances.
